Vuzix® Corporation, a leading supplier of video eyewear and smart glasses products in the consumer, commercial and entertainment markets, announced that Intel Corporation has made a $24.8 million investment into the Company. Vuzix’ wearable display technology is focused on next generation optics and displays that have the potential to fit in fashion-based wearable glasses. Intel’s investment will be used for general working capital to accelerate the introduction of Vuzix next generation fashion-based wearable display products into the consumer market.
Intel purchased 49,626 of Vuzix’ Series A Preferred Stock, which are convertible into 4,962,600 shares of Vuzix’ common stock at an initial conversion price of $5.00 per share, subject to adjustment in the event of stock splits, dividends or other combinations. The shares issuable upon conversion of the Series A Preferred Stock represent approximately 30 percent of Vuzix total outstanding stock, assuming full conversion of the Series A Preferred Stock. As holders of Series A Preferred Stock, Intel has the right to vote with the holders of Common Stock on an as-converted basis, and has the right to appoint two members to Vuzix’ Board of Directors, in addition to the Company’s current five members.
In connection with the sale of its Series A Preferred Stock, holders of all of the convertible notes issued by Vuzix in June 2014 and holders of approximately 86% of the warrants issued in connection with Vuzix’ July 2013 public offering and simultaneous debt conversion, agreed to irrevocably waive their rights to anti dilution protection under their respective instruments, thereby eliminating approximately $10 million of derivative liability from Vuzix’ balance sheet.
The foregoing description of Intel’s investment is qualified in its entirety by reference to the Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 2, 2015 and the agreements attached as exhibits thereto.
About Vuzix Corporation
Vuzix is a leading supplier of Video Eyewear and Smart Glasses products in the consumer, commercial and entertainment markets.
The Company’s products include personal display and wearable computing devices that offer users a portable high quality viewing experience, provide solutions for mobility, wearable displays and virtual and augmented reality. Vuzix holds 39 patents and 10 additional patents pending and numerous IP licenses in the Video Eyewear field. The Company has won Consumer Electronics Show (or CES) awards for innovation for the years 2005 to 2014 and several wireless technology innovation awards, among others. Founded in 1997, Vuzix is a public company (VUZI.QB) with offices in Rochester, NY, Oxford, UK and Tokyo, Japan.