false Q3 --12-31 0000065770 Yes Yes 0000065770 2024-01-01 2024-09-30 0000065770 2024-11-04 0000065770 2024-09-30 0000065770 2023-12-31 0000065770 2024-07-01 2024-09-30 0000065770 2023-07-01 2023-09-30 0000065770 2023-01-01 2023-09-30 0000065770 us-gaap:CommonStockMember 2023-06-30 0000065770 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0000065770 us-gaap:ReceivablesFromStockholderMember 2023-06-30 0000065770 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-06-30 0000065770 us-gaap:RetainedEarningsMember 2023-06-30 0000065770 2023-06-30 0000065770 us-gaap:CommonStockMember 2024-06-30 0000065770 us-gaap:AdditionalPaidInCapitalMember 2024-06-30 0000065770 us-gaap:ReceivablesFromStockholderMember 2024-06-30 0000065770 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-06-30 0000065770 us-gaap:RetainedEarningsMember 2024-06-30 0000065770 2024-06-30 0000065770 us-gaap:CommonStockMember 2022-12-31 0000065770 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0000065770 us-gaap:ReceivablesFromStockholderMember 2022-12-31 0000065770 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0000065770 us-gaap:RetainedEarningsMember 2022-12-31 0000065770 2022-12-31 0000065770 us-gaap:CommonStockMember 2023-12-31 0000065770 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0000065770 us-gaap:ReceivablesFromStockholderMember 2023-12-31 0000065770 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-12-31 0000065770 us-gaap:RetainedEarningsMember 2023-12-31 0000065770 us-gaap:CommonStockMember 2023-07-01 2023-09-30 0000065770 us-gaap:AdditionalPaidInCapitalMember 2023-07-01 2023-09-30 0000065770 us-gaap:ReceivablesFromStockholderMember 2023-07-01 2023-09-30 0000065770 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-07-01 2023-09-30 0000065770 us-gaap:RetainedEarningsMember 2023-07-01 2023-09-30 0000065770 us-gaap:CommonStockMember 2024-07-01 2024-09-30 0000065770 us-gaap:AdditionalPaidInCapitalMember 2024-07-01 2024-09-30 0000065770 us-gaap:ReceivablesFromStockholderMember 2024-07-01 2024-09-30 0000065770 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-07-01 2024-09-30 0000065770 us-gaap:RetainedEarningsMember 2024-07-01 2024-09-30 0000065770 us-gaap:CommonStockMember 2023-01-01 2023-09-30 0000065770 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-09-30 0000065770 us-gaap:ReceivablesFromStockholderMember 2023-01-01 2023-09-30 0000065770 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-01-01 2023-09-30 0000065770 us-gaap:RetainedEarningsMember 2023-01-01 2023-09-30 0000065770 us-gaap:CommonStockMember 2024-01-01 2024-09-30 0000065770 us-gaap:AdditionalPaidInCapitalMember 2024-01-01 2024-09-30 0000065770 us-gaap:ReceivablesFromStockholderMember 2024-01-01 2024-09-30 0000065770 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-01-01 2024-09-30 0000065770 us-gaap:RetainedEarningsMember 2024-01-01 2024-09-30 0000065770 us-gaap:CommonStockMember 2023-09-30 0000065770 us-gaap:AdditionalPaidInCapitalMember 2023-09-30 0000065770 us-gaap:ReceivablesFromStockholderMember 2023-09-30 0000065770 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-09-30 0000065770 us-gaap:RetainedEarningsMember 2023-09-30 0000065770 2023-09-30 0000065770 us-gaap:CommonStockMember 2024-09-30 0000065770 us-gaap:AdditionalPaidInCapitalMember 2024-09-30 0000065770 us-gaap:ReceivablesFromStockholderMember 2024-09-30 0000065770 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-09-30 