Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 09, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Vuzix Corp | |
Entity Central Index Key | 0001463972 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | VUZI | |
Entity Common Stock, Shares Outstanding | 33,083,620 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and Cash Equivalents | $ 3,359,730 | $ 17,263,643 |
Accounts Receivable | 1,024,146 | 772,336 |
Accrued Project Revenue | 281,783 | 0 |
Inventories, Net | 8,428,223 | 7,281,802 |
Manufacturing Vendor Prepayments | 515,661 | 755,219 |
Prepaid Expenses and Other Assets | 813,482 | 1,310,095 |
Total Current Assets | 14,423,025 | 27,383,095 |
Long-Term Assets | ||
Fixed Assets, Net | 4,614,642 | 4,291,690 |
Operating Lease Right-of-Use Asset | 697,510 | 0 |
Patents and Trademarks, Net | 1,244,251 | 1,164,543 |
Software Development Costs, Net | 150,000 | 200,000 |
Licenses, Net | 376,666 | 437,120 |
Intangible Asset, Net | 1,194,000 | 1,398,000 |
Other Assets | 305,418 | 259,192 |
Total Assets | 23,005,512 | 35,133,640 |
Current Liabilities | ||
Accounts Payable | 1,587,271 | 2,668,241 |
Operating Lease Liability | 533,289 | 0 |
Customer Deposits | 820 | 152,362 |
Unearned Revenue | 229,205 | 211,726 |
Accrued Expenses | 640,792 | 1,614,078 |
Taxes Payable | 59,489 | 30,258 |
Total Current Liabilities | 3,050,866 | 4,676,665 |
Long-Term Liabilities | ||
Operating Lease Liability | 164,221 | 0 |
Total Liabilities | 3,215,087 | 4,676,665 |
Stockholders' Equity | ||
Preferred Stock - $.001 Par Value, 5,000,000 Shares Authorized; 49,626 and 49,626 Shares Issued and Outstanding as of June 30, 2019 and December 31, 2018. | 50 | 50 |
Common Stock - $.001 Par Value, 100,000,000 Shared Authorized; 27,604,166 Shares Issued and Outstanding as of June 30, 2019 and 27,591,670 as of December 31, 2018. | 27,604 | 27,591 |
Additional Paid-in Capital | 149,444,907 | 148,695,775 |
Accumulated Deficit | (129,682,136) | (118,266,441) |
Total Stockholders' Equity | 19,790,425 | 30,456,975 |
Total Liabilities and Stockholders' Equity | $ 23,005,512 | $ 35,133,640 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
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 | 27,604,166 | 27,591,670 |
Common Stock, Shares Outstanding | 27,604,166 | 27,591,670 |
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, 2017 | $ 50 | $ 24,276 | $ 117,827,839 | $ (96,472,452) | $ 21,379,713 |
Balance (in shares) at Dec. 31, 2017 | 49,626 | 24,276,275 | |||
Cumulative Revenue Adjustment - ASC 606 Adoption | $ 0 | $ 0 | 0 | 81,724 | 81,724 |
Stock-Based Compensation Expense | $ 28 | 932,660 | 0 | 932,688 | |
Stock-Based Compensation Expense (in shares) | 0 | 27,576 | |||
Exercise of Warrants | $ 25 | 55,697 | 0 | 55,722 | |
Exercise of Warrants (in shares) | 0 | 24,928 | |||
Exercise of Stock Options | $ 8 | (8) | 0 | ||
Exercise of Stock Options(in shares) | 0 | 8,433 | |||
Proceeds from Common Stock Offerings | $ 3,000 | 29,997,000 | 0 | 30,000,000 | |
Proceeds from Common Stock Offerings (in shares) | 0 | 3,000,000 | |||
Direct Costs of Common Stock Offerings | $ 0 | $ 0 | (1,975,000) | 0 | (1,975,000) |
Net Loss | 0 | 0 | 0 | (11,514,098) | (11,514,098) |
Balance at Jun. 30, 2018 | $ 50 | $ 27,337 | 146,838,188 | (107,904,826) | 38,960,749 |
Balance (in shares) at Jun. 30, 2018 | 49,626 | 27,337,212 | |||
Balance at Dec. 31, 2017 | $ 50 | $ 24,276 | 117,827,839 | (96,472,452) | 21,379,713 |
Balance (in shares) at Dec. 31, 2017 | 49,626 | 24,276,275 | |||
Net Loss | (21,875,713) | ||||
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 | |||
Balance at Mar. 31, 2018 | $ 50 | $ 27,307 | 146,313,883 | (101,756,373) | 44,584,857 |
Balance (in shares) at Mar. 31, 2018 | 49,626 | 27,307,455 | |||
Stock-Based Compensation Expense | $ 0 | $ 30 | 524,305 | 0 | 524,335 |
Stock-Based Compensation Expense (in shares) | 0 | 29,757 | |||
Net Loss | (6,148,443) | (6,148,443) | |||
Balance at Jun. 30, 2018 | $ 50 | $ 27,337 | 146,838,188 | (107,904,826) | 38,960,749 |
Balance (in shares) at Jun. 30, 2018 | 49,626 | 27,337,212 | |||
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 | $ 13 | 749,132 | 0 | 749,145 |
Stock-Based Compensation Expense (in shares) | 0 | 12,496 | |||
Net Loss | $ 0 | $ 0 | 0 | (11,415,695) | (11,415,695) |
Balance at Jun. 30, 2019 | $ 50 | $ 27,604 | 149,444,907 | (129,682,136) | 19,790,425 |
Balance (in shares) at Jun. 30, 2019 | 49,626 | 27,604,166 | |||
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 | |||
Stock-Based Compensation Expense | $ 0 | $ 6 | 335,453 | 0 | 335,459 |
Stock-Based Compensation Expense (in shares) | 0 | 6,249 | |||
Net Loss | $ 0 | $ 0 | 0 | (5,055,934) | (5,055,934) |
Balance at Jun. 30, 2019 | $ 50 | $ 27,604 | $ 149,444,907 | $ (129,682,136) | $ 19,790,425 |
Balance (in shares) at Jun. 30, 2019 | 49,626 | 27,604,166 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Sales: | ||||
Total Sales | $ 2,185,861 | $ 2,647,583 | $ 3,559,232 | $ 4,191,478 |
Cost of Sales: | ||||
Total Cost of Sales | 2,033,822 | 1,977,410 | 3,367,304 | 3,344,180 |
Gross Profit (exclusive of depreciation shown separately below) | 152,039 | 670,173 | 191,928 | 847,298 |
Operating Expenses: | ||||
Research and Development | 1,987,129 | 2,564,119 | 4,503,228 | 4,619,910 |
Selling and Marketing | 822,749 | 1,545,160 | 2,240,714 | 3,079,258 |
General and Administrative | 1,803,590 | 2,320,151 | 3,699,992 | 3,985,381 |
Depreciation and Amortization | 607,965 | 294,988 | 1,167,054 | 568,610 |
Total Operating Expenses | 5,221,433 | 6,724,418 | 11,610,988 | 12,253,159 |
Loss from Operations | (5,069,394) | (6,054,245) | (11,419,060) | (11,405,861) |
Other Income (Expense): | ||||
Investment Income | 32,739 | 39,986 | 91,052 | 39,986 |
Other Taxes | (10,301) | (1,316) | (62,963) | (29,858) |
