MicroVision(US:MVIS)2025-08-07 21:58markdown [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%2E%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents MicroVision, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, shareholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, revenue recognition, financial instrument valuations, and other financial components for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The company's total assets increased by $19.46 million to $140.62 million as of June 30, 2025, primarily driven by a significant increase in cash and cash equivalents. Total liabilities decreased by $8.88 million, while shareholders' equity increased by $28.34 million | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $74,094 | $54,486 | $19,608 | 36.0% | | Total current assets | $103,183 | $82,470 | $20,713 | 25.1% | | Total assets | $140,617 | $121,161 | $19,456 | 16.1% | | Total current liabilities | $42,829 | $45,951 | $(3,122) | (6.8)% | | Total liabilities | $63,513 | $72,392 | $(8,879) | (12.3)% | | Total shareholders' equity | $77,104 | $48,769 | $28,335 | 58.1% | - Cash and cash equivalents **increased by 36.0%** to **$74.09 million** as of June 30, 2025, from **$54.49 million** at December 31, 2024[10](index=10&type=chunk) - Total shareholders' equity **increased by 58.1%** to **$77.10 million** as of June 30, 2025, from **$48.77 million** at December 31, 2024[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) MicroVision reported a net loss of $14.23 million for Q2 2025, an improvement from $23.93 million in Q2 2024. Revenue significantly decreased, but operating expenses and interest expense also saw substantial reductions, alongside unrealized gains on derivative and warrant liabilities | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $155 | $1,900 | $744 | $2,856 | | Gross (loss) profit | $(561) | $346 | $(522) | $25 | | R&D expense | $7,658 | $14,204 | $15,061 | $31,515 | | SG&A expense | $6,437 | $7,746 | $13,113 | $16,824 | | Loss from operations | $(14,656) | $(24,631) | $(28,696) | $(51,341) | | Net loss | $(14,229) | $(23,930) | $(43,008) | $(50,243) | | Net loss per share | $(0.06) | $(0.11) | $(0.18) | $(0.25) | - Revenue for the three months ended June 30, 2025, **decreased by 91.8%** to **$0.155 million** compared to **$1.900 million** in the same period of 2024[12](index=12&type=chunk) - Net loss **improved to $(14.23) million** for the three months ended June 30, 2025, from **$(23.93) million** in the prior year, and to **$(43.01) million** for the six months ended June 30, 2025, from **$(50.24) million** in the prior year[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The company's comprehensive loss for the three months ended June 30, 2025, was $13.83 million, an improvement from $23.99 million in the prior year, primarily due to a reduced net loss and a positive foreign currency translation adjustment | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(14,229) | $(23,930) | $(43,008) | $(50,243) | | Unrealized loss on investment securities, available for-sale | $(3) | $(11) | $(22) | $(45) | | Unrealized gain (loss) on translation | $402 | $(45) | $540 | $(64) | | Comprehensive loss | $(13,830) | $(23,986) | $(42,490) | $(50,352) | - Comprehensive loss for the six months ended June 30, 2025, **improved to $(42.49) million** from **$(50.35) million** in the prior year[15](index=15&type=chunk) - The company recognized an **unrealized gain on translation of $402 thousand** for the three months ended June 30, 2025, compared to a loss of **$45 thousand** in the prior year[15](index=15&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Total shareholders' equity increased to $77.10 million as of June 30, 2025, from $48.77 million at the beginning of the year, driven by significant sales of common stock and warrants, and conversions of notes payable, despite a net loss | Metric (in thousands) | Balance as of January 1, 2025 | Balance as of June 30, 2025 | Change | | :-------------------- | :---------------------------- | :-------------------------- | :----- | | Common Stock (shares) | 224,993 | 278,018 | 53,025 | | Common Stock (par value) | $225 | $278 | $53 | | Additional paid-in capital | $910,825 | $981,597 | $70,772 | | Accumulated deficit | $(862,281) | $(905,289) | $(43,008) | | Total shareholders' equity | $48,769 | $77,104 | $28,335 | - **Sales of common stock, net, and warrants contributed $44.99 million** to shareholders' equity for the six months ended June 30, 2025[18](index=18&type=chunk) - **Conversions of notes payable added $21.98 million** to shareholders' equity during the six months ended June 30, 2025[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, MicroVision significantly reduced cash used in operating activities and generated positive cash from investing