Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 11, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Vuzix Corp | |
Entity Central Index Key | 0001463972 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | VUZI | |
Entity Common Stock, Shares Outstanding | 34,307,210 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and Cash Equivalents | $ 6,142,658 | $ 10,606,091 |
Accounts Receivable, Net | 376,570 | 1,371,913 |
Accrued Project Revenue | 160,206 | 0 |
Note Receivable | 250,000 | 250,000 |
Inventories, Net | 5,668,376 | 5,707,867 |
Licenses, Net | 527,249 | 0 |
Manufacturing Vendor Prepayments | 474,518 | 242,539 |
Prepaid Expenses and Other Assets | 707,286 | 895,098 |
Total Current Assets | 14,306,863 | 19,073,508 |
Long-Term Assets | ||
Fixed Assets, Net | 3,880,275 | 4,327,676 |
Operating Lease Right-of-Use Asset | 1,964,984 | 2,096,190 |
Patents and Trademarks, Net | 1,261,841 | 1,294,675 |
Licenses, Net | 284,234 | 314,416 |
Intangible Asset, Net | 888,000 | 990,000 |
Other Assets, Net | 441,430 | 350,000 |
Total Assets | 23,027,627 | 28,446,465 |
Current Liabilities | ||
Accounts Payable | 1,297,924 | 1,062,785 |
Unearned Revenue | 99,714 | 142,463 |
Accrued Expenses | 555,021 | 885,897 |
Taxes Payable | 21,200 | 18,687 |
Operating Lease Right-of-Use Liability | 524,825 | 524,825 |
Total Current Liabilities | 2,498,684 | 2,634,657 |
Long-Term Liabilities | ||
Operating Lease Right-of-Use Liability | 1,440,159 | 1,571,365 |
Total Liabilities | 3,938,843 | 4,206,022 |
Stockholders' Equity | ||
Preferred Stock - $.001 Par Value, 5,000,000 Shares Authorized; 49,626 and 49,626 Shares Issued and Outstanding as of March 31, 2020 and December 31, 2019. | 50 | 50 |
Common Stock - $.001 Par Value, 100,000,000 Shared Authorized; 33,128,620 Shares Issued and Outstanding as of March 31, 2020 and December 31, 2019. | 33,128 | 33,128 |
Additional Paid-in Capital | 169,160,041 | 168,950,076 |
Accumulated Deficit | (150,104,435) | (144,742,811) |
Total Stockholders' Equity | 19,088,784 | 24,240,443 |
Total Liabilities and Stockholders' Equity | $ 23,027,627 | $ 28,446,465 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 49,626 | 49,626 |
Preferred Stock, Shares Outstanding | 49,626 | 49,626 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued | 33,128,620 | 33,128,620 |
Common Stock, Shares Outstanding | 33,128,620 | 33,128,620 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 50 | $ 27,591 | $ 148,695,775 | $ (118,266,441) | $ 30,456,975 |
Balance (in shares) at Dec. 31, 2018 | 49,626 | 27,591,670 | |||
Stock-Based Compensation Expense | $ 0 | $ 7 | 413,679 | 0 | 413,686 |
Stock-Based Compensation Expense (in shares) | 6,247 | ||||
Net Loss | 0 | $ 0 | 0 | (6,359,761) | (6,359,761) |
Balance at Mar. 31, 2019 | $ 50 | $ 27,598 | 149,109,454 | (124,626,202) | 24,510,900 |
Balance (in shares) at Mar. 31, 2019 | 49,626 | 27,597,917 | |||
Balance at Dec. 31, 2018 | $ 50 | $ 27,591 | 148,695,775 | (118,266,441) | 30,456,975 |
Balance (in shares) at Dec. 31, 2018 | 49,626 | 27,591,670 | |||
Net Loss | (26,476,370) | ||||
Balance at Dec. 31, 2019 | $ 50 | $ 33,128 | 168,950,076 | (144,742,811) | 24,240,443 |
Balance (in shares) at Dec. 31, 2019 | 49,626 | 33,128,620 | |||
Stock-Based Compensation Expense | $ 0 | $ 0 | 209,965 | 0 | 209,965 |
Stock-Based Compensation Expense (in shares) | 0 | ||||
Net Loss | 0 | $ 0 | 0 | (5,361,624) | (5,361,624) |
Balance at Mar. 31, 2020 | $ 50 | $ 33,128 | $ 169,160,041 | $ (150,104,435) | $ 19,088,784 |
Balance (in shares) at Mar. 31, 2020 | 49,626 | 33,128,620 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Sales: | ||
Total Sales | $ 1,531,715 | $ 1,373,371 |
Cost of Sales: | ||
Total Cost of Sales | 1,451,199 | 1,333,481 |
Gross Profit (exclusive of depreciation shown separately below) | 80,516 | 39,890 |
Operating Expenses: | ||
Research and Development | 2,023,058 | 2,516,100 |
Selling and Marketing | 1,152,808 | 1,417,966 |
General and Administrative | 1,537,820 | 1,896,402 |
Depreciation and Amortization | 648,541 | 559,089 |
Impairment of Patents and Trademarks | 57,532 | 0 |
Total Operating Expenses | 5,419,759 | 6,389,557 |
Loss from Operations | (5,339,243) | (6,349,667) |
Other Income (Expense): | ||
Investment Income | 22,157 | 58,313 |
Other Taxes | (17,686) | (52,662) |
Foreign Exchange Loss | (26,852) | (15,745) |
Total Other Income (Expense) | (22,381) | (10,094) |
Loss Before Provision for Income Taxes | (5,361,624) | (6,359,761) |
Provision for Income Taxes | 0 | 0 |
Net Loss | (5,361,624) | (6,359,761) |
Preferred Stock Dividends | (499,838) | (465,765) |
Loss Attributable to Common Stockholders | $ (5,861,462) | $ (6,825,526) |
Basic and Diluted Loss per Share | $ (0.18) | $ (0.25) |
Weighted-average Shares Outstanding - Basic and Diluted | 33,128,620 | 27,595,767 |
Products Sold | ||
Sales: | ||
Total Sales | $ 1,371,509 | $ 1,373,371 |
Cost of Sales: | ||
Cost of Sales | 1,426,038 | $ 1,333,481 |
Sales of Engineering Services | ||
Sales: | ||
Total Sales | 160,206 | |
Cost of Sales: | ||
Cost of Sales | $ 25,161 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities | ||
Net Loss | $ (5,361,624) | $ (6,359,761) |
Non-Cash Adjustments | ||
Depreciation and Amortization | 648,541 | 559,089 |
Amortization of Software Development Costs in Cost of Sales - Products | 25,000 | 25,000 |
Stock-Based Compensation | 282,201 | 489,754 |
Impairment of Patents and Trademarks | 57,532 | |
(Increase) Decrease in Operating Assets | ||
Accounts Receivable | 450,454 | 572,577 |
Accrued Project Revenue | (160,206) | |
Inventories | 39,491 | (828,424) |
Vendor Prepayments | (231,979) | 368,658 |
Prepaid Expenses and Other Assets | 187,812 | 437,947 |
Increase (Decrease) in Operating Liabilities | ||
Accounts Payable | 235,139 | (952,497) |
Accrued Expenses | (330,876) | (171,068) |
Customer Deposits | (77,747) | |
Unearned Revenue | (42,749) | 18,618 |
Income and Other Taxes Payable | 2,513 | 43,497 |
Net Cash Flows Used in Operating Activities | (4,198,751) | (5,874,357) |
Cash Flows from Investing Activities | ||
Purchase of Fixed Assets | (221,074) | (724,565) |
Investments in Patents and Trademarks | (41,475) | |
Investments in Licenses and Other Intangible Assets | (43,608) | (537,409) |
Net Cash Used in Investing Activities | (264,682) | (1,303,449) |
Net Increase (Decrease) in Cash and Cash Equivalents | (4,463,433) | (7,177,806) |
Cash and Cash Equivalents - Beginning of Period | 10,606,091 | 17,263,643 |
Cash and Cash Equivalents - End of Period | 6,142,658 | 10,085,837 |
Supplemental Disclosures | ||
Investment in Other Intangible Assets included in Accrued Expenses | 250,000 | |
