UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 001-34170 MicroVision, Inc. (Exact name of registrant as specified in its charter) Delaware 91-1600822 (State or Other ...

MicroVision, Inc. (NASDAQ:MVIS) Q4 2021 Earnings Conference Call February 24, 2022 5:00 PM ET Company Participants Drew Markham - VP, Secretary & General Counsel Sumit Sharma - CEO & Director Anubhav Verma - VP, CFO & Treasurer Conference Call Participants Andres Sheppard - Cantor Fitzgerald & Co. Operator Good day, everyone, and welcome to the MicroVision Fourth Quarter and Full Year 2021 Financial and Operating Results Conference Call. [Operator Instructions]. At this time, I'd like to turn the conference ...

MicroVision, Inc. (NASDAQ:MVIS) Investment Community Webcast and Press Conference January 5, 2022 5:00 PM ET Company Participants Sumit Sharma - Chief Executive Officer Anubhav Verma - Chief Financial Officer Drew Markham - General Counsel Sumit Sharma Welcome to 2022, and our first ever virtual CES. I hope everyone remains safe through these unique times. I'm excited to be here today and share our big plans and how this will change our trajectory as a company. I'm excited for us to start unlocking busines ...

PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (Unaudited)](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) Presents MicroVision's unaudited condensed financial statements, covering balance sheets, operations, equity, cash flows, and accounting notes [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) Summarizes the company's financial position, showing assets, liabilities, and equity at specific points in time Condensed Balance Sheet Highlights (in thousands) | Metric | September 30, 2021 | December 31, 2020 | | :-------------------------- | :------------------- | :------------------ | | Cash and cash equivalents | $125,135 | $16,862 | | Total current assets | $129,097 | $17,560 | | Total assets | $134,065 | $21,006 | | Total current liabilities | $11,384 | $10,028 | | Total liabilities | $11,718 | $11,997 | | Total shareholders' equity | $122,347 | $9,009 | - The company's cash and cash equivalents significantly increased from **$16.86 million** at December 31, 2020, to **$125.14 million** at September 30, 2021, primarily due to financing activities[13](index=13&type=chunk) - Total shareholders' equity saw a substantial increase from **$9.01 million** at December 31, 2020, to **$122.35 million** at September 30, 2021[13](index=13&type=chunk) [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) Details the company's revenues, expenses, and net loss over specific periods, reflecting operational performance Condensed Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :---------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Product revenue | $0 | $100 | $0 | $1,347 | | License and royalty revenue | $718 | $539 | $1,943 | $1,323 | | Total revenue | $718 | $639 | $1,943 | $2,695 | | Gross profit | $728 | $639 | $1,989 | $1,297 | | Research and development expense | $5,791 | $1,972 | $17,629 | $7,262 | | Sales, marketing, general and admin | $5,006 | $1,485 | $15,608 | $4,536 | | Total operating expenses | $10,797 | $3,457 | $33,237 | $11,348 | | Loss from operations | $(10,069) | $(2,818) | $(31,248) | $(10,051) | | Net loss | $(9,382) | $(2,826) | $(30,575) | $(10,064) | | Net loss per share | $(0.06) | $(0.02) | $(0.19) | $(0.07) | - Total revenue for the nine months ended September 30, 2021, decreased to **$1.94 million** from **$2.70 million** in the prior year, primarily due to the cessation of product shipments and a shift to royalty revenue[15](index=15&type=chunk) - Net loss significantly increased for the nine months ended September 30, 2021, to **$(30.58) million** compared to **$(10.06) million** in the same period of 2020, driven by higher operating expenses, particularly in R&D and SG&A[15](index=15&type=chunk) [Condensed Statements of Shareholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Statements%20of%20Shareholders'%20Equity%20(Deficit)) Outlines changes in the company's equity over time, including common stock, additional paid-in capital, and accumulated deficit Shareholders' Equity Changes (in thousands) | Metric | Balance at Jan 1, 2021 | Sales of common stock | Share-based compensation expense | Net loss | Balance at Sep 30, 2021 | | :----------------------------- | :--------------------- | :-------------------- | :------------------------------- | :------- | :---------------------- | | Common Stock (Par value) | $153 | $8 | $2 | - | $164 | | Additional paid-in capital | $601,224 | $122,885 | $12,343 | - | $738,991 | | Subscriptions receivable | $(6,135) | $6,135 | - | - | $0 | | Accumulated deficit | $(586,233) | - | - | $(30,575) | $(616,808) | | Total shareholders' equity | $9,009 | $129,028 | $12,345 | $(30,575) | $122,347 | - Total shareholders' equity increased significantly from **$9.01 million** at January 1, 2021, to **$122.35 million** at September 30, 2021, primarily driven by **$129.03 million** from sales of common stock[18](index=18&type=chunk) - The accumulated deficit grew from **$(586.23) million** at January 1, 2021, to **$(616.81) million** at September 30, 2021, reflecting the net loss incurred during the period[18](index=18&type=chunk) [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Reports the cash generated and used by operating, investing, and financing activities over specific periods Condensed Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(21,245) | $(11,847) | | Net cash provided by (used in) investing activities | $(2,034) | $431 | | Net cash provided by financing activities | $131,552 | $10,606 | | Change