Vuzix Corp

Previous wording

recognition, allowance for credit losses, inventories, warranty reserves, product warranty, carrying value of long-lived assets, fair value measurement of financial instruments, valuation of stock compensation awards, achievement of equity market capitalization and probability of operational milestones being achieved under our LTIP, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not apparent from other sources. Since future events and their impact cannot be determined with certainty, the actual results will inevitably differ from our estimates. Such differences could be material to the consolidated financial statements.

Current wording

The discussion and analysis of our financial condition and results of operations is based upon our unaudited consolidated financial statements and related notes appearing elsewhere in this quarterly report. The preparation of these statements in conformity with GAAP requires the appropriate application of certain accounting policies, many of which require us to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements, including the statement of operations, balance sheet, cash flow and related notes. We continually evaluate our estimates used in the preparation of our financial statements, including those related to revenue recognition, allowance for credit losses, inventories, warranty reserves, product warranty, carrying value of long-lived assets, fair value measurement of financial instruments, valuation of stock compensation awards, achievement of equity market capitalization and probability of operational milestones being achieved under our LTIP, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not apparent from other sources. Since future events and their impact cannot be determined with certainty, the actual results will inevitably differ from our estimates. Such differences could be material to the consolidated financial statements.

Previous wording

We are engaged in the design, manufacture, marketing and sale of augmented reality wearable display devices also referred to as head mounted displays (or HMDs, but also known as near-eye displays), in the form of Smart Glasses and Augmented Reality (AR) glasses. Our wearable display devices are worn like eyeglasses or attach to a head worn mount. These devices typically include cameras, sensors, and a computer that enable the user to view, record and interact with video and digital content, such as computer data, the Internet, social media or entertainment applications. Our

Current wording

We are engaged in the design, manufacture, marketing and sale of augmented reality wearable display devices also referred to as head mounted displays (or HMDs, but also known as near-eye displays), in the form of Smart Glasses and Augmented Reality (AR) glasses. Our wearable display devices are worn like eyeglasses or attach to a head worn mount. These devices typically include cameras, sensors, and a computer that enable the user to view, record and interact with video and digital content, such as computer data, the Internet, social media or entertainment applications. Our wearable display products integrate micro-display technology with our advanced optics to produce compact high-resolution display engines, less than half an inch diagonally, which when viewed through our Smart Glasses products create virtual images that appear comparable in size to that of a computer monitor or a large-screen television.

Previous wording

With respect to our Smart Glasses and AR products, we are focused on the enterprise, defense, industrial, medical and commercial markets. All of the mobile display and mobile electronics markets in which we compete have been subject to rapid technological change over the last decade including the rapid adoption of tablets, larger screen sizes and display resolutions along with declining prices on mobile phones and other computing devices, and as a result we must continue to improve our products’ performance and lower our costs. We believe our technology, intellectual property portfolio and position in the marketplace give us a leadership position in AR and Smart Glasses products, waveguide optics and display engine technology.

Current wording

With respect to our Smart Glasses and AR products, we are focused on the enterprise, defense, industrial, medical and commercial markets. All of the mobile display and mobile electronics markets in which we compete have been subject to rapid technological change over the last decade including the rapid adoption of tablets, larger screen sizes and display resolutions along with declining prices on mobile phones and other computing devices, and as a result we must continue to improve our products’ performance and lower our costs. We believe our technology, intellectual

Previous wording

Sales. There was a decrease in total sales for the three months ended June 30, 2024, compared to the same period in 2023 of $3,598,264, or 77%. 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 September 30, 2024, compared to the same period in 2023 of $794,293, or 36%. The following table reflects the major components of our sales:

Previous wording

Sales of products decreased by 86% for the three months ended June 30, 2024, compared to the same period in 2023. Reduced sales of smart glasses was the primary driver of this decrease as unit sales of our M400 product decreased compared to the previous year’s comparable period, when an Asian distributor placed a significant order in the second quarter of 2023.

Current wording

Sales of products decreased by 28% for the three months ended September 30, 2024, compared to the same period in 2023. Reduced sales of smart glasses was the primary driver of this decrease as unit sales of our M400 product decreased compared to the previous year’s comparable period.

Previous wording

Sales of engineering services for the three months ended June 30, 2024, was $491,308, compared to $265,673 in the comparable 2023 period.

Current wording

Sales of engineering services for the three months ended September 30, 2024, was $397,386, compared to $808,156 in the comparable 2023 period.

