MICROVISION, INC.

Previous wording

We have incurred substantial losses since inception and expect to incur significant losses in the near term. We have funded 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. In October 2024, we entered into a securities purchase agreement with an institutional investor for the purchase of senior secured convertible notes due March 2026 of up to $75.0 million (the “Prior Note”). SeePart I, Item 1, Note 7. Notes Payable and Derivative Liability. In February 2025, we entered into another securities purchase agreement with the same institutional investor for the issuance and sale of $8.0 million in shares of common stock, plus warrants to purchase additional shares of common stock for approximately $9.0 million. SeePart I, Item 1, Note 8. Warrant Liability. In February 2026, we entered into a securities purchase and exchange agreement with the same investor, pursuant to which we issued two senior secured convertible notes due March 2028 (the “2026 Notes Financing”) – one for approximately $20.6 million in exchange for the Prior Note and the other for approximately $22.4 million. SeePart I, Item 1, Note 7. Notes Payable and Derivative Liability for additional discussion.

Current wording

We have incurred substantial losses since inception and expect to incur significant losses in the near term. We have funded 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. In October 2024, we entered into a securities purchase agreement with an institutional investor for the purchase of senior secured convertible notes due March 2026 of up to $75.0 million (the “Prior Note”). SeePart I, Item 1, Note 7. Notes Payable and Derivative Liability. In February 2025, we entered into another securities purchase agreement with the same institutional investor for the issuance and sale of $8.0 million in shares of common stock, plus warrants to purchase additional shares of common stock for approximately $9.0 million. SeePart I, Item 1, Note 8. Warrant Liability. In February 2026, we entered into a securities purchase and exchange agreement with the same investor, pursuant to which we issued two senior secured convertible notes due March 2028 (the “2026 Notes Financing”) – one for approximately $20.6 million in exchange for the Prior Note and the other for approximately $22.4 million. SeePart I, Item 1, Note 7. Notes Payable and Derivative Liability for additional discussion. In August 2026, we entered into a securities purchase agreement with certain investors for the issuance and sale of $17.0 million in shares of comment stock, plus warrants to purchase up to 6.8 million additional shares of common stock. SeePart I, Item 1, Note 8. Warrant Liability.

Previous wording

The increase in revenue for the three and six months ended June 30, 2026 compared to the same period in 2025 was primarily due to shipments of our long-range IRIS sensors to automotive and industrial customers and shipments of our short-range MOVIA L sensors to a security and defense customer, among others.

Current wording

The increase in revenue for the three and nine months ended September 30, 2026 compared to the same period in 2025 was primarily due to shipments of our long-range IRIS sensors to industrial customers and shipments of our short-range MOVIA L sensors to a security and defense customer, among others.

Previous wording

Cost of revenue can fluctuate significantly from period to period, depending on the product mix and volume, the level of overhead expense and the volume of direct material purchased. For the first three and six months of 2026, cost of revenue was positively impacted by sensor sales out of acquired IRIS and existing MOVIA L inventories.

Current wording

Cost of revenue can fluctuate significantly from period to period, depending on the product mix and volume, the level of overhead expense and the volume of direct material purchased. For the first three and nine months of 2026, cost of revenue was positively impacted by sensor sales out of IRIS inventories acquired at favorable costs, sensor sales out of existing MOVIA L inventories, along with higher production volumes.

Previous wording

The increase in research and development expense during the six months ended June 30, 2026 compared to the same period in 2025 was primarily due to higher salary and benefits expense of $7.0 million, higher one-time employee-related restructuring charges of $1.0 million stemming from the Luminar acquisition and Consolidation Plan, higher building expenses of $1.8 million, higher purchased services of $0.9 million, higher direct materials and equipment costs of $0.9 million, and higher IT and software costs of $0.6 million.

Current wording

The increase in research and development expense during the three months ended September 30, 2026 compared to the same period in 2025 was primarily due to higher salary and benefits expense of $2.0 million due to increased headcount from acquisitions (seePart I, Item 1, Note 4. Business Combinations), higher purchased services of $0.7 million, higher IT and software costs of $0.6 million, and higher building expenses of $0.5 million.

Previous wording

The increase in research and development expense during the three months ended June 30, 2026 compared to the same period in 2025 was primarily due to higher salary and benefits expense of $3.3 million due to increased headcount from acquisitions (seePart I, Item 1, Note 4. Business Combinations), higher building expenses of $1.0 million, higher purchased services of $0.9 million, higher direct materials and equipment costs of $0.4 million, and higher IT and software costs of $0.3 million. In connection with the Consolidation Plan, the Redmond-based reductions were substantially complete as of July 3, 2026; accordingly, the upward trend in research and development expense seen in the first half of 2026 is not expected to continue.

