Good afternoon. And welcome to the MicroVision First Quarter 2025 Financial and Operating Results Conference Call. At this time, all participants are in a listen-only mode. Please note, this event is being recorded. I will now like to turn the conference over to Drew Markham. Please go ahead.

Thank you, operator. Good afternoon. I am here today with our Chief Executive Officer, Sumit Sharma, and our Chief Financial Officer, Anubhav Verma. Following their prepared remarks, our Chief Technology Officer, Glen DeVos will join us and we will open the call to questions. Please note that some of the information you'll hear in today's discussion will include forward-looking statements including, but not limited to, statements regarding status of commercial engagement, business, product, and go-to-market strategies, level of customer and partner engagement, cash, liquidity and the impacts of our recent financing activities, market landscape, opportunities, program volumes and timing, project development, performance of our products and solutions, product sales and future demand, projections of future operations, cash flow and financial results, availability of funds, and conditions for capital raising as well as statements containing words like believe, expect, plan or other similar expressions. These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statements. We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K and our quarterly reports on Forms 10-Q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking statements. All forward-looking statements are made as of the date of this call and except as required by law, we undertake no obligation to update this information. In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC's Regulation G. For reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure, as well as for all the financial data presented on this call, please refer to the information included in our press release and in our Form 8-K dated and submitted to the SEC today, both of which can be found on our corporate website at microvision.com under the SEC Filings tab. This conference call will also be available for audio replay on the investor relations section of our website at www.microvision.com. Now, I'd like to turn the call over to our Chief Executive Officer, Sumit Sharma. Sumit?

Thank you, Drew, and welcome, everyone, to this review of our first quarter 2025 results. I want to thank everyone for joining today's call. I will provide an update on the progress we have made towards commercial agreements in automotive and industrial markets, as well as expansion towards the military market with our existing products. I will also provide context about our already announced Investor Day event being hosted in Redmond. First, I would like to begin our update in engagements with automotive RFQ opportunities. We remain engaged in seven RFQs for automotive programs and are making incremental progress. This has been really slow going because of OEM's focus shifting to their global plans. Lots of ebbs and flows we continue to deal with. On one hand, it is clear to us that the current global rebalancing of trade is expected to have a huge refocus on automotive OEM's resources under supply chain issues. Advanced ADAS rollout is expected to be delayed with only very low volume LiDAR integration so far. On the other hand, we are engaged in new upcoming RFQ and custom development opportunities. We continue to support these potential customers with patience with the quickest path to on-ramp for any type of project. In previous years, we focused on winning programs targeted for production with several years of customization in play. These deals could be described as the ones our competitors signed. In each agreement, the challenge we faced was not our technology or capability; rather, the state of our balance sheet would always cause OEMs to pause. Let me elaborate a bit. Our competitors who went public as part of a D-SPAC collectively raised more than a billion dollars. OEMs required a strong balance sheet to feel confident that for the initial start, we had enough runway to fund their development. MicroVision has been running leaner on capital, so it was a huge challenge to get them comfortable with our cash on hand. Our competition has not fared well after winning early engagements. We strongly believe it is greenfield in the space with their lidar applications absolutely required for advanced ADAS and autonomy. With the strengthening of our balance sheet with the high-trail deal, we are in a stronger position than previously. So we continue to drive and make progress, but I do not expect any substantial projects to be awarded with material production revenues in the near future. We intend to focus on finding custom development opportunities with OEMs. Make no mistake with the ebbs and flows of the automotive demand. This will remain the largest opportunity that eventually could deliver millions of units shipped and billions of dollars of revenues generated from this segment. With our Movia, Mavin, and Movia S lidar products, we believe we have the entire suite of sensors to address all OEM inquiries. I remain very excited and optimistic about our industrial segment, though. Our in-production Movia L sensor integrated with onboard perception software is an advanced solution, which is frictionless for our customers to integrate. We have delivered software integrated solutions to multiple potential partners since last year. These evaluations remain in flight. We continue to make progress in this space, and I expect these engagements will lead to commercial wins for us. With our partnership with ZF, we have no exposure to China tariffs and remain cost-competitive with our economy at scales with Movia L and eventually Movia S. We remain fully engaged with our potential customers as they evaluate their rollout. Up to this point, none of our potential customers have made us aware of any impact on their timing due to the ongoing global trade rebalancing or tariffs. As I shared in our last earnings call, another segment we started expanding with engagements in 2024 was mobile autonomous robots, military and commercial vehicles with our LiDAR product. We have brought on a Defense Advisory Board that will help us on opportunities to engage with the Department of Defense with our software integrated sensor technology to potentially enable programs with drones and land vehicles, as well as help us explore potential opportunities with larger companies in space for a partnership. As I also mentioned previously, with our long history with delivering augmented reality for military, we remain focused on opportunities to leverage the large body of work. In this space, we expect to leverage our LiDAR products fused with radar and other third-party technologies into our software. We expect to partner with existing military primes to deliver full sensor intelligence solutions. This segment benefits from all the hardware and software building blocks that already exist within MicroVision. We expect the first system and product prototypes for this segment to be available in six to nine months. Next week, we will host Investor Day in Redmond. We are planning to make this an event in view of annual CES attendance. At this event, investors will get an opportunity to interact with our various technology offerings, as well as demos of how we plan to enable potential customers, including ride-along in our demo vehicle. Investors could have a deeper discussion with management on all the ups and downs of our journey so far, as well as get confidence on the stronger path we expect moving forward. I'm going to keep my prepared remarks brief today, as there are questions from several shareholders, and I'd like to address that as the main narrative. I would like to turn over the call to Anubhav. Anubhav?