activities, primarily due to investment securities sales. Financing activities provided substantial cash through common stock and warrant issuances | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(26,827) | $(39,393) | | Net cash provided by (used in) investing activities | $2,769 | $(7,413) | | Net cash provided by financing activities | $43,283 | $26,171 | | Change in cash, cash equivalents, and restricted cash | $19,544 | $(20,609) | | Cash, cash equivalents, and restricted cash at end of period | $75,791 | $28,782 | - **Net cash used in operating activities decreased by 31.9%** to **$(26.83) million** for the six months ended June 30, 2025, compared to **$(39.39) million** in the prior year[21](index=21&type=chunk) - **Net cash provided by financing activities increased by 65.4%** to **$43.28 million** for the six months ended June 30, 2025, from **$26.17 million** in the prior year[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering business description, accounting policies, per-share data, revenue recognition, investment securities, debt and warrant liabilities, financial statement components, share-based compensation, leases, commitments, common stock, income taxes, and restructuring charges [1. DESCRIPTION OF BUSINESS](index=11&type=section&id=1.%20DESCRIPTION%20OF%20BUSINESS) MicroVision develops proprietary products leveraging deterministic AI with perception and application software on lidar sensors for ADAS and autonomy in various industries, including automotive, robotics, and agriculture. The company has incurred significant losses but anticipates sufficient liquidity for the next 12 months - **MicroVision focuses on deterministic AI at the edge with innovative perception and application software running on diverse lidar sensors for ADAS and autonomy features**. Solutions are applied across robotics, automated warehouse, agriculture, mining, military, and automotive sectors[24](index=24&type=chunk) - The company had **$91.4 million in total liquidity** as of June 30, 2025, including **$74.1 million** in cash and cash equivalents and **$17.3 million** in short-term investment securities[27](index=27&type=chunk) - **MicroVision has approximately $76.5 million availability under its current at-the-market (ATM) facility and a remaining commitment of $30.0 million from a convertible note facility**[27](index=27&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The financial statements are prepared in accordance with US GAAP for interim information, consolidating wholly-owned subsidiaries. Key estimates involve valuations of intangibles, derivatives, warrants, revenue recognition, and share-based payments. The company operates as one reportable segment related to lidar hardware and software - The company operates in **one operating segment and one reportable segment**, focused on the sale and servicing of lidar hardware and software[32](index=32&type=chunk) - For the six months ended June 30, 2025, a leading agricultural equipment manufacturer and an automotive supplier accounted for **66%** and **22%** of total revenue, respectively[35](index=35&type=chunk) - Recently adopted ASU 2024-01 (Compensation: Stock Compensation) had **no material impact**. Recently issued ASUs 2023-09 (Income Taxes) and 2024-03 (Expense Disaggregation Disclosures) are expected to result in **incremental disclosures**, while ASU 2024-04 (Debt with Conversion) is **not expected to have a material impact**[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [3. NET LOSS PER SHARE](index=14&type=section&id=3.%20NET%20LOSS%20PER%20SHARE) Basic and diluted net loss per share for the three and six months ended June 30, 2025, were $(0.06) and $(0.18) respectively, improving from the prior year. Diluted EPS equals basic EPS due to anti-dilutive securities | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss available for common shareholders | $(14,229) | $(23,930) | $(43,008) | $(50,243) | | Weighted-average common shares outstanding | 254,658 | 208,665 | 245,347 | 202,706 | | Net loss per share - basic and diluted | $(0.06) | $(0.11) | $(0.18) | $(0.25) | - Securities excluded from diluted EPS calculation due to their anti-dilutive effect include **0.7 million** outstanding options, **21.2 million** nonvested restricted and performance stock units, **20.5 million** shares from derivative liability conversion, and **5.8 million** shares from warrant exercise as of June 30, 2025[45](index=45&type=chunk) [4. REVENUE RECOGNITION](index=15&type=section&id=4.