in cash, cash equivalents, and restricted cash | $108,273 | $(810) | | Cash, cash equivalents, and restricted cash at end of period | $125,570 | $5,462 | - Net cash used in operating activities increased to **$(21.25) million** for the nine months ended September 30, 2021, from **$(11.85) million** in the prior year, primarily due to increased operating expenses[20](index=20&type=chunk)[98](index=98&type=chunk) - Net cash provided by financing activities significantly increased to **$131.55 million** for the nine months ended September 30, 2021, from **$10.61 million** in the prior year, mainly driven by proceeds from common stock issuance[20](index=20&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[103](index=103&type=chunk) [Notes to Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Provides detailed explanations and additional information regarding the figures presented in the condensed financial statements [1. Management's Statement](index=9&type=section&id=1.%20MANAGEMENT'S%20STATEMENT) Management confirms the unaudited financial statements are fairly stated and highlights the strategic shift to automotive Lidar development - MicroVision, Inc. is prioritizing the development of its **1st Generation Long Range Lidar (LRL) module** for automotive safety and autonomous driving applications[24](index=24&type=chunk) - The company's previous strategy of selling AR displays, Interactive Displays, or Consumer Lidars to OEMs/ODMs has not yielded significant sales or royalties, leading to a search for strategic alternatives since February 2020[25](index=25&type=chunk) Cash and Cash Equivalents | Date | Amount (in millions) | | :--- | :------------------- | | Sep 30, 2021 | $125.1 | [2. Net Loss Per Share](index=9&type=section&id=2.%20NET%20LOSS%20PER%20SHARE) Explains the calculation of basic and diluted net loss per share, noting that potentially dilutive securities were anti-dilutive Net Loss Per Share (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net loss available for common shareholders | $(9,382) | $(2,826) | $(30,575) | $(10,064) | | Weighted-average common shares outstanding | 163,985 | 143,685 | 159,452 | 137,027 | | Net loss per share - basic and diluted | $(0.06) | $(0.02) | $(0.19) | $(0.07) | - The net loss per share increased from **$(0.02)** to **$(0

Financial Data and Key Metrics Changes - Revenue for Q3 2021 was $718,000, a slight decrease from $746,000 in Q2 2021, with all revenue attributed to royalty income from an augmented reality customer [25][26] - Gross profit for Q3 was $728,000, down from $777,000 in the previous quarter [27] - Operating expenses were $10.8 million, lower than the guidance of $14 million to $16 million and down from $15.7 million in Q2 [28] - Net loss for Q3 was $9.4 million, or $0.06 per share, compared to a net loss of $15 million, or $0.09 per share in Q2 [31] - Cash and equivalents at the end of Q3 were $125.1 million, down from $135.3 million at the end of Q2 [34] Business Line Data and Key Metrics Changes - The company is focusing on the OEM automotive lidar sensor market, which is expected to provide significant recurring revenue opportunities [10][17] - The introduction of the LiDAR sensor at the IAA Munich mobility show was highlighted as a key product showcase [9] Market Data and Key Metrics Changes - The company anticipates that OEMs will make partnership decisions within the next 16 months, with a larger rollout of electric vehicles expected in 2026 [12][20] - The demand for lidar technology is increasing as more OEMs incorporate it into their ADAS systems [71] Company Strategy and Development Direction - The company is prioritizing strategic sales to OEMs over direct sales, with plans to demonstrate an integrated software and hardware ADAS solution by June 2022 [16][17] - The focus on OEM partnerships is seen as critical for long-term success in the automotive market [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's competitive position and the positive feedback received from OEMs regarding their lidar technology [12][42] - The company is preparing for a significant amount of consolidation in the ADAS space, with expectations of recurring revenue not materializing until 2025 and beyond [20] Other Important Information - The company announced a new CFO, Anubhav Verma, who will join on November 15, 2021, following the retirement of Steve Holt [21][22] - The company signed a lease for new office and testing space, indicating plans for expansion [36] Q&A Session Summary Question: Thoughts on Facebook's rebranding to Meta and its impact on AR investments - Management noted that significant investments in AR by large companies like Meta could spur further investment in the AR space [48][50] Question: Focus on OEM versus direct sales - Management acknowledged that while direct sales may provide incidental revenue, the focus will remain on securing OEM partnerships for long-term value [52][56] Question: Trends in lidar adoption among OEMs - Management confirmed that there is a growing trend among OEMs to adopt lidar technology, especially for higher-level ADAS features [70][72] Question: MicroVision's lidar sensor advantages - Management emphasized that their lidar technology is best-in-class due to cost, size, features, and technological maturity [88][92][102] Question: Employee morale and turnover - Management reported that employee morale is good and turnover has not been a significant issue [110] Question: Use of ATM and cash management - Management indicated that while they have not utilized the ATM recently, maintaining a strong balance sheet is important for long-term partnerships [112]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents unaudited condensed financial statements, detailing significant increases in cash and equity, a shift to royalty revenue, and a substantial rise in net loss [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) **Condensed Balance Sheet Highlights (in thousands):** | Item | June 30, 2021 | December 31, 2020 | Change ($) | Change (%) | | :-------------------------- | :------------ | :---------------- | :--------- | :--------- | | Cash and cash equivalents | $135,288 | $16,862 | $118,426 | 702.3% | | Total current assets | $136,324 | $17,560 | $118,764 | 676.3% | | Total assets | $140,417 | $21,006 | $119,411 | 568.5% | | Total current liabilities | $10,399 | $10,028 | $371 | 3.7% | | Total liabilities | $11,520 | $11,997 | $(477) | (4.0)% | | Total shareholders' equity | $128,897 | $9,009 | $119,888 | 1330.8% | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) **Condensed Statements of Operations Highlights (in thousands):** | Item | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product revenue | $0 | $0 | $0 | $1,247 | | License and royalty revenue | $746 | $572 | $1,225 | $784 | | Contract revenue | $0 | $15 | $0 | $25 | | **Total revenue** | **$746** | **$587** | **$1,225** | **$2,056** | | Gross profit | $777 | $588 | $1,261 | $658 | | Research and development expense | $7,376 | $1,607 | $11,838 | $5,290 | | Sales, marketing, general and administrative expense | $8,355 | $1,280 | $10,602 | $3,051 | | **Total operating expenses** | **$15,731** | **$2,887** | **$22,440** | **$7,891** | | Loss from operations | $(14,954)$ | $(2,299)$ | $(21,179)$ | $(7,233)$ | | **Net loss** | **$(14,962)$** | **$(2,304)$** | **$(21,193)$** | **$(7,238)$** | | Net loss per share - basic and diluted | $(0.09)$ | $(0.02)$ | $(0.13)$ | $(0.05)$ | - Total revenue for the six months ended June 30, 2021, decreased by **40.5% to $1.225 million** from $2.056 million in the prior year, primarily due to a **100% decrease in product revenue** as the company shifted to royalty-based revenue recognition[15](index=15&type=chunk) - Net loss for the six months ended June 30, 2021, significantly widened to **$(21.193) million** from $(7.238) million in the prior year, driven by substantial increases in research and development expense (**123.8%**) and sales, marketing, general and administrative expense (**247.5%**)[15](index=15&type=chunk) [Condensed Statements of Shareholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Statements%20of%20Shareholders'%20Equity%20(Deficit)) **Changes in Shareholders' Equity (in thousands) for Six Months Ended June 30, 2021:** | Item | Amount | | :-------------------------------- | :------- | | Balance at January 1, 2021 | $9,009 | | Share-based compensation expense | $9,535 | | Exercise of options | $2,510 | | Sales of common stock | $129,036 | | Net loss | $(21,193)| | **Balance at June 30, 2021** | **$128,897** | - Total shareholders' equity increased significantly from **$9.009 million** at January 1, 2021, to **$128.897 million** at June 30, 2021, primarily due to **$129.036 million** from sales of common stock, partially offset by a net loss of $21.193 million[17](index=17&type=chunk) [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) **Condensed Statements of Cash Flows Highlights (in thousands) for Six Months Ended June 30:** | Activity | 2021 | 2020 | | :------------------------------------ | :--------- | :--------- | | Net cash used in operating activities | $(11,277)$ | $(8,370)$ | | Net cash provided by (used in) investing activities | $(1,884)$ | $431 | | Net cash provided by financing activities | $131,587 | $9,907 | | Change in cash, cash equivalents, and restricted cash | $118,426 | $1,968 | | Cash, cash equivalents, and restricted cash at end of period | $135,723 | $8,240 | - Net cash provided by financing activities surged to **$131.587 million** for the six months ended June 30, 2021, from $9.907 million in the prior year, primarily driven by **$125.470 million** in net proceeds from common stock issuance[20](index=20&type=chunk) - Cash used in operating activities increased to **$11.277 million** in 2021 from $8.370 million in 2020, mainly due to increased operating expenses[20](index=20&type=chunk) [Notes to Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) [Note 1. Management's Statement](index=10&type=section&id=Note%201.%20Management's%20Statement) - MicroVision is focused on developing its **1st Generation Long Range Lidar (LRL) module** for the automotive market, aiming for features and performance exceeding competitors[24](index=24&type=chunk) - The company's past strategy of selling AR, Interactive, or Consumer Lidars to OEMs/ODMs has not secured significant additional customers, with only one customer generating royalty income[25](index=25&type=chunk) - Since February 2020, MicroVision has been exploring strategic alternatives (e.g., sale, merger, licensing) while continuing LRL development[25](index=25&type=chunk) - As of June 30, 2021, the company had **$135.3 million in cash and cash equivalents**, projected to fund operations for at least the next 12 months[27](index=27&type=chunk) [Note 2. Net Loss Per Share](index=10&type=section&id=Note%202.%20Net%20Loss%20Per%20Share) **Net Loss Per Share (in thousands, except per share data):** | Item | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss available for common shareholders - basic and diluted | $(14,962)$ | $(2,304)$ | $(21,193)$ | $(7,238)$ | | Weighted-average common shares outstanding - basic and diluted | 158,818 | 140,107 | 157,136 | 133,661 | | Net loss per share - basic and diluted | $(0.09)$ | $(0.02)$ | $(0.13)$ | $(0.05)$ | - Basic and diluted net loss per share are equal because the effect of potentially dilutive securities (options, restricted/performance stock units) was anti-dilutive[28](index=28&type=chunk)[29](index=29&type=chunk) [Note 3. Long-Term Contracts](index=11&type=section&id=Note%203.