Thanks, Sumit. I'd like to begin by reiterating Sumit’s comments. We're absolutely aligned with shareholders to quickly demonstrate step-function progress towards our commercial engagements with industrial customers for near-term, high-volume-based revenue. We remain deeply engaged with them for testing and integration of our solutions into their fleet. Next, I'd like to discuss the impact of the recently announced global tariffs. While the situation continues to be dynamic and evolving, we believe MicroVision remains well-positioned as we have our manufacturing partner in France. As announced late last year, we secured a production commitment with ZF in France to be able to meet the anticipated high-volume demand from customers in the industrial space for our Mobia L product. We believe this does offer yet another pricing advantage to some of our customers, given our minimal exposure to China-based manufacturing. Based on certain triggers, we are planning to bring up another site for Mobia L production later this year to meet the demand. We continue to closely monitor the tariff policy developments and will provide more updates on this later in the year. Now let me provide the progress in each of the verticals we're focused on. Number one, automotive. We continue to be engaged in the seven RFQs with automotive OEMs. However, the automotive industry is navigating a complex landscape shaped by actual and potential new tariffs. Some OEMs have suspended their annual guidance while some have quantified the potential impact of tariff-related costs. While LiDAR adoption appears to be a lower priority given the macroeconomic landscape, the direct impact of tariffs has pushed OEMs to focus even more on component costs and the origin of subsystems that go into their vehicles. OEMs will continue to go through the reformulation of existing and upcoming RFQs looking for cheaper LiDAR solutions that meet the desired performance criteria. Especially with Glen joining us from the automotive industry, we're excited to pursue our continued engagement with automotive OEMs. This vertical, albeit slower, will be the primary driver for high-volume recurring business that gets us to scale. Number two, industrial with a focus on AGV/AMR, and warehouse and factory automation. The various efforts in flight in the industrial space our team is focused on deep engagement with customers, including on-site, working closely with their teams to support evaluation and integration of our solutions into their fleet. We remain confident in the near-term demand from this vertical, especially after securing production capacity to meet this demand. We're seeing a lot of momentum in the AGV/AMR space as these companies continue to embrace autonomy and AI faster than others. With our current Mobia technology and secure production capabilities, we're well-positioned to grow in this space. Number three, the defense vertical. In the last few months, we established a Defense Advisory Board to execute our strategy in the defense vertical to map new opportunities for our products globally and pursue monetization of our existing product portfolio through near-term partnerships. Leveraging our existing product portfolio for formulating our go-to-market with the support and guidance of our distinguished industry advisors. The current administration has made the advancement of new technologies in defense a central priority, emphasizing rapid innovation through public-private partnerships. We will provide more updates on this at our upcoming Investor Day next week. We're thrilled to see our engineering team working closely with Glen to align our technology portfolio and strategically advance our product roadmap. With a capital raise in the first quarter and a streamlined cash burn, our cash runway has extended into 2026. MicroVision remains well-positioned in the marketplace with diversified near-term revenue opportunities in the industrial and defense sectors. The expanded TAMs, streamlined cost structure, and recent financing have solidified our position. Now let's review our Q1 financial performance. For the first quarter, we reported revenues of $0.6 million. This quarter's revenue was primarily driven by our sales in the industrial verticals. Expenses. Our first quarter 2025 R&D and SG&A expenses were $14.1 million, including $1.9 million of non-cash charges related to stock-based compensation expense and $1.4 million in non-cash charges related to depreciation and amortization. Backing out these non-cash charges, our R&D and SG&A expenses were only $11 million in the quarter. On a YOY basis, we have reduced our expenses by 45%. We expect the current level to be sustained through the rest of the year. We believe our existing workforce and level of expenses will allow us to execute on the current business strategy. We believe our current engineering teams can support continued engagement with automotive OEM and simultaneously scale faster with industrial and defense revenue opportunities in the near term. We believe that the go-forward annual run rate of our cash, R&D, and SG&A expense will be in line with our existing quarter. Q4 CapEx was $0.1 million in line with our expectations. Now let's talk about our balance sheet. We finished the quarter with $69 million in cash and cash flow equivalents. In addition, the company has availability of $113.4 million under the ATM facility and about $30 million of undrawn capital under the convertible note facility. Drawing on these facilities to their fullest extent requires additional authorized capital as well as certain favorable market conditions. On the convertible note, we have approximately $33 million outstanding that converts at a fixed price of $1.59 or approximately $1.60. The $30 million second tranche remains undrawn and available for future drawdowns subject to certain limitations. We're pleased to have found a strategic partner whose confidence in MicroVision's future has motivated an alignment of economic interest in step with our management team, employees, and shareholders. Now let's talk about 2025 targets. We remain relentlessly focused on our execution. We continue to have excellent engagement with industrial customers on their technology roadmaps. Based on the expected advancement in current customer engagement, along with targeted market opportunities, we believe we have line of sight to $30 million to $50 million in revenue over the next 12 to 18 months. Our production commitment from our manufacturing partners ZF allowed us to commit to high-volume deliveries to meet the anticipated demand from current customer projects. While we're not providing fiscal year 2025 guidance, this should help investors understand the size and level of engagement with customers for our Movia L sensors. As we expand our TAM into defense and other related areas and expand our solutions portfolio and accelerate our go-to-market strategy, we will provide more color on financial and business milestones for 2025 and 2026 and upcoming events. To summarize, we're really excited about 2025 and beyond as MicroVision drives forward with significantly higher TAMs, including defense and industrial, expansive and broadening solutions advancements, solid balance sheets and superior trading metrics, and a well-experienced team to execute the strategy.

