Corporate Presentation March 2018

Transcription

1 Corporate Presentation March 2018

2 Cautionary Note Regarding Forward Looking Statements Certain statements included in this presentation may be considered forward-looking. All statements in this presentation that are not historical facts are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be taken as guarantees of future performance or results. We may use words such as expects, anticipates, intends, plans, believes, could, seeks, estimates, and variations of such words and similar expressions in identifying forward-looking statements. The forward-looking statements herein include, but not limited to, statements concerning: our possible or assumed future results of operations; our business strategies; our ability to attract and retain customers; our ability to sell additional products and services to customers; our cash needs and financing plans; our competitive position; our industry environment; our potential growth opportunities; expected technological advances by us or by third parties and our ability to leverage them; the effects of future regulation; and the effects of competition. These statements are based on our management s beliefs and assumptions and on information currently available to our management. It is important to note that forward-looking statements are not guarantees of future performance, and that our actual results could differ materially from those set forth in any forward-looking statements. Due to risks and uncertainties, actual events may differ materially from current expectations. For a more in-depth discussion of these and other factors that could cause actual results to differ from those contained in forward-looking statements, see the discussions under the heading "Risk Factors" in the Company s most recent annual report on Form 10-K and other documents that the Company has subsequently filed with the SEC. Vuzix disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events orotherwise, except asrequired by law. 2

3 Vuzix Corporation: Leading Augmented Reality Wearable Display Company Year Founded Headquarters Financial Statistics Company Overview Ownership Key Customers Company was founded in 1997, IPO in 2009 West Henrietta, NY (suburb of Rochester) Share price: [$8.65] Market Cap: [$235 million] (1) Cash: [$49.9 million] (2) Leading provider of next-generation Smart Glasses and AR wearable display technology for the global enterprise market CEO and CFO together own +14% Intel Corporation (~16% Ownership) Series A Preferred Vuzix Global Presence (1): As of [March 2, 2018]. Market Cap does not include Intel preferred stock on an as converted basis ((2): As of September 30, 2017 inclusive of 12/19/17 $11.5m equity financing and 1/29/18 $28.4m equity financing 3

4 The Team: Prepared for our Future Growth Paul Travers President and Chief Executive Officer Founder of Vuzix and has served as President and CEO since 1997 Founder of both e-tek Labs and Forte Technologies Driving force behind the development of products and entrance to the consumer market, with more than 30 years of experience in the consumer electronics field 24 years of experience in virtual reality and virtual display fields Grant Russell Chief Financial Officer CFO since 2000 Experience growing and selling technology companies; cofounded Advanced Gravis Computer which became the world s largest PC and Macintosh joystick manufacturer and was listed on the Toronto Stock Exchange and NASDAQ Paul Boris Chief Operating Officer COO since May 2017 Former Vice President of Manufacturing Industries at GE Digital Former CIO of Advanced Manufacturing and Software Technology Center at GE Former Global Vice President of Enterprise Operations Management at SAP Lance Anderson VP of Enterprise Sales Responsible for sales, marketing and business development, with a focus on expanding the global enterprise market for the enterprise line of Smart Glasses Spent over 15 years in the supply chain and logistics space, with extensive sales and management experience Experience at Beumer Group, Invata, Reddwerks, W&H and FKI Logistix 4

5 The Market: Wearable Technology The Revolution is Just Beginning IDC forecasts that the global market for smart AR/VR glasses will grow to $150 billion by 2020, with AR taking the lion s share around $120 billion IDC expects Enterprise based AR headset sales to reach 20.5 million units by 2021 Enterprise is adopting AR First: Enterprise market for wearables to surpass consumer market, predicts Deloitte s Consulting Good ROIs can be demonstrated in enterprise (productivity of hands free and information access) There are millions of field service, warehouse, maintenance and other enterprise users that will benefit from hands free smart glasses solutions 5

6 Vuzix 2017: Building a Foundation for Tremendous Growth 2017 has seen three consecutive quarters of record revenue Quarter Revenue 2017 vs 2016 (YOY) 1 $1,210, % 2 $1,325, % 3 $1,405, % Q1 - Announced $1.1 million development agreement with Toshiba for a specialized pair of smart glasses with volume production is running now (Q1 2018). Q2 - Appointed new Chief Operating Office (COO), Paul Boris, business development and experienced manufacturing, technology and operations veteran, formally VP of Manufacturing Industries at GE Digital. Q3 - Financial results - Quarterly smart glasses revenues alone eclipsed $1,000,000 for the first time in the Company's history Q4 We announced a $5.0 million minimum supply agreement with Toshiba for a co-branded Toshiba product, powered by Vuzix 6