Current wording

The increase in research and development expense during the nine months ended September 30, 2026 compared to the same period in 2025 was primarily due to higher salary and benefits expense of $9.5 million due to increased headcount from acquisitions, higher purchased services of $1.7 million, higher building expenses of $1.6 million, higher IT and software costs of $1.5 million, higher direct materials and equipment costs of $1.0 million, higher one-time employee-related restructuring charges of $1.0 million stemming from the Luminar acquisition and Consolidation Plan, and higher travel expenses of $0.3 million. In connection with the Consolidation Plan, the Redmond-based reductions were substantially complete prior to September 30, 2026; accordingly, the upward trend in research and development expense seen in the first three quarters of 2026 is not expected to continue.

Previous wording

The increase in sales, marketing, general and administrative expense during the three months ended June 30, 2026 compared to the same period in 2025 was primarily due to higher professional and purchased service fees of $2.3 million primarily related to acquisitions (seePart I, Item 1, Note 4. Business Combinations) and higher salary and benefits expense of approximately $1.2 million due to increased headcount from acquisitions. These increases were partially offset by lower share-based compensation expense of $0.9 million.

Current wording

The increase in sales, marketing, general and administrative expense during the three months ended September 30, 2026 compared to the same period in 2025 was primarily due to higher salary and benefits expense of $2.4 million primarily due to the reversal during three months ended September 30, 2025 of previously recognized non-cash expense related to the forfeiture of awards in connection with the CEO separation that occurred in the same period, and higher professional and purchased service fees of $2.3 million primarily related to nonrecurring financing costs.

Previous wording

The increase in sales, marketing, general and administrative expense during the six months ended June 30, 2026 compared to the same period in 2025 was primarily due to higher professional and purchased services fees of $4.9 million primarily related to acquisitions, higher salary and benefits expense of $2.6 million due to increased headcount from acquisitions, and higher restructuring charges of $0.1 million. These increases were partially offset by lower share-based compensation expense of $1.6 million.

Current wording

The increase in sales, marketing, general and administrative expense during the nine months ended September 30, 2026 compared to the same period in 2025 was primarily due to higher professional and purchased services fees of $7.2 million primarily related to acquisitions (seePart I, Item 1, Note 4. Business Combinations), higher salary and benefits expense of $2.9 million due to increased headcount from acquisitions, higher recruiting costs of $0.3 million, and higher restructuring charges of $0.1 million. These increases were partially offset by lower IT and software costs of $0.4 million.

Previous wording

The decrease in interest expense during the six months ended June 30, 2026 compared to the same period in 2025 relates to $7.3 million of non-cash interest expense representing the discount on the 2025 Purchase Agreement for warrants and shares of common stock during the six months ended June 30, 2025 (seePart I, Item 1, Note 8. Warrant Liability) and $2.1 million non-cash interest expense related to the modification of notes payable during the six months ended June 30, 2025 (seePart I, Item 1, Note 7. Notes Payable and Derivative Liability). These decreases were partially offset by accelerated non-cash interest expense related to the conversions of notes payable during the six months ended June 30, 2026.

Current wording

The decrease in interest expense during the nine months ended September 30, 2026 compared to the same period in 2025 relates to $7.3 million of non-cash interest expense representing the discount on the 2025 Purchase Agreement for warrants and shares of common stock during the nine months ended September 30, 2025 (seePart I, Item 1, Note 8. Warrant Liability)and*$2.1 million non-cash interest expense related to the modification of notes payable during the nine months ended September 30, 2025 (seePart I, Item 1, Note 7. Notes Payable and Derivative Liability*). These decreases were partially offset by accelerated non-cash interest expense related to the conversions of notes payable during the nine months ended September 30, 2026.

Previous wording

Unrealized gain on warrant liability

Current wording

Unrealized gain (loss) on warrant liability

Previous wording

Unrealized gain on warrant liability reflects the revaluation of our warrant liability as of June 30, 2026. Due to the decrease in the fair value of the warrant liability as of June 30, 2026 driven primarily by the decrease in our stock price, we recognized an unrealized gain. SeePart I, Item 1, Note 8. Warrant Liability for additional discussion.

Current wording

Unrealized gain (loss) on warrant liability reflects the revaluation of our warrant liability as of September 30, 2026. The increase during the three and nine months ended September 30, 2026 primarily relates to the decrease in fair value of the 2026 warrants as of September 30, 2026 relative to their initial measurement on August 17, 2026 due to a decline in our stock price during the same time period. SeePart I, Item 1, Note 8. Warrant Liability for additional discussion.

