Microvision, Inc 10-K for FY2019

Microvision, Inc. (MVIS)

10-K 2020-03-12 For: 2019-12-31

Added on April 11, 2026

About this 10-K

Microvision, Inc filed this 10-K on March 12, 2020, covering the fiscal year ended December 31, 2019 (FY2019).

Headline figures

Fiscal year ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.89M; down 49.5% from $17.61M a year earlier
Net loss: $26.48M; compared with a net loss of $27.25M a year earlier

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Delaware	91-1600822
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.001 par value per share	MVIS	The Nasdaq Stock Market LLC

Part I.		Page
Item 1.	Business	1
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	12
Item 2.	Properties	13
Item 3.	Legal Proceedings	13
Item 4.	Mine Safety Disclosures	13
Item 4A.	Executive Officers of the Registrant	13
Part II.
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	Selected Financial Data	14
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 8.	Financial Statements and Supplementary Data	23
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	45
Item 9A.	Controls and Procedures	45
Item 9B.	Other Information	47
Part III.
Item 10.	Directors, Executive Officers and Corporate Governance	47
Item 11.	Executive Compensation	47
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	47
Item 13.	Certain Relationships and Related Transactions and Director Independence	47
Item 14.	Principal Accounting Fees and Services	47
Part IV.
Item 15.	Exhibits, Financial Statement Schedules	48
Item 16.	Form 10-K Summary	49
Signatures		50

(In thousands, except per share data)		Year Ended December 31,
Statement of Operations Data		2019		2018		2017		2016		2015
Revenue	$	8,886	$	17,607	$	9,634	$	12,527	$	9,188
Net loss available for common shareholders		(26,483)		(27,250)		(25,486)		(17,981)		(14,542)
Basic and diluted net loss per share		(0.24)		(0.31)		(0.35)		(0.35)		(0.31)
Weighted-average shares outstanding basic and diluted		111,297		86,983		72,786		51,958		46,540
Balance Sheet Data
Cash and cash equivalents	$	5,837	$	13,766	$	16,966	$	15,139	$	7,888
Working capital (deficit)		(6,619)		(539)		4,143		11,417		3,371
Total assets		11,836		23,033		29,767		20,395		14,042
Long-term liabilities		1,357		728		607		238		6,491
Total shareholders' equity (deficit)		(3,977)		4,117		10,086		13,937		(153)

			% of			% of
			total			total
		2019	revenue		2018	revenue		$ change	% change
(In thousands)
Product revenue	$	5,345	60.2	$	-	-	$	5,345	-

			% of			% of
			product			product
		2019	revenue		2018	revenue		$ change	% change
(In thousands)
Cost of product revenue	$	6,692	125.2	$	5,468	-	$	1,224	22.4

			% of			% of
			contract			contract
		2019	revenue		2018	revenue		$ change	% change
(In thousands)
Cost of contract revenue	$	1,872	54.4	$	5,170	68.1	$	(3,298)	(63.8)

		Payments Due By Period
		‹ 1 year		1-3 years		3-5 years		> 5 years		Total
Contractual Obligations
Open purchase obligations *	$	8,235	$	184	$	46	$	-	$	8,465
Minimum payments under finance leases		27		9		-		-		36
Minimum payments under operating leases		656		1,372		175		-		2,203
Minimum payments under long-term liabilities		-		-		-		-		-
Minimum payments under research, royalty and
licensing agreements		12		24		24		-	†	60
	$	8,930	$	1,589	$	245	$	-	$	10,764

		Amount	Percent
Cash and cash equivalents	$	5,837	100	%
Less than one year		-	-
	$	5,837	100	%

	Page
Report of Independent Registered Public Accounting Firm	24

Consolidated Balance Sheets as of December 31, 2019 and 2018	25

Consolidated Statements of Operations for the years ended December 31, 2019 and 2018	26

Consolidated Statements of Shareholders' Equity (Deficit) for the years ended December 31, 2019 and 2018	27

Consolidated Statements of Cash Flows for the years ended December 31, 2019 and 2018	28

Notes to Consolidated Financial Statements	29

		December 31,
		2019		2018
Assets
Current assets
Cash and cash equivalents	$	5,837	$	13,766
Accounts receivable, net of allowances of $0 and $0, respectively		1,079		476
Costs and estimated earnings in excess of billings on uncompleted contracts		-		987
Inventory		192		1,109
Other current assets		729		1,311
Total current assets		7,837		17,649

Property and equipment, net		1,849		2,993
Operating lease right-of-use asset		1,308		-
Restricted cash		435		435
Intangible assets, net		221		486
Other assets		186		1,470
Total assets	$	11,836	$	23,033