Previous wording

For the three months ended June 30, 2024, there was a gross loss from total sales of $333,145 or 31% as compared to a gross profit of $972,386 or 21% in the comparable period in 2023.

Current wording

For the three months ended September 30, 2024, there was a gross loss from total sales of $259,848, or 19% as compared to a gross loss of $237,544, or 11% in the comparable period in 2023.

Previous wording

Unapplied manufacturing overhead costs, not already added in product cost of sales, increased by $95,172 or 26% for the three months ended June 30, 2024, over the 2023 comparable period and increased as a percentage of total sales to 42% as compared to 8% in 2023 due to lower quarterly product revenue. The increase in the net dollar amount of these unapplied overhead costs in the current period versus the prior period was primarily driven by a decrease in actual versus originally planned production levels during the period in preparation for the temporary cessation of smart glasses production in the second half of 2024 at our Rochester plant.

Current wording

Unapplied manufacturing overhead costs, not already added in product cost of sales, increased by $224,302 or 69% for the three months ended September 30, 2024, over the 2023 comparable period and increased as a percentage of total sales to 40% as compared to 15% in 2023 due to lower quarterly product revenue. The increase in the net dollar amount of these unapplied overhead costs in the current period versus the prior period was primarily driven by a decrease in actual versus originally planned production levels during the period in preparation for the temporary cessation of smart glasses production in the second half of 2024 at our Rochester, New York plant.

Previous wording

Depreciation and Amortization included in cost of sales was 29% less than the in the 2023 period, due to the full amortization and depreciation of certain manufacturing assets.

Current wording

Depreciation and Amortization included in cost of sales was 22% less than the comparable period in the 2023 period, due to the full amortization and depreciation of certain manufacturing assets.

Previous wording

Research and development expenses for the six months ended June 30, 2024 decreased by $833,234 or 14%, compared to the comparable period in 2023. This decrease was largely due to a $429,602 decrease in salary and benefits related expenses; a $309,493 decrease in external development costs; and a $49,194 decrease in supplies expenses.

Current wording

Total research and development expenses for the three months ended September 30, 2024 decreased by $578,764, or 20%, compared to the comparable period in 2023. This decrease was largely due to a $403,791 decrease in external development costs and a $222,899 decrease in salary and benefits related expenses; partially offset by a $111,550 increase in non-cash stock-based compensation primarily driven by the voluntary salary reduction program.

Previous wording

Selling and marketing expenses for the six months ended June 30, 2024 decreased by $570,416 or 11%, compared to the comparable period in 2023. This decrease was largely due to a decrease of $483,266 in advertising and tradeshow expenses; a $262,759 decrease in salary and benefits related expenses driven by headcount decreases; and a decrease of $123,741 in travel related expenses; partially offset by a $290,000 increase to our allowance for credit losses.

Current wording

Total selling and marketing expenses for the three months ended September 30, 2024 decreased by $1,065,785, or 38%, compared to the comparable period in 2023. This overall decrease was largely due to a decrease of $532,919 in advertising and tradeshow expenses; a $427,062 decrease in salary and benefits related expenses driven by headcount decreases; a decrease of $224,916 in travel related expenses; a decrease of $124,645 in external consulting expenses; and a $37,792 decrease in computer hardware and supplies expense; partially offset by a $250,000 increase to our allowance for credit losses; and a $58,168 increase in non-cash stock-based compensation primarily driven by the voluntary salary reduction program.

Previous wording

Depreciation and Amortization. Depreciation and amortization expense, not included in cost of sales, for the six months ended June 30, 2024, was $2,158,716, compared to $1,937,487 in the comparable period in 2023 or an

Current wording

Depreciation and Amortization. Depreciation and amortization expense, not included in cost of sales, for the three months ended September 30, 2024, was $410,697, compared to $959,353 in the comparable period in 2023, or a decrease of $548,656. This decrease was due to the write-off of our Atomistic technology license intangible asset at June 30, 2024. This intangible asset was previously being amortized over a ten-year period.

Previous wording

Other Income, Net. Total other income was $162,897 for the six months ended June 30, 2024, compared to other income of $1,169,334 in the comparable period in 2023, a decrease of $1,006,437. The overall decrease in other income was primarily the result of a decrease of $966,283 in investment income due to lower excess cash on-hand to invest; an increase of $145,528 in foreign exchange losses; partially offset by a decrease in Income and Other Taxes of $105,374.

