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Basis of Presentation | 9 Months Ended
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Sep. 30, 2025
Basis of Presentation |
Basis of Presentation | Note 1 – Basis of Presentation The accompanying unaudited consolidated financial statements of Vuzix Corporation (“the Company” or “Vuzix”) 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 (“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. The results of the Company’s operations for the three and nine months ended September 30, 2025 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 and for the year ended December 31, 2024, as reported in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2025. ​ Customer Concentrations For the three months ended September 30, 2025, four customers represented 19%, 17%, 11%, and 11%, of total product revenue and four customers represented 39%, 32%, 16%, and 12%, of engineering services revenue. For the three months ended September 30, 2024, two customers represented 10%, each, of total product revenue and three customers represented 50%, 27%, and 19% of engineering services revenue. For the nine months ended September 30, 2025, one customer represented 17% of total product revenue and four customers represented 29%, 25%, 23%, and 11% of engineering services revenue. For the nine months ended September 30, 2024, one customer represented 11% of total product revenue and two customers represented 71% and 17% of engineering services revenue. As of September 30, 2025, four customers represented 25%, 18%, 16%, and 10% of accounts receivable. As of December 31, 2024, one customer represented 76% of accounts receivable. Fair Value of Financial Instruments ​ The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, accounts payable, unearned revenue, accrued expenses, and income and other taxes payable. As of the consolidated balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short maturities of these instruments. Going Concern ​ The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should we be unable to continue as a going concern. ​ The Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. (ASU) 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. As a result, management is primarily responsible for assessing if there is a going concern issue when issuing an entity’s financial statements. The going concern assumption underlies all GAAP financial reporting and therefore requires and assumes that the financial statements have been prepared on a going concern basis. It presumes that a Company will continue normal business operations into the future. ​ Additional disclosure is required when there is substantial doubt about business continuity or substantial doubt that has not been alleviated by management’s mitigation plans. As required under applicable accounting standards, management has concluded that doubt may exist surrounding the Company's ability to meet its obligations within one year of the release of the financial statements. ​ The Company incurred net losses for the nine months ended September 30, 2025 of $23,658,106; $73,538,157 for the year ended December 31, 2024; and $50,149,077 for the year ended December 31, 2023. The Company had net cash outflows from operations of $13,234,835 for the nine months ended September 30, 2025; $23,739,372 for the year ended December 31, 2024; and $26,277,824 for the year ended December 31, 2023. As of September 30, 2025, the Company had an accumulated deficit of $391,181,056. The Company’s cash outflows for investing activities were $2,090,434 for the nine months ended September 30, 2025; $2,919,949 for the year ended December 31, 2024; and $19,280,966 for the year ended December 31, 2023. ​ The Company’s cash requirements going forward are primarily for funding operating losses, research and development, working capital, and capital expenditures. Our cash requirements related to funding operating losses depend upon numerous factors, including new product development activities, 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 through the sale of equity securities. The Company will need to grow its business significantly to become profitable and self-sustaining on a cash flow basis or it will be required to cut its operating costs significantly or raise new equity and/or debt capital. ​ These historical financial factors initially raise doubt about the Company’s ability to continue as a going concern. The Company’s management intends to take actions necessary to continue as a going concern, as discussed herein. Management’s plans to alleviate the conditions that raise doubt include raising further capital and the implementation of operational improvements and the curtailment of certain development programs, both of which the Company expects will preserve cash. ​ Management’s plans concerning these matters and managing our liquidity include, among other things:
| ● | Reductions in our cash annual operating expenses across all operating areas, including in the areas of Research and Development, Sales and Marketing and General and Administrative;
| ● | Delaying or curtailing discretionary and non-essential capital expenditures not related to near-term product and manufacturing needs and reducing other investing activities for the remainder of our 2025 and 2026 fiscal years;
| ● | The expected margin contribution upon the commencement of volume manufacturing and sales of waveguides from our new waveguide manufacturing plant, particularly to OEM customers; and
| ● | Continued pursuit of licensing and strategic opportunities around our waveguide technologies with potential OEMs, which would include the receipt of upfront licensing fees and on-going supply agreements.