Foreign Exchange Loss | (8,978) | (5,235) | (24,724) | (9,652) |
Loss on Asset Disposal | 0 | (56,836) | 0 | (56,836) |
Loss on Derivative Valuation | 0 | (63,820) | 0 | (35,687) |
Interest Expense | 0 | (6,977) | 0 | (16,190) |
Total Other Income (Expense) | 13,460 | (94,198) | 3,365 | (108,237) |
Loss Before Provision for Income Taxes | (5,055,934) | (6,148,443) | (11,415,695) | (11,514,098) |
Provision for Income Taxes | 0 | 0 | 0 | 0 |
Net Loss | (5,055,934) | (6,148,443) | (11,415,695) | (11,514,098) |
Preferred Stock Dividends | (477,907) | (450,276) | (943,672) | (889,112) |
Loss Attributable to Common Stockholders | $ (5,533,841) | $ (6,598,719) | $ (12,359,367) | $ (12,403,210) |
Basic and Diluted Loss per Share | $ (0.20) | $ (0.24) | $ (0.45) | $ (0.46) |
Weighted-average Shares Outstanding - Basic and Diluted | 27,602,014 | 27,326,649 | 27,598,909 | 26,814,264 |
Sales of Products | ||||
Sales: | ||||
Total Sales | $ 1,834,915 | $ 2,647,583 | $ 3,208,286 | $ 4,010,962 |
Cost of Sales: | ||||
Cost of Sales | 1,941,350 | 1,977,410 | 3,274,832 | 3,159,584 |
Sales of Engineering Services | ||||
Sales: | ||||
Total Sales | 350,946 | 0 | 350,946 | 180,516 |
Cost of Sales: | ||||
Cost of Sales | $ 92,472 | $ 0 | $ 92,472 | $ 184,596 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows from Operating Activities | ||
Net Loss | $ (11,415,695) | $ (11,514,098) |
Non-Cash Adjustments | ||
Depreciation and Amortization | 1,167,054 | 568,610 |
Amortization of Software Development Costs in Cost of Sales - Products | 50,000 | 0 |
Stock-Based Compensation | 872,250 | 932,687 |
Loss on Disposal of Fixed Assets | 0 | 56,836 |
Loss on Derivative Valuation | 0 | 35,687 |
(Increase) Decrease in Operating Assets | ||
Accounts Receivable | (251,810) | (1,070,354) |
Accrued Project Revenue | (281,783) | 497,784 |
Inventories | (1,146,421) | (1,421,603) |
Vendor Prepayments | 239,558 | (259,714) |
Prepaid Expenses and Other Assets | 496,613 | 104,873 |
Increase (Decrease) in Operating Liabilities | ||
Accounts Payable | (1,080,970) | (1,106,884) |
Accrued Expenses | (223,286) | (217,682) |
Customer Deposits | (151,542) | 155,919 |
Unearned Revenue | 17,479 | 43,217 |
Income and Other Taxes Payable | 25,432 | 17,468 |
Accrued Compensation | 0 | 511,365 |
Accrued Interest | 0 | (87,875) |
Net Cash Flows Used in Operating Activities | (11,683,121) | (12,753,764) |
Cash Flows from Investing Activities | ||
Purchase of Fixed Assets | (1,286,811) | (603,441) |
Investments in Patents and Trademarks | (137,755) | (108,480) |
Investments in Licenses and Other Intangible Assets | (796,226) | (250,000) |
Investments in Software Development | 0 | (87,500) |
Net Cash Used in Investing Activities | (2,220,792) | (1,049,421) |
Cash Flows from Financing Activities | ||
Proceeds from Exercise of Warrants | 0 | 39,375 |
Proceeds from Common Stock Offerings | 0 | 30,000,000 |
Issuance Costs on Common Stock Offerings | 0 | (1,975,000) |
Net Cash Flows from Financing Activities | 0 | 28,064,375 |
Net (Decrease) Increase in Cash and Cash Equivalents | (13,903,913) | 14,261,190 |
Cash and Cash Equivalents - Beginning of Period | 17,263,643 | 14,889,636 |
Cash and Cash Equivalents - End of Period | 3,359,730 | 29,150,826 |
Supplemental Disclosures | ||
Amortized Common Stock Expense and Vested Common Stock Issued | 123,105 | 0 |
Cumulative Revenue Adjustment - ASC 606 Adoption | $ 0 | $ 81,724 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
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 and six months ended June 30, 2019 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, 2018, as reported in the Company’s Annual Report on Form 10‑K filed with the SEC on March 15, 2019. 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 six months ended June 30, 2019 of $11,415,695 and annual net losses of $21,875,713 in 2018 and $19,633,502 in 2017. As of June 30, 2019, the Company has an accumulated deficit of $129,682,136. The Company’s cash requirements are primarily for funding operating losses, working capital, research and development, and capital expenditures. Our cash requirements related to funding operating losses depend on 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 by the sale of equity, borrowings under notes, and sales of convertible debt. 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 and Blade inventory; · the introduction of our M400 Smart Glasses, our third-generation monocular device for enterprise. We expect to launch the product in the third quarter of 2019; · the commencement of volume manufacturing and sale of the new M100 Smart Swim product in the third quarter of 2019; · new engineering services and product sales to business customers, first responder, defense and governmental entity customers; · tightly control operating costs and reduce spending growth rates wherever possible; · decrease tradeshow and external PR expenditures; · right size operations across all areas of the Company, including head-count and spending; · delay or curtail discretionary and non-essential capital expenditures not related to near-term new products; and · reduce the rate of research and development spending on new technologies, particularly the use of external contractors. Historically, the Company has met its cash needs primarily by the sale of equity. On July 1, 2019, the Company entered into a securities purchase agreement with certain purchasers for the sale of an aggregate of 5,479,454 shares of the Company’s common stock and warrants to purchase an aggregate of up to 5,479,454 shares of common stock, in a registered direct offering at a combined purchase price of $3.65 per share for aggregate gross sale proceeds of $20,000,000. The purchase agreement closed on July 2, 2019. The Company received net proceeds after issuance costs and expenses of $18,800,000. The warrants associated with the stock sale will be exercisable for a period of two years commencing six months from issuance date at an exercise price of $4.10 per share. 