UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to _________

Commission file number 001-34170

MicroVision, Inc.

(Exact name of registrant as specified in its charter)

Delaware		91-1600822
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

18390 NE 68^th Street

Redmond, Washington 98052

(Address of Principal Executive Offices, including Zip Code)

(425) 936-6847

(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		MVIS		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days.

YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☐
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐ NO ☒

The number of shares of the registrant’s common stock outstanding as of May 6, 2024 was 206,659,634.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)		3

Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023		3

Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023		4

Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2024 and 2023		5

Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2024 and 2023		6

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023		7

Notes to Condensed Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		20

Item 3. Quantitative and Qualitative Disclosures About Market Risk		23

Item 4. Controls and Procedures		24

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		24

Item 1A. Risk Factors		24

Item 5. Other Information		32

Item 6. Exhibits		33

Signatures		34

PART I.

ITEM 1. FINANCIAL STATEMENTS

MicroVision, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

	March 31,			December 31,
	2024			2023
Assets
Current assets
Cash and cash equivalents	$	44,298		$	45,167
Investment securities, available-for-sale		28,770			28,611
Restricted cash, current		71			3,263
Accounts receivable, net of allowances		1,121			949
Inventory		3,738			3,874
Other current assets		4,302			4,890
Total current assets		82,300			86,754

Property and equipment, net		8,549			9,032
Operating lease right-of-use asset		13,212			13,758
Restricted cash, net of current portion		1,968			961
Intangible assets, net		16,662			17,235
Other assets		1,491			1,895
Total assets	$	124,182		$	129,635

Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	2,161		$	2,271
Accrued liabilities		9,971			8,640
Accrued liability for Ibeo business combination		2,969			6,300
Contract liabilities		213			300
Current portion of operating lease liability		2,167			2,323
Other current liabilities		270			669
Total current liabilities		17,751			20,503

Operating lease liability, net of current portion		12,358			12,714
Other long-term liabilities		270			614
Total liabilities		30,379			33,831

Commitments and contingencies		-			-

Shareholders’ equity
Preferred stock, par value $0.001; 25,000 shares authorized; zero and zero shares issued and outstanding		-			-
Common stock, par value $0.001; 310,000 shares authorized; 205,874 and 194,736 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		206			195
Additional paid-in capital		885,119			860,765
Accumulated other comprehensive income		157			210
Accumulated deficit		(791,679	)		(765,366	)
Total shareholders’ equity		93,803			95,804
Total liabilities and shareholders’ equity	$	124,182		$	129,635

The accompanying notes are an integral part of these financial statements.

MicroVision, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	2024			2023
	Three Months Ended
	March 31,
	2024			2023

Revenue	$	956		$	782

Cost of revenue		1,277			544

Gross margin		(321	)		238

Research and development expense		17,311			12,692
Sales, marketing, general and administrative expense		9,078			8,737
Total operating expenses		26,389			21,429

Loss from operations		(26,710	)		(21,191	)

Bargain purchase gain, net of tax		-			1,706
Other income (expense), net		631			639

Net loss before taxes		(26,079	)		(18,846	)

Income tax expense		(234	)		(181	)

Net loss	$	(26,313	)	$	(19,027	)

Net loss per share - basic and diluted	$	(0.13	)	$	(0.11	)

Weighted-average shares outstanding - basic and diluted		196,748			174,703

The accompanying notes are an integral part of these financial statements.

MicroVision, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)

	2024			2023
	Three Months Ended
	March 31,
	2024			2023
Net loss	$	(26,313	)	$	(19,027	)

Other comprehensive loss:
Unrealized gain (loss) on investment securities, available for sale		(34	)		77
Unrealized gain (loss) on translation		(19	)		107
Comprehensive loss	$	(26,366	)	$	(18,843	)

The accompanying notes are an integral part of these financial statements.

MicroVision, Inc.

Condensed Consolidated Statements of Shareholders’ Equity
(In thousands)
(Unaudited)

	Shares		value		capital		Income (loss)			deficit			equity
	Common Stock				Additional		Accumulated other						Total
			Par		paid-in		comprehensive			Accumulated			shareholders’
	Shares		value		capital		income (loss)			deficit			equity
Balance at January 1, 2023		170,503	$	171	$	772,221	$	(127	)	$	(682,524	)	$	89,741
Share-based compensation expense		463		-		2,949		-			-			2,949
Sales of common stock, net of issuance costs		5,060		5		12,686		-			-			12,691
Net loss		-		-		-		-			(19,027	)		(19,027	)
Other comprehensive income		-		-		-		184			-			184
Balance at March 31, 2023		176,026	$	176	$	787,856	$	57		$	(701,551	)	$	86,538