Liabilities and shareholders' equity (deficit)
Current liabilities
Accounts payable	$	1,871	$	2,411
Accrued liabilities		2,045		5,602
Deferred revenue		21		-
Contract liabilities		9,755		-
Other current liabilities		83		10,154
Current portion of operating lease liability		656		-
Current portion of finance lease obilgations		25		21
Total current liabilities		14,456		18,188

Operating lease liability, net of current portion		1,348		-
Finance lease obligations, net of current portion		9		33
Deferred rent, net of current portion		-		695
Total liabilities		15,813		18,916

Commitments and contingencies (Note 12)

Shareholders' equity (deficit)
Preferred stock, par value $0.001; 25,000 shares authorized; zero and
zero shares issued and outstanding, respectively		-		-
Common stock, par value $0.001; 150,000 shares authorized;
125,803 and 100,105 shares issued and outstanding at December 31,
2019 and 2018, respectively		126		100
Additional paid-in capital		568,496		550,133
Accumulated deficit		(572,599)		(546,116)
Total shareholders' equity (deficit)		(3,977)		4,117
Total liabilities and shareholders' equity (deficit)	$	11,836	$	23,033

					Additional				Total
	Common Stock				paid-in		Accumulated		shareholders'
	Shares		Par value		capital		deficit		equity (deficit)
Balance at December 31, 2017	78,597	$	79	$	528,873	$	(518,866)	$	10,086
Share-based compensation expense	108		-		1,061		-		1,061
Sales of common stock	21,400		21		20,199		-		20,220
Net loss	-		-		-		(27,250)		(27,250)
Balance at December 31, 2018	100,105		100		550,133		(546,116)		4,117
Share-based compensation expense	822		1		1,613		-		1,614
Sales of common stock	24,876		25		16,750		-		16,775
Net loss	-		-		-		(26,483)		(26,483)
Balance at December 31, 2019	125,803	$	126	$	568,496	$	(572,599)	$	(3,977)

		Year Ended December 31, 2019
				License and
		Product		royalty		Contract
		revenue		revenue		revenue		Total
Timing of revenue recognition:
Products transferred at a point in time	$	5,345	$	99	$	178	$	5,622
Product and services transferred over time		-		-		3,264		3,264
Total	$	5,345	$	99	$	3,442	$	8,886

		Year Ended December 31, 2018
				License and
		Product		royalty		Contract
		revenue		revenue		revenue		Total
Timing of revenue recognition:
Products transferred at a point in time	$	-	$	10,011	$	189	$	10,200
Product and services transferred over time		-		-		7,407		7,407
Total	$	-	$	10,011	$	7,596	$	17,607

		2020		2021

Product revenue	$	6,680	$	-
License and royalty revenue		217		-

	Year Ended December 31,
	2019	2018
Options outstanding and warrants exercisable	5,104	6,619
Nonvested restricted stock units	1,215	1,149
	6,319	7,768

		December 31,
		2019		2018
Bonuses	$	201	$	1,475
Payroll and payroll taxes		425		608
Compensated absences		448		493
Warranty		38		25
Relocation		-		22
Deferred rent credit		-		178
Separation agreement		-		241
Prepayments from customers		432		1,585
Other		501		975
	$	2,045	$	5,602

		December 31,
		2019		2018
Production equipment	$	6,969	$	7,124
Leasehold improvements		913		909
Computer hardware and software/lab equipment		6,165		6,082
Office furniture and equipment		1,345		1,342
		15,392		15,457
Less: Accumulated depreciation		(13,543)		(12,464)
	$	1,849	$	2,993

Years Ended December 31,		Amount
2020	$	57
2021		49
2022		40
2023		32
2024		22
Thereafter		21
	$	221

				Weighted-average
				remaining		Aggregate
			Weighted-average	contractual		intrinsic
Options	Shares		exercise price	term (in years)		value
Outstanding as of December 31, 2017	5,034	$	2.94	6.6	$	53
Granted	1,229		1.16	-		-
Exercised	-		-	-		-
Forfeited or expired	(1,617)		3.51	-		-
Outstanding as of December 31, 2018	4,646		2.27	7.0		-
Granted	1,636		0.65	-		-
Exercised	-		-	-		-
Forfeited or expired	(1,178)		2.66	-		-
Outstanding as of December 31, 2019	5,104	$	1.66	7.4	$	122

Vested and expected to vest as of December 31, 2019	4,807	$	1.71	7.3	$	106

Exercisable as of December 31, 2019	2,355	$	2.45	5.6	$	3

		Year Ended
(in thousands)		December 31, 2019
Operating lease expense	$	464

Finance lease expense:
Amortization of leased assets		15
Interest on lease liabilities		6
Total finance lease expense		21
Total lease expense	$	485

(in thousands)		December 31, 2019
Operating leases
Operating lease right-of-use assets	$	1,308