Previous wording

As a result of the debt exchange during the six months ended June 30, 2026 and the debt modification during the six months ended June 30, 2025, we recognized losses on the extinguishment of notes payable. SeePart I, Item 1, Note 7. Notes Payable and Derivative Liability for additional discussion.

Current wording

As a result of the debt exchange during the nine months ended September 30, 2026 and the debt modification during the nine months ended September 30, 2025, we recognized losses on the extinguishment of notes payable. SeePart I, Item 1, Note 7. Notes Payable and Derivative Liability for additional discussion.

Previous wording

We have incurred significant losses since inception. We have funded 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. As of June 30, 2026, we had $27.2 million in cash and cash equivalents. In addition to cash and cash equivalents, we also have potential availability of $41.2 million on our existing $150.0 million ATM facility that was put in place in the first quarter of 2024, subject to certain conditions.

Current wording

We have incurred significant losses since inception. We have funded 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. As of September 30, 2026, we had $28.9 million in cash and cash equivalents. In addition to cash and cash equivalents, we also have potential availability of $41.1 million on our existing $150.0 million ATM facility that was put in place in the first quarter of 2024, subject to certain conditions.

Previous wording

In consideration of the $27.2 million in cash and cash equivalents and $41.2 million available capacity on our existing ATM, we have potential total liquidity of $68.4 million. Pursuant to terms of the securities purchase and exchange agreement entered into in February 2026, as amended, we are required to maintain minimum cash liquidity of the lesser of $17.5 million or 110% of the then outstanding balance of the Notes for so long as the Notes remain outstanding.

Current wording

Considering the $28.9 million in cash and cash equivalents and $41.1 million available capacity on our existing ATM, we have potential total liquidity of $70.0 million. Pursuant to terms of the securities purchase and exchange agreement entered into in February 2026, as amended, we are required to maintain minimum cash liquidity of the lesser of $17.5 million (which was reduced to $10.9 million subsequent to September 30, 2026) or 110% of the then outstanding balance of the Notes for so long as the Notes remain outstanding.

Previous wording

During the first quarter of 2026, we completed the strategic acquisition of certain assets related to the worldwide lidar business of Luminar Technologies, Inc. (“Luminar”). The purchase price of $33.0 million was funded with cash on hand and, following the closing of the acquisition, we completed the 2026 Notes Financing to support the cash funding. The acquisition resulted in a near-term increase in headcount and leased properties, thereby significantly increasing cash usage and decreasing available liquidity. In light of this increase in operating expenses and cash usage, in March 2026 we began the implementation of a consolidation plan, which included a workforce reduction and other operational efficiencies, thereby partially offsetting the increase in cash usage that resulted from the Luminar acquisition. SeePart I, Item 1, Note 4. Business Combinations andNote 15. Restructuring Charges for additional discussion. The operating expense and cash usage improvements resulting from the consolidation plan are expected to begin taking effect during the third quarter of 2026. In the meantime, however, the combination of the higher cash burn during the first half of 2026 with historical losses and current liquidity, when analyzed in the aggregate in accordance with Accounting Standards Codification (“ASC”) 205-40, raises substantial doubt about our ability to continue as a going concern through at least twelve months from the date the condensed consolidated financial statements are issued.

Current wording

During the first quarter of 2026, we completed the strategic acquisition of certain assets related to the worldwide lidar business of Luminar Technologies, Inc. (“Luminar”). The purchase price of $33.0 million was funded with cash on hand and, following the closing of the acquisition, we completed the 2026 Notes Financing to support the cash funding. The acquisition resulted in a near-term increase in headcount and leased properties, thereby significantly increasing cash usage and decreasing available liquidity. In light of this increase in operating expenses and cash usage, in March 2026 we began the implementation of a consolidation plan, which included a workforce reduction and other operational efficiencies, thereby partially offsetting the increase in cash usage that resulted from the Luminar acquisition. SeePart I, Item 1, Note 4. Business Combinations andNote 15. Restructuring Charges for additional discussion. The operating expense and cash usage improvements resulting from the consolidation plan are expected to continue taking effect during the fourth quarter of 2026. In the meantime, however, the combination of the higher cash burn during the first half of 2026 with historical losses and current liquidity, when analyzed in the aggregate in accordance with Accounting Standards Codification (“ASC”) 205-40, raises substantial doubt about our ability to continue as a going concern through at least twelve months from the date the condensed consolidated financial statements are issued.