Balance at January 1, 2024		194,736	$	195	$	860,765	$	210		$	(765,366	)	$	95,804
Balance		194,736	$	195	$	860,765	$	210		$	(765,366	)	$	95,804
Share-based compensation expense		628		1		3,742		-			-			3,743
Exercise of options		84		-		62		-			-			62
Sales of common stock, net of issuance costs		10,426		10		20,550		-			-			20,560
Net loss		-		-		-		-			(26,313	)		(26,313	)
Other comprehensive loss		-		-		-		(53	)		-			(53	)
Other comprehensive income (loss)		-		-		-		(53	)		-			(53	)
Balance at March 31, 2024		205,874	$	206	$	885,119	$	157		$	(791,679	)	$	93,803
Balance		205,874	$	206	$	885,119	$	157		$	(791,679	)	$	93,803

The accompanying notes are an integral part of these financial statements.

MicroVision, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	2024			2023
	Three Months Ended
	March 31,
	2024			2023
Cash flows from operating activities
Net loss	$	(26,313	)	$	(19,027	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization		1,800			2,524
Impairment of property and equipment		13			-
Bargain purchase gain		-			(1,706	)
Share-based compensation expense		3,743			2,949
Inventory write-downs		9			29
Net accretion of premium on short-term investments		(288	)		(396	)

Change in:
Accounts receivable		(172	)		(506	)
Contract assets		-			(192	)
Inventory		102			(87	)
Other current and non-current assets		992			647
Accounts payable		(527	)		1,629
Accrued liabilities		1,331			2,017
Contract liabilities and other current liabilities		(480	)		(711	)
Operating lease liabilities		(639	)		(669	)
Other long-term liabilities		(330	)		17
Net cash used in operating activities		(20,759	)		(13,482	)

Cash flows from investing activities
Sales of investment securities		7,900			22,000
Purchases of investment securities		(7,805	)		(3,898	)
Purchases of property and equipment		(114	)		(615	)
Cash paid for Ibeo business combination		(3,263	)		(11,233	)
Net cash provided by (used in) investing activities		(3,282	)		6,254

Cash flows from financing activities
Principal payments under finance leases		-			(6	)
Proceeds from stock option exercises		62			-
Net proceeds from issuance of common stock		20,956			12,691
Net cash provided by financing activities		21,018			12,685

Effect of exchange rate changes on cash and cash equivalents		(31	)		-

Change in cash, cash equivalents, and restricted cash		(3,054	)		5,457
Cash, cash equivalents, and restricted cash at beginning of period		49,391			21,954
Cash, cash equivalents, and restricted cash at end of period	$	46,337		$	27,411

Supplemental schedule of non-cash investing and financing activities
Non-cash additions to property and equipment	$	21		$	703
Acquisition of right-of-use asset	$	-		$	234
Settlement of preexisting Advance to Ibeo in exchange for net assets acquired	$	-		$	4,132
Amounts issued to escrow for acquisition consideration	$	-		$	3,263
Accrued liability for Ibeo business combination	$	2,969		$	2,928
Accrued financing fees	$	396		$	-
Foreign currency translation adjustment	$	(19	)	$	107
Unrealized gain (loss) in investment securities, available-for-sale	$	(34	)	$	77

The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of March 31, 2024 and December 31, 2023:

	March 31,		December 31,
	2024		2023
Cash and cash equivalents	$	44,298	$	45,167
Restricted cash		2,039		4,224
Cash, cash equivalents, and restricted cash	$	46,337	$	49,391

The accompanying notes are an integral part of these financial statements.

MicroVision, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. MANAGEMENT’S STATEMENT

The Condensed Consolidated Balance Sheets as of March 31, 2024, the Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive Loss and Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2024 and 2023, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023, have been prepared by MicroVision, Inc. (“we” or “our”) and have not been audited. In the opinion of management, all adjustments necessary to state fairly the financial position at March 31, 2024 and the results of operations and cash flows for all periods presented have been made and consist of normal recurring adjustments. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules of the Securities and Exchange Commission (SEC). The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. You should read these Condensed Consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results that may be attained for the entire fiscal year.

We are developing lidar sensors and perception software to address the needs of the Level 2+, or L2+, and Level 3 or L3, advanced driver-assistance systems (ADAS) markets to be used in automotive safety and autonomous driving applications. Our micro-electromechanical systems, or MEMS-based high-speed lidar sensors, which we call MAVIN™, use our pioneering laser beam scanning (LBS) technology. Our solution-based development approach recognizes two key realities of the L2+ and L3 markets: that safety is mission critical and that OEMs require cost efficiency and integration adaptability. With these factors in mind, we believe that our best-in-class MAVIN lidar sensors support critical safety needs by providing the highest resolution at range and velocity of moving objects with a dynamic field of view while running at 30 hertz, thus enabling ADAS features, such as automatic emergency braking, forward collision warning, and automatic emergency steering, at higher speeds of operation than most competing products.

