United States securities and exchange commission logo
August 18, 2022
Grant Russell
Chief Financial Officer
Vuzix Corp
25 Hendrix Road
West Henrietta, New York 14586
Re: Vuzix Corp
Form 10-K for the
Fiscal Year Ended December 31, 2021
Filed March 2, 2022
File No. 001-35955
Dear Mr. Russell:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2021
Managements Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations for Fiscal Years Ended December 31, 2021 and
December 31, 2020, page
41
1. We note that you
disclose a subtotal for Gross Profit Before Reserve for
Obsolescence. Since
inventory obsolescence reserves are normal, recurring expense to
operate your business,
please tell us how you considered the guidance in Question 100.01
of the Compliance and
Disclosure Interpretations on Non-GAAP Financial Measures.
Grant Russell
FirstName
Vuzix CorpLastNameGrant Russell
Comapany
August 18, NameVuzix
2022 Corp
August
Page 2 18, 2022 Page 2
FirstName LastName
Liquidity and Capital Resources, page 49
2. Please address the following for the Net Loss less Non-Cash
Operating Expenses and
"Net Cash Loss" measures disclosed on page 49:
We note that this measure appears to represent a non-GAAP
liquidity measure. Please
provide the most directly comparable GAAP measure, and tell us how
you considered
Item 10(e)(1)(ii)(A) of Regulation S-K.
Please explain to us how management uses this measure and why you
believe it
provides useful information to investors.
In future filings and earnings releases, please provide
disclosures that comply with
Item 10(e) of Regulation S-K and Regulation G, including
reconciliation to the most
directly comparable GAAP measure. In this regard, if Net Loss is
not the most
directly comparable GAAP measure, please revise the title of this
measure to better
describe the nature of this measure.
Consolidated Statements of Operations, page F-6
3. We note on the statements of operations, that you present a measure of
gross profit (loss)
(exclusive of depreciation shown separately below). Please tell us how
your presentation
complies with the guidance in SAB Topic 11.B. In this regard, if you
do not allocate any
depreciation and amortization to cost of sales, you should remove the
gross profit subtotal
from your statements of operations and relabel the cost of sales line
item to indicate that it
excludes depreciation and amortization. Your disclosures in MD&A
should be similarly
revised. Additionally, we note that in your Form 10-Q for the Quarter
Ended July 3,
2022, it is not clear where depreciation is presented in the
Statements of Comprehensive
Income. Please advise and revise accordingly, if applicable.
Notes to the Consolidated Financial Statements, page F-8
4. We note from your disclosure in Note 1 on page F-13, that for the year
ended December
31, 2021 you recognized $4,047,444 of stock compensation expense
related to stock
awards and stock option grants and $13,255,388 related to the LTIP. In
light of this
significant expense, please consider disclosing the amount of expense
related to share-
based payment arrangements included in each specific line item on the
income statement.
See guidance in SAB Topic 14.F.
Grant Russell
FirstName
Vuzix CorpLastNameGrant Russell
Comapany
August 18, NameVuzix
2022 Corp
August
Page 3 18, 2022 Page 3
FirstName LastName
Note 14. Long Term Incentive Plan, page F-24
5. We note your disclosure that during the fourth quarter of 2021 you
corrected an error
made in determining the fair market value of the market capitalization
awards first put in
place in March 2021. As a result, stock compensation expense, and
therefore net loss and
EPS, for each of the three preceding 2021 quarters was misstated, and
you have presented
the restated amounts for each quarter in the notes to the financial
statements. In light of
the fact that the error appears to materially affect the income
statement for at least 2 of the
quarters, please tell us why you did not file an amended Form 10-Q for
the periods
affected by this restatement. Please also tell us what consideration
was given to filing an
Item 4.02 Form 8-K.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Eiko Yaoita Pyles, Staff Accountant, at 202-551-3587 or
Claire
Erlanger, Senior Staff Accountant, at 202-551-3301 with any questions.
Sincerely,
Division of
Corporation Finance
Office of
Manufacturing