%20Long-Term%20Contracts) - The five-year license agreement with Sharp Corporation for laser beam scanning (LBS) technology was amended in February 2021, extending the term to six years and adding twelve months to the initial exclusivity period due to COVID-19 impacts[30](index=30&type=chunk) [Note 4. Revenue Recognition](index=11&type=section&id=Note%204.%20Revenue%20Recognition) - Revenue is recognized when control of promised goods or services is transferred to customers, following a 5-step model, with all revenue generated from customer contracts[31](index=31&type=chunk)[32](index=32&type=chunk) **Disaggregated Revenue by Timing of Recognition (in thousands):** | Timing of Revenue Recognition | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | | :---------------------------- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Products transferred at a point in time | $746 | $1,225 | $572 | $2,035 | | Product and services transferred over time | $0 | $0 | $15 | $21 | | **Total** | **$746** | **$1,225** | **$587** | **$2,056** | - Contract liabilities decreased by **$1.225 million (15.8%)** from December 31, 2020, to June 30, 2021, with **$1.2 million** applied against the Microsoft Corporation prepayment during the six months ended June 30, 2021[38](index=38&type=chunk) - An additional **$1.1 million** in license and royalty revenue is expected to be recognized in the remainder of 2021 from the prepayment, with the remaining **$6.5 million** contract liability classified as current but likely to be recognized beyond 12 months[40](index=40&type=chunk)[41](index=41&type=chunk) [Note 5. Concentration of Credit Risk and Major Customers and Suppliers](index=13&type=section&id=Note%205.%20Concentration%20of%20Credit%20Risk%20and%20Major%20Customers%20and%20Suppliers) - One customer, Microsoft Corporation, accounted for **100% of total revenue** for the three and six months ended June 30, 2021 (**$746 thousand** and **$1.2 million**, respectively) and 2020 (**$587 thousand** and **$2.1 million**, respectively)[43](index=43&type=chunk) - The company relies on single or limited-source suppliers for components, posing risks of increased costs, revenue loss, or significant delays if supply chain disruptions occur[44](index=44&type=chunk) [Note 6. Inventory](index=14&type=section&id=Note%206.%20Inventory) **Inventory (in thousands):** | Item | June 30, 2021 | December 31, 2020 | | :----------- | :------------ | :---------------- | | Raw materials | $151 | $0 | | Finished goods | $0 | $0 | | **Total** | **$151** | **$0** | - Inventory consists solely of raw materials, valued at **$151 thousand** as of June 30, 2021, and is computed using the first-in, first-out (FIFO) method at the lower of cost and net realizable value[45](index=45&type=chunk) [Note 7. Share-Based Compensation](index=14&type=section&id=Note%207.%20Share-Based%20Compensation) **Share-Based Compensation Expense (in thousands):** | Expense Category | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development expense | $2,201 | $103 | $3,387 | $142 | | Sales, marketing, general and administrative expense | $5,696 | $97 | $6,148 | $247 | | **Total** | **$7,897** | **$200** | **$9,535** | **$389** | - Share-based compensation expense significantly increased for the six months ended June 30, 2021, to **$9.535 million** from $389 thousand in the prior year, primarily due to higher non-cash compensation and changes in incentive/retention programs[48](index=48&type=chunk)[88](index=88&type=chunk) - Unrecognized share-based compensation related to RSUs was **$25.0 million** (expensed over 2.6 years) and for non-executive PSUs was **$10.4 million** (expensed over 1.2 years) as of June 30, 2021[52](index=52&type=chunk) [Note 8. Leases](index=16&type=section&id=Note%208.%20Leases) **Total Lease Expense (in thousands):** | Period | 2021 | 2020 | | :------------------------------- | :----- | :----- | | Three Months Ended June 30, | $126 | $123 | | Six Months Ended June 30, | $251 | $246 | **Supplemental Balance Sheet Information Related to Leases (in thousands):** | Item | June 30, 2021 | December 31, 2020 | | :------------------------------------ | :------------ | :---------------- | | Operating lease right-of-use assets | $753 | $946 | | Total operating lease liabilities | $1,153 | $1,450 | | Total finance lease liabilities | $57 | $75 | - The weighted-average remaining lease term for operating leases was **1.8 years** and for finance leases was **1.5 years** as of June 30, 2021[55](index=55&type=chunk) [Note 9. Commitments and Contingencies](index=17&type=section&id=Note%209.%20Commitments%20and%20Contingencies) - 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[56](index=56&type=chunk) [Note 10. Common Stock](index=18&type=section&id=Note%2010.%20Common%20Stock) - In June 2021, MicroVision entered into a **$140.0 million** At-The-Market (ATM) equity offering agreement, issuing **4.0 million shares** for **$67.8 million** in net proceeds by June 30, 2021[57](index=57&type=chunk) - In February 2021, the company completed a **$50.0 million** ATM equity offering, issuing **2.5 million shares** for **$48.8 million** in net proceeds[58](index=58&type=chunk) - In December 2020, a **$13.0 million** ATM equity offering resulted in **$12.7 million** in net proceeds from **2.1 million shares** issued by January 2021[59](index=59&type=chunk) [Note 11. Subsequent Event](index=18&type=section&id=Note%2011.