Financial Data and Key Metrics Changes - For Q3 2020, revenue was $639 thousand, with $539 thousand from royalty revenue and $100 thousand from product revenue, compared to $587 thousand in Q2 2020 [37] - Operating expenses were $3.5 million in Q3, up from $2.9 million in the prior quarter, primarily due to non-cash compensation and engineering materials [42] - The net loss for Q3 was $2.8 million, compared to a net loss of $2.3 million in Q2 [43] Business Line Data and Key Metrics Changes - The company recognized all third-quarter royalty revenue from an April 2017 customer, with a balance of $8.2 million in prepayment liabilities [39] - Product revenue in Q3 was related to projection engines made for RagenTek in 2017, with a legal settlement allowing for an additional $100,000 of revenue recognition [37] Market Data and Key Metrics Changes - The automotive sensor market is projected to grow from $8.7 billion in 2020 to $22.4 billion by 2025, with automotive LiDAR expected to grow at a 113% compound annual growth rate [22] - By 2025, automotive LiDAR revenue is projected to reach $1.7 billion, representing only 2.3% of all vehicle classes sold globally [22] Company Strategy and Development Direction - The company is focused on exploring strategic alternatives, including a potential sale, while maintaining strict control over expenses [8][9] - MicroVision aims to leverage its intellectual property and technology portfolio in augmented reality and automotive LiDAR markets, emphasizing the importance of partnerships for future growth [12][20] Management's Comments on Operating Environment and Future Outlook - The management highlighted the ongoing impact of the COVID-19 pandemic on global markets and the potential for consolidation in the technology sector [11] - The company is optimistic about the future scaling of augmented reality and automotive LiDAR, believing it has a solid IP and technology portfolio to capitalize on these trends [12][25] Other Important Information - The company ended Q3 with total cash and cash equivalents of $5 million and raised $5.8 million from the Lincoln Park Capital facility in Q4 [48][49] - The company has granted very few limited licenses for its technology, which is seen as a strong value proposition for potential acquirers [17] Q&A Session Summary Question: Cash burn and elevated CapEx in Q4 - Management expects cash usage to be elevated in Q4 but anticipates it to be lower in Q1 [56] Question: Comparison of MicroVision's product with competitors - Management believes their product will significantly match or exceed current market offerings, especially in the automotive space [57] Question: Interest in consumer LiDAR products - Interest in consumer LiDAR remains neutral, with distinctions made between MicroVision's technology and competitors like Apple [66] Question: Status of strategic alternatives - Management indicated that the list of interested parties remains the same, with ongoing evaluations [69] Question: Shareholder support for strategic direction - Management confirmed commitment to exploring strategic alternatives while recognizing the potential for standalone growth [72] Question: Development of AR products - Management stated that AR development is ahead, but partnerships are crucial for commercialization [78][90] Question: Headcount and hiring plans - The company is hiring to support LiDAR development, with a current headcount of 41 [105]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited financial statements for the period ended September 30, 2020, show a continued net loss and a shareholders' deficit. Total revenue decreased significantly in the third quarter compared to 2019, though it increased for the nine-month period. The company holds a small cash position and faces substantial doubt about its ability to continue as a going concern, with cash expected to last only through **Q1 2021**. A key event was the shift from component production to a royalty-based model with a major technology customer Condensed Balance Sheet Data (in thousands) | Account | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $5,027 | $5,837 | | Total current assets | $5,775 | $7,837 | | Total assets | $8,961 | $11,836 | | Total current liabilities | $11,615 | $14,456 | | Total liabilities | $13,154 | $15,813 | | Total shareholders' equity (deficit) | $(4,193) | $(3,977) | Condensed Statements of Operations (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $639 | $1,190 | $2,695 | $4,281 | | Gross profit (loss) | $639 | $(882) | $1,297 | $(857) | | Loss from operations | $(2,818) | $(6,145) | $(10,051) | $(23,192) | | Net loss | $(2,826) | $(6,141) | $(10,064) | $(23,199) | | Net loss per share | $(0.02) | $(0.05) | $(0.07) | $(0.21) | Condensed Statements of Cash Flows (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(11,847) | $(19,733) | | Net cash provided by (used in) investing activities | $431 | $(671) | | Net cash provided by financing activities | $10,606 | $13,280 | - Management has expressed substantial doubt about the company's ability to continue as a **going concern** due to significant historical losses and the need for additional capital. Cash on hand is only expected to fund operations through the **first quarter of 2021**[26](index=26&type=chunk)[28](index=28&type=chunk) [Notes to Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) The notes detail critical accounting policies and events. Key disclosures include the company's strategic shift to explore a sale or merger after an OEM canceled a planned 2020 product launch. The company received a **$1.57 million** PPP loan, of which it expects about **$690,000** to be forgiven. A major technology customer, accounting for **96%** of YTD revenue, transitioned from purchasing components to a royalty agreement against an **$8.2 million prepayment**. The company also continued to raise capital through its stock purchase agreement with Lincoln Park - In February 2020, an OEM informed the company that products using its interactive display module would not launch in 2020, leading to a **60% headcount reduction** and a focus on strategic alternatives like a sale or merger[24](index=24&type=chunk) - In March 2020, the company transitioned a contract with a major technology company from component production to a royalty-based model. Royalties earned will be applied against the remaining **$8.2 million prepayment** from the customer[32](index=32&type=chunk) - In April 2020, the company received a **$1.57 million loan** under the Paycheck Protection Program (PPP). It has used all funds for qualified purposes and intends to apply for partial forgiveness of approximately **$690,000**[33](index=33&type=chunk)[34](index=34&type=chunk) - For the nine months ended September 30, 2020, one customer accounted for **$2.6 million in revenue**, representing **96% of total revenue**[48](index=48&type=chunk) - As of September 30, 2020, the company had raised a total of **$9.9 million** under its Common Stock Purchase Agreement with Lincoln Park. Subsequent to the quarter end, it raised an additional **$5.8 million** through October 26, 2020[64](index=64&type=chunk)[69](index=69&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategic pivot towards seeking a sale, merger, or licensing deal while continuing development of its automotive LiDAR module. The analysis of operations highlights a significant shift in revenue composition, with contract and product revenues declining while license and royalty revenues surged due to a new agreement with a major customer. Operating expenses decreased across the board due to cost-cutting measures, including a major headcount reduction. The company's liquidity remains a critical concern, with existing cash and anticipated proceeds from stock sales expected to fund operations only through **Q1 2021**, reinforcing the 'going concern' doubt [Overview](index=18&type=section&id=Overview) MicroVision, a pioneer in laser beam scanning (LBS) technology, is shifting its focus to strategic alternatives, including a potential sale or merger. This decision follows the failure to secure a customer for its module products in 2020. Concurrently, the company will continue developing its 1st Generation Long Range LiDAR (LRL) module for the automotive market to maximize shareholder value. The COVID-19 pandemic has introduced uncertainties, affecting the supply chain and creating potential disruptions to development and strategic transaction timelines - The company's strategy has shifted to focus on strategic alternatives, including a potential sale or merger, after failing to secure a customer to launch one of its module products[74](index=74&type=chunk) - While pursuing strategic alternatives, the company plans to complete the development of its 1st Generation Long Range LiDAR (LRL) module for the automotive market[75](index=75&type=chunk) - In March 2020, the company transferred component production to a customer and will now earn a royalty, preserving gross profit potential while conserving cash[76](index=76&type=chunk) - The COVID-19 pandemic is causing business uncertainty, with potential impacts on the supply chain, employee productivity, and the ability to complete a strategic transaction[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20operations) For Q3 2020, total revenue fell to **$0.6 million** from **$1.2 million** in Q3 2019, driven by a sharp drop in product and contract revenue. However, this was partially offset by a significant increase in license and royalty revenue to **$539,000** from a new agreement. For the nine-month period, total revenue decreased to **$2.7 million** from **$4.3 million** year-over-year, mainly due to the completion of a major development contract in 2019. Costs and operating expenses were substantially lower in both the three and nine-month periods due to lower product shipments, reduced inventory write-downs, and significant cuts in personnel and R&D spending Revenue by Type (in thousands) | Revenue Type | Q3 2020 | Q3 