Unamortized Common Stock Expense included in Prepaid Expenses | 295,725 | 463,154 |
Non-Cash Investment in Licenses and Other Intangible Assets | 544,889 | |
Stock-Based Compensation Expense - Expensed less Previously Issued | $ 72,236 | $ 76,068 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Basis of Presentation | |
Basis of Presentation | Note 1 – Basis of Presentation The accompanying unaudited consolidated financial statements of Vuzix Corporation (“the Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10‑Q and Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, the unaudited consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Certain re-classifications have been made to prior periods to conform with current reporting. The results of the Company’s operations for the three months ended March 31, 2020 are not necessarily indicative of the results of the Company’s operations for the full fiscal year or any other period. The accompanying interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto of the Company as of December 31, 2019, as reported in the Company’s Annual Report on Form 10‑K filed with the SEC on March 16, 2020. Going Concern The accompanying unaudited consolidated financial statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. These unaudited consolidated financial statements do not include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should we be unable to continue as a going concern. The Company incurred net losses for the three months ended March 31, 2020 of $5,361,624 and annual net losses of $26,476,370 in 2019 and $21,875,713 in 2018. As of March 31, 2020, the Company had an accumulated deficit of $150,104,435. The Company’s cash requirements 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, our ability to commercialize our products, our products’ timely market acceptance, selling prices and gross margins, and other factors. Historically, the Company has met its cash needs primarily by the sale of equity securities. The Company’s management intends to take actions necessary to continue as a going concern, as discussed herein. The Company will need to grow its business significantly to become profitable and self-sustaining on a cash flow basis or it will be required to raise new equity and/or debt capital. Management’s plans concerning these matters and managing our liquidity include, among other things: · the continued sale of our existing M300XL finished goods and Blade component inventory, of which we have significant levels; · the expected success of our third-generation monocular device for enterprise, the M400 Smart Glasses, which entered production near the end of the third quarter of 2019, and to date customer interest and adoption of the M400 has been more rapid than earlier models; · the commencement of volume manufacturing and sale of the new Vuzix Smart Swim product in the second quarter of 2020; · the timely sale and disposal of as many products and components as possible included in our inventory write-down losses as of December 31, 2019, primarily related to the first M300 Smart Glasses models, including the M300-C Smart Glasses in China, and excess components related to the cessation of such production; · increased our efforts to further promote our engineering services programs, which result in overall higher gross margins since such programs enable the absorption of some of our operating costs by utilizing a significant portion of our internal engineering fixed salary costs; · continued to pursue 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; · greater control of operating costs and reductions in spending growth rates wherever possible; · implementation of a Company-wide payroll reduction program for individuals earning more than $60,000 annually with required base salary reductions of 10% to 25% depending upon the respective base salary level in the period from May to December 31, 2020. The expected cash savings will be $1,200,000 and will result in the issuance of stock awards, at a rate of 150% of the net cash wage reductions; · decreased tradeshow and external PR expenditures; · right-sized operations across all areas of the Company, including head-count freezes or reductions; · delayed or curtailed discretionary and non-essential capital expenditures not related to near-term new products; · reduced the rate of new product introductions and leveraged existing platforms to reduce new product development and engineering costs; · the introduction of the M4000 in the second half of 2020 will be the Company’s next generation see-through waveguide-based product specifically designed for the enterprise market; and · further reductions of the rate of research and development spending on new technologies, particularly the use of external contractors. Based upon our current amount of cash on hand, management’s historical ability to raise capital, and our ability to manage our cost structure and adjust operating plans if and as required, we have concluded that substantial doubt of our ability to continue as a going concern has been alleviated. Customer Concentrations For the three months ended March 31, 2020, one customer represented 15% of total product revenue and two confidential defense customers represented 100% of engineering services revenue. For the three months ended March 31, 2019, no one customer represented more than 10% of total product revenue. As of March 31, 2020, two customers represented 23% and 11% of accounts receivable, respectively and two confidential defense customers represented 100% of accrued project revenue. As of December 31, 2019, three customers represented 32%, 26% and 13%, respectively, of accounts receivable. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). ASU 2016-13 provides for a new impairment model which requires measurement and recognition of expected credit losses for most financial assets and certain other instruments, including but not limited to accounts receivable. ASU 2016-13 will become effective for the Company on January 1, 2023 and early adoption is permitted. The Company does not anticipate that the adoption of this standard will have a material impact on our consolidated financial statements. |
Revenue Recognition and Contrac
Revenue Recognition and Contracts with Customers | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition and Contracts with Customers | |