%20Subsequent%20Event) - Approximately **$690 thousand** of the **$1.6 million** Paycheck Protection Program (PPP) loan received in April 2020 was approved for forgiveness in July 2021, which will be recorded as a gain on extinguishment of debt in the third quarter of 2021[62](index=62&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses financial performance, highlighting the strategic shift to automotive lidar, COVID-19 impacts, increased operating expenses, and enhanced liquidity from equity offerings [Overview](index=19&type=section&id=Overview) - MicroVision is developing a **1st Generation Long Range Lidar (LRL) sensor** for automotive safety and autonomous driving applications, leveraging its patented laser beam scanning (LBS) technology[65](index=65&type=chunk)[66](index=66&type=chunk) - The **A-Sample LRL module** was completed in April 2021, with potential for small quantity sales in the fourth quarter of 2021[67](index=67&type=chunk) - The company's strategy has been to sell AR displays, Interactive Displays, or Consumer Lidars, but it has been unable to secure additional customers beyond Microsoft Corporation, leading to an ongoing exploration of strategic alternatives since February 2020[69](index=69&type=chunk)[70](index=70&type=chunk) - MicroVision has incurred substantial losses since inception and expects to incur a significant loss during the fiscal year ending December 31, 2021[71](index=71&type=chunk) [Impact of COVID-19 on Our Business](index=20&type=section&id=Impact%20of%20COVID-19%20on%20Our%20Business) - COVID-19 has caused supply chain disruptions, leading to lower component availability from suppliers, which could materially impact future operating results[73](index=73&type=chunk) - Remote work for office-based employees may reduce productivity and disrupt business routines, potentially affecting development activities, capital raising, licensing agreements, or strategic transactions[74](index=74&type=chunk) - Approximately **$690 thousand** of the **$1.6 million** Paycheck Protection Program (PPP) loan received in April 2020 was approved for forgiveness in July 2021[75](index=75&type=chunk) [Key accounting policies and estimates](index=21&type=section&id=Key%20accounting%20policies%20and%20estimates) - There have been no significant changes to the company's critical accounting judgments, policies, and estimates as described in its Annual Report on Form 10-K for the year ended December 31, 2020[76](index=76&type=chunk) [Results of operations](index=21&type=section&id=Results%20of%20operations) [Product revenue](index=21&type=section&id=Product%20revenue) **Product Revenue (in thousands):** | Period | 2021 | 2020 | $ Change | % Change | | :------------------------ | :--- | :--- | :------- | :------- | | Three Months Ended June 30, | $0 | $0 | $0 | - | | Six Months Ended June 30, | $0 | $1,247 | $(1,247) | (100.0)% | - Product revenue decreased by **100%** for the six months ended June 30, 2021, to **$0**, due to ceasing product shipments in March 2020 and transferring production to the customer, shifting revenue recognition to royalties[78](index=78&type=chunk) [License and royalty revenue](index=21&type=section&id=License%20and%20royalty%20revenue) **License and Royalty Revenue (in thousands):** | Period | 2021 | 2020 | $ Change | % Change | | :------------------------ | :--- | :--- | :------- | :------- | | Three Months Ended June 30, | $746 | $572 | $174 | 30.4% | | Six Months Ended June 30, | $1,225 | $784 | $441 | 56.3% | - License and royalty revenue increased by **56.3%** for the six months ended June 30, 2021, to **$1.225 million**, primarily due to the shift from product revenue to royalty recognition after the customer took over component production in March 2020[81](index=81&type=chunk) - This royalty revenue is recognized as a reduction in a **$10.0 million** prepayment received in 2017, meaning no cash is received until the prepayment is exhausted[81](index=81&type=chunk) [Contract revenue](index=22&type=section&id=Contract%20revenue) **Contract Revenue (in thousands):** | Period | 2021 | 2020 | $ Change | % Change | | :------------------------ | :--- | :--- | :------- | :------- | | Three Months Ended June 30, | $0 | $15 | $(15) | (100.0)% | | Six Months Ended June 30, | $0 | $25 | $(25) | (100.0)% | - Contract revenue decreased by **100%** for the six months ended June 30, 2021, to **$0**, attributed to decreased support contract activity with the customer and no prototype shipments[83](index=83&type=chunk) [Cost of product revenue](index=22&type=section&id=Cost%20of%20product%20revenue) **Cost of Product Revenue (in thousands):** | Period | 2021 | 2020 | $ Change | % Change | | :------------------------ | :---- | :---- | :------- | :-------- | | Three Months Ended June 30, | $(31) | $(1) | $(30) | 3,000.0% | | Six Months Ended June 30, | $(36) | $1,394 | $(1,430) | (102.6)% | - Cost of product revenue decreased by **102.6%** for the six months ended June 30, 2021, to a credit of **$36 thousand**, primarily due to ceasing product shipments after transferring production to the customer in March 2020. The credits relate to the reversal of accrued warranty liabilities[84](index=84&type=chunk) [Cost of contract revenue](index=23&type=section&id=Cost%20of%20contract%20revenue) **Cost of Contract Revenue (in thousands):** | Period | 2021 | 2020 | $ Change | % Change | | :------------------------ | :--- | :--- | :------- | :------- | | Three Months Ended June 30, | $0 | $0 | $0 | - | | Six Months Ended June 30, | $0 | $4 | $(4) | (100.0)% | - Cost of contract revenue decreased by **100%** for the six months ended June 