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Product Revenue | $100 | $999 | $1,347 | $1,198 | | License and Royalty Revenue | $539 | $17 | $1,323 | $17 | | Contract Revenue | $0 | $174 | $25 | $3,066 | - The significant increase in license and royalty revenue is due to a new agreement effective March 2020 where a customer pays a royalty per component shipped, which is applied against a prepayment[89](index=89&type=chunk) - The decrease in contract revenue is attributed to the completion of a development contract with a major customer in 2019[91](index=91&type=chunk) - Research & Development expense decreased by **44.7%** for the quarter and **53.1%** for the nine months YoY, due to reduced personnel-related compensation, benefits, and lower direct materials and subcontractor costs[96](index=96&type=chunk)[97](index=97&type=chunk) - Sales, Marketing, General & Administrative expense decreased by **12.5%** for the quarter and **33.8%** for the nine months YoY, due to reduced personnel-related compensation and purchased services[98](index=98&type=chunk)[100](index=100&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20capital%20resources) The company's liquidity position is precarious, with **$5.0 million** in cash and cash equivalents at quarter-end. Management anticipates this, along with proceeds from its stock purchase agreement with Lincoln Park, will only be sufficient to fund operations through **Q1 2021**. This situation raises substantial doubt about the company's ability to continue as a **going concern**. Financing activities in 2020 included a **$1.57 million** PPP loan and raising **$9.9 million** through the Lincoln Park agreement as of September 30, 2020 - The company anticipates that its current cash and proceeds from its stock purchase agreement will only fund operations through the **first quarter of 2021**, necessitating additional capital[102](index=102&type=chunk) - These factors raise substantial doubt about the company's ability to continue as a **going concern**[103](index=103&type=chunk) - Cash used in operating activities decreased to **$11.8 million** for the first nine months of 2020, compared to **$19.7 million** in the same period of 2019, primarily due to reduced operating expenses[104](index=104&type=chunk) - Financing activities included receiving a **$1.57 million** PPP loan and raising **$9.9 million** under the Lincoln Park stock purchase agreement as of September 30, 2020[106](index=106&type=chunk)[107](index=107&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that its exposure to market risk, including interest rate and foreign exchange rate risk, is not material. Cash and cash equivalents of **$5.0 million** are held in operating accounts and highly rated money market savings accounts. While some purchase agreements may be in foreign currencies, the exposure is considered immaterial, and the company's major contracts are denominated in U.S. dollars - The company believes its exposure to market and interest rate risk is not material as of September 30, 2020[111](index=111&type=chunk) - Major contracts are paid in U.S. dollars, and exposure to foreign currency fluctuations from supply agreements is considered immaterial[113](index=113&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, evaluated the company's disclosure controls and procedures as of September 30, 2020, and concluded they were effective. There were no material changes in internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[114](index=114&type=chunk) [PART II. OTHER INFORMATION](index=23&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it has settled all claims with Ragentek and its distributor, leading to the dismissal of the arbitration filed in Hong Kong in March 2019. As part of the settlement, a final **$100,000 payment** to the distributor was no longer required. The company is not currently party to any other legal proceedings expected to have a material adverse effect - The company settled all claims with Ragentek and its distributor and dismissed the arbitration it had filed. A final **$100,000 payment** to the distributor was waived as part of the settlement[116](index=116&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks to the company's business. Key risks include its history of operating losses and the substantial doubt about its ability to continue as a **going concern**, driven by the need for additional capital which may not be available. The COVID-19 pandemic poses risks to operations, capital raising, and strategic plans. Business risks are heightened by the dependence on a small number of customers, reliance on third-party manufacturers, and the challenge of achieving market acceptance for its technology. Competitive pressures, rapid technological change, and potential intellectual property disputes also present material threats [Financial and Operational Risks](index=24&type=section&id=Financial%20and%20Operational%20Risks) The company has a history of substantial losses, with an accumulated deficit of **$582.7 million** as of September 30, 2020. It requires additional capital to fund operations beyond **Q1 2021**, and there is no assurance it can be obtained. The failure to secure a customer for a 2020 product launch has led to a focus on strategic alternatives, the success of which is uncertain. The COVID-19 pandemic adds further uncertainty, potentially impacting capital raising, development timelines, and the ability to complete a merger or sale - The company has a history of substantial operating losses and expects to incur significant losses in the future[120](index=120&type=chunk) - The company will require additional capital to fund operations past **Q1 2021**. Failure to obtain it may require substantial curtailment of operations[125](index=125&type=chunk) - The COVID-19 pandemic could adversely impact the ability to raise capital, enter licensing agreements, meet development timelines, and complete a sale or merger of the company[124](index=124&type=chunk)[126](index=126&type=chunk) [Business and Market Risks](index=25&type=section&id=Business%20and%20Market%20Risks) The company's success is highly dependent on third parties for manufacturing, sales, and marketing, and on a small number of customers for revenue. For the nine months ended September 30, 2020, one customer accounted for **96% of total revenue**. The company relies on single or limited-source suppliers, and any disruption could cause significant delays and lost revenue. There is no certainty that its LBS technology will achieve market acceptance, which is crucial for future growth. Furthermore, there is a risk of being delisted from **The Nasdaq Global Market** if listing standards are not maintained - The company is dependent on third parties to develop, manufacture, sell, and market products, which reduces control and introduces risk[133](index=133&type=chunk) - The company relies on single or limited-source suppliers, and the loss of any could result in lost revenues and damaged customer relationships[129](index=129&type=chunk)[130](index=130&type=chunk) - For the nine months ended September 30, 2020, one customer accounted for **96% of total revenue**, highlighting significant customer concentration risk[139](index=139&type=chunk) - The company's common stock could be delisted from **The Nasdaq Global Market** if it fails to meet listing maintenance standards, which would reduce liquidity[143](index=143&type=chunk) [Technology and Intellectual Property Risks](index=27&type=section&id=Technology%20and%20Intellectual%20Property%20Risks) The company operates in an industry with rapid technological change and may not be able to keep pace with competitors, many of whom have substantially greater resources. Its success depends on advancing its technology, which relies on components from other companies. There is also a significant risk of intellectual property litigation. Third-party patents could be used to challenge the company's own patents, and defending against infringement claims would be costly and time-consuming, potentially limiting its ability to commercialize its technology - The company faces competition from established manufacturers with substantially greater financial and technical resources[146](index=146&type=chunk) - The industry is characterized by rapid technological change, and the company's success depends on its ability to innovate in a timely and cost-effective manner[147](index=147&type=chunk) - The company could face costly lawsuits related to patent infringement, which could limit its ability to commercialize its technology or require expensive licensing agreements[149](index=149&type=chunk)[150](index=150&type=chunk) - Failure to obtain and maintain effective intellectual property protection for its technology could subject the company to increased competition[157](index=157&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q. The exhibits include the Certificate of Amendment to the company's Certificate of Incorporation, certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, and the XBRL Interactive Data Files - The list of exhibits includes the Certificate of Amendment, CEO/CFO certifications (Rule 13a-14(a) and Section 1350), and XBRL data files[169](index=169&type=chunk) [Signatures](index=32&type=section&id=Signatures) The report is duly signed and authorized by the company's Chief Executive Officer, Sumit Sharma, and Chief Financial Officer, Stephen P. Holt, on October 29, 2020 - The Form 10-Q was signed on October 29, 2020, by Sumit Sharma (CEO) and Stephen P. Holt (CFO)[172](index=172&type=chunk)

MicroVision, Inc. (NASDAQ:MVIS) Q2 2020 Earnings Conference Call August 5, 2020 5:00 PM ET Company Participants Lindsey Stibbard Sumit Sharma - Chief Executive Officer Steve Holt - Chief Financial Officer Conference Call Participants Glenn Mattson - Ladenburg Thalmann Kevin Dede - HCW Good day, and welcome to the MicroVision Second Quarter 2020 Financial and Operating Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an o ...