Revenue Recognition and Contracts with Customers | Note 2 – Revenue Recognition and Contracts with Customers Disaggregated Revenue The Company’s total revenue was comprised of three major product lines: Smart Glasses Sales, Waveguide and Display Engine Sales, and Engineering Services. The following table summarizes the revenue recognized by major product line: Three Months Ended March 31, 2020 2019 Revenues Smart Glasses Sales $ 1,371,509 $ 1,278,371 Waveguide and Display Engine Sales — 95,000 Engineering Services 160,206 — Total Revenue $ 1,531,715 $ 1,373,371 Significant Judgments Under Topic 606 “Revenue from Contracts with Customers”, there are judgments used that could potentially impact both the timing of our satisfaction of performance obligations and our determination of transaction prices used in determining revenue recognized by major product line. Judgments made include considerations in determining our transaction prices for our standard product sales that include an end-user 30‑day right to return if not satisfied with product and include general payment terms that are between Net 30 and 60 days. For our Engineering Services, performance obligations are recognized over time using the input method and the estimated costs to complete each project are considered significant judgments. Performance Obligations Revenues from our performance obligations are typically satisfied at a point in time for Smart Glasses, Waveguides and Display Engines, and our OEM Products, which are recognized when the customer obtains control and ownership, which is generally upon shipment. The Company also records revenue for performance obligations relating to our Engineering Services over time by using the input method measuring progress toward satisfying the performance obligations. Satisfaction of our performance obligations related to our Engineering Services is measured by the Company’s cost incurred as a percentage of total expected costs to project completion as the inputs of actual costs incurred by the Company are directly correlated with progress of completing the contract. As such, the Company believes that our methodologies for recognizing revenue over time for our Engineering Services correlate directly with the transfer of control of the underlying assets to our customers. Our standard product sales include a twelve (12) month assurance-type product warranty. In the case of certain of our OEM products and waveguide sales, some include a standard product warranty of up to eighteen (18) months to allow distribution channels to offer the end customer a full twelve (12) months of coverage. We offer extended warranties to customers, which extend the standard product warranty on product sales for an additional twelve (12) month period. All revenue related to extended product warranty sales is deferred and recognized over the extended warranty period. Our Engineering Services contracts vary from contract to contract but typically include payment terms of Net 30 days from date of billing, subject to an agreed upon customer acceptance period. The following table presents a summary of the Company’s net sales by revenue recognition method as a percentage of total net sales for the three months ended March 31, 2020: % of Total Net Sales Point-in-Time 90 % Over Time - Input Method 10 % Total 100 % Remaining Performance Obligations As of March 31, 2020, the Company had $695,000 of remaining performance obligations under two current waveguide development projects with two global aerospace and defense firms, which represents the total transaction price of these development agreements of $855,000, less revenue recognized under percentage of completion in the three months ended March 31, 2020. The Company currently expects to recognize the remaining revenue relating to these existing performance obligations of $695,000 in the second quarter of 2020. Revenues earned less amounts paid at March 31, 2020 in the amount of $160,206 are reflected as Accrued Project Revenue in the accompanying Consolidated Balance Sheets. As of March 31, 2020, the Company had $86,000 of remaining performance obligations related to its extended warranties, which are included in deferred revenue on our Consolidated Balance Sheets. The Company is recognizing this deferred revenue on a straight-line basis ending on September 30, 2020. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Loss Per Share | |
Loss Per Share | Note 3 – Loss Per Share Basic loss per share is computed by dividing the loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution from the assumed exercise of stock options and warrants, and the conversion of convertible preferred shares. During periods of net loss, all common stock equivalents are excluded from the diluted EPS calculation because they are anti-dilutive. Since the Company reported a net loss for the three months ended March 31, 2020 and 2019, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive. As of March 31, 2020 and 2019, there were 12,858,707 and 7,529,006 common stock share equivalents, respectively, potentially issuable under conversion of preferred shares, options, and warrants that could dilute basic earnings per share in the future. |
Inventories, Net
Inventories, Net | 3 Months Ended |
Mar. 31, 2020 | |
Inventories, Net | |
Inventories, Net | Note 4 – Inventories, Net Inventories are stated at the lower of cost and net realizable value and consisted of the following: March 31, December 31, 2020 2019 Purchased Parts and Components $ 5,524,161 $ 5,985,214 Work in Process 2,231,136 2,414,142 Finished Goods 2,500,949 2,096,744 Less: Reserve for Obsolescence (4,587,870) (4,788,233) Net $ 5,668,376 $ 5,707,867 |
Licenses, Net
Licenses, Net | 3 Months Ended |
Mar. 31, 2020 | |
Licenses, Net | |
Licenses, Net | Note 5 – Licenses, Net March 31, 2020 December 31, 2019 Licenses $ 493,717 $ 493,717 Less: Accumulated Amortization (227,123) (179,301) Additions 544,889 — 811,483 314,416 Less: Current Portion (527,249) — Licenses, Net $ $ In January 2020, the Company entered into a global non-exclusive master reseller agreement for certain smart glasses software under which it committed to sell a minimum number of software licenses in 2020. The amount capitalized, included in current assets on the Consolidated Balance Sheets, will be expensed to cost of goods sold during the period based on actual software licenses sold, with any of the remaining prepaid licenses expensed at the end of the master reseller agreement’s term. |
Intangible Asset, Net
Intangible Asset, Net | 3 Months Ended |
Mar. 31, 2020 | |
Intangible Asset, Net | |