30, 2021, to **$0**, primarily due to reduced contract activity[86](index=86&type=chunk) [Research and development expense](index=23&type=section&id=Research%20and%20development%20expense) **Research and Development Expense (in thousands):** | Period | 2021 | 2020 | $ Change | % Change | | :------------------------ | :----- | :----- | :------- | :------- | | Three Months Ended June 30, | $7,376 | $1,607 | $5,769 | 359.0% | | Six Months Ended June 30, | $11,838 | $5,290 | $6,548 | 123.8% | - Research and development expense increased by **123.8%** for the six months ended June 30, 2021, to **$11.838 million**, primarily due to higher non-cash compensation expense, increased headcount, and direct material and equipment expenses related to lidar sensor development[88](index=88&type=chunk) [Sales, marketing, general and administrative expense](index=23&type=section&id=Sales,%20marketing,%20general%20and%20administrative%20expense) **Sales, Marketing, General and Administrative Expense (in thousands):** | Period | 2021 | 2020 | $ Change | % Change | | :------------------------ | :------ | :----- | :------- | :------- | | Three Months Ended June 30, | $8,355 | $1,280 | $7,075 | 552.7% | | Six Months Ended June 30, | $10,602 | $3,051 | $7,551 | 247.5% | - Sales, marketing, general and administrative expense increased by **247.5%** for the six months ended June 30, 2021, to **$10.602 million**, primarily attributed to higher non-cash compensation expense and professional services[90](index=90&type=chunk) [Liquidity and capital resources](index=24&type=section&id=Liquidity%20and%20capital%20resources) - As of June 30, 2021, MicroVision had **$135.3 million in cash and cash equivalents**, which is anticipated to be sufficient to fund operations for at least the next 12 months[92](index=92&type=chunk)[93](index=93&type=chunk) - Cash used in operating activities increased to **$11.3 million** for the six months ended June 30, 2021, from $8.4 million in the prior year, primarily due to increased operating expenses for development activities[94](index=94&type=chunk) - Net cash provided by financing activities was **$131.6 million** for the six months ended June 30, 2021, significantly higher than $9.9 million in the prior year, driven by substantial net proceeds from common stock issuances through ATM equity offerings[20](index=20&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company assesses its exposure to market, interest rate, and foreign exchange risks as not material, with cash in variable rate accounts and contracts in USD - MicroVision believes its exposure to market and interest rate risk is not material, as all cash and cash equivalents have variable interest rates[100](index=100&type=chunk) - The company's exposure to currency fluctuations related to foreign purchase orders and supply agreements is not material, as major contracts and licensing activity payments are currently made in U.S. dollars[102](index=102&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of June 30, 2021, due to a material weakness in equity award grant date determination, with remediation ongoing - Disclosure controls and procedures were not effective as of June 30, 2021, due to a **material weakness** in controls supporting the determination of the grant date of equity awards[104](index=104&type=chunk)[105](index=105&type=chunk) - Remediation activities are in progress, including revising processes for equity grants, defining documentation requirements, and training personnel[105](index=105&type=chunk)[106](index=106&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to routine legal claims but does not anticipate any current proceedings will materially affect its financial position or operations - MicroVision 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[108](index=108&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks, including operating losses, commercialization uncertainty, single-customer dependence, supply chain vulnerabilities, capital needs, stock volatility, intellectual property, competition, and internal control weaknesses - MicroVision has a history of substantial operating losses, with an accumulated deficit of **$607.4 million** as of June 30, 2021, and expects to incur significant losses in the future[110](index=110&type=chunk)[113](index=113&type=chunk) - There is substantial risk that efforts to secure strategic alternatives (e.g., sale, merger) or successfully commercialize its automotive lidar technology will be unsuccessful, with no current agreements or commitments[114](index=114&type=chunk) - The company's ability to raise additional capital beyond the next 12 months is uncertain, and any future equity issuance could dilute current shareholders[116](index=116&type=chunk)[118](index=118&type=chunk) - MicroVision is highly dependent on a **single customer (Microsoft Corporation)** for **100% of its revenue** and relies on single or limited-source suppliers, posing significant risks if these relationships are disrupted[120](index=120&type=chunk)[128](index=128&type=chunk) - The company's stock price has been highly volatile, trading between **$1.25 and $28.00** in the past 12 months, and may be subject to further volatility, including potential 'short squeeze' risks[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - A **material weakness** in internal controls related to the determination of equity award grant dates has been identified, which, if not remediated, could lead to material misstatements and harm investor confidence[132](index=132&type=chunk) - MicroVision faces intense competition from companies with greater resources and risks falling behind rapid