Current wording

Other Income, Net. Total other income was $76,999 for the three months ended September 30, 2024, compared to other income of $449,536 in the comparable period in 2023, a decrease of $372,537. The overall decrease in other income was primarily the result of a decrease of $404,833 in investment income due to lower excess cash on-hand to invest; a foreign exchange gain of $26,471 versus a loss of $28,816 in the comparable period in 2023; partially offset by an increase of $22,991 in income and other taxes.

Previous wording

The following table compares the Company’s consolidated statements of operations data for the six months ended June 30, 2024 and 2023:

Current wording

The following table compares the Company’s consolidated statements of operations data for the nine months ended September 30, 2024 and 2023:

Previous wording

Sales. There was a decrease in total sales for the six months ended June 30, 2024, compared to the same period in 2023 of $5,785,758, or 65%. The following table reflects the major components of our sales:

Current wording

Sales. There was a decrease in total sales for the nine months ended September 30, 2024, compared to the same period in 2023 of $6,580,050, or 59%. The following table reflects the major components of our sales:

Previous wording

Sales of products decreased by 72% for the six months ended June 30, 2024, compared to the same period in 2023. Reduced smart glasses revenue was the primary driver of this decrease as unit sales of our M400 product decreased substantially compared to the previous year’s comparable period, when two major distributors placed significant stocking orders in the first half of 2023.

Current wording

Sales of products decreased by 66% for the nine months ended September 30, 2024, compared to the same period in 2023. Reduced smart glasses revenue was the primary driver of this decrease as unit sales of our M400 product decreased substantially compared to the previous year’s comparable period, when two major distributors placed significant stocking orders in the first half of 2023.

Previous wording

Sales of engineering services for the six months ended June 30, 2024, was $666,102, compared to $265,673 in the comparable 2023 period.

Current wording

Sales of engineering services for the nine months ended September 30, 2024, was $1,063,488 as compared to $1,073,829 in the comparable 2023 period.

Previous wording

For the six months ended June 30, 2024, there was a gross loss from total sales of $386,398 or 12% as compared to a gross profit of $1,848,392 or 21% in the comparable period in 2023.

Current wording

For the nine months ended September 30, 2024, there was a gross loss from total sales of $646,245, or 14% as compared to a gross profit of $1,610,847, or 15% in the comparable period in 2023.

Previous wording

Unapplied manufacturing overhead costs, not already added in product cost of sales, increased by $50,504 or 6% for the six months ended June 30, 2024, over the 2023 comparable period and increased as a percentage of total sales to 31% as compared to 10% in 2023 due to lower quarterly product revenue. The increase in the net dollar amount of these unapplied overhead costs in the current period versus the prior period was primarily driven by a decrease in actual

Current wording

Unapplied manufacturing overhead costs, not already added in product cost of sales, increased by $274,234, or 22% for the nine months ended September 30, 2024 over the 2023 comparable period and increased as a percentage of total sales to 33% as compared to 11% in 2023 due to lower quarterly product revenue. The increase in the net dollar amount of these unapplied overhead costs in the current period versus the prior period was primarily driven by a decrease in actual versus originally planned production levels during the period and the temporary cessation of smart glasses production in the second half of 2024.

Previous wording

Depreciation and Amortization included in cost of sales decreased by $127,240 or 26% for the six months ended June 30, 2024 versus the 2023 period, due to the full amortization and depreciation of certain manufacturing assets.

Current wording

Depreciation and Amortization included in cost of sales decreased by $178,323, or 25% for the nine months ended September 30, 2024 versus the 2023 period, due to the full amortization and depreciation of certain manufacturing assets.

Previous wording

Research and development expenses for the three months ended June 30, 2024 decreased by $477,826 or 17%, compared to the comparable period in 2023. This decrease was largely due to a $267,008 decrease in external development costs; a $150,809 decrease in salary and benefits related expenses; and a $44,376 reduction in supplies expenses.

Current wording

Total research and development expenses for the nine months ended September 30, 2024 decreased by $1,411,998, or 16% compared to the comparable period in 2023. This decrease was largely due to a $713,285 decrease in external development costs; a $630,246 decrease in salary and benefits related expenses; and a $62,444 decrease in supplies expenses; partially offset by a $89,295 increase in non-cash stock-based compensation primarily driven by the voluntary salary reduction program.