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 six months ended June 30, 2019, Foxconn Technology Group, or Foxconn (f/k/a Toshiba Japan) represented 30% of the Company’s product revenues and 27% of the Company’s total revenues. For the six months ended June 30, 2018, Toshiba Japan represented 94% of the Company’s engineering revenues and 27% of the Company’s total revenues. As of June 30, 2019, Foxconn represented 92% of accounts receivable. As of December 31, 2018, Toshiba Japan and SATS Ltd. represented 32% and 38%, 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, 2020 and early adoption is permitted. The Company does not anticipate 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 | 6 Months Ended |
Jun. 30, 2019 | |
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 four major product lines: Smart Glasses and iWear Video Headphone Sales, OEM Product Sales, Waveguide and Display Engine Sales, and Engineering Services. The following table summarizes the revenue recognized by major product line: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Revenues Smart Glasses and iWear Video Headphone Sales $ 835,847 $ 1,907,476 $ 2,114,218 $ 3,120,247 OEM Product Sales 951,570 651,895 951,570 766,065 Waveguide and Display Engine Sales 47,498 88,212 142,498 124,650 Engineering Services 350,946 — 350,946 180,516 Total Revenue $ 2,185,861 $ 2,647,583 $ 3,559,232 $ 4,191,478 Significant Judgments Under Topic 606, 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 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 satisfied at a point in time are typically for standard goods (Smart Glasses, iWear Video Headphone and, 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, except in certain European countries where it can be twenty-four (24) months for some consumer-focused products. In the case of our OEM product and waveguide sales, some include a standard product warranty of up to eighteen (18) months. In 2018, we began offering 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 six months ended June 30, 2019: % of Total Net Sales Point-in-Time 90 % Over Time - Input Method 10 % Total 100 % Remaining Performance Obligations As of June 30, 2019, the Company had $315,000 of performance obligations under our current waveguide development agreements with a global aerospace firm, which represents the total transaction price of these development agreements of $666,000, less revenue recognized under percentage of completion in the second quarter. The Company expects to recognize the remaining revenue relating to these existing performance obligations of $315,000 in the third and fourth quarter of 2019. Revenues earned less amounts paid at June 30, 2019 in the amount of $281,783 are reflected as Accrued Project Revenue in the accompanying balance sheet. As of June 30, 2019, the Company had $148,000 of remaining performance obligations related to its extended warranties. The Company expects to recognize this deferred revenue on a twelve (12) month straight-line basis beginning on October 1, 2019. |
Loss Per Share
Loss Per Share | 6 Months Ended |
Jun. 30, 2019 | |
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 and six months ended June 30, 2019 and 2018, 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 June 30, 2019 and 2018, there were 7,390,669 and 8,772,813 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 | 6 Months Ended |
Jun. 30, 2019 | |
Inventories, Net | |
Inventories | Note 4 – Inventories, Net Inventories are stated at the lower of cost and net realizable value and consisted of the following: June 30, December 31, 2019 2018 Purchased Parts and Components $ 3,527,189 $ 3,284,848 Work in Process 731,208 1,523,616 Finished Goods 4,733,711 2,837,183 Less: Reserve for Obsolescence (563,885) (363,845) Net $ 8,428,223 $ 7,281,802 |
Intangible Asset, Net
Intangible Asset, Net | 6 Months Ended |
Jun. 30, 2019 | |
Intangible Asset, Net | |
Intangible Asset, Net | Note 5 – Intangible Asset, Net June 30, December 31, 2019 2018 Intangible Asset $ 1,500,000 $ 1,500,000 Less: Accumulated Amortization (306,000) (102,000) Intangible Asset, Net $ 1,194,000 $ 1,398,000 On October 4, 2018, the Company entered into amendment No. 1 to the original agreements (the “TDG Amendment”) with TDG Acquisition Company, LLC (“TDG”), aka Six15 Technologies, LLC. The TDG Amendment amends certain provisions of prior agreements between Vuzix and TDG, including an asset purchase agreement dated June 15, 2012, and an authorized reseller agreement dated June 15, 2012. Pursuant to the TDG Amendment, the Company will be permitted to engage in sales of heads-up display components or subsystems (and any services to support such sale) for incorporation into finished goods or systems for sale to military organizations, subject to certain conditions. The Company will also be permitted to sell its products to defense and security organizations that include business customers and governmental entity customers that primarily provide security and defense services, including police, fire fighters, EMTs, other first responders, and homeland and border security. The Company will owe TDG commissions with respect to all such sales until June 2022. This reacquired right covers the entire remaining term of the original non-compete agreement with TDG, which expires June 15, 2022. The capitalized cost of this reacquired right is being amortized over 44 months, which began in October 2018. Total amortization expense for this intangible asset for the three and six months ended June 30, 2019 was $102,000 and $204,000, respectively. Future monthly amortization expense for the next 35 months is $34,000 per month. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Expenses | |