0000065770 us-gaap:RetainedEarningsMember 2024-09-30 0000065770 MVIS:AtmEquityOfferingAgreementMember 2024-01-01 2024-09-30 0000065770 us-gaap:SubsequentEventMember 2024-10-23 2024-10-23 0000065770 MVIS:AtmEquityOfferingAgreementMember us-gaap:SubsequentEventMember 2024-10-23 0000065770 MVIS:AtmEquityOfferingAgreementMember us-gaap:SubsequentEventMember 2024-10-23 2024-10-23 0000065770 us-gaap:SalesRevenueNetMember MVIS:OneCustomerMember us-gaap:CustomerConcentrationRiskMember 2024-07-01 2024-09-30 0000065770 us-gaap:SalesRevenueNetMember MVIS:TwoCustomerMember us-gaap:CustomerConcentrationRiskMember 2024-07-01 2024-09-30 0000065770 us-gaap:SalesRevenueNetMember MVIS:ThreeCustomerMember us-gaap:CustomerConcentrationRiskMember 2024-07-01 2024-09-30 0000065770 us-gaap:SalesRevenueNetMember MVIS:OneCustomerMember us-gaap:CustomerConcentrationRiskMember 2023-07-01 2023-09-30 0000065770 us-gaap:SalesRevenueNetMember MVIS:OneCustomerMember us-gaap:CustomerConcentrationRiskMember 2024-01-01 2024-09-30 0000065770 us-gaap:SalesRevenueNetMember MVIS:TwoCustomerMember us-gaap:CustomerConcentrationRiskMember 2024-01-01 2024-09-30 0000065770 us-gaap:SalesRevenueNetMember MVIS:ThreeCustomerMember us-gaap:CustomerConcentrationRiskMember 2024-01-01 2024-09-30 0000065770 us-gaap:SalesRevenueNetMember MVIS:OneCustomerMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-09-30 0000065770 us-gaap:SalesRevenueNetMember MVIS:TwoCustomerMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-09-30 0000065770 us-gaap:SalesRevenueNetMember MVIS:ThreeCustomerMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-09-30 0000065770 us-gaap:SalesRevenueNetMember MVIS:FourCustomerMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-09-30 0000065770 us-gaap:AccountsReceivableMember MVIS:CustomersMember us-gaap:CustomerConcentrationRiskMember 2024-01-01 2024-09-30 0000065770 us-gaap:StockCompensationPlanMember 2024-01-01 2024-09-30 0000065770 us-gaap:StockCompensationPlanMember 2023-01-01 2023-09-30 0000065770 us-gaap:RestrictedStockUnitsRSUMember 2024-01-01 2024-09-30 0000065770 us-gaap:RestrictedStockUnitsRSUMember 2023-01-01 2023-09-30 0000065770 MVIS:IbeoAutomotiveSystemsMember 2023-01-31 2023-01-31 0000065770 MVIS:IbeoAutomotiveSystemsMember 2024-01-01 2024-03-31 0000065770 MVIS:IbeoAutomotiveSystemsMember 2023-01-31 0000065770 MVIS:IbeoAutomotiveSystemsMember 2023-01-01 2023-03-31 0000065770 MVIS:AcquiredTechnologyMember 2023-01-31 2023-01-31 0000065770 MVIS:OrderBacklogMember 2023-01-31 2023-01-31 0000065770 MVIS:ProductRevenueMember us-gaap:TransferredAtPointInTimeMember 2024-07-01 2024-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember us-gaap:TransferredAtPointInTimeMember 2024-07-01 2024-09-30 0000065770 MVIS:ContractRevenueMember us-gaap:TransferredAtPointInTimeMember 2024-07-01 2024-09-30 0000065770 us-gaap:TransferredAtPointInTimeMember 2024-07-01 2024-09-30 0000065770 MVIS:ProductRevenueMember us-gaap:TransferredOverTimeMember 2024-07-01 2024-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember us-gaap:TransferredOverTimeMember 2024-07-01 2024-09-30 0000065770 MVIS:ContractRevenueMember us-gaap:TransferredOverTimeMember 2024-07-01 2024-09-30 0000065770 us-gaap:TransferredOverTimeMember 2024-07-01 2024-09-30 0000065770 MVIS:ProductRevenueMember 2024-07-01 2024-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember 2024-07-01 