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What changed in Vuzix Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Vuzix Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+329 added−373 removedSource: 10-K (2026-03-12) vs 10-K (2025-03-13)

Top changes in Vuzix Corp's 2025 10-K

329 paragraphs added · 373 removed · 244 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

85 edited+19 added−25 removed21 unchanged
Biggest changeWe seek to generate revenue and ultimately profitable growth through the continued introduction of market leading technologies, including AI/AR Smart Glasses, waveguides and display engines, software applications and solutions. 2 ​ Table of Contents To broaden our position as a leading provider of wearable display products for AI/AR and hands-free computing, as well as waveguides and display engines for OEMs and ODMs, we seek to: ● develop innovative products based on our unique technology for both specialized and large enterprise and medical markets, as well as for defense and security; ● expand waveguide production and optimization by enhancing manufacturing efficiencies, reducing costs, and maintaining proprietary process protections to ensure competitive market positioning; ● establish mass production partnerships with leading ODMs/OEMs to accelerate the adoption of next-generation AI/AR Smart Glasses and wearable computing solutions; ● sell our waveguide products to ODMs and OEMs as a standard product or on a custom order basis to meet their design requirements; ● expand licensing and technology partnerships, allowing third-party companies to incorporate and white-label our smart glasses and optical technologies into their branded product lines; ● develop new microdisplay engine products utilizing third-party displays; ● extend our innovative and proprietary technology leadership; ● develop, promote and enhance the development of third-party software and our own that can take advantage of our products, including offering apps and software through our own “app store”; ● enhance and protect our intellectual property portfolio; ● leverage third-party technology and marketing strategic relationships; and ● attract and retain highly qualified personnel.
Biggest changeTo strengthen our position in wearable display products for AI/AR and hands-free computing, as well as waveguides and display engines for OEMs and ODMs, we seek to: ● develop innovative products based on our technology for enterprise, medical, and defense and security markets; ● expand waveguide production and optimization by improving manufacturing efficiency, reducing costs, and maintaining proprietary process protections; ● establish mass production and supply partnerships with ODMs/OEMs to support adoption and sale of next-generation AI/AR smart glasses and wearable computing solutions; ● offer waveguide products as standard or custom solutions to meet customer design requirements; ● expand licensing and technology partnerships enabling third parties to incorporate and white-label our smart glasses and optical technologies; ● develop microdisplay engine products utilizing available third-party displays; ● expand our technology and product capabilities; ● support third-party and in-house software development for our products, including distribution of applications through our sales and distribution channels; ● enhance and protect our intellectual property portfolio; ● leverage third-party technology and strategic relationships; and ● attract and retain qualified personnel. 2 ​ Table of Contents We believe the continued introduction of new products and related optical components in our target markets is important to our growth.
For warehousing, we have contracted with a third-party fulfillment center based in the Netherlands to service our customers in EMEA. We also currently serve other APAC customers through North American (West Coast) and Tokyo sales offices.
For warehousing, we have contracted with a third-party fulfillment center based in the Netherlands to service our customers in EMEA. We also currently serve other APAC customers through our North American (West Coast) and Tokyo sales offices.
We procure components from suppliers, contract manufacturers for electronic circuit board and cable assemblies, and perform final product assembly at our West Henrietta, New York facility. This facility enables efficient, cost-effective production, with the capability to manufacture thousands of units annually. We are experienced in the successful production of our products in moderate volumes.
We procure components from suppliers, use contract manufacturers for electronic circuit board and cable assemblies, and perform final product assembly at our West Henrietta, New York facility. This facility enables efficient, cost-effective production, with the capability to manufacture thousands of units annually. We are experienced in the successful production of our products in moderate volumes.
This commitment directly shapes our approach to fostering a culture of inclusion and diversity and ensuring employees can reach their potential. We believe that our strong Company culture is a key enabler of our success. The values of accountability, integrity, teamwork, agility, and innovation are central to our culture and how we operate and work together.
This commitment directly shapes our approach to fostering a culture of inclusion and ensuring employees can reach their potential. We believe that our strong Company culture is a key enabler of our success. The values of accountability, integrity, teamwork, agility, and innovation are central to our culture and how we operate and work together.
While we do not manufacture our raw components, other than waveguides, we do own the tooling that is used to make our custom components. Most of such tooling is located primarily in China. Some of our accessory products are sourced from third parties as finished goods.
While we do not manufacture our raw components, other than waveguides, we do own the tooling that is used to make our custom components. Most of such tooling is located in China. Some of our accessory products are sourced from third parties as finished goods.
We typically have them print our Vuzix brand name on these products if they are co-branded. Such third-party products represented less than 3% of our sales in last three fiscal years.
We typically have them print our Vuzix brand name on these products if they are co-branded. Such third-party products represented less than 3% of our sales in the last three fiscal years.
We believe our waveguides provide several competitive advantages including: (i) cost-effective, scalable volume manufacturing; (ii) higher brightness and display clarity with no forward glow (Incognito technology); (iii) thinner, lighter optics with wider field-of-view (FOV); (iv) better light efficiency and durability; and (v) our ability to quickly develop customizable designs for ODM and OEM customers.
We believe our waveguides provide several competitive advantages including: (i) cost-effective, scalable volume manufacturing; (ii) higher brightness and display clarity with minimal forward light glow (Incognito technology); (iii) thinner, lighter optics with wider field-of-view (FOV); (iv) better light efficiency and durability; and (v) our ability to quickly develop customizable designs for ODM and OEM customers.
Major core technologies that we employ in our products include: ● See-Through Waveguides : We hold numerous patents and pending applications for passive, dynamic, and diffractive optics-based waveguides, which enable compact, high-performance AR Smart Glasses. Our goal is to create AI/AR-based displays that resemble everyday sunglasses in comfort, size, and weight.
Major core technologies that we employ in our products include : ● See-Through Waveguides : We hold numerous patents and pending applications for passive, dynamic, and diffractive optics-based waveguides, which enable compact AI/AR Smart Glasses. Our goal is to create AI/AR-based displays that resemble everyday sunglasses in comfort, size, and weight.
We plan to increase R&D investments as revenues grow and will continue licensing and acquiring technologies to accelerate development. By combining cutting-edge optics, microdisplay technology, and advanced manufacturing, Vuzix remains at the forefront of AI/AR Smart Glasses innovation.
We plan to increase R&D investments as revenues grow and will continue licensing and acquiring technologies to accelerate development. By combining advanced optics, microdisplay technology, and advanced manufacturing, Vuzix remains at the forefront of AI/AR Smart Glasses innovation.
There are also several China-based companies that have been showing monocular smart glasses products, including Lenovo, but their sales activities thus far have been somewhat limited and 9 ​ Table of Contents focused primarily on Asia. We expect to encounter competition in the future from major consumer electronics companies and suppliers of imaging and information products for defense applications.
There are also several China-based companies that have been showing monocular smart glasses products, including Lenovo, but their sales activities thus far have been somewhat limited and focused primarily on Asia. We expect to encounter competition in the future from major consumer electronics companies and suppliers of imaging and information products for defense applications.
We file and prosecute our patent applications in pursuit of the most extensive fields of protection possible including, where appropriate, the application of the relevant technology to the broader display industry. We believe that our intellectual property portfolio, coupled with our supplier relationships and accumulated experience in the near-eye display field, gives us an advantage over potential competitors.
We file and prosecute our patent applications in pursuit of the most extensive fields of protection possible including, where appropriate, the application of the relevant technology to the broader display industry. 8 ​ Table of Contents We believe that our intellectual property portfolio, coupled with our supplier relationships and accumulated experience in the near-eye display field, gives us an advantage over potential competitors.
Encased in lightweight, prescription-ready safety glasses, it also includes stereo HD cameras, making it a powerful hands-free AR tool for various industries. Vuzix Z100 Smart Glasses The Z100 Smart Glasses are a lightweight, enterprise-focused solution that pairs seamlessly via Bluetooth with Android and iOS devices.
Encased in lightweight, prescription-ready safety glasses, it also includes stereo HD cameras, making it a hands-free AR tool for various industries. Vuzix Ultralite Z100 Smart Glasses The Z100 Smart Glasses are a lightweight, enterprise-focused solution that pairs via Bluetooth with Android and iOS devices.
Vuzix competes or has competed with such companies as Lumus, Snap’s WaveOptics, Digilens, Dispelix, and multiple emerging Chinese manufacturers such as Goertek, Goolton, Crystal Optech, Optiark, and Xiaomi.
Vuzix competes or has competed with such companies as Lumus, Snap’s WaveOptics, Digilens, AAC Technologies’ Dispelix, and multiple emerging Chinese manufacturers such as Goertek, Goolton, Crystal Optech, Optiark, and Xiaomi.
We generally procure our other non-micro-display components and products from our vendors on a purchase order basis without any long-term commitments. Many of the raw components used in our products are standard to the consumer electronics and computer industry. We provide forecasts that can allow our contract manufacturers to stock component parts and other materials and plan capacity.
We generally procure our other non-microdisplay components and products from our vendors on a purchase order basis without any long-term commitments. Many of the raw components used in our products are standard for the consumer electronics and computer industry. We provide forecasts that can allow our contract manufacturers to stock component parts and other materials and plan capacity.
Competition – Binocular Wearable Display and VR Products Vuzix AR Smart Glasses competitors include binocular wearable displays and virtual reality systems, using micro-displays or smaller flat panels.
Competition – Binocular Wearable Display and VR Products Vuzix AR Smart Glasses competitors include binocular wearable displays and virtual reality systems, using microdisplays or smaller flat panels.
Any such request must be made in writing to us, c/o Investor Relations, Vuzix Corporation, 25 Hendrix Road, West Henrietta, NY, 14586. ​ Information about Geographic Revenue Information about geographic revenue is described in Note 17, “Geographic and Other Financial Information” in the notes to our consolidated financial statements.
Any such request must be made in writing to us, c/o Investor Relations, Vuzix Corporation, 25 Hendrix Road, West Henrietta, NY, 14586. ​ 12 ​ Table of Contents Information about Geographic Revenue Information about geographic revenue is described in Note 17, “Geographic and Other Financial Information” in the notes to our consolidated financial statements.
To protect our technologies, we have developed a patent portfolio which currently consists of 246 issued U.S. and foreign patents and 180 pending U.S. and foreign patent applications. We are also currently evaluating several invention disclosures for the purposes of submitting design and utility patent applications.
To protect our technologies, we have developed a patent portfolio which currently consists of 306 issued U.S. and foreign patents and 202 pending U.S. and foreign patent applications. We are also currently evaluating several invention disclosures for the purposes of submitting design and utility patent applications.
We also believe our copyrights, trademarks, and patents are critical to our success and we intend to maintain and protect these. We also rely on proprietary technology, trade secrets, and know-how, including manufacturing processes and procedures, which are 8 ​ Table of Contents not patented.
We also believe our copyrights, trademarks, and patents are critical to our success and we intend to maintain and protect these. We also rely on proprietary technology, trade secrets, and know-how, including manufacturing processes and procedures, which are not patented.
Our contract manufacturers procure raw materials in volumes consistent with our forecasts, manufacture and/or assemble the products 11 ​ Table of Contents and perform tests according to our specifications. In some cases, we procure specific components and either sell them or consign them to our contract manufacturers.
Our contract manufacturers procure raw materials in volumes consistent with our forecasts, manufacture and/or assemble the products and perform tests according to our specifications. In some cases, we procure specific components and either sell them or consign them to our contract manufacturers.
Our expertise spans tool design, custom grating software, high-index polymers, precision lithography, and automated quality control, ensuring high-volume production with superior optical clarity. ● Micro-Display Optics : Optical components are a major cost factor in wearable displays. We have developed thin, lightweight optics that integrate with ultra-compact micro-displays, reducing bulk while maintaining high-resolution AR visuals.
Our expertise spans tool design, custom grating software, high-index polymers, precision lithography, and automated quality control, supporting high-volume production with optical clarity. ● Microdisplay Optics : Optical components are a major cost factor in wearable displays. We have developed thin, lightweight optics that integrate with ultra-compact microdisplays, reducing bulk while maintaining high-resolution AR visuals.
Our relationship with these micro-display suppliers is generally on a purchase order basis and none have a contractual obligation to provide adequate supply or acceptable pricing to us on a long-term basis, nor do we have any contractual obligation to purchase micro-displays from them.
Our relationship with these microdisplay suppliers is generally on a purchase order basis and none have a contractual obligation to provide adequate supply or acceptable pricing to us on a long-term basis, nor do we have any contractual obligation to purchase microdisplays from them.
For customer support for the Americas and EMEA, we have contracted with a third-party end-user technical support firm that provides sixteen (16) hours of customer and technical support daily. For our ODM and OEM customers, we primarily supply waveguides, display engines, and Smart Glasses platforms for integration into branded products.
For customer support for the Americas and EMEA, we have contracted with a third-party end-user technical support firm that provides customer and technical support 16 hours a day. 10 ​ Table of Contents For our ODM and OEM customers, we primarily supply waveguides, display engines, and Smart Glasses platforms for integration into branded products.
The see-through waveguide display projects information like a heads-up display, making it useful for applications such as messaging, social media, navigation, work instructions, and biometrics. The Blade OS supports voice commands and cloud-based AI platforms, allowing users to access critical information hands-free while keeping their phones in their pockets.
The see-through waveguide display projects information like a heads-up display, making it useful for applications such as messaging, notifications, navigation, work instructions, and other information overlays. The Blade OS supports voice commands and cloud-based AI platforms, allowing users to access information hands-free while keeping their phones in their pockets.
Vuzix also resells a variety of other applications, including its internally developed “connector” applications, to enable third party applications like Zoom and others, which provide remote telepresence capabilities, otherwise known as “see-what-I-see” video collaboration and work instructions, amongst other features. These applications increase productivity and customer satisfaction by sharing information between field technicians and remote support experts.
Vuzix also resells a variety of other applications, including its internally developed “connector” applications, to enable third party applications like Zoom, Teams and others, which provide remote telepresence capabilities, otherwise known as “see-what-I-see” video collaboration and work instructions, amongst other features. These applications may support remote assistance workflows by sharing information between field technicians and remote support experts.
Our U.S. and foreign patents expire on various dates with the capacity to remain enforceable through at least June of 2043. In addition to our various patents, we have 8 registered U.S. trademarks and 82 trademark registrations worldwide. Competitors The near-eye wearable computer and mobile personal display device industry in which we operate is highly competitive and evolving rapidly.
Our U.S. and foreign patents expire on various dates with the capacity to remain enforceable through at least March of 2050. In addition to our various patents, we have 10 registered U.S. trademarks and 85 trademark registrations worldwide. Competitors The near-eye wearable computer and mobile personal display device industry in which we operate is highly competitive and evolving rapidly.
Vuzix Blade® Smart Glasses The Blade 2 combines a monocular full color waveguide display with a lightweight eyeglasses-style form factor. It features stereo audio, an autofocus HD camera, voice control, wireless connectivity, and a modern processor for enhanced performance.
Vuzix Blade® Smart Glasses The Blade 2 combines a monocular full color waveguide display with a lightweight eyeglasses-style form factor. It features stereo audio, an autofocus HD camera, voice control, wireless connectivity, and a CPU.
Overall Strategy Our goal is to establish and maintain a leadership position as a worldwide supplier of waveguides for AI/AR Smart Glasses and wearable displays for our own product needs and third-party ODMs and OEMs.
Overall Strategy Our goal is to establish and maintain a competitive position as a worldwide supplier of waveguides for AI/AR smart glasses and wearable smart displays for both our products and third-party ODMs and OEMs.
Vuzix Shield™ Smart Glasses The Shield is our first binocular AR Smart Glasses featuring microLED displays. Designed for enterprise applications, it offers more power and performance than the M400 series. The Shield combines Vuzix’ proprietary waveguide optics with microLED stereo displays to deliver a fully transparent, high-resolution 3D heads-up display.
Vuzix Shield™ Smart Glasses The Shield is our first binocular AR Smart Glasses featuring microLED displays. Designed for enterprise applications, it offers a binocular, see-through display architecture. The Shield combines Vuzix’ proprietary waveguide optics with microLED stereo displays to deliver a fully transparent, high-resolution heads-up display.
This facility can support high-volume production, at reduced manufacturing costs, and allows us to implement advanced waveguide processing techniques for next-generation designs. For the foreseeable future, all waveguide manufacturing will remain at this facility.
This facility can support high-volume production, at reduced manufacturing costs, and allows us to implement advanced waveguide processing techniques for next-generation designs. For the foreseeable future, all waveguide manufacturing will remain at this facility. In April 2025, Vuzix acquired an advanced waveguide R&D facility in Milpitas, California.
Therefore, we believe at this time that backlog information is not material to the understanding of our business. Human Capital As of December 31, 2024, the Company had 76 employees globally. A small percentage of the U.S. and non-U.S. employees are full-time or part-time contractors. The Company is committed to attracting, developing, and retaining talent to enable our strategic vision.
Therefore, we believe at this time that backlog information is not material to the understanding of our business. Human Capital As of December 31, 2025, the Company had 88 full-time employees and contractors globally.The Company is committed to attracting, developing, and retaining talent to enable our strategic vision.
History - Corporate We were incorporated in Delaware in 1997 as VR Acquisition Corp. In 1997, we acquired substantially all of the assets of Forte Technologies, Inc. (Forte), which was engaged in the manufacture and sale of Virtual Reality headsets and the development of related technologies.
History - Corporate We were incorporated in Delaware in 1997 as VR Acquisition Corp. In 1997, we acquired substantially all the assets of Forte Technologies, Inc. (Forte), which was engaged in the manufacture and sale of Virtual Reality headsets and the development of related technologies. Forte was originally owned and controlled by Kopin Corporation, one of our prior microdisplay suppliers.