Accrued Expenses | Note 6 – Accrued Expenses Accrued expenses consisted of the following: June 30, December 31, 2019 2018 Accrued Wages and Related Costs $ 237,297 $ 461,619 Accrued Professional Services 126,289 138,438 Accrued Warranty Obligations 246,039 218,047 Other Accrued Expenses 31,167 795,974 Total $ 640,792 $ 1,614,078 As of December 31, 2018, there was $750,000 in Other Accrued Expenses related to the TDG Amendment (see Note 5). 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 except in certain European countries where it can be twenty-four (24) months for some consumer-focused products. 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 six months ended June 30, 2019 and the balance as of December 31, 2018 were as follows: Accrued Warranty Obligation at December 31, 2018 $ 218,047 Reductions for Settling Warranties (64,504) Warranties Issued During Period 92,496 Accrued Warranty Obligations at June 30, 2019 $ 246,039 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Taxes | |
Income Taxes | Note 7 – 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 | 6 Months Ended |
Jun. 30, 2019 | |
Capital Stock | |
Capital Stock | Note 8 – 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 June 30, 2019 and December 31, 2018, 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 June 30, 2019 and December 31, 2018. 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 June 30, 2019, total accumulated and unpaid preferred dividends were $7,612,904. As of December 31, 2018, total accumulated and unpaid preferred dividends were $6,669,232. There were no declared preferred dividends owed as of June 30, 2019 or December 31, 2018. 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 June 30, 2019 and December 31, 2018 there were 27,604,166 and 27,591,670 shares of common stock issued and outstanding, respectively. Historically, the Company has met its cash needs primarily by the sale of equity. On July 1, 2019, the Company entered into a securities purchase agreement with certain purchasers for the sale of an aggregate of 5,479,454 shares of the Company’s common stock and warrants to purchase an aggregate of up to 5,479,454 shares of common stock, in a registered direct offering at a combined purchase price of $3.65 per share for aggregate gross sale proceeds of $20,000,000. The purchase agreement closed on July 2, 2019. The Company received net proceeds after issuance costs and expenses of $18,800,000. The warrants associated with the stock sale will be exercisable for a period of two years commencing six months from issuance date at an exercise price of $4.10 per share. |
Stock Warrants
Stock Warrants | 6 Months Ended |
Jun. 30, 2019 | |
Stock Warrants | |
Stock Warrants | Note 9 – Stock Warrants A summary of the various changes in warrants during the six months ended June 30, 2019 is as follows: Number of Warrants Warrants Outstanding at December 31, 2018 2,233,062 Exercised During the Period — Issued During the Period — Expired During the Period (1,200,000) Warrants Outstanding at June 30, 2019 1,033,062 The outstanding warrants as of June 30, 2019 expire on June 18, 2021. The remaining term of the warrants is 2 years and the exercise price is $7.00 per share. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 6 Months Ended |
Jun. 30, 2019 | |
Stock Based Compensation Plans | |
Stock Based Compensation Plans | Note 10 – Stock-Based Compensation Plans A summary of stock option activity for the six months ended June 30, 2019 is as follows: Weighted Average Number of Exercise Options Price Outstanding at December 31, 2018 1,546,521 $ 5.11 Granted — — Exercised — — Expired or Forfeited (151,514) 5.52 Outstanding at June 30, 2019 1,395,007 $ 5.07 The weighted average remaining contractual term for all options as of June 30, 2019 and December 31, 2018 was 6.5 years and 7.2 years, respectively. As of June 30, 2019, there were 980,475 options that were fully-vested and exercisable at a weighted average exercise price of $4.73 per share. The weighted average remaining contractual term on the vested options is 5.6 years. As of June 30, 2019, there were 414,532 unvested options exercisable at a weighted average exercise price of $5.87 per share. The weighted average remaining contractual term on the unvested options is 8.6 years. The weighted average fair value of option grants was calculated using the Black-Scholes-Merton option pricing method. At June 30, 2019, the Company had approximately $2,100,000 of unrecognized stock compensation expense, which will be recognized over a weighted average period of approximately 2.6 years. For the three months ended June 30, 2019 and 2018, the Company recorded total stock-based compensation expense, including stock awards, of approximately $382,000 and $408,000, respectively. For the six months ended June 30, 2019 and 2018, the Company recorded total stock-based compensation expense, including stock awards, of approximately $872,000 and $933,000, respectively. |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2019 | |
Litigation | |