7 Products: New Revenue Generation Programs Rolling into 2018 Vuzix Basics Video - SaaS offering supports hardware stickiness and rapid deployments in unserved portion of the Enterprise market - Shipping began in Q Available for download from the Vuzix App Store as of February Annual subscription of $699 - Bundled with M300 $1999 7

8 Products: New Revenue Generation Programs Rolling into 2018 Vuzix Blade Smart Glasses - Introduced at CES and MWC Volume production expected to begin in Q Beginning to ship Vuzix Blade units to developers in Q Seeded developers focused on business development projects and native device applications for end user experiences on the Blade 8

9 Products: New Revenue Generation Programs Rolling into 2018 Vuzix Blade Introduced at CES and MWC Created Tremendous Industry Awareness for: Blade & Vuzix Waveguide Optics Vuzix Blade received positive media coverage from nearly every leading technology media platform at CES and MWC including TIME, Bloomberg, The Verge, Wired, Engadget, Cult of Mac, Gizmodo, TechRadar, The Street, Rolling Stone, Women s Wear Daily, Digital Trends and many more The introduction of the Vuzix Blade resulted in a flood of interest from major consumer electronics companies, leading social media platforms and online advertising conglomerates, several professional sport and mass media and entertainment conglomerates. Vuzix Blade was demonstrated to numerous major consumer electronic companies behind closed doors at both conferences 9

10 Vuzix Blade Smart Glasses 2018 CES + MWC Coverage

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14 Vuzix Blade Smart Glasses Worlds First Alexa Enabled Smart Glasses Vuzix Blade: AR for business and prosumers WiFi, BT, Quad Core CPU, Android, 4 GB with SD expansion In a class of their own weighing in at less than 3oz. The ultimate hands-free accessory for a smart phone You will leave your phone in your pocket! Supports standalone operation Winner of 4 CES innovation awards Winner of several Best of CES 2018 awards 14

15 Growing OEM Partnerships: Vuzix Waveguide Optics Technology As a result of the introduction of the Vuzix Blade and the incredibly positive reaction by customers, press, and the industry in general: - A significant number of new customers have requested access to our waveguides and are actively performing due diligence of Vuzix waveguide optics technology for integration into their hardware roadmap - Vuzix is also already engaged with a list of select consumer electronic companies that have started building and evaluating hardware designs which incorporate Vuzix waveguide optics technology - Vuzix waveguides becoming the augmented reality platform technology for mass adoption of consumer smart glasses 15

16 Growing OEM Partnerships: Enterprise Solutions -Toshiba - $5m Minimum Supply Agreement with Toshiba Toshiba today just announced its release in North America Toshiba Powered by Vuzix Smart Glasses have entered volume production in Q We expect initial shipments within 30 days First Windows-based smart glasses solution Smart glasses solution will be sold and marketed by Toshiba s CSD + = 16

17 Vuzix Enterprise Business is at an Inflection Point 350+ Active Pilot Programs Customers shift from Pilot Program to Commercial Deployments Underway Single customers placing million dollar orders 17

18 Smart Glasses in Enterprise Forecasted to Experience Viral Adoption beginning in Smart Glasses Shipped Worldwide Industry Pivoting into Deployment Phase Source: Tractica 18

19 Vuzix has 350+ Active Pilot Programs within Enterprise Active Pilot Programs Industry Pivoting into Deployment Phase 19

20 Vuzix Smart Glasses: The M300 Solution M300: Next-generation enterprise smart glasses - Intel Inside: 4X the speed of current Smart Glasses - Ruggedized and designed for 24/7 operation - 4X the image resolution of current Smart Glasses - Significant reduction in power consumption - Newest version of Android 6.0 M300 For Enterprise 20

21 M300: Accessories and mounting system Set us apart from competition prescriptions - safety glasses - hard hat - left or right eye mountable remote battery head band Live on Vuzix website today 21