The Company has historically raised capital through the sale of equity securities. The Company filed a Registration Statement on Form S-3 that became effective in May 2024, which includes a sales agreement prospectus for the issuance and sale of up to $50,000,000 of our common stock that may be issued and sold from time to time under a sales agreement with an investment bank in an “at the market” offering. Since May 2024, the Company has raised $20,363,120, net of broker expenses, including $5,550,599 and $9,640,449, respectively, in the three and nine months ended September 30, 2025, under this sales agreement. Management monitors the capital markets on an ongoing basis and may consider raising capital if favorable market conditions develop. If the Company’s actual results are less than projected or the Company needs to raise capital for additional liquidity, the Company may be required to pursue additional equity financings, further curtail expenses, or enter into one or more strategic transactions. However, management can make no assurance that the Company will be able to successfully complete any of the forementioned pursuits on terms acceptable to the Company, or at all. ​ As a result of management’s plan above, our current amount of cash on hand, and our historical ability to raise capital, management has concluded that doubt of our ability to continue as a going concern has been alleviated. ​ Use of Estimates ​ The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at year-end and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Segment Data, Geographic Information and Significant Customers Operating segments are defined as components of an entity for which separate financial information is available and regularly reviewed by the chief operating decision maker (“CODM”). The Company’s CODM is its Chief Executive Officer. The Company is not organized by market and is managed and operated as one business. A single management team that reports to the CODM comprehensively manages the entire business. The Company does not operate any material separate lines of business or separate business entities and therefore manages its operations as a single operating segment and, therefore, a single reportable segment. Our CODM evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis, accompanied by information about revenue disaggregated by geographic region. Because our CODM evaluates financial performance on a consolidated basis, we have determined that we have a single operating segment composed of the consolidated financial results of Vuzix Corporation. ​ The CODM reviews financial information, presented on a consolidated basis, focusing on significant expenses and net loss/income for purposes of making operating decisions, allocating resources, and evaluating financial performance. The measure used by our CODM to assess performance and make operating decisions is net loss as reported on our consolidated statements of operations. Net loss is used by our CODM to identify underlying trends in the performance of our business and make comparisons with the financial performance of our competitors. The measure of segment assets is reported on the balance sheet as total consolidated assets. Our CODM also reviews total assets, as reported on our consolidated balance sheets, and purchases of fixed assets, as reported on our consolidated statements of cash flows. ​ Significant expenses regularly provided to and reviewed by the CODM are Cost of Sales, Research and Development, Total Compensation, General and Administrative, and Intangible Asset and Equity Investment Impairment. These segment items for the three and nine months ended September 30, 2025 and 2024 are: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Nine Months Ended September 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Sales | ​ | $ | 1,160,947 | ​ | $ | 1,385,714 | ​ | $ | 4,037,598 | ​ | $ | 4,482,153
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Less expenses: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cost of Sales, excluding compensation | ​ | ​ | (1,161,854) | ​ | ​ | (1,200,502) | ​ | ​ | (4,219,187) | ​ | ​ | (3,813,394)
Research and Development, excluding compensation | ​ | ​ | (1,475,858) | ​ | ​ | (701,501) | ​ | ​ | (3,870,517) | ​ | ​ | (2,240,152)
General and Administrative, excluding compensation | ​ | ​ | (1,301,298) | ​ | ​ | (1,668,433) | ​ | ​ | (4,417,010) | ​ | ​ | (4,723,130)
Total Compensation | ​ | ​ | (4,043,040) | ​ | ​ | (5,892,772) | ​ | ​ | (13,212,176) | ​ | ​ | (18,619,455)
Intangible Asset and Equity Investment Impairment | ​ | ​ | — | ​ | ​ | (181,676) | ​ | ​ | — | ​ | ​ | (30,301,355)
Other segment items | ​ | ​ | (533,122) | ​ | ​ | (963,109) | ​ | ​ | (1,976,814) | ​ | ​ | (4,666,721)
​ | ​ | ​ | (8,515,172) | ​ | ​ | (10,607,993) | ​ | ​ | (27,695,704) | ​ | ​ | (64,364,207)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net Loss | ​ | $ | (7,354,225) | ​ | $ | (9,222,279) | ​ | $ | (23,658,106) | ​ | $ | (59,882,054)
​ Other Segment Items:
| - | Selling and Marketing, excluding compensation expense;
| - | Depreciation and Amortization, not included in Cost of Sales; and
| - | Other Income.
Geographic Information ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30,
​ | ​ | 2025 | ​ | ​ | ​ | ​ | 2024 | ​
​ |  | Revenue |  | % of Total |  | ​ | ​ |  | Revenue |  | % of Total |
U.S. | ​ | $ | 1,001,990 |  | 86 | % | ​ | U.S. | ​ | $ | 830,264 |  | 60 | %
Others | ​ |  | 158,957 |  | 14 | % | ​ | Others | ​ |  | 555,450 |  | 40 | %
Total Revenues | ​ | $ | 1,160,947 |  | 100 | % | ​ | Total Revenues | ​ | $ | 1,385,714 |  | 100 | %
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30,
​ | ​ | 2025 | ​ | ​ | ​ | ​ | 2024 | ​
​ |  | Revenue |  | % of Total |  | ​ | ​ |  | Revenue |  | % of Total |
U.S. | ​ | $ | 2,470,637 |  | 61 | % | ​ | U.S. | ​ | $ | 2,234,932 |  | 50 | %
Netherlands | ​ |  | 574,023 |  | 14 | % | ​ | Poland | ​ |  | 1,005,280 |  | 22 | %
Others | ​ |  | 992,938 |  | 25 | % | ​ | Others | ​ |  | 1,241,941 |  | 28 | %
Total Revenues | ​ | $ | 4,037,598 |  | 100 | % | ​ | Total Revenues | ​ | $ | 4,482,153 |  | 100 | %
​ All long-lived assets are located in the U.S. Recent Accounting Pronouncements In December 2023, the FASB released Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which amends income tax disclosure requirements to enhance the transparency and decision usefulness for users of the consolidated financial statements. The standard will be effective for the Company beginning with its annual financial statements for the fiscal year ending December 31, 2025. The Company is currently evaluating the impact of this standard, if any, on its financial statement disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public entities to provide disaggregated disclosures of certain expense captions presented on the face of the income statement into specific categories within the notes to the consolidated financial statements. ASU 2024-03 is effective for the Company’s annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The ASU may be applied either on a prospective or retrospective basis. The Company is currently evaluating the impact of adoption of ASU 2024-03 on its financial statements and related disclosures. In July 2024, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which amends ASC 326-20 to provide a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities, that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The standard is effective for annual reporting periods beginning after December 15, 2025, including interim periods, and allows for early adoption. The Company is currently evaluating the impact on its financial statements and related disclosures.

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