Leadership Transition - MicroVision, Inc. has appointed Glen W. DeVos as the new CEO, effective September 30, 2025, bringing over 30 years of leadership experience in automotive and industrial technology sectors [1] - DeVos has been serving as Chief Technology Officer since 2025, overseeing the evolution of the company's engineering operations towards productization and commercialization [2] Strategic Focus - The company is sharpening its strategic focus on delivering products and solutions to targeted industries, making this leadership transition timely [3] - Bob Carlile, Chair of MicroVision's Board of Directors, emphasized that DeVos's experience in getting products to market and anticipating industry challenges will aid in executing the strategic plan efficiently [3] Technology and Product Offering - MicroVision specializes in integrated hardware and software lidar systems, providing high-resolution 3D data for autonomous systems and advanced driver-assistance systems (ADAS) [4] - The MAVIN lidar sensor captures detailed point cloud data, which is processed by their perception software to identify and track objects, enhancing safety in industries such as automotive, robotics, and logistics [4]

```markdown [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%2E%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents MicroVision, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, shareholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, revenue recognition, financial instrument valuations, and other financial components for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The company's total assets increased by $19.46 million to $140.62 million as of June 30, 2025, primarily driven by a significant increase in cash and cash equivalents. Total liabilities decreased by $8.88 million, while shareholders' equity increased by $28.34 million | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $74,094 | $54,486 | $19,608 | 36.0% | | Total current assets | $103,183 | $82,470 | $20,713 | 25.1% | | Total assets | $140,617 | $121,161 | $19,456 | 16.1% | | Total current liabilities | $42,829 | $45,951 | $(3,122) | (6.8)% | | Total liabilities | $63,513 | $72,392 | $(8,879) | (12.3)% | | Total shareholders' equity | $77,104 | $48,769 | $28,335 | 58.1% | - Cash and cash equivalents **increased by 36.0%** to **$74.09 million** as of June 30, 2025, from **$54.49 million** at December 31, 2024[10](index=10&type=chunk) - Total shareholders' equity **increased by 58.1%** to **$77.10 million** as of June 30, 2025, from **$48.77 million** at December 31, 2024[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) MicroVision reported a net loss of $14.23 million for Q2 2025, an improvement from $23.93 million in Q2 2024. Revenue significantly decreased, but operating expenses and interest expense also saw substantial reductions, alongside unrealized gains on derivative and warrant liabilities | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $155 | $1,900 | $744 | $2,856 | | Gross (loss) profit | $(561) | $346 | $(522) | $25 | | R&D expense | $7,658 | $14,204 | $15,061 | $31,515 | | SG&A expense | $6,437 | $7,746 | $13,113 | $16,824 | | Loss from operations | $(14,656) | $(24,631) | $(28,696) | $(51,341) | | Net loss | $(14,229) | $(23,930) | $(43,008) | $(50,243) | | Net loss per share | $(0.06) | $(0.11) | $(0.18) | $(0.25) | - Revenue for the three months ended June 30, 2025, **decreased by 91.8%** to **$0.155 million** compared to **$1.900 million** in the same period of 2024[12](index=12&type=chunk) - Net loss **improved to $(14.23) million** for the three months ended June 30, 2025, from **$(23.93) million** in the prior year, and to **$(43.01) million** for the six months ended June 30, 2025, from **$(50.24) million** in the prior year[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The company's comprehensive loss for the three months ended June 30, 2025, was $13.83 million, an improvement from $23.99 million in the prior year, primarily due to a reduced net loss and a positive foreign currency translation adjustment | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(14,229) | $(23,930) | $(43,008) | $(50,243) | | Unrealized loss on investment securities, available for-sale | $(3) | $(11) | $(22) | $(45) | | Unrealized gain (loss) on translation | $402 | $(45) | $540 | $(64) | | Comprehensive loss | $(13,830) | $(23,986) | $(42,490) | $(50,352) | - Comprehensive loss for the six months ended June 30, 2025, **improved to $(42.49) million** from **$(50.35) million** in the prior year[15](index=15&type=chunk) - The company recognized an **unrealized gain on translation of $402 thousand** for the three months ended June 30, 2025, compared to a loss of **$45 thousand** in the prior year[15](index=15&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Total shareholders' equity increased to $77.10 million as of June 30, 2025, from $48.77 million at the beginning of the year, driven by significant sales of common stock and warrants, and conversions of notes payable, despite a net loss | Metric (in thousands) | Balance as of January 1, 2025 | Balance as of June 30, 2025 | Change | | :-------------------- | :---------------------------- | :-------------------------- | :----- | | Common Stock (shares) | 224,993 | 278,018 | 53,025 | | Common Stock (par value) | $225 | $278 | $53 | | Additional paid-in capital | $910,825 | $981,597 | $70,772 | | Accumulated deficit | $(862,281) | $(905,289) | $(43,008) | | Total shareholders' equity | $48,769 | $77,104 | $28,335 | - **Sales of common stock, net, and warrants contributed $44.99 million** to shareholders' equity for the six months ended June 30, 2025[18](index=18&type=chunk) - **Conversions of notes payable added $21.98 million** to shareholders' equity during the six months ended June 30, 2025[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, MicroVision significantly reduced cash used in operating activities and generated positive cash from investing activities, primarily due to investment securities sales. Financing activities provided substantial cash through common stock and warrant issuances | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(26,827) | $(39,393) | | Net cash provided by (used in) investing activities | $2,769 | $(7,413) | | Net cash provided by financing activities | $43,283 | $26,171 | | Change in cash, cash equivalents, and restricted cash | $19,544 | $(20,609) | | Cash, cash equivalents, and restricted cash at end of period | $75,791 | $28,782 | - **Net cash used in operating activities decreased by 31.9%** to **$(26.83) million** for the six months ended June 30, 2025, compared to **$(39.39) million** in the prior year[21](index=21&type=chunk) - **Net cash provided by financing activities increased by 65.4%** to **$43.28 million** for the six months ended June 30, 2025, from **$26.17 million** in the prior year[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering business description, accounting policies, per-share data, revenue recognition, investment securities, debt and warrant liabilities, financial statement components, share-based compensation, leases, commitments, common stock, income taxes, and restructuring charges [1. DESCRIPTION OF BUSINESS](index=11&type=section&id=1.