%20REVENUE%20RECOGNITION) Total revenue for the three months ended June 30, 2025, was $0.155 million, a significant decrease from $1.900 million in the prior year, with most revenue recognized at a point in time. Contract liabilities decreased by 9.4% to $0.337 million | Revenue Type (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | License and Product Revenue | $34 | $1,697 | $538 | $2,552 | | Royalty Revenue | $81 | $152 | $166 | $199 | | Contract Revenue | $40 | $51 | $40 | $105 | | Total Revenue | $155 | $1,900 | $744 | $2,856 | | Contract Balances (in thousands) | June 30, 2025 | December 31, 2024 | $ Change | % Change | | :------------------------------- | :------------ | :---------------- | :------- | :------- | | Contract assets and accounts receivable | $104 | $926 | $(822) | (88.8)% |\n| Contract liabilities | $(337) | $(308) | $(29) | 9.4% | | Net contract (liabilities) assets | $(233) | $618 | $(851) | (137.7)% | - The company expects to recognize **100% of the remaining $0.3 million** contract liabilities as revenue over the next 12 months[50](index=50&type=chunk) [5. INVESTMENT SECURITIES, AVAILABLE-FOR-SALE AND FAIR VALUE MEASUREMENTS](index=16&type=section&id=5.%20INVESTMENT%20SECURITIES,%20AVAILABLE-FOR-SALE%20AND%20FAIR%20VALUE%20MEASUREMENTS) Investment securities available-for-sale decreased to $17.31 million as of June 30, 2025, from $20.22 million at December 31, 2024, consisting entirely of Level 2 corporate and U.S. Treasury debt securities with maturities less than one year | Investment Type (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Corporate debt securities | $13,036 | $14,001 | | U.S. Treasury securities | $4,277 | $6,215 | | Total | $17,313 | $20,216 | - **All investment securities are classified as Level 2** in the fair value hierarchy, indicating observable inputs other than quoted prices in active markets[55](index=55&type=chunk) - **All investment securities available-for-sale have maturity dates of less than one year**[57](index=57&type=chunk) [6. NOTES PAYABLE AND DERIVATIVE LIABILITY](index=18&type=section&id=6.%20NOTES%20PAYABLE%20AND%20DERIVATIVE%20LIABILITY) The company's notes payable, net carrying amount, decreased to $32.27 million as of June 30, 2025, from $33.00 million at December 31, 2024. A debt modification in February 2025 resulted in a $4.7 million realized loss on debt extinguishment and $2.1 million in interest expense. The derivative liability decreased significantly to $2.92 million from $14.58 million, resulting in an unrealized gain - On October 23, 2024, MicroVision **issued $45.0 million in senior secured convertible notes**, with an **option for an additional $30.0 million**[59](index=59&type=chunk) - A Letter Agreement on February 3, 2025, led to an **early conversion of $8.8 million of principal** into 11,725,337 shares of common stock and **deferred $11.6 million of principal repayments**. This modification **resulted in a $4.7 million realized loss on debt modification and $2.1 million in interest expense** for the six months ended June 30, 2025[61](index=61&type=chunk) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Notes payable, net carrying amount | $32,271 | $33,002 | | Derivative liability | $2,915 | $14,581 | [7. WARRANT LIABILITY](index=20&type=section&id=7.%20WARRANT%20LIABILITY) A new Securities Purchase Agreement in February 2025 resulted in the issuance of warrants to purchase 5,750,225 shares of common stock. The warrant liability was initially recorded at $6.3 million and subsequently remeasured to $3.73 million as of June 30, 2025, generating an unrealized gain of $2.56 million for the six months ended June 30, 2025 - On February 3, 2025, the company entered into a **new Securities Purchase Agreement for $8.0 million**, **selling 5,750,225 shares of common stock and warrants** to purchase an equal number of shares at an exercise price of **$1.57** per share[72](index=72&type=chunk) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Warrant liability | $3,733 | $- | | Metric (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------- | :------------------------------- | :----------------------------- | | Unrealized gain on warrant liability | $803 | $2,564 | [8. FINANCIAL STATEMENT COMPONENTS](index=21&type=section&id=8.%20FINANCIAL%20STATEMENT%20COMPONENTS) Inventory increased significantly to $6.13 million as of June 30, 2025, from $2.29 million at December 31, 2024, primarily due to higher finished goods. Net property and equipment slightly decreased, while intangible assets, mainly acquired technology, also saw a minor decrease | Inventory (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Raw materials | $2,361 | $1,616 | | Finished goods | $3,767 | $678 | | Total Inventory | $6,128 | $2,294 | | Asset (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Property and equipment, net | $6,739 | $7,061 | | Intangible assets, net | $10,510 | $10,972 | - **No impairment of intangible assets occurred** during the six months ended June 30, 2025, **compared to a $3.0 million impairment charge** on Reference software in Q2 2024[82](index=82&type=chunk) [9. SHARE-BASED COMPENSATION](index=22&type=section&id=9.