Previous wording

Selling and marketing expenses for the three months ended June 30, 2024 decreased by $271,701 or 11%, compared to the comparable period in 2023. This overall decrease was largely due to a decrease of $288,049 in advertising and tradeshow expenses; a $110,150 decrease in salary and benefits related expenses driven by headcount decreases; a decrease of $76,714 in travel related expenses; and a decrease of $63,314 in external consulting expenses; partially offset by a $290,000 increase to our allowance for credit losses.

Current wording

Total selling and marketing expenses for the nine months ended September 30, 2024 decreased by $1,636,201, or 21% compared to the comparable period in 2023. This decrease was largely due to a decrease of $1,016,185 in advertising and tradeshow expenses; a $730,290 decrease in salary and benefits related expenses driven by headcount decreases; a decrease of $348,656 in travel related expenses; and a $108,880 decrease in external consulting expenses; partially offset by a $540,000 increase to our allowance for credit losses; and a $98,636 increase in non-cash stock-based compensation primarily driven by the voluntary salary reduction program.

Previous wording

General and administrative expenses for the six months ended June 30, 2024, decreased by $797,824 or 8%, compared to the comparable period in 2023. This decrease was largely due to a decrease of $1,133,267 in salary and benefits related expenses which was primarily driven by a decrease in non-cash stock-based compensation; a decrease of $183,519 in investor relations expenses; a decrease of $99,349 in external consulting expenses; a decrease of $59,531 in insurance premiums; a decrease of $40,073 in travel related expenses; and a decrease of $38,650 in rent expenses; partially offset by an increase of $435,612 in legal expenses; an increase of $285,190 in additional accounting and auditing fees related to the finalization of the 2023 audit; and an increase of $37,727 in utilities expenses.

Current wording

Total general and administrative expenses for the nine months ended September 30, 2024, decreased by $917,660, or 7% compared to the comparable period in 2023. This decrease was largely due to a decrease of $315,518 in salary and benefits related expenses; a $1,557,932 decrease in non-cash stock-based compensation; a decrease of $160,697 in insurance premiums; a decrease of $141,054 in external consulting expenses; a decrease of $47,796 in recruitment and hiring expenses; and a decrease of $46,257 in travel expenses; partially offset by an increase of $568,938 in legal expenses; an increase of $418,895 in investor relations expenses; and an increase of $342,459 in additional accounting and auditing fees related to the finalization of the 2023 audit.

Previous wording

Depreciation and Amortization. Depreciation and amortization expense, not included in cost of sales, for the three months ended June 30, 2024, was $1,188,339, compared to $973,222 in the comparable period in 2023 or an increase of $215,117. This increase was due to leasehold improvements being put into service this year related to our new waveguide manufacturing facility.

Current wording

Depreciation and Amortization. Depreciation and amortization expense, not included in cost of sales, for the nine months ended September 30, 2024, was $2,569,413, compared to $2,896,840 in the comparable period in 2023 or a decrease of $327,427. This decrease was due to a significant decrease in amortization expense related to our Atomistic technology license, which was written-off as of June 30, 2024; partially offset by increases in depreciation related to leasehold improvements being put into service this year related to our new waveguide manufacturing facility.

Previous wording

Impairment on Intangible Asset and Equity Investment. For the three months ended June, 2024 there was a total impairment charges on an intangible and an equity investment of $30,119,679. Atomistic exercised on July 1, 2024 its option to terminate its previously granted license related to certain microLED technologies it was developing, and as a result of the termination of the granted license, which was effective June 30, 2024, the Company determined that the technology license asset of $24,335,554, net book value of as of June 30, 2024, has been impaired as the Company no longer has exclusive licensing rights to the technology for its use. The Company had a related equity interest in Atomistic, a private French company, and determined that at this point in time, the Company is unable to reasonably estimate a value to its future value and therefore recorded a full impairment of its investment in Atomistic referred shares resulting in a write-down charge of $5,664,446 for the period ended June 30, 2024.

Current wording

Impairment on Intangible Asset and Equity Investment. For the nine months ended September 30, 2024 there was a total impairment charge on an intangible and an equity investment of $30,301,355. On July 1, 2024, Atomistic exercised its option to terminate its previously granted license related to certain microLED technologies it was developing, and as a result of the termination of the granted license, which was effective June 30, 2024, the Company determined that the technology license asset of $24,335,554, net book value as of June 30, 2024, was impaired as the Company no longer has exclusive licensing rights to the technology. The Company had a related equity interest in Atomistic, a private French company, and determined that at this point in time, the Company is unable to reasonably estimate a value to its future value and therefore recorded a full impairment of its investment in Atomistic resulting in a write-down charge of $5,664,446 for the period ended June 30, 2024.