```markdown PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed financial statements for the three and six months ended June 30, 2020, and 2019, including balance sheets, statements of operations, statements of shareholders' equity, and statements of cash flows, revealing significant operating losses, a strategic shift, and substantial doubt about the company's going concern ability [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2020, total assets were $11.5 million, a slight decrease from $11.8 million at the end of 2019, while total liabilities decreased to $14.0 million from $15.8 million, improving the total shareholders' deficit to $(2.5) million from $(4.0) million due to increased cash from stock sales Condensed Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $7,805 | $5,837 | | Total current assets | $8,106 | $7,837 | | Total assets | $11,506 | $11,836 | | **Liabilities & Equity** | | | | Total current liabilities | $12,078 | $14,456 | | Total liabilities | $14,028 | $15,813 | | Total shareholders' equity (deficit) | $(2,522) | $(3,977) | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) For the six months ended June 30, 2020, total revenue decreased to $2.1 million from $3.1 million year-over-year, resulting in a net loss of **$7.2 million**, a significant improvement from the **$17.1 million** loss in 2019, primarily due to sharply reduced operating expenses, particularly in research and development, with net loss per share improving to **$(0.05)** from **$(0.16)** Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $587 | $1,240 | $2,056 | $3,091 | | Gross profit (loss) | $588 | $(583) | $658 | $25 | | Loss from operations | $(2,299) | $(8,983) | $(7,233) | $(17,047) | | Net loss | $(2,304) | $(8,990) | $(7,238) | $(17,058) | | Net loss per share | $(0.02) | $(0.08) | $(0.05) | $(0.16) | [Condensed Statements of Shareholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Statements%20of%20Shareholders%27%20Equity%20(Deficit)) The shareholders' deficit improved from **$(7.3) million** at the end of Q1 2020 to **$(2.5) million** at June 30, 2020, primarily driven by the sale of common stock, which raised **$8.3 million** in the first six months of 2020, offsetting the **$7.2 million net loss** for the period - For the six months ended June 30, 2020, the company raised **$8.3 million from the sale** of **17.4 million shares** of common stock[16](index=16&type=chunk) - The total shareholders' deficit improved from **$(4.0) million** at the start of 2020 to **$(2.5) million** at June 30, 2020, despite a **$7.2 million net loss**, due to capital raised from stock sales[16](index=16&type=chunk) [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the first six months of 2020, net cash used in operating activities was **$8.4 million**, a significant reduction from **$16.4 million** in the prior-year period, mainly due to lower operating expenses, while net cash from financing activities was **$9.9 million**, primarily from stock issuance and a PPP loan, resulting in a period-end cash balance of **$8.2 million** Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,370) | $(16,358) | | Net cash provided by (used in) investing activities | $431 | $(513) | | Net cash provided by financing activities | $9,907 | $7,719 | | **Change in cash, cash equivalents, and restricted cash** | **$1,968** | **$(9,152)** | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) The notes detail the company's critical financial situation, highlighting significant losses since inception and raising substantial doubt about its ability to continue as a going concern, following an OEM's decision not to launch a product using MicroVision's technology, a subsequent **60%** headcount reduction, and a strategic shift to explore a potential sale or merger, with the company securing a **$1.57 million loan** and relying on equity sales for funding, but needing shareholder approval for more authorized shares, while a single customer accounted for **100%** of revenue in the first half of 2020 - The company has incurred significant losses since inception, and these factors raise substantial doubt regarding its ability to continue as a going concern[22](index=22&type=chunk)[26](index=26&type=chunk) - Following an OEM's decision not to launch a product with the company's technology in 2020, MicroVision reduced its headcount by approximately **60%** and is now focused on strategic alternatives, including a potential sale or merger[22](index=22&type=chunk) - The company anticipates having sufficient cash to fund operations only through **Q4 2020** and requires additional capital, seeking shareholder approval to increase authorized shares after a similar proposal failed in May 2020[24](index=24&type=chunk) - In April 2020, the company received a **$1.57 million loan** under the Paycheck Protection Program (PPP)[31](index=31&type=chunk) - A single customer accounted for **100%** of total revenue for the three and six months ended June 30, 2020[46](index=46&type=chunk) - As of June 30, 2020, the company has raised a total of **$9.3 million under its Common Stock Purchase Agreement** with Lincoln Park Capital[61](index=61&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategic shift towards exploring a sale, merger, or licensing deal after a key OEM partner canceled a 2020 product launch, with a focus on LBS technology for automotive LiDAR, noting a significant decrease in revenue and operating expenses year-over-year, and expressing major liquidity concerns with cash expected to last only through **Q4 2020**, raising substantial doubt about its going concern ability, alongside the uncertain impact of COVID-19 on supply chain and business operations [Overview and COVID-19 Impact](index=16&type=section&id=Overview%20and%20COVID-19%20Impact) MicroVision, a pioneer in LBS technology, has shifted its focus to pursuing strategic alternatives, including a potential sale or merger, after being unable to secure a customer for a 2020 product launch, with plans to prioritize developing its automotive LiDAR module if funding is secured, while the COVID-19 pandemic has added uncertainty, causing supply chain disruptions and potentially impacting development timelines and strategic efforts due to remote work policies - The company is focusing on strategic alternatives, including a potential sale or merger, after failing to secure a customer for a 2020 product launch[68](index=68&type=chunk) - If sufficient funds are raised, the company plans to focus on developing its automotive LiDAR module[69](index=69&type=chunk) - The COVID-19 pandemic has caused supply chain disruptions and may adversely affect development, capital raising, and strategic transaction efforts[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) For the six months ended June 30, 2020, total revenue fell to **$2.1 million** from **$3.1 million** YoY, driven by a sharp decline in contract revenue after a major development contract was completed in 2019, partially offset by new license and royalty revenue of **$0.8 million**, while operating expenses were significantly reduced, with R&D expenses down **55.6%** and SG&A expenses down **40.8%** due to lower personnel-related costs and other savings following a major headcount reduction Revenue by Type (in thousands) | Revenue Type | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | % Change | | :--- | :--- | :--- | :--- | | Product revenue | $1,247 | $199 | 526.6% | | License and royalty revenue | $784 | $0 | N/A | | Contract revenue | $25 | $2,892 | (99.1)% | | **Total revenue** | **$2,056** | **$3,091** | **(33.5)%** | Operating Expenses (in thousands) | Expense Type | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | % Change | | :--- | :--- | :--- | :--- | | Research and development | $5,290 | $11,918 | (55.6)% | | Sales, marketing, general and administrative | $3,051 | $5,154 | (40.8)% | [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is critical, with **$7.8 million** in cash and cash equivalents at June 30, 2020, expected to fund operations only through **Q4 2020**, raising substantial doubt about its ability to continue as a going concern, as it plans to seek additional capital through equity or debt but requires shareholder approval to increase authorized shares, a proposal that previously failed, while cash used in operations decreased significantly to **$8.4 million in H1 2020** from **$16.4 million in H1 2019** due to lower expenses - The company anticipates having sufficient cash and cash equivalents to fund operations only through the **fourth quarter of 2020**[93](index=93&type=chunk) - The company requires additional capital and needs shareholder approval to increase authorized shares to raise significant cash through stock sales, a proposal which failed in a May 2020 vote[93](index=93&type=chunk) - Cash used in operating activities decreased to **$8.4 million in H1 2020** from **$16.4 million in H1 2019**, primarily due to reduced operating expenses[95](index=95&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's exposure to market risk is considered not material, with minimal interest rate risk as all cash and cash equivalents (**$7.8 million**) are in variable-rate operating and money market accounts, and foreign exchange rate risk also deemed immaterial as major contracts are denominated in U.S. dollars, though future hedges may be used if material exposure arises - Interest rate and market liquidity risk is considered not material as all cash and cash equivalents are held in variable interest rate operating and money market accounts[102](index=102&type=chunk) - Foreign exchange rate risk is not considered material as major contracts are currently made in U.S. dollars[104](index=104&type=chunk) [Item 4. Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, evaluated the company's disclosure controls and procedures as of June 30, 2020, and concluded they were effective, with no material changes in internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer have concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[105](index=105&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[105](index=105&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in an arbitration proceeding against Ragentek in Hong Kong, initiated in March 2019, seeking **$4.0 million plus interest** and costs for breach of a purchase order, with the outcome currently unpredictable, and no other legal proceedings expected to have a material adverse effect - In March 2019, the company filed a Notice of Arbitration in Hong Kong against Ragentek, seeking **$4.0 million plus interest** and arbitration costs, with the likelihood of a favorable outcome currently unpredictable[108](index=108&type=chunk) [Item 1A. Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks to the company's business, including a history of operating losses, substantial doubt about its ability to continue as a going concern, and the need for additional capital which may not be available, with its focus on strategic alternatives like a sale or merger carrying substantial risk of failure, alongside other major risks involving the adverse impacts of COVID-19, dependence on single-source suppliers and a small number of customers, potential failure to achieve market acceptance for its technology, and the risk of delisting from Nasdaq - The company has a history of substantial losses, with an accumulated deficit of **$579.8 million as of June 30, 2020**, and expects to incur significant losses in the future[111](index=111&type=chunk)[116](index=116&type=chunk) - The company requires additional capital to fund operations beyond **Q4 2020**, and failure to obtain capital may require substantial curtailment of operations and raises doubt about its ability to continue as a going concern[117](index=117&type=chunk)[119](index=119&type=chunk) - The company's focus on strategic alternatives (sale, merger, licensing) is high-risk and may be unsuccessful, potentially impeded by COVID-19[114](index=114&type=chunk) - The company is dependent on a small number of customers, with one customer accounting for **100%** of revenue in the first six months of 2020[132](index=132&type=chunk) - The company relies on single or limited-source suppliers, and the loss of any such supplier could cause significant delays and damage customer relationships[122](index=122&type=chunk) - Failure to get shareholder approval to increase authorized shares would limit the ability to raise cash through stock sales, potentially jeopardizing the company's ability to continue as a going concern[120](index=120&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act of 2002, and XBRL data files - The exhibits include certifications from the CEO and CFO pursuant to Sarbanes-Oxley Act Sections 302 and 906, as well as XBRL data files for interactive data[161](index=161&type=chunk) Signatures [Signatures](index=30&type=section&id=Signatures) The report is duly signed and authorized by the company's Chief Executive Officer, Sumit Sharma, and Chief Financial Officer, Stephen P. Holt, on August 5, 2020 - The report was signed on August 5, 2020, by Sumit Sharma, Chief Executive Officer, and Stephen P. Holt, Chief Financial Officer[165](index=165&type=chunk) ```

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents unaudited condensed financial statements for Q1 2020, including balance sheets, operations, equity, and cash flows with explanatory notes [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets%20as%20of%20March%2031%2C%202020%20and%20December%2031%2C%202019) Highlights the company's financial position, showing assets, liabilities, and equity changes between December 2019 and March 2020 Condensed Balance Sheet Highlights (in thousands) | Metric | March 31, 2020 | December 31, 2019 | | :----------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $2,325 | $5,837 | | Total current assets | $3,290 | $7,837 | | Total assets | $6,904 | $11,836 | | Total current liabilities | $12,962 | $14,456 | | Total liabilities | $14,178 | $15,813 | | Total shareholders' equity (deficit) | $(7,274) | $(3,977) | - Total assets decreased by approximately **41.6%** from **$11.8 million** at December 31, 2019, to **$6.9 million** at March 31, 2020[12](index=12&type=chunk) - Shareholders' equity (deficit) worsened from **$(3.98) million** at December 31, 2019, to **$(7.27) million** at March 31, 2020[12](index=12&type=chunk) [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations%20for%20the%20three%20months%20ended%20March%2031%2C%202020%20and%202019) Details revenue, expenses, and net loss for Q1 2020 and 2019, reflecting operational performance Condensed Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change ($) | Change (%) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Product revenue | $1,247 | $199 | $1,048 | 526.6% | | License and royalty revenue | $212 | $- | $212 | - | | Contract revenue | $10 | $1,652 | $(1,642) | (99.4%) | | **Total revenue** | **$1,469** | **$1,851** | **$(382)** | **(20.6%)**| | Total cost of revenue | $1,399 | $1,243 | $156 | 12.6% | | Gross profit | $70 | $608 | $(538) | (88.5%) | | Research and development expense | $3,683 | $5,973 | $(2,290) | (38.3%) | | Sales, marketing, general and admin | $1,771 | $2,699 | $(928) | (34.4%) | | Total operating expenses | $5,004 | $8,672 | $(3,668) | (42.3%) | | Net loss | $(4,934) | $(8,068) | $3,134 | (38.8%) | | Net loss per share - basic and diluted | $(0.04) | $(0.08) | $0.04 | (50.0%) | - Net loss decreased by **38.8%** from **$(8.07) million** in Q1 2019 to **$(4.93) million** in Q1 2020, primarily due to a significant reduction in operating expenses[14](index=14&type=chunk) - Gross profit declined by **88.5%** despite an increase in product and license revenue, due to a sharp decrease in high-margin contract revenue[14](index=14&type=chunk) [Condensed Statements of Shareholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Statements%20of%20Shareholders'%20Equity%20(Deficit)%20for%20the%20three%20months%20ended%20March%2031%2C%202020%20and%202019) Outlines changes in shareholders' equity, including stock transactions and accumulated deficit, for Q1 2020 and 2019 Shareholders' Equity (Deficit) Changes (in thousands) | Metric | Balance at Jan 1, 2020 | Share-based compensation expense | Sales of common stock | Net loss | Balance at Mar 31, 2020 | | :----------------------- | :--------------------- | :------------------------------- | :-------------------- | :------- | :---------------------- | | Common Stock (Shares) | 125,803 | - | 5,075 | - | 130,878 | | Common Stock (Par value) | $126 | - | $5 | - | $131 | | Additional paid-in capital | $568,496 | $156 | $1,476 | - | $570,128 | | Accumulated deficit | $(572,599) | - | - | $(4,934) | $(577,533) | | Total shareholders' equity (deficit) | $(3,977) | $156 | $1,481 | $(4,934) | $(7,274) | - The accumulated deficit increased by **$4.93 million** during Q1 2020 due to the net loss incurred[17](index=17&type=chunk) - Sales of common stock contributed **$1.48 million** to additional paid-in capital during Q1 2020[17](index=17&type=chunk) [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20March%2031%2C%202020%20and%202019) Summarizes cash inflows and outflows from operating, investing, and financing activities for Q1 2020 and 2019 Condensed Statements of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(5,437) | $(7,647) | | Net cash provided by (used in) investing activities | $450 | $(313) | | Net cash provided by financing activities | $1,475 | $1,173 | | Change in cash, cash equivalents, and restricted cash | $(3,512) | $(6,787) | | Cash, cash equivalents, and restricted cash at end of period | $2,760 | $7,414 | - Net cash used in operating activities decreased by **$2.21 million (28.9%)** in Q1 2020 compared to Q1 2019, primarily due to reduced operating expenses[20](index=20&type=chunk)[94](index=94&type=chunk) - Investing activities shifted from using **$313,000** cash in Q1 2019 to providing **$450,000** in Q1 2020, driven by proceeds from the sale of property and equipment[20](index=20&type=chunk)[95](index=95&type=chunk) [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Provides detailed explanations of accounting policies, significant events, and financial instrument details, including going concern status and revenue recognition [1. MANAGEMENT'S STATEMENT](index=8&type=section&id=1.%20MANAGEMENT'S%20STATEMENT) Addresses the company's going concern status, strategic shift, and near-term funding expectations - The company has incurred significant losses since inception and faces substantial doubt regarding its ability to continue as a going concern[23](index=23&type=chunk)[27](index=27&type=chunk) - An OEM informed the company that products using its interactive display module would not launch in 2020 as planned, leading to a **60% headcount reduction** and a strategic shift to licensing module products and technology, or exploring a potential sale/merger[23](index=23&type=chunk) - With current operating plans, including anticipated proceeds from Lincoln Park and a PPP loan, the company expects to fund operations through **Q4 2020** but will require additional capital thereafter[25](index=25&type=chunk) [2. NET LOSS PER SHARE](index=9&type=section&id=2.%20NET%20LOSS%20PER%20SHARE) Presents the calculation of net loss per share for Q1 2020 and 2019, considering common shares outstanding Net Loss Per Share Data (in thousands, except loss per share) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss available for common shareholders | $(4,934) | $(8,068) | | Weighted-average common shares outstanding | 127,214 | 101,971 | | Net loss per share - basic and diluted | $(0.04) | $(0.08) | - Dilutive securities (options and warrants) were anti-dilutive and thus excluded from net loss per share calculations for both periods[29](index=29&type=chunk)[30](index=30&type=chunk) [3. LONG-TERM CONTRACTS](index=9&type=section&id=3.%20LONG-TERM%20CONTRACTS) Details changes in long-term contracts, including a shift to a royalty model and prepayment application - In March 2020, the company entered an agreement for a major technology customer to take over production of components, shifting from component sales to a royalty model[31](index=31&type=chunk) - Royalties earned will be applied against the remaining **$9.3 million** prepayment received from the customer until exhausted[31](index=31&type=chunk) - The original April 2017 contract for LBS display system development totaled **$15.1 million** in fees, with **$15.0 million** recognized as of December 31, 2019[31](index=31&type=chunk) [4. REVENUE RECOGNITION](index=9&type=section&id=4.