%20DESCRIPTION%20OF%20BUSINESS) MicroVision develops proprietary products leveraging deterministic AI with perception and application software on lidar sensors for ADAS and autonomy in various industries, including automotive, robotics, and agriculture. The company has incurred significant losses but anticipates sufficient liquidity for the next 12 months - **MicroVision focuses on deterministic AI at the edge with innovative perception and application software running on diverse lidar sensors for ADAS and autonomy features**. Solutions are applied across robotics, automated warehouse, agriculture, mining, military, and automotive sectors[24](index=24&type=chunk) - The company had **$91.4 million in total liquidity** as of June 30, 2025, including **$74.1 million** in cash and cash equivalents and **$17.3 million** in short-term investment securities[27](index=27&type=chunk) - **MicroVision has approximately $76.5 million availability under its current at-the-market (ATM) facility and a remaining commitment of $30.0 million from a convertible note facility**[27](index=27&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The financial statements are prepared in accordance with US GAAP for interim information, consolidating wholly-owned subsidiaries. Key estimates involve valuations of intangibles, derivatives, warrants, revenue recognition, and share-based payments. The company operates as one reportable segment related to lidar hardware and software - The company operates in **one operating segment and one reportable segment**, focused on the sale and servicing of lidar hardware and software[32](index=32&type=chunk) - For the six months ended June 30, 2025, a leading agricultural equipment manufacturer and an automotive supplier accounted for **66%** and **22%** of total revenue, respectively[35](index=35&type=chunk) - Recently adopted ASU 2024-01 (Compensation: Stock Compensation) had **no material impact**. Recently issued ASUs 2023-09 (Income Taxes) and 2024-03 (Expense Disaggregation Disclosures) are expected to result in **incremental disclosures**, while ASU 2024-04 (Debt with Conversion) is **not expected to have a material impact**[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [3. NET LOSS PER SHARE](index=14&type=section&id=3.%20NET%20LOSS%20PER%20SHARE) Basic and diluted net loss per share for the three and six months ended June 30, 2025, were $(0.06) and $(0.18) respectively, improving from the prior year. Diluted EPS equals basic EPS due to anti-dilutive securities | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss available for common shareholders | $(14,229) | $(23,930) | $(43,008) | $(50,243) | | Weighted-average common shares outstanding | 254,658 | 208,665 | 245,347 | 202,706 | | Net loss per share - basic and diluted | $(0.06) | $(0.11) | $(0.18) | $(0.25) | - Securities excluded from diluted EPS calculation due to their anti-dilutive effect include **0.7 million** outstanding options, **21.2 million** nonvested restricted and performance stock units, **20.5 million** shares from derivative liability conversion, and **5.8 million** shares from warrant exercise as of June 30, 2025[45](index=45&type=chunk) [4. REVENUE RECOGNITION](index=15&type=section&id=4.%20REVENUE%20RECOGNITION) Total revenue for the three months ended June 30, 2025, was $0.155 million, a significant decrease from $1.900 million in the prior year, with most revenue recognized at a point in time. Contract liabilities decreased by 9.4% to $0.337 million | Revenue Type (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | License and Product Revenue | $34 | $1,697 | $538 | $2,552 | | Royalty Revenue | $81 | $152 | $166 | $199 | | Contract Revenue | $40 | $51 | $40 | $105 | | Total Revenue | $155 | $1,900 | $744 | $2,856 | | Contract Balances (in thousands) | June 30, 2025 | December 31, 2024 | $ Change | % Change | | :------------------------------- | :------------ | :---------------- | :------- | :------- | | Contract assets and accounts receivable | $104 | $926 | $(822) | (88.8)% |\n| Contract liabilities | $(337) | $(308) | $(29) | 9.4% | | Net contract (liabilities) assets | $(233) | $618 | $(851) | (137.7)% | - The company expects to recognize **100% of the remaining $0.3 million** contract liabilities as revenue over the next 12 months[50](index=50&type=chunk) [5. INVESTMENT SECURITIES, AVAILABLE-FOR-SALE AND FAIR VALUE MEASUREMENTS](index=16&type=section&id=5.%20INVESTMENT%20SECURITIES,%20AVAILABLE-FOR-SALE%20AND%20FAIR%20VALUE%20MEASUREMENTS) Investment securities available-for-sale decreased to $17.31 million as of June 30, 2025, from $20.22 million at December 31, 2024, consisting entirely of Level 2 corporate and U.S. Treasury debt securities with maturities less than one year | Investment Type (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Corporate debt securities | $13,036 | $14,001 | | U.S. Treasury securities | $4,277 | $6,215 | | Total | $17,313 | $20,216 | - **All investment securities are classified as Level 2** in the fair value hierarchy, indicating observable inputs other than quoted prices in active markets[55](index=55&type=chunk) - **All investment securities available-for-sale have maturity dates of less than one year**[57](index=57&type=chunk) [6. NOTES PAYABLE AND DERIVATIVE LIABILITY](index=18&type=section&id=6.%20NOTES%20PAYABLE%20AND%20DERIVATIVE%20LIABILITY) The company's notes payable, net carrying amount, decreased to $32.27 million as of June 30, 2025, from $33.00 million at December 31, 2024. A debt modification in February 2025 resulted in a $4.7 million realized loss on debt extinguishment and $2.1 million in interest expense. The derivative liability decreased significantly to $2.92 million from $14.58 million, resulting in an unrealized gain - On October 23, 2024, MicroVision **issued $45.0 million in senior secured convertible notes**, with an **option for an additional $30.0 million**[59](index=59&type=chunk) - A Letter Agreement on February 3, 2025, led to an **early conversion of $8.8 million of principal** into 11,725,337 shares of common stock and **deferred $11.6 million of principal repayments**. This modification **resulted in a $4.7 million realized loss on debt modification and $2.1 million in interest expense** for the six months ended June 30, 2025[61](index=61&type=chunk) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Notes payable, net carrying amount | $32,271 | $33,002 | | Derivative liability | $2,915 | $14,581 | [7. WARRANT LIABILITY](index=20&type=section&id=7.%20WARRANT%20LIABILITY) A new Securities Purchase Agreement in February 2025 resulted in the issuance of warrants to purchase 5,750,225 shares of common stock. The warrant liability was initially recorded at $6.3 million and subsequently remeasured to $3.73 million as of June 30, 2025, generating an unrealized gain of $2.56 million for the six months ended June 30, 2025 - On February 3, 2025, the company entered into a **new Securities Purchase Agreement for $8.0 million**, **selling 5,750,225 shares of common stock and warrants** to purchase an equal number of shares at an exercise price of **$1.57** per share[72](index=72&type=chunk) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Warrant liability | $3,733 | $- | | Metric (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------- | :------------------------------- | :----------------------------- | | Unrealized gain on warrant liability | $803 | $2,564 | [8. FINANCIAL STATEMENT COMPONENTS](index=21&type=section&id=8.%20FINANCIAL%20STATEMENT%20COMPONENTS) Inventory increased significantly to $6.13 million as of June 30, 2025, from $2.29 million at December 31, 2024, primarily due to higher finished goods. Net property and equipment slightly decreased, while intangible assets, mainly acquired technology, also saw a minor decrease | Inventory (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Raw materials | $2,361 | $1,616 | | Finished goods | $3,767 | $678 | | Total Inventory | $6,128 | $2,294 | | Asset (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Property and equipment, net | $6,739 | $7,061 | | Intangible assets, net | $10,510 | $10,972 | - **No impairment of intangible assets occurred** during the six months ended June 30, 2025, **compared to a $3.0 million impairment charge** on Reference software in Q2 2024[82](index=82&type=chunk) [9. SHARE-BASED COMPENSATION](index=22&type=section&id=9.%20SHARE-BASED%20COMPENSATION) Total share-based compensation expense for the six months ended June 30, 2025, was $3.85 million, a decrease from $7.10 million in the prior year. Unrecognized compensation related to RSUs and PSUs totals $17.0 million, to be expensed over the next 0.9 to 2.2 years | Expense Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development expense | $521 | $1,252 | $1,029 | $2,596 | | Sales, marketing, general and administrative expense | $1,409 | $2,101 | $2,822 | $4,500 | | Total share-based compensation expense | $1,930 | $3,353 | $3,851 | $7,096 | | RSU/PSU Activity (in thousands) | Shares | Weighted Average Price | | :------------------------------ | :----- | :--------------------- | | Unvested as of December 31, 2024 | 12,913 | $1.53 | | Granted | 10,568 | $1.15 | | Vested | (1,681) | $1.95 | | Forfeited | (577) | $1.74 | | Unvested as of June 30, 2025 | 21,223 | $1.30 | - As of June 30, 2025, **unrecognized share-based compensation related to RSUs was $11.0 million** (expensed over **2.2 years**) and **for executive PSUs was $6.0 million** (expensed over **0.9 years**)[90](index=90&type=chunk) [10. LEASES](index=24&type=section&id=10.