Vuzix Corp

Previous wording

Sales. There was a decrease in total sales for the three months ended March 31, 2026, compared to the same period in 2025 of $189,617, or 12%. The following table reflects the major components of our sales:

Current wording

Sales. There was a decrease in total sales for the three months ended June 30, 2026, compared to the same period in 2025 of $182,211, or 14%. The following table reflects the major components of our sales:

Previous wording

Sales of products decreased by 21% for the three months ended March 31, 2026, compared to the same period in 2025.

Current wording

Sales of products decreased by 15%, or $161,014 for the three months ended June 30, 2026, compared to the same period in 2025, from $1,045,310 to $884,296. Reduced smart glasses revenue was the primary driver of this decrease as unit sales of our M400 product decreased, along with the unit sales of our products that were discontinued in 2026, compared to the previous year’s comparable period.

Previous wording

For the three months ended March 31, 2026, there was a gross loss from total sales of $377,911, or 27%, compared to a gross loss of $265,118, or 17% in the comparable period in 2025. The increased gross loss was primarily due to lower total sales as compared to the comparable 2025 period.

Current wording

For the three months ended June 30, 2026, there was a gross loss from total sales of $645,411, or 58%, compared to a gross loss of $761,370, or 59%, in the comparable period in 2025.

Previous wording

Unapplied manufacturing overhead costs, not already added into product cost of sales, increased by $28,613, or 5% for the three months ended March 31, 2026 compared to the 2025 comparable period. As a percentage of total sales, such costs increased to 44% compared to 37% in 2025 due to lower product revenue and lower production levels of new product, as the Company has sufficient finished goods on hand to meet currently expected demand for current Smart Glasses models for the foreseeable future.

Current wording

Unapplied manufacturing overhead costs, not already added into product cost of sales, increased by $60,828, or 12%, for the three months ended June 30, 2026 compared to the 2025 comparable period. As a percentage of total sales, such costs increased to 51% compared to 39% in 2025 due to lower product revenue and lower production levels of new product, as the Company has sufficient finished goods on hand to meet currently expected demand for current Smart Glasses models for the foreseeable future.

Previous wording

Depreciation and Amortization included in cost of sales decreased by $94,128, or 53%, for the three months ended March 31, 2026 versus the comparable period 2025.

Current wording

Depreciation and amortization included in cost of sales decreased by $93,770, or 56%, for the three months ended June 30, 2026 versus the comparable period 2025. This decrease was due to certain leasehold improvements becoming fully depreciated in November 2025.

Previous wording

Total research and development expenses for the three months ended March 31, 2026 increased by $422,515, or 16%, compared to the comparable period in 2025. This increase was largely due to a $433,703 increase in cash salary and benefits related expenses due to headcount increases; a $244,601 increase in depreciation related to under-utilized new manufacturing equipment still being used primarily for R&D purposes, which were still being built in the comparable period; a $75,494 increase in rent and utilities expenses related to our new California-based waveguide research and development facility that we did not have in the first quarter of 2025; and a $37,932 increase in computer software subscription expenses; partially offset by a $217,233 decrease in non-cash stock-based compensation expenses and a $188,919 decrease in external development costs.

Current wording

Total research and development expenses for the three months ended June 30, 2026 increased by $527,002, or 20%, compared to the comparable period in 2025. This increase was largely due to a $326,614 increase in external development costs for our new products; a $231,641 increase in cash salary and benefits related expenses due to headcount increases; a $98,880 increase in depreciation related to under-utilized new manufacturing equipment still being used primarily for R&D purposes; and a $41,964 increase in supplies expenses; partially offset by a $98,443 decrease in rent and utilities expenses.

Previous wording

Depreciation and Amortization. Depreciation and amortization expense, not included in cost of sales or research and development expenses, for the three months ended March 31, 2026, was $115,017, compared to $405,011 in the comparable period in 2025, or a decrease of $289,994. This decrease was due to certain leasehold improvements becoming fully depreciated in November 2025.

Current wording

Depreciation and Amortization. Depreciation and amortization expense, not included in cost of sales or research and development expenses, for the three months ended June 30, 2026, was $118,245, compared to $413,483 in the comparable period in 2025, or a decrease of $295,238. This decrease was due to certain leasehold improvements becoming fully depreciated in November 2025.

Previous wording

Other Income, Net. Total other income was $134,767 for the three months ended March 31, 2026 compared to other income of $136,793 in the comparable period in 2025, a modest decrease of $2,026.

Current wording

Other Income, Net. Total other income was $125,110 for the three months ended June 30, 2026, compared to other income of $189,050 in the comparable period in 2025, a decrease of $63,940. This decrease was due to an increase of $61,104 in other taxes; and an increase of $24,842 in foreign exchange losses; partially offset by an increase in investment income of $22,006.

