Vuzix Corp. (VUZI) Says Intel (INTC) No Longer Plans to Pursue Strategic Relationship
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Vuzix Corp. (NASDAQ: VUZI) disclosed the following in a U.S. SEC filing on Wednesday night:
Item 8.01 Other Events.
On January 2, 2015 (the “Closing Date”), Vuzix Corporation (the “Company” or “Vuzix”), and Intel Corporation (“Intel”) entered into an agreement pursuant to which the company sold to Intel shares of Series A Preferred Stock for an aggregate purchase price of $24,813,000 (the “Stock Purchase Agreement”). Such shares are convertible into 4,962,600 shares of the Company’s common Stock at a price of $5.00 per share. Pursuant to that Stock Purchase Agreement, the parties agreed to use their commercially reasonable efforts within the 45-day period following the Closing Date, to negotiate in good faith a collaborative development agreement pursuant to which the Company and Intel would collaborate with respect to certain key technologies of the Company, and the Company would grant certain rights to Intel to be a lead partner in commercializing such technologies in certain markets to be agreed upon. Since that time the parties have done some limited technology work together, but they have not been able to negotiate such an agreement on acceptable commercial terms to both parties.
On November 10, 2016, the Company received a letter from Intel stating that Intel had been evaluating its alternatives with respect to its significant investment in and strategic relationship with the Company and that it has concluded that it no longer desires to pursue a strategic relationship with Vuzix. While Intel stated they had high regard for the Vuzix team and Vuzix’s technology, the technology did not fit into Intel’s strategic plans. Over the last two years, Vuzix’s collaboration work with Intel has not generated material revenue to the Company.
Furthermore, Intel added that it wanted to work with the Vuzix to undertake an orderly disposition of Intel’s stock, subject to pricing and other conditions, that would minimize disruption in the markets, although Intel has not made any final decisions regarding its Vuzix stock or the timing of a disposition.
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