We aim to continuously enhance our products through internal development and partnerships with third-party suppliers. Our proprietary technologies, including advanced optics, micro-projection display engines, and specialized software, provide a strong market position. We also leverage trade secrets and nanoimprinting expertise to develop cutting-edge diffractive waveguide optics.
We aim to continuously enhance our product offerings through internal development and partnerships with third-party suppliers. Our proprietary technologies, including advanced optics, micro-projection display engines, and specialized software, support our product and ODM/OEM offerings. We also leverage trade secrets and nanoimprinting expertise to develop diffractive waveguide optics.
Forte was originally owned and controlled by Kopin Corporation, one of our prior micro-display suppliers. Most of the technologies developed by Forte are now owned and used by us. 12 ​ Table of Contents Reference in this report to “Vuzix”, the “Company”, “we,” “us,” “our” and similar words refer to Vuzix Corporation and its wholly-owned subsidiary.
Most of the technologies developed by Forte are now owned and used by us. Reference in this report to “Vuzix”, the “Company”, “we,” “us,” “our” and similar words refer to Vuzix Corporation and its wholly-owned subsidiary.
These hands-free wearable products integrate an Android-based computing platform, voice control, high-resolution camera, audio, sensors, and wireless connectivity. Pre-installed apps enable video streaming, barcode scanning, and calendar integration, with optional subscription-based connectors for platforms like Zoom. These Smart Glasses can enhance workflows, provide AI-driven solutions, and unlock new opportunities across industries such as healthcare, logistics, retail, and remote support.
These hands-free wearable products integrate an Android-based computing platform, voice control, high-resolution camera, audio, sensors, and wireless connectivity. Included 4 ​ Table of Contents apps enable video streaming, barcode scanning, and calendar integration, with optional connectors for platforms like Zoom. These Smart Glasses are used in workflows across industries such as healthcare, logistics, retail, and remote support.
We continue to foster the development of an ecosystem of third-party developers to offer applications and demo trials for their smart glasses apps, many of which will be sold on an industry common revenue share model, with the publisher receiving approximately 70% of the subscriptions collected.
We continue to foster the development of an ecosystem of third-party developers to offer applications and demo trials, many of which will be sold on an industry-standard revenue share model, with the publisher generally receiving the majority of the subscription revenue collected.
Beyond developing and selling our own Vuzix-branded Smart Glasses, we are expanding our business model to provide custom optical display solutions and engineering services for ODMs and OEMs. These customers can leverage our waveguide technology to develop fully integrated AR-enabled wearable displays for commercial, industrial, defense, and consumer applications.
In addition to selling Vuzix-branded smart glasses, we provide custom optical display solutions and engineering services for ODMs and OEMs. These customers may use our waveguide technology and display engines to develop integrated, AR-enabled wearable displays for commercial, industrial, defense, and consumer applications.
Our production process currently supports +2D to -8D diopters, with plans to expand further. 7 ​ Table of Contents ● Nanoimprinting : We continue to refine nanoimprinting techniques to produce ultra-thin waveguides, as thin as 0.35 mm, essential for lightweight and fashionable Smart Glasses.
Our production process currently supports prescription ranges of +2D to -8D diopters, with plans to expand further. 7 ​ Table of Contents ● Nanoimprinting : We continue to refine nanoimprinting techniques to produce ultra-thin waveguides, including waveguides with thicknesses down to approximately 0.35 mm, which may be important for lightweight and eyewear-style Smart Glasses.
Designed for extended wear, the 38-gram glasses provide a transparent monochrome waveguide display powered by a custom microdisplay engine. With up to 48 hours of battery life, they deliver AI-driven information hands-free, streamlining workflows and enhancing productivity. The Z100 also serves as a scalable white-label platform for ODM/OEM partners and enterprise customization.
Designed for extended wear, they provide a transparent monochrome waveguide display powered by a custom microdisplay engine. With up to a two-day extended battery life, they deliver information hands-free, support notifications and workflow information access. The Z100 also serves as a scalable white-label platform for ODM/OEM partners and enterprise customization.
The best ways to capitalize on our waveguides is to have extremely efficient full color micro-displays or projectors capable of high brightness for use in any conditions. Engineering Services Vuzix provides engineering services and ODM/OEM component solutions to select partners seeking to integrate waveguide optics and wearable display technologies into their products.
The best ways to capitalize on our waveguides include pairing them with full color microdisplays or projectors capable of high brightness across target use environments. Engineering Services and Related Products Vuzix provides engineering services and ODM/OEM component solutions to select partners seeking to integrate waveguide optics and wearable display technologies into their products.
We currently source micro-displays from Sony Corporation, Jade Bird Display, and Texas Instruments and regularly and actively evaluate new suppliers of compact display engines to enhance AI/AR Smart Glasses performance.
The new LX1 is our first smart glasses product to be made by them for us. We currently source microdisplays from Sony Corporation, Jade Bird Display, and Texas Instruments and regularly and actively evaluate new suppliers of compact display engines to enhance AI/AR Smart Glasses performance.
Recent advancements include Incognito technology, which minimizes forward light leakage and enhances optical performance in low-light environments. In addition, our waveguides now support integrated prescription vision correction, allowing users to incorporate their exact prescription seamlessly while maintaining a natural eyewear look.
Recent advancements include our Incognito™ technology, which minimizes forward light leakage, including in lower-light operating conditions. In addition, our waveguides now support integrated prescription vision correction, allowing users to incorporate their vision prescription into certain configurations while maintaining a natural eyewear appearance.
These smart display systems—worn like eyeglasses or attached to a head-mounted frame—typically include cameras, sensors, and onboard computing that allow users to view, record, and interact with video and digital content, including internet-based applications, cloud-based AI assistants, and real-time AR overlays.
Our product offerings include near-eye displays, heads-up displays (“HUDs”), and wearable computing devices that provide a portable viewing experience. These smart display systems—worn like eyeglasses or attached to a head-mounted frame—may incorporate cameras, sensors, and onboard processing to enable users to view, capture, and interact with digital content, including internet-based applications, cloud-based AI assistants, and real-time AR overlays.
Additionally, our waveguide optics and display engines support both Vuzix-branded products and external ODM/OEM customers. M400 and M4000 Smart Glasses (M Series) The M400 and M4000 are industrial-grade monocular Smart Glasses designed for enterprise, industrial, medical, and commercial use. The M400 features an occluded nHD OLED display, while the M4000 incorporates a see-through waveguide display for more immersive AR applications.
M400 and M4000 Smart Glasses (M Series) The M400 and M4000 are monocular Smart Glasses designed for enterprise, industrial, medical, and commercial use. The M400 features an occluded nHD OLED display, while the M4000 incorporates a see-through waveguide display to support see-through display use cases.
We also have an app store on our website where users can download and purchase Smart Glasses applications, including third-party apps.
These standard applications are designed to be easy to use, and we believe help demonstrate novice and expert use cases. We also have an app store on our website where users can download and purchase Smart Glasses applications, including third-party apps.
Examples of such companies include or have included Carl Zeiss, Seiko Epson (Epson), Sony Corporation, Microsoft Corporation, Apple, Avegant Corp., Meta (formerly Oculus/Facebook), HTC Corporation, Razer Inc., HP, Lenovo, Snap, Xreal, TLC, Huawei and many others.
Examples of such companies include or have included Carl Zeiss, Seiko Epson (Epson), Sony Corporation, Microsoft Corporation, Apple, Avegant Corp., Meta (formerly Oculus/Facebook), HTC Corporation, Razer Inc., HP, Lenovo, Snap, Xreal, TCL, Huawei and many others. Some of these firms have discontinued their efforts while others continue to introduce new products focused on either video viewers or VR goggles.
These innovations allow our Smart Glasses to resemble traditional eyewear while delivering immersive digital experiences. ● Custom Display Engines : We are advancing micro-display projection technology, developing high-brightness, full-color display engines optimized for waveguides. We collaborate with multiple industry partners to deliver both monochrome and full color micro-display solutions, ensuring power efficiency, clarity, and seamless integration into compact Smart Glasses.
These innovations are intended to allow our Smart Glasses to resemble traditional eyewear while delivering immersive digital experiences. ● Custom Display Engines : We are advancing microdisplay projection technology, developing high-brightness, full-color display engines optimized for waveguides.
Our primary development efforts are focused on: ● waveguide optics and scalable manufacturing processes to enhance brightness, clarity, and cost efficiency for high-volume production; ● projection and microdisplay engines; ● next-generation electronic designs that minimize power consumption, extend battery life, and enable lightweight, ergonomic wearable displays; ● embedded firmware and AI-powered software that enhances AR visualization, voice interaction, real-time translation, and contextual information overlays; and ● industrial design and user experience optimization, ensuring Vuzix smart glasses meet the needs of our users. ​ We expect to continue our research and development expenditure levels in the future and perhaps increase them as our revenues grow.
Our primary development efforts are focused on: ● waveguide optics and scalable manufacturing processes to improve optical performance, manufacturability, brightness, clarity, and cost efficiency for higher-volume production; ● projection and microdisplay engines; ● industrial design and user experience optimization; ● electronic designs that reduce power consumption, extend battery life, and enable lightweight, ergonomic wearable displays; and ● embedded firmware and AI-enabled software to support AR visualization, voice interaction, real-time translation, and contextual information overlays.
In addition to in-house development, we actively evaluate, acquire, and license cutting-edge technologies that align with our strategic roadmap. The Market The mobile phone has evolved into a powerful, location-aware computing device, reshaping how people interact with their world. Mobile technology is now essential in work and daily life around the globe.
We expect to continue our research and development expenditures in the future and may increase them as revenues grow. In addition to in-house development, we evaluate, acquire, and license technologies that align with our roadmap. The Market The mobile phone has evolved into a powerful, location-aware computing device, reshaping how people interact with the world.
We focus on developing long-term ODM/OEM relationships, including supply contracts, rather than traditional "work-for-hire" contracts. To date, we have a developed a strong reputation for innovation, attracting interest from leading consumer and mobile electronics firms. We can offer our ODM/OEM customers comprehensive support, from prototype development to production, including technical consulting, engineering data, and application support.
We focus on developing long-term ODM/OEM relationships, including supply contracts, rather than traditional "work-for-hire" contracts. We have engaged with potential partners across consumer and enterprise markets regarding the use of our waveguide and display technologies. We can offer our ODM/OEM customers support from prototype development to production, including technical consulting, engineering data, and application support.
Several Japanese electronics companies including Hitachi, Murata Manufacturing Co., Sony Corporation, WESTUNITIS, and Olympus have or had announced monocular smart glasses systems for industry and many have exited the business over the last three years.
Vuzix offers superior form factors, optics, and AI integrations, positioning its products as compelling alternatives. 9 ​ Table of Contents Several Japanese electronics companies including Hitachi, Murata Manufacturing Co., Sony Corporation, WESTUNITIS, and Olympus announced monocular smart glasses systems for the enterprise market and many have exited the business over the last three years.
Many of these goggles are using external view cameras to simulate an AR environment where the wearer can see the outside world and most are not currently using see-through waveguide optics. Competition – Monocular Smart Glasses The monocular smart glasses segment primarily serves enterprise, industrial, defense and security applications.
Today, many of these products have relatively bulky goggle style HMDs and are typically tethered to an external controller. Many of these goggles are using external view cameras to simulate an AR environment where the wearer can see the outside world and most are not currently using see-through waveguide optics.
Our wearable computing solutions, waveguides, and display engines also support ODM and OEM partnerships, expanding their adoption across industries. Our target markets are: ​ Enterprise ​ Vuzix Smart Glasses enhance efficiency and accuracy across industries such as manufacturing, logistics, and field service. Workers can access real-time data, including AI, follow guided instructions, and collaborate remotely without using handheld devices.
Our wearable computing solutions, waveguides, and display engines also support ODM and OEM partnerships, enabling third parties to incorporate our technologies into their products. Enterprise Vuzix smart glasses support hands-free workflows in industries such as manufacturing, logistics, and field service by enabling access to guided work instructions, remote assistance, and real-time data without requiring handheld devices.
These ODM/OEM customer partnerships typically involve design cycles of 6 to 24 months, depending on product complexity.
These ODM/OEM customer partnerships typically involve design cycles of 6 to 24 months, depending on product complexity. Given the technical nature of these components, our sales, technical, and executive teams work closely with customers throughout the evaluation and integration process.
Some of these firms have discontinued their efforts while others continue to introduce new products that continue to be focused as either video viewers or VR goggles. Despite their size, VR headsets from companies like Meta and Sony have been selling in the millions of units, primarily for game applications.
Despite their size, VR headsets from companies like Meta and Sony have been selling in the millions of units, primarily for game applications. VR systems are either standalone devices or require a wire to be connected to a PC or game console to operate.
Marketing Our marketing efforts focus on brand awareness, lead generation, and industry engagement. Our marketing and sales teams, along with external agencies, manage product positioning, advertising, PR, and marketing communications. We also employ marketing services firms to help prepare brochures, packaging, tradeshow messaging and advertising campaigns, focused on customers in our target markets.
To strengthen relationships and gain market insights, our teams regularly engage with customers worldwide and participate in key industry trade shows and conferences. Marketing Our marketing efforts focus on brand awareness, lead generation, and industry engagement. Our marketing and sales teams, along with external agencies, manage product positioning, advertising, PR, and marketing communications.
Product Development Continuous innovation and product expansion drive our growth, with product life cycles typically lasting less than five years. Our team of in-house engineers and external consultants focuses on: ● Waveguide optics and manufacturing; ● Projection engines and micro-displays; ● Low-power electronics and firmware; and ● Wearable computing software and UI/UX design.
Our team of in-house engineers and external consultants focuses on: ● Waveguide optics and manufacturing; ● Projection engines and microdisplays, including ODM/OEM reference designs and platforms; ● Ergonomic designs and utility; ● Low-power electronics and firmware; and ● Wearable computing software and UI/UX design.
Waveguides require a display engine built for the purpose of the intended design. Vuzix offers proprietary waveguide optics designed to integrate with compact third-party display engines, forming high-performance, see-through AR display modules. Our waveguide optical design reference kits, which include display projectors, waveguides, and supporting electronics, are provided to select ODMs and OEMs to facilitate evaluation, prototyping, and product development.
Our waveguide optical design reference kits, which include display projectors, waveguides, and supporting electronics, are provided to select ODMs and OEMs to facilitate evaluation, prototyping, and product development.
Although we believe sales of these devices have seen limited large-scale adoption beyond pilot programs, demand is increasing in industries such as healthcare, logistics, security, and field services. Vuzix offers superior form factors, optics, and AI integrations, positioning its products as compelling alternatives.
We believe that the market opportunity for these products has been limited primarily to pilot program tests and smaller rollouts in enterprise markets rather than broad commercial volume purchases. Although we believe sales of these devices have seen limited large-scale adoption beyond pilot programs, demand is increasing in industries such as healthcare, logistics, security, and field services.
Item 1. Business Company Overview Incorporated in Delaware in 1997, Vuzix Corporation ("Vuzix" or "the Company") is a leading designer, manufacturer, and marketer of Artificial Intelligence (AI)-powered Smart Glasses, Waveguides, and Augmented Reality (AR) technologies. Our solutions serve the enterprise, medical, defense, security, and select consumer markets, offering cutting-edge wearable computing and display technologies that enhance productivity and operational efficiency.
Item 1. Business Company Overview Incorporated in Delaware in 1997, Vuzix Corporation (“Vuzix” or the “Company”) designs, manufactures, and markets AI-enabled smart glasses, waveguides, and augmented reality (“AR”) display technologies. Our products and solutions support enterprise, medical, defense and security, and select consumer applications, with a focus on hands-free computing and near-eye visualization.
In some cases, these applications will be free to the user and in other cases we will charge monthly or annual subscription fees. We feel that Vuzix Smart Glasses and waveguide technologies are leading innovations in AI-powered wearable computing.
In some cases, these applications are offered free to the user and in other cases we charge monthly or annual subscription fees. We believe our smart glasses products, waveguide technologies, and software ecosystem support hands-free computing use cases across enterprise, healthcare, defense and security, and select consumer markets.
We evaluate contract manufacturers and component suppliers on an ongoing basis, including whether or not to utilize new or alternative contract manufacturers or component suppliers and will be working with our new investor and partner Quanta Computer to potentially provide such services, among others.
The facility, which features state-of-the-art equipment, includes an advanced ion milling machine, which offers superior precision, advanced tool development capabilities, and batch-processing, enables Vuzix to further innovate and scale its waveguide development capabilities, a critical component for next-generation AI/AR smart glasses. 11 ​ Table of Contents We evaluate contract manufacturers and component suppliers on an ongoing basis, including whether or not to utilize new or alternative contract manufacturers or component suppliers and will be working with our investor and partner Quanta Computer to potentially provide such services, among others.
Our business strategy is to commercialize our waveguide technologies and products to permit select ODMs and OEMs to integrate and embed our technologies and products in a way that best matches their unique capabilities and timeline for bringing their products to market.
Our business strategy is to commercialize our waveguide technologies and products to enable select ODMs and OEMs to integrate and embed our technologies and products consistent with their capabilities and timeline for bringing products to market. Vuzix serves defense and security markets with customized waveguide optics and display engine solutions tailored for mission-critical applications.
To support this innovation pipeline, we have built a highly skilled team of engineers, product designers, and optical specialists who work both in-house and collaboratively with external consultants, ODM/OEM partners, and technology developers.
Our products tend to have life cycles of less than five years, which requires ongoing investment in research and development and next-generation product evolution. To support this work, we maintain teams of engineers, product designers, and optical specialists who work in-house and with external consultants, ODM/OEM partners, and other technology developers.
Our proprietary waveguide optics and display engines, which can power both Vuzix-branded Smart Glasses and third-party Original Design Manufacturers (“ODM”) and Original Equipment Manufacturers (“OEM”) devices, set us apart in the AR industry. Historically, most AR and AI-enabled wearable displays have been bulky, goggle-like headsets that limit widespread adoption.