Intangible Asset, Net | Note 6 – Intangible Asset, Net March 31, December 31, 2020 2019 Intangible Asset $ 1,500,000 $ 1,500,000 Less: Accumulated Amortization (612,000) (510,000) Intangible Asset, Net $ 888,000 $ 990,000 On October 4, 2018, the Company entered into amendment No. 1 to agreements (the “TDG Amendment”) with TDG Acquisition Company, LLC (“TDG”), aka Six15 Technologies, LLC. The TDG Amendment amends certain provisions of prior agreements between Vuzix and TDG, including an asset purchase agreement dated June 15, 2012, and an authorized reseller agreement dated June 15, 2012. Pursuant to the TDG Amendment, the Company will be permitted to engage in sales of heads-up display components or subsystems (and any services to support such sale) for incorporation into a finished good or system for sale to military organizations, subject to certain conditions. The Company will also be permitted to sell its products to defense and security organizations that include business customers and governmental entity customers that primarily provide security and defense services, including police, fire fighters, EMTs, other first responders, and homeland and border security. The Company will owe TDG commissions with respect to all such sales until June 15, 2022, when the amendment and original non-compete agreements expire, after which the Company will be free to sell any product to any customer world-wide with no commission liability to TDG. Total commissions expense under this agreement for the three months ended March 31, 2020 and 2019 was $36,580 and nil, respectively. Total amortization expense for this intangible asset for the three months ended March 31, 2020 and 2019 was $102,000. Future monthly amortization expense for the next 26 months is $34,000 per month or $408,000 per annum. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Expenses | |
Accrued Expenses | Note 7 – Accrued Expenses Accrued expenses consisted of the following: March 31, December 31, 2020 2019 Accrued Wages and Related Costs $ 286,126 $ 394,669 Accrued Professional Services 69,690 217,721 Accrued Warranty Obligations 99,115 98,893 Other Accrued Expenses 100,090 174,614 Total $ 555,021 $ 885,897 The Company has warranty obligations in connection with the sale of certain of its products. The warranty period for its products is generally twelve (12) months. The costs incurred to provide for these warranty obligations are estimated and recorded as an accrued liability at the time of sale. The Company estimates its future warranty costs based on product-based historical performance rates and related costs to repair. The changes in the Company’s accrued warranty obligations for the three months ended March 31, 2020 and the balance as of December 31, 2019 were as follows: Accrued Warranty Obligation at December 31, 2019 $ 98,893 Reductions for Settling Warranties (17,122) Warranties Issued During Period 17,344 Accrued Warranty Obligations at March 31, 2020 $ 99,115 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Taxes | |
Income Taxes | Note 8 – Income Taxes The Company’s effective income tax rate is a combination of federal, state and foreign tax rates and differs from the U.S. statutory rate due to taxes on foreign income, permanent differences including tax-exempt interest, and the resolution of tax uncertainties, offset by a valuation allowance against U.S. deferred income tax assets. |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2020 | |
Capital Stock | |
Capital Stock | Note 9 – Capital Stock Preferred stock The Board of Directors is authorized to establish and designate different series of preferred stock and to fix and determine their voting powers and other special rights and qualifications. A total of 5,000,000 shares of preferred stock with a par value of $0.001 are authorized as of March 31, 2020 and December 31, 2019, 49,626 of which are designated as Series A Preferred Stock. There were 49,626 shares of Series A Preferred Stock issued and outstanding on March 31, 2020 and December 31, 2019. On January 2, 2015, the Company closed a sale of Series A Preferred Stock to Intel Corporation (the "Series A Purchaser"), pursuant to which we issued and sold an aggregate of 49,626 shares of the Company's Series A Preferred Stock, at a purchase price of $500 per share, for an aggregate purchase price of $24,813,000. Each share of Series A Preferred Stock is convertible, at the option of the Series A holder, into 100 shares of the Company's common stock (determined by dividing the Series A Original Issue Price of $500 by the Series A Conversion Price, which is equal to $5.00). Each share of Series A Preferred Stock is entitled to receive dividends at a rate of 6% per year, compounded quarterly and payable in cash or in kind, at the Company’s sole discretion. As of March 31, 2020, total accumulated and unpaid preferred dividends were $9,100,930. As of December 31, 2019, total accumulated and unpaid preferred dividends were $8,601,092. There were no declared preferred dividends owed as of March 31, 2020 or December 31, 2019. The Series A Purchaser has the right, but not the obligation, to participate in any proposed issuance by the Company of its securities, subject to certain exceptions and in such amount as is sufficient to maintain the Series A Purchaser’s ownership percentage in the Company, calculated immediately prior to such applicable financing, at a purchase price equal to the per share price of the Company’s securities in such applicable financing. Common Stock The Company’s authorized common stock consists of 100,000,000 shares, par value of $.001. As of March 31, 2020 and December 31, 2019, there were 33,128,620 shares of common stock issued and outstanding. |
Stock Warrants
Stock Warrants | 3 Months Ended |
Mar. 31, 2020 | |
Stock Warrants | |
Stock Warrants | Note 10 – Stock Warrants A summary of the various changes in warrants during the three months ended March 31, 2020 is as follows: Number of Warrants Warrants Outstanding at December 31, 2019 6,512,516 Exercised During the Period — Issued During the Period — Expired During the Period — Warrants Outstanding at March 31, 2020 6,512,516 Of the outstanding warrants as of March 31, 2020, 1,033,062 expire on June 18, 2021 and the remaining 5,479,454 expire on January 2, 2022. The weighted average remaining term of the warrants was 1.7 years. The weighted average exercise price was $4.56 per share. |
Stock Option Plans
Stock Option Plans | 3 Months Ended |
Mar. 31, 2020 | |
Stock Option Plans | |
