MICROVISION INC

Previous wording

The informationset forth in this report in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Item 3, “Quantitative and Qualitative Disclosures about Market Risk,” includes “Forward-Looking Statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is subject to the safe harbor created by those sections. Such statements may include, but are not limited to, projections of revenues and expenses, and measures of income or loss, status of product development and performance, market opportunity and future demand, partner and customer engagement, cooperative agreements, strategic plans, future operations, financing needs or plans of MicroVision, Inc. (“we,” “our,” or “us”), as well as assumptions relating to the foregoing. The words “anticipate,” “could,” “believe,” “estimate,” “expect,” “goal,” “may,” “plan,” “will,” and similar expressions identify forward-looking statements. Factors that could cause actual results to differ materially from those projected in our forward-looking statements include risk factors identified below in Item 1A.

Current wording

The information set forth in this report in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Item 3, “Quantitative and Qualitative Disclosures about Market Risk,” includes “Forward-Looking Statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is subject to the safe harbor created by those sections. Such statements may include, but are not limited to, projections of revenues and expenses, and measures of income or loss, status of product development and performance, market opportunity and future demand, partner and customer engagement, cooperative arrangements, strategic plans, future operations, financing needs or plans of MicroVision, Inc. (“we,” “our,” or “us”), as well as assumptions relating to the foregoing. The words “anticipate,” “could,” “believe,” “estimate,” “expect,” “goal,” “may,” “plan,” “will” and similar expressions identify forward-looking statements. Factors that could cause actual results to differ materially from those projected in our forward-looking statements include risk factors identified below in Item 1A.

Previous wording

Founded in 1993, MicroVision, Inc. is a pioneer in laser beam scanning, or LBS technology, which is based on our patented expertise in micro-electromechanical systems, or MEMS, laser diodes, opto-mechanics, electronics, algorithms and software and how those elements are packaged into a small form factor. Throughout our history, we have combined our proprietary technologies with our development expertise to create innovative solutions to address existing and emerging market needs, such as augmented reality microdisplay engines; interactive display modules; consumer lidar components; and, most recently, automotive lidar sensors and software solutions for the automotive market.

Current wording

Founded in 1993, MicroVision, Inc. is a pioneer in laser beam scanning, or LBS technology, which is based on our patented technology in micro-electromechanical systems, or MEMS, laser diodes, opto-mechanics, electronics, algorithms and software and how those elements are packaged into a small form factor. Throughout our history, we have combined our proprietary technology with our development expertise to create innovative solutions to address existing and emerging market needs, such as augmented reality microdisplay engines; interactive display modules; consumer lidar components; and, more recently, lidar sensors and software solutions for industrial, automotive, and military markets.

Previous wording

In January 2023, we acquired certain strategic assets of Germany-based Ibeo, which was founded in 1998 as a lidar hardware and software provider. Ibeo developed and launched the first lidar sensor to be automotive qualified for serial production with a Tier 1 automotive supplier and that is currently available in passenger cars by premium OEMs. Ibeo developed software solutions, including perception and validation software, which are also used by premium OEMs. In addition, Ibeo sold its products for non-automotive uses such as industrial, smart infrastructure and robotics applications.

Current wording

In January 2023, we acquired certain strategic assets of Germany-based Ibeo Automotive Systems GmbH, which was founded in 1998 as a lidar hardware and software provider. Ibeo developed and launched the first lidar sensor to be automotive qualified for serial production with a premium, or Tier 1, automotive supplier and that is currently available in passenger cars by premium original equipment manufacturers, or OEMs. Ibeo developed software solutions, including perception and validation software, which are also used by premium OEMs. In addition, Ibeo sold its products for non-automotive uses such as industrial, agriculture, smart infrastructure and robotics applications.