22 Competition Enterprise work environments - diverse flexibility on wearability is needed & Almost always an 8 hour day is required Metta Daqri Hololens

23 Established Ecosystem of Partners and Pilot Programs Setting the Stage for Commercial Deployments and Subsequent Innovations VARs System Integrators Tool Providers Customers See Next Page(s) 23

24 USA Project Pipeline

25 EMEA Project Pipeline

26 APAC and Japan Project Pipeline

27 APAC and LATAM Project Pipeline

28 Airport ramp operations: SATS Cuts aircraft turn around times in half Significant reduction in errors Revolutionize airport operations in many areas Bag handling to aircraft loading

29 The Bottom line Delivering Amazing KPI s Reduction of Errors to Zero Improved Accuracy Improved Turnaround Times 50% +Productivity Increase Eliminate Hand Scanners Faster Training Process DHL successfully completed their international AR smart glasses vision picking trial using the Vuzix M100 and M300 Smart Glasses Now standard tools for picking processes John Deere deployed Vuzix M300 Smart Glasses for vision picking at their machinery plant assembly line in Germany SATS deploying Vuzix M300 at the Singapore airport for ramp handling operations The list is Long. But many cant afford to get started this way Improved User Satisfaction Worker Flexibility Hands-Free Solution 29

30 AR / VR Technology is Still in the Early Innings Like the mobile market, AR products are in the early innings of a transition to becoming ordinary, staple devices - Cell phones were bulky and unaesthetic now, everyday consumers are used to carrying what have ultimately become portable, miniaturized computers - Adoption and technology validation among enterprise customers will be the first step to accessing a massive market opportunity - BUT for the mass market to adopt, the technology needs to disappear - THIS IS THE WAY INTO THE ~$100B MASS MARKET and the future of AR 30

31 Vuzix Technology Leadership and World-Class IP Portfolio Waveguides (patented) that allow true eyeglass form factors Leading AR / VR technology, supported by a strong patent portfolio of 66 granted patents and 43 pending patents IP portfolio covering advanced optics functions and applications, providing the core base for Vuzix waveguide technology Waveguides: Technology poised to disrupt the Smart Glasses sector Revolutionary way to move light and magnify 1.4mm thin and shrinks display engine, so not bulky like conventional optics Significant improvements in weight, size, cost and optical performance Path to curved optics with higher resolution and larger field of view Cobra II Display Engine Patent pending display engine custom built to drive waveguide imagery Conventional Optics Waveguides 31

32 When the the digital world enters the real world...everything changes View of the future through the Vuzix waveguide based Blade Smart Sunglasses 32

33 33 Vuzix Corporation - Rochester NY R&D and Manufacturing Facility Focused on Wearable Display Technology

34 Vuzix Reactive Ion Beam Etch (Tool Mastering Equipment)

35 Vuzix Nano Imprinting (Automated high Volume Nano Imprinting Equipment)

36 36 Nano Replication Automation Current capacity 30,000-50,000 waveguide/month (multiple shifts) 100% automated replication and QA feedback to ensure high yield rates.

37 37 REAL TIME METROLOGY: MEASUREMENTS CAPTURED DURING MANUFACTURE. Vuzix uses a robot assist, high-precision, automated process to manufacture waveguides to an exacting standard.

38 Automated Stacking, Gluing, & Final Alignment

39 Vuzix (the bottom line) Vuzix business has reached an inflection point Vuzix is the industry leader in AR Smart Glasses with Enterprise solutions already rolling out and consumer oriented products coming to market. Vuzix has solid relationships with leading industry players like Toshiba, PTC/Vuforia, PowerShelf, DHL, SATS and many many more Vuzix has more pilots and rollouts in process than practically any other competitor Vuzix has THE leading AR Smart Glasses products in the market with M300, M300 C (Toshiba) and now the Blade Vuzix BLADE announced at CES is by far the leading form factor within the AR Smart Glasses space Vuzix is becoming the platform tech for AR displays and enterprise Smart glasses and were just getting started Vuzix waveguide technology solves one of the biggest problem in the AR industry. Optics that fit in glasses. We feel we are uniquely alone with this capability in production today and companies are beginning to realize it

40 Contact: Vuzix Corporation Investor Relations: Vuzix Matt Margolis THANK YOU Investor Relations: IRTH Communications Andrew Haag