Previous wording

The Company still retains an equity interest in Atomistic, the right to appoint a member to the Atomistic board of directors and certain other rights as an equity owner pursuant to the stock purchase agreement and shareholders’ agreement entered into in connection with the License Agreement. The Company’s equity interest in Atomistic entitles it to a preferential allocation to 49% of the distributable amounts in the event of a liquidation event, such as an acquisition of Atomistic or its assets a share of any future royalties it receives from the technology based on the license and the 49% liquidation preferred allocation value, if any, are considered gain contingencies and will not be recorded until any specific events materialize.

Current wording

The Company retains an equity interest in Atomistic, the right to appoint a member to the Atomistic board of directors and certain other rights as an equity owner pursuant to the stock purchase agreement and shareholders’ agreement entered into in connection with the License Agreement. The Company’s equity interest in Atomistic entitles it to a preferential allocation to 49% of the distributable amounts in the event of a liquidation event, such as an acquisition of Atomistic or its assets. A share of any future royalties it receives from the technology based on the license and the 49% liquidation preferred allocation value, if any, are considered gain contingencies and will not be recorded until any specific events materialize.

Previous wording

Other Income, Net. Total other income was $118,085 for the three months ended June 30, 2024, compared to other income of $562,712 in the comparable period in 2023, a decrease of $444,627. The overall decrease in other income was primarily the result of a decrease of $423,099 in investment income due to lower excess cash on-hand to invest; an increase of $39,389 in foreign exchange losses; partially offset by a decrease in Income and Other Taxes of $17,861.

Current wording

Other Income, Net. Total other income was $239,896 for the nine months ended September 30, 2024, compared to other income of $1,618,870 in the comparable period in 2023, a decrease of $1,378,974. The overall decrease in other income was primarily the result of a decrease of $1,371,116 in investment income due to lower excess cash on-hand to invest; an increase of $90,241 in foreign exchange losses; partially offset by a decrease in income and other taxes of $82,383.

Previous wording

Provision for Income Taxes. There was not a provision for income taxes in the respective six-month periods ending June 30, 2024, and 2023.

Current wording

Provision for Income Taxes. There was not a provision for income taxes in the respective nine-month periods ending September 30, 2024, and 2023.

Previous wording

Capital Resources: As of June 30, 2024, we had cash and cash equivalents of $9,881,216, a decrease of $16,674,376 from $26,555,592 as of December 31, 2023.

Current wording

Capital Resources: As of September 30, 2024, we had cash and cash equivalents of $14,271,666, a decrease of $12,283,926 from $26,555,592 as of December 31, 2023.

Previous wording

As of June 30, 2024, we had current assets of $24,661,074 compared to current liabilities of $2,586,637 which resulted in a positive working capital position of $22,074,437. As of December 31, 2023, we had a working capital position of $36,284,259. Our current liabilities are comprised principally of accounts payable, accrued expenses, and operating lease right-of-use liabilities.

Current wording

As of September 30, 2024, we had current assets of $28,711,290 compared to current liabilities of $2,181,398 which resulted in a positive working capital position of $26,529,892. As of December 31, 2023, we had a working capital position of $36,284,259. 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 six months ended:

Current wording

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

Previous wording

a $2,081,002 decrease in trade accounts payables and accrued expenses; a $1,163,798 increase in inventory and vendor prepayments; and a $597,436 decrease in trade accounts and other receivables. For the six months ended June 30, 2023, we used a total of $12,085,707 in cash for operating activities.

Current wording

During the nine months ended September 30, 2024 we used $19,717,197 of cash for operating activities. Net changes in working capital items were $2,412,416 for the nine months ended September 30, 2024, with the largest factors resulting from a $2,611,906 decrease in trade accounts payables and accrued expenses; a $730,170 increase in inventory and vendor prepayments; a $496,022 decrease in trade accounts and other receivables; and a $199,343 decrease in other prepaid expenses. For the nine months ended September 30, 2023, we used a total of $20,133,643 in cash for operating activities.