I would now like to open the line for questions.

Good afternoon, everybody, and thank you for the great update. Thank you for taking my questions. So, the first question, I think, Anubhav, you mentioned the revenue for Q1 was actually from commercial sales. Is this the first quarter we've had some commercial sales versus, say, NREs or R&D work?

No, we have had commercial sales in the fourth quarter as well, Casey, so this just continues. This is just a continuing effort on that part.

Okay. Let me check something here. Alright, that's good. It seems like you are highlighting a focus on the industrial sector, which aligns with my understanding. What factors are influencing consumption? You mentioned a potential revenue range of $30 million to $50 million over the next 12 to 18 months. I’m curious about what is determining the speed of that revenue growth.

Yes. I'll take that one, Anubhav. Maybe you can help a little bit. So, I think what will drive that is primarily industrial, and in industrial space, there are automation activities and there's also activities to deploy ADAS with the LiDAR and create it on to everything you can get onto the sensor. So that's what's driving it, but it's primarily in the industrial space. We, of course, you know, all of us have very high hopes of what we want to achieve. But Q1 kind of froze up for almost everybody, right? There was a lot of decision. And we have worked through that now. Anubhav, you want to add something?

Yes, to expand on that, the trajectory of this $30 million to $50 million revenue will primarily be driven by the deployment and rollout by the end customers in their internal environments. This is largely motivated by their need to reduce costs and increase productivity. These are key factors influencing our customers' demand for these solutions to meet their objectives.

Yes, okay, so it feels very closely connected to the end customer versus, say, the hardware manufacturer who's consuming your product isn't necessarily building up some large level of inventory or sort of pre-ordering product yet, it doesn't sound like.

No, yes, so this is deployment across the customer's facilities and different environments that we are dealing with different customers in the AGV, AMR space.

Yes, okay, and then, please go ahead.

The customers could be classified as OEMs in this space.

Got it.

We're dealing with directly OEMs, so they don't build inventory; they are kind of roll it out –

Consuming in, like, real-time. Yes.

That's right.

I see. Okay. That's helpful. And then, would you be willing to characterize sort of the number of people you're dealing with? It's sort of more than one and less than 10, or would you care to characterize how many potential unique entities you guys are working with?

Yes, less than 10, yes, definitely more than one, but less than 10.

Okay. That's helpful. Okay, so a couple of other items very quickly. You mentioned military, and I think you have some partners for military, and you mentioned drones. What's filled with the military opportunities as you see them? Is it sort of all vehicles across all branches? Is it potentially specific to, like, one branch, or –

No, consider our product line. Our main offering is a sensor and software. We also have previous developments that enable us to integrate sensors with other technologies, and we can provide that capability. We are not a primary contractor in the military sector and are not pursuing billion-dollar contracts; instead, we aim to be a technology partner for a primary contractor to address specific issues. This opportunity resurfaced for us last year, as there seemed to be interest in our existing products, allowing us to quickly transition from a standstill to a working demonstration. We expanded our current product offerings to engage as many potential clients as possible. The new element mentioned in the earnings call today relates to drones. As we explore this area, we note the focus of the Department of Defense, aided by our newly formed advisory board; they are still getting familiar with our product range but are helping us align with market demand. We will discuss this further next week, emphasizing that our experience in the automotive sector with perception and sensor fusion can also be applied to drones for military purposes that our potential clients, including the Department of Defense and other smaller agencies, are investigating. This opportunity feels organic for us, especially since the automotive sector is currently slow but is expected to recover, while industrial activities are ongoing, albeit at a cautious pace. We need to remain patient as we await the right engagements, but this military opportunity was significant for us to pursue.

And how many primes should we think about you working with? Is there one significant prime, or do you have one now and you guys are open to working with multiple? Or are there multiple now that you guys are engaged with?

From the work we've done so far, there are several prime contractors to consider. In the past, we referred to primes like Lockheed or Northrop Grumman, which are different programs. Currently, the primes include many newer technology companies that are unfamiliar in the military sector. These companies operate differently, allowing for much faster engagement, similar to other tech companies. However, their revenues are usually below $10 billion, and sometimes even less than $1 billion. There are actually multiple such companies, not just one.