Previous wording

Bolstering our strategic plan driven by revenue generation and achievement of operational efficiencies, we intend to increase liquidity through near-term financing activities, including utilization of the ATM facility. Notwithstanding such plans, there can be no assurance that financing activities will be successful or timely, or that capital can be raised on commercially acceptable terms, or at all. If we are unable to raise additional capital within the expected timeframe, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, streamlining operations and otherwise reducing operating expenses. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Current wording

Bolstering our strategic plan driven by revenue generation and achievement of operational efficiencies, with such efficiencies stemming from both the March 2026 consolidation plan and further restructuring activities commencing October 2026, we intend to increase liquidity through near-term financing activities, including utilization of the ATM facility. Notwithstanding such plans, there can be no assurance that financing activities will be successful or timely, or that capital can be raised on commercially acceptable terms, or at all. If we are unable to raise additional capital within the expected timeframe, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, streamlining operations and otherwise reducing operating expenses. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Previous wording

Cash used in operating activities totaled $35.6 million during the six months ended June 30, 2026 compared to cash used in operating activities of $26.8 million during the same period in 2025. Cash used in operating activities resulted primarily from cash used to fund our net loss, after adjusting for non-cash charges such as interest expense, share-based compensation, depreciation and amortization charges, unrealized and realized gains and losses, and changes in operating assets and liabilities. The overall increase in cash used in operating activities for the first half of 2026 compared to the same period of the prior year is primarily attributable to increased operating expenses related to personnel and operations following the acquisitions closed in January 2026, as well as separation costs stemming from the Redmond-based workforce reduction; seePart I, Item 1, Note 4. Business Combinations.

Current wording

Cash used in operating activities totaled $49.2 million during the nine months ended September 30, 2026 compared to cash used in operating activities of $43.3 million during the same period in 2025. Cash used in operating activities resulted primarily from cash used to fund our net loss, after adjusting for non-cash charges such as interest expense, share-based compensation, depreciation and amortization charges, unrealized and realized gains and losses, and changes in operating assets and liabilities. The overall increase in cash used in operating activities for the first three quarters of 2026 compared to the same period of the prior year is primarily attributable to increased operating expenses related to personnel and operations following the acquisitions closed in January 2026, as well as separation costs stemming from the Redmond-based workforce reduction; seePart I, Item 1, Note 4. Business Combinations.

Previous wording

During the six months ended June 30, 2026, net cash provided by investing activities was $8.9 million compared to net cash provided by investing activities of $2.8 million during the same period in 2025. During the six months ended June 30, 2026, we sold short-term investment securities totaling $42.5 million, in part, to fund the $33.2 million purchase price to acquire from Luminar Technology, Inc. (“Luminar”) certain assets related to Luminar’s worldwide lidar sensor business (seePart I, Item 1, Note 4. Business Combinations). During the six months ended June 30, 2025, we purchased short-term investment securities totaling $19.3 million and sold short-term investment securities totaling $22.4 million.

Current wording

During the nine months ended September 30, 2026, net cash provided by investing activities was $7.5 million compared to net cash used in investing activities of $6.6 million during the same period in 2025. During the nine months ended September 30, 2026, we sold short-term investment securities totaling $42.5 million, in part, to fund the $33.2 million purchase price to acquire from Luminar Technology, Inc. (“Luminar”) certain assets related to Luminar’s worldwide lidar sensor business (seePart I, Item 1, Note 4. Business Combinations). During the nine months ended September 30, 2025, we purchased short-term investment securities totaling $32.9 million and sold short-term investment securities totaling $26.7 million.

Previous wording

Net cash provided by financing activities totaled $21.4 million during the six months ended June 30, 2026, compared to net cash provided by financing activities of $43.3 million during the same period of 2025. During the six months ended June 30, 2026, we received approximately $20.7 million in net proceeds, inclusive of certain debt issuance costs, from the issuance of a $22.4 million senior secured convertible note (seePart I, Item 1, Note 7. Notes Payable and Derivative Liability). Net proceeds from issuance of common stock and warrants were $0.8 million during the six months ended June 30, 2026 compared to $43.3 million during the same period of 2025.

Current wording

Net cash provided by financing activities totaled $38.0 million during the nine months ended September 30, 2026, compared to net cash provided by financing activities of $67.8 million during the same period of 2025. During the nine months ended September 30, 2026, we received approximately $20.6 million in net proceeds, inclusive of certain debt issuance costs, from the issuance of a $22.4 million senior secured convertible note (seePart I, Item 1, Note 7. Notes Payable and Derivative Liability). During the nine months ended September 30, 2025, we repaid $5.0 million principal on our outstanding note payable plus a 10% repayment premium. Net proceeds from issuance of common stock and warrants were $17.3 million during the nine months ended September 30, 2026 compared to $73.3 million during the same period of 2025.