2024-09-30 0000065770 MVIS:ContractRevenueMember 2024-07-01 2024-09-30 0000065770 MVIS:ProductRevenueMember us-gaap:TransferredAtPointInTimeMember 2024-01-01 2024-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember us-gaap:TransferredAtPointInTimeMember 2024-01-01 2024-09-30 0000065770 MVIS:ContractRevenueMember us-gaap:TransferredAtPointInTimeMember 2024-01-01 2024-09-30 0000065770 us-gaap:TransferredAtPointInTimeMember 2024-01-01 2024-09-30 0000065770 MVIS:ProductRevenueMember us-gaap:TransferredOverTimeMember 2024-01-01 2024-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember us-gaap:TransferredOverTimeMember 2024-01-01 2024-09-30 0000065770 MVIS:ContractRevenueMember us-gaap:TransferredOverTimeMember 2024-01-01 2024-09-30 0000065770 us-gaap:TransferredOverTimeMember 2024-01-01 2024-09-30 0000065770 MVIS:ProductRevenueMember 2024-01-01 2024-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember 2024-01-01 2024-09-30 0000065770 MVIS:ContractRevenueMember 2024-01-01 2024-09-30 0000065770 MVIS:ProductRevenueMember us-gaap:TransferredAtPointInTimeMember 2023-07-01 2023-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember us-gaap:TransferredAtPointInTimeMember 2023-07-01 2023-09-30 0000065770 MVIS:ContractRevenueMember us-gaap:TransferredAtPointInTimeMember 2023-07-01 2023-09-30 0000065770 us-gaap:TransferredAtPointInTimeMember 2023-07-01 2023-09-30 0000065770 MVIS:ProductRevenueMember us-gaap:TransferredOverTimeMember 2023-07-01 2023-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember us-gaap:TransferredOverTimeMember 2023-07-01 2023-09-30 0000065770 MVIS:ContractRevenueMember us-gaap:TransferredOverTimeMember 2023-07-01 2023-09-30 0000065770 us-gaap:TransferredOverTimeMember 2023-07-01 2023-09-30 0000065770 MVIS:ProductRevenueMember 2023-07-01 2023-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember 2023-07-01 2023-09-30 0000065770 MVIS:ContractRevenueMember 2023-07-01 2023-09-30 0000065770 MVIS:ProductRevenueMember us-gaap:TransferredAtPointInTimeMember 2023-01-01 2023-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember us-gaap:TransferredAtPointInTimeMember 2023-01-01 2023-09-30 0000065770 MVIS:ContractRevenueMember us-gaap:TransferredAtPointInTimeMember 2023-01-01 2023-09-30 0000065770 us-gaap:TransferredAtPointInTimeMember 2023-01-01 2023-09-30 0000065770 MVIS:ProductRevenueMember us-gaap:TransferredOverTimeMember 2023-01-01 2023-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember us-gaap:TransferredOverTimeMember 2023-01-01 2023-09-30 0000065770 MVIS:ContractRevenueMember us-gaap:TransferredOverTimeMember 2023-01-01 2023-09-30 0000065770 us-gaap:TransferredOverTimeMember 2023-01-01 2023-09-30 0000065770 MVIS:ProductRevenueMember 2023-01-01 2023-09-30 0000065770 MVIS:LicenseAndRoyaltyRevenueMember 2023-01-01 2023-09-30 0000065770 MVIS:ContractRevenueMember 2023-01-01 2023-09-30 0000065770 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2024-09-30 0000065770 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2024-09-30 0000065770 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2024-09-30 0000065770 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2024-09-30 0000065770 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2024-09-30 0000065770 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2024-09-30 0000065770 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2024-09-30 