Okay, all right. That's helpful. And then sort of last thing for me, I think you mentioned that you guys have expanded your capacity again. And I think over the last 12 months, maybe the second time you've done that. And so I suppose we're looking sort of compared to the revenue, but tell me why you're doing that. It sounds like your customers are asking you to ramp up.

No, we haven't expanded the capacity. What I think I'm saying is that we expect to expand capacity later on this year based on agreements that we are able to get done. I think what capacity we have with ZF right now is perfectly adequate and sufficient, but we expect that if some agreements go a certain way, we are going to expand our capacity.

Okay. That's helpful. I suppose one nuance on that is sort of you talked about the $30 million to $50 million. If you do need to expand capacity, would it be fair to think that somehow, we're sort of at $50 million or above, that sort of part of that opportunity?

Yes. So I do think that, yes, if we end up expanding our capacity, we would hit the upper bound of that range, possibly beyond that.

Good. That's something to look for then. Well, it's been an exciting update. So thank you for taking all my questions. I appreciate it.

Your next question is from Jesse Sobelson with D. Boral Capital.

Hey, guys. Thanks for the update here. Thanks for taking my questions. It's good to see some progress on expanding the addressable markets. The first question I had was just on this defense piece of the business. Are you guys looking at strategic alliances that could potentially lead to equity investment, or are you currently solely focused on commercial arrangements?

Well, we're primarily focused on commercial arrangements right now.

Yes. Helpful to understand a little bit of detail there. I'm also just kind of curious. We talked $30 million to $50 million in potential next 12 to 18 months. That's been reiterated here in the Q&A so far. But I am kind of curious. DoD seems to be a little bit more of a focus this quarter than it was in the past when that $30 million to $50 million number was initially presented. Piggybacking off of that conversation on capacity, is defense work included in this potential $30 million to $50 million loose figure, or is it something that's incremental to current expectations for the business?

Yes, I think that's a great question, Jesse. No, look, I think the $30 million to $50 million we believe is primarily driven from the industrial vertical. For the defense vertical, it's still early days. But I think as Sumit pointed out, we're working to formulate our strategy and have more clarity in the upcoming events where we could provide and upgrade our revenue targets based on quantifying what kind of projects we're going to take part in through these partnerships like Sumit described. And I think one thing I would like to also highlight is obviously, MicroVision does have an existing intellectual property portfolio related to the ARP that we have. And obviously, we're at this point looking at all possible options as to how we can partner with other bigger players to accelerate their deployment and go to market as well. So that could result in monetization of that to different structures. But like I said, at this point, early days, and we would have more clarity on the revenue targets for this in the upcoming events.

Right. So it sounds like you're open to things such as co-development agreements and potential technology licensing, in addition to manufacturing products to be used in market equipment. Is that fair to say?

Right. So I think mostly the way the defense contracts will be expected to work through the partnership structure that I described would be typically in the form of ED&T revenue, which is engineering, design, and testing revenue, which is essentially the work, or if I could draw an analogy for you, that's the NRE equivalent to what we have been talking about in the automotive world, where the government entities, if they're directly engaged with the government or the prime estimate described, they would pay for the project where we are developing this. Keep in mind, we already have the building blocks of the technology. So it's really just putting together the solution, like the drone solution that Sumit mentioned, et cetera. But what it essentially translates into is the ED&T revenue that would start flowing through the system. And that's what I plan to update the numbers with once we have more clarity and more visibility into this sector.

Right. I appreciate the color here. And it sounds like it's a little bit of a wait-and-see approach for the time being, but excited to see what happens here. So thanks for taking my questions.

I will now turn this call back over to Anubhav Verma to read questions submitted through the webcast. Thank you.

Thank you, operator. All right. The first question, if we have the best-in-class sensor with the lowest price point, why are we not winning these industrial RFQs?