We also offer proprietary waveguide optics and display engines designed for integration into both Vuzix-branded smart glasses and third-party original design manufacturer (“ODM”) and original equipment manufacturer (“OEM”) devices. Historically, many virtual reality (“VR”) and AR wearable displays have been larger, goggle-style headsets.
VR systems are either standalone devices or require a wire to be connected to a PC or game console to operate. Competition – AR Glasses In the AR or mixed reality (XR) markets, there are currently fewer competitors with much of this market currently aimed at the high-end user and research markets.
Competition – AR Glasses In the AR or mixed reality (XR) markets, there are currently fewer competitors with much of this market aimed at the high-end user and research markets. Companies with products in this area include or have included Microsoft Corporation, Sony Corporation, Epson, Lenovo, Magic Leap, Snap, Meta, Xreal, TCL, Rokid, and Apple.
Moviynt has developed a logistics mobility software platform, Mobilium®, which eliminates traditional middleware and is device agnostic. Moviynt’s SAP studio product is highly configurable and allows customers to customize and optimize specific mobile workflows for a given use case.
Moviynt has developed a logistics mobility software platform, Mobilium®, which is designed to reduce or eliminate the need for traditional middleware and is device agnostic.
Our History Historically, we have focused on three markets: the consumer markets for VR, entertainment, and mobile video; Smart Glasses products for enterprise; and rugged mobile displays for defense markets.
We also leverage Moviynt, our internal software solutions development team, to support solution development and customer deployments. Our History Historically, we have served three primary markets: (i) enterprise smart glasses, (ii) rugged wearable display products for defense applications, and (iii) select consumer uses including VR, entertainment, and mobile video.
We believe our waveguides coupled with appropriate third-party display engine technologies address the critical performance parameters for next generation AR products to be brought to market. Our strategy for addressing the broader mass market includes developing partnerships with both select consumer electronic and software companies as well as with their ODMs or OEMs.
Our strategy for addressing the broader mass market includes developing partnerships with select consumer electronics and software companies, as well as with their ODMs or OEMs. We believe manufacturing scale and being cost-competitve, together with improvements in display engine efficiency, are important factors for broader adoption of waveguide-based smart glasses.
We believe the demand for head-worn displays in these markets is being driven by the following: ● the continued growth of mobile computing devices; ● the exploding use of AI with its potential to change how most people live, work and play; ● the growing use of AR/AI applications that will drive the need for head-worn display solutions to replace the need to hold up handheld devices to use the applications; and ● the expansion of IoT that enables the exchange of information among smart connected devices to improve timeliness and visibility where real-time data improves productivity and decision-making.
We believe demand for head-worn displays in these markets is driven by: ● continued growth in mobile computing; ● rapid adoption of AI; ● increasing use of AR/AI applications in workflows where hands-free access to information can improve efficiency and safety; and ● expansion of IoT and connected devices that increase the value of timely, real-time data for productivity and decision-making. 3 ​ Table of Contents Target Markets Vuzix develops AI- and AR-enabled smart glasses and optical components for enterprise, defense, medical, security, and select consumer applications.
Moviynt’s core technology and architecture consists of a certified SAP gateway module, iOS and Android client and mobile apps that run on a wide range of handhelds and wearables.
The product consists of a certified SAP gateway module, iOS and Android client and mobile apps that run on a wide range of handhelds and wearables and is designed to operate without additional middleware or intermediate servers to process warehouse and logistics-related transactions such as cycle counts and picks and transfers on the shop floor.
Many of these applications are similar to what is available to the customer with modern smart phones. These standard applications are designed to be simple to get started and easy-to-use, and we believe can immediately provide some of the fundamental benefits of Smart Glasses to novice and expert users alike.
Applications for Smart Glasses We make available standard applications that are compatible with Vuzix Smart Glasses through device-installed software and the Vuzix App Store. Many of these applications are similar to what is available to the customer with modern smart phones.
We strive to be an innovator in designing wearable display devices and computers as well as waveguide optics that can enable hands-free enterprise productivity applications, see-what-I see remote viewing, and AI and AR applications.
We seek to advance the design of smart wearable display devices and waveguide optics that can enable hands-free enterprise productivity applications such as, “see-what-I-see” remote viewing, and AI and AR applications. We seek to generate revenue and ultimately profitable growth through the continued introduction of new technologies, including AI/AR smart glasses, waveguides and display engines, and related software applications.
We believe that interactive AR content, Edge Computing, and internet of things (“IoT”) will further transform how digital content and intelligence is delivered and experienced through head worn displays, including the enabling of new experiences that cannot be experienced in any other way. 3 ​ Table of Contents Current mobile display technology is almost universally based upon direct view screens.
Mobile technology is widely used in work and daily life. Continued growth in mobile computing is increasing demand for hands-free solutions. We believe interactive AI and AR content, edge computing, and the internet of things (“IoT”) will continue to influence how digital content and intelligence is delivered and experienced through head-worn displays.
By leveraging advanced optics, compact form factors, and seamless enterprise integration, Vuzix is driving the adoption of AR solutions across enterprise, healthcare, defense, and consumer markets. OEM Services and Products Waveguide Optics and Display Engines We offer waveguide optics and related coupling optics combined for use with compact display engines from third parties to form a see-through display module.
Engineering Services and ODM/OEM Products Waveguide Optics and Display Engines We offer waveguide optics and related coupling optics that can be integrated with compact display engines from third parties to form a see-through display module. Waveguide-based display modules require a compatible display engine designed for the intended optical architecture and performance requirements.
Vuzix has built a strong intellectual property portfolio spanning over 25 years of experience in wearable display technology. This includes patents covering waveguide optics and nano-imprinting techniques, custom micro-display engine designs, and advanced AR computing interfaces, and ergonomic wearable form factors.
We have built an intellectual property portfolio over more than 28 years in wearable display technology, including patents and know-how related to waveguide optics and nano-imprinting, microdisplay engine designs, AR computing interfaces, and ergonomic wearable form factors. We believe our technology and manufacturing capabilities provide competitive differentiation in high-performance wearable display solutions.
Competitors include or have included: Google (formerly Google Glass), RealWear, Lumus, Kopin, Optinvent, Brother, Garmin, BAE Systems, and Rockwell Collins. We believe that the market opportunity for these products has been limited primarily to trial tests and smaller rollouts in enterprise markets rather than broad commercial volume purchases.
Competition – Monocular Smart Glasses The monocular smart glasses segment primarily serves enterprise, industrial, defense and security applications. Competitors include or have included Google (formerly Google Glass), RealWear, Lumus, Kopin, Optinvent, Brother, Garmin, BAE Systems, and Rockwell Collins.
Our waveguide technology, combined with advanced micro-display projectors, is engineered to meet next-generation AR performance requirements, delivering: • high-brightness, full-color micro-displays for clear visibility in any environment; • compact, lightweight optics that enhance wearability for all-day use; and 6 ​ Table of Contents • superior image clarity and resolution, optimizing user experience in AI/AR applications.
Our waveguide technology, combined with microdisplay projectors, is designed to support performance requirements for see-through wearable displays, including: • high-brightness, full-color display capability for a range of lighting conditions; ​ • compact optics intended to support wearable form factors; and ​ • image clarity and resolution to support AI/AR applications. 6 ​ Table of Contents We believe our waveguides, when coupled with appropriate third-party display engine technologies, address key performance parameters for next generation AR products.
As near-eye display technology has evolved, we transitioned towards enterprise-focused Smart Glasses, leveraging waveguide optics and available microdisplays to develop lightweight, hands-free computing solutions that function as wearable displays with the look and feel of fashion forward all-day wearable solutions.
As near-eye display technology matured, we shifted our focus away from VR and video viewers toward enterprise smart glasses, leveraging our waveguide optics and available microdisplays to develop lightweight, hands-free wearable computing solutions designed for eyewear-style form factors suitable for extended wear.
Most of our finished products today are currently sold under the Vuzix brand name.
We also employ marketing services firms to help prepare brochures, packaging, tradeshow messaging and advertising campaigns, focused on customers in our target markets. Most of our finished products today are currently sold under the Vuzix brand name.
We feel our innovative Smart Glasses represent the forefront of AR and AI-powered wearables, providing hands-free computing solutions across multiple markets while paving the way for broader adoption of smart eyewear. 5 ​ Table of Contents Mobilium® Logistics Mobility Software In 2022, we acquired Moviynt®, a boutique-specialized software firm that is a US-based SAP Certified ERP platform software solution provider, to support Smart Glasses and hand-held mobile phones and scanners used in logistics, warehousing and manufacturing applications.
Mobilium® Logistics Mobility Software In 2022, we acquired Moviynt®, which is an SAP Certified ERP platform software solution provider that supports Smart Glasses and handheld mobile phones and scanners used in logistics, warehousing and manufacturing applications.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur failure to comply with past, present and future similar laws could result in reduced sales of our products, substantial product inventory write-offs, reputational damage, penalties and other sanctions, which could harm our business and financial condition. We also expect that our products will be affected by new environmental laws and regulations on an ongoing basis.
Biggest changeChanges in interpretation or enforcement of these requirements could increase our compliance costs or impose additional obligations. Failure to comply with these or similar laws, whether past, present, or future, could result in reduced product sales, inventory write-offs, reputational damage, fines, penalties, or other sanctions, any of which could materially harm our business and financial condition.
The size, resources and brand name of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our revenue and profitability. The market for head-worn display devices, including AR and AI Smart Glasses, is highly competitive.
The size, resources and brand name of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our revenue. The market for head-worn display devices, including AR and AI Smart Glasses, is highly competitive.
Summary of Risk Factors: ● We have incurred net losses since our inception and may continue to incur losses. ● We operate in a highly competitive market and the size, resources and brand name of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our revenue and profitability. ● We depend on advances in technology by other companies and if those advances do not materialize or are not accessible to us, some of our anticipated new products could be delayed or cancelled. ● Our products could infringe on the intellectual property rights of others. ● If we lose our rights under our third-party technology licenses, our operations could be adversely affected.
Summary of Risk Factors: ● We have incurred net losses since our inception and may continue to incur losses. ● We operate in a highly competitive and complex market and the size, resources and brand name of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our revenue. ● We depend on advances in technology by other companies and if those advances do not materialize or are not accessible to us, some of our anticipated new products could be delayed or cancelled. ● Our products could infringe on the intellectual property rights of others. ● If we lose our rights under our third-party technology licenses, our operations could be adversely affected.
The following factors could present difficulties to us: ● Managing our ongoing research and development efforts associated with the development of new products based on emerging and innovative technologies; ● Managing product quality issues to minimize higher-than-expected warranty claims or returns that could harm our business and operating results; 13 ​ Table of Contents ● Managing our rights under our third-party technology licenses to avoid losing any competitive advantages in the market or the ability to commercialize certain products or technologies completely, which could substantially decrease our revenues; ● Managing our marketing initiatives effectively to generate sufficient levels of product and brand awareness; ● Managing our technical support, firmware or software updates on products to maintain customer satisfaction; ● Managing the need to replace and regularly introduce on a timely basis new products and technologies, enhance existing products, and effectively stimulate customer demand for new products and upgraded or enhanced versions of our existing products; and ● Managing the maintenance and further development of our sales channels for our products, including developing and supporting our value-added resellers (VARs), distributors and retail sales channels, many of which offer products from several different manufacturers and could give a higher priority to selling other companies’ products.
The following factors could present difficulties for us: ● Managing our ongoing research and development efforts associated with the development of new products based on emerging and innovative technologies; ● Managing our rights under our third-party technology licenses to avoid losing any competitive advantages in the market or the ability to commercialize certain products or technologies completely, which could substantially decrease our revenues; ● Managing our marketing initiatives effectively to generate sufficient levels of product and brand awareness; ● Managing product quality issues to minimize higher-than-expected warranty claims or returns that could harm our business and operating results; ● Managing our technical support, firmware or software updates on products to maintain customer satisfaction; ● Managing the need to replace and regularly introduce on a timely basis new products and technologies, enhance existing products, and effectively stimulate customer demand for new products and upgraded or enhanced versions of our existing products; and ● Managing the maintenance and further development of our sales channels for our products, including developing and supporting our value-added resellers (VARs), distributors and retail sales channels, many of which offer products from several different manufacturers and could give a higher priority to selling other companies’ products.
Further, our current and prospective competitors may consolidate with each other or acquire companies that will allow them to develop products that better compete with our products, which would intensify the competition that we face and may also disrupt or lead to termination of our distribution, technology and content partnerships.
Further, our current and prospective competitors may consolidate with each other or acquire companies that will allow them to develop products that better compete with our products, which would intensify the competition that we face and may also disrupt or lead to termination of our distribution, technology, software, and/or content partnerships.
Our products are subject to U.S. export controls, including the Commerce Department’s Export Administration Regulations and various economic and trade sanctions regulations established by the Treasury Department’s Office of Foreign Assets Controls, and exports of our products must be made in compliance with these laws.
Our products are subject to U.S. export controls, including the Commerce Department’s Export Administration Regulations and various economic and trade sanctions regulations established by the Treasury Department’s Office of Foreign Assets Control, and exports of our products must be made in compliance with these laws.
If we experience any significant disruption in the operation of our manufacturing facility or a serious failure of a critical piece of equipment, we may be unable to supply products to our customers in a timely manner.
If we experience any significant disruption in the operation of our manufacturing facility or a serious failure of a critical piece of equipment or tooling, we may be unable to supply products to our customers in a timely manner.
The new U.S. government administration is currently altering its approach to international trade policy, including through the potential termination, of certain existing bilateral or multilateral trade agreements and treaties and the imposition of tariffs on a wide range of products and other goods from China, Canada, Mexico, and other countries in Europe and Asia.
The current U.S. government administration is currently altering its approach to international trade policy, including through the potential termination of certain existing bilateral or multilateral trade agreements and treaties and the imposition of tariffs on a wide range of products and other goods from China, Canada, Mexico, and other countries in Europe and Asia.
In addition, we expect that our expenses relating to product development and research, sales and marketing, as well as our general and administrative costs, may increase as our business grows. If we do not achieve and maintain profitability, our financial condition will ultimately be materially and adversely affected, and we would eventually be required to raise additional capital.
In addition, we expect that our expenses relating to product development and research, sales and marketing, as well as our general and administrative costs, may increase as our business grows. If we do not achieve and maintain profitability, our financial condition will be materially and adversely affected, and we would be required to raise additional capital.
There are a number of competing providers of micro-display-based personal display technology, including smart glasses, and we may fail to capture a substantial portion of the personal wearable display market. In addition to competing with direct view displays, we also compete with micro-display-based personal and wearable display technologies that have been developed by many other companies.
There are a number of competing providers of microdisplay-based personal display technology, including smart glasses, and we may fail to capture a substantial portion of the personal wearable display market. In addition to competing with direct view displays, we also compete with microdisplay-based personal and wearable display technologies that have been developed by many other companies.
Travers is critical to the strategic direction and overall management of our Company as well as our research and development process. The loss of Mr. Travers could adversely affect our business, financial condition, and operating results. We do not carry key person life insurance on any of our senior management or other key personnel.
Travers, the Company’s founder, is critical to the strategic direction and overall management of our Company as well as our research and development process. The loss of Mr. Travers could adversely affect our business, financial condition, and operating results. We do not carry key person life insurance on any of our senior management or other key personnel.
We have experienced production interruptions in the past and no assurance can be given that we will not lose potential sales or be able to meet production orders due to future production interruptions in our manufacturing lines. Our waveguide and display engine products are subject to lengthy OEM development periods.
We have experienced production interruptions in the past and no assurance can be given that we will not lose potential sales or be able to meet production orders due to future production interruptions in our manufacturing lines. Our waveguide and display engine products sales to third parties are subject to lengthy OEM development periods.
Any worsening of global economic, financial, or public health conditions, including global pandemics, such as COVID-19, could materially adversely affect (i) demand for our current and future products; (ii) our ability to raise, or the terms of, needed capital; and (iii) the supply of components for our products.
Any worsening of global economic, financial, political, social, or public health conditions, including global pandemics, such as COVID-19, could materially adversely affect (i) demand for our current and future products; (ii) our ability to raise, or the terms of, needed capital; and (iii) the supply of components for our products.
Operational Risks The manufacture of waveguides encompasses several complex processes, and several steps of our production processes are dependent upon certain critical machines and tools which could result in delivery interruptions, which could adversely affect our operating results. Our product technology and manufacturing processes are evolving which can result in production challenges and difficulties.
Operational Risks The design, tooling and manufacture of waveguides encompasses several complex processes, and several steps of our production processes are dependent upon certain critical machines and tools which could result in delivery interruptions, which could adversely affect our operating results. Our product technology and manufacturing processes are evolving, which can result in production challenges and difficulties.
We compete against established, well-known diversified consumer electronics manufacturers including Samsung Electronics Co., Sony Corporation, Meta, LG Electronics (LGE), HTC, and Lenovo, and many of our current competitors have substantial market share, longer operating histories, larger intellectual property portfolios, diversified product lines, ability to bundle competitive offerings with our products and services, well-established supply and distribution systems, strong worldwide brand recognition and greater financial, marketing, research and development and other resources than we do.
We compete against established, well-known diversified consumer electronics manufacturers including Samsung Electronics Co., Sony Corporation, Meta, LG Electronics (LGE), HTC, TCL, and Lenovo, and many of our current competitors have substantial market share, longer operating histories, larger intellectual property portfolios, diversified product lines, ability to bundle competitive offerings including software products and cloud services with their products, well-established supply and distribution systems, strong worldwide brand recognition and greater financial, marketing, research and development and other resources than we do.