0000065770 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2024-09-30 0000065770 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2024-09-30 0000065770 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2024-09-30 0000065770 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2024-09-30 0000065770 us-gaap:FairValueMeasurementsRecurringMember 2024-09-30 0000065770 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2023-12-31 0000065770 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2023-12-31 0000065770 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2023-12-31 0000065770 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2023-12-31 0000065770 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2023-12-31 0000065770 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2023-12-31 0000065770 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2023-12-31 0000065770 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2023-12-31 0000065770 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2023-12-31 0000065770 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2023-12-31 0000065770 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2023-12-31 0000065770 us-gaap:FairValueMeasurementsRecurringMember 2023-12-31 0000065770 us-gaap:CorporateDebtSecuritiesMember 2024-09-30 0000065770 us-gaap:USTreasurySecuritiesMember 2024-09-30 0000065770 us-gaap:CorporateDebtSecuritiesMember 2023-12-31 0000065770 us-gaap:USTreasurySecuritiesMember 2023-12-31 0000065770 MVIS:CorporateDebtAndUsTreasurySecuritiesMember 2024-09-30 0000065770 MVIS:CorporateDebtAndUsTreasurySecuritiesMember 2023-12-31 0000065770 us-gaap:CorporateDebtSecuritiesMember 2024-09-30 0000065770 us-gaap:USTreasurySecuritiesMember 2024-09-30 0000065770 us-gaap:CorporateDebtSecuritiesMember 2023-12-31 0000065770 us-gaap:USTreasurySecuritiesMember 2023-12-31 0000065770 us-gaap:AssetManagementArrangementMember 2024-09-30 0000065770 2024-01-01 2024-06-30 0000065770 us-gaap:MachineryAndEquipmentMember 2024-09-30 0000065770 us-gaap:MachineryAndEquipmentMember 2023-12-31 0000065770 us-gaap:LeaseholdImprovementsMember 2024-09-30 0000065770 us-gaap:LeaseholdImprovementsMember 2023-12-31 0000065770 us-gaap:ComputerEquipmentMember 2024-09-30 0000065770 us-gaap:ComputerEquipmentMember 2023-12-31 0000065770 us-gaap:OfficeEquipmentMember 2024-09-30 0000065770 us-gaap:OfficeEquipmentMember 2023-12-31 0000065770 MVIS:AcquiredTechnologyMember 2024-09-30 0000065770 MVIS:AcquiredTechnologyMember 2024-01-01 2024-09-30 0000065770 MVIS:BacklogMember 2024-09-30 0000065770 MVIS:BacklogMember 2024-01-01 2024-09-30 0000065770 MVIS:AcquiredTechnologyMember 2023-12-31 0000065770 MVIS:AcquiredTechnologyMember 2023-01-01 2023-12-31 0000065770 MVIS:BacklogMember 2023-12-31 0000065770 MVIS:BacklogMember 2023-01-01 2023-12-31 0000065770 2023-01-01 2023-12-31 0000065770 us-gaap:CostOfSalesMember 2024-09-30 0000065770 us-gaap:ResearchAndDevelopmentExpenseMember 2024-09-30 0000065770 us-gaap:ResearchAndDevelopmentExpenseMember 2024-07-01 2024-09-30 0000065770 us-gaap:ResearchAndDevelopmentExpenseMember 2023-07-01 2023-09-30 0000065770 us-gaap:ResearchAndDevelopmentExpenseMember 2024-01-01 2024-09-30 0000065770 us-gaap:ResearchAndDevelopmentExpenseMember 2023-01-01 2023-09-30 0000065770 MVIS:SalesMarketingGeneralAndAdministrativeExpenseMember 2024-07-01 2024-09-30 0000065770 MVIS:SalesMarketingGeneralAndAdministrativeExpenseMember 