%20REVENUE%20RECOGNITION) Explains the company's revenue recognition policies and disaggregates revenue by timing of transfer - Revenue is recognized when control of promised goods or services is transferred to customers, following the 5-step model of Topic 606[32](index=32&type=chunk)[33](index=33&type=chunk) Disaggregated Revenue by Timing of Recognition (in thousands) | Revenue Type | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Products transferred at a point in time | $1,463 | $215 | | Product and services transferred over time | $6 | $1,636 | | **Total** | **$1,469** | **$1,851** | - Contract liabilities decreased by **7.1%** from **$10.2 million** at December 31, 2019, to **$9.49 million** at March 31, 2020[41](index=41&type=chunk) Estimated Future Revenue from Remaining Performance Obligations (in thousands) | Revenue Type | Remainder of 2020 | | :---------------------- | :---------------- | | License and royalty revenue | $1,375 | | Contract revenue | $15 | [5. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS](index=11&type=section&id=5.%20CONCENTRATION%20OF%20CREDIT%20RISK%20AND%20MAJOR%20CUSTOMERS%20AND%20SUPPLIERS) Identifies significant customer and supplier concentrations and associated risks - For the three months ended March 31, 2020, **one customer accounted for 100% of total revenue ($1.5 million)** and **100% of net accounts receivable ($552,000)**[46](index=46&type=chunk) - The company relies on single or limited-source suppliers for a significant concentration of components, posing risks of increased costs, lost revenues, or delivery delays[48](index=48&type=chunk) [6. INVENTORY](index=12&type=section&id=6.%20INVENTORY) Provides a breakdown of inventory and details any write-downs for the period Inventory Breakdown (in thousands) | Inventory Type | March 31, 2020 | December 31, 2019 | | :------------- | :------------- | :---------------- | | Raw materials | $- | $- | | Finished goods | $- | $192 | | **Total** | **$-** | **$192** | - Inventory write-downs of **$168,000** were recorded during the three months ended March 31, 2020[51](index=51&type=chunk) [7. SHARE-BASED COMPENSATION](index=12&type=section&id=7.%20SHARE-BASED%20COMPENSATION) Reports share-based compensation expense and unrecognized amounts for stock options, RSUs, and PSUs Share-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of product revenue | $- | $1 | | Research and development expense | $39 | $123 | | Sales, marketing, general and admin | $150 | $227 | | **Total** | **$189** | **$351** | - Total share-based compensation expense decreased by **46.2%** from **$351,000** in Q1 2019 to **$189,000** in Q1 2020[53](index=53&type=chunk) - As of March 31, 2020, unrecognized share-based compensation totaled **$791,000** for stock options, **$240,000** for RSUs, and **$12,000** for PSUs, to be amortized over **1.3 to 1.8 years**[54](index=54&type=chunk) [8. LEASES](index=13&type=section&id=8.%20LEASES) Details lease accounting adoption, lease expenses, and future lease liability maturities - The company adopted ASU 2016-02 (Topic 842) on January 1, 2019, recognizing an operating ROU asset of **$1.6 million** and a lease liability of **$2.5 million**, with no material impact on the Statement of Operations or Cash Flows[55](index=55&type=chunk) Lease Expense (in thousands) | Expense Type | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :----------------------- | :-------------------------------- | :-------------------------------- | | Operating lease expense | $116 | $116 | | Finance lease expense | $6 | $5 | | **Total lease expense** | **$122** | **$121** | Lease Liabilities Maturities as of March 31, 2020 (in thousands) | Year | Operating Leases | Finance Leases | | :--- | :--------------- | :------------- | | 2020 | $496 | $21 | | 2021 | $676 | $9 | | 2022 | $696 | $- | | 2023 | $175 | $- | | **Total minimum lease payments** | **$2,043** | **$30** | [9. COMMITMENTS AND CONTINGENCIES](index=15&type=section&id=9.%20COMMITMENTS%20AND%20CONTINGENCIES) Outlines legal proceedings, including an arbitration case, and other potential financial impacts - The company filed a Notice of Arbitration in Hong Kong against Ragentek in March 2019, seeking **$4.0 million** plus interest and arbitration costs for failure to perform purchase order obligations[59](index=59&type=chunk) - Management believes no other current legal proceedings are reasonably possible to have a material adverse effect on financial position, results of operations, or cash flows[60](index=60&type=chunk) [10. COMMON STOCK](index=15&type=section&id=10.%20COMMON%20STOCK) Describes common stock transactions, including agreements for future stock sales and capital raised - In December 2019, the company entered a Common Stock Purchase Agreement with Lincoln Park Capital Fund, LLC, allowing the sale of up to **$16.0 million** in common stock over **24 months**[61](index=61&type=chunk) - As of March 31, 2020, the company issued **7.0 million shares** and raised **$2.4 million** under the Lincoln Park agreement[61](index=61&type=chunk) - In January 2019, the company raised **$1.2 million** (before costs) through a registered direct offering of **2.0 million common shares** to a private investor[62](index=62&type=chunk) [11. SUBSEQUENT EVENTS](index=15&type=section&id=11.%20SUBSEQUENT%20EVENTS) Discloses significant events occurring after the reporting period, such as PPP loans and further stock sales - In April 2020, the company received a **$1,570,881** loan under the Paycheck Protection Program (PPP) of the 2020 CARES Act, with a **0.98% interest rate** and **24-month term**, potentially forgivable for certain uses[63](index=63&type=chunk) - Subsequent to March 31, 2020, and through May 6, 2020, the company issued an additional **11.5 million shares** and raised **$6.2 million** under the Lincoln Park Common Stock Purchase Agreement[64](index=64&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's perspective on financial performance, condition, and future outlook, including strategic shifts, COVID-19 impact, and liquidity [Overview](index=16&type=section&id=Overview) Introduces MicroVision's technology, strategic shift to licensing, and exploration of strategic alternatives - MicroVision, Inc. is a pioneer in laser beam scanning (LBS) technology, marketed as PicoP®, used in interactive projection, consumer LiDAR, automotive LiDAR, and augmented/mixed reality[67](index=67&type=chunk) - Due to the inability to secure a customer for a module product launch in 2020, the company is shifting its focus to licensing module products and technology, and exploring strategic alternatives like a sale or merger[68](index=68&type=chunk) - If successful in securing a significant licensing agreement or raising sufficient equity, the company plans to focus on developing its automotive LiDAR module[69](index=69&type=chunk) - In March 2020, the company transferred component production to a customer, now receiving royalties applied against a prepayment, aiming to conserve cash while retaining financial reward potential[70](index=70&type=chunk) [Impact of COVID-19 on Our Business](index=17&type=section&id=Impact%20of%20COVID-19%20on%20Our%20Business) Assesses the uncertain impact of the COVID-19 pandemic on business operations and financial condition - The COVID-19 pandemic's impact is uncertain but may affect business, operations, and financial condition, with full effects difficult to predict[73](index=73&type=chunk) - Supply chain disruptions from component suppliers operating at reduced capacity have resulted in lower than planned product shipments[74](index=74&type=chunk) - Remote work for most office-based employees may lead to reduced productivity and disruptions, potentially adversely affecting development activities, capital raising, licensing agreements, or M&A efforts[75](index=75&type=chunk) [Key accounting policies and estimates](index=17&type=section&id=Key%20accounting%20policies%20and%20estimates) Confirms no significant changes to critical accounting policies from the prior annual report - No significant changes to critical accounting judgments, policies, and estimates were made from the Annual Report on Form 10-K for the year ended December 31, 2019[76](index=76&type=chunk) [Results of operations](index=17&type=section&id=Results%20of%20operations) Analyzes revenue and expense performance for Q1 2020 versus Q1 2019, highlighting key changes [Product revenue](index=17&type=section&id=Product%20revenue) Analyzes the significant increase in product revenue and the shift in production arrangements Product Revenue (in thousands) | Period | 2020 | 2019 | $ Change | % Change | | :-------------------------- | :--- | :--- | :------- | :------- | | Three Months Ended March 31 | $1,247 | $199 | $1,048 | 526.6% | - The significant increase in product revenue was primarily due to product shipments to a major technology company[78](index=78&type=chunk) - In March 2020, the company completed an agreement for the customer to take over production of components, resulting in **zero product revenue backlog** at March 31, 2020[78](index=78&type=chunk) [License and royalty revenue](index=18&type=section&id=License%20and%20royalty%20revenue) Explains the increase in license and royalty revenue due to increased sales of royalty-bearing products License and Royalty Revenue (in thousands) | Period | 2020 | 2019 | $ Change | % Change | | :-------------------------- | :--- | :--- | :------- | :------- | | Three Months Ended March 31 | $212 | $- | $212 | - | - The increase in license and royalty revenue was primarily due to increased sales of royalty-bearing products[81](index=81&type=chunk) [Contract revenue](index=18&type=section&id=Contract%20revenue) Details the substantial decrease in contract revenue due to the completion of a major development contract Contract Revenue (in thousands) | Period | 2020 | 2019 | $ Change | % Change | | :-------------------------- | :--- | :--- | :------- | :------- | | Three Months Ended March 31 | $10 | $1,652 | $(1,642) | (99.4%) | - The substantial decrease in contract revenue was attributed to decreased contract activity, as the April 2017 customer contract was completed in 2019[83](index=83&type=chunk) - Contract backlog was **zero** at March 31, 2020, down from **$1.3 million** at March 31, 2019[83](index=83&type=chunk) [Cost of product revenue](index=18&type=section&id=Cost%20of%20product%20revenue) Examines the increase in cost of product revenue, including inventory write-downs Cost of Product Revenue (in thousands) | Period | 2020 | % of product revenue (2020) | 2019 | % of product revenue (2019) | $ Change | % Change | | :-------------------------- | :--- | :-------------------------- | :--- | :-------------------------- | :------- | :------- | | Three Months Ended March 31 | $1,395 | 111.9% | $288 | 144.7% | $1,107 | 384.4% | - Cost of product revenue increased due to higher product shipments, with inventory write-downs of **$168,000** recorded in Q1 2020[86](index=86&type=chunk) [Cost of contract revenue](index=19&type=section&id=Cost%20of%20contract%20revenue) Discusses the decrease in cost of contract revenue due to reduced development activity Cost of Contract Revenue (in thousands) | Period | 2020 | % of contract revenue (2020) | 2019 | % of contract revenue (2019) | $ Change | % Change | | :-------------------------- | :--- | :--------------------------- | :--- | :--------------------------- | :------- | :------- | | Three Months Ended March 31 | $4 | 40.0% | $955 | 57.8% | $(951) | (99.6%) | - The decrease in cost of contract revenue was primarily due to reduced activity on the April 2017 development contract, which was completed in 2019[87](index=87&type=chunk) [Research and development expense](index=19&type=section&id=Research%20and%20development%20expense) Analyzes the reduction in R&D expense driven by lower personnel and material costs Research and Development Expense (in thousands) | Period | 2020 | 2019 | $ Change | % Change | | :-------------------------- | :--- | :--- | :------- | :------- | | Three Months Ended March 31 | $3,683 | $5,973 | $(2,290) | (38.3%) | - The decrease in R&D expense was due to reduced personnel-related compensation and benefits, and lower direct materials and subcontractor costs[88](index=88&type=chunk) [Sales, marketing, general and administrative expense](index=19&type=section&id=Sales%2C%20marketing%2C%20general%20and%20administrative%20expense) Explains the decrease in SG&A expense due to reduced personnel and purchased services Sales, Marketing, General and Administrative Expense (in thousands) | Period | 2020 | 2019 | $ Change | % Change | | :-------------------------- | :--- | :--- | :------- | :------- | | Three Months Ended March 31 | $1,771 | $2,699 | $(928) | (34.4%) | - The decrease was attributed to reduced personnel-related compensation and benefits expenses, and lower purchased services[89](index=89&type=chunk) [Liquidity and capital resources](index=20&type=section&id=Liquidity%20and%20capital%20resources) Details the company's cash position, funding history, future capital needs, and going concern doubt - The company had **$2.3 million** in cash and cash equivalents at March 31, 2020, and has historically funded operations through stock sales, convertible securities, and development/licensing activities[91](index=91&type=chunk) - Current operating plans, including anticipated proceeds from Lincoln Park and a PPP loan, are expected to fund operations through **Q4 2020**, but additional capital will be required thereafter[92](index=92&type=chunk) - The need for additional capital raises substantial doubt about the company's ability to continue as a going concern, with plans to seek equity or debt, product sales, or licensing activities[92](index=92&type=chunk)[93](index=93&type=chunk) [Operating activities](index=20&type=section&id=Operating%20activities) Analyzes the change in cash used in operating activities, primarily due to reduced expenses - Cash used in operating activities decreased to **$5.4 million** in Q1 2020 from **$7.6 million** in Q1 2019, primarily due to reduced operating expenses[94](index=94&type=chunk) [Investing activities](index=20&type=section&id=Investing%20activities) Explains the shift in cash flow from investing activities, driven by asset sales - Net cash provided by investing activities was **$450,000** in Q1 2020, a shift from **$313,000** used in Q1 2019, driven by **$525,000** from the sale of fixed assets to a customer[95](index=95&type=chunk) [Financing activities](index=20&type=section&id=Financing%20activities) Details capital raised through stock issuances and other financing arrangements - The company raised **$2.4 million** through the issuance of **7.0 million shares** under the Lincoln Park Common Stock Purchase Agreement as of March 31, 2020[96](index=96&type=chunk) - In January 2019, **$1.2 million** was raised from a registered direct offering of **2.0 million common shares**[97](index=97&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) Assesses exposure to market risks, concluding that interest rate and foreign exchange rate risks are not material [Interest rate and market liquidity risk](index=20&type=section&id=Interest%20rate%20and%20market%20liquidity%20risk) Evaluates the company's exposure to interest rate fluctuations and market liquidity for cash and equivalents - All cash and cash equivalents have variable interest rates, leading to a belief that exposure to market and interest rate risk is not material[98](index=98&type=chunk) - The investment policy prioritizes principal preservation, adequate liquidity, and return for its **$2.3 million** in cash and cash equivalents[99](index=99&type=chunk) [Foreign exchange rate risk](index=21&type=section&id=Foreign%20exchange%20rate%20risk) Assesses the company's exposure to currency fluctuations, noting primary transactions are in U.S. dollars - Major contracts and payments are currently made in U.S. dollars, and exposure to currency fluctuations from past or future foreign currency arrangements is not considered material[100](index=100&type=chunk) [Item 4. Controls and Procedures](index=21&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, 2020, with no material changes to internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2020[101](index=101&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2020 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[101](index=101&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) Details ongoing legal matters, including an arbitration case, and confirms no other material adverse effects are expected - The company filed a Notice of Arbitration in Hong Kong against Ragentek in March 2019, seeking **$4.0 million** plus interest and arbitration costs for breach of a purchase order[103](index=103&type=chunk) - Management does not believe any other current legal proceedings are reasonably possible to have a material adverse effect on the company's financial position, results of operations, or cash flows[104](index=104&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) Outlines significant risks to the business, including operating losses, capital needs, COVID-19 impact, and competitive challenges [Risk Factors Related to Our Business and Industry](index=21&type=section&id=Risk%20Factors%20Related%20to%20Our%20Business%20and%20Industry) Highlights the company's history of substantial operating losses and accumulated deficit - The company has a history of substantial operating losses since inception, with an accumulated deficit of **$577.5 million** as of March 31, 2020, and expects to incur significant losses in the future[106](index=106&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) [Inability to secure customer for module products and strategic alternatives](index=22&type=section&id=We%20have%20been%20unable%20to%20secure%20a%20customer%20to%20launch%20one%20of%20our%20module%20products%20in%202020%2C%20as%20planned.%20As%20a%20result%2C%20we%20plan%20to%20focus%20our%20attention%20in%20the%20near%20term%20on%20licensing%20our%20module%20products%20and%20related%20technology%20to%20other%20companies.%20We%20are%20also%20exploring%20licensing%20of%20technology%20and%20designs%20and%20other%20strategic%20alternatives%20for%20moving%20forward%20without%20orders%20from%20the%20OEM%20for%202020%20delivery%2C%20including%20a%20potential%20sale%20or%20merger%20of%20the%20Company.%20There%20is%20substantial%20risk%20that%20these%20efforts%20will%20be%20unsuccessful.%20Such%20efforts%20may%20also%20be%20impeded%20by%20the%20impact%20of%20COVID-19%20on%20parties%20who%20might%20have%20otherwise%20been%20interested%20in%20pursuing%20a%20transaction%20or%20on%20economic%20and%20market%20conditions%20generally.) Discusses the failure to secure an OEM customer, leading to a strategic shift and associated risks - The company failed to secure an OEM customer for a module product launch in 2020, leading to a strategic shift towards licensing or exploring a potential sale/merger[110](index=110&type=chunk) - There is substantial risk that these strategic efforts will be unsuccessful, potentially exacerbated by the impact of COVID-19 on interested parties or general economic conditions[110](index=110&type=chunk) [COVID-19 Impact](index=22&type=section&id=COVID-19%20has%20had%20an%20adverse%20effect%20on%20our%20business%2C%20and%20the%20future%20Covid-19%20effects%20on%20our%20financial%20position%20and%20business%20prospects%20are%20uncertain.) Examines the adverse effects and uncertainties of the COVID-19 pandemic on business and financial prospects - The COVID-19 pandemic has adversely affected the business, and its future impact on financial position and business prospects remains uncertain due to various unpredictable factors[111](index=111&type=chunk) - Potential adverse impacts include reduced ability to raise capital, enter licensing agreements, delays in technology development, significant revenue declines from supply chain disruptions, reduced operating effectiveness from remote work, and challenges in completing a sale or merger[114](index=114&type=chunk) [Need for Additional Capital and Going Concern Doubt](index=22&type=section&id=We%20will%20require%20additional%20capital%20to%20fund%20our%20operations%20and%20to%20implement%20our%20business%20plan.