Previous wording

In addition to our dynamic-range and long-range MAVIN sensor and perception software solution for the automotive market, our product suite includes our short-range flash-based MOVIA lidar sensor as well as perception software, for automotive and industrial applications, including smart infrastructure, robotics, and other commercial segments. Also, our validation software tool, the MOSAIK suite, is targeted for use by OEMs and Tier 1s for validating vehicle sensors for ADAS and AV applications, but we have reduced our development and sales efforts on this product. As such, in the first half of 2024, in an effort to better align our resources away from MOSAIK, we performed a restructuring and reorganization to focus on MAVIN and MOVIA driven by perception software. While this 37% reduction in workforce resulted in approximately $5.8 million in expenses through the nine months ended September 30, 2024, we expect this to extend our financial runway through reduced personnel expenses and provide operational efficiencies that will streamline cash burn. SeeItem 1, Note 13. Restructuring Charges for additional discussion.

Current wording

Our product suite also includes our validation software tool, the MOSAIK™ suite, which is targeted for use by OEMs and Tier 1s for validating vehicle sensors for ADAS and autonomous driving, or AD, applications. In 2024, we reduced the dedicated resources and investment into further development of MOSAIK. Specifically, in 2024, in an effort to better align our resources with our product plan, we restructured and reorganized our workforce and related expenditures to strategically focus on our perception software and MAVIN and MOVIA products. While this 41% reduction in workforce added approximately $6.0 million to our fiscal year 2024 expenses, we expect this action to extend our financial runway through reduced personnel expenses and other operational efficiencies.

Previous wording

In the recent past, we developed micro-display concepts and designs for use in head-mounted augmented reality, or AR, headsets and developed a 1440i MEMS module supporting AR headsets. We also developed an interactive display solution targeted at the smart speaker market and a small consumer lidar sensor for use indoors with smart home systems.

Current wording

In the recent past, we developed micro-display concepts and designs for use in head-mounted augmented reality, or AR, headsets and developed a 1440i MEMS module supporting AR headsets. This technology was integrated into products marketed to consumer and military sectors.

Previous wording

To date, we have been unable to secure customers at the scale needed to successfully launch our products. We have incurred significant losses since inception and we expect to continue to incur significant losses in the near term. 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. In October 2024, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Holder”) for the purchase of a senior secured convertible note (the “Convertible Note”) up to $75.0 million. SeeItem 1, Note 14. Subsequent Events.

Current wording

To date, we have been unable to secure customers at the scale needed to successfully launch our products. We have incurred significant losses since inception and we expect to continue to incur significant losses in the near term. 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. In October 2024, we entered into a securities purchase agreement with an institutional investor for the sale of up to $75.0 million in senior secured convertible notes. SeePart I, Item 1, Note 6. 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 7. Warrant Liability.

Previous wording

The increase in revenue for the nine months ended September 30, 2024 compared to the same period in 2024 primarily due to the sale of sensors to an existing industrial customer for agricultural equipment and service parts, an increase in shipments of MOVIA L sensors to Daimler Truck North America and affiliates as part of their RFQ evaluation process, and increased sales to a second industrial customer. These increases were partially offset by a decrease in sales related to an OEM for our MOSAIK software.

Current wording

The decrease in revenue for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to shipments of MOVIA L sensors to Daimler Truck North America and affiliates in the first quarter of 2024 as part of their RFQ evaluation process.

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. The increase in cost of revenue for the nine months ended September 30, 2024 compared to the same period in 2023 was primarily due to an increase in revenue from sensors in 2024. The change in cost of revenue was driven primarily by the revenue mix as 2023 had higher MOSAIK software revenue compared to sale of sensors in 2024.

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. The decrease in cost of revenue for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to decreased revenue and the revenue mix.

Previous wording

The decrease in research and development expense during the three months ended September 30, 2024 compared to the same period in 2023 was primarily due to lower salary and benefits expense and non-cash compensation of $4.8 million as a result of 2024 restructuring events, lower subcontractor fees of $1.6 million primarily related to subcontractors used in 2023 on our MOVIA lidar sensors, lower direct materials and equipment costs of $0.2 million, and lower depreciation expense of $0.1 million. The decrease was partially offset by higher IT and software costs of $0.2 million.

Current wording

The decrease in research and development expense during the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to lower salary and benefits expense of $5.6 million, lower restructuring charges of $2.4 million, lower purchased services of $1.2 million, and lower direct materials and equipment costs of $0.4 million.