Previous wording

Sales of engineering services and OEM products for the three months ended March 31, 2026, were $348,936 compared to $256,868 in the comparable 2025 period, an increase of 36%.

Current wording

Sales of engineering services and OEM products for the six months ended June 30, 2026, were $578,139 compared to $507,267 in the comparable 2025 period, an increase of 14%.

Previous wording

Total selling and marketing expenses for the three months ended March 31, 2026 increased by $13,400, or 1% compared to the comparable period in 2025. This increase was due to a $254,426 increase in cash salary and benefits related expenses due to headcount increases; and a $47,663 increase in travel related expenses; offset by a $292,027 decrease in non-cash stock-based compensation expense; and a decrease of $21,572 in advertising and tradeshow expenses.

Current wording

Total selling and marketing expenses for the six months ended June 30, 2026 decreased by $129,646, or 4%, compared to the comparable period in 2025. This decrease was due to a $482,840 decrease in non-cash stock-based compensation expenses; partially offset by a $258,678 increase in cash salary and benefits-related expenses due to headcount increases; and a $32,926 increase in travel-related expenses.

Previous wording

Total general and administrative expenses for the three months ended March 31, 2026, decreased by $1,827,042, or 46%, compared to the comparable period in 2025. The decrease was largely due to a $1,729,895 decrease in non-cash stock-based compensation expense related to our 2024 cash salary reduction program in exchange for equity, which ended on April 30, 2025, and the termination of the Company’s original LTIP, which was cancelled on June 16, 2025; a $304,376 decrease in IR and shareholder related expenses; a $63,259 decrease in legal expenses; and a $35,763 decrease in consulting fees; partially offset by a $232,908 increase in cash salary and benefits; a $30,263 increase in travel related expenses; and a $25,087 increase in accounting and auditing fees.

Current wording

Total general and administrative expenses for the six months ended June 30, 2026 decreased by $1,901,300, or 28%, compared to the comparable period in 2025. The decrease was largely due to a $1,618,957 decrease in non-cash stock-based compensation expense related to our 2024 cash salary reduction program in exchange for equity, which ended on April 30, 2025, and the termination of the Company’s original LTIP, which was cancelled on June 16, 2025; a $805,641 decrease in IR and shareholder related expenses; a $87,397 decrease in legal expenses; and a $77,467 decrease in consulting fees; partially offset by a $459,578 increase in cash salary and benefits mostly due to our 2024 cash salary reduction program, which ended on April 30, 2025; a $87,984 increase in recruitment and hiring expenses; a $58,825 increase in supplies expenses; a $43,503 increase in accounting and auditing costs; and a $38,289 increase in travel related costs.

Previous wording

Capital Resources: As of March 31, 2026, we had cash and cash equivalents of $20,167,137, a decrease of $983,076 from $21,150,213 as of December 31, 2025.

Current wording

Capital Resources: As of June 30, 2026, we had cash and cash equivalents of $17,297,697, a decrease of $3,852,516 from $21,150,213 as of December 31, 2025.

Previous wording

As of March 31, 2026, we had current assets of $24,780,826 compared to current liabilities of $4,005,287 which resulted in a positive working capital position of $20,775,539. As of December 31, 2025, we had a positive working capital position of $22,307,525. Our current liabilities are comprised principally of accounts payable, accrued expenses, and operating lease right-of-use liabilities.

Current wording

As of June 30, 2026, we had current assets of $21,850,841 compared to current liabilities of $3,836,024 which resulted in a positive working capital position of $18,014,817. As of December 31, 2025, we had a positive working capital position of $22,307,525. Our current liabilities are comprised principally of accounts payable, accrued expenses, and operating lease right-of-use liabilities.

Previous wording

The following table summarizes our select cash flows for the three months ended:

Current wording

The following table summarizes our select cash flows for the six months ended:

Previous wording

During the three months ended March 31, 2026, we used $5,555,245 of cash for operating activities, an increase of $2,101,622 from the comparable 2025 period. Net changes in working capital items were $385,149 for the three months ended March 31, 2026, with the largest factors resulting from a $1,068,533 decrease in trade accounts and other receivables; a $300,007 increase in inventory and vendor prepayments; partially offset by a $1,028,238 decrease in trade accounts payables and accrued expenses. For the three months ended March 31, 2025, we used a total of $3,453,623 in cash for operating activities.