2023-07-01 2023-09-30 0000065770 MVIS:SalesMarketingGeneralAndAdministrativeExpenseMember 2024-01-01 2024-09-30 0000065770 MVIS:SalesMarketingGeneralAndAdministrativeExpenseMember 2023-01-01 2023-09-30 0000065770 us-gaap:PerformanceSharesMember MVIS:ShareBasedPaymentArrangementNonExecutiveEmployeesMember MVIS:AnnualandShortTermIncentiveAwardsMember 2024-01-01 2024-09-30 0000065770 us-gaap:PerformanceSharesMember MVIS:ShareBasedPaymentArrangementNonExecutiveEmployeesMember MVIS:NewHireGrantsMember 2024-01-01 2024-09-30 0000065770 us-gaap:PerformanceSharesMember MVIS:ShareBasedPaymentArrangementExecutiveEmployeesMember MVIS:AnnualandShortTermIncentiveAwardsMember 2024-01-01 2024-09-30 0000065770 us-gaap:RestrictedStockUnitsRSUMember 2024-09-30 0000065770 us-gaap:RestrictedStockUnitsRSUMember 2024-01-01 2024-09-30 0000065770 us-gaap:PerformanceSharesMember MVIS:ShareBasedPaymentArrangementExecutiveMember 2024-09-30 0000065770 us-gaap:PerformanceSharesMember MVIS:ShareBasedPaymentArrangementExecutiveMember 2024-01-01 2024-09-30 0000065770 MVIS:ShareBasedPaymentArrangementNonExecutiveMember us-gaap:PerformanceSharesMember 2024-01-01 2024-09-30 0000065770 2021-09-01 2021-09-30 0000065770 2022-04-01 2022-04-30 0000065770 MVIS:FirstLeaseMember 2024-01-01 2024-09-30 0000065770 2022-09-01 2022-09-30 0000065770 MVIS:SecondLeaseMember 2024-01-01 2024-09-30 0000065770 MVIS:FirstLeaseMember 2023-01-01 2023-01-31 0000065770 MVIS:ThirdLeaseMember 2024-01-01 2024-09-30 0000065770 MVIS:SecondLeaseMember 2023-01-01 2023-01-31 0000065770 MVIS:ThirdLeaseMember 2023-01-01 2023-01-31 0000065770 MVIS:FinancialLeaseMember 2024-09-30 0000065770 MVIS:FinancialLeaseMember 2023-12-31 0000065770 srt:ScenarioForecastMember 2025-12-31 0000065770 MVIS:AtmEquityOfferingAgreementMember MVIS:AgentsMember 2024-03-01 2024-03-31 0000065770 MVIS:AtmEquityOfferingAgreementMember us-gaap:CommonStockMember MVIS:AgentsMember 2024-03-01 2024-03-31 0000065770 MVIS:AtmEquityOfferingAgreementMember MVIS:AgentsMember 2024-01-01 2024-09-30 0000065770 MVIS:AtmEquityOfferingAgreementMember us-gaap:CommonStockMember MVIS:AgentsMember 2024-01-01 2024-09-30 0000065770 MVIS:AtmEquityOfferingAgreementMember MVIS:CraigHallumMember 2023-06-01 2023-06-30 0000065770 MVIS:AtmEquityOfferingAgreementMember us-gaap:CommonStockMember MVIS:CraigHallumMember 2023-06-01 2023-06-30 0000065770 us-gaap:CommonStockMember MVIS:SalesAgreementMember 2023-01-01 2023-06-30 0000065770 MVIS:AtmEquityOfferingAgreementMember MVIS:CraigHallumMember 2021-06-01 2021-06-30 0000065770 MVIS:AtmEquityOfferingAgreementMember us-gaap:CommonStockMember MVIS:CraigHallumMember 2021-06-01 2021-06-30 0000065770 MVIS:AtmEquityOfferingAgreementMember MVIS:CraigHallumMember 2022-01-01 2022-12-31 0000065770 MVIS:AtmEquityOfferingAgreementMember MVIS:CraigHallumMember 2023-01-01 2023-03-31 0000065770 us-gaap:ForeignCountryMember 2024-07-01 2024-09-30 0000065770 us-gaap:ForeignCountryMember 2023-07-01 2023-09-30 0000065770 us-gaap:ForeignCountryMember 2024-01-01 2024-09-30 0000065770 us-gaap:ForeignCountryMember 2023-01-01 2023-09-30 0000065770 us-gaap:SubsequentEventMember MVIS:SecuritiesPurchaseAgreementMember 2024-10-14 0000065770 us-gaap:SubsequentEventMember 2024-10-14 2024-10-14 0000065770 us-gaap:SubsequentEventMember 2024-10-14 iso4217:USD xbrli:shares iso4217:USD xbrli:shares utr:sqft MVIS:Employees iso4217:EUR xbrli:pure