technological changes in the automotive lidar and consumer display industries[139](index=139&type=chunk)[140](index=140&type=chunk) - The company's success depends on its ability to obtain and maintain effective intellectual property protection for its LBS technology, which involves complex legal and factual questions and is subject to challenges[149](index=149&type=chunk)[151](index=151&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including employment agreements, officer certifications, and Inline XBRL documents - Exhibits include the Employment Agreement for Sumit Sharma, Principal Executive Officer and Principal Financial Officer Certifications, and various Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents)[160](index=160&type=chunk) [Signatures](index=36&type=section&id=Signatures) The report was officially signed by MicroVision, Inc.'s CEO and Director, Sumit Sharma, and CFO, Stephen P. Holt, on August 11, 2021 - The report was signed on August 11, 2021, by Sumit Sharma, Chief Executive Officer and Director, and Stephen P. Holt, Chief Financial Officer[164](index=164&type=chunk)

MicroVision, Inc. (NASDAQ:MVIS) Q2 2021 Earnings Conference Call August 4, 2021 5:00 PM ET Company Participants Lindsey Stibbard - Paralegal at MicroVision Sumit Sharma - Chief Executive Officer Steve Holt - Chief Financial Officer Conference Call Participants Glenn Mattson – Ladenburg Thalmann & Co. Richard Shannon – Craig-Hallum Capital Group Ty Bordner – Private Investor Mike Wolken – Private Investor Operator Welcome to the MicroVision Second Quarter 2021 Financial and Operating Results Conference Call. ...

MicroVision, Inc. (NASDAQ:MVIS) Q1 2021 Earnings Conference Call April 29, 2021 5:00 PM ET Company Participants Lindsey Stibbard - IR Sumit Sharma - Chief Executive Officer Steve Holt - Chief Financial Officer Conference Call Participants Glenn Mattson - Ladenburg Thalmann & Co. Inc. Kevin Dede - H.C. Wainwright & Co, LLC Ty Bordner - Private Investor Jim Groninger - Private Investor Adam Jones - Private Investor Geo Rule - Private Investor Geoff Porter - Private Investor Operator Welcome to the MicroVision ...

```markdown PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited Q1 2021 financial statements detail increased cash and equity from stock offerings, a revenue shift to royalties, and a wider net loss [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) As of March 31, 2021, the company's financial position strengthened significantly compared to December 31, 2020, with total assets increasing to $79.6 million, primarily driven by a substantial rise in cash and cash equivalents to $75.3 million, leading to a surge in total shareholders' equity from $9.0 million to $68.0 million Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $75,338 | $16,862 | +$58,476 | | Total current assets | $75,903 | $17,560 | +$58,343 | | **Total assets** | **$79,611** | **$21,006** | **+$58,605** | | **Liabilities & Equity** | | | | | Total current liabilities | $10,101 | $10,028 | +$73 | | Total liabilities | $11,650 | $11,997 | -$347 | | **Total shareholders' equity** | **$67,961** | **$9,009** | **+$58,952** | | **Total liabilities and shareholders' equity** | **$79,611** | **$21,006** | **+$58,605** | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) For the three months ended March 31, 2021, MicroVision reported total revenue of $0.48 million, a significant decrease from $1.47 million in the same period of 2020 due to the cessation of product sales and a shift to royalties, resulting in a wider net loss of $6.2 million from $4.9 million year-over-year Q1 2021 vs Q1 2020 Statement of Operations (in thousands, except per share data) | Metric | Q1 2021 | Q1 2020 | Change | | :--- | :--- | :--- | :--- | | Total revenue | $479 | $1,469 | -67.4% | | Gross profit | $484 | $70 | +591.4% | | Research and development expense | $4,462 | $3,683 | +21.2% | | Sales, marketing, general and administrative expense | $2,247 | $1,771 | +26.9% | | Loss from operations | $(6,225) | $(4,934) | +26.2% | | **Net loss** | **$(6,231)** | **$(4,934)** | **+26.3%** | | **Net loss per share** | **$(0.04)** | **$(0.04)** | **0.0%** | [Condensed Statements of Shareholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Statements%20of%20Shareholders'%20Equity%20(Deficit)) Shareholders' equity increased dramatically from $9.0 million at the start of 2021 to $68.0 million by March 31, 2021, primarily driven by $61.5 million in proceeds from common stock sales, partially offset by a net loss of $6.2 million - Sales of common stock generated **$61.5 million** in cash during Q1 2021, significantly boosting shareholders' equity[17](index=17&type=chunk) - Share-based compensation expense for Q1 2021 was **$1.6 million**[17](index=17&type=chunk) [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the first quarter of 2021, net cash used in operating activities improved to $4.5 million, while financing activities provided $63.6 million, primarily from common stock issuance, resulting in a net increase in cash of $58.5 million and a total cash balance of $75.8 million Q1 2021 vs Q1 2020 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,531) | $(5,437) | | Net cash provided by (used in) investing activities | $(565) | $450 | | Net cash provided by financing activities | $63,572 | $1,475 | | **Change in cash, cash equivalents, and restricted cash** | **$58,476** | **$(3,512)** | | **Cash, cash equivalents, and restricted cash at end of period** | **$75,773** | **$2,760** | - Net proceeds from the issuance of common stock were **$57.4 million** in Q1 2021, compared to only **$1.5 million** in Q1 