Current wording

During the six months ended June 30, 2026, we used $12,151,830 of cash for operating activities, an increase of $3,910,018 from the comparable 2025 period. Net changes in working capital items were $275,710 for the six months ended June 30, 2026, with the largest factors resulting from an $848,156 decrease in trade accounts and other receivables; a $344,656 decrease in inventory and vendor prepayments; offset by a $1,257,323 decrease in trade accounts payables and accrued expenses. For the six months ended June 30, 2025, we used a total of $8,241,812 in cash for operating activities.

Previous wording

During the three months ended March, 2026, we used $1,172,101 of cash for investing activities, which included: $996,385 in manufacturing equipment and tooling primarily for our new waveguide manufacturing facility and $175,716 in patent and trademark expenditures. For the three months ended March 31, 2025, we used a total of $764,132 in cash for investing activities.

Current wording

During the six months ended June 30, 2026, we used $1,537,472 of cash for investing activities, which included: $1,213,562 in manufacturing equipment and tooling, primarily for new waveguide manufacturing equipment, and $323,910 in patent and trademark expenditures. For the six months ended June 30, 2025, we used a total of $1,631,941 in cash for investing activities.

Previous wording

During the three months ended March 31, 2026, we received $5,744,270 from financing activities, which included $5,784,193 in net proceeds from sales of common stock under our ATM program less $39,923 in Series B Preferred Stock dividend payments. For the three months ended March 31, 2025, we received $1,262,250 from financing activities.

Current wording

During the six months ended June 30, 2026, we received $9,836,786 from financing activities, which included $9,914,210 in net proceeds from sales of common stock under our ATM program less $77,424 in Series B Preferred Stock dividend payments. For the six months ended June 30, 2025, we received $9,141,832 from financing activities.

Previous wording

In February 2026, the U.S. Supreme Court issued a ruling invalidating tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Through March 31, 2026, the Company has paid approximately $190,000 related to IEEPA tariffs for the purchase of fixed assets and components included in the costs of sales. However, significant uncertainty remains regarding the ultimate availability, timing, and magnitude of potential refunds due to a phased administrative process, ongoing litigation, and potential appeals. Consequently, as of March 31, 2026, the Company has not recorded a receivable, asset, or gain because recovery is not considered "probable" or "reasonably estimable" under the loss recovery model of ASC 410-30 and ASC 450, with potential refunds currently treated as unrecognized gain contingencies.

Current wording

In February 2026, the U.S. Supreme Court issued a ruling invalidating tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Through March 31, 2026, the Company had paid approximately $190,000 related to IEEPA tariffs for the purchase of fixed assets and components included in the costs of sales. However, significant uncertainty remains regarding the ultimate availability, timing, and magnitude of potential refunds due to a phased administrative process, ongoing litigation, and potential appeals. Consequently, as of June 30, 2026, the Company has not recorded a receivable, asset, or gain because recovery for any unrefunded amounts as they

Previous wording

The Company incurred net losses of $7,071,324 for the three months ended March 31, 2026; $32,273,128 for the year ended December 31, 2025; and $73,538,157 for the year ended December 31, 2024. The Company had net cash outflows from operations of $5,555,245 for the three months ended March 31, 2026; $18,789,272 for the year ended December 31, 2025; and $23,739,372 for the year ended December 31, 2024. As of March 31, 2026, the Company had an accumulated deficit of $406,967,234.

Current wording

The Company incurred net losses of $14,700,019 for the six months ended June 30, 2026; $32,273,128 for the year ended December 31, 2025; and $73,538,157 for the year ended December 31, 2024. The Company had net cash outflows from operations of $12,151,830 for the six months ended June 30, 2026; $18,789,272 for the year ended December 31, 2025; and $23,739,372 for the year ended December 31, 2024. As of June 30, 2026, the Company had an accumulated deficit of $414,633,429.

Previous wording

These historical financial factors initially raise substantial 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 substantial 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.

Current wording

These historical financial factors initially raise substantial 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 substantial doubt include raising further capital, the implementation of operational improvements, and the curtailment of certain development programs, all of which the Company expects will preserve cash.

Previous wording

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 from time to time under a sales agreement with an investment bank in an ATM offering. Since commencement of the ATM offering in May 2024, the Company has raised $28,250,484, net of broker expenses, including $5,784,193 in the three months ended March 31, 2026, under this sales agreement.

Current wording

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 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 $32,380,501, net of broker expenses, including $9,914,210 to date in 2026, under this sales agreement.

Previous wording

Management monitors the capital markets on an ongoing basis and may consider raising capital if favorable market conditions develop. If the Company needs to raise capital for additional liquidity, the Company may 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.

Current wording

Management will continue to utilize the available “at the market” noted above to satisfy obligations as they become due, as well as, monitor the capital markets on an ongoing basis and may consider raising capital under other programs if favorable market conditions develop. If the Company needs to raise capital for additional liquidity, the Company may 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.