Stock Option Plans | Note 11 – Stock Option Plans A summary of stock option activity for the three months ended March 31, 2020 is as follows: Weighted Average Number of Exercise Options Price Outstanding at December 31, 2019 1,383,591 $ 4.77 Granted — — Exercised — — Expired or Forfeited — — Outstanding at March 31, 2020 1,383,591 $ 4.77 The weighted average remaining contractual term for all options as of March 31, 2020 and December 31, 2019 was 6.0 years and 6.3 years, respectively. As of March 31, 2020, there were 1,058,503 options that were fully vested and exercisable at a weighted average exercise price of $4.67 per share. The weighted average remaining contractual term on the vested options is 5.3 years. As of March 31, 2020, there were 325,088 unvested options exercisable at a weighted average exercise price of $5.12 per share. The weighted average remaining contractual term on the unvested options is 8.3 years. The weighted average fair value of option grants was calculated using the Black-Scholes-Merton option pricing method. At March 31, 2020, the Company had approximately $1,394,000 of unrecognized stock compensation expense, which will be recognized over a weighted average period of approximately 2.1 years. For the three months ended March 31, 2020 and 2019, the Company recorded total stock-based compensation expense, including stock awards, of approximately $282,201 and $489,754, respectively. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2020 | |
Litigation | |
Litigation | Note 12 – Litigation We are not currently involved in any actual or pending legal proceeding or litigation and we are not aware of any such proceedings contemplated by or against us or involving our property, except as follows: On or about December 16, 2019, Throop, LLC ("Throop") filed a patent infringement lawsuit in the United States District Court for the Central District of California against the Company. The complaint alleges that certain Vuzix products (which have yet to be sufficiently identified) infringe claims of U.S. Patent No. 7,035,897 and U.S. Patent No. 9,479,726. Both patents expired on January 14, 2020. The complaint purports to seek an injunction or payment of an ongoing royalty with respect to the patents, an award of damages to compensate for alleged past infringement, trebled damages, and an award of costs and attorney's fees. On March 6, 2020, before the Company filed a formal response to the complaint with the Court, Throop filed a voluntary dismissal without prejudice of the California complaint in response to the Company's position that venue was improper. The Company denies that Throop is entitled to the relief requested and intends to vigorously defend itself against the claims asserted and any lawsuit related thereto brought against the Company going forward. |
Right-of-Use Assets and Liabili
Right-of-Use Assets and Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Right-of-Use Assets and Liabilities | |
Right-of-Use Assets and Liabilities | Note 13 – Right-of-Use Assets and Liabilities Future lease payments under operating leases as of March 31,2020 were as follows: Remainder of 2020 $ 456,524 2021 599,190 2022 587,286 2023 489,405 Total Future Lease Payments 2,132,405 Less: Imputed Interest (167,421) Total Lease Liability Balance $ 1,964,984 Operating lease costs under the operating leases totaled $150,000 and $140,300 for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, the weighted average discount rate was 4.5% and the weighted average remaining lease term was 3.5 years. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events | |
Subsequent Events | Note 14 – Subsequent Events On May 4, 2020, the Company implemented a Company-wide payroll reduction program for individuals earning more than $60,000 annually with required base salary reductions of 15% to 25% depending upon the respective base salary level in the period from May to December 31, 2020. The expected cash savings will be $1,200,000 and will result in the issuance of stock awards under the Company’s 2014 Stock Incentive Plan, at a rate 150% of the net cash wage reductions. The FMV of these stock awards has been determined at $1.53 and a total of 1,178,590 stock awards were issued. These awards are subject to vesting and resale rules. On April 21, 2020, the Company entered into a Paycheck Protection Program (PPP) Term Note under the Paycheck Protection Program of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration (the “US SBA”). The Company received total proceeds of $1,555,900 from the PPP Note. The PPP Note bears interest at the annual rate of 1%, with the first six months of interest deferred, has a term of two years, and is unsecured and guaranteed by the US SBA. The Company may apply for forgiveness of the PPP Note, with the amount which may be forgiven equating to the sum of payroll costs, covered rent and mortgage obligations, and covered utility payments incurred by the Company during the eight-week period beginning on April 21, 2020, calculated in accordance with the terms of the CARES Act. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Basis of Presentation | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of Vuzix Corporation (“the Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10‑Q and Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, the unaudited consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Certain re-classifications have been made to prior periods to conform with current reporting. The results of the Company’s operations for the three months ended March 31, 2020 are not necessarily indicative of the results of the Company’s operations for the full fiscal year or any other period. The accompanying interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto of the Company as of December 31, 2019, as reported in the Company’s Annual Report on Form 10‑K filed with the SEC on March 16, 2020. |
Going Concern | Going Concern The accompanying unaudited consolidated financial statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. These unaudited consolidated financial statements do not include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should we be unable to continue as a going concern. The Company incurred net losses for the three months ended March 31, 2020 of $5,361,624 and annual net losses of $26,476,370 in 2019 and $21,875,713 in 2018. As of March 31, 2020, the Company had an accumulated deficit of $150,104,435. The Company’s cash requirements 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, our ability to commercialize our products, our products’ timely market acceptance, selling prices and gross margins, and other factors. Historically, the Company has met its cash needs primarily by the sale of equity securities. The Company’s management intends to take actions necessary to continue as a going concern, as discussed herein. The Company will need to grow its business significantly to become profitable