%20SHARE-BASED%20COMPENSATION) Total share-based compensation expense for the six months ended June 30, 2025, was $3.85 million, a decrease from $7.10 million in the prior year. Unrecognized compensation related to RSUs and PSUs totals $17.0 million, to be expensed over the next 0.9 to 2.2 years | Expense Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development expense | $521 | $1,252 | $1,029 | $2,596 | | Sales, marketing, general and administrative expense | $1,409 | $2,101 | $2,822 | $4,500 | | Total share-based compensation expense | $1,930 | $3,353 | $3,851 | $7,096 | | RSU/PSU Activity (in thousands) | Shares | Weighted Average Price | | :------------------------------ | :----- | :--------------------- | | Unvested as of December 31, 2024 | 12,913 | $1.53 | | Granted | 10,568 | $1.15 | | Vested | (1,681) | $1.95 | | Forfeited | (577) | $1.74 | | Unvested as of June 30, 2025 | 21,223 | $1.30 | - As of June 30, 2025, **unrecognized share-based compensation related to RSUs was $11.0 million** (expensed over **2.2 years**) and **for executive PSUs was $6.0 million** (expensed over **0.9 years**)[90](index=90&type=chunk) [10. LEASES](index=24&type=section&id=10.%20LEASES) Total lease expense for the six months ended June 30, 2025, was $1.75 million, an increase from $1.33 million in the prior year. The company has operating lease right-of-use assets of $16.12 million and total operating lease liabilities of $18.65 million as of June 30, 2025 | Lease Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease expense | $867 | $668 | $1,742 | $1,333 | | Total finance lease expense | $3 | $- | $6 | $- | | Total lease expense | $870 | $668 | $1,748 | $1,333 | | Lease Balance Sheet (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets | $16,123 | $16,746 | | Total operating lease liabilities | $18,648 | $18,636 | - **The company subleased a portion of its Redmond office space**, commencing July 15, 2025, **providing $0.1 million in monthly rent** until April 2030[93](index=93&type=chunk) [11. COMMITMENTS AND CONTINGENCIES](index=25&type=section&id=11.%20COMMITMENTS%20AND%20CONTINGENCIES) MicroVision has remaining purchase commitments of approximately $2.3 million with a contract manufacturing partner for MOVIA sensor inventory, expected to be fulfilled through 2025 and 2026. The company is not currently party to any material legal proceedings - **Remaining future minimum payments of approximately $2.3 million** for MOVIA sensor inventory are **expected through the remainder of 2025 and 2026**[99](index=99&type=chunk) - The company is **not currently party to any legal proceedings that management believes are reasonably possible to have a material adverse effect** on financial position, results of operations, or cash flows[100](index=100&type=chunk) [12. COMMON STOCK](index=26&type=section&id=12.%20COMMON%20STOCK) As of June 30, 2025, MicroVision had $76.5 million remaining available under its $150 million ATM equity offering agreement, having completed sales of 54.8 million shares for net proceeds of $70.7 million - As of June 30, 2025, **$76.5 million remains available under the $150 million ATM equity offering agreement**[101](index=101&type=chunk) - **Sales under the ATM agreement totaled 54.8 million shares for net proceeds of $70.7 million** as of June 30, 2025[101](index=101&type=chunk) [13. INCOME TAXES](index=26&type=section&id=13.%20INCOME%20TAXES) Income tax expense for the six months ended June 30, 2025, was $0.17 million, primarily due to income in foreign jurisdictions, partially offset by a deferred income tax benefit from the Ibeo acquisition. No unrecognized tax positions exist | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $93 | $84 | $166 | $318 | - **Income tax expense for the six months ended June 30, 2025, was largely due to foreign jurisdiction income, offset by a deferred income tax benefit from the Ibeo acquisition**[103](index=103&type=chunk) [14. RESTRUCTURING CHARGES](index=26&type=section&id=14.%20RESTRUCTURING%20CHARGES) MicroVision incurred no restructuring charges during the six months ended June 30, 2025. In the first half of 2024, the company recognized $5.7 million in restructuring and reorganization charges, primarily for employee severance, due to a 37% global workforce reduction to align resources with product plans - **No restructuring charges were incurred** during the six months ended June 30, 2025[105](index=105&type=chunk) - **In the first half of 2024, the company recognized $5.7 million in restructuring and related reorganization charges**, **primarily for employee severance and benefits, due to a 37% global workforce reduction**[105](index=105&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on MicroVision's financial condition and results of