%20LEASES) Total lease expense for the six months ended June 30, 2025, was $1.75 million, an increase from $1.33 million in the prior year. The company has operating lease right-of-use assets of $16.12 million and total operating lease liabilities of $18.65 million as of June 30, 2025 | Lease Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease expense | $867 | $668 | $1,742 | $1,333 | | Total finance lease expense | $3 | $- | $6 | $- | | Total lease expense | $870 | $668 | $1,748 | $1,333 | | Lease Balance Sheet (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets | $16,123 | $16,746 | | Total operating lease liabilities | $18,648 | $18,636 | - **The company subleased a portion of its Redmond office space**, commencing July 15, 2025, **providing $0.1 million in monthly rent** until April 2030[93](index=93&type=chunk) [11. COMMITMENTS AND CONTINGENCIES](index=25&type=section&id=11.%20COMMITMENTS%20AND%20CONTINGENCIES) MicroVision has remaining purchase commitments of approximately $2.3 million with a contract manufacturing partner for MOVIA sensor inventory, expected to be fulfilled through 2025 and 2026. The company is not currently party to any material legal proceedings - **Remaining future minimum payments of approximately $2.3 million** for MOVIA sensor inventory are **expected through the remainder of 2025 and 2026**[99](index=99&type=chunk) - The company is **not currently party to any legal proceedings that management believes are reasonably possible to have a material adverse effect** on financial position, results of operations, or cash flows[100](index=100&type=chunk) [12. COMMON STOCK](index=26&type=section&id=12.%20COMMON%20STOCK) As of June 30, 2025, MicroVision had $76.5 million remaining available under its $150 million ATM equity offering agreement, having completed sales of 54.8 million shares for net proceeds of $70.7 million - As of June 30, 2025, **$76.5 million remains available under the $150 million ATM equity offering agreement**[101](index=101&type=chunk) - **Sales under the ATM agreement totaled 54.8 million shares for net proceeds of $70.7 million** as of June 30, 2025[101](index=101&type=chunk) [13. INCOME TAXES](index=26&type=section&id=13.%20INCOME%20TAXES) Income tax expense for the six months ended June 30, 2025, was $0.17 million, primarily due to income in foreign jurisdictions, partially offset by a deferred income tax benefit from the Ibeo acquisition. No unrecognized tax positions exist | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $93 | $84 | $166 | $318 | - **Income tax expense for the six months ended June 30, 2025, was largely due to foreign jurisdiction income, offset by a deferred income tax benefit from the Ibeo acquisition**[103](index=103&type=chunk) [14. RESTRUCTURING CHARGES](index=26&type=section&id=14.%20RESTRUCTURING%20CHARGES) MicroVision incurred no restructuring charges during the six months ended June 30, 2025. In the first half of 2024, the company recognized $5.7 million in restructuring and reorganization charges, primarily for employee severance, due to a 37% global workforce reduction to align resources with product plans - **No restructuring charges were incurred** during the six months ended June 30, 2025[105](index=105&type=chunk) - **In the first half of 2024, the company recognized $5.7 million in restructuring and related reorganization charges**, **primarily for employee severance and benefits, due to a 37% global workforce reduction**[105](index=105&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on MicroVision's financial condition and results of operations, highlighting the company's strategic focus on AI-driven lidar solutions, the impact of the Ibeo acquisition and subsequent restructuring, and detailed analysis of revenue, expenses, and liquidity for the periods presented [Overview](index=27&type=section&id=Overview) MicroVision is focused on developing and commercializing proprietary AI-driven perception and application software for diverse lidar sensors, enabling ADAS and autonomy across various industries. The company acquired Ibeo assets in 2023, enhancing its lidar and software solutions, but has incurred significant losses and recently restructured its workforce to focus on core products - **MicroVision's core business involves proprietary products leveraging deterministic AI at the edge with perception and application software on lidar sensors for ADAS and autonomy in automotive, robotics, and industrial sectors**[108](index=108&type=chunk) - **In January 2023, the company acquired strategic assets of Germany-based Ibeo Automotive Systems GmbH, including automotive-qualified lidar sensors and perception software**[111](index=111&type=chunk) - In 2024, **MicroVision reduced its dedicated resources and investment** in MOSAIK™ validation software, implementing a **41% workforce reduction**, which **added $6.0 million to 2024 expenses** but **reduced go-forward operating costs**[113](index=113&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Revenue for the six months ended June 30, 2025, decreased by 73.9% to $0.74 million, primarily due to lower sensor sales to industrial customers. Operating expenses, including R&D and SG&A, significantly decreased due to lower personnel costs and restructuring. Interest expense surged due to debt discount amortization and warrant discounts, while unrealized gains on derivative and warrant liabilities partially offset losses | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $155 | $1,900 | $744 | $2,856 | | Cost of Revenue | $716 | $1,554 | $1,266 | $2,831 | | R&D Expense | $7,658 | $14,204 | $15,061 | $31,515 | | SG&A Expense | $6,437 | $7,746 | $13,113 | $16,824 | | Impairment loss on intangible assets | $- | $3,027 | $- | $3,027 | | Interest expense | $(2,170) | $(13) | $(15,073) | $(32) | | Unrealized gain on derivative liability | $1,952 | $- | $2,794 | $- | | Unrealized gain on warrant liability | $803 | $- | $2,564 | $- | | Realized loss on debt extinguishment | $- | $- | $(4,654) | $- | - **The decrease in revenue for the six months ended June 30, 2025, was primarily due to higher sales of MOVIA L sensors to Daimler Truck North America and affiliates as part of their RFQ evaluation processes in the comparable 2024 period**[118](index=118&type=chunk) - **Research and development expense decreased by 52.2% for the six months ended June 30, 2025**, **primarily due to lower salary and benefits expense ($8.0 million)** and **reduced restructuring charges ($5.0 million)**[124](index=124&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) MicroVision had $91.4 million in total liquidity as of June 30, 2025, and anticipates sufficient cash to fund operations for at least the next 12 months. Cash used in operating activities decreased significantly, while financing activities provided substantial cash through equity and warrant issuances - As of June 30, 2025, the company had **$74.1 million** in cash and cash equivalents and **$17.3 million** in short-term investment securities, totaling **$91.4 million in liquidity**[135](index=135&type=chunk) - The company has approximately **$76.5 million** available under its ATM facility and a remaining **$30.0 million** commitment from its convertible note facility[135](index=135&type=chunk) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(26,827) | $(39,393) | | Net cash provided by (used in) investing activities | $2,769 | $(7,413) | | Net cash provided by financing activities | $43,283 | $26,171 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) MicroVision's exposure to interest rate risk is not material due to short-term investment maturities. Foreign exchange rate risk exists due to significant European operations and foreign suppliers, with potential negative impacts from unfavorable currency fluctuations - **The company's exposure to market and interest rate risks is not material** due to the short-term maturities of its investment securities[140](index=140&type=chunk) | (in thousands) | Amount | Percent | | :------------- | :----- | :------ | | Cash and cash equivalents | $74,094 | 81.1% | | Less than one year (investment securities) | $17,313 | 18.9% | | Total | $91,407 | 100.0% | - **Unfavorable fluctuations in the U.S. dollar to Euro and other currencies may negatively impact financial condition and results of operations** due to significant international operations and foreign suppliers[142](index=142&type=chunk)[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, concluded that disclosure controls and procedures were effective as of June 30, 2025. No material changes to internal control over financial reporting occurred during the quarter - **Disclosure controls and procedures were evaluated and deemed effective** as of June 30, 2025[144](index=144&type=chunk)[145](index=145&type=chunk) - **No material changes in internal control over financial reporting occurred** during the quarter ended June 30, 2025[145](index=145&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) MicroVision is subject to various claims and lawsuits in the normal course of business but is not currently involved in any legal proceedings that management believes would have a material adverse effect on its financial position, results of operations, or cash flows - The company is **not currently party to any legal proceedings that management believes are reasonably possible to have a material adverse effect** on its financial position, results of operations, or cash flows[147](index=147&type=chunk) [Item 1A. Risk Factors](index=35&type=page&id=Item%201A.%20Risk%20Factors) MicroVision faces significant risks including a history of operating losses and expected future losses, the need for additional capital which could dilute current shareholders, revenue concentration from a small number of customers, and potential stock price volatility. Operational risks include supply chain dependencies, reliance on third-party partners, intellectual property challenges, product liability, IT system failures, and the loss of key personnel. The company also faces risks related to the rapidly evolving industrial and automotive markets, including OEM adoption delays, competition from alternative technologies, and difficulties in forecasting demand and pricing - **MicroVision has incurred significant losses since inception and expects to continue to incur significant losses in the near term, with an accumulated deficit of $905.3 million** as of June 30, 2025[149](index=149&type=chunk)[151](index=151&type=chunk)[154](index=154&type=chunk) - The company will **require additional capital beyond the next 12 months to fund operations**, and raising capital through equity or debt could dilute current shareholders or be unavailable on acceptable terms[152](index=152&type=chunk)[155](index=155&type=chunk) - **Revenue is highly concentrated**, with a leading agricultural equipment manufacturer accounting for **66%** and an automotive supplier for **22%** of total revenue for the six months ended June 30, 2025[156](index=156&type=chunk) - The **stock price has been volatile**, and there is a significant risk of failing to maintain compliance with Nasdaq's minimum bid price requirement, potentially leading to delisting[159](index=159&type=chunk)[164](index=164&type=chunk) - **Risks related to the convertible note include potential events of default, covenants, and significant dilution of common stock upon conversion**[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[180](index=180&type=chunk) - **Operational risks include difficulty in qualifying contract manufacturers, reliance on third parties, potential lawsuits related to LBS technology, challenges in managing expansion, competition from larger companies, environmental regulations, and geopolitical/economic uncertainties affecting foreign operations**[177](index=177&type=chunk)[178](index=178&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - **Market-specific risks include the significant time and resources required for OEM product selection, potential delays or defects in complex products, adverse conditions in industrial/automotive sectors, competition from alternative technologies (cameras, radar), and difficulties in forecasting customer adoption rates and demand in rapidly evolving markets**[207](index=207&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2025, none of MicroVision's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement - **No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements** during the three months ended June 30, 2025[215](index=215&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications, equity incentive plans, and XBRL-related documents - **Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer, the 2025 Executive Bonus Plan, the 2022 Equity Incentive Plan, and various Inline XBRL documents**[217](index=217&type=chunk) [Signatures](index=48&type=section&id=Signatures) The report is signed by Sumit Sharma, Chief Executive Officer and Director (Principal Executive Officer), and Anubhav Verma, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), on August 7, 2025 - **The report was signed by Sumit Sharma, CEO, and Anubhav Verma, CFO, on August 7, 2025**[220](index=220&type=chunk) ```

Financial Data and Key Metrics Changes - For the second quarter, the company reported revenues of $150,000, driven by sales in the industrial verticals [21] - R&D and SG&A expenses for the second quarter were $14.1 million, with cash expenses at $11 million after backing out non-cash charges [21] - Year-over-year, expenses have been reduced by 44%, and the company expects to sustain current spending levels through the rest of the year [21][22] - The company finished the quarter with $91.4 million in cash and cash equivalents, with additional availability under current facilities [23][25] - Average daily trading volume has more than doubled to over 5.2 million shares during the second quarter compared to 2.6 million in the same period in 2024 [26] Business Line Data and Key Metrics Changes - The automotive vertical is expected to be the primary driver for high-volume recurring business, with a focus on cost competitiveness to drive adoption [18] - In the industrial vertical, the company is finalizing several engagements and has introduced an aftermarket product that can be retrofitted into existing forklift fleets [9][10] - The defense vertical presents significant opportunities, with plans to demonstrate an autonomous swarming drone system in the first half of next year [12][13] Market Data and Key Metrics Changes - Increased trading activity and institutional interest in LiDAR and automotive technology have been noted, with blue-chip institutions focusing on these sectors [15][16] - The company is well-positioned with its manufacturing partner in France, minimizing exposure to China-based manufacturing amid dynamic global tariffs [18][19] Company Strategy and Development Direction - The company aims to accelerate the global adoption of autonomous technologies across automotive, industrial, and military segments [14] - The go-to-market strategy focuses on OEMs with mass market product plans, emphasizing scalable and cost-competitive LiDAR products [8] - Partnerships with established prime defense contractors are targeted to enhance revenue growth in the defense sector [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the engagement with automotive OEMs and the potential for increased revenue from industrial and defense sectors [6][15] - The company is focused on developing advanced LiDAR sensors and sensor fusion technology to deliver actionable perception software [13][19] - Management highlighted the importance of cost competitiveness in driving higher LiDAR adoption among OEMs [18] Other Important Information - The company has raised approximately $35 million net from the ATM during the second quarter, bolstering its balance sheet [23][25] - The recent investment commitment of over $90 million from a single investor has significantly increased trading activity and visibility among institutional investors [26][27] Q&A Session Summary Question: Can you expand on specific use cases or customer types showing traction in the industrial pipeline? - The company is targeting AGV AMRs in logistics, focusing on higher safety levels and retrofittable solutions to existing installations [31][32] - Revenue is expected to materialize in the second half of this year and continue into 2026 [35] Question: Are there any specific programs or agencies in the defense vertical that you are aiming to engage with? - The company is actively working on partnerships and expects to demonstrate drone technology in the first half of next year [36][38] Question: How do you plan to compete with existing players in the industrial sector? - The company competes on technology, offering silicon-based sensors that provide a cost advantage and are designed for harsh environments [59][60] - The full software stack accompanying the sensors allows for tailored solutions to OEM needs, enhancing competitive positioning [62] Question: What is the status of the industrial OEM evaluating your technology? - There is no delay in decision-making; customers are in various levels of evaluation regarding integration into their systems [54][56] Question: What happened to the seven RFQs mentioned previously? - The RFQs are being reformulated by OEMs, and the quality of these RFQs has improved, indicating potential for real programs and revenue [80][84]

