Vuzix Corporation

Climate Impact & Sustainability Data (2021, 2022, 2023)

Component shortages impacting Blade projector engines.
COVID-19 pandemic causing supply chain disruptions and deferral of engineering services programs.
Material weakness in internal control over financial reporting related to the valuation of Long Term Incentive Plan stock options.

Increased investment in inventory in 2021 (to moderate in 2022).
Retaining additional resources with technical accounting and valuation expertise.
Regular reporting to the Audit Committee on remediation plan progress.

Supply chain disruptions due to component shortages and global events like COVID-19.
Competition from larger companies with more resources.
Maintaining profitability with declining product prices.
Managing risks associated with international operations, including foreign exchange rates and regulatory compliance.
ESG reporting and disclosure requirements are continuing to evolve, with increasing global regulation and heightened investor expectations.

Investing in research and development to improve products and reduce costs.
Developing partnerships with OEMs to expand market reach.
Expanding waveguide production capacity.
Implementing policies and procedures to ensure compliance with laws and regulations.
Exploring ways to develop its own micro-display technologies using micro LED and laser scanning displays.

Clean room facility emissions are less than permitting and reporting thresholds, and we track emissions monthly to verify compliance with the regulations.
We look for ways to reduce energy consumption in our facilities.
We make and sell products that are generally considered more environmentally friendly than alternative computing devices and in most of their actual use by customers reduce their travel needs, either locally or across the world with their remote presence capabilities, and consume significantly less power or raw materials to manufacture than are typically used or required for laptop or tablet computers.

We strive to create and maintain a working environment that fosters honesty and hard work and rewards all of our employees’ hard work.
We endeavor to make Vuzix a place in which people are proud to be associated.
We have installed safety protocols and monitoring systems. We have periodic audits by third parties to test our systems and perform preventative maintenance. Our policies prohibit an employee from being alone in our production facilities or in unsupervised areas of our facilities.

We are committed to ensuring ethical organizational governance and embracing diversity and inclusion in the board room and throughout the organization.
We are committed to observing fair, transparent, and accountable operating practices.
We have a Whistleblower Ethics Hotline that includes global telephone access and online access. We have an independent third party periodically test the Whistleblower Ethics Hotline.

Recurring losses from operations and future cash requirements to fund operating losses raise substantial doubt about the Company's ability to continue as a going concern.
Highly competitive market with larger competitors possessing greater financial, marketing, research and development resources.
Dependence on third-party suppliers for critical components, leading to potential supply shortages and disruptions.
Lengthy OEM development periods for waveguide and display engine products.
Managing the growth and increased complexity of the business.
Cybersecurity risks and potential for cyber-attacks.
Attracting and retaining highly skilled personnel.
Managing inventory obsolescence due to short product life cycles.
Exposure to foreign exchange rate risks.
Compliance with evolving ESG reporting and disclosure requirements.

Operational improvements and curtailment of certain development programs to preserve cash.
Continued sale of existing products and component inventory.
Cutting annual operating expenses by approximately $8,000,000 for 2024.
Right-sizing operations and headcount reductions.
Expected margin contribution from volume manufacturing and sales of waveguides.
Pursuing licensing and strategic opportunities with OEMs.
Implementation of a voluntary Company-wide payroll reduction program.
Delayed or curtailed discretionary capital expenditures.
Reduced rate of new product introductions.
Reduced research and development spending.
Potential for at-the-market common stock offering of up to $50,000,000.
Implementing a cybersecurity program aligned with NIST CSF standards.
Offering competitive salaries and benefits to attract and retain personnel.
Implementing inventory minimization strategies.

Intention to request suppliers adhere to the RBA Code of Conduct or its equivalent.

Smart Glasses designed to reduce travel needs and consume less power than alternative computing devices.