That's a good question. Actually, I think this is a reaction to some of the announcements that are coming from our other customers, our competitors. I can tell you that we are engaged with multiple customers that are evaluating. One of the challenges that always happens in here is now that you have software, now that you have hardware, I think that our investors, but also a lot of people just think about LiDAR company. When you think about automotive, you just output a LiDAR with a point cloud. In that sense, it's a LiDAR company. And there's a bunch of us competing in that space. In the industrial space, it is LiDAR plus the perception software on board. So there's integration, there's validation, there's, I would say, 90% of all the discussions that we've been part of for the last eight months with a group of customers, it's all about what the software does and how the software will connect to their software and how the qualification is going to happen, actually more than that eight months. So if you think about the evaluation part of it, it's not the hardware anymore. It is really how the software solves a specific problem for them. I get it. I think investors are frustrated, but I can assure you, nobody's more frustrated than I am about this. But it takes whatever time it takes, but I don't think it's going to take forever. I think things will converge sometime soon. So you have to think about it, right? Yes, you can have the best price point, but you also have to find an opportunity that you can actually sign a business that's profitable. And I'll give you a great example. Recently of more than one, less than 10 customers, there was one that we actually lost, but it was a small project. It was less than, I would say, 500 sensors are what they wanted. But what it required, what was the requirement for us to win that was to absorb something like almost a million dollars worth of development. And so pretty much at that point, yes, you can say you can get an announcement done, but it is not a sustainable model where you're actually burning through cash to win these things to just get the share price up. So long term, it was not the smartest thing to take care of. But we are getting closer to the point for the right customer, for the right volume, that it is time for us to push our chips in and actually take a risk for the right customer with the right volume. And we're getting closer to that. And again, you want not just one customer, you want multiple of them. So you have to reserve your capital based on who's the one that you want to make a bet behind. That's going to be advantageous long term. And that could actually turn into a sustainable business because there'll be others that will come on faster. So that's how we focus ourselves. I get this thing, the best-in-class sensor. Well, what's best-in-class for Mobia L? It's in production. It's very robust, solid state. Mobia S, it's I think we're going to talk about that in Q3 this year when we're going to announce it publicly. But it's a 180-degree sensor, whereas you have our competition from China and the U.S. talking about they're making 180-degree sensors. But if you know anything about physics, you'll know that their sensor, there's no way you can achieve 180 degrees because it's not, they're just showing some rendering where we actually have samples that we will show next week, mechanical samples of what we expect out of that. So, yes, having the great sensor is the building block that is important. Now comes the software for industrial, that how can we actually enable them with a, let's say, some of the ADAS features that were developed by our team in Hamburg a long time ago and deploy that into industrial. So it's going to take some time, but I don't think it's going to take a very long time to get to some conclusion here.

Thank you, Sumit. Of the prospective industrial customers that engage with MicroVision, how many are no longer involved? Have you lost some programs in your pipeline? Why? I guess you partly answered that. So maybe let me skip to the next one. How do you plan to compete with the existing players like Ouster and SICK in the industrial vertical?

That's a good question. The two ways that we're going to compete is, number one, we're going to sell our sensor with software on board. And since we have spent a lot of capital already developing this, and the same software is going to go across to multiple customers, as a standard, we're going to offer these features on there. So no more customers have to worry about custom NREs for some features, because the core development is all actually MicroVision's assets. So that's important, because what they're getting is not just a sensor that would require a software team from us or from them to integrate, but they get a full-blown solution. So we have to start engaging with industrial customers that are focused on that, not just a LiDAR, but they want a solution. The other one is the economy of scale. We have to start hitting price points that are significantly lower than any other competition, and that means we have to aggregate a lot of volume. I think other LiDAR companies are public as well. You know their ASP. The clear indication from everybody is that those ASPs are not sustainable. I think in the safety sensor space, SICK has got a very unique position. They have deployed that for many, many years, and ultimately when we described our safety sensor last year, eventually our intention is to go after that market as well. But at the moment, we want to just focus on the non-safety industrial market with the software. I'm pretty sure that we can take on Ouster, and I don't think there's any doubt that we have a better product. I think the spinners, our spinners, they may have some sort of reliability, but ultimately, they're mechanical sensors, right? And SICK is a mechanical sensor, but in limited life applications, perhaps they're okay. But if you want something robust that has to go for a long period of time, I think the solid-state sensor would be very competitive. And even Mavin as we start transitioning it to work while automotive is doing its own thing, finding applications for it in commercial vehicles or military or agriculture, mining, I think the robustness of the technology, we just have to make competitive, sign smart deals, so we're not starting off in the hole by financing somebody else's development. I think long term, we're going to be okay and be very competitive and probably more profitable because our expenses are going to be low and the profit margins per project are going to be much more compelling, in my opinion. Glen, would you like to add some color on this? I think you've been on board and you've had a chance to look at this as well.

Yes, thanks, Sumit. I appreciate the opportunity. And I think to build on your comments, one, the sensor being a solid-state sensor, not only does it have greater reliability in other sensing modalities, we got away from electromechanical sensors for just that reason, as well as, as you scale, having a solid-state solution gives you better positioning relative to reducing hardware costs while you scale. It's basically, it's a silicon solution and it really allows you to achieve lower hardware costs than simply scaling up electromechanical solutions. So, I think that's an important part of it. But as you said, it's not just the LiDAR sensor that delivers a point cloud. It has a significant amount of processing capability on board. And why that's important, it means that we can provide not just the point cloud, but we can provide perception, localization, as well as the LCAS, or the Driver Assistance Feature Set, and do that in a way that's essentially a bolt-on solution to the vehicle. So, whether it's a forklift or a tugger or some other type of vehicle, you don't have to cut into the vehicle or disturb the vehicle architecture. You can simply bolt this solution on, and that's tremendous from an ease of implementation standpoint, that's very good. You don't have to add another ECU, so from a system cost standpoint, it's very good. And then, ultimately, from a TAM perspective, it's great because it means it opens up existing vehicles to your solution, where you can essentially retrofit, all of which means time to revenue is reduced. So, I think the solution that we have with a smart sensor, going industrial, will be very competitive and very compelling for the OEMs. Anubhav, I'll turn it back over to you.

Thanks, Glen. Let me take the next question. What are the 2025 milestones that shareholders should track in each market, including industrial, defense, and automotive design wins, custom development agreements, partnership agreements, ideas?