Litigation | Note 11 – Litigation We are not currently involved in any actual or pending material legal proceeding or litigation and we are not aware of any such proceedings contemplated by or against us or our property except as follows: We filed a defamation lawsuit against Ricardo Antonio Pearson (a\k\a Richard Pearson) in the Supreme Court of the State of New York, County of New York on April 5, 2018. The Company’s complaint against Mr. Pearson alleges he published false and defamatory articles about the Company. Vuzix is seeking damages in excess of $80 million, including punitive damages, and money damages. The lawsuit was moved from New York State Supreme Court, New York County, to the United States District Court, Southern District of New York, and the parties are awaiting a court ruling on the motion to dismiss that the defendant filed on May 3, 2019. On or about October 27, 2018, Bob Glenn filed a shareholder derivative suit in the Supreme Court of the State of New York, County of Monroe against certain of the Company’s current and former directors and executive officers. The Company was named as a nominal defendant only. The complaint alleges breaches of fiduciary duty, unjust enrichment, and waste of corporate assets. The complaint alleges that the Company and certain of its officers and directors made materially false and/or misleading statements and failed to disclose material adverse events about the Company’s business, operations and prospects in press releases and public filings. The complaint seeks a declaration that the defendants have breached and/or aided and abetted the breach of their fiduciary duties to the Company, determining and awarding damages, and directing the Company to reform and improve its corporate governance. Similar derivative suits were filed by Michael Washington and John Mayer on or about October 26, 2018 and October 29, 2018. The Company believes the allegations are false and intends to vigorously defend itself. The Company plans to file a motion to dismiss the complaints. |
Right-of-Use Assets and Liabili
Right-of-Use Assets and Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Right-of-Use Assets and Liabilities | |
Right-of-Use Assets and Liabilities | Note 12 – Right-of-Use Assets and Liabilities The Company has signed several lease agreements, with the largest being for its office and manufacturing facility in the Rochester, New York area under an operating lease that commenced October 3, 2015 and expires on October 3, 2020. This lease 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. This renewal term is excluded from our right-to-use asset and liability as of June 30, 2019 as the renewal option for our current leased facility is not reasonably certain. Operating lease cost under the operating leases totaled $149,777 and $118,900 for the three months ended June 30, 2019 and 2018, respectively. Operating lease cost under the operating leases totaled $290,077 and $231,796 for the six months ended June 30, 2019 and 2018, respectively. Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The leases generally also include real estate taxes and common area maintenance charges in the annual rental payments. Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases. As none of our leases provide an implicit interest rate, we use our incremental borrowing rate to determine our discount rate at lease inception based upon the information available at commencement in determining the present value of lease payments. As of June 30, 2019, the weighted average discount rate was 5% and the weighted average remaining lease term was 1.3 years. Future lease payments under operating leases as of June 30, 2019 were as follows: Remainder of 2019 $ 282,614 2020 441,607 Total Future Lease Payments 724,221 Less: Imputed Interest (26,711) Total Lease Liability Balance $ 697,510 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events | |
Subsequent Events | Note 13 – Subsequent Events Historically, the Company has met its cash needs primarily by the sale of equity. On July 1, 2019, the Company entered into a securities purchase agreement with certain purchasers for the sale of an aggregate of 5,479,454 shares of the Company’s common stock, and warrants to purchase an aggregate of up to 5,479,454 shares of common stock, in a registered direct offering at a combined purchase price of $3.65 per share for aggregate gross sale proceeds of $20,000,000. The purchase agreement closed on July 2, 2019. The Company received net proceeds after issuance costs and expenses of $18,800,000. The warrants associated with the stock sale will be exercisable for a period of two years commencing six months from issuance date at an exercise price of $4.10 per share. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
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 and six months ended June 30, 2019 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, 2018, as reported in the Company’s Annual Report on Form 10‑K filed with the SEC on March 15, 2019. |
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 six months ended June 30, 2019 of $11,415,695 and annual net losses of $21,875,713 in 2018 and $19,633,502 in 2017. As of June 30, 2019, the Company has an accumulated deficit of $129,682,136. The Company’s cash requirements are primarily for funding operating losses, working capital, research and development, and capital expenditures. Our cash requirements related to funding operating losses depend on 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 by the sale of equity, borrowings under notes, and sales of convertible debt. 