and self-sustaining on a cash flow basis or it will be required to raise new equity and/or debt capital. Management’s plans concerning these matters and managing our liquidity include, among other things: · the continued sale of our existing M300XL finished goods and Blade component inventory, of which we have significant levels; · the expected success of our third-generation monocular device for enterprise, the M400 Smart Glasses, which entered production near the end of the third quarter of 2019, and to date customer interest and adoption of the M400 has been more rapid than earlier models; · the commencement of volume manufacturing and sale of the new Vuzix Smart Swim product in the second quarter of 2020; · the timely sale and disposal of as many products and components as possible included in our inventory write-down losses as of December 31, 2019, primarily related to the first M300 Smart Glasses models, including the M300-C Smart Glasses in China, and excess components related to the cessation of such production; · increased our efforts to further promote our engineering services programs, which result in overall higher gross margins since such programs enable the absorption of some of our operating costs by utilizing a significant portion of our internal engineering fixed salary costs; · continued to pursue 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; · greater control of operating costs and reductions in spending growth rates wherever possible; · implementation of a Company-wide payroll reduction program for individuals earning more than $60,000 annually with required base salary reductions of 10% to 25% depending upon the respective base salary level in the period from May to December 31, 2020. The expected cash savings will be $1,200,000 and will result in the issuance of stock awards, at a rate of 150% of the net cash wage reductions; · decreased tradeshow and external PR expenditures; · right-sized operations across all areas of the Company, including head-count freezes or reductions; · delayed or curtailed discretionary and non-essential capital expenditures not related to near-term new products; · reduced the rate of new product introductions and leveraged existing platforms to reduce new product development and engineering costs; · the introduction of the M4000 in the second half of 2020 will be the Company’s next generation see-through waveguide-based product specifically designed for the enterprise market; and · further reductions of the rate of research and development spending on new technologies, particularly the use of external contractors. Based upon our current amount of cash on hand, management’s historical ability to raise capital, and our ability to manage our cost structure and adjust operating plans if and as required, we have concluded that substantial doubt of our ability to continue as a going concern has been alleviated. |
Customer Concentrations | Customer Concentrations For the three months ended March 31, 2020, one customer represented 15% of total product revenue and two confidential defense customers represented 100% of engineering services revenue. For the three months ended March 31, 2019, no one customer represented more than 10% of total product revenue. As of March 31, 2020, two customers represented 23% and 11% of accounts receivable, respectively and two confidential defense customers represented 100% of accrued project revenue. As of December 31, 2019, three customers represented 32%, 26% and 13%, respectively, of accounts receivable. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). ASU 2016-13 provides for a new impairment model which requires measurement and recognition of expected credit losses for most financial assets and certain other instruments, including but not limited to accounts receivable. ASU 2016-13 will become effective for the Company on January 1, 2023 and early adoption is permitted. The Company does not anticipate that the adoption of this standard will have a material impact on our consolidated financial statements. |
Revenue Recognition and Contr_2
Revenue Recognition and Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition and Contracts with Customers | |
Schedule of company's total revenue by major product lines | The following table summarizes the revenue recognized by major product line: Three Months Ended March 31, 2020 2019 Revenues Smart Glasses Sales $ 1,371,509 $ 1,278,371 Waveguide and Display Engine Sales — 95,000 Engineering Services 160,206 — Total Revenue $ 1,531,715 $ 1,373,371 |
Schedule of company's net sales by revenue recognition method as a percentage of total net sales | The following table presents a summary of the Company’s net sales by revenue recognition method as a percentage of total net sales for the three months ended March 31, 2020: % of Total Net Sales Point-in-Time 90 % Over Time - Input Method 10 % Total 100 % |
Inventories, Net (Tables)
Inventories, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventories, Net | |
Schedule of Inventories | Inventories are stated at the lower of cost and net realizable value and consisted of the following: March 31, December 31, 2020 2019 Purchased Parts and Components $ 5,524,161 $ 5,985,214 Work in Process 2,231,136 2,414,142 Finished Goods 2,500,949 2,096,744 Less: Reserve for Obsolescence (4,587,870) (4,788,233) Net $ 5,668,376 $ 5,707,867 |
Licenses, Net (Tables)
Licenses, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of Finite-Lived Intangible Assets | March 31, December 31, 2020 2019 Intangible Asset $ 1,500,000 $ 1,500,000 Less: Accumulated Amortization (612,000) (510,000) Intangible Asset, Net $ 888,000 $ 990,000 |
Licenses [Member] | |
Schedule of Finite-Lived Intangible Assets | March 31, 2020 December 31, 2019 Licenses $ 493,717 $ 493,717 Less: Accumulated Amortization (227,123) (179,301) Additions 544,889 — 811,483 314,416 Less: Current Portion (527,249) — Licenses, Net $ $ |
Intangible Asset, Net (Tables)
Intangible Asset, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Intangible Asset, Net | |
Schedule of Finite-Lived Intangible Assets | March 31, December 31, 2020 2019 Intangible Asset $ 1,500,000 $ 1,500,000 Less: Accumulated Amortization (612,000) (510,000) Intangible Asset, Net $ 888,000 $ 990,000 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Expenses | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following: March 31, December 31, 2020 2019 Accrued Wages and Related Costs $ 286,126 $ 394,669 Accrued Professional Services 69,690 217,721 Accrued Warranty Obligations 99,115 98,893 Other Accrued Expenses 100,090 174,614 Total $ 555,021 $ 885,897 |