Yes, I think in the industrial space, it’s all about taking our sensors that we’ve talked about and signing commercial deals. Certainly, we make as many sales as possible of the less than let's say 50, let's call them spot sales. I think that's how we refer to them always. But our focus, of course, is to find a group of anchor customers that essentially take up all the capacity that we have deployed already. That's primarily the way you can gauge that industrial market is moving along. So, you should be able to announce deals and you'll start seeing backlogs and revenues and normal business on Mobia L. On Mobia S, I think we're going to announce it publicly. And there's again, engagement will start. Pilot line will be sometime next year and then some sort of ramp. But we expect to start engaging some customers with that technology. But it's not something that's going to have a material impact on the revenues that I'm about to talk about. On the defense side, I think the best way to imagine is again, we're going to be a subcontractor to a prime. There will be most likely, as I've already mentioned, we would engage in some sort of customized development with some partial funding from them while we still maintain all the IP or exploration of our existing portfolio of technologies that we have shipped in the past and some sort of development agreements of what they want to see. Because anybody that wants to work deeply with a technology that's new to them, they always do a small project together to understand the team, understand the technology and the viability before they jump to the next one. So defense would be that. And longer term, I think the opportunity in defense is that there are smaller contracts, I'm saying sub-$500 million, maybe sub-$200 million contracts, where maybe a pilot program of maybe several hundred units or something has to be built or several hundred units have to be built. And you're part of those contracts where you have to deliver an integrated piece of hardware and software that kind of plugs into some device. So that's much more intimate. So the best way to engage in defense would be that. In automotive, I think I'm going to have Glen actually comment on this, but in automotive the best way to think about it is some sort of development agreement or early advanced prototyping for a future program that's coming or a RFQ that, again, will roll on for about a year before they'll award it. So that's about all we can do. But I don't expect meaningful revenues coming from it, but certainly some sort of partnership announcement for much smaller size opportunities.

Yes, I can add to that. Yes, I can add to that last comment. So the, I think you, the OEMs and talking to them as recently as last week, and the OEMs are going through a bit of a reformulation on level three. And the good news is all level three platforms still need LiDAR. So there's no change in approach in that regard. But really the first generation had limited success, very low volumes and take rates. And so now there's a bit of a kind of a refocusing on, well, what is that right solution? And I think pre-development contracts are normally how the next step in that environment where they test out and showcase what the solution could look like and validate cost models as well as performance models. And really trying to get to a value prop that the end consumer will buy. And what's exciting for us is in those discussions, and like I mentioned as recently as last week, we have the portfolio that between long range as well as short range wide field of view, extended range field of view. We have the portfolio that can really, I think, deliver a solution for them. So you probably have seen the pre-development contract prior to any big production contracts, but that's exactly where we are today.

Thank you, Glen. All right. Next question. Given that MicroVision is engaged in seven automotive RFQs and the typical timeline suggests OEMs might be making decisions for model year 2028 programs around this time, can you provide any update on the status of these engagements and whether there has been any significant progress or indications of timelines accelerating or solidifying during the first quarter this year?

Glen, do you want to take that since you have the most contact with the OEMs now?

Yes. I think timing wise; that's certainly the target is to be able to have solutions implemented in the model year or during calendar year 2028. That generally speaking is the timing that we've been talking about. And so what that means is if you think about it, it's already virtually mid-year 2025. That means you have to have solutions that are fairly mature and ready to go. And as I mentioned earlier, that's what's exciting about where we are in terms of the portfolio offering that we have, the software maturity that we have, and the different solutions that we can provide. And I would say those are active discussions right now. Once the OEMs kind of settle in on the technical solution, then it can move very quickly. Model year 2028, it's still aggressive, but it's still feasible if the OEMs move quickly really over the next, I would say, three months or so.

Thank you, Glen. All right. Next question is defense related. Why will MicroVision successfully secure business in the defense industry after years of unsuccess in the automotive and industrial markets?

Maybe I can start. Yes, go ahead.

Yes, maybe I'll just start and then turn it back over to you. A couple of things to highlight. One, these are very different markets, and if you think about automotive, there's really one application for LiDAR at this point in time. It's really level three driver assistance, and maybe some level two functions, but it's really, really around ADAS. When you look at the defense industry, there's multiple avenues for the application of the technology. There are drones. There are the unmanned autonomous vehicles. There's also AR headsets. There's terrain mapping. So, you have multiple areas where the technology is either being applied today in a very limited fashion or the defense industry is looking for solutions in a very aggressive fashion. So, you have a much greater number of opportunities to apply our portfolio, and what's also really good is it's the same technology that we would be applying, broadly speaking, to automotive or to industrial. It is in a whole different field from a technology standpoint for MicroVision. So we are applying those assets that we have effectively across those other verticals. Sumit, I'll turn it back to you.