[MicroVision Second Quarter 2025 Results](index=1&type=section&id=MicroVision%20Second%20Quarter%202025%20Results) MicroVision reports Q2 2025 results, detailing strategic advancements in autonomy, financial performance, and future outlook [Announcement and Executive Summary](index=1&type=section&id=Announcement%20and%20Executive%20Summary) MicroVision announced Q2 2025 results, highlighting strategic execution in autonomy, competitive pricing, industrial revenue confidence, NVIDIA integration, and expanded financial runway - CEO Sumit Sharma expressed confidence in MicroVision's position to secure **2025 revenue opportunities** from the industrial vertical, emphasizing the integrated perception software and compelling solutions at attractive price points[4](index=4&type=chunk) - CFO Anubhav Verma highlighted progress in **NVIDIA integration**, increased momentum in the defense vertical, expansion of the Sales and Business Development team, and production commitment with ZF for high-volume deliveries. Recent capital raises have expanded the financial runway[4](index=4&type=chunk) [Key Business and Operational Highlights](index=1&type=section&id=Key%20Business%20and%20Operational%20Highlights) MicroVision integrated MOVIA lidar into NVIDIA DRIVE AGX, engaged top automotive OEMs, drove industrial momentum, and expanded defense tech - Achieved **full integration of MOVIA lidar into NVIDIA's DRIVE AGX platform**, becoming part of their prestigious autonomous vehicle ecosystem[6](index=6&type=chunk) - Continued engagement with top-tier global automotive OEMs, with reformulated and **higher-volume RFQs** for passenger vehicles and custom development opportunities[6](index=6&type=chunk) - Driving momentum in industrial markets with a focus on **near-term revenue opportunities** with programs that leverage full stack ADAS software and multi-modal sensor capability[6](index=6&type=chunk) - Progressed opportunities to accelerate **strategic expansion in the defense tech and military sectors**, and deepened expertise on the Board of Directors and defense industry advisory board with new appointments[6](index=6&type=chunk) [Key Financial Highlights for Q2 2025](index=1&type=section&id=Key%20Financial%20Highlights%20for%20Q2%202025) Q2 2025 revenue was $0.2M, down from $1.9M YoY; operating expenses decreased 44% to $14.1M, narrowing net loss to $14.2M and Adjusted EBITDA loss to $11.2M, with $91.4M cash and $106.5M capital access Q2 2025 vs Q2 2024 Key Financial Highlights | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (YoY) | | :-------------------------------- | :----------------- | :----------------- | :----------- | | Revenue | $0.2 | $1.9 | -89.5% | | Total Operating Expenses | $14.1 | $25.0 | -43.6% | | Net Loss | $14.2 | $23.9 | -40.6% | | Net Loss Per Share | $0.06 | $0.11 | -45.5% | | Adjusted EBITDA Loss | $11.2 | $12.6 | -11.2% | | Cash Used in Operations | $12.7 | $18.6 | -31.7% | - As of June 30, 2025, the Company has access to **$106.5 million of capital**, including **$76.5 million** under its existing ATM facility and **$30 million** from the remaining commitment pursuant to the convertible note facility[7](index=7&type=chunk) - The Company ended the second quarter of 2025 with **$91.4 million in cash and cash equivalents**, including investment securities, compared to **$74.7 million** as of December 31, 2024[11](index=11&type=chunk) [Conference Call and Webcast](index=2&type=section&id=Conference%20Call%20and%20Webcast) MicroVision will host a conference call and webcast on August 7, 2025, at 1:30 PM PT/4:30 PM ET to discuss Q2 2025 results and business update - Conference call and webcast scheduled for **Thursday, August 7, 2025, at 1:30 PM PT/4:30 PM ET**[8](index=8&type=chunk) - The live webcast can be accessed on the Company's Investor Relations website under the Events tab[9](index=9&type=chunk) [About MicroVision](index=2&type=section&id=About%20MicroVision) MicroVision pioneers advanced perception solutions for autonomy and mobility, enhancing safety through integrated lidar hardware and software for automotive ADAS, industrial, and defense sectors - MicroVision delivers advanced perception solutions in autonomy and mobility, with engineering excellence based in **Redmond, Washington, and Hamburg, Germany**[2](index=2&type=chunk)[10](index=10&type=chunk) - Proprietary technologies enhance safety and automation across various **industrial applications, including robotics, automated warehouses, and agriculture**, and are instrumental in the development of autonomous systems[10](index=10&type=chunk) - Core technology, initially developed for the automotive industry (ADAS and autonomous driving), also targets semi- and fully autonomous airborne and terrestrial sensor systems for the military segment, utilizing **solid-state MEMS-based long-range and flash-based short-range lidar**[10](index=10&type=chunk) [Non-GAAP Information](index=3&type=section&id=Non-GAAP%20information) MicroVision uses non-GAAP measures like Adjusted EBITDA and Adjusted Gross Profit to supplement GAAP, excluding specific items to provide insights into core operating performance and facilitate comparisons - Non-GAAP measures "**adjusted EBITDA**" and "**adjusted Gross Profit**" are presented to supplement MicroVision's condensed financial statements presented in accordance with GAAP[13](index=13&type=chunk) - **Adjusted EBITDA** consists of **GAAP net income (loss)** excluding interest, income tax, depreciation and amortization, non-cash gains and losses, share-based compensation, and restructuring costs. **Adjusted Gross Profit** is **GAAP gross profit** before share-based compensation expense and amortization of acquired intangibles[13](index=13&type=chunk) - These non-GAAP measures provide important supplemental information to management and investors regarding **financial and business trends, consistency, and comparability**, despite their limitations in not reflecting all GAAP costs[14](index=14&type=chunk)[15](index=15&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements on customer engagement, revenue, expenses, market position, product capabilities, and capital access, highlighting risks and uncertainties - Statements regarding **customer engagement, revenue and cash opportunities, expense reduction, market position, product portfolio, product and manufacturing capabilities, and access to capital** are forward-looking[18](index=18&type=chunk) - Factors that could cause actual results to differ include the ability to operate with **limited cash or raise additional capital**, **market acceptance of technologies**, **failure of commercial partners**, **financial and technical resources relative to competitors**, **rapid technological change**, **government regulation**, **intellectual property rights**, and **potential product liability claims**[18](index=18&type=chunk) [Investor Relations and Media Contact](index=4&type=section&id=Investor%20Relations%20Contact) Provides contact information for investor relations and media inquiries - Investor Relations Contact: **Jeff Christensen at Darrow Associates