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 and Blade inventory; · the introduction of our M400 Smart Glasses, our third-generation monocular device for enterprise. We expect to launch the product in the third quarter of 2019; · the commencement of volume manufacturing and sale of the new M100 Smart Swim product in the third quarter of 2019; · new engineering services and product sales to business customers, first responder, defense and governmental entity customers; · tightly control operating costs and reduce spending growth rates wherever possible; · decrease tradeshow and external PR expenditures; · right size operations across all areas of the Company, including head-count and spending; · delay or curtail discretionary and non-essential capital expenditures not related to near-term new products; and · reduce the rate of research and development spending on new technologies, particularly the use of external contractors. Historically, the Company has met its cash needs primarily by the sale of equity. On July 1, 2019, the Company entered into a securities purchase agreement with certain purchasers for the sale of an aggregate of 5,479,454 shares of the Company’s common stock and warrants to purchase an aggregate of up to 5,479,454 shares of common stock, in a registered direct offering at a combined purchase price of $3.65 per share for aggregate gross sale proceeds of $20,000,000. The purchase agreement closed on July 2, 2019. The Company received net proceeds after issuance costs and expenses of $18,800,000. The warrants associated with the stock sale will be exercisable for a period of two years commencing six months from issuance date at an exercise price of $4.10 per share. 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 six months ended June 30, 2019, Foxconn Technology Group, or Foxconn (f/k/a Toshiba Japan) represented 30% of the Company’s product revenues and 27% of the Company’s total revenues. For the six months ended June 30, 2018, Toshiba Japan represented 94% of the Company’s engineering revenues and 27% of the Company’s total revenues. As of June 30, 2019, Foxconn represented 92% of accounts receivable. As of December 31, 2018, Toshiba Japan and SATS Ltd. represented 32% and 38%, 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, 2020 and early adoption is permitted. The Company does not anticipate 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) | 6 Months Ended |
Jun. 30, 2019 | |
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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Revenues Smart Glasses and iWear Video Headphone Sales $ 835,847 $ 1,907,476 $ 2,114,218 $ 3,120,247 OEM Product Sales 951,570 651,895 951,570 766,065 Waveguide and Display Engine Sales 47,498 88,212 142,498 124,650 Engineering Services 350,946 — 350,946 180,516 Total Revenue $ 2,185,861 $ 2,647,583 $ 3,559,232 $ 4,191,478 |
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 six months ended June 30, 2019: % of Total Net Sales Point-in-Time 90 % Over Time - Input Method 10 % Total 100 % |
Inventories, Net (Tables)
Inventories, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventories, Net | |
Schedule of Inventories | Inventories are stated at the lower of cost and net realizable value and consisted of the following: June 30, December 31, 2019 2018 Purchased Parts and Components $ 3,527,189 $ 3,284,848 Work in Process 731,208 1,523,616 Finished Goods 4,733,711 2,837,183 Less: Reserve for Obsolescence (563,885) (363,845) Net $ 8,428,223 $ 7,281,802 |
Intangible Asset, Net (Tables)
Intangible Asset, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Intangible Asset, Net | |
Schedule of Finite-Lived Intangible Assets | June 30, December 31, 2019 2018 Intangible Asset $ 1,500,000 $ 1,500,000 Less: Accumulated Amortization (306,000) (102,000) Intangible Asset, Net $ 1,194,000 $ 1,398,000 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Expenses | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following: June 30, December 31, 2019 2018 Accrued Wages and Related Costs $ 237,297 $ 461,619 Accrued Professional Services 126,289 138,438 Accrued Warranty Obligations 246,039 218,047 Other Accrued Expenses 31,167 795,974 Total $ 640,792 $ 1,614,078 |
Schedule of changes in accrued warranty obligations | The changes in the Company’s accrued warranty obligations for the six months ended June 30, 2019 and the balance as of December 31, 2018 were as follows: Accrued Warranty Obligation at December 31, 2018 $ 218,047 Reductions for Settling Warranties (64,504) Warranties Issued During Period 92,496 Accrued Warranty Obligations at June 30, 2019 $ 246,039 |
Stock Warrants (Tables)
Stock Warrants (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stock Warrants | |
Schedule of changes in warrants | A summary of the various changes in warrants during the six months ended June 30, 2019 is as follows: Number of Warrants Warrants Outstanding at December 31, 2018 2,233,062 Exercised During the Period — Issued During the Period — Expired During the Period (1,200,000) Warrants Outstanding at June 30, 2019 1,033,062 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stock Based Compensation Plans | |
Summary of Stock Option Activity | A summary of stock option activity for the six months ended June 30, 2019 is as follows: Weighted Average Number of Exercise Options Price Outstanding at December 31, 2018 1,546,521 $ 5.11 Granted — — Exercised — — Expired or Forfeited (151,514) 5.52 Outstanding at June 30, 2019 1,395,007 $ 5.07 |
Right-of-Use Assets and Liabi_2
Right-of-Use Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Right-of-Use Assets and Liabilities | |
Schedule of Future lease payments under operating leases | Future lease payments under operating leases as of June 30, 2019 were as follows: Remainder of 2019 $ 282,614 2020 441,607 Total Future Lease Payments 724,221 Less: Imputed Interest (26,711) Total Lease Liability Balance $ 697,510 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) | Jul. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Summary Of Significant Accounting Policies [Line Items] | |||||||
Net Loss | $ 5,055,934 | $ 6,148,443 | $ 11,415,695 | $ 11,514,098 | $ 21,875,713 | $ 19,633,502 | |
Accumulated Deficit | (129,682,136) | (129,682,136) | (118,266,441) | ||||
Operating Lease, Liability | 697,510 | 697,510 | |||||
Operating Lease, Liability, Current | 533,289 | 533,289 | 0 | ||||