%20If%20we%20do%20not%20obtain%20additional%20capital%2C%20we%20may%20be%20required%20to%20curtail%20our%20operations%20substantially.%20Raising%20additional%20capital%20may%20dilute%20the%20value%20of%20current%20shareholders'%20shares.) Addresses the critical need for additional capital, going concern doubt, and potential shareholder dilution - The company anticipates having sufficient cash to fund operations only through **Q4 2020** and will require additional capital thereafter, raising substantial doubt about its ability to continue as a going concern[112](index=112&type=chunk)[114](index=114&type=chunk) - Efforts to obtain additional capital through equity or debt securities, product sales, or licensing activities may not be successful or on acceptable terms, potentially leading to substantial operational curtailment and shareholder dilution[112](index=112&type=chunk)[114](index=114&type=chunk) - Capital requirements are uncertain and depend on factors like commercial success of LBS modules, OEM/ODM product introductions, market acceptance, and expense management[113](index=113&type=chunk) [Shareholder Approval for Proxy Items](index=23&type=section&id=Approval%20of%20items%20in%20our%202020%20Proxy%20is%20not%20assured.) Explains risks related to shareholder approval of proxy items, including potential Nasdaq delisting and funding limitations - Failure to approve a reverse stock split proposal could lead to Nasdaq delisting if the minimum **$1.00 bid price** requirement is not met by **August 24, 2020**[115](index=115&type=chunk) - Without approval for increasing authorized shares, the company's ability to raise cash for operations will be limited, potentially jeopardizing its going concern status[116](index=116&type=chunk) - Lack of approval for adding shares to the Employee Incentive Plan could hinder the ability to attract and retain skilled personnel in a competitive market[117](index=117&type=chunk) [Supply Chain and Manufacturing Risks](index=23&type=section&id=Qualifying%20a%20new%20or%20alternative%20contract%20manufacturer%20or%20foundry%20for%20our%20products%20could%20cause%20us%20to%20experience%20delays%20that%20result%20in%20lost%20revenues%20and%20damaged%20customer%20relationships.) Details risks associated with reliance on single-source suppliers and qualifying new contract manufacturers - The company relies on single or limited-source suppliers, and qualifying new manufacturers is a time-consuming process, risking delays, increased costs, lost revenues, and damaged customer relationships[119](index=119&type=chunk)[120](index=120&type=chunk) - Changes in the supply chain may lead to increased costs, delays, and risks related to product warranty, liability, and quality control standards[120](index=120&type=chunk) [Dependence on Third Parties](index=23&type=section&id=Our%20success%20will%20depend%2C%20in%20part%2C%20on%20our%20ability%20to%20secure%20significant%20third%20party%20manufacturing%20resources.) Highlights reliance on third-party manufacturing, licensing, and marketing arrangements and associated risks - Success depends on securing third-party manufacturing resources to produce components and products at competitive prices and on schedule[121](index=121&type=chunk) - The business strategy relies on development, manufacturing, licensing, sales, and marketing arrangements with OEMs, ODMs, and other third parties, which reduces control and introduces risks[123](index=123&type=chunk) - There is no certainty that such arrangements will be on acceptable terms or successful in yielding commercially viable products, potentially requiring additional capital and expertise if they fail[124](index=124&type=chunk)[125](index=125&type=chunk) [Market Acceptance Risk](index=24&type=section&id=We%20cannot%20be%20certain%20that%20our%20technology%20system%20or%20products%20incorporating%20our%20PicoP%C2%AE%20scanning%20technology%20will%20achieve%20market%20acceptance.%20If%20our%20technology%20system%20or%20products%20incorporating%20our%20technology%20do%20not%20achieve%20market%20acceptance%2C%20our%20revenues%20may%20not%20grow.) Discusses the uncertainty of market acceptance for PicoP® scanning technology and its impact on revenue growth - The company's success is contingent on customer acceptance of its PicoP® scanning technology, which must meet expectations in consumer electronics, automotive, and other markets[126](index=126&type=chunk) - Failure to achieve market acceptance for its technology or products could prevent revenue growth and further technology development[126](index=126&type=chunk) [Dependence on Third-Party Technology Advances](index=24&type=section&id=Future%20products%20incorporating%20our%20PicoP%C2%AE%20scanning%20technology%20and%20scanning%20modules%20are%20dependent%20on%20advances%20in%20technology%20by%20other%20companies.) Explains reliance on other companies for advances in key supporting technologies for future products - Future products incorporating PicoP® scanning technology rely on advances in technologies like laser diode light sources and other components developed by other companies[127](index=127&type=chunk) - There are no guarantees that supporting companies developing key technologies will result in useful or profitable products[127](index=127&type=chunk) [Customer Concentration and Revenue Volatility](index=24&type=section&id=We%20are%20dependent%20on%20a%20small%20number%20of%20customers%20for%20our%20revenue.%20Our%20quarterly%20performance%20may%20vary%20substantially%20and%20this%20variance%2C%20as%20well%20as%20general%20market%20conditions%2C%20may%20cause%20our%20stock%20price%20to%20fluctuate%20greatly%20and%20potentially%20expose%20us%20to%20litigation.) Addresses high customer concentration, potential revenue volatility, and stock price fluctuations - The company is highly dependent on a small number of customers, with **one customer accounting for 100% of revenue in Q1 2020**, making it vulnerable to customer loss[128](index=128&type=chunk) - Quarterly operating results can vary significantly due to factors like market acceptance, analyst recommendations, competitor announcements, and economic conditions, leading to stock price fluctuations and potential litigation[128](index=128&type=chunk)[131](index=131&type=chunk) [Performance Under Agreements](index=25&type=section&id=We%20or%20our%20customers%20may%20fail%20to%20perform%20under%20open%20orders%20or%20agreements%2C%20which%20could%20adversely%20affect%20our%20operating%20results%20and%20cash%20flows.) Outlines risks of non-performance by the company or customers under open orders and agreements - There is a risk that either the company or its customers may fail to meet performance requirements and obligations under agreements, including specifications, milestones, or delivery dates[132](index=132&type=chunk) - Such failures, or customers' inability/unwillingness to perform, could adversely affect operating results and cash flows, especially if products do not achieve market acceptance[132](index=132&type=chunk) [Nasdaq Listing Risk](index=25&type=section&id=We%20may%20not%20be%20able%20to%20maintain%20our%20listing%20on%20The%20Nasdaq%20Global%20Market%20and%20it%20may%20become%20more%20difficult%20to%20sell%20our%20stock%20in%20the%20public%20market.) Details the risk of delisting from The Nasdaq Global Market due to non-compliance with listing standards - The company faces a risk of delisting from The Nasdaq Global Market due to not meeting the minimum **$1.00 bid price** and **$50,000,000 market value** requirements[133](index=133&type=chunk)[135](index=135&type=chunk) - Nasdaq granted extensions for compliance until **August 24, 2020** (bid price) and **November 27, 2020** (market value) due to the COVID-19 pandemic[136](index=136&type=chunk) - Delisting could reduce stock liquidity, make it harder to sell shares, and potentially subject the stock to 'penny stock' rules[137](index=137&type=chunk)[138](index=138&type=chunk) [Competitive Disadvantage](index=26&type=section&id=Our%20lack%20of%20financial%20and%20technical%20resources%20relative%20to%20our%20competitors%20may%20limit%20our%20revenues%2C%20potential%20profits%2C%20overall%20market%20share%20or%20value.) Discusses the company's financial and technical resource limitations relative to competitors - Many competitors possess substantially greater financial, technical, and other resources, potentially enabling them to develop superior products or technologies[140](index=140&type=chunk) - The introduction of superior competing products could lead to reduced revenues, lower margins, or loss of market share, diminishing the company's value[140](index=140&type=chunk) [Rapid Technological Change](index=26&type=section&id=We%20may%20not%20be%20able%20to%20keep%20up%20with%20rapid%20technological%20change%20and%20our%20financial%20results%20may%20suffer.) Highlights the challenge of keeping pace with rapid technological changes in the industry - The consumer display and 3D sensing industries are characterized by rapidly changing technology and evolving standards, requiring continuous development and timely introduction of new products[141](index=141&type=chunk) - Failure to keep pace due to product development delays, lack of market acceptance, or insufficient funds for R&D and marketing could adversely affect financial results[141](index=141&type=chunk) [Intellectual Property Litigation Risk](index=26&type=section&id=We%20could%20face%20lawsuits%20related%20to%20our%20use%20of%20PicoP%C2%AE%20scanning%20technology%20or%20other%20technologies.%20Defending%20these%20suits%20would%20be%20costly%20and%20time-consuming.