operations, highlighting the company's strategic focus on AI-driven lidar solutions, the impact of the Ibeo acquisition and subsequent restructuring, and detailed analysis of revenue, expenses, and liquidity for the periods presented [Overview](index=27&type=section&id=Overview) MicroVision is focused on developing and commercializing proprietary AI-driven perception and application software for diverse lidar sensors, enabling ADAS and autonomy across various industries. The company acquired Ibeo assets in 2023, enhancing its lidar and software solutions, but has incurred significant losses and recently restructured its workforce to focus on core products - **MicroVision's core business involves proprietary products leveraging deterministic AI at the edge with perception and application software on lidar sensors for ADAS and autonomy in automotive, robotics, and industrial sectors**[108](index=108&type=chunk) - **In January 2023, the company acquired strategic assets of Germany-based Ibeo Automotive Systems GmbH, including automotive-qualified lidar sensors and perception software**[111](index=111&type=chunk) - In 2024, **MicroVision reduced its dedicated resources and investment** in MOSAIK™ validation software, implementing a **41% workforce reduction**, which **added $6.0 million to 2024 expenses** but **reduced go-forward operating costs**[113](index=113&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Revenue for the six months ended June 30, 2025, decreased by 73.9% to $0.74 million, primarily due to lower sensor sales to industrial customers. Operating expenses, including R&D and SG&A, significantly decreased due to lower personnel costs and restructuring. Interest expense surged due to debt discount amortization and warrant discounts, while unrealized gains on derivative and warrant liabilities partially offset losses | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $155 | $1,900 | $744 | $2,856 | | Cost of Revenue | $716 | $1,554 | $1,266 | $2,831 | | R&D Expense | $7,658 | $14,204 | $15,061 | $31,515 | | SG&A Expense | $6,437 | $7,746 | $13,113 | $16,824 | | Impairment loss on intangible assets | $- | $3,027 | $- | $3,027 | | Interest expense | $(2,170) | $(13) | $(15,073) | $(32) | | Unrealized gain on derivative liability | $1,952 | $- | $2,794 | $- | | Unrealized gain on warrant liability | $803 | $- | $2,564 | $- | | Realized loss on debt extinguishment | $- | $- | $(4,654) | $- | - **The decrease in revenue for the six months ended June 30, 2025, was primarily due to higher sales of MOVIA L sensors to Daimler Truck North America and affiliates as part of their RFQ evaluation processes in the comparable 2024 period**[118](index=118&type=chunk) - **Research and development expense decreased by 52.2% for the six months ended June 30, 2025**, **primarily due to lower salary and benefits expense ($8.0 million)** and **reduced restructuring charges ($5.0 million)**[124](index=124&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) MicroVision had $91.4 million in total liquidity as of June 30, 2025, and anticipates sufficient cash to fund operations for at least the next 12 months. Cash used in operating activities decreased significantly, while financing activities provided substantial cash through equity and warrant issuances - As of June 30, 2025, the company had **$74.1 million** in cash and cash equivalents and **$17.3 million** in short-term investment securities, totaling **$91.4 million in liquidity**[135](index=135&type=chunk) - The company has approximately **$76.5 million** available under its ATM facility and a remaining **$30.0 million** commitment from its convertible note facility[135](index=135&type=chunk) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(26,827) | $(39,393) | | Net cash provided by (used in) investing activities | $2,769 | $(7,413) | | Net cash provided by financing activities | $43,283 | $26,171 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) MicroVision's exposure to interest rate risk is not material due to short-term investment maturities. Foreign exchange rate risk exists due to significant European operations and foreign suppliers, with potential negative impacts from unfavorable currency fluctuations - **The company's exposure to market and interest rate risks is not material** due to the short-term maturities of its investment securities[140](index=140&type=chunk) | (in thousands) | Amount | Percent | | :------------- | :----- | :------ | | Cash and cash equivalents | $74,094 | 81.1% | | Less than one year (investment securities) | $17,313 | 18.9% | | Total | $91,407 | 100.0% | - **Unfavorable fluctuations in the U.S. dollar to Euro and other currencies may negatively impact financial condition and results of operations** due to significant international operations and foreign