Investor Relations (MVIS@darrowir.com)**[19](index=19&type=chunk) - Media Contact: **Marketing@MicroVision.com**[19](index=19&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) Presents the company's unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows for Q2 2025 and comparative periods [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Presents unaudited consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity Consolidated Balance Sheets (as of June 30, 2025 vs. December 31, 2024) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Assets | $140,617 | $121,161 | +$19,456 | | Total Liabilities | $63,513 | $72,392 | -$8,879 | | Total Shareholders' Equity | $77,104 | $48,769 | +$28,335 | | Cash and cash equivalents | $74,094 | $54,486 | +$19,608 | | Inventory | $6,128 | $2,294 | +$3,834 | | Derivative liability | $2,915 | $14,581 | -$11,666 | | Notes payable, current | $32,271 | $24,248 | +$8,023 | [Consolidated Statement of Operations](index=6&type=section&id=Consolidated%20Statement%20of%20Operations) Details unaudited consolidated statements of operations for three and six months ended June 30, 2025 and 2024, showing revenue, expenses, and net loss Consolidated Statement of Operations (Three Months Ended June 30, 2025 vs. 2024) | Metric (in thousands) | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :------ | :------ | :----------- | | Revenue | $155 | $1,900 | -$1,745 | | Gross (loss) profit | $(561) | $346 | -$907 | | Total operating expenses | $14,095 | $24,977 | -$10,882 | | Loss from operations | $(14,656) | $(24,631) | +$9,975 | | Net loss | $(14,229) | $(23,930) | +$9,701 | | Net loss per share | $(0.06) | $(0.11) | +$0.05 | Consolidated Statement of Operations (Six Months Ended June 30, 2025 vs. 2024) | Metric (in thousands) | H1 2025 | H1 2024 | Change (YoY) | | :-------------------- | :------ | :------ | :----------- | | Revenue | $744 | $2,856 | -$2,112 | | Gross (loss) profit | $(522) | $25 | -$547 | | Total operating expenses | $28,174 | $51,366 | -$23,192 | | Loss from operations | $(28,696) | $(51,341) | +$22,645 | | Net loss | $(43,008) | $(50,243) | +$7,235 | | Net loss per share | $(0.18) | $(0.25) | +$0.07 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Provides unaudited consolidated statements of cash flows for six months ended June 30, 2025 and 2024, categorizing cash activities Consolidated Statements of Cash Flows (Six Months Ended June 30, 2025 vs. 2024) | Metric (in thousands) | H1 2025 | H1 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net cash used in operating activities | $(26,827) | $(39,393) | +$12,566 | | Net cash provided by (used in) investing activities | $2,769 | $(7,413) | +$10,182 | | Net cash provided by financing activities | $43,283 | $26,171 | +$17,112 | | Cash, cash equivalents, and restricted cash at end of period | $75,791 | $28,782 | +$47,009 | [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Provides detailed reconciliations of GAAP gross (loss) profit to Adjusted Gross (Loss) Profit and GAAP net loss to Adjusted EBITDA for Q2 and H1 2025 and 2024 Reconciliation of Non-GAAP Gross (Loss) Profit (Three Months Ended June 30) | Metric (in thousands) | Q2 2025 | Q2 2024 | | :-------------------- | :------ | :------ | | Gross (loss) profit | $(561) | $346 | | Amortization of acquired intangibles | $217 | $387 | | Adjusted Gross (Loss) Profit | $(344) | $733 | Reconciliation of Adjusted EBITDA (Three Months Ended June 30) | Metric (in thousands) | Q2 2025 | Q2 2024 | | :-------------------- | :------ | :------ | | GAAP Net loss | $(14,229) | $(23,930) | | Interest expense, net | $2,235 | $(559) | | Income taxes | $93 | $84 | | Depreciation and amortization | $1,544 | $1,770 | | Unrealized gain on derivative liability | $(1,952) | - | | Unrealized gain warrant liability | $(803) | - | | Impairment loss on intangible assets | - | $3,027 | | Impairment of operating lease right-of-use assets | - | $393 | | Share-based compensation expense | $1,930 | $3,353 | | Restructuring costs | - | $3,216 | | Adjusted EBITDA | $(11,182) | $(12,646) | Reconciliation of Adjusted EBITDA (Six Months Ended June 30) | Metric (in thousands) | H1 2025 | H1 2024 | | :-------------------- | :------ | :------ | | GAAP Net loss | $(43,008) | $(50,243) | | Interest expense, net | $14,850 | $(1,108) | | Income taxes | $166 | $318 | | Depreciation and amortization | $2,952 | $3,570 | | Unrealized gain on derivative liability | $(2,794) | - | | Unrealized gain warrant liability | $(2,564) | - | | Loss on debt extinguishment | $4,654 | - | | Impairment loss on intangible assets | - | $3,027 | | Impairment of operating lease right-of-use assets | - | $393 | | Share-based compensation expense | $3,851 | $7,096 | | Restructuring costs | - | $5,714 | | Adjusted EBITDA | $(21,893) | $(31,233) |

Financial Data and Key Metrics Changes - For Q1 2025, the company reported revenues of $600,000, primarily driven by sales in the industrial verticals [23] - R&D and SG&A expenses for Q1 2025 were $14.1 million, including $1.9 million in non-cash charges related to stock-based compensation and $1.4 million in non-cash charges related to depreciation and amortization, resulting in a reduction of 45% year-over-year [24][25] - The company finished the quarter with $69 million in cash and cash equivalents, with additional availability under various facilities [26][27] Business Line Data and Key Metrics Changes - The automotive segment is engaged in seven RFQs, but progress has been slow due to OEMs focusing on supply chain issues and tariff impacts [7][19] - The industrial segment is seeing momentum, particularly in AGV and AMR applications, with expectations for commercial wins from ongoing evaluations [12][20] - The defense vertical is expanding, with a focus on partnerships and leveraging existing technology for military applications [14][22] Market Data and Key Metrics Changes - The automotive industry is navigating a complex landscape influenced by tariffs, leading to a focus on component costs and the origin of systems [19] - The industrial market is experiencing increased demand for automation and AI, with the company well-positioned to meet this demand [20][21] - The defense market presents multiple opportunities for technology application, including drones and unmanned vehicles, which differ significantly from automotive applications [106] Company Strategy and Development Direction - The company aims to strengthen its balance sheet and focus on custom development opportunities with OEMs in the automotive sector [11] - There is a strategic push towards the defense sector, with plans to engage with the Department of Defense and explore partnerships with larger companies [14][22] - The company is preparing for an Investor Day to showcase technology offerings and engage with potential customers [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the slow progress in automotive RFQs but remains optimistic about the long-term potential in this segment [11] - The company expects to generate $30 million to $50 million in revenue over the next 12 to 18 months, primarily from industrial engagements [28] - Management emphasizes the importance of patience and strategic engagement with customers to ensure sustainable growth [78] Other Important Information - The company has secured a production commitment with ZF in France, minimizing exposure to China tariffs and enhancing competitiveness [18] - The company plans to expand production capacity later in the year based on customer agreements [55] Q&A Session Summary Question: Is this the first quarter with commercial sales? - No, commercial sales were also present in Q4 [32] Question: What is driving the potential $30 million to $50 million revenue range? - Primarily driven by industrial automation and ADAS deployment [36][38] Question: How many unique entities is the company working with? - Less than 10 [45] Question: What is the scope of military opportunities? - The company is not a prime contractor but aims to be a technology partner for primes [46][47] Question: How does the company plan to compete with existing players in the industrial vertical? - By offering integrated solutions with software and achieving economies of scale [81][83] Question: What are the 2025 milestones to track? - Focus