ROCHESTER, N.Y., April 1, 2013 /CNW/ - Vuzix Corporation (TSX-V:
VZX, OTC:BB: VUZI, FMB: V7X) ("Vuzix" or, the "Company"), a leading
supplier of Video Eyewear and smart glasses products in the
consumer, commercial and entertainment markets, reported today that
it has entered into definitive agreements with the holders of
outstanding secured promissory notes to convert all their debt
subject to the closing of the Company's proposed public stock
offering. Pursuant to these agreements, the various holders have
agreed to convert their outstanding secured promissory notes, in
the total principal amounts of $2,374,692 (as of December
31, 2012), together with accrued interest thereon (equal to
$411,572 as of December 31, 2012) into shares of the Company's
common stock, subject to the closing of the Company's proposed
public stock offering, at a conversion price equal to the public
offering price (or in the case of one lender, at its option, the
conversion price provided in its notes). That same lender also
agreed, subject to the closing of the Company's proposed public
stock offering, to exchange its outstanding warrants to purchase
533,333 shares of the Company's common stock into the greater of
(a) 200,000 shares of the Company's common stock, or (b) the Black
Scholes value of the warrants as of the date of the pricing of the
Company's proposed public stock offering based upon the per share
offering price.
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The Company also entered into deferred compensation deferral and
conversion option agreements with its President, Paul Travers and its CFO, Grant Russell that are subject to and effective
upon the closing of the Company's proposed public stock offering.
Under these agreements, unpaid salary owed to them, in the
aggregate amount of $1,452,735
(including $442,638 in accrued
interest, as of December 31, 2012),
will be convertible into shares of the Company's common stock, at
their option, at a conversion price equal to the offering price of
the Company's proposed public stock offering, subject to approval
of the TSX Venture Exchange. In addition, any remaining unconverted
amounts will be due and payable beginning April 1, 2014 in equal monthly payments over a
maximum of 12 months.
The closing of all these transactions is subject to approval of
the TSX Venture Exchange and satisfaction of customary closing
conditions, as well as the closing of the Company's proposed public
stock offering by June 30, 2013.
Paul Travers, Chief Executive
Officer of Vuzix, said that, "This debt restructuring where up to a
$4,238,998 in liabilities will be
converted to equity will dramatically improve our balance sheet and
should help make Vuzix more attractive to our current and new
investors. Further it shows the continuing support and belief of
our senior creditors and management of the exciting future
potential for Vuzix."
Further details of the debt restructurings will be available in
the Company's Form 8-K filed with the SEC by the Company and all of
the transaction documents will be filed as exhibits to the Form
8-K.
The securities to be issued upon the closing of the conversions
and warrant exchange have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or applicable state
securities laws. Accordingly, the securities may not be offered or
sold in the United States except
pursuant to an effective registration statement or an applicable
exemption from the registration requirements of the Securities Act
and such applicable state securities laws.
This release does not constitute an offer to sell or the
solicitation of an offer to buy any securities of the Company.
About Vuzix Corporation
Vuzix is a leading supplier of Video Eyewear products in the
consumer, commercial and entertainment markets. The Company's
products, personal display devices that offer users a portable high
quality viewing experience, provide solutions for mobility,
wearable displays and virtual and augmented reality. Vuzix holds 32
patents and has 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 2013 and several wireless technology innovation awards, among
others. Founded in 1997, Vuzix is a public company (TSX-V:VZX -
News, OTC:BB: VUZI, FMB: V7X) with offices in Rochester, NY, Oxford, UK and Tokyo, Japan. For more information visit
www.vuzix.com.
Forward-Looking Statements Disclaimer
Certain statements contained in this release are
"forward-looking statements" within the meaning of the Securities
Litigation Reform Act of 1995 and applicable Canadian securities
laws. Forward looking statements contained in this release relate
to the actual conversion and exchange of the debt and warrants, the
effectiveness of the deferred compensation arrangements, the
Company's ability to undertake the proposed public offering or
consummate such offering, the effects on Vuzix' balance sheet of
the arrangements described herein, and whether or not they will
increase attractiveness of the Company to its existing and new
investors, among other things, and the Company's leadership in the
Video Eyewear industry. They are generally identified by words such
as "believes," "may," "expects," "anticipates," "should" and
similar expressions. Readers should not place undue reliance on
such forward-looking statements, which are based upon the Company's
beliefs and assumptions as of the date of this release. The
Company's actual results could differ materially due to risk
factors and other items described in more detail in the "Risk
Factors" section of the Company's Annual Reports and MD&A filed
with the United States Securities and Exchange Commission and
applicable Canadian securities regulators (copies of which may be
obtained at www.sedar.com or www.sec.gov). Subsequent events and
developments may cause these forward-looking statements to change.
The Company specifically disclaims any obligation or intention to
update or revise these forward-looking statements as a result of
changed events or circumstances that occur after the date of this
release, except as required by applicable law.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For further Investor Information, please contact:
Vuzix Corporation
2166 Brighton Henrietta Townline Road
Rochester, NY 14623 USA
Investor Information – Grant
Russell
IR@Vuzix.com
Tel: +1 (585) 359-7562
Vuzix.com
SOURCE Vuzix Corporation