Current portion of operating lease liability		656
Operating lease liability, net of current portion		1,348
Total operating lease liabilities	$	2,004

Finance leases
Property and equipment, at cost	$	66
Accumulated depreciation		(25)
Property and equipment, net	$	41

Current portion of finance lease obligations	$	25
Finance lease obligations, net of current portion		9
Total finance lease liabilities	$	34

Weighted Average Remaining Lease Term
Operating leases		3 years
Finance leases		1 year

Weighted Average Discount Rate
Operating leases		6.0%
Finance leases		13.8%

		Operating		Finance
(in thousands)		leases		leases
Years Ended December 31,
2020	$	656	$	27
2021		676		9
2022		696		-
2023		175		-
Thereafter		-		-
Total minimum lease payments		2,203		36
Less: amount representing interest		(199)		(2)
Present value of lease liabilities	$	2,004	$	34

		Fiscal Year 2019
		December 31,		September 30,		June 30,		March 31,
Revenue	$	4,605	$	1,190	$	1,240	$	1,851
Gross profit		1,179		(882)		(583)		608
Net loss		(3,284)		(6,141)		(8,990)		(8,068)
Net loss per share, basic and diluted		(0.03)		(0.05)		(0.08)		(0.08)

		Fiscal Year 2018
		December 31,		September 30,		June 30,		March 31,
Revenue	$	1,833	$	11,572	$	2,014	$	2,188
Gross profit		(2,606)		8,927		333		315
Net income (loss)		(11,948)		289		(8,459)		(7,132)
Net loss per share, basic and diluted		(0.13)		-		(0.10)		(0.09)

	Equity Compensation Plan Information
	Number of			Number of securities
	securities to be		Weighted-	remaining available for
	issued upon		average exercise	further issuance under
	exercise of		price of	equity compensation
	outstanding		outstanding	plans (excluding
	options, warrants		options, warrants	securities reflected in
	and rights		and rights	column (a))
Plan Category	(a)		(b)	(c)
Equity compensation plans approved by shareholders	5,104	$	1.66	2,989
Equity compensation plans not approved by shareholders	-		-	-
Total	5,104			2,989

				Additions
		Balance at		Charges		Charges				Balance
		beginning of		to costs and		to other				at end of
Year Ended December 31,		fiscal period		expenses		accounts		Deductions		fiscal period
2018
Tax valuation allowance	$	111,236	$	4,077	$	-	$	-	$	115,313

2019
Tax valuation allowance	$	115,313	$	2,412	$	-	$	-	$	117,725

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of MicroVision, Inc., as amended.⁽²⁾
3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of MicroVision, Inc.⁽⁴⁾
3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of MicroVision, Inc. dated June 7, 2018.⁽⁶⁾
3.4	Bylaws of MicroVision, Inc.⁽⁵⁾
4.1	Form of Specimen Stock Certificate for Common Stock.⁽¹⁾
4.2	Registration Rights Agreement, dated as of December 27, 2019, by and between MicroVision, Inc. and Lincoln Park Capital Fund, LLC.⁽⁹⁾
4.3	Description of Common Stock.
10.1	2013 MicroVision, Inc. Incentive Plan, as amended.^(8)*
10.2	Third Amendment to Lease Agreement between BRE WA Office Owner, LLC and MicroVision, Inc., dated July 25, 2017.⁽⁷⁾
10.3	Change of Control Severance Plan.^(3)*
10.4	Employment Agreement between MicroVision, Inc. and Perry Mulligan dated November 21, 2017.^(7)*
10.5	Purchase Agreement, dated as of December 27, 2019, by and between MicroVision, Inc. and Lincoln Park Capital Fund, LLC.⁽⁹⁾
23.1	Consent of Independent Registered Public Accounting Firm - Moss Adams LLP.
31.1	Principal Executive Officer Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Principal Financial Officer Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Principal Executive Officer Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350, Chapter 63 of Title 18, United States Code (18 U.S.C. 1350), as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
32.2	Principal Financial Officer Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350, Chapter 63 of Title 18, United States Code (18 U.S.C. 1350), as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

		MICROVISION, INC.
Date: March 11, 2020	By	/s/ Sumit Sharma Sumit Sharma Chief Executive Officer and Director

Signature	Title
/s/ Sumit Sharma Sumit Sharma	Chief Executive Officer and Director (Principal Executive Officer)

/s/ Stephen P. Holt Stephen P. Holt	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

/s/ Simon Biddiscombe Simon Biddiscombe	Director

/s/ Robert P. Carlile Robert P. Carlile	Director

/s/ Yalon Farhi Yalon Farhi	Director

/s/ Perry M. Mulligan Perry M. Mulligan	Director

/s/ Bernee D.L. Strom Bernee D.L. Strom	Director

/s/ Brian V. Turner Brian V. Turner	Director