on signing commercial deals in industrial, engaging in pilot programs in defense, and developing partnerships in automotive [92][93]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported revenues of $600,000, primarily driven by sales in the industrial verticals [23] - R&D and SG&A expenses for Q1 2025 were $14.1 million, including $1.9 million in non-cash stock-based compensation and $1.4 million in non-cash depreciation and amortization, resulting in a reduction of 45% year-over-year [24][25] - The company finished the quarter with $69 million in cash and cash equivalents, with additional availability under various financing facilities [26] Business Line Data and Key Metrics Changes - The company is engaged in seven RFQs for automotive programs, but progress has been slow due to OEMs focusing on supply chain issues and global trade rebalancing [7][19] - In the industrial segment, the company has made progress with its Movia sensor integrated with onboard perception software, expecting commercial wins from ongoing evaluations [12][20] - The defense vertical is being expanded with a newly established defense advisory board to explore opportunities with the Department of Defense [14][22] Market Data and Key Metrics Changes - The automotive industry is experiencing delays in advanced ADAS rollout, with LiDAR integration at low volumes [7][19] - The industrial market shows momentum in AGV and AMR sectors, with companies embracing autonomy and AI [20] - The defense market presents multiple avenues for technology application, including drones and unmanned vehicles, which differ significantly from automotive applications [104] Company Strategy and Development Direction - The company aims to focus on custom development opportunities with OEMs in the automotive sector, while also expanding its presence in industrial and defense markets [11][22] - The strategy includes leveraging existing technology for partnerships in the defense sector, emphasizing rapid innovation through public-private partnerships [22] - The company plans to host an Investor Day to showcase technology offerings and engage with potential customers [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the industrial segment and the potential for significant revenue growth, projecting $30 million to $50 million in revenue over the next 12 to 18 months [28] - The company remains cautious about the automotive sector, expecting no substantial projects to be awarded in the near future [11] - Management highlighted the importance of a strong balance sheet and strategic partnerships to navigate the current market challenges [10][22] Other Important Information - The company has secured a production commitment with ZF in France, minimizing exposure to China tariffs and enhancing competitiveness [18] - The company is exploring strategic alliances in the defense sector but is currently focused on commercial agreements [57] Q&A Session Summary Question: Is this the first quarter with commercial sales? - The company confirmed that commercial sales were also present in the fourth quarter, indicating a continued effort in this area [32][33] Question: What is driving the potential revenue range of $30 million to $50 million? - The revenue is primarily driven by industrial automation activities and the deployment of ADAS solutions [35][36] Question: How many unique entities is the company working with? - The company is currently engaging with less than 10 unique customers in the industrial space [42] Question: What is the scope of military opportunities? - The company aims to be a technology partner for prime contractors in the military space, focusing on delivering integrated solutions rather than bidding for large contracts [44][45] Question: How does the company plan to compete with existing players in the industrial vertical? - The company plans to offer a complete solution that includes both hardware and software, aiming for lower price points through economies of scale [78][79] Question: What are the 2025 milestones to track? - Key milestones include signing commercial deals in the industrial space, engaging in pilot programs for new technologies, and establishing partnerships in the defense sector [89][90]

Revenue Performance - Revenue for the three months ended March 31, 2025, was $589,000, a decrease of $367,000 or 38.4% compared to $956,000 in the same period of 2024[112]. - Revenue for Q1 2025 was $589,000, a decrease of 38.4% from $956,000 in Q1 2024, primarily due to reduced shipments of MOVIA L sensors[112][113]. Cost of Revenue - Cost of revenue for the three months ended March 31, 2025, was $550,000, representing 93.4% of revenue, down from $1,277,000 or 133.6% of revenue in 2024, a decrease of $727,000 or 56.9%[114]. - Cost of revenue decreased to $550,000 in Q1 2025, representing 93.4% of revenue, compared to $1.277 million or 133.6% of revenue in Q1 2024, attributed to decreased revenue and revenue mix[114][115]. Expenses - Research and development expenses for the three months ended March 31, 2025, were $7,403,000, a decrease of $9,908,000 or 57.2% compared to $17,311,000 in 2024[116]. - Research and development expenses dropped to $7.403 million in Q1 2025, a 57.2% decrease from $17.311 million in Q1 2024, mainly due to lower salary and benefits expenses[116][118]. - Sales, marketing, general and administrative expenses for the three months ended March 31, 2025, were $6,676,000, a decrease of $2,402,000 or 26.5% from $9,078,000 in 2024[119]. - Sales, marketing, general and administrative expenses were $6.676 million in Q1 2025, down 26.5% from $9.078 million in Q1 2024, primarily due to reduced salary and benefits expenses[119][120]. Interest Expense - Interest expense for the three months ended March 31, 2025, was $(12,903,000), an increase of $12,885,000 or 71,583.3% compared to $(18,000) in 2024[121]. - Interest expense increased significantly to $(12.903) million in Q1 2025 from $(18) in Q1 2024, largely due to non-cash interest expenses related to warrants and notes payable[121]. Cash and Investments - As of March 31, 2025, the company had $51.9 million in cash and cash equivalents and $17.1 million in short-term investment securities[125]. - The company has approximately $113.4 million available under its existing $150.0 million ATM facility, which was established in the first quarter of 2024[125]. - As of March 31, 2025, the company reported an unrealized gain on derivative liability of $842,000 due to a decrease in the fair value of the derivative liability[122]. - The unrealized gain on warrant liability was $1,761,000 as of March 31, 2025, reflecting a decrease in the fair value of the warrant liability[123]. - The company recognized a realized loss on debt extinguishment of $4,654,000 during the three months ended March 31, 2025[124]. - Cash used in operating activities decreased to $14.1 million in Q1 2025 from $20.8 million in Q1 2024, primarily due to reduced operating expenses related to personnel[126]. - Net cash provided by investing activities was $3.1 million in Q1 2025, compared to a net cash used of $3.3 million in Q1 2024, with short-term investment securities purchased totaling $10.3 million and sold totaling $13.5 million[127]. - Cash provided by financing activities totaled $8.2 million in Q1 2025, down from $21.0 million in Q1 2024, with net proceeds from the issuance of common stock and warrants being $8.2 million in Q1 2025[128]. - The company has a remaining commitment of $30.0 million under its convertible note facility, subject to certain limitations[125]. Future Expectations - The company expects to continue incurring significant losses in the near term, having funded operations primarily through equity and convertible debt[110]. - The company expects to make minimum payments of approximately $2.6 million to its contract manufacturing partner for MOVIA sensor inventory production during 2025 and 2026[126]. - The company restructured its workforce in 2024, resulting in a 41% reduction, which added approximately $6.0 million to fiscal year 2024 expenses but is expected to extend its financial runway[107]. - In February 2025, the company entered into a securities purchase agreement for 5,750,225 shares of common stock and warrants, receiving net proceeds of $7.8 million[129].