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 September 30, 2024, the Company had total liquidity of $43.2 million including $16.5 million in cash and cash equivalents and $26.7 million in short-term investment securities. We also have approximately $122.6 million availability left on our existing $150.0 million ATM facility that was put in place in the first quarter of 2024. After giving effect to the net proceeds of $38.0 million from the first $45.0 million tranche of the Convertible Note, the Company expects to have approximately $81.2 million in cash and cash equivalents and access to $153 million of additional capital, including $122.6 million under its existing ATM facility and $30.0 million from the remaining commitment pursuant to the Convertible Note. SeeItem 1. Note 14, Subsequent Events. 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.

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 March 31, 2025, we had $51.9 million in cash and cash equivalents and $17.1 million in short-term investment securities. We also have approximately $113.4 million availability left on our existing $150.0 million ATM facility that was put in place in the first quarter of 2024, although sales under the ATM facility require sufficient authorized capital. In addition, we have a remaining commitment pursuant to the convertible note facility of $30.0 million, subject to certain limitations. 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.

Previous wording

Cash used in operating activities totaled $53.5 million during the nine months ended September 30, 2024 compared to cash used in operating activities of $50.5 million during the same period in 2023. Cash used in operating activities resulted primarily from cash used to fund our net loss, after adjusting for non-cash charges such as share-based compensation, intangible impairment expense, depreciation and amortization charges and changes in operating assets and liabilities. The changes in cash used in operating activities are primarily attributable to severance payments related to the 2024 restructuring events and timing of customer payments in 2024.

Current wording

Cash used in operating activities totaled $14.1 million during the three months ended March 31, 2025 compared to cash used in operating activities of $20.8 million during the same period in 2024. 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 gains and losses, and changes in operating assets and liabilities. The changes in cash used in operating activities were primarily attributed to decreased operating expenses related to personnel. We expect to make minimum payments to our contract manufacturing partner in connection with the production of MOVIA sensor inventory of approximately $2.6 million during the remainder of 2025 and 2026 in line with agreed-upon deliveries.

Previous wording

During the nine months ended September 30, 2024, net cash used in investing activities was $3.8 million compared to net cash provided by investing activities of $21.4 million during the same period in 2023. During the nine months ended September 30, 2024, we purchased short-term investment securities totaling $25.6 million and sold short-term investment securities totaling $28.3 million, compared to purchases of $27.1 million and sales of $61.7 million in the same period of 2023. During the nine months ended September 30, 2024, we purchased property and equipment totaling $0.3 million compared to $2.0 million in the same period in 2023. During the nine months ended September 30, 2024, we made payments totaling $6.3 million related to the acquisition of Ibeo assets compared to $11.2 million in the same period in 2023.

Current wording

During the three months ended March 31, 2025, net cash provided by investing activities was $3.1 million compared to net cash used in investing activities of $3.3 million during the three months ended March 31, 2024. During the three months ended March 31, 2025, we purchased short-term investment securities totaling $10.3 million and sold short-term investment securities totaling $13.5 million. During the three months ended March 31, 2024, we purchased short-term investment securities totaling $7.8 million and sold short-term investment securities totaling $7.9 million. Purchases of property and equipment during the three months ended March 31, 2025 and 2024 were $0.1 million. During the three months ended March 31, 2024, we made payments totaling $3.3 million related to the acquisition of Ibeo assets.

Previous wording

Net cash provided by financing activities totaled $26.2 million during the nine months ended September 30, 2024, compared to net cash provided by financing activities of $60.8 million during the same period of 2023. Proceeds received from stock option exercises totaled $0.1 million during the nine months ended September 30, 2024 compared to $0.2 million during the same period in 2023. Net proceeds from issuance of common stock were $26.1 million during nine months ended September 30, 2024 compared to $60.6 million during the same period in 2023.

Current wording

Cash provided by financing activities totaled $8.2 million during the three months ended March 31, 2025, compared to net cash provided by financing activities of $21.0 million during the same period of 2024. Proceeds received from stock option exercises totaled $0.1 million during the three months ended March 31, 2024. Net proceeds from issuance of common stock and warrants were $8.2 million during the three months ended March 31, 2025 compared to $21.0 million during the three months ended March 31, 2024.