suppliers[142](index=142&type=chunk)[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, concluded that disclosure controls and procedures were effective as of June 30, 2025. No material changes to internal control over financial reporting occurred during the quarter - **Disclosure controls and procedures were evaluated and deemed effective** as of June 30, 2025[144](index=144&type=chunk)[145](index=145&type=chunk) - **No material changes in internal control over financial reporting occurred** during the quarter ended June 30, 2025[145](index=145&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) MicroVision is subject to various claims and lawsuits in the normal course of business but is not currently involved in any legal proceedings that management believes would have a material adverse effect on its financial position, results of operations, or cash flows - The company is **not currently party to any legal proceedings that management believes are reasonably possible to have a material adverse effect** on its financial position, results of operations, or cash flows[147](index=147&type=chunk) [Item 1A. Risk Factors](index=35&type=page&id=Item%201A.%20Risk%20Factors) MicroVision faces significant risks including a history of operating losses and expected future losses, the need for additional capital which could dilute current shareholders, revenue concentration from a small number of customers, and potential stock price volatility. Operational risks include supply chain dependencies, reliance on third-party partners, intellectual property challenges, product liability, IT system failures, and the loss of key personnel. The company also faces risks related to the rapidly evolving industrial and automotive markets, including OEM adoption delays, competition from alternative technologies, and difficulties in forecasting demand and pricing - **MicroVision has incurred significant losses since inception and expects to continue to incur significant losses in the near term, with an accumulated deficit of $905.3 million** as of June 30, 2025[149](index=149&type=chunk)[151](index=151&type=chunk)[154](index=154&type=chunk) - The company will **require additional capital beyond the next 12 months to fund operations**, and raising capital through equity or debt could dilute current shareholders or be unavailable on acceptable terms[152](index=152&type=chunk)[155](index=155&type=chunk) - **Revenue is highly concentrated**, with a leading agricultural equipment manufacturer accounting for **66%** and an automotive supplier for **22%** of total revenue for the six months ended June 30, 2025[156](index=156&type=chunk) - The **stock price has been volatile**, and there is a significant risk of failing to maintain compliance with Nasdaq's minimum bid price requirement, potentially leading to delisting[159](index=159&type=chunk)[164](index=164&type=chunk) - **Risks related to the convertible note include potential events of default, covenants, and significant dilution of common stock upon conversion**[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[180](index=180&type=chunk) - **Operational risks include difficulty in qualifying contract manufacturers, reliance on third parties, potential lawsuits related to LBS technology, challenges in managing expansion, competition from larger companies, environmental regulations, and geopolitical/economic uncertainties affecting foreign operations**[177](index=177&type=chunk)[178](index=178&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - **Market-specific risks include the significant time and resources required for OEM product selection, potential delays or defects in complex products, adverse conditions in industrial/automotive sectors, competition from alternative technologies (cameras, radar), and difficulties in forecasting customer adoption rates and demand in rapidly evolving markets**[207](index=207&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2025, none of MicroVision's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement - **No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements** during the three months ended June 30, 2025[215](index=215&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications, equity incentive plans, and XBRL-related documents - **Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer, the 2025 Executive Bonus Plan, the 2022 Equity Incentive Plan, and various Inline XBRL documents**[217](index=217&type=chunk) [Signatures](index=48&type=section&id=Signatures) The report is signed by Sumit Sharma, Chief Executive Officer and Director (Principal Executive Officer), and Anubhav Verma, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), on August 7, 2025 - **The report was signed by Sumit Sharma, CEO, and Anubhav Verma, CFO, on August 7, 2025**[220](index=220&type=chunk)