Revenue Performance - Revenue for Q1 2025 was $0.6 million, a decrease of 40% compared to $1.0 million in Q1 2024, primarily driven by demand from industrial customers[7] - Adjusted Gross Profit for Q1 2025 was $256 thousand, significantly up from $66 thousand in Q1 2024, indicating a year-over-year increase of approximately 287.9%[32] Operating Expenses and Losses - Total operating expenses for Q1 2025 were $14.1 million, representing a 47% decline year-over-year from $26.4 million in Q1 2024[7] - Net loss for Q1 2025 was $28.8 million, or $0.12 per share, compared to a net loss of $26.3 million, or $0.13 per share, in Q1 2024[7] - For the three months ended March 31, 2025, the net loss was $28,779 thousand, compared to a net loss of $26,313 thousand for the same period in 2024, representing an increase in loss of approximately 9.4%[30] Cash Flow and Financing - Cash used in operations in Q1 2025 was $14.1 million, down from $20.8 million in Q1 2024[14] - The company raised $8 million in Q1 2025 through an equity sale, building on a $75 million convertible note facility established in Q4 2024[6] - Net cash provided by financing activities was $8,205 thousand in Q1 2025, compared to $21,018 thousand in Q1 2024, showing a decrease of about 60.9%[30] Cash Position - As of March 31, 2025, the company had access to $143.4 million in capital, including $113.4 million under its existing ATM facility[8] - The company ended Q1 2025 with $69.0 million in cash and cash equivalents, down from $74.7 million as of December 31, 2024[14] - Cash, cash equivalents, and restricted cash at the end of Q1 2025 totaled $53,525 thousand, up from $46,337 thousand at the end of Q1 2024, marking an increase of approximately 15.5%[30] EBITDA and Financial Improvements - Adjusted EBITDA for Q1 2025 was a loss of $10.7 million, an improvement from a loss of $18.7 million in Q1 2024[14] - The company recorded an adjusted EBITDA of $(10,711) thousand for Q1 2025, an improvement from $(18,693) thousand in Q1 2024, indicating a reduction in losses of approximately 42.7%[32] - The company reported cash flows from operating activities of $(14,098) thousand for Q1 2025, an improvement from $(20,759) thousand in Q1 2024, reflecting a decrease in cash used of about 32.1%[30] Inventory and Expense Management - The company experienced a decrease in inventory by $(228) thousand in Q1 2025, compared to an increase of $102 thousand in Q1 2024, indicating a shift in inventory management strategy[30] - The company reported a share-based compensation expense of $1,921 thousand in Q1 2025, down from $3,743 thousand in Q1 2024, indicating a reduction of approximately 48.7%[32] Strategic Initiatives - The company is committed to high-volume deliveries in the range of $30-$50 million over the next 12-18 months due to a production commitment with ZF[4] - The company established a defense industry advisory board to pursue revenue opportunities in the defense tech and military sectors[6] Other Financial Metrics - The unrealized gain on derivative liability was $(842) thousand in Q1 2025, while there was no such gain in Q1 2024, reflecting a change in financial position[32] - The total cash flows from investing activities were $3,090 thousand in Q1 2025, contrasting with $(3,282) thousand in Q1 2024, representing a significant turnaround[30]

Financial Data and Key Metrics Changes - For Q4 2024, the company reported revenue of $1.7 million, up from $0.5 million year-over-year, primarily driven by industrial vertical customers [43][44]. - The company experienced a cash burn that remains one of the lowest in the marketplace, with a cash balance of $75 million at year-end [39][48]. - The company has extended its cash runway into 2026 due to successful financing activities, including a $75 million convertible facility and a $17 million common equity transaction [39][40]. Business Line Data and Key Metrics Changes - The company focused on automotive OEM programs with seven RFQs and several custom development proposals, while also engaging in industrial opportunities such as automated guided vehicles (AGVs) and autonomous mobile robots (AMRs) [11][13]. - The revenue potential from industrial verticals is immediate and significant, with expectations for large-scale decisions in 2025 [19][34]. Market Data and Key Metrics Changes - The total addressable market (TAM) for industrial applications is lower than automotive but offers faster revenue realization from multi-year programs [18][34]. - The company is actively pursuing opportunities in the defense sector, anticipating increased defense spending under the current administration [22][36]. Company Strategy and Development Direction - The company aims to expand its product offerings in the industrial and defense sectors while maintaining a commitment to automotive applications [31][34]. - The new CTO, Glenn DeVoss, emphasizes the importance of integrating advanced software and hardware solutions for automotive and industrial markets [31][32]. Management's Comments on Operating Environment and Future Outlook - Management noted that automotive OEMs are adjusting their timelines for product launches, impacting the company's revenue generation from this sector [14][86]. - The company remains optimistic about its future, citing strong market positioning and a solid balance sheet as key factors for growth [42][55]. Other Important Information - The company has secured production commitments from its manufacturing partner, ZF, to meet anticipated demand in the industrial sector, estimating demand in the $30 to $50 million range over the next 12 to 18 months [54][80]. - The company has a well-experienced leadership team to execute its strategy, with a focus on operational excellence and cost management [37][55]. Q&A Session Summary Question: How much of the $1.7 million revenue was from commercial shipments versus R&D work? - The $1.7 million was primarily from sensor sales to multiple customers, with minimal non-recurring engineering (NRE) revenue expected to be pushed to 2025 [60][62]. Question: Are the defense opportunities related to ground-based or aerial objects? - The focus is on ground-based applications, with the company working with partners in the military space [65][66]. Question: What is the competitive nature of the commercial customers in Q4? - The company competes against several known players, but its unique capabilities and local presence provide a competitive edge [72][76]. Question: Can you clarify the $30 to $50 million demand from ZF? - This demand is expected over the next 12 to 18 months, with secured production commitments from ZF to ensure supply [80][81]. Question: What are the realistic timelines for RFQs converting into revenue? - The timelines for RFQs are elongating due to technical evaluations and churn within OEMs, making it difficult to predict when contracts will be awarded [86][88]. Question: How does MicroVision plan to compete with FMCW LiDAR technology? - The company focuses on its unique technology and partnerships, emphasizing the importance of delivering integrated solutions for OEMs [135][136].

Financial Data and Key Metrics Changes - For Q4 2024, the company reported revenue of $1.7 million, up from $500,000 year-over-year, primarily driven by industrial vertical customers [26][27] - The company experienced a cash burn that remains one of the lowest in the marketplace, with a cash balance of $75 million at year-end [24][29] - The company has extended its cash runway into 2026 following two rounds of investments totaling over $90 million [24][30] Business Line Data and Key Metrics Changes - The company is focusing on automotive OEM programs with seven RFQs and several custom development proposals, while also engaging in industrial opportunities such as Automated Guided Vehicles (AGVs) and Autonomous Mobile Robots (AMRs) [6][9] - The total addressable market (TAM) for industrial applications is lower than automotive but offers faster revenue potential from multi-year programs [12][21] Market Data and Key Metrics Changes - The company is actively pursuing opportunities in the defense sector, anticipating increased defense spending under the current administration [15][21] - The competitive landscape includes challenges from Chinese automotive OEMs, which are driving U.S. and European OEMs to expedite their ADAS and EV initiatives [21] Company Strategy and Development Direction - The company aims to expand its near-term revenue opportunities in industrial and defense sectors while adapting to evolving timelines in the automotive industry [21][24] - The new CTO, Glenn De Vos, emphasizes the importance of delivering a complete perception system and advanced features suitable for various markets, including automotive and defense [20][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that automotive OEMs are adjusting their product launch timelines, which has affected revenue expectations [10][21] - The company remains optimistic about its engagements in the industrial sector and expects to see significant revenue from these partnerships in the near future [12][32] Other Important Information - The company has secured production commitments from its manufacturing partner, ZedF, to meet anticipated demand in the industrial vertical [50] - The company plans to maintain a disciplined cost management approach while focusing on operational excellence [23][24] Q&A Session Summary Question: How much of the $1.7 million revenue in Q4 was from commercial shipments versus R&D work? - The revenue was primarily derived from the sale of sensors to multiple customers, with minimal NRE expected to be pushed to 2025 [34][35] Question: Are the defense opportunities related to ground-based or aerial objects? - The focus is on ground-based applications, with the company working with partners in the military space [37][39] Question: What is the competitive nature of the commercial opportunities? - The company competes against various players but emphasizes its unique capabilities and the value of being a domestic supplier [41][43] Question: Can you clarify the $30 million to $50 million demand from ZedF? - This figure represents anticipated demand over the next 12 to 18 months, with secured production commitments to ensure supply [50] Question: What are the realistic timelines for RFQs converting into revenue? - The timelines for RFQs are elongating due to technical evaluations and the complexity of decisions within OEMs [54][56] Question: How does MicroVision plan to compete with FMCW LiDAR technology? - The company believes that while FMCW technology is gaining traction, it faces significant cost barriers and that its time-of-flight technology remains competitive [90][89]