Previous wording

During the six months ended June 30, 2024, we used $2,234,041 of cash for investing activities, which included; $929,635 in manufacturing equipment and tooling for our new waveguide manufacturing facility; $1,000,000 final payment made towards our technology license fee commitment with Atomistic; and $304,406 in patent and trademark expenditures. For the six months ended June 30, 2023, we used a total of $11,440,020 in cash for investing activities.

Current wording

During the nine months ended September 30, 2024, we used $2,566,729 of cash for investing activities, which included: $1,129,120 in manufacturing equipment and tooling for our new waveguide manufacturing facility; $1,000,000 final payment made towards our technology license fee commitment with Atomistic; and $437,609 in patent and trademark expenditures. For the nine months ended September 30, 2023, we used a total of $13,931,702 in cash for investing activities.

Previous wording

The Company’s cash requirements are primarily for funding operating losses, working capital, research and development and capital expenditures. Our operations have historically been financed primarily through net proceeds from the sale of our equity securities. The Company incurred net losses for the six months ended June 30, 2024 of $50,659,775; $50,149,077 for the year ended December 31, 2023; and $40,763,573 for the year ended December 31, 2022. The Company had net cash outflows from operations of $14,440,335 for the six months ended June 30, 2024; $26,277,824 for the year ended December 31, 2023; and $24,521,082 for the year ended December 31, 2022. As of June 30, 2024, the Company had an accumulated deficit of $344,644,568. The Company’s cash outflows for investing activities were $2,234,041 for the six months ended June 30, 2024; $19,280,966 for the year ended December 31, 2023; and $21,170,816 for the year ended December 31, 2022.

Current wording

The Company’s cash requirements are primarily for funding operating losses, working capital, research and development and capital expenditures. Our operations have historically been financed primarily through net proceeds from the sale of our equity securities. The Company incurred net losses for the nine months ended September 30, 2024 of $59,882,054; $50,149,077 for the year ended December 31, 2023; and $40,763,573 for the year ended December 31, 2022. The Company had net cash outflows from operations of $19,717,197 for the nine months ended September 30, 2024; $26,277,824 for the year ended December 31, 2023; and $24,521,082 for the year ended December 31, 2022. As of September 30, 2024, the Company had an accumulated deficit of $353,866,847. The Company’s cash outflows for investing activities were $2,566,729 for the nine months ended September 30, 2024; $19,280,966 for the year ended December 31, 2023; and $21,170,816 for the year ended December 31, 2022.

Previous wording

The factors above 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 below. 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:

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 the implementation of

Previous wording

The Company has historically sold equity securities and currently has a new Registration Statement on Form S-3 that become effective in May 2024, which includes a sales agreement with an investment banking firm 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 in an “at the market” offering. 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.

Current wording

The Company has historically raised capital through the sale of equity securities. The Company has 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 banking in an “at the market” offering. 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.

Previous wording

All such forward-looking statements are subject to certain risks and uncertainties and should be evaluated in light of important risk factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risk factors include, but are not limited to, those described in “Risk Factors” in this report and under Item 1A and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2023, and other filings we make with the Securities and Exchange Commission and the following: business and economic conditions, rapid technological changes accompanied by frequent new product introductions, competitive pressures, dependence on key customers, inability to gauge order flows from customers, fluctuations in quarterly and annual results, the reliance on a limited number of third-party suppliers, limitations of our manufacturing capacity and arrangements, the protection of our proprietary technology, the dependence on key personnel, changes in critical accounting estimates, potential impairments related to investments, foreign regulations, liquidity issues, and potential material weaknesses in internal control over financial reporting. Further, during weak or uncertain economic periods, customers may delay the placement of their orders. These factors often result in a substantial portion of our revenue being derived from orders placed within a quarter and shipped in the final month of the same quarter.

Current wording

elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2023, and other filings we make with the Securities and Exchange Commission and the following: business and economic conditions, rapid technological changes accompanied by frequent new product introductions, competitive pressures, dependence on key customers, inability to gauge order flows from customers, fluctuations in quarterly and annual results, the reliance on a limited number of third-party suppliers, limitations of our manufacturing capacity and arrangements, the protection of our proprietary technology, the dependence on key personnel, changes in critical accounting estimates, potential impairments related to investments, foreign regulations, liquidity issues, and potential material weaknesses in internal control over financial reporting. Further, during weak or uncertain economic periods, customers may delay the placement of their orders. These factors often result in a substantial portion of our revenue being derived from orders placed within a quarter and shipped in the final month of the same quarter.