2020[20](index=20&type=chunk) [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) The notes detail accounting policies, strategic focus on developing its **1st Generation Long Range Lidar (LRL) module**, ongoing pursuit of strategic alternatives, confirmation of sufficient cash for at least the next 12 months, and the fact that **100%** of Q1 2021 revenue came from a single customer - The company is focused on completing the development of its **1st Generation Long Range Lidar (LRL) module**[23](index=23&type=chunk) - Since February 2020, the company has been seeking strategic alternatives, including a potential sale or merger[24](index=24&type=chunk) - As of March 31, 2021, the company had **$75.3 million** in cash and cash equivalents and believes it has sufficient funds for at least the next 12 months[26](index=26&type=chunk) - In Q1 2021, one customer accounted for **100%** of total revenue (**$479,000**); this was also the case in Q1 2020, where one customer accounted for **100%** of revenue (**$1.5 million**)[42](index=42&type=chunk) - In February 2021, the company completed a **$50.0 million** **ATM equity offering**, issuing **2.5 million shares** for net proceeds of **$48.8 million**[54](index=54&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic shift to automotive lidar, revenue decline from royalty transition, increased expenses, and strong liquidity from stock offerings - The company's primary focus is now on developing a Long Range Lidar (LRL) sensor for automotive applications, with an **A-Sample** completed in April 2021[62](index=62&type=chunk)[63](index=63&type=chunk) - The company is simultaneously pursuing strategic alternatives, including a potential sale, merger, or strategic investment, but has no current agreements[66](index=66&type=chunk) - The company believes it has sufficient cash (**$75.3 million** at March 31, 2021) to fund operations for at least the next 12 months, but may require additional capital thereafter[91](index=91&type=chunk)[92](index=92&type=chunk) - Financing activities in Q1 2021 were dominated by **ATM equity offerings**, including a **$50.0 million** facility that yielded **$48.8 million** in net proceeds[96](index=96&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that its exposure to market risk, specifically interest rate risk and foreign exchange rate risk, is not material, as its cash and cash equivalents are held in variable interest rate accounts and major contracts are in U.S. dollars - The company believes its exposure to market and interest rate risk is not material, as all cash and cash equivalents have variable interest rates[99](index=99&type=chunk) - Foreign exchange rate risk is considered not material as major contracts are in U.S. dollars, though the company may enter into foreign currency purchase orders[101](index=101&type=chunk) [Item 4. Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, concluded that the company's disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures are effective as of the end of the reporting period[102](index=102&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[102](index=102&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is subject to various claims and lawsuits in the normal course of business but is not currently a party to any legal proceedings that management believes could 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 expected to have a material adverse effect on its financials[105](index=105&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) Key risks include substantial losses, future capital needs, uncertain strategic alternatives, COVID-19 impacts, single customer reliance, and stock volatility - The company has a history of substantial losses, with an accumulated deficit of **$592.5 million** as of March 31, 2021, and expects to incur significant losses in the future[107](index=107&type=chunk)[112](index=112&type=chunk) - The company may require additional capital to fund operations beyond the next 12 months, and there is no assurance it will be available on acceptable terms[113](index=113&type=chunk) - The company's stock price has been and may continue to be extremely volatile, trading between **$0.15** and **$27.80** in the 12 months prior to the report[132](index=132&type=chunk) - The company is dependent on a small number of customers, with a single customer accounting for **100%** of revenue in Q1 2021 and Q1 2020[126](index=126&type=chunk) - The COVID-19 pandemic has had an adverse effect and its future impact on capital raising, technology development, and strategic transactions remains uncertain[111](index=111&type=chunk)[119](index=119&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q report, including certifications from the Principal Executive Officer and Principal Financial Officer as required by the **Sarbanes-Oxley Act of 2002**, as well as **XBRL Interactive Data Files** - Lists certifications by the Principal Executive Officer and Principal Financial Officer pursuant to **Sarbanes-Oxley Act Sections 302 and 906**[161](index=161&type=chunk) - Includes **XBRL data files** (Instance, Schema, Calculation, Definition, Label, and Presentation documents) as exhibits[161](index=161&type=chunk) Signatures The report is duly signed and authorized on April 29, 2021, by Sumit Sharma, the Chief Executive Officer, and Stephen P. Holt, the Chief Financial Officer - The report was signed on **April 29, 2021**, by Sumit Sharma (Chief Executive Officer) and Stephen P. Holt (Chief Financial Officer)[164](index=164&type=chunk) ```

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 001-34170 MicroVision, Inc. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of ...