We have incurred significant losses since inception. We have funded our operations to date primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales and licensing activities.

At March 31, 2024, we had total liquidity of $73.1 million including $44.3 million in cash and cash equivalents and $28.8 million in short-term investment securities. Based on our current operating plan, we anticipate that we have sufficient cash and cash equivalents to fund our operations for at least the next 12 months.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of MicroVision, Inc. and MicroVision GmbH. MicroVision GmbH is a wholly owned subsidiary of MicroVision, Inc. All material intercompany accounts and transactions have been eliminated in consolidation.

Foreign Currency Translation

The functional currency for our German operation is the Euro, which represents the currency of its primary economic environment. The results of operations for the German operation are translated from the local currency into U.S. dollars using the average exchange rates during each period. All assets and liabilities are translated using exchange rates at the end of each period, with foreign currency translation adjustments included as a component of other comprehensive loss. All equity transactions and certain assets are translated using historical rates. The consolidated financial statements are presented in U.S. dollars.

Segment Information

We determine operating segments based on how our chief operating decision maker (“CODM”) manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. Our CODM is our Executive Management team, who reviews our operating results on a consolidated basis. We operate as one segment, which relates to sale and servicing of lidar hardware and software. The profitability of our product group is not a determining factor in allocating resources and the CODM does not evaluate profitability below the level of the consolidated company.

2. NET LOSS PER SHARE

Basic net loss per share is calculated using the weighted-average number of common shares outstanding during the period. Net loss per share, assuming dilution, is calculated using the weighted-average number of common shares outstanding and the dilutive effect of all potentially dilutive securities, including common stock equivalents and convertible securities. Net loss per share, assuming dilution, is equal to basic net loss per share because the effect of dilutive securities outstanding during the period, including options and warrants computed using the treasury stock method, is anti-dilutive.

The components of basic and diluted net loss per share were as follows (in thousands, except loss per share data):

	2024			2023
	Three Months Ended
	March 31,
	2024			2023
Numerator:
Net loss available for common shareholders - basic and diluted	$	(26,313	)	$	(19,027	)
Denominator:
Weighted-average common shares outstanding - basic and diluted		196,748			174,703

Net loss per share - basic and diluted	$	(0.13	)	$	(0.11	)

For the three months ended March 31, 2024 and 2023, we excluded the following securities from net loss per share as the effect of including them would have been anti-dilutive: outstanding options exercisable into a total of 0.7 million and 0.9 million shares of common stock, respectively, and 9.2 million and 8.4 million nonvested restricted stock units, respectively.

3. BUSINESS COMBINATION

On January 31, 2023, we completed the acquisition of certain net assets of Ibeo, a lidar hardware and software provider based in Hamburg, Germany. The purpose of the acquisition was to acquire certain Ibeo assets, primarily intellectual property, and personnel, to enable us to expand our technology and product portfolio and diversify our revenue profile.

Total consideration related to this transaction was approximately EUR 20.0 million or $21.6 million, consisting of approximately (i) EUR 7.0 million or $7.6 million in cash paid at closing, (ii) EUR 6.6 million or $7.1 million in cash advanced to Ibeo prior to closing, (iii) EUR 3.0 million or $3.3 million released from escrow during the quarter ended March 31, 2024, (iv) EUR 0.6 million or $0.7 million in costs paid on behalf of the seller, and (v) EUR 2.7 million or approximately $3.0 million after calculating the deduction in purchase price agreed between both the parties. The remaining balance of approximately EUR 2.7 million is recorded as an accrued liability for Ibeo business combination on our balance sheet as of March 31, 2024 and is expected to be paid during the second quarter of 2024. In addition, we incurred $0.6 million of acquisition-related costs associated with the acquisition during the three months ended March 31, 2023, which were included in Sales, marketing, general and administrative expense.

The transaction has been accounted for as a business combination. The results of operations for the acquisition are included in our consolidated financial statements from the date of acquisition onwards.

The following table summarizes the final purchase price allocation to assets acquired and liabilities assumed (in thousands):

				Weighted Average
	Amount			Useful Life (in years)
Total purchase consideration	$	21,611

Inventory	$	1,197
Other current assets		703
Operating lease right-of-use asset		234
Property and equipment, net		5,330
Intangible assets:
Acquired technology		17,987			13
Order backlog		26			1
Contract liabilities		(1,178	)
Operating lease liabilities		(234	)
Deferred tax liabilities		(785	)
Total identifiable net assets	$	23,280
Bargain purchase gain⁽¹⁾		(1,669	)

(1)

The bargain purchase gain represents the excess of the fair value of the underlying net assets acquired and liabilities assumed over the purchase consideration and is included in bargain purchase gain in the Consolidated Statement of Operations. The bargain purchase gain was attributable to the negotiation process with Ibeo during its insolvency proceedings resulting in cash consideration paid being less than the fair value of the net assets acquired.