The trading price of our common stock has been subject to wide fluctuations in response to quarter-to-quarter variations in results of operations, announcements of technological innovations or new products introduced by us or our competitors, general conditions in the wearable, wireless communications, consumer electronics, semiconductor and display markets, changes in our operating results estimates by financial analysts or other events or factors.
The trading price of our common stock has been subject to wide fluctuations in response to quarter-to-quarter variations in results of operations, announcements of technological innovations or new products introduced by us or our competitors, general conditions in the wearable, wireless communications, software applications (including AI), consumer electronics, semiconductor and display markets, changes in our operating results estimates by financial analysts or other events or factors.
Such activities might not result in useful technologies or components for us. If micro-display-based personal displays or near-eye displays do not gain greater acceptance in the market for head worn or mobile displays, our business strategy may fail.
Such activities might not result in useful technologies or components for us. If microdisplay-based personal displays or near-eye displays do not gain greater acceptance in the market for head worn or mobile displays, our business strategy may fail.
There is uncertainty as to whether we would seek to, or whether we could successfully, apply this exclusive forum provision to any actions that may be brought against us under the Securities Acts. 21 ​ Table of Contents Additional stock offerings in the future may dilute then existing stockholders’ percentage ownership of our Company.
There is uncertainty as to whether we would seek to, or whether we could successfully, apply this exclusive forum provision to any actions that may be brought against us under the Securities Acts. Additional stock offerings in the future may dilute the existing stockholders’ percentage ownership of our Company.
We depend on advances in technology by other companies and if those advances do not materialize, some of our anticipated new products could be delayed or cancelled. We rely on and will continue to rely on technologies (including micro-displays, mobile computing electronics and operating systems) that are developed and produced by other companies.
We depend on advances in certain technology by other companies and if those advances do not materialize, some of our anticipated new products could be delayed or cancelled. We rely on and will continue to rely on technologies (including microdisplays, mobile computing electronics and operating systems) that are developed and produced by other companies.
In addition, the public stock markets recently have experienced high price and trading volatility. The risks related to rising inflation, rising interest rates and the imposition of tariffs could have a material impact on our revenues and costs.
In addition, the public stock markets have recently experienced high price and trading volatility. The risks relating to inflation, interest rates and the imposition of tariffs could have a material impact on our revenues and costs.
We may be unable to produce our products in sufficient quantity and quality to maintain existing customers and attract new customers. In addition, we may experience manufacturing problems which could result in delays in delivery of orders or product introductions. We currently do not have full equipment redundancy in our manufacturing facility.
We may be unable to produce our products in sufficient quantity and quality to maintain existing customers and attract new customers. In addition, we may experience manufacturing problems which could result in delays in delivering orders or product introductions. We currently do not have full equipment redundancy in our manufacturing facility or tooling.
We will be able to protect our intellectual property from unauthorized use by third parties only to the extent that these assets are covered by valid and enforceable patents, trademarks, copyrights or other intellectual property rights, or are effectively maintained as trade secrets.
We will be able to protect our intellectual property from unauthorized use by third parties only to the extent that these assets are covered 23 ​ Table of Contents by valid and enforceable patents, trademarks, copyrights or other intellectual property rights, or are effectively maintained as trade secrets.
Given our capital plans, needs and expectations, we may issue additional shares of common stock, preferred stock or securities convertible or exercisable for shares of common stock, including convertible preferred stock, convertible notes, stock options or warrants. The issuance of additional securities in the future will dilute the percentage ownership of the then existing stockholders.
Given our capital plans, needs and expectations, we may issue additional shares of common stock, preferred stock or securities convertible or exercisable for shares of common stock, including convertible preferred stock, convertible notes, warrants, and equity incentive awards. The issuance of additional securities in the future will dilute the percentage ownership of the then existing stockholders.
This volatility has significantly affected the market prices of securities of many technology companies for reasons frequently unrelated to the operating performance of the specific companies. These broad market fluctuations may adversely affect the market price of our common stock. There is uncertainty regarding the exclusive forum clause in our amended and restated bylaws.
These matters can significantly affect the market prices and price volatility of securities of many technology companies for reasons frequently unrelated to the operating performance of the specific companies. These broad market fluctuations may adversely affect the market price of our common stock. There is uncertainty regarding the exclusive forum clause in our amended and restated bylaws.
As of the date of this filing, we have 246 issued U.S. and foreign patents and 180 pending U.S. and foreign patent applications. We apply for patents covering our products, services, technologies and designs, as we deem appropriate. We may fail to apply for patents on important products, services, technologies or designs in a timely fashion, or at all.
As of the date of this filing, we have 306 issued U.S. and foreign patents and 202 pending U.S. and foreign patent applications. We apply for patents covering our products, services, technologies and designs, as we deem appropriate. We may fail to apply for patents on important products, services, technologies, processes or designs in a timely fashion, or at all.
If we do not pay dividends, our common stock may be less valuable because a return on a stockholders’ investment will only occur if our stock price appreciates. Our stock price may be volatile in the future.
If we do not pay dividends, our common stock may be less valuable because a return on a stockholders’ investment will only occur if our stock price appreciates. 19 ​ Table of Contents Our stock price may be volatile in the future.
We cannot predict the timing, strength, or duration of any economic slowdown or subsequent economic recovery, or such impact on the display industry. Due to our significant level of international operations, including the use of foreign suppliers and contract manufactures, we are subject to international operational, financial, legal, political and public health risks which could harm our operating results.
We cannot predict the timing, strength, or duration of any future economic slowdown or subsequent economic recovery, or such impact on the wearable display industry. 16 ​ Table of Contents Due to our significant level of international operations, including the use of foreign suppliers and contract manufacturers, we are subject to international operational, financial, legal, political and public health risks which could harm our operating results.
These requirements could adversely affect the sourcing, availability and pricing of 23 ​ Table of Contents the materials used in the manufacture of components used in our products.
These requirements could adversely affect the sourcing, availability and pricing of the materials used in the manufacture of components used in our products.
Changes in our management could have an adverse effect on our business and, in particular, while our staff is relatively small with just under 70 employees and full-time foreign contractors globally, we are dependent upon the active participation of several key management personnel, including Paul Travers, our President and Chief Executive 18 ​ Table of Contents Officer. Mr.
Changes in our management could have an adverse effect on our business and, in particular, while our staff is relatively small with 88 employees and full-time contractors globally, we are dependent upon the active participation of several key management personnel, including Paul Travers, our President and Chief Executive Officer. Mr.
Our failure to obtain required import or export approval for our products could harm our international and domestic sales and adversely affect our revenue.
Our failure to obtain required 22 ​ Table of Contents import or export approval for our products could harm our international and domestic sales and adversely affect our revenue.
General Business and Industry Risks We have incurred net losses since our inception and may continue to incur losses. We reported a net loss of $73,538,157 for the year ended December 31, 2024; $50,149,077 for the year ended December 31, 2023, and $40,763,573 for the year ended December 31, 2022.
General Business and Industry Risks We have incurred net losses since our inception and may continue to incur losses. We reported a net loss of $32,273,128 for the year ended December 31, 2025; $73,538,157 for the year ended December 31, 2024, and $50,149,077 for the year ended December 31, 2023.
If we are unable to access third-party platforms or technologies, or if our access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies are delayed or change without notice to us, our business and operating results could be adversely affected.
Our business depends in part on access to third-party platforms or technologies, and if the access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.
Any of the foregoing could disrupt and harm our business and financial condition. Our operating results may be adversely impacted by worldwide political, economic, public health uncertainties, wars and specific conditions in the markets we address.
Any of these outcomes could adversely affect our business, financial condition, and results of operations. Our operating results may be adversely impacted by worldwide political, economic, public health uncertainties, wars and specific conditions in the markets we address.
Advances in direct view LCD and OLED technology, microLED or other technologies, including foldable and stretchable displays may overcome current market limitations and permit them to remain or become more attractive technologies for personal viewing applications, which could limit the potential market for our near-eye display and computing technology and cause our business strategy to fail.
Advances in direct view LCD and OLED technology, microLED or other technologies, including foldable and stretchable displays may overcome their current market limitations and permit them to remain or become more attractive technologies for most personal viewing applications, which, along with general public acceptability of wearing smart glasses, could limit the potential market for our near-eye display and wearable computing technology and cause our business strategy to fail.
We have an accumulated deficit of $367,522,950 as of December 31, 2024. We may not achieve or maintain profitability in the future. We will need to increase sales in order to achieve and maintain profitability.
We have an accumulated deficit of $399,858,410 as of December 31, 2025. We may not achieve or maintain profitability in the future. We will need to increase sales in order to achieve and maintain profitability.
Although we do not currently enter into currency option contracts or engage in other hedging activities, we may do so in the future. There is no assurance that we will undertake any such hedging activities or that, if we do so, they will be successful in reducing the risks to us of our exposure to foreign currency fluctuations.
There is no assurance that we will undertake any such hedging activities or that, if we do so, they will be successful in reducing the risks to us of our exposure to foreign currency fluctuations.
Since our distributors and VARs would act as intermediaries between us and the end user customers or resellers, we would be required to rely on our distributors to accurately report inventory levels and production forecasts.
Our VAR and distributor relationships may reduce our ability to forecast sales and increase risks to our business. Since our distributors and VARs would act as intermediaries between us and the end user customers or resellers, we would be required to rely on our distributors to accurately report inventory levels and production forecasts.
We require employees, contractors, consultants, financial advisors, suppliers and strategic partners to enter into confidentiality and intellectual property assignment agreements (as appropriate), but these agreements may not provide sufficient protection for our trade secrets, know-how or other proprietary information. 25 ​ Table of Contents Human Capital Resources As of December 31, 2024, our consolidated business employed 76 individuals.
We require employees, contractors, consultants, advisors, suppliers and strategic partners to enter into confidentiality and intellectual property assignment agreements (as appropriate), but these agreements may not provide sufficient protection for our trade secrets, know-how or other proprietary information.
Increased competition may result in pricing pressures and reduced profit margins and may impede our ability to increase the sales of our products, any one of which could substantially harm our business and results of operations. Our lack of long-term purchase orders and commitments from our customers may lead to a rapid decline in our sales.
Increased competition may result in pricing pressures and 14 ​ Table of Contents reduced profit margins and may impede our ability to increase the sales of our products, any one of which could substantially harm our business and results of operations.
We operate in a highly competitive and complex market and believe our future success depends in part on our ability to effectively manage the growth and increased complexity of our business.
If we fail to achieve or maintain profitability, the market price of our common stock may decline. 13 ​ Table of Contents We operate in a highly competitive and complex market and believe our future success depends in part on our ability to effectively manage the growth and increased complexity of our business.
Regulations related to conflict minerals may cause us to incur additional expenses and could limit the supply and increase the costs of certain materials used in the manufacturing of our products.
Any of these developments could have a material adverse effect on our business, financial condition, and results of operations. Regulations related to conflict minerals may cause us to incur additional expenses and could limit the supply and increase the costs of certain materials used in the manufacturing of our products.
To the extent that trade tariffs and other restrictions imposed by the United States or other countries increase the price of, or limit the amount of, our products or components or materials used in our products imported into the United States or other countries, or create adverse tax consequences, the sales, cost or gross margin of our products may be adversely affected and the demand from our customers for products and services may be diminished. 24 ​ Table of Contents We collect, store, process and use portions of our customers’ personally identifiable information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, information security and data protection.
To the extent that trade tariffs and other restrictions imposed by the United States or other countries increase the price of, or limit the amount of, our products or components or materials used in our products imported into the United States or other countries, or create adverse tax consequences, the sales, cost or gross margin of our products may be adversely affected and the demand from our customers for products and services may be diminished.
This may require us to manage a more complex supply chain and monitor the financial condition and credit worthiness of our distributors and VARs and their major end user customers. Our failure to manage one or more of these risks could result in excess inventory or shortages that could adversely impact our operating results and financial condition.
This may require us to manage a more complex supply chain and monitor the financial condition and credit worthiness of our distributors and VARs and their major end user customers.
We also may face reputational harm if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to alter our products, processes or sources of supply to avoid such materials. We could be adversely affected by violations of anti-bribery laws in other jurisdictions in which we operate.
We also may face reputational harm if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to alter our products, processes or sources of supply to avoid such materials, as well as our contract manufacturers breaching their local labor laws.
The global nature of our business and the significance of our international revenue create various domestic and local regulatory challenges and subject us to risks associated with our international operations.
We could be adversely affected by violations of anti-bribery laws in other jurisdictions in which we operate. The global nature of our business and the significance of our international revenue create various domestic and local regulatory challenges and subject us to risks associated with our international operations.
If our products are unable to capture a reasonable portion of the smart wearable display market, our business strategy may fail. Our products may experience declining unit prices and we may not be able to offset that decline with production cost decreases or higher unit sales.
Our products may experience declining unit prices and we may not be able to offset that decline with production cost decreases or higher unit sales.
The majority of our current expenditures are incurred in U.S. dollars and many of our components come from countries that currently peg their currency against the U.S. dollar. If the pegged exchange rates change adversely or are allowed to float up, additional U.S. dollars will be required to fund our purchases of these components.
The majority of our current expenditures are incurred in U.S. dollars and many of our components come from countries that currently peg their currency against the U.S. dollar.
We are also subject to various environmental laws and governmental regulations related to toxic, volatile, and other hazardous chemicals used in the third-party components incorporated into our products, including the Restriction of Certain Hazardous Substances Directive, or RoHS and the EU Waste Electrical and Electronic Equipment Directive, or the WEEE Directive, as well as the implementing legislation of the EU member states, such Directive which restricts the distribution of products within the EU that exceed very low maximum concentration amounts of certain substances, including lead.
We are subject to environmental laws and regulations related to the use of toxic, volatile, or otherwise hazardous substances in third party components incorporated into our products, including the Restriction of Certain Hazardous Substances (RoHS) Directive and the EU Waste Electrical and Electronic Equipment (WEEE) Directive, as well as similar laws and regulations in China, Japan, and other jurisdictions.
We may not be able to raise any necessary capital on commercially reasonable terms or at all. If we fail to achieve or maintain profitability, the market price of our common stock may decline.
We may not be able to raise any necessary capital on commercially reasonable terms or at all.
Our Executive Vice President and Chief Financial Officer, Grant Russell, a Canadian citizen, currently has his principal residence in Vancouver, Canada and a second residence in West Henrietta, New York. If he becomes unable to travel to and work in the United States, his ability to perform some of his duties could be materially adversely affected.
Our Executive Vice President and Chief Financial Officer, Grant Russell, a Canadian citizen, currently has his principal 17 ​ Table of Contents residence in Vancouver, Canada and a second residence in West Henrietta, New York.
Numerous other start-up companies have announced their intentions to offer smart glasses and AI/AR products. Most of our competitors have greater financial, marketing, distribution and technical resources than we do. Moreover, our competitors may succeed in developing new micro-display-based personal display technologies and near-eye display products that are more affordable or have more desirable features than our technology.
Numerous other companies have announced their intentions to offer smart glasses and AI/AR products. Most of our competitors have greater financial, marketing, distribution and technical resources than we do.
We have in the past experienced end-of-life issues and expect to see more shortages in the future. As such, the availability of these components may be unpredictable.
We have experienced component end of life issues in the past and expect to encounter additional shortages and supply constraints in the future, making component availability unpredictable.
We intend to sell some of our waveguides as components and in some cases, related display engines with micro-displays, to ODMs/OEMs with the objective that they then incorporate them into products they sell. To date, this business has not been a material contributor to our overall revenues, but it could become so in the future.
We intend to sell certain of our waveguides, and in some cases related display engines with microdisplays, as components to ODMs/OEMs for incorporation into their products. To date, these sales have not been a material contributor to our revenues, and there can be no assurance they will become so in the future.
We do not manufacture the integrated circuit chip sets, microprocessors, wireless chips, optics, micro-displays, backlights, projection engines, printed circuit boards or other electronic components which are used in our products.
We do not manufacture the integrated circuit chip sets, microprocessors, wireless chips, optics, microdisplays, backlights, some projection engines, printed circuit boards, or other electronic components used in our products. Instead, we depend on third party suppliers and independent contractors, including contract manufacturers, to source, manufacture, and assemble all or portions of our products.
In the future, large consumer electronics manufacturers of those devices, such as Apple Inc., Samsung, LGE, Lenovo, Alphabet/Google, Snap, Garmin, Meta/Facebook, Microsoft and others may design or develop products similar to ours. In addition to competition or potential competition from large, established companies, new companies may emerge and offer competitive products.
Moreover, smartphones, tablets, and new wearable devices with ever-expanding video display screens, including foldable and expandable screens, and ever-increasing computing power have significantly improved the mobile personal computing experience. In the future, large consumer electronics manufacturers of those devices, such as Apple, Samsung, LGE, Lenovo, Alphabet/Google, Snap, Garmin, Meta/Facebook, Microsoft and others may design or develop products similar to ours.
In our current business and as we expand into new markets and product categories, we must comply with a wide variety of laws, regulations, standards and other requirements governing, among other things, electrical safety, wireless emissions, health and safety, e-commerce, consumer protection, export and import requirements, hazardous materials usage, product-related energy consumption, packaging, recycling and environmental matters.
Our current operations and our expansion into new markets and product categories subject us to a wide array of domestic and international laws, regulations, standards, and other requirements governing, among other things, electrical safety, wireless emissions, health and safety, e-commerce, cybersecurity, consumer protection, and export and import controls.
Federal Communications Commission (FCC) regulating electromagnetic radiation in order to be sold in the United States and with comparable requirements of the regulatory authorities of the EU, Japan, China and other jurisdictions in order to be sold in those jurisdictions. Our AI/AR smart glasses products include wireless radios and receivers which require additional emission testing.
Our products must comply with regulations governing electromagnetic radiation, including those administered by the U.S. Federal Communications Commission (FCC), in order to be sold in the United States, as well as comparable requirements of regulatory authorities in the European Union, Japan, China, and other jurisdictions.