Operating Lease, Liability, Noncurrent | 164,221 | 164,221 | $ 0 | ||||
Common Stock | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Net Loss | $ 0 | $ 0 | $ 0 | ||||
Stock Issued During Period, Shares, New Issues | 5,479,454 | 3,000,000 | |||||
Warrant [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 5,479,454 | ||||||
Warrants and Rights Outstanding, Term | 2 years | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4.10 | ||||||
Common Stock and Warrant [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Share Price | $ 3.65 | ||||||
Proceeds From Issuance Of Stock And Warrants, Gross | $ 20,000,000 | ||||||
Proceeds from Issuance or Sale of Equity, Net | $ 18,800,000 | ||||||
SATS [Member] | Accounts Receivable [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Concentration Risk, Percentage | 38.00% | ||||||
Toshiba Japan [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Concentration Risk, Percentage | 94.00% | ||||||
Engineering Revenues Percentage | 27.00% | ||||||
Toshiba Japan [Member] | Accounts Receivable [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Concentration Risk, Percentage | 32.00% | ||||||
Foxconn [Member] | Accounts Receivable [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Concentration Risk, Percentage | 92.00% | ||||||
Foxconn [Member] | Total revenues [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Concentration Risk, Percentage | 27.00% | ||||||
Foxconn [Member] | Sales of Products | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Concentration Risk, Percentage | 30.00% |
Revenue Recognition and Contr_3
Revenue Recognition and Contracts with Customers - Company's total revenue by major product lines (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | $ 2,185,861 | $ 2,647,583 | $ 3,559,232 | $ 4,191,478 |
Smart Glasses and iWear Video Headphone Sales [Member] | ||||
Revenue | 835,847 | 1,907,476 | 2,114,218 | 3,120,247 |
OEM Product Sales [Member] | ||||
Revenue | 951,570 | 651,895 | 951,570 | 766,065 |
Waveguide and Display Engine Sales [Member] | ||||
Revenue | 47,498 | $ 88,212 | 142,498 | 124,650 |
Engineering Services [Member] | ||||
Revenue | $ 350,946 | $ 350,946 | $ 180,516 |
Revenue Recognition and Contr_4
Revenue Recognition and Contracts with Customers - Company's net sales as a percentage (Details) | 6 Months Ended |
Jun. 30, 2019 | |
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) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Standard Product Warranty Term | 12 months | |
Revenue, Remaining Performance Obligation | $ 315,000 | |
Revenue, Performance Obligation, Total Transaction Price | 666,000 | |
Expects to Recognize Sales in Existing Remaining Performance Obligation | 315,000 | |
Accrued Revenue, Current | 281,783 | $ 0 |
Extended Warranties [Member] | ||
Standard Product Warranty Term | 12 months | |
Revenue, Remaining Performance Obligation | $ 148,000 | |
Consumer Focused Products [Member] | ||
Standard Product Warranty Term | 24 months | |
OEM Product and Waveguide Sales [Member] | ||
Standard Product Warranty Term | 18 months |
Loss Per Share (Details)
Loss Per Share (Details) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Loss Per Share | ||
Earnings Per Share, Potentially Dilutive Securities | 7,390,669 | 8,772,813 |
Inventories, Net - Components o
Inventories, Net - Components of Inventories (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Inventories, Net | ||
Purchased Parts and Components | $ 3,527,189 | $ 3,284,848 |
Work in Process | 731,208 | 1,523,616 |
Finished Goods | 4,733,711 | 2,837,183 |
Less: Reserve for Obsolescence | (563,885) | (363,845) |
Inventories, Net | $ 8,428,223 | $ 7,281,802 |
Intangible Asset, Net - Schedul
Intangible Asset, Net - Schedule of Finite-Lived Intangible Assets (Details) - Intangible Assets [Member] - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Intangible Asset | $ 1,500,000 | $ 1,500,000 |
Less: Accumulated Amortization | (306,000) | (102,000) |
Intangible Asset, Net | $ 1,194,000 | $ 1,398,000 |
Intangible Asset, Net - Additio
Intangible Asset, Net - Additional Information (Details) - TDG Acquisition Company LLC [Member] - USD ($) | Oct. 04, 2018 | Jun. 30, 2019 | Jun. 30, 2019 |
Amortization of Intangible Assets | $ 102,000 | $ 204,000 | |
Finite-Lived Intangible Assets, Remaining Amortization Period | 44 months | 35 months | |
Future monthly amortization expense | $ 34,000 | $ 34,000 |
Accrued Expenses - Components o
Accrued Expenses - Components of Accrued Expenses (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Accrued Expenses | ||
Accrued Wages and Related Costs | $ 237,297 | $ 461,619 |
Accrued Professional Services | 126,289 | 138,438 |
Accrued Warranty Obligations | 246,039 | 218,047 |
Other Accrued Expenses | 31,167 | 795,974 |
Total | $ 640,792 | $ 1,614,078 |
Accrued Expenses - Changes in A
Accrued Expenses - Changes in Accrued Warranty Obligations (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Accrued Expenses | |
Accrued Warranty Obligation | $ 218,047 |
Reductions for Settling Warranties | (64,504) |
Warranties Issued During Period | 92,496 |
Accrued Warranty Obligations | $ 246,039 |
Accrued Expenses - Additional I
Accrued Expenses - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Other Accrued Liabilities, Current | $ 31,167 | $ 795,974 |
Standard Product Warranty Term | 12 months | |
Consumer Focused Products [Member] | ||
Standard Product Warranty Term | 24 months | |
TDG Acquisition Company LLC [Member] | ||
Other Accrued Liabilities, Current | $ 750,000 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | Jul. 01, 2019 | Jan. 02, 2015 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
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 | |||
Stock Issued During Period, Value, New Issues | $ 30,000,000 | ||||