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 10-Q

 

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2024

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ________to _________

 

Commission file number 001-34170

 

 

MicroVision, Inc.
(Exact name of registrant as specified in its charter)

 

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

 

18390 NE 68th Street
Redmond, Washington 98052

(Address of Principal Executive Offices, including Zip Code)

 

(425) 936-6847
(Registrant’s Telephone Number, including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, $0.001 par value per share   MVIS   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days.

 YES ☒ NO ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 YES ☒ NO ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer ☐  
Non-accelerated filer ☐ Smaller reporting company  
  Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐ NO

 

The number of shares of the registrant’s common stock outstanding as of November 4, 2024 was 219,018,180.

 

 

 

 
 

 

TABLE OF CONTENTS

 

  Page
PART I. FINANCIAL INFORMATION  
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 3
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 4
Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2024 and 2023 5
Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2024 and 2023 6
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023   7
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21
Item 3. Quantitative and Qualitative Disclosures About Market Risk 25
Item 4. Controls and Procedures 25
   
PART II. OTHER INFORMATION  
Item 1. Legal Proceedings 26
Item 1A. Risk Factors 26
Item 5. Other Information 35
Item 6. Exhibits 36
Signatures 37

 

2
 

 

PART I.

 

ITEM 1. FINANCIAL STATEMENTS

 

MicroVision, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)

(Unaudited)

 

   September 30,   December 31, 
   2024   2023 
Assets          
Current assets          
Cash and cash equivalents  $16,523   $45,167 
Investment securities, available-for-sale   26,679    28,611 
Restricted cash, current   270    3,263 
Accounts receivable, net of allowances   232    949 
Inventory   4,486    3,874 
Other current assets   4,857    4,890 
Total current assets   53,047    86,754 
           
Property and equipment, net   7,668    9,032 
Operating lease right-of-use assets   12,090    13,758 
Restricted cash, net of current portion   1,572    961 
Intangible assets, net   12,563    17,235 
Other assets   1,322    1,895 
Total assets  $88,262   $129,635 
           
Liabilities and shareholders’ equity          
Current liabilities          
Accounts payable  $1,487   $2,271 
Accrued liabilities   5,893    8,640 
Accrued liability for Ibeo business combination   -    6,300 
Contract liabilities   180    300 
Operating lease liabilities, current   2,149    2,323 
Other current liabilities   902    669 
Total current liabilities   10,611    20,503 
           
Operating lease liabilities, net of current portion   11,662    12,714 
Other long-term liabilities   134    614 
Total liabilities   22,407    33,831 
           
Commitments and contingencies (Note 10)   -     -  
           
Shareholders’ equity          
Preferred stock, par value $0.001; 25,000 shares authorized; zero and zero shares issued and outstanding as of September 30, 2024 and December 31, 2023   -    - 
Common stock, par value $0.001; 310,000 shares authorized; 213,439 and 194,736 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively   213    195 
Additional paid-in capital   896,424    860,765 
Accumulated other comprehensive income   344    210 
Accumulated deficit   (831,126)   (765,366)
Total shareholders’ equity   65,855    95,804 
Total liabilities and shareholders’ equity  $88,262   $129,635 

 

The accompanying notes are an integral part of these financial statements.

 

3
 

 

MicroVision, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

 

   2024   2023   2024   2023 
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2024   2023   2024   2023 
                 
Revenue  $190   $1,047   $3,046   $2,158 
                     
Cost of revenue   583    625    3,414    1,870 
                     
Gross profit (loss)   (393)   422    (368)   288 
                     
Research and development expense   8,736    15,584    40,251    42,127 
Sales, marketing, general and administrative expense   6,599    8,743    23,423    27,172 
Impairment loss on intangible assets   -    -    3,027    - 
Gain on disposal of fixed assets   (22)   (10)   (22)   (25)
Total operating expenses   15,313    24,317    66,679    69,274 
                     
Loss from operations   (15,706)   (23,895)   (67,047)   (68,986)
                     
Bargain purchase gain, net of tax   -    -    -    1,706 
Other income   297    637    1,713    4,846 
                     
Net loss before taxes   (15,409)   (23,258)   (65,334)   (62,434)
                     
Income tax expense   (108)   (211)   (426)   (671)
Net loss  $(15,517)  $(23,469)  $(65,760)  $(63,105)
                     
Net loss per share - basic and diluted  $(0.07)  $(0.12)  $(0.32)  $(0.35)
                     
Weighted-average shares outstanding - basic and diluted   213,004    188,306    206,164    180,156 

 

The accompanying notes are an integral part of these financial statements.

 

4
 

 

MicroVision, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(Unaudited)

 

   2024   2023   2024   2023 
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2024   2023   2024   2023 
Net loss  $(15,517)  $(23,469)  $(65,760)  $(63,105)
                     
Other comprehensive income:                    
Unrealized gain on investment securities, available-for-sale   78    22    33    117 
Unrealized gain on translation   165    31    101    55 
Total comprehensive income   243    53    134    172 
Comprehensive loss  $(15,274)  $(23,416)  $(65,626)  $(62,933)

 

The accompanying notes are an integral part of these financial statements.