%20An%20adverse%20outcome%2C%20in%20any%20such%20matter%2C%20could%20limit%20our%20ability%20to%20commercialize%20our%20technology%20or%20products%20incorporating%20our%20PicoP%C2%AE%20scanning%20technology%2C%20reduce%20our%20revenues%20and%20increase%20our%20operating%20expenses.) Addresses the risk of lawsuits related to intellectual property and the costs of defense - The company is aware of third-party patents related to light scanning displays and 3D sensing, which could lead to infringement claims or challenges to its own patents[142](index=142&type=chunk) - Defending patent suits is costly and time-consuming, and an adverse outcome could limit commercialization, reduce revenues, increase operating expenses, or require licensing from third parties[143](index=143&type=chunk) [Management of Expansion and Cost Control](index=26&type=section&id=If%20we%20fail%20to%20manage%20expansion%20effectively%2C%20our%20revenue%20and%20expenses%20could%20be%20adversely%20affected.) Emphasizes the importance of effective growth management and cost control, especially after headcount reductions - Effective management of growth and relationships with customers and third parties is crucial, as expansion places significant strain on management systems and resources[144](index=144&type=chunk) - Failure to adequately reduce and control manufacturing, supply chain, and operating costs, especially after a substantial headcount reduction, could adversely affect business and financial condition[144](index=144&type=chunk)[145](index=145&type=chunk) [Regulatory and Economic Uncertainties](index=27&type=section&id=Our%20technology%20and%20products%20incorporating%20our%20PicoP%C2%AE%20scanning%20technology%20may%20be%20subject%20to%20future%20environmental%2C%20health%20and%20safety%20regulations%20that%20could%20increase%20our%20development%20and%20production%20costs.) Discusses potential impacts of future environmental, health, and safety regulations - Future environmental, health, and safety regulations could increase development and production costs for PicoP® scanning technology and products, with violations potentially leading to fines or production suspension[146](index=146&type=chunk) [Worldwide Political and Economic Uncertainties](index=27&type=section&id=Our%20operating%20results%20may%20be%20adversely%20impacted%20by%20worldwide%20political%20and%20economic%20uncertainties%20and%20specific%20conditions%20in%20the%20markets%20we%20address.) Examines how global political and economic uncertainties, including pandemics, can affect operations - Global economic downturns, including those caused by infectious diseases like COVID-19, could adversely affect the company's ability to raise capital, demand for products, and commercialization efforts[147](index=147&type=chunk) [Foreign Operations Risks](index=27&type=section&id=Because%20we%20plan%20to%20continue%20using%20foreign%20contract%20manufacturers%2C%20our%20operating%20results%20could%20be%20harmed%20by%20economic%2C%20political%2C%20regulatory%20and%20other%20factors%20in%20foreign%20countries.) Details risks associated with relying on foreign contract manufacturers, such as political instability and currency fluctuations - Continued reliance on foreign contract manufacturers exposes the company to risks such as political/economic instability, inflation, foreign laws/regulations, taxes, duties, and currency exchange rate volatility[148](index=148&type=chunk)[151](index=151&type=chunk) [Natural Disaster and Supply Chain Disruption](index=27&type=section&id=Our%20contract%20manufacturers'%20facilities%20could%20be%20damaged%20or%20disrupted%20by%20a%20natural%20disaster%20or%20labor%20strike%2C%20either%20of%20which%20would%20materially%20affect%20our%20financial%20position%2C%20results%20of%20operations%20and%20cash%20flows.) Highlights risks from natural disasters or labor strikes at manufacturing facilities - Major catastrophes (e.g., earthquakes, floods, infectious diseases like COVID-19) or labor strikes at contract manufacturers' facilities could cause prolonged business interruptions, significant delays, and loss of sales/customers[149](index=149&type=chunk) [Intellectual Property Protection](index=27&type=section&id=If%20we%20are%20unable%20to%20obtain%20effective%20intellectual%20property%20protection%20for%20our%20products%2C%20processes%20and%20technology%2C%20we%20may%20be%20unable%20to%20compete%20with%20other%20companies.) Stresses the importance of effective intellectual property protection and risks to competitive advantage - Effective intellectual property protection is crucial for competitive success, relying on patents and trade secrets for PicoP® scanning technology[150](index=150&type=chunk) - Uncertainty in patent scope, validity challenges, and the risk of trade secret disclosure could enable competitors to develop similar products, negatively affecting the company's competitive position[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) [Product Liability Claims](index=28&type=section&id=We%20could%20be%20subject%20to%20significant%20product%20liability%20claims%20that%20could%20be%20time-consuming%20and%20costly%2C%20divert%20management%20attention%20and%20adversely%20affect%20our%20ability%20to%20obtain%20and%20maintain%20insurance%20coverage.) Addresses inherent product liability risks and potential costs, reputational harm, and insurance challenges - The company faces inherent product liability risks, particularly for scanning modules that project light into users' eyes, which could lead to claims, negative publicity, and harm to reputation[154](index=154&type=chunk)[155](index=155&type=chunk) - Successful product liability claims could result in significant costs, divert management attention, and hinder the ability to obtain adequate insurance coverage[155](index=155&type=chunk) [Long Sales Cycles](index=28&type=section&id=Our%20contracts%20and%20collaborative%20research%20and%20development%20agreements%20have%20long%20sales%20cycles%2C%20which%20makes%20it%20difficult%20to%20plan%20our%20expenses%20and%20forecast%20our%20revenues.) Explains how long sales cycles make expense planning and revenue forecasting difficult - Long sales cycles for contracts and R&D agreements, often lasting several years, make it difficult to plan expenses and forecast revenues, leading to significant variability in operating results[156](index=156&type=chunk) - Infectious diseases like COVID-19 can further delay face-to-face meetings and contract closings, exacerbating forecasting challenges[156](index=156&type=chunk) [Exploratory Nature of Contracts](index=28&type=section&id=Our%20contracts%20and%20collaborative%20research%20and%20development%20agreements%20may%20not%20lead%20to%20any%20product%20or%20any%20products%20that%20will%20be%20profitable.) Notes that R&D agreements may not lead to profitable products - The company's contracts and collaborative R&D agreements are exploratory, and there is no guarantee that these efforts will result in the development of any profitable products[157](index=157&type=chunk) [Information Technology System Failures](index=29&type=section&id=Our%20operations%20could%20be%20adversely%20impacted%20by%20information%20technology%20system%20failures%2C%20network%20disruptions%2C%20or%20cyber%20security%20breaches.) Discusses risks from IT system failures, network disruptions, or cybersecurity breaches - Reliance on IT systems for data processing and protection exposes operations to risks from natural disasters, power loss, cyber attacks, and other disruptions[159](index=159&type=chunk) - System redundancy and disaster recovery planning may be inadequate, and insurance coverage for cyber risks may be insufficient to cover all potential losses[159](index=159&type=chunk) [Loss of Key Personnel](index=29&type=section&id=Loss%20of%20any%20of%20our%20key%20personnel%20could%20have%20a%20negative%20effect%20on%20the%20operation%20of%20our%20business.) Highlights the negative impact of losing key personnel and challenges in attracting new talent - The company's success depends on its executive officers and key personnel, and the ability to attract and retain qualified new personnel in a competitive market[160](index=160&type=chunk) - Inability to attract or the loss of highly skilled personnel could hinder the ability to compete effectively and adversely affect business strategy execution and results of operations[160](index=160&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed as part of the Form 10-Q, including various certifications by the Principal Executive Officer and Principal Financial Officer, as well as XBRL (eXtensible Business Reporting Language) documents - The exhibits include certifications from the Principal Executive Officer and Principal Financial Officer as required by the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002[161](index=161&type=chunk) - XBRL Instance Document and Taxonomy Extension Documents (Schema, Calculation, Definition, Label, Presentation) are also filed[161](index=161&type=chunk) [Signatures](index=30&type=section&id=Signatures) Contains the official signatures of MicroVision, Inc.'s Chief Executive Officer and Chief Financial Officer, certifying the accuracy and completeness of the Form 10-Q report - The report was duly signed on behalf of MicroVision, Inc. by Sumit Sharma, Chief Executive Officer and Director, and Stephen P. Holt, Chief Financial Officer, on May 7, 2020[164](index=164&type=chunk)[165](index=165&type=chunk)

MicroVision, Inc. (NASDAQ:MVIS) Q1 2020 Earnings Conference Call May 7, 2020 5:00 PM ET Company Participants Lindsey Stibbard – Paralegal Sumit Sharma – Chief Executive Officer Steve Holt – Chief Financial Officer Conference Call Participants Operator Greetings. Welcome to MicroVision First Quarter 2020 Financial and Operating Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please not ...

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, 2019 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 ...

MicroVision, Inc. (NASDAQ:MVIS) Q4 2019 Earnings Conference Call March 11, 2020 5:00 PM ET Company Participants Lindsey Stibbard Sumit Sharma - Chief Executive Officer Steve Holt - Chief Financial Officer Conference Call Participants Glenn Mattson - Ladenburg Thalmann Operator Good day, and welcome to the MicroVision Fourth Quarter 2019 Financial and Operating Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportuni ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 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 Othe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (425) 936-6847 (Registrant's Telephone Number, including Area Code) For the transition period from ________to _________ Commission file number 001-34170 MicroVision, Inc. (Exact name of registrant ...