Yes, I think part of the question is, like why after years of unsuccess in automotive and industrial, I think I get the frustration, but let's always focus on the reality of it. Let me be honest about this. Now, last year, we were deep into it with Daimler, as most of you know, and at that point, we chose to stop at a certain point because going forward would have meant more than $20 million of OpEx with them not covering anything when the economy was going in the wrong direction, and it was clear, small indication, that the OEMs by themselves were struggling with the long-term timelines to deliver what they had said, okay? I would argue that if we had actually done that deal, we're not here right now. We would have been in a much worse position, in my opinion, and the example of that, in that example, really, if you look at what happened to STEPCON, I'm pretty sure investors wanted to sign the deal, but we also have to evaluate because some of those investors wanted to trade on that information and move on to the next thing, but we really have to support the thesis that the company's going to be around to finish these contracts. That's a very important one, and Daimler, for example, was not the right one for us, right? It was not big enough, and I will tell you that the technical review and acceptance happened the year before, in 2023, and I would say Anubhav and I actually were going to these meetings four months into it, four to five months into it trying to convince them our balance sheet was going to be okay, that the ATM was a medium that was going to allow us to raise, and they wanted more capital because they wanted to make sure that the ATM was not going to be exercised, that their project would not be in trouble, and they would have to come in and fund it. If you think about all of this, right, I mean, those kind of projects, so you can say I was unsuccessful in automotive. I wouldn't say that. It's just, you want to get a deal done, but it's worse to get a bad deal done that's going to cause you to fail. So, yes, I expect you guys to come in next week and have some very, very direct questions. You're going to get direct answers with me, as always, but just think in these terms. At some point, the company has to survive. It's not just about announced something and trade on it and move on, and if you have a customer that's really giving an indication that they're not so certain about their timeline, but they expect you to put all your money in and all your investors to come along with it, you've got to really evaluate, right? So automotive has just been tough. Industrial market is just going I mean, I would say it's going really, really well. I think we have, we started the acquisition of Ibeo happen. All the asset transfer took a while. Production started late in 2023, in 2024. We did some work, which is anytime you go into industrial space expect somewhere between 12 to 24 months for adoption. We got the samples out. This is a very mature product. We started working on software, as I said, for the last nine months or more, rather than hardware. So it's moving along. So I would not say that industrial has not been demonstrated. I know everybody in every earnings call; they want something announced that we can go forward. And we have tried to navigate, but now we're to the point where we have the group of target customers and it's time for us to push our chips in and take a risk with the customers that are high enough volume. And they're trustworthy because the things that they're saying, they understand and acknowledge who we are. They see the balance sheet. They see the strength of it. And they see that we can solve their problem right now without any investment from them. So I think, like, keep that in context. Right. I think, like, so I think like what Glen is representing is the future, where we're going to take it. Things that we cannot imagine as MicroVision by itself, where the product is going to go. I'm happy to answer all the questions about the past, about automotive and industrial. Certainly whatever frustration investors have, we can cover that. But I think the opportunity that we have, if we sort of break it out, the defense is not something we just entered into because it was kind of cool. It's, we were given some indications that it was kind of important for us to be in this space because it's opening up and we had the opportunity with no extra expenses to go address that of things that we've already created. So certainly, we're expanding rather than just going towards the success. And I think in defense, we've done it in the past. We've had success there with multiple projects, multiple announcements. So defense is probably something that we're more confident on. And with Glen's help, of course, we can expand where we can be relevant in defense, specifically in drones and other military vehicles. And of course, AR.

Thanks Sumit. Next question. Would you say your LiDAR company or have you been fully morphed into an autonomous systems company? And if we're now more of a systems company, how have that retooled our approach to securing these new opportunities mentioned specifically industrial and defense?

I think that's a really good question. If you think about the three segments, I'll start on one end, high volume automotive. They will think of us as a LiDAR company for now that provides a clean point cloud and some software support. But really, they want to be the software company they go develop. So we're just a LiDAR company there. A lot of our competition is in that space as well. In industrial, we have already graduated to the next level where we are going to be, we are shipping product and eventually we expect to ship it in volume with software integrated on it. So the LiDAR is no longer LiDAR. It is an actual LiDAR solution, software that does something specific. Terms that we talk about like automotive ADAS, think about industrial ADAS. Those kind of features are enabled in this space for our customers. So therefore, they don't have to have huge investments in software development. They get a solution. They plug it and that solves a specific problem for them. When I think about the industrial space, now we are again at much lower volume. These margins. But now we're integrating our LiDAR, radar, other things that Glen will, of course, talk about as we go forward. And significantly more amount of software, but it's a full-blown solution that you could strap this thing onto a drone or strap this thing onto a military vehicle and it could do autonomous ADAS. So we have, in my opinion, broadened to all three segments. In each segment, we are offering higher and higher value proposition. So we are transitioning toward more of a software solutions company based on our hardware from LiDAR, but also the capability of integrating other hardware from radar and other technologies into a few systems that we can provide to the military and to industry. So I think our differentiation is naturally happening because the strength of our team in developing software is going to be highlighted more and more. We're going to talk about partnerships that we are enabling. It's not just because of our LiDAR and competitive price. It's our LiDAR competitive price and the software, what it enables for folks. Glen, do you want to add something to this?

I think you really said it well, Sumit. Depending on the end market, we have the right solution. We're a high-performance LiDAR sensor for the automotive space. And on the other extreme where we can provide the complete, not just the LiDAR perception, but multimodal perception, the full localization and environmental mapping, as well as features on top. And what's really impressive is that we have those assets across the entire company. And so we're not having to develop that from ground up. We're really just having to integrate and apply it. And so I'm really excited about what we'll be able to do across all of those verticals with the technology that we have.