 

5
 

 

MicroVision, Inc.
Condensed Consolidated Statements of Shareholders’ Equity
(In thousands)
(Unaudited)

 

   Shares   value   capital   receivable   income (loss)   deficit   equity 
               Accumulated         
   Common Stock   Additional       other       Total 
       Par   paid-in   Subscriptions   comprehensive   Accumulated   shareholders’ 
   Shares   value   capital   receivable   income (loss)   deficit   equity 
Balance as of June 30, 2023   187,620   $188   $835,410   $(925)  $(8)  $(722,160)  $112,505 
Share-based compensation expense   411    -    4,343    -    -    -    4,343 
Exercise of options   11    -    7    -    -    -    7 
Sales of common stock, net   1,787    2    4,215    602    -    -    4,819 
Net loss   -    -    -    -    -    (23,469)   (23,469)
Other comprehensive income   -    -    -    -    53    -    53 
Balance as of September 30, 2023   189,829   $190   $843,975   $(323)  $45   $(745,629)  $98,258 
                                    
Balance as of June 30, 2024   211,961   $212   $894,005   $-   $101   $(815,609)  $78,709 
Share-based compensation expense   1,478    1    2,425    -    -    -    2,426 
Sales of common stock, net   -    -    (6)   -    -    -    (6)
Net loss   -    -    -    -    -    (15,517)   (15,517)
Other comprehensive income   -    -    -    -    243    -    243 
Balance as of September 30, 2024   213,439   $213   $896,424   $-   $344   $(831,126)  $65,855 
                                    
Balance as of January 1, 2023   170,503   $171   $772,221   $-   $(127)  $(682,524)  $89,741 
Share-based compensation expense   1,410    1    10,769    -    -    -    10,770 
Exercise of options   191    -    175    -    -    -    175 
Sales of common stock, net   17,725    18    60,810    (323)   -    -    60,505 
Net loss   -    -    -    -    -    (63,105)   (63,105)
Other comprehensive income   -    -    -    -    172    -    172 
Balance as of September 30, 2023   189,829   $190   $843,975   $(323)  $45   $(745,629)  $98,258 
                                    
Balance as of January 1, 2024   194,736   $195   $860,765   $-   $210   $(765,366)  $95,804 
Share-based compensation expense   3,642    3    9,519    -    -    -    9,522 
Exercise of options   84    -    62    -    -    -    62 
Sales of common stock, net   14,977    15    26,078    -    -    -    26,093 
Net loss   -    -    -    -    -    (65,760)   (65,760)
Other comprehensive income   -    -    -    -    134    -    134 
Balance as of September 30, 2024   213,439   $213   $896,424   $-   $344   $(831,126)  $65,855 

 

The accompanying notes are an integral part of these financial statements.

 

6
 

 

MicroVision, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

 

   2024   2023 
   Nine Months Ended 
   September 30, 
   2024   2023 
Cash flows from operating activities          
Net loss  $(65,760)   (63,105)
           
Adjustments to reconcile net loss to net cash used in operations:          
Depreciation and amortization   5,246    6,288 
Bargain purchase gain, net of tax   -    (1,706)
Gain on disposal of fixed assets   (22)   (25)
Impairment of intangible assets   3,027    - 
Impairment of operating lease right-of-use assets   406    - 
Impairment of property and equipment   -    12 
Inventory write-downs   127    61 
Share-based compensation expense   9,522    11,506 
Net accretion of premium on short-term investments   (776)   (986)
           
Change in:          
Accounts receivable   717    (740)
Inventory   (723)   (619)
Other current and non-current assets   606    (3,214)
Accounts payable   (784)   896 
Accrued liabilities   (2,747)   4,321 
Contract liabilities and other current liabilities   109    (1,405)
Operating lease liabilities   (1,944)   (1,813)
Other long-term liabilities   (488)   17 
Net cash used in operating activities   (53,484)   (50,512)
           
Cash flows from investing activities          
Sales of investment securities   28,311    61,700 
Purchases of investment securities   (25,570)   (27,101)
Cash paid for Ibeo business combination   (6,300)   (11,233)
Purchases of property and equipment   (271)   (1,981)
Net cash (used in) provided by investing activities   (3,830)   21,385 
           