Schedule of changes in accrued warranty obligations | The changes in the Company’s accrued warranty obligations for the three months ended March 31, 2020 and the balance as of December 31, 2019 were as follows: Accrued Warranty Obligation at December 31, 2019 $ 98,893 Reductions for Settling Warranties (17,122) Warranties Issued During Period 17,344 Accrued Warranty Obligations at March 31, 2020 $ 99,115 |
Stock Warrants (Tables)
Stock Warrants (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stock Warrants | |
Schedule of changes in warrants | A summary of the various changes in warrants during the three months ended March 31, 2020 is as follows: Number of Warrants Warrants Outstanding at December 31, 2019 6,512,516 Exercised During the Period — Issued During the Period — Expired During the Period — Warrants Outstanding at March 31, 2020 6,512,516 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stock Option Plans [Abstract] | |
Schedule of Summary of Stock Option Activity | A summary of stock option activity for the three months ended March 31, 2020 is as follows: Weighted Average Number of Exercise Options Price Outstanding at December 31, 2019 1,383,591 $ 4.77 Granted — — Exercised — — Expired or Forfeited — — Outstanding at March 31, 2020 1,383,591 $ 4.77 |
Right-of-Use Assets and Liabi_2
Right-of-Use Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Right-of-Use Assets and Liabilities | |
Schedule of Future lease payments under operating leases | Future lease payments under operating leases as of March 31,2020 were as follows: Remainder of 2020 $ 456,524 2021 599,190 2022 587,286 2023 489,405 Total Future Lease Payments 2,132,405 Less: Imputed Interest (167,421) Total Lease Liability Balance $ 1,964,984 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Net Income Loss | $ (5,361,624) | $ (6,359,761) | $ (26,476,370) | $ (21,875,713) | |
Retained Earnings Accumulated Deficit | $ (150,104,435) | (144,742,811) | |||
Earnings Per Share, Potentially Dilutive Securities | 12,858,707 | 7,529,006 | |||
Individual earnings reduction | $ 60,000 | ||||
Cash wage reductions | 150.00% | ||||
Accrued Revenue, Current | $ 160,206 | $ 0 | |||
Sales of Engineering Services | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration Risk, Percentage | 100.00% | ||||
Share-based Payment Arrangement, Employee [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Isuance of stock award | $ 1,200,000 | ||||
Accrued Project Revenue [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration Risk, Percentage | 100.00% | ||||
Minimum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Interest rate (as a percent) | 10.00% | ||||
Maximum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Interest rate (as a percent) | 25.00% | ||||
One customer | Total revenues [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration Risk, Percentage | 15.00% | 0.00% | |||
One customer | Accounts Receivable [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration Risk, Percentage | 23.00% | 32.00% | |||
Two customers | Accounts Receivable [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration Risk, Percentage | 11.00% | 26.00% | |||
Three Customers [Member] | Accounts Receivable [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration Risk, Percentage | 13.00% |
Revenue Recognition and Contr_3
Revenue Recognition and Contracts with Customers - Company's total revenue by major product lines (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | $ 1,531,715 | $ 1,373,371 |
Smart Glasses Sales [Member] | ||
Revenue | 1,371,509 | 1,278,371 |
Waveguide and Display Engine Sales [Member] | ||
Revenue | $ 95,000 | |
Engineering Services [Member] | ||
Revenue | $ 160,206 |
Revenue Recognition and Contr_4
Revenue Recognition and Contracts with Customers - Company's net sales as a percentage (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Performance Obligation Percentage | 100.00% |
Point-in-Time - Output Method [Member] | |
Revenue Performance Obligation Percentage | 90.00% |
Over Time - Input Method [Member] | |
Revenue Performance Obligation Percentage | 10.00% |
Revenue Recognition and Contr_5
Revenue Recognition and Contracts with Customers - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Standard Product Warranty Term | 12 months |
Revenue, Remaining Performance Obligation | $ 695,000 |
Revenue, Performance Obligation, Total Transaction Price | 855,000 |
Expects to Recognize Sales in Existing Remaining Performance Obligation | $ 695,000 |
Extended Warranties [Member] | |
Standard Product Warranty Term | 12 months |
Revenue, Remaining Performance Obligation | $ 86,000 |
OEM Product and Waveguide Sales [Member] | |
Standard Product Warranty Term | 18 months |
Loss Per Share - Additional Inf
Loss Per Share - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Loss Per Share | ||
Earnings Per Share, Potentially Dilutive Securities | 12,858,707 | 7,529,006 |
Inventories, Net - Components o
Inventories, Net - Components of Inventories (Detail) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Inventories, Net | ||
Purchased Parts and Components | $ 5,524,161 | $ 5,985,214 |
Work in Process | 2,231,136 | 2,414,142 |
Finished Goods | 2,500,949 | 2,096,744 |
Less: Reserve for Obsolescence | (4,587,870) | (4,788,233) |
Inventories, Net | $ 5,668,376 | $ 5,707,867 |
Licenses, Net (Details)
Licenses, Net (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Licenses,Net [Line Items] | ||
Less: Current Portion | $ (527,249) | $ 0 |
Licenses, Net | 284,234 | 314,416 |
Licensing Agreements [Member] | ||
Licenses,Net [Line Items] | ||
Licenses | 493,717 | 493,717 |
Less: Accumulated Amortization | (227,123) | (179,301) |
Additions | 544,889 | |
Licenses, Net | 811,483 | 314,416 |
Less: Current Portion | (527,249) | |
Licenses, Net | $ 284,234 | $ 314,416 |
Intangible Asset, Net - Schedul
Intangible Asset, Net - Schedule of Finite-Lived Intangible Assets (Details) - Intangible Assets [Member] - USD ($) | Mar. 31, 2020 | Dec. 31, 2018 |
Intangible Asset | $ 1,500,000 | $ 1,500,000 |
Less: Accumulated Amortization | (612,000) | (510,000) |
Intangible Asset, Net | $ 888,000 | $ 990,000 |
Intangible Asset, Net - Additio
Intangible Asset, Net - Additional Information (Details) - TDG Acquisition Company LLC [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total commission expense | $ 36,580 | $ 0 |
Amortization of Intangible Assets | $ 102,000 | |
Finite-Lived Intangible Assets, Remaining Amortization Period | 26 months | |
Future monthly amortization expense | $ 34,000 | |
Future per annum amortization expense | $ 408,000 |