The time elapsed between initial sampling of our products by ODMs/OEMs, the custom design of our products to meet specific product requirements, and the ultimate incorporation of our products into their ODM/OEM products can be significant, often with a duration of between six months to two years or even longer.
ODMs and OEMs determine whether and when to incorporate our products during their development cycles, which can be lengthy and unpredictable. The period between initial product sampling, customization to meet specific customer requirements, qualification, and ultimate incorporation into an ODM or OEM product may extend from six months to two years or longer.
Moreover, our expense levels and the amounts we invest in capital equipment and new product development are based in part on our expectations of future sales and, if our expectations regarding future sales are inaccurate, we may be unable to reduce costs in a timely manner to adjust for sales shortfalls.
Furthermore, our operating expenses and investments in capital equipment and new product development are based in part on expectations of future sales. If actual demand does not align with these expectations, we may be unable to reduce costs or adjust our operations in a timely manner, which could adversely affect our gross margins, operating results, and financial condition.
Any of these could have a material adverse effect on our competitive position, results of operations, financial condition or liquidity. Due to the evolving nature of such risks, the impact of any potential incident cannot be predicted. ​ We may lose the services of key management personnel and may not be able to attract and retain other necessary personnel.
The impact of any future cybersecurity incident cannot be predicted with certainty. We may lose the services of key management personnel and may not be able to attract and retain other necessary personnel.
To date, our expenditures for environmental compliance have not had a material impact on our results of operations or cash flows and, although we cannot predict the future impact of such laws or regulations, they will likely result in additional costs and may increase penalties associated with violations or require us to change the content of our products or how they are manufactured, which could have a material adverse effect on our business and financial condition.
While our historical expenditures for environmental compliance have not had a material impact on our results of operations or cash flows, we expect that ongoing and future environmental laws and regulations will continue to affect our products and operations and may result in additional costs, increased penalties for non-compliance, or requirements to modify product content or manufacturing processes.
All of our customers for our Vuzix branded products issue purchase orders solely at their own discretion, often shortly before the requested date of shipment. These customers are generally able to cancel orders (without penalty) or delay the delivery of products on relatively short notice.
Instead, customers typically issue purchase orders at their discretion, often shortly before the requested shipment date. These purchase orders may be canceled, reduced, or delayed by customers, in many cases without penalty and on relatively short notice. In addition, our customers may decide to discontinue purchasing our products at any time and for any reason.
If those customers do not continue to purchase our products, our sales volume could decline rapidly with little or no warning. 14 ​ Table of Contents We cannot currently rely on long-term purchase orders or commitments to protect us from the negative financial effects of a decline in demand for our products.
Because we cannot rely on long-term purchase orders or contractual commitments, we have limited visibility into future demand and are not protected from sudden declines in customer orders. As a result, our sales volume may decline rapidly with little or no warning if customers reduce, delay, or cancel orders or choose not to continue purchasing our products.
If we fail to attract and retain the technical and managerial personnel required to be successful, our business, operating results and financial condition could be materially adversely affected.
As a result, we may be required to increase compensation, incentive awards, equity-based compensation, and other benefits, which could increase our operating expenses and adversely affect our results of operations. If we are unable to attract, retain, and motivate qualified personnel, our business, financial condition, and results of operations could be materially adversely affected.
Additionally, we use our West Henrietta, New York facility for the production of waveguides and their related display engines and intend to do so for some time. In the future, our mature products could have their final assembly performed outside the United States, including at facilities owned by our new strategic partner Quanta Computer.
We source components from third party suppliers, utilize contract manufacturers for certain assemblies, and conduct specific manufacturing activities in West Henrietta, New York. In the future, final assembly of certain products may be performed outside the United States, including at facilities operated by our new strategic partner, Quanta Computer.
In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules. Further, the electronic components we utilize can go end-of-life due to technological changes, which can require us to invest in implementation costs of alternatives and the potential for the forced obsolescence of other related items.
We are subject to risks of supply shortages, long lead times, changes or discontinuation of components, and end of life obsolescence due to technological changes, which may require product redesigns, increased costs, or the forced obsolescence of related inventory. In addition, lengthy component lead times limit our ability to rapidly adjust production quantities or delivery schedules.
Legal and Regulatory Risks ​ Our business and products are subject to government regulation and we may incur additional compliance costs or, if we fail to comply with applicable regulations, may incur fines or be forced to suspend or cease operations.
Legal and Regulatory Risks ​ Our business and products are subject to extensive government regulation, and failure to comply with applicable laws and regulations, or changes in such laws and regulations, could adversely affect our business, financial condition, and results of operations.
If any of these third-party contractors or suppliers were unable or unwilling to supply these or other critical components to us, we would be unable to manufacture and sell our products until a suitable replacement supplier could be found.
If any of our suppliers or contractors are unable or unwilling to supply required components, experience production disruptions, discontinue their relationship with us, or are affected by events such as government mandated shutdowns related to health epidemics, we may be unable to manufacture and sell our products until suitable replacement suppliers are identified.
Our products may require regulatory approvals or satisfaction of other regulatory concerns in the various jurisdictions in which they are manufactured, sold or both. These requirements create procurement and design challenges that require us to incur additional costs identifying suppliers and manufacturers who 22 ​ Table of Contents can obtain and produce compliant materials, parts and products.
These requirements can create procurement, manufacturing, and design challenges and may require us to incur additional costs to identify and qualify suppliers and manufacturers capable of producing compliant materials, components, and products.
Our human capital and labor issues related to recruiting and retention success is substantially dependent upon our ability to offer competitive salaries and benefits to our employees. We must compete with companies that possess greater financial and other resources than we do and that may be more attractive to potential employees and contractors.
Competition for such talent is intense, and our ability to recruit and retain employees and contractors depends in part on offering competitive compensation and benefits. We compete with companies that have significantly greater financial and other resources and may be more attractive to prospective personnel.
If our products fail to meet our eventual customers’ cost, performance or technical requirements or if unexpected technical challenges arise in the integration of our products into their overall products, our operating results could be significantly and adversely affected.
If our products fail to meet customer cost, performance, reliability, or technical requirements, or if unanticipated technical challenges arise during integration, customers may delay, limit, or abandon adoption of our products. Prolonged development cycles, delays in customer qualification, or failure to achieve design wins could materially and adversely affect our operating results, financial condition, and prospects.
If we fail to do so, our results of operations will be materially and adversely affected. 15 ​ Table of Contents Our business depends in part on access to third-party platforms or technologies, and if the access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.
If we fail to do so, our results of operations will be materially and adversely affected.
In addition, as a result of the rapid pace of technological change, we and our customers, suppliers, subcontractors and other third parties with whom we conduct business continue to rely on legacy systems and software, which can be more vulnerable to cyber threats and attacks.
We are subject to ongoing cybersecurity risks, including threats to our information technology (“IT”) infrastructure, products, and data, as well as to the systems of customers, suppliers, subcontractors, and other third parties with whom we conduct business. We rely extensively on electronic systems to operate our business, manage data, and transact with customers, vendors, and subsidiaries.
Any cyber-attack that attempts to obtain our or our users’ data and assets, disrupt our service, or otherwise access our systems, or those of third parties we use, if successful, could adversely affect our business, operating results, and financial condition, be expensive to remedy, and damage our reputation.
Any of these risks could disrupt our operations, adversely affect our financial condition, and limit our ability to grow internationally. Cybersecurity incidents or failures of our information technology systems, or those of third parties, could adversely affect our business, results of operations, and financial condition.
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Moreover, smartphones, tablets, and new wearable devices with ever-expanding video display screens, including foldable and expandable screens, and ever-increasing computing power have significantly improved the mobile personal computing experience.
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In addition to competition or potential competition from large, established companies, new companies may emerge and offer competitive products.
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In addition, our current customers may decide not to purchase products from us for any reason.
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Our lack of long-term purchase orders or binding commitments from customers could result in significant volatility and a rapid decline in our sales and operating results. We generally do not receive long-term purchase orders or other binding commitments from customers for our Vuzix branded products.
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We typically plan our production and inventory levels based on internal forecasts of customer demand, which are highly unpredictable and can fluctuate substantially. The uncertainty of product orders makes it difficult for us to forecast our sales and allocate our resources in a manner consistent with our actual sales.
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We plan our production schedules, inventory levels, and resource allocation based primarily on internal forecasts of customer demand. These forecasts are inherently uncertain and subject to significant fluctuation. Inaccurate demand forecasts may result in excess or insufficient inventory, inefficient use of capital, and operational challenges.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIncidents are reported internally to members of senior management and/or the Board of Directors as appropriate based on severity and incident type and are also analyzed for external reporting requirements. Our incident response process is also designed to coordinate functions to enable continuity of essential business operation in the event of a cyber crisis. Third Party Service Providers.
Biggest changeOur incident response processes are designed to manage and mitigate cybersecurity risks and to support continuity of essential business operations in the event of a cybersecurity incident. ​ Cybersecurity incidents are reported internally to senior management and, when appropriate based on severity and incident type, to the Board of Directors.
Our main external service provider is US-based and utilizes a 24 x 7 x 365 Service Operation Center (SOC). Program Assessment. We regularly evaluate and seek to improve and mature our cybersecurity processes.
Our main external service provider is US-based and utilizes a 24x7x365 Service Operation Center (SOC). Program Assessment. We regularly evaluate and seek to improve and mature our cybersecurity processes.
We engage third party service providers to expand the capabilities and capacity of our cybersecurity program, including for design, monitoring and testing of the program’s risk prevention and protection measures, and process execution including incident detection, investigation, analysis and response, eradication, and recovery.
Incidents are also evaluated for potential external reporting obligations. ​ Third-Party Service Providers. We engage third party service providers to expand the capabilities and capacity of our cybersecurity program, including for design, monitoring and testing of the program’s risk prevention and protection measures, and process execution including incident detection, investigation, analysis and response, eradication, and recovery.
Cybersecurity threats also include attempts to infiltrate our products or services, including attacks targeting the security, confidentiality, integrity 27 ​ Table of Contents and/or availability of the hardware, software and information installed, stored or transmitted in our products, including after the purchase of those products and when they are incorporated into third-party products, facilities, or infrastructure. ​ Our Cybersecurity Program Our products and services are normally classified as EAR 99 (items not designated under the control) by the U.S. government, but our defense customers may ask us to make some alterations for the environments in which the products will be used.
Cybersecurity threats also include attempts to infiltrate our products or services, including attacks targeting the security, confidentiality, integrity and/or availability of the hardware, software and information installed, stored or transmitted in our products, including after the purchase of those products and when they are incorporated into third-party products, facilities, or infrastructure. ​ Our cybersecurity risk management program is integrated into our enterprise risk management processes and is designed to address risks associated with both our internal systems and our products and services, including risks that may arise after product delivery or when our products are incorporated into third-party systems or infrastructure. ​ Our Cybersecurity Program Our products and services are normally classified as EAR 99 (items not designated under the control) by the U.S. government, but our defense customers may ask us to make some alterations for the environments in which the products will be used.
Our enterprise cybersecurity program aligns with the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) standards, among others. The program includes processes and controls for the deployment of new IT systems by the Company and controls over new and existing system operations.
Our enterprise cybersecurity program has been designed to align, as much as reasonably possible, with the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) standards, among others. The program includes processes and controls for the deployment of new IT systems by the Company and controls over new and existing system operations.
We use these assessments to supplement our own evaluation of the overall health of our program and target improvement areas. Board Oversight and Management’s Role Our Board of Directors has primary oversight responsibility for enterprise cybersecurity risks. The Audit Committee also considers enterprise cybersecurity risks in connection with its financial and compliance risk oversight role.
We use these assessments to supplement our own evaluation of the overall health of our program and target improvement areas. Board Oversight and Management’s Role Our Board of Directors has primary oversight responsibility for cybersecurity risks as part of its oversight of enterprise risk management.
We, or third parties we contract with, monitor and conduct regular testing of these controls and systems, including vulnerability management through active discovery and testing to regularly assess patching and configuration status. In addition, we require our employees to complete annual cybersecurity training, and we regularly conduct simulated phishing and cyber-related communications. Incident Response.
We, or third parties we contract with, monitor and conduct regular testing of these controls and systems, including vulnerability management through active discovery and testing to regularly assess patching and configuration status.
The Chief Financial Officer regularly reports to the Board of Directors on the status of the Company’s cybersecurity program and provides the Board of Directors with the annual assessment by a third party on the Company’s cybersecurity program. 28 ​ Table of Contents Cybersecurity risks are also included with the Company’s annual business risk assessment which is provided to the Board of Directors.
The CFO periodically reports to the Board of Directors regarding the status of the cybersecurity program and provides the Board with the results of periodic third-party assessments of the program. Cybersecurity risks are also included in the Company’s annual enterprise risk assessment presented to the Board of Directors. ​ For more information on risks related to cybersecurity, see Item IA.
For more information on risks related to cybersecurity, see Item IA. "Risk Factors” of this Form 10-K. ​ ​
"Risk Factors” of this Form 10-K. ​ ​
Our cybersecurity program includes monitoring for potential security threats that may lead to vulnerabilities. We evaluate and assign severity levels to incidents, escalate and engage an incident response team based on severity, and manage and mitigate the related risks.
Findings from these assessments are used to inform enhancements to our cybersecurity program. Incident Response Our cybersecurity program includes processes for monitoring, detecting, and responding to cybersecurity incidents. Potential incidents are evaluated and assigned severity levels, and an incident response team is engaged based on the nature and severity of the incident.
Cybersecurity threats include attacks on, or other attempts to infiltrate, our information technology (IT) infrastructure and the IT infrastructure of our customers, suppliers, subcontractors and other third parties, attempting to gain unauthorized access to our confidential or other proprietary information, classified information, or information relating to our employees, customers, and other third parties, or to disrupt our systems or the systems of our customers, suppliers, subcontractors, and other third parties.
As a company that sells products and performs engineering services for defense applications, we recognize that our business may be subject to cybersecurity threats from a variety of threat actors, including those seeking unauthorized access to confidential, proprietary, classified, employee, customer, or third-party information, or attempting to disrupt our systems or the systems of our customers, suppliers, subcontractors, and other-third parties.
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Item 1C. Cybersecurity As a Company selling some products and performing engineering services for defense applications, we may be the target of cyber-attacks from a variety of threat actors.
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Item 1C. Cybersecurity We maintain a cybersecurity risk management program designed to identify, assess, and manage risks from cybersecurity threats to our information technology systems, products, services, and supply chain.
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In addition, we require our employees to complete annual cybersecurity training, and we regularly conduct simulated phishing and cyber-related communications. ​ 24 ​ Table of Contents To supplement our internal capabilities, we engage third-party service providers to support aspects of our cybersecurity program, including monitoring, testing, and incident response activities.
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Our primary external cybersecurity service provider is based in the United States and operates a 24x7x365 security operations center. ​ We periodically assess and evaluate the effectiveness of our cybersecurity controls, policies, and processes, including compliance with applicable regulatory requirements and identification of potential risk areas and improvement opportunities.
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The Audit Committee considers cybersecurity risks in connection with its financial and compliance risk oversight responsibilities. ​ Management is responsible for the day-to-day oversight and operation of the Company’s cybersecurity program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe lease at 30 Becker Road has an original three-year term with an option by the Company to renew for two additional one-year terms at pre-agreed to lease rates. We believe that our West Henrietta facilities are in good operating condition and currently adequately serve our needs and expect to negotiate new lease renewals by November 30, 2025.
Biggest changeWe believe that our West Henrietta facilities are in good operating condition and currently adequately serve our needs and expect to negotiate new lease renewals by November 30, 2027. In April 2025, Vuzix leased a facility located in Milpitas, California upon the purchase of advanced waveguide R&D equipment operating in that space.
Item 2. Properties We lease approximately 39,000 square feet as our main facility at 25 Hendrix Road, West Henrietta, New York, 14586 (a suburb of Rochester). This facility houses our headquarters office, R&D and manufacturing space under an operating lease for the facility that we began occupying in October 2015.
Item 2. Properties We lease approximately 39,000 square feet as our main facility at 25 Hendrix Road, West Henrietta, New York, 14586 (a suburb of Rochester). This facility houses our headquarters office, R&D and manufacturing space under an 25 ​ Table of Contents operating lease for the facility that we began occupying in October 2015.
In October 2022, we leased an additional 12,000 square feet for our new waveguide manufacturing facility at 30 Becker Road, also in West Henrietta, New York. The total base rent contractual payment obligations under these operating leases are currently $726,000 per year.
In October 2022, we leased an additional 12,000 square feet for our new waveguide manufacturing facility at 30 Becker Road, also in West Henrietta, New York. The total base rent contractual payment obligations under these operating leases are currently $675,000 per year.
In Okayama and Kyoto, Japan, we rent offices of 1,000 square feet and 100 square feet, respectively, of office space at a cost of approximately $29,000 per year. These leases are on a month-to-month basis.
The lease for this space is on a month-to-month basis at a cost of $35,000 per month. In Okayama and Kyoto, Japan, we rent office space of 1,000 square feet and 100 square feet, respectively, at a cost of approximately $38,000 per year. These leases are on a month-to-month basis.
The lease at 25 Hendrix Road has an original five-year term with an option by the Company to renew for two additional three-year terms at pre-agreed to lease rates. On January 16, 2024, the Company exercised its second renewal term extending its current lease to November 30, 2025.
The lease at 25 Hendrix Road has an original five-year term with an option by the Company to renew for two additional three-year terms at pre-agreed lease rates. On September 23, 2025, the Company executed lease renewal agreements for both its current properties located in West Henrietta, New York extending the current lease terms to November 30, 2027.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings We are not currently involved in any actual or pending legal proceedings or litigation that we consider to be material, and we are not aware of any such material proceedings contemplated by or against us or involving our property.