Stock Issued During Period, Value, New Issues | 30,000,000 | ||||
Dividends Payable | $ 7,612,904 | $ 6,669,232 | |||
Preferred Stock, Dividends, Declared | $ 0 | $ 0 | |||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | |||
Common Stock, Shares, Issued | 27,604,166 | 27,591,670 | |||
Common Stock, Shares, Outstanding | 27,604,166 | 27,591,670 | |||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||
Common Stock | |||||
Stock Issued During Period, Value, New Issues | $ 3,000 | ||||
Stock Issued During Period, Shares, New Issues | 5,479,454 | 3,000,000 | |||
Stock Issued During Period, Value, New Issues | $ 3,000 | ||||
Warrant [Member] | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 5,479,454 | ||||
Warrants and Rights Outstanding, Term | 2 years | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4.10 | ||||
Common Stock and Warrant [Member] | |||||
Share Price | $ 3.65 | ||||
Proceeds From Issuance Of Stock And Warrants, Gross | $ 20,000,000 | ||||
Proceeds from Issuance or Sale of Equity, Net | $ 18,800,000 | ||||
Series A Preferred Stock [Member] | |||||
Preferred Stock, Shares Issued | 49,626 | 49,626 | |||
Preferred Stock, Shares Outstanding | 49,626 | 49,626 | |||
Convertible Preferred Stock, Shares Issued upon Conversion | 100 | ||||
Convertible Preferred Stock, Convertible, Conversion Price | $ 5 | ||||
Shares Issued, Price Per Share | $ 500 | ||||
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) | 6 Months Ended |
Jun. 30, 2019shares | |
Stock Warrants | |
Warrants Outstanding at December 31, 2018 | 2,233,062 |
Exercised During the Period | 0 |
Issued During the Period | 0 |
Expired During the Period | (1,200,000) |
Warrants Outstanding at June 30, 2019 | 1,033,062 |
Stock Warrants - Additional Inf
Stock Warrants - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2019$ / shares | |
Stock Warrants | |
Weighted average term of warrants | 2 years |
Class of Warrant or Right Weighted Average Exercise Price of Warrants or Rights | $ 7 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Summary of Stock Option Activity (Details) - Employee Stock Option [Member] | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Number of Options outstanding | |
Outstanding, Beginning Balance | shares | 1,546,521 |
Granted | shares | 0 |
Exercised | shares | 0 |
Expired or Forfeited | shares | (151,514) |
Outstanding, Ending Balance | shares | 1,395,007 |
Weighted Average Exercise Price | |
Outstanding, Beginning Balance | $ / shares | $ 5.11 |
Granted | $ / shares | 0 |
Exercised | $ / shares | 0 |
Expired or Forfeited | $ / shares | 5.52 |
Outstanding, Ending Balance | $ / shares | $ 5.07 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Stock Based Compensation Plans | |||||
Exercisable Options Outstanding Shares | 980,475 | 980,475 | |||
Weighted average exercise price per share, Exercisable | $ 4.73 | $ 4.73 | |||
Unvested Options Outstanding, Shares | 414,532 | 414,532 | |||
Unvested Options Outstanding, Weighted average exercise price | $ 5.87 | ||||
Unvested Options Outstanding Weighted average remaining life (years) | 8 years 7 months 6 days | ||||
Weighted average remaining contractual term on vested options | 5 years 7 months 6 days | ||||
Unrecognized stock compensation expense | $ 2,100,000 | $ 2,100,000 | |||
Weighted average recognition period | 2 years 7 months 6 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 6 months | 7 years 2 months 12 days | |||
Share-based Compensation | $ 382,000 | $ 408,000 | $ 872,250 | $ 932,687 |
Litigation (Details)
Litigation (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Litigation | |
Loss Contingency, Damages Sought, Value | $ 80 |
Right-of-Use Assets and Liabi_3
Right-of-Use Assets and Liabilities (Details) | Jun. 30, 2019USD ($) |
Right-of-Use Assets and Liabilities | |
Remainder of 2019 | $ 282,614 |
2020 | 441,607 |
Total Future Lease Payments | 724,221 |
Less: Imputed Interest | (26,711) |
Total Lease Liability Balance | $ 697,510 |
Right-of-Use Assets and Liabi_4
Right-of-Use Assets and Liabilities - Additional information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Right-of-Use Assets and Liabilities | ||||
Lessee, Operating Lease, Term of Contract | 5 years | 5 years | ||
Lessee, Operating Lease, Option to Extend | True | |||
Lessee, Operating Lease, Renewal Term | 3 years | 3 years | ||
Operating Leases, Rent Expense, Net | $ 149,777 | $ 118,900 | $ 290,077 | $ 231,796 |
Operating Lease, Weighted Average Remaining Lease Term | 1 year 3 months 18 days | 1 year 3 months 18 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 5.00% | 5.00% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jul. 01, 2019 | Jun. 30, 2018 |
Common Stock | ||
Subsequent Event [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 5,479,454 | 3,000,000 |
Common Stock | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 5,479,454 | |
Warrant [Member] | ||
Subsequent Event [Line Items] | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 5,479,454 | |
Warrants and Rights Outstanding, Term | 2 years | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4.10 | |
Warrant [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 5,479,454 | |
Warrants and Rights Outstanding, Term | 2 years | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4.10 | |
Common Stock and Warrant [Member] | ||
Subsequent Event [Line Items] | ||
Share Price | $ 3.65 | |
Proceeds From Issuance Of Stock And Warrants, Gross | $ 20,000,000 | |
Proceeds from Issuance or Sale of Equity, Net | $ 18,800,000 | |
Common Stock and Warrant [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Share Price | $ 3.65 | |
Proceeds From Issuance Of Stock And Warrants, Gross | $ 20,000,000 | |
Proceeds from Issuance or Sale of Equity, Net | $ 18,800,000 |