The estimated fair value of acquired technology was calculated through the income approach using the multi-period excess earnings and relief from royalty methodologies. The estimated fair value of the order backlog was calculated through the income approach using the multi-period excess earnings methodology.

4. REVENUE RECOGNITION

The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

We evaluate contracts based on the 5-step model as stated in Topic 606 as follows: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price, and (v) recognize revenue when (or as) performance obligations are satisfied.

A contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group of promises) that is distinct, as defined in the revenue standard.

The transaction price is the amount of consideration an entity expects to be entitled to from a customer in exchange for providing the goods or services. A number of factors should be considered to determine the transaction price, including whether there is variable consideration, a significant financing component, noncash consideration, or amounts payable to the customer. The determination of variable consideration will require a significant amount of judgment. In estimating the transaction price we will use either the expected value method or the most likely amount method.

The transaction price is allocated to the separate performance obligations in the contract based on relative standalone selling prices. Determining the relative standalone selling price can be challenging when goods or services are not sold on a standalone basis. The revenue standard sets out several methods that can be used to estimate a standalone selling price when one is not directly observable. Allocating discounts and variable consideration must also be considered. Allocating the transaction price can require significant judgement on our part.

Revenue is recognized when (or as) the customer obtains control of the good or service/performance obligations are satisfied. Topic 606 provides guidance to help determine if a performance obligation is satisfied at a point in time or over time. Where a performance obligation is satisfied over time, the related revenue is also recognized over time.

Disaggregation of revenue

The following table provides information about disaggregated revenue by timing of revenue recognition (in thousands):

SCHEDULE OF DISAGGREGATION OF REVENUE

	revenue		revenue		revenue		Total
	Three Months Ended March 31, 2024
	Product		License and Royalty		Contract
	revenue		revenue		revenue		Total
Timing of revenue recognition:
Products transferred at a point in time	$	856	$	47	$	53	$	956
Product and services transferred over time		-		-		-		-
Total	$	856	$	47	$	53	$	956

	revenue		revenue		revenue		Total
	Three Months Ended March 31, 2023
	Product		License and Royalty		Contract
	revenue		revenue		revenue		Total
Timing of revenue recognition:
Products transferred at a point in time	$	590	$	-	$	-	$	590
Product and services transferred over time		-		-		192		192
Total	$	590	$	-	$	192	$	782

Contract balances

Under Topic 606, our rights to consideration are presented separately depending on whether those rights are conditional or unconditional. We present our unconditional rights to consideration as “accounts receivable” in our Balance Sheet.

Significant changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands, except percentages):

	March 31,			December 31,
	2024			2023			$ Change		% Change

Contract assets	$	1,121		$	949		$	172		18.1
Contract liabilities		(213	)		(300	)		87		(29.0	)
Net contract assets (liabilities)	$	908		$	649		$	259		39.9

Contract acquisition costs

We are required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed. We currently do not pay any commissions upon the signing of a contract; therefore, no commission cost has been incurred as of March 31, 2024.

Transaction price allocated to the remaining performance obligations

The remaining balance of the contract liabilities was approximately $0.2 million as of March 31, 2024. The following table provides information about the estimated timing of revenue recognition (in thousands):

	Remainder of 2024		2025

Revenue	$	213	$	-

5. INVESTMENT SECURITIES, AVAILABLE-FOR-SALE AND FAIR VALUE MEASUREMENTS

Our investment securities, available-for-sale are comprised of corporate and government debt securities. The principal markets for the debt securities are dealer markets which have a high level of price transparency. The market participants for debt securities are typically large money center banks and regional banks, brokers, dealers, pension funds, and other entities with debt investment portfolios.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes a three level fair value inputs hierarchy and requires an entity to maximize the use of observable valuation inputs and minimize the use of unobservable inputs. We use market data, assumptions and risks we believe market participants would use in measuring the fair value of the asset or liability, including the risks inherent in the inputs and the valuation techniques. The hierarchy is summarized below.

Level 1 - Quoted prices in active markets for identical assets and liabilities at the measurement date that the reporting entity has the ability to access.

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Unobservable inputs for which there is little or no market data, which requires us to develop our own assumptions, which are significant to the measurement of the fair values.

The valuation inputs hierarchy classification for assets measured at fair value on a recurring basis are summarized below as of March 31, 2024 and December 31, 2023 (in thousands). These tables do not include cash held in our money market savings accounts.

As of March 31, 2024

Level 1

Level 2

Level 3

SEC Form 10-Q filed by MicroVision Inc.