Accrued Expenses - Components o
Accrued Expenses - Components of Accrued Expenses (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Accrued Wages and Related Costs | $ 286,126 | $ 394,669 |
Accrued Professional Services | 69,690 | 217,721 |
Accrued Warranty Obligations | 99,115 | 98,893 |
Other Accrued Expenses | 100,090 | 174,614 |
Total | $ 555,021 | $ 885,897 |
Accrued Expenses - Changes in A
Accrued Expenses - Changes in Accrued Warranty Obligations (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Accrued Expenses | |
Accrued Warranty Obligation | $ 98,893 |
Reductions for Settling Warranties | (17,122) |
Warranties Issued During Period | 17,344 |
Accrued Warranty Obligations | $ 99,115 |
Accrued Expenses - Additional I
Accrued Expenses - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Accrued Expenses | ||
Other Accrued Liabilities, Current | $ 100,090 | $ 174,614 |
Standard Product Warranty Term | 12 months |
Capital Stock - Additional Info
Capital Stock - Additional Information (Details) - USD ($) | Jan. 02, 2015 | Mar. 31, 2020 | Dec. 31, 2019 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |
Preferred Stock, Shares Issued | 49,626 | 49,626 | |
Preferred Stock, Shares Outstanding | 49,626 | 49,626 | |
Conversion of Stock, Description | Each share of Series A Preferred Stock is convertible, at the option of the Series A holder, into 100 shares of the Company's common stock (determined by dividing the Series A Original Issue Price of $500 by the Series A Conversion Price, which is equal to $5.00). | ||
Dividends Payable | $ 9,100,930 | $ 8,601,092 | |
Preferred Stock, Dividends, Declared | $ 0 | $ 0 | |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | |
Common Stock, Shares, Issued | 33,128,620 | 33,128,620 | |
Common Stock, Shares, Outstanding | 33,128,620 | 33,128,620 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |
Series A Preferred Stock [Member] | |||
Preferred Stock, Shares Issued | 49,626 | 49,626 | |
Preferred Stock, Shares Outstanding | 49,626 | 49,626 | |
Preferred Stock, Dividend Rate, Percentage | 6.00% | ||
Series A Preferred Stock [Member] | Corporation [Member] | |||
Stock Issued During Period, Value, New Issues | $ 24,813,000 | ||
Stock Issued During Period, Shares, New Issues | 49,626 | ||
Shares Issued, Price Per Share | $ 500 | ||
Stock Issued During Period, Value, New Issues | $ 24,813,000 |
Stock Warrants - Changes in War
Stock Warrants - Changes in Warrants (Details) | 3 Months Ended |
Mar. 31, 2020shares | |
Stock Warrants | |
Warrants Outstanding, Beginning of Year | 6,512,516 |
Exercised During the Year | 0 |
Issued During the Year | 0 |
Expired During the Year | 0 |
Warrants Outstanding, End of Year | 6,512,516 |
Stock Warrants - Additional Inf
Stock Warrants - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right Weighted Average Exercise Price of Warrants or Rights | $ / shares | $ 4.56 |
Warrants | |
Class of Warrant or Right [Line Items] | |
Weighted average term of warrants | 1 year 8 months 12 days |
Warrants, expire on June 18, 2021 | 1,033,062 |
Remaining of warrants, expires on January 2, 2022 | 5,479,454 |
Stock Option Plans - Summary of
Stock Option Plans - Summary of Stock Option Activity (Details) - Employee Stock Option [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Number of Options | |
Outstanding, Beginning Balance | shares | 1,383,591 |
Granted | shares | 0 |
Exercised | shares | 0 |
Expired or Forfeited | shares | 0 |
Outstanding, Ending Balance | shares | 1,383,591 |
Weighted Average Exercise Price | |
Outstanding, Beginning Balance | $ / shares | $ 4.77 |
Granted | $ / shares | 0 |
Exercised | $ / shares | 0 |
Expired or Forfeited | $ / shares | 0 |
Outstanding, Ending Balance | $ / shares | $ 4.77 |
Stock Option Plans - Additional
Stock Option Plans - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Stock Option Plans | |||
Exercisable Options Outstanding Shares | 1,058,503 | ||
Weighted average exercise price per share, Exercisable | $ 4.67 | ||
Unvested Options Outstanding, Shares | 325,088 | ||
Unvested Options Outstanding, Weighted average exercise price | $ 5.12 | ||
Unvested Options Outstanding Weighted average remaining life (years) | 8 years 3 months 18 days | ||
Weighted average remaining contractual term on vested options | 5 years 3 months 18 days | ||
Unrecognized stock compensation expense | $ 1,394,000 | ||
Weighted average recognition period | 2 years 1 month 6 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years | 6 years 3 months 18 days | |
Share-based Compensation | $ 282,201 | $ 489,754 |
Right-of-Use Assets and Liabi_3
Right-of-Use Assets and Liabilities - Operating Leases (Details) | Mar. 31, 2020USD ($) |
Right-of-Use Assets and Liabilities | |
Remainder of 2020 | $ 456,524 |
2021 | 599,190 |
2022 | 587,286 |
2023 | 489,405 |
Total Future Lease Payments | 2,132,405 |
Less: Imputed Interest | (167,421) |
Total Lease Liability Balance | $ 1,964,984 |
Right-of-Use Assets and Liabi_4
Right-of-Use Assets and Liabilities - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Right-of-Use Assets and Liabilities | ||
Operating Leases, Rent Expense | $ 150,000 | $ 140,300 |
Operating Lease, Weighted Average Remaining Lease Term | 3 years 6 months | |
Operating Lease, Weighted Average Discount Rate, Percent | 4.50% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | May 04, 2020 | Apr. 21, 2020 | Mar. 31, 2020 |
Subsequent Event [Line Items] | |||
Individual earnings reduction | $ 60,000 | ||
Cash wage reductions | 150.00% | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Individual earnings reduction | $ 60,000 | ||
Cash wage reductions | 150.00% | ||
Excercise price for the FMV | $ 1.53 | ||
Issuance of stock awards by FMV | 1,178,590 | ||
Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Interest rate (as a percent) | 10.00% | ||
Minimum [Member] | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Interest rate (as a percent) | 15.00% | ||
Maximum [Member] | |||
Subsequent Event [Line Items] | |||
Interest rate (as a percent) | 25.00% | ||
Maximum [Member] | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Interest rate (as a percent) | 25.00% | ||
Share-based Payment Arrangement, Employee [Member] | |||
Subsequent Event [Line Items] | |||
Isuance of stock award | $ 1,200,000 | ||
Share-based Payment Arrangement, Employee [Member] | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Isuance of stock award | $ 1,200,000 | ||
Term note issued under PPP | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Proceeds from debt note | $ 1,555,900 | ||
Interest rate | 1.00% | ||
Debt instrument, term | 2 years |