Thanks, Glen. Next question. Why is MicroVision asking for more shares? Why are you asking for more shares than approved shares before with the promise that it was needed to show OEMs? We had financial stability, but we never got a deal. Why should investors vote to approve another 200 million more shares when no meaningful deal has been announced in the last four years?

Yes, I'll start with that. And Anubhav, perhaps you can help me on this one. So I think there are certain tools that the company needs to be able to work with our partners. And as I've said multiple times, and this is not the first earnings call I've shared this, that the concern that always keeps coming up is the long-term viability of the company. Now, if you go back to my prepared remarks, right, I've tried to highlight that in there to give context. Our competition, they raised significantly more capital because they went public with a D-SPAC. All along the way, we've been just raising as little as possible as we go forward. So I know, like the investors would love to hear, like how we're being competitive. But capital matters because most of the customers, especially the automotive, they expect you to invest $20 million, $25 million of your money while they have zero risk to get to some level of production and then have all the risk on top of that. So if you don't have the cash on hand, like some of our competition did, it has always been hard for us to convince them that we have viability, that we have the support, that we have an anchor customer. And since our investor base is so diverse, it's really hard for us to point that yes, we have an investor that can actually come in and support us, somebody with a high reputation. I think Anubhav has done a great job to, like try to get us to that point. We started with UBS. That did not happen. Deutsche Bank has been helping us a lot. And now if you think about Hytrel, I think we've done everything humanly possible to give them the confidence that we have anchor customers, anchor investors that can step in at the right moment for any kind of deal. Because to get the deal done, it's not about technology. I can assure you that. It'd be very hard for me to attract somebody like Glen to the company if it was like a big gap in technology or what magical things that can be built on top of what we already have. I think our problem has always been that they have to have a high confidence the company's going to survive for a period of time, execute on these and be able to expand the revenue base faster than other LiDAR companies. So support that. The company needs certain tools. I think management is with a very close council with our board of directors, we've come up with what we believe is what we need as tools to go forward with.

Yes, and I think, Sumit, to add to the point, obviously, 200 million more shares don’t mean that we're going to use those shares right away. It's more often optics as well, because when you are competing in defense contracts and big contracts, people would like to see the authorized capital, the number of outstanding shares as a percentage of your authorized capital to be some significant numbers. And I think we believe that 200 million would get us there. But I think I would just like to summarize four things that why now 200 million, right? I'd like to point out for the last seven, eight months, look at our consistently heavy trading volume. What that signifies is the visibility of MicroVision on not just retail, but institutional radar screens that sort of depicts the momentum that we already have generated, which is the most significant momentum that this company has ever seen in its recent history. Number two, in the last seven months, we had a $90 million investment commitment from one single investor. And I think you can count on fingers how many other companies have been able to do that. Number three, the quality of people who have joined MicroVision's executive team, as well as the Defense Advisory Board, that tells you that this is the time when people are looking to go all ships and believe in the future of the company. That itself is very significant of why the 200 million shares would get us to the stature of competing with the big boys. And I think the last thing is what I would say is this is more of an offtake which is a direct corollary of the first three factors is what I can just say is the investor day event, we had to double our capacity since two years ago. That shows the interest of people interested in MicroVision. And that's just retail. We have the second half of the day lined up with quality financial institutions joining us to know more about MicroVision. So that highlights the visibility that MicroVision has generated and the momentum that we have seen in the past 12 to 15 months, which is incredibly positive. And obviously, given the geopolitics that we're seeing usher in across the globe. So that's why I feel more confident and why this 200 million share authorization would get us in that lead. We're running out of time. So maybe one last question. Sumit, what do we expect on the investor day next week?

I think it's kind of important that I think CES has not been really that super expensive and it's not really been easy for us to connect with our investors and analysts. So we decided that we're going to actually host it here annually, about the same time. And it's, again, a great opportunity for us to show all the stuff we spend money, what we have created and what customers are going to learn too. So without talking directly about any specific customer we have not announced, you can get a really good idea of where technology is going to be deployed and ask specific questions so you get confidence in the product portfolio. We certainly are also going to talk about our future plans with all our products. Again, given the context that Anubhav has said that we're not expecting our cash expenses to increase, that we're going to run it tight. It will be a good opportunity to really understand how we're going to manage that and still create value. And of course, in the longer term, I think we get a lot of questions from our investors all the time. And to be honest, right, even our earnings call is very hard to address them because sometimes they're kind of out of context. They're more conversational. So our intention is to have a session like we did last time where ask us anything and if we can answer it in a public forum that we've covered in previous earnings calls, we will absolutely do it. And so we can have a more direct dialogue. So you have a clear understanding of what we're facing and where we're headed with it. So look forward to meeting you all again next week.

Thank you, Sumit. With this, we'd like to wrap our first quarter earnings call. Thank you again, everybody, for joining us. We look forward to seeing you next week.

Thank you. This concludes today's conference. All parties may disconnect. And have a great day.