Cash flows from financing activities          
Principal payments under finance leases   -    (19)
Proceeds from stock option exercises   62    175 
Net proceeds from issuance of common stock   26,093    60,607 
Net cash provided by financing activities   26,155    60,763 
           
Effect of exchange rate changes on cash and cash equivalents and restricted cash   133    - 
           
Change in cash, cash equivalents, and restricted cash   (31,026)   31,636 
Cash, cash equivalents, and restricted cash at beginning of period   49,391    21,954 
Cash, cash equivalents, and restricted cash at end of period  $18,365   $53,590 
           
Supplemental schedule of non-cash investing and financing activities          
Amounts issued to escrow for acquisition consideration  $-   $3,263 
Acquisition of right-of-use asset  $-   $1,294 
Accrued financing fees  $-   $101 
Issuance of common stock for subscriptions receivable  $-   $323 
Foreign currency translation adjustments  $101   $55 
Unrealized loss on investment securities, available-for-sale  $33   $117 

 

The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of September 30, 2024 and 2023:

 

   September 30,   September 30, 
   2024   2023 
Cash and cash equivalents  $16,523   $49,366 
Restricted cash, current   270    3,263 
Restricted cash, net of current portion   1,572    961 
Cash, cash equivalents and restricted cash  $18,365   $53,590 

 

The accompanying notes are an integral part of these financial statements.

 

7
 

 

MicroVision, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

 

1. DESCRIPTION OF BUSINESS

 

MicroVision, Inc. (“MicroVision” or “the Company”) delivers safe mobility at the speed of life through its hardware and software solutions focused primarily on advanced driver-assistance systems (“ADAS”) and autonomous vehicle (“AV”) applications. The Company is a global developer and supplier of light detection and ranging (“lidar”) sensors and perception and validation software. With the acquisition of the experienced team from Ibeo Automative Systems GmbH (“Ibeo”) in January 2023, MicroVision has combined a long history of developing and commercializing the core components of its lidar hardware and related software with experience in automotive-grade qualification.

 

Liquidity

 

The Company has incurred significant losses since inception. Operations to date have been funded primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales, and licensing activities.

 

As of September 30, 2024, the Company had total liquidity of $43.2 million including $16.5 million in cash and cash equivalents and $26.7 million in short-term investment securities. In addition, the Company has approximately $122.6 million availability under its current at-the-market (“ATM”) facility as of September 30, 2024. Subsequent to the date of these financial statements, on October 23, 2024, the Company issued $45.0 million in senior secured convertible notes for gross proceeds of $41.4 million. See Note 14. Subsequent Events for detail. After giving effect to the net proceeds from the first $45.0 million tranche of the financing transaction, the Company expects to have approximately $81.2 million in cash and cash equivalents and access to $152.6 million of additional capital, including $122.6 million under its existing ATM facility and $30.0 million from the remaining commitment pursuant to the convertible note facility. Based on the current operating plan, the Company anticipates having sufficient cash and cash equivalents to fund operations for at least the next 12 months from the issuance of these condensed consolidated financial statements.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation and Basis of Presentation

 

The unaudited condensed consolidated financial statements and accompanying notes include the accounts of the Company and its wholly owned subsidiaries, after elimination of all intercompany balances and transactions. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2023. The information as of December 31, 2023 included in the condensed consolidated balance sheets was derived from those audited financial statements.

 

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial information for the interim periods presented. The unaudited condensed consolidated results of operations for the interim period are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other future annual or interim period.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts therein. The most significant estimates and assumptions relate to business combinations, valuation of intangibles, revenue recognition, inventory valuation, valuation of share-based payments, income taxes, depreciable lives assessment and related disclosure of contingent assets and liabilities. Due to the inherent uncertainty involved, actual results reported in future periods could differ from those estimates.

 

8
 

 

Foreign Currency Translation

 

Foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in currencies other than the functional currency. Realized gains and losses on those foreign currency transactions are included in determining net loss for the period of exchange and are recorded in other income in the condensed consolidated statements of operations.

 

Segment Information

 

The Company determines operating segments based on how the chief operating decision maker (“CODM”) manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. The CODM is the Executive Management team. The Company