Vuzix Gets $2M Credit Facility

Vuzix Corporation (OTC:VUZI) announced today, in a press release, that it has entered into a $2 million revolving credit agreement with Bridge Bank, National Association to support its ongoing working capital needs. As I write, shares of Vuzix are down slightly at $0.104 per share on light volume of 5,000 shares. The company has a market cap of $27 million and a 52-week range between $0.05 and $0.30 per share.

The credit facility is an accounts receivable formula-based line of credit, which matures on the second anniversary of the signing of the agreement. Under the agreement, Vuzix may borrow up to 80% of eligible North American accounts receivable and, in addition, approved international accounts on a case-by-case basis.

Vuzix must satisfy certain loan covenants on an ongoing basis. Bridge Bank has been granted a first position security interest in all of Vuzix' current and future assets, with the exception of Intellectual Property in which a second lien has been granted. All secured debt is subordinated to the Bridge Bank facility.

The closing of this transaction satisfies certain obligations of the Company under its loan agreement with LC Capital Master Fund Ltd. (LC), which was consummated on December 23, 2010, and eliminates the penalties, including the issuance of additional securities to LC, if it failed to do so.

Vuzix is a leading supplier of Video Eyewear products in the defense, consumer and media & entertainment markets. The Company's products, personal display devices that offer users a portable high quality viewing experience, provide solutions for mobility, thermal sighting systems, tactical wearable displays and virtual and augmented reality. With its origins in defense research and development for next generation display solutions, Vuzix holds over 51 patents in the Video Eyewear field.

The company has won 9 Consumer Electronics Show Innovations Awards, the RetailVision Best New Product and several wireless technology innovation awards, among others. Founded in 1997, Vuzix is a public company (TSX-V:VZX - News) (OTC.BB:VUZI - News) (Frankfurt:V7X - News) with offices in Rochester, NY, Oxford, UK and Tokyo, Japan.

For more information, visit www.vuzix.com.

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