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Item 3. Legal Proceedings We are involved in various lawsuits and claims arising in the ordinary course of business, including actions with respect to intellectual property, employment, and contractual matters. In connection with these matters, we assess, on a regular basis, the probability and range of possible loss based upon the developments in these matters.
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A liability is recorded in the consolidated financial statements if it is believed to be probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about future events.
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We regularly review outstanding legal matters to determine the adequacy of the liabilities accrued and related disclosures in consideration of many factors, which include, but are not limited to, past history, scientific and other evidence, and the specifics and status of each matter.
Added
We may change our estimates if our assessment of the various factors changes and the amount of ultimate loss may differ from our estimates, resulting in a material effect on our business, financial condition, results of operations, and/or cash flows.
Added
With respect to these matters, based upon management’s current knowledge, the Company believes that the amount or range of any reasonably possible loss, if any, will not, either individually or in the aggregate, have a material adverse effect on the Company’s financial position, results of operations or cash flows. ​ The Company is not currently party to, nor is its property subject to, any material legal proceedings. ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

67 edited+25 added−24 removed59 unchanged
Biggest changeThe Company expects that these milestones will be achieved in the first half of 2026; • Reductions in our cash annual operating expenses across all operating areas, representing a reduction of at least 20% as compared to 2023 levels vs. 2024 levels, including in the areas of Research and Development, Sales and Marketing and General and Administrative; • Right-sizing of operations across all areas of the Company, including headcount reductions and personnel hiring freezes; • Reduction in the rate of new product introductions and further leveraging of existing platforms to reduce new product development and engineering costs; • Delaying or curtailing discretionary and non-essential capital expenditures not related to near-term product and manufacturing needs, now that our waveguide manufacturing plant expansion has substantially been completed and the license fees payments under the Atomistic License have been completed; 44 ​ Table of Contents • The expected margin contribution upon the commencement of volume manufacturing and sales of waveguides from our new waveguide manufacturing plant, particularly to OEM and ODM customers such as Quanta; • Continued pursuit of further licensing and strategic opportunities around our waveguide technologies with potential ODMs/OEMs, which would include the receipt of upfront licensing fees and on-going supply agreements; and • Reduction in our existing products’ selling prices and higher volume discount levels to turn as much of our inventory of finished products into cash and pursue external manufacturers for Vuzix non-waveguide production needs.
Biggest changeManagement’s plans to alleviate the conditions that raise doubt include raising further capital and the implementation of operational improvements and the curtailment of certain development programs, both of which the Company expects will preserve cash. ​ Management’s plans concerning these matters and managing our liquidity include, among other things: 41 ​ Table of Contents ● Reductions in our cash annual operating expenses across all operating areas, including in the areas of Research and Development, Sales and Marketing and General and Administrative; ● Delaying or curtailing discretionary and non-essential capital expenditures not related to near-term product and manufacturing needs and reducing other investing activities for the remainder of our 2026 and 2027 fiscal years; ● The expected margin contribution upon the commencement of volume manufacturing and sales of waveguides from our new waveguide manufacturing plant, particularly to OEM customers; and ● Continued pursuit of licensing and strategic opportunities around our waveguide technologies with potential OEMs, which would include the receipt of upfront licensing fees and on-going supply agreements.
The accounting estimate related to valuation of inventories is considered a “critical accounting estimate” because it is susceptible to changes from period-to-period due to the requirement for management to make estimates relative to each of the underlying factors, ranging from purchasing to sales, production, and after-sale support.
The accounting estimate related to the valuation of inventories is considered a “critical accounting estimate” because it is susceptible to changes from period-to-period due to the requirement for management to make estimates relative to each of the underlying factors, ranging from purchasing to sales, production, and after-sale support.
Cost of product revenues and engineering services are comprised of materials, components, labor, warranty costs, freight costs, manufacturing overhead, software royalties, the depreciation for our tooling and manufacturing equipment, and amortization of software development costs related to the production of our products and rendering of engineering services.
Cost of product revenues and engineering services are comprised of materials, components, labor, warranty costs, freight costs, manufacturing overhead, software royalties, the depreciation for our tooling and manufacturing equipment, and amortization of software development costs related to the production of our products and the rendering of engineering services.
Our research and development expenses consist primarily of compensation costs for personnel, including non-cash stock-based compensation expenses, third-party services, purchases of research supplies and materials, and consulting fees related to research and development.
Our research and development expenses consist primarily of compensation costs for personnel, including non-cash stock-based compensation expenses, third-party services, purchases of research supplies and materials, and consulting fees related to research and development.
The Company will need to grow its business significantly to become profitable and self-sustaining on a cash flow basis or it will be required to cut its operating costs significantly or raise new equity and/or debt capital. ​ These historical financial factors initially raise substantial doubt about the Company’s ability to continue as a going concern.
The Company will need to grow its business significantly to become profitable and self-sustaining on a cash flow basis or it will be required to cut its operating costs significantly or raise new equity and/or debt capital. ​ These historical financial factors initially raise doubt about the Company’s ability to continue as a going concern.
The following table reflects the components of our cost of goods sold: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ % of ​ Year Ended ​ % of ​ Dollar ​ % Increase ​ ​ December 31, 2024 Total Sales December 31, 2023 Total Sales Change (Decrease) ​ Product Cost of Sales ​ $ 3,887,820 68 % $ 7,224,107 60 % $ (3,336,287) (46) % Inventory Reserve for Obsolescence ​ 4,167,917 72 % 4,358,062 36 % (190,145) (4) % Manufacturing Overhead - Unapplied ​ 2,119,380 37 % 1,615,172 13 % 504,208 31 % Depreciation and Amortization ​ 734,456 13 % 886,117 7 % (151,661) (17) % Engineering Services Cost of Sales ​ 444,653 8 % 680,411 6 % (235,758) (35) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Cost of Sales ​ ​ 11,354,226 197 % ​ 14,763,869 122 % ​ (3,409,643) (23) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit (Loss) ​ $ (5,599,670) ​ (97) % $ (2,634,730) (22) % $ (2,964,940) 113 % ​ For the year ended December 31, 2024, there was a gross loss from total sales of $5,599,670, or 97% of total sales as compared to a gross loss of $2,634,730, or 22% in 2023.
The following table reflects the components of our cost of sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ % of ​ Year Ended ​ % of ​ Dollar ​ % Increase ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ Total Sales ​ ​ ​ December 31, 2023 ​ ​ ​ Total Sales ​ ​ ​ Change ​ ​ ​ (Decrease) ​ Product Cost of Sales ​ $ 3,887,820 68 % $ 7,224,107 60 % $ (3,336,287) (46) % Inventory Reserve for Obsolescence ​ 4,167,917 72 % 4,358,062 36 % (190,145) (4) % Manufacturing Overhead - Unapplied ​ 2,119,380 37 % 1,615,172 13 % 504,208 31 % Depreciation and Amortization ​ 734,456 13 % 886,117 7 % (151,661) (17) % Engineering Services Cost of Sales ​ 444,653 8 % 680,411 6 % (235,758) (35) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Cost of Sales ​ ​ 11,354,226 197 % ​ 14,763,869 122 % ​ (3,409,643) (23) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Loss ​ $ (5,599,670) ​ (97) % $ (2,634,730) (22) % $ (2,964,940) 113 % ​ For the year ended December 31, 2024, there was a gross loss from total sales of $5,599,670, or 97% of total sales as compared to a gross loss of $2,634,730, or 22% in 2023.
General and administrative expenses include professional fees, investor relations (IR) costs, salaries and related stock compensation, travel costs, office and rental costs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ % of ​ Year Ended ​ % of ​ Dollar ​ % Increase ​ ​ December 31, 2024 Total Sales December 31, 2023 Total Sales Change (Decrease) ​ General and Administrative Expenses ​ $ 8,933,952 155 % $ 8,933,458 74 % $ 494 0 % Related Stock-based Compensation (non-cash) ​ ​ 8,296,341 144 % ​ 9,658,727 80 % ​ (1,362,386) (14) % Total General and Administrative ​ $ 17,230,293 299 % $ 18,592,185 153 % $ (1,361,892) (7) % ​ 38 ​ Table of Contents General and administrative expenses for the year ended December 31, 2024, decreased by $1,361,892, or 7% compared to 2023.
General and administrative expenses include professional fees, investor relations (IR) costs, salaries and related stock compensation, travel costs, office and rental costs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ % of ​ Year Ended ​ % of ​ Dollar ​ % Increase ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ Total Sales ​ ​ ​ December 31, 2023 ​ ​ ​ Total Sales ​ ​ ​ Change ​ ​ ​ (Decrease) ​ General and Administrative Expenses ​ $ 8,933,952 155 % $ 8,933,458 74 % $ 494 0 % Related Stock-based Compensation (non-cash) ​ ​ 8,296,341 144 % ​ 9,658,727 80 % ​ (1,362,386) (14) % Total General and Administrative ​ $ 17,230,293 299 % $ 18,592,185 153 % $ (1,361,892) (7) % ​ 39 ​ Table of Contents General and administrative expenses for the year ended December 31, 2024, decreased by $1,361,892, or 7% compared to 2023.
The increase in the net dollar amount of these unapplied overhead costs in the current period versus the prior period was primarily driven by a decrease in actual production levels during the period and the temporary cessation of M400 smart glasses production in the second half of 2024. ​ Depreciation and Amortization included in cost of sales decreased by $151,661, or 17% for the year ended December 31, 2024 versus 2023, due to the full amortization and depreciation of certain manufacturing assets. ​ 37 ​ Table of Contents Research and Development.
The increase in the net dollar amount of these unapplied overhead costs in the current period versus the prior period was primarily driven by a decrease in actual production levels during the period and the temporary cessation of M400 smart glasses production in the second half of 2024. ​ Depreciation and Amortization included in cost of sales decreased by $151,661, or 17% for the year ended December 31, 2024 versus 2023, due to the full amortization and depreciation of certain manufacturing assets. 38 ​ Table of Contents Research and Development.
A substantially greater number of holders of the Company’s common stock are in “street name” or beneficial holders whose shares are held by banks, brokers and other financial institutions. Issuer Purchases of Equity Securities We did not purchase equity securities that are registered under Section 12 of the Exchange Act during the three months ended December 31, 2024.
A substantially greater number of holders of the Company’s common stock are in “street name” or beneficial holders whose shares are held by banks, brokers and other financial institutions. Issuer Purchases of Equity Securities We did not purchase equity securities that are registered under Section 12 of the Exchange Act during the three months ended December 31, 2025.
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.
Our wearable display products integrate microdisplay 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.
Impairment losses are dependent on a number of factors such as general economic trends and major technology advances, and thus could be significantly different from historical results. For the years ending December 31, 2024 and 2023, there were no indicators of impairment present.
Impairment losses are dependent on a number of factors such as general economic trends and major technology advances, and thus could be significantly different from historical results. For the years ending December 31, 2025 and 2024, there were no indicators of impairment present.
As of December 31, 2024 and 2023, deferred revenue associated with our expected returns was immaterial. The Company collects and remits sales taxes in certain jurisdictions and reports revenue net of any associated sales taxes. Revenue from engineering consulting and other services is recognized at the time the services are rendered.
As of December 31, 2025 and 2024, deferred revenue associated with our expected returns was immaterial. The Company collects and remits sales taxes in certain jurisdictions and reports revenue net of any associated sales taxes. Revenue from engineering consulting and other services is recognized at the time the services are rendered.
Going Concern For all annual and interim periods, management will assess going concern uncertainty in our consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in U.S.
Going Concern For all annual and interim periods, management assesses our going concern uncertainty in our consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in U.S.
If actual demand, market conditions or product life cycles differ from estimates, inventory adjustments to net realizable values would result in a reduction to the carrying value of inventory, an increase in inventory write-offs and a decrease to gross margins.
If actual demand, market conditions or product life cycles differ from estimates, inventory adjustments to net realizable values could result in a reduction to the carrying value of inventory, an increase in inventory write-offs and a decrease to gross margins.
The adequacy of the provision is assessed at each quarter end and is based on historical experience of warranty claims and costs. The costs incurred to provide for these warranty obligations are estimated and recorded as an accrued liability at the time of sale.
The adequacy of the provision is assessed at each quarter end and is based on historical experience and projected factors of warranty claims and costs. The costs incurred to provide for these warranty obligations are estimated and recorded as an accrued liability at the time of sale.
Recent Accounting Pronouncements Refer to Note 1 35 ​ Table of Contents Results of Operations for Fiscal Years Ended December 31, 2024 and December 31, 2023 The following table compares the Company’s consolidated statements of operations data for the years ended December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ Dollar % Increase ​ ​ 2024 ​ 2023 ​ Change ​ (Decrease) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ Sales of Products ​ $ 4,487,202 ​ $ 10,760,352 ​ $ (6,273,150) (58) % Sales of Engineering Services ​ 1,267,354 ​ 1,368,787 ​ (101,433) (7) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Sales ​ 5,754,556 ​ 12,129,139 ​ (6,374,583) (53) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of Sales: ​ ​ ​ ​ Cost of Sales - Products Sold ​ 6,007,200 ​ 8,839,279 ​ (2,832,079) (32) % Cost of Sales - Inventory Reserve for Obsolescence ​ 4,167,917 ​ 4,358,062 ​ (190,145) (4) % Cost of Sales - Depreciation and Amortization ​ 734,456 ​ 886,117 ​ (151,661) (17) % Cost of Sales - Engineering Services ​ 444,653 ​ 680,411 ​ (235,758) (35) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Cost of Sales ​ 11,354,226 ​ 14,763,869 ​ (3,409,643) (23) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit (Loss) ​ (5,599,670) ​ (2,634,730) ​ (2,964,940) 113 % Gross Profit (Loss) % ​ (97) % (22) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Expenses: ​ ​ ​ ​ Research and Development ​ 9,626,452 ​ 12,339,534 ​ (2,713,082) (22) % Selling and Marketing ​ 8,191,427 ​ 12,711,800 ​ (4,520,373) (36) % General and Administrative ​ 17,230,293 ​ 18,592,185 ​ (1,361,892) (7) % Depreciation and Amortization ​ 2,994,643 ​ 3,844,428 ​ (849,785) (22) % Loss on Goodwill and Other Intangible Asset Impairment ​ — ​ 2,136,993 ​ (2,136,993) (100) % Loss on Fixed Asset Disposal ​ 27,654 ​ — ​ 27,654 NM ​ Impairment on Intangible Asset and Equity Investment ​ 30,301,355 ​ — ​ 30,301,355 NM ​ Impairment of Patents and Trademarks ​ — ​ 41,869 ​ (41,869) (100) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from Operations ​ (73,971,494) ​ (52,301,539) ​ (21,669,955) 41 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Income (Expense): ​ ​ ​ ​ Investment Income ​ 591,319 ​ 2,219,226 ​ (1,627,907) (73) % Other Taxes ​ 59,335 ​ (230,973) ​ 290,308 (126) % Foreign Exchange Loss ​ (217,317) ​ (44,062) ​ (173,255) 393 % Utility Improvement Refund/Employee Retention Credit Refund ​ — ​ 208,271 ​ (208,271) (100) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Other Income, Net ​ 433,337 ​ 2,152,462 ​ (1,719,125) (80) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ $ (73,538,157) ​ $ (50,149,077) ​ $ (23,389,080) 47 % ​ 36 ​ Table of Contents Sales.
There were no provisions for income taxes in 2025 or 2024. 36 ​ Table of Contents Results of Operations for Fiscal Years Ended December 31, 2024 and December 31, 2023 ​ The following table compares the Company’s consolidated statements of operations data for the years ended December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollar ​ ​ ​ % Increase ​ ​ 2024 ​ 2023 ​ Change ​ (Decrease) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ ​ ​ ​ ​ Sales of Products ​ $ 4,487,202 ​ $ 10,760,352 ​ $ (6,273,150) (58) % Sales of Engineering Services ​ 1,267,354 ​ 1,368,787 ​ (101,433) (7) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Sales ​ 5,754,556 ​ 12,129,139 ​ (6,374,583) (53) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of Sales: ​ ​ ​ ​ ​ ​ ​ ​ Cost of Sales - Products Sold ​ 6,007,200 ​ 8,839,279 ​ (2,832,079) (32) % Cost of Sales - Inventory Reserve for Obsolescence ​ 4,167,917 ​ 4,358,062 ​ (190,145) (4) % Cost of Sales - Depreciation and Amortization ​ 734,456 ​ 886,117 ​ (151,661) (17) % Cost of Sales - Engineering Services ​ 444,653 ​ 680,411 ​ (235,758) (35) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Cost of Sales ​ 11,354,226 ​ 14,763,869 ​ (3,409,643) (23) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Loss ​ (5,599,670) ​ (2,634,730) ​ (2,964,940) 113 % Gross Loss % ​ (97) % (22) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Expenses: ​ ​ ​ ​ ​ ​ ​ ​ Research and Development ​ 9,626,452 ​ 12,339,534 ​ (2,713,082) (22) % Selling and Marketing ​ 8,191,427 ​ 12,711,800 ​ (4,520,373) (36) % General and Administrative ​ 17,230,293 ​ 18,592,185 ​ (1,361,892) (7) % Depreciation and Amortization ​ 2,994,643 ​ 3,844,428 ​ (849,785) (22) % Loss on Goodwill and Other Intangible Asset Impairment ​ — ​ 2,136,993 ​ (2,136,993) (100) % Loss on Fixed Asset Disposal ​ 27,654 ​ — ​ 27,654 NM ​ Impairment on Intangible Asset and Equity Investment ​ 30,301,355 ​ — ​ 30,301,355 NM ​ Impairment of Patents and Trademarks ​ — ​ 41,869 ​ (41,869) (100) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from Operations ​ (73,971,494) ​ (52,301,539) ​ (21,669,955) 41 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Income (Expense): ​ ​ ​ ​ ​ ​ ​ ​ Investment Income ​ 591,319 ​ 2,219,226 ​ (1,627,907) (73) % Other Taxes ​ 59,335 ​ (230,973) ​ 290,308 (126) % Foreign Exchange Loss ​ (217,317) ​ (44,062) ​ (173,255) 393 % Utility Improvement Refund ​ — ​ 208,271 ​ (208,271) (100) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Other Income, Net ​ 433,337 ​ 2,152,462 ​ (1,719,125) (80) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ $ (73,538,157) ​ $ (50,149,077) ​ $ (23,389,080) 47 % ​ 37 ​ Table of Contents Sales.
Exposure to inventory valuation risks is managed by maintaining safety stocks, minimum purchase lots, managing 31 ​ Table of Contents product and end-of-life issues brought on by aging components or new product introductions, and by utilizing certain inventory minimization strategies such as vendor-managed inventories.
Exposure to inventory valuation risks is managed by maintaining safety stocks, minimum purchase lots, managing product and end-of-life issues brought on by aging components or new product introductions, and by utilizing certain inventory minimization strategies such as vendor-managed inventories.
In addition to its normal Reserve for Obsolescence provision, the Company reserved as of December 31, 2023 additional provisions for expected surplus component parts and obsolescence in excess of its currently planned existing product builds in 2024 and into 2025 on most of its existing smart glass product models in anticipation of the planned introduction of newer models, which would logically replace the existing models when introduced.
In addition to its normal Reserve for Obsolescence provision, the Company reserved as of December 31, 2025 additional provisions for expected surplus component parts and obsolescence in excess of its currently planned existing product builds in 2026 on most of its existing smart glass product models in anticipation of the planned introduction of newer models, which would logically replace the existing models when introduced.
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 devices are 27 ​ Table of Contents 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.
Sales of engineering services for the year ended December 31, 2024, was $1,267,354, as compared to $1,368,787 in 2023, a decrease of 7%. Cost of Sales and Gross Profit (Loss).
Sales of engineering services for the year ended December 31, 2024, were $1,267,354, as compared to $1,368,787 in 2023, a decrease of 7%. Cost of Sales and Gross Loss.
The Company had a related equity interest in Atomistic, a private French company, and determined that at this time, the Company is unable to reasonably estimate a value to its future value and therefore recorded a full impairment of its investment in Atomistic resulting in a write-down charge of $5,784,125 for the period ended June 30, 2024. ​ Other Income (Expense), Net .
The Company had a related equity interest in Atomistic, a private French company, and determined that the Company was unable to reasonably estimate its future value and therefore recorded a full impairment of its investment in Atomistic resulting in a write-down charge of $5,784,125 for the period ended June 30, 2024. ​ Other Income (Expense), Net .
The critical accounting policies, judgments and estimates that we believe have the most significant effect on our financial statements are: ● Valuation of inventories; ● Going Concern; ● Variable interest entities; ● Investments in equity securities; ● Carrying value of long-lived assets, goodwill and other intangible assets; ● Software development costs; ● Revenue recognition; ● Product warranty; ● Stock-based compensation; and ● Income taxes.
The critical accounting policies, judgments and estimates that we believe have the most significant effect on our financial statements are: ● Valuation of inventories; ● Going concern; ● Evaluation of Liabilities to Equity and Derivatives ● Variable interest entities; ● Investments in equity securities; ● Carrying value of long-lived assets, goodwill and other intangible assets; ● Software development costs; 28 ​ Table of Contents ● Revenue recognition; ● Product warranty; ● Stock-based compensation; and ● Income taxes.
In the event that it should be determined that all or part of a deferred tax asset in the future is more likely than not to be realized, an adjustment (reduction) of the valuation allowance would increase income to be recognized in the period such determination was made.
In the event that we determine that all or part of a deferred tax asset in the future is more likely than not to be realized, an adjustment (reduction) of the valuation allowance would increase income to be recognized in the period such determination was made.
The Company’s management intends to continue to take actions necessary to continue as a going concern, as discussed herein.
Management intends to take actions necessary to continue as a going concern, as discussed herein.
The disposal value of the excess components that could not be used in future models is unknown, so a 100% obsolescence provision has been accrued. During the year ended December 31, 2024, the Company wrote-off gross inventory of $4,167,917 and disposed of $1,998,893 of inventory that was fully provisioned for in the previous year.
The disposal value of the excess components that could not be used in future models was unknown, so a 100% obsolescence provision was accrued. During the year ended December 31, 2024, the Company recorded an obsolescence provision for gross inventory of $4,167,917 and disposed of $1,998,893 of inventory that was fully provisioned for in the previous year.
Stock-Based Compensation Expense Our Board of Directors approves grants of stock awards and options to employees to purchase our common stock. Stock-based compensation expense is recorded based upon the estimated fair value of the stock option or stock award at the date of grant.
Stock-Based Compensation Expense Our Board of Directors approves grants of stock awards, including restricted stock units (“RSUs) and performance stock units (“PSUs”) and options to employees and independent directors to purchase our common stock. Stock-based compensation expense is recorded based upon the estimated fair value of the stock option or stock award at the date of grant.
Product sales represent the majority of the Company’s revenue. The Company recognizes revenue from these product sales as performance obligations are satisfied and transfer of control to the customer has occurred, typically upon physical shipment. Revenue is recognized in the amount that the Company expects to receive in exchange from the sale of our products.
The Company recognizes revenue from these product sales as performance obligations are satisfied and transfer of control to the customer has occurred. Revenue is recognized in the amount that the Company expects to receive in exchange for the sale of our products.
The write-off to our obsolescence provision for finished goods and components totaled $4,167,917, $4,358,062, and $290,405 for the years ended December 31, 2024, 2023, and 2022, respectively. These additional obsolescence provisions are included in Cost of Sales in the Consolidated Statements of Operations.
The increase to our obsolescence provision for finished goods and components totaled $503,400, $4,167,917, and $4,358,062 for the years ended December 31, 2025, 2024, and 2023, respectively. These additional obsolescence provisions are included in Cost of Sales in the Consolidated Statements of Operations.
As a result of management’s plan above, our current amount of cash on hand, and our historical ability to raise capital, management has concluded that substantial doubt of our ability to continue as a going concern has been alleviated. ​ Contractual Obligations The following is a summary of our contractual payment obligations as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ More than Contractual Obligations ​ Total ​ 1 Year ​ 1-3 Years ​ 3-5 Years ​ 5 Years Operating Lease Obligations $ 511,980 $ 511,980 $ — — — Open Purchase Obligations ​ 1,061,429 ​ 1,061,429 ​ — — — ​ ​
As a result of management’s plan above, our current amount of cash on hand, and our historical ability to raise capital, management has concluded that substantial doubt of our ability to continue as a going concern has been alleviated. ​ Contractual Obligations The following is a summary of our contractual payment obligations as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ More than Contractual Obligations ​ Total ​ 1 Year ​ 1-3 Years ​ 3-5 Years ​ 5 Years Operating Lease Obligations ​ ​ ​ $ 1,087,103 ​ ​ ​ $ 567,184 ​ ​ ​ $ 519,919 ​ ​ ​ — ​ ​ ​ — Open Purchase Obligations ​ 3,278,002 ​ 3,278,002 ​ — — — ​ ​
Our current liabilities are comprised principally of accounts payable, accrued expenses, and operating lease right-of-use liabilities. ​ Summary of Cash Flow: ​ The following table summarizes our select cash flows for the years ended: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ December 31, ​ 2024 2023 2022 Net Cash Provided by (used in) ​ ​ ​ Operating Activities ​ (23,739,372) ​ (26,277,824) ​ (24,521,082) Investing Activities ​ (2,919,949) ​ (19,280,966) ​ (21,170,816) Financing Activities ​ 18,290,235 ​ (449,561) ​ (1,948,032) ​ During the year ended December 31, 2024 we used $23,739,372 of cash for operating activities.
Our current liabilities are comprised principally of accounts payable, accrued expenses, and operating lease right-of-use liabilities. ​ 40 ​ Table of Contents Summary of Cash Flow: ​ The following table summarizes our select cash flows for the years ended: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Net Cash Provided by (used in) ​ ​ ​ ​ ​ ​ Operating Activities ​ (18,789,272) ​ (23,739,372) ​ (26,277,824) Investing Activities ​ (2,618,270) ​ (2,919,949) ​ (19,280,966) Financing Activities ​ 24,371,250 ​ 18,290,235 ​ (449,561) ​ During the year ended December 31, 2025 we used $18,789,272 of cash for operating activities.
Unregistered Sales of Equity Securities and Use of Proceeds Sales of Unregistered Securities - none ​ 29 ​ Table of Contents Purchase of Equity Securities - none ​ ​ ​ ​ ​ Equity Compensation Plan Information The following table provides information about our equity compensation plan as of December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Weighted ​ ​ ​ Securities to ​ Average ​ ​ ​ ​ be Issued ​ Exercise Price ​ Number of ​ ​ Upon Exercise ​ of ​ Securities ​ ​ of Outstanding ​ Outstanding ​ Remaining ​ ​ Options, ​ Options, ​ Available for ​ ​ Warrants and ​ Warrants and ​ Future Issuance Plan Category ​ Rights ​ Rights ​ (1) Equity compensation plans approved by security holders 10,367,990 ​ $ 12.41 1,031,737 Equity compensation plans not approved by security holders — ​ — — Total 10,367,990 ​ $ 12.41 1,031,737 (1) The amount appearing under “Number of securities remaining available for future issuance” includes shares available under the Company’s 2023 Equity Incentive Plan (the “2023 Plan”).
Unregistered Sales of Equity Securities and Use of Proceeds Sales of Unregistered Securities - none ​ Purchase of Equity Securities - none ​ ​ ​ ​ ​ Equity Compensation Plan Information The following table provides information about our equity compensation plan as of December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ Securities to ​ Average ​ ​ ​ ​ be Issued ​ Exercise Price ​ Number of ​ ​ Upon Exercise ​ of ​ Securities ​ ​ of Outstanding ​ Outstanding ​ Remaining ​ ​ Options, ​ Options, ​ Available for ​ ​ Warrants and ​ Warrants and ​ Future Issuance Plan Category ​ Rights ​ Rights ​ (1) Equity compensation plans approved by security holders 6,078,999 ​ $ 3.37 2,795,108 Equity compensation plans not approved by security holders — ​ — — Total 6,078,999 ​ $ 3.37 2,795,108 (1) The amount appearing under “Number of securities remaining available for future issuance” includes shares available under the Company’s 2023 Equity Incentive Plan (the “2023 Plan”).
The unamortized software development costs remaining were valued (net of accumulated amortization) at $194,445 as of December 31, 2024. Management believes that this value is recoverable. 33 ​ Table of Contents Revenue Recognition The Company adopted the guidance on Revenue from Contracts with Customers under FASB ASC Topic 606, Revenue from Contracts with Customers , as of January 1, 2018.
The unamortized software development costs remaining were valued (net of accumulated amortization) at $27,778 as of December 31, 2025. Management believes that this value is recoverable. Revenue Recognition The Company adopted the guidance under FASB ASC Topic 606, Revenue from Contracts with Customers , as of January 1, 2018. Product sales represent the majority of the Company’s revenue.
With respect to our Smart Glasses and AI/AR products, we are focused on the enterprise, defense, industrial, medical and commercial markets.
With respect to our Smart Glasses and AI/AR products, we are focused on the enterprise, defense, medical, security, and select consumer applications.
The Company incurred net losses for the year ended December 31, 2024 of $73,538,157; $50,149,077 for the year ended December 31, 2023; and $40,763,573 for the year ended December 31, 2022.
The Company incurred net losses for the year ended December 31, 2025 of $32,273,128; $73,538,157 for the year ended December 31, 2024; and $50,149,077 for the year ended December 31, 2023.
The Company incurred net losses for the year ended December 31, 2024 of $73,538,157; $50,149,077 for the year ended December 31, 2023; and $40,763,573 for the year ended December 31, 2022.
The Company incurred net losses for the year ended December 31, 2025 of $32,273,128; $73,538,157 for the year ended December 31, 2024; and $50,149,077 for the year ended December 31, 2023.
These 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.
This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. These 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 29 ​ Table of Contents as a going concern.
Future warranty costs are estimated based on historical performance rates and related costs to repair given products. The accounting estimate related to product warranty is considered a “critical accounting estimate” because judgment is exercised in determining future estimated warranty costs. Should actual performance rates or repair costs differ from estimates, revision to the estimated warranty liability would be required.
Future warranty costs are estimated 31 ​ Table of Contents based on historical performance rates and related costs to repair given products. The accounting estimate related to product warranty is considered a “critical accounting estimate” because judgment is exercised in determining future estimated warranty costs.
The Company had net cash outflows from operations of $23,739,372 for the year ended December 31, 2024; $26,277,824 for the year ended December 31, 2023; and $24,521,082 for the year ended December 31, 2022. As of December 31, 2024, the Company had an accumulated deficit of $367,522,950.
The Company had net cash outflows from operations of $18,789,272 for the year ended December 31, 2025; $23,739,372 for the year ended December 31, 2024; and $26,277,824 for the year ended December 31, 2023. As of December 31, 2025, the Company had an accumulated deficit of $399,858,410.
As of December 31, 2024, the Company had an accumulated deficit of $367,522,950. ​ The ongoing losses and accumulated deficit initially raise substantial doubt about the Company’s ability to continue as a going concern.
The ongoing losses and accumulated deficit initially raise substantial doubt about the Company’s ability to continue as a going concern.
Smart glasses revenue was the primary driver of this increase as unit sales of our M400 product increased. Sales of engineering services for the year ended December 31, 2023, were $1,368,787, as compared to $1,330,119 in the same period of 2022, an increase of 3%. Cost of Sales and Gross Profit (Loss).
Increased smart glasses revenue was the primary driver of this increase as unit sales of our M400 product increased compared to the previous year. Sales of engineering services and OEM products for the year ended December 31, 2025, were $1,603,979, as compared to $1,267,354 in 2024, an increase of 27%. Cost of Sales and Gross Loss.
We continually evaluate our estimates used in the preparation of our consolidated financial statements, including those related to revenue recognition, bad debt, inventories, warranty reserves, product warranty, carrying value of long-lived assets, derivatives, valuation of stock compensation awards, and income taxes.
We continually evaluate our estimates used in the preparation of our consolidated financial statements, including those related to valuation of inventories, going concern, variable interest entities, investments in equity securities, carrying value of long-lived assets, goodwill and other intangible assets, software development costs, revenue recognition, product warranty, valuation of stock-based compensation, and income taxes.
Provision for Income Taxes . There were no provisions for income taxes in 2023 or 2022. Liquidity and Capital Resources ​ Capital Resources: As of December 31, 2024, we had cash and cash equivalents of $18,186,506, a decrease of $8,369,086 from $26,555,592 as of December 31, 2023.
Provision for Income Taxes . There were no provisions for income taxes in 2024 or 2023. Liquidity and Capital Resources ​ Capital Resources: As of December 31, 2025, we had cash and cash equivalents of $21,150,213, an increase of $2,963,707 from $18,186,506 as of December 31, 2024.
The Company had net cash outflows from operations of $23,739,372 for the year ended December 31, 2024; $26,277,824 for the year ended December 31, 2023; and $24,521,082 for the year ended December 31, 2022.
The Company had net cash outflows from operations of $18,789,272 for the year ended December 31, 2025; $23,739,372 for the year ended December 31, 2024; and $26,277,824 for the year ended December 31, 2023. As of December 31, 2025, the Company had an accumulated deficit of $399,858,410.
As a result, the Company has no further contractual requirements to pay further licensing development fees to Atomistic. ​ 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’ timely market acceptance, selling prices and gross margins, and other factors.
The Company’s cash requirements going forward are primarily for funding operating losses, research and development, working capital, and capital expenditures. Our cash requirements related to funding operating losses depend upon numerous factors, including new product development activities, research and development costs, our ability to commercialize our products, our products’ timely market acceptance, selling prices and gross margins, and other factors.
The fair value of our common stock on the date of each option grant is determined based on the most recent quoted sales price on our primary trading stock exchange, currently the NASDAQ Capital Market. For stock options awards under the Company's LTIP (Long-term Incentive Plan), options vest upon the achievement of certain equity market conditions and performance-based milestones.
The fair value of our common stock, including PSUs and RSUs, on the date of each equity grant is determined based on the most recent quoted sales price on our primary trading stock exchange, currently the NASDAQ Capital Market.
The Company has historically raised capital through the sale of equity securities. The Company has entered into a sales agreement with an investment bank for the issuance and sale of up to $50,000,000 of our common stock that may be issued and sold from time to time in an “at the market” (ATM) offering.
The Company filed a Registration Statement on Form S-3 that became effective in May 2024, which includes a sales agreement prospectus for the issuance and sale of up to $50,000,000 of our common stock that may be issued and sold from time to time under a sales agreement with an investment bank in an “at the market” offering.
For the years ended December 31, 2024, 2023, and 2022, we recorded a loss on fixed asset disposal of $27,654, nil, and $35,350, respectively, upon the retirement of certain tooling and manufacturing equipment assets no longer in use. We perform an evaluation of our patents and trademark assets when events or circumstances indicate their carrying amounts may be unrecoverable.
For the years 30 ​ Table of Contents ended December 31, 2025, 2024, and 2023, we recorded a loss on fixed asset disposal of $106,898, $27,654, and nil, respectively, upon the retirement of certain tooling and manufacturing equipment assets no longer in use.
For the years ended December 31, 2024, 2023, and 2022, there was an impairment charge of nil, $41,869, and $97,675, respectively. The carrying value of the remaining intellectual property, such as patents and trademarks, was valued (net of accumulated amortization) at $2,998,760 as of December 31, 2024, because management believes that this value is recoverable.
The carrying value of the remaining intellectual property, such as patents and trademarks, was valued (net of accumulated amortization) at $3,359,066 as of December 31, 2025, because management believes that this value is recoverable.
We believe our technology, intellectual property portfolio and position in the marketplace give us a leadership position in AI/AR and Smart Glasses products, waveguide optics, microLEDs and display engine technology. 30 ​ Table of Contents Critical Accounting Policies and Significant Developments and Estimates The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements and related notes appearing elsewhere in this annual report.
Critical Accounting Policies and Significant Developments and Estimates The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements and related notes appearing elsewhere in this annual report.
Net changes in working capital items were $1,171,047 for the year ended December 31, 2024, with the largest factors resulting from a $2,503,100 decrease in trade accounts payables and accrued expenses; a $941,149 decrease in trade accounts and other receivables; and a $271,399 decrease in other prepaid expenses.
Net changes in working capital items were $3,993,328 for the year ended December 31, 2025, with the largest factors resulting from a $2,237,067 decrease in inventory and vendor prepayments; a $2,028,448 increase in trade accounts payables and accrued expenses; and a $257,699 increase in trade accounts and other receivables.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Holders of Record As of March 13, 2025, there were 89 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the Nasdaq Capital Market under the symbol “VUZI.” 26 ​ Table of Contents Holders of Record As of March 12, 2026, there were 50 holders of record of our common stock.
As of December 31, 2024, we had current assets of $26,722,490 as compared to current liabilities of $2,112,273, which resulted in a positive working capital position of $24,610,217. As of December 31, 2023, we had a working capital position of $36,284,259.
As of December 31, 2025, we had current assets of $27,195,727 compared to current liabilities of $4,888,202, which resulted in a positive working capital position of $22,307,525. As of December 31, 2024, we had a working capital position of $24,610,217.
The disposal value of the excess components that could not be used in future models is unknown, so a 100% obsolescence provision has been accrued. The total reserve write-down recorded at December 31, 2023 was $2,700,000 and the Company increased its standard reserve by $1,658,000.
The disposal value of the excess components that could not be used in future models is unknown, so a 100% obsolescence provision has been accrued.
For the year ended December 31, 2023, we used a total of $26,277,824 in cash for operating activities.
For the year ended December 31, 2024, we used $23,739,372 in cash for operating activities.
For the year ended December 31, 2023, we used a total of $19,280,966 in cash for investing activities.
For the year ended December 31, 2024, we used $2,919,949 in cash for investing activities.
It presumes that a Company will continue normal business operations into the future. ​ 32 ​ Table of Contents Variable Interest Entities We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests is considered a variable interest entity (VIE).
Changes in these classifications or valuations could materially affect the Company’s financial position and results of operations. ​ Variable Interest Entities We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests is considered a variable interest entity (VIE).
Management’s plans to alleviate the conditions that raise substantial doubt include operational improvements being implemented and the curtailment of certain development programs, both of which the Company expects will preserve cash. ​ The Financial Accounting Standards Board (FASB) issued Accounting Standards Update No.
Management’s plans to alleviate the conditions that raise substantial doubt include operational improvements being implemented and the curtailment of certain development programs, both of which the Company expects will preserve cash. ​ Evaluation of Liabilities, Equity and Derivatives The Company evaluates whether financial instruments issued by the Company should be classified as liabilities, mezzanine equity, or permanent equity and whether such instruments contain features that meet the definition of a derivative.
There was an increase in total sales for the year ended December 31, 2023, from those achieved in 2022 of $293,257, or 2%.
There was an increase in total sales for the year ended December 31, 2025, compared to 2024 of $526,055, or 9%.
For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings. ​ Carrying Value of Long-Lived Assets If facts and circumstances indicate that a long-lived asset, including a products’ mold tooling and equipment, may be impaired, the carrying value is reviewed in accordance with FASB ASC Topic 360-10 Accounting for the Impairment or Disposal of Long-Lived Assets .
For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings. As of December 31, 2025 and 2024, we had $300,000 and $650,000 of investments in equity securities.
Selling and marketing expenses consist of trade show costs, advertising, sales samples, travel costs, sales staff compensation costs including stock-based compensation expense, consulting fees, public relations agency fees, website costs and sales commissions paid to full-time staff and outside consultants. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ % of ​ Year Ended ​ % of ​ Dollar ​ % Increase ​ ​ December 31, 2023 Total Sales December 31, 2022 Total Sales Change (Decrease) ​ Selling and Marketing Expenses ​ $ 11,632,032 ​ 96 % $ 7,156,266 ​ 60 % $ 4,475,766 ​ 63 % Related Stock-based Compensation (non-cash) ​ ​ 1,079,768 ​ 9 % ​ 922,272 ​ 8 % ​ 157,496 ​ 17 % Total Selling and Marketing ​ $ 12,711,800 ​ 105 % $ 8,078,538 ​ 68 % $ 4,633,262 ​ 57 % ​ Selling and marketing expenses for the year ended December 31, 2023, increased by $4,633,262 or 57%, compared to the comparable period in 2022.
Selling and marketing expenses consist of trade show costs, advertising, sales samples, travel costs, sales staff compensation costs including stock-based compensation expense, consulting fees, public relations agency fees, website costs and sales commissions paid to full-time staff and outside consultants. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ % of ​ Year Ended ​ % of ​ Dollar ​ % Increase ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ Total Sales ​ ​ ​ December 31, 2024 ​ ​ ​ Total Sales ​ ​ ​ Change ​ ​ ​ (Decrease) ​ Selling and Marketing Expenses ​ $ 4,690,931 75 % $ 6,953,169 121 % $ (2,262,238) (33) % Related Stock-based Compensation (non-cash) ​ ​ 787,665 12 % ​ 1,238,258 21 % ​ (450,593) (36) % Total Selling and Marketing ​ $ 5,478,596 87 % $ 8,191,427 142 % $ (2,712,831) (33) % ​ Selling and marketing expenses for the year ended December 31, 2025 decreased by $2,712,831, or 33% compared to 2024.
Depreciation and Amortization. Depreciation and amortization expense, not included in cost of sales, for the year ended December 31, 2023, was $3,844,428, compared to $1,788,584 in the comparable period in 2022, an increase of $2,055,844.
Depreciation and Amortization. Depreciation and amortization expense, not included in cost of sales or research and development, for the year ended December 31, 2025 was $1,602,632, compared to $2,994,643 in 2024 or a decrease of $1,392,011.
The increase in this expense is primarily due to the amortization of our technology license related to the Atomistic Agreements, which began on May 12, 2022. Other Income (Expense), Net . Total other income was $2,152,462 for the year ended December 31, 2023, as compared to $1,468,698 in the same period in 2022, an increase of $683,764.
This decrease was primarily due to a significant decrease in amortization expense related to our Atomistic technology license, which was written off as of June 30, 2024. Other Income (Expense), Net . Total other income was $234,766 for the year ended December 31, 2025, compared to other income of $433,337 in 2024, a decrease of $198,571.
Software development expenses to determine technical feasibility before final development and ongoing maintenance are not capitalized and are included in research and development expenses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ % of ​ Year Ended ​ % of ​ Dollar ​ % Increase ​ ​ December 31, 2023 Total Sales December 31, 2022 Total Sales Change (Decrease) ​ Research and Development Expenses ​ $ 10,611,176 87 % $ 10,841,011 92 % $ (229,835) (2) % Related Stock-based Compensation (non-cash) ​ ​ 1,728,358 14 % ​ 1,835,677 16 % ​ (107,319) (6) % Total Research and Development ​ $ 12,339,534 102 % $ 12,676,688 107 % $ (337,154) (3) % ​ Research and development expenses for the year ended December 31, 2023, decreased by $337,154, or 3%, compared to the comparable period in 2022.
Software development expenses to determine technical feasibility before final development and ongoing maintenance are not capitalized and are included in research and development expenses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ % of ​ Year Ended ​ % of ​ Dollar ​ % Increase ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ Total Sales ​ ​ ​ December 31, 2024 ​ ​ ​ Total Sales ​ ​ ​ Change ​ ​ ​ (Decrease) ​ Research and Development Expenses ​ $ 11,774,608 187 % $ 7,840,491 136 % $ 3,934,117 50 % Related Stock-based Compensation (non-cash) ​ ​ 850,948 14 % ​ 1,785,961 31 % ​ (935,013) (52) % Total Research and Development Costs ​ $ 12,625,556 201 % $ 9,626,452 167 % $ 2,999,104 31 % ​ Research and development expenses for the year ended December 31, 2025 increased by $2,999,104, or 31% compared to 2024.
During the year ended December 31, 2024, we used $2,919,949 of cash for investing activities, which included: $1,358,991 in manufacturing equipment and tooling for our new waveguide manufacturing facility; $1,000,000 final payment made towards our technology license fee commitment with Atomistic; and $560,958 in patent and trademark expenditures.
During the year ended December 31, 2025, we used $2,618,270 of cash for investing activities, which included: $2,013,454 in manufacturing equipment and tooling primarily for our new waveguide manufacturing facility; $554,816 in patent and trademark expenditures, and $50,000 of additional investment in a private corporation (see Note 8 in the Consolidated Financial Statements for further details).
General and administrative expenses include professional fees, investor relations (IR) costs, salaries and related stock compensation, travel costs, office and rental costs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ % of ​ Year Ended ​ % of ​ Dollar ​ % Increase ​ ​ December 31, 2023 Total Sales December 31, 2022 Total Sales Change (Decrease) ​ General and Administrative Expenses ​ $ 8,933,458 74 % $ 8,502,412 72 % $ 431,046 5 % Related Stock-based Compensation (non-cash) ​ ​ 9,658,727 80 % ​ 12,536,150 106 % ​ (2,877,423) (23) % Total General and Administrative ​ $ 18,592,185 153 % $ 21,038,562 178 % $ (2,446,377) (12) % ​ General and administrative expenses for the year ended December 31, 2023 decreased by $2,446,377, or 12% compared to the comparable period in 2022.
General and administrative expenses include professional fees, investor relations (IR) costs, salaries and related stock compensation, travel costs, office and rental costs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ % of ​ Year Ended ​ % of ​ Dollar ​ % Increase ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ Total Sales ​ ​ ​ December 31, 2024 ​ ​ ​ Total Sales ​ ​ ​ Change ​ ​ ​ (Decrease) ​ General and Administrative Expenses ​ $ 8,205,903 131 % $ 8,933,952 155 % $ (728,049) (8) % Related Stock-based Compensation (non-cash) ​ ​ 3,425,915 55 % ​ 8,296,341 144 % ​ (4,870,426) (59) % Total General and Administrative ​ $ 11,631,818 185 % $ 17,230,293 299 % $ (5,598,475) (32) % ​ General and administrative expenses for the year ended December 31, 2025, decreased by $5,598,475, or 32%, compared to 2024.
The accompanying consolidated financial statements have been prepared assuming that the Company 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.
GAAP financial reporting and presumes that the Company will continue normal business operations into the foreseeable future, unless such conditions or events raise substantial doubt about the Company’s ability to continue as a going concern. ​ The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
This overall increase was primarily the result of an increase of $823,647 in investment income resulting from the rise in interest rates earned on the Company’s excess cash period-over-period; and decrease of $136,527 in foreign exchange losses; partially offset by a $258,434 reduction in government and utility incentives, primarily related to the employee retention refunds received in 2022.
The overall decrease in other income was primarily the result of a $400,000 impairment charge on equity investments; a decrease of $36,281 in foreign tax refunds; partially offset by a decrease of $156,753 in foreign exchange losses and a $80,957 increase in investment income earned on excess cash on hand. Provision for Income Taxes .
Removed
(ASU) 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. As a result, management is primarily responsible for assessing if there is a going concern issue when issuing an entity’s financial statements.
Added
We believe our technology, intellectual property portfolio and position in the marketplace give us a leadership position in AI/AR and Smart Glasses products, waveguide optics, microLEDs and display engine technology.
Removed
The going concern assumption underlies all GAAP financial reporting and therefore requires and assumes that the financial statements have been prepared on a going concern basis.
Added
In accordance with ASC Subtopic 205-40, Presentation of Financial Statements — Going Concern, management is required to evaluate whether conditions or events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The going concern assumption underlies all U.S.
Removed
The fair value of options granted under this program was calculated by using a Monte Carlo simulation for the equity market condition tranches and the Black-Scholes-Merton option pricing method for the performance-based tranches. The equity market condition awards are expensed over their derived service periods, which is an output of the Monte Carlo model.
Added
This evaluation requires judgment and consideration of the instrument’s contractual terms and applicable accounting guidance, including an assessment of redemption features and settlement provisions. ​ Instruments classified as liabilities are recorded at fair value, with changes in fair value recognized in earnings.
Removed
Upon the achievement of any market condition milestone, any unrecognized expense to date would be expensed immediately. The performance-based tranches, which are currently considered probable of achievement, are expensed over their respective implicit service periods.
Added
Mezzanine equity is initially recorded at issuance date fair value and subsequently adjusted to its redemption value when it is probable that the instrument will become redeemable. Instruments classified as equity are not subsequently remeasured.
Removed
We may experience significant catch-up or reversal of expense in the future in a period when any performance-based milestones first are determined to be probable of achievement or when any that are currently deemed probable are considered no longer probable. 34 ​ Table of Contents Income Taxes We have historically incurred operating losses from both a financial reporting and tax return standpoint.
Added
For the year ended December 31, 2025, we recorded an impairment loss of $400,000 on these investments. ​ Carrying Value of Long-Lived Assets, Goodwill and Other Intangible Assets If facts and circumstances indicate that a long-lived asset, including a products’ mold tooling and equipment, may be impaired, the carrying value is reviewed in accordance with FASB ASC Topic 360-10 Accounting for the Impairment or Disposal of Long-Lived Assets .
Removed
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our financial condition, financial statements, revenues or expenses.
Added
We perform an evaluation of our patents and trademark assets when events or circumstances indicate their carrying amounts may be unrecoverable. For the years ended December 31, 2025 and 2024 there were nil in impairment charges and for the year ended December 31, 2023 there was an impairment charge of $41,869 to patents and trademarks.
Removed
There were no provisions for income taxes in 2024 or 2023. 39 ​ Table of Contents Results of Operations for Fiscal Years Ended December 31, 2023 and December 31, 2022 ​ The following table compares the Company’s consolidated statements of operations data for the years ended December 31, 2023 and 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ Dollar % Increase ​ ​ 2023 ​ 2022 ​ Change ​ (Decrease) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ Sales of Products ​ $ 10,760,352 ​ $ 10,505,763 ​ $ 254,589 2 % Sales of Engineering Services ​ 1,368,787 ​ 1,330,119 ​ 38,668 3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Sales ​ 12,129,139 ​ 11,835,882 ​ 293,257 2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of Sales: ​ ​ ​ ​ Cost of Sales - Products Sold ​ 8,839,279 ​ 8,737,852 ​ 101,427 1 % Cost of Sales - Inventory Reserve for Obsolescence ​ 4,358,062 ​ 290,405 ​ 4,067,657 1,401 % Cost of Sales - Depreciation and Amortization ​ 886,117 ​ 799,317 ​ 86,800 11 % Cost of Sales - Engineering Services ​ 680,411 ​ 525,182 ​ 155,229 30 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Cost of Sales ​ 14,763,869 ​ 10,352,756 ​ 4,411,113 43 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit (Loss) ​ (2,634,730) ​ 1,483,126 ​ (4,117,856) (278) % Gross Profit (Loss) % ​ (22) % 13 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Expenses: ​ ​ ​ ​ Research and Development ​ 12,339,534 ​ 12,676,688 ​ (337,154) (3) % Selling and Marketing ​ 12,711,800 ​ 8,078,538 ​ 4,633,262 57 % General and Administrative ​ 18,592,185 ​ 21,038,562 ​ (2,446,377) (12) % Depreciation and Amortization ​ 3,844,428 ​ 1,788,584 ​ 2,055,844 115 % Loss on Goodwill and Other Intangible Asset Impairment ​ 2,136,993 ​ — ​ 2,136,993 NM ​ Loss on Fixed Asset Disposal ​ — ​ 35,350 ​ (35,350) (100) % Impairment of Patents and Trademarks ​ 41,869 ​ 97,675 ​ (55,806) (57) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from Operations ​ (52,301,539) ​ (42,232,271) ​ (10,069,268) 24 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Income (Expense): ​ ​ ​ ​ Investment Income ​ 2,219,226 ​ 1,395,579 ​ 823,647 59 % Income and Other Taxes ​ (230,973) ​ (212,997) ​ (17,976) 8 % Foreign Exchange Loss ​ (44,062) ​ (180,589) ​ 136,527 (76) % Utility Improvement Refund/Employee Retention Credit Refund ​ 208,271 ​ 466,705 ​ (258,434) (55) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Other Income, Net ​ 2,152,462 ​ 1,468,698 ​ 683,764 47 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ $ (50,149,077) ​ $ (40,763,573) ​ $ (9,385,504) 23 % ​ 40 ​ Table of Contents Sales.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe estimate that any market risk associated with our international operations is unlikely to have a material adverse effect on our business, financial condition or results of operation.
Biggest changeWe do not currently hedge our foreign currency exchange rate 42 ​ Table of Contents risk. We estimate that any market risk associated with our international operations is unlikely to have a material adverse effect on our business, financial condition or results of operation.
We are also exposed to the effects of exchange rates in the purchase of certain raw materials whose price is in U.S. dollars but the price on future purchases is subject to change based on the relationship of the Japanese Yen/Euro to the U.S. Dollar. We do not currently hedge our foreign currency exchange rate risk.
We are also exposed to the effects of exchange rates in the purchase of certain raw materials whose price is in U.S. dollars but the price on future purchases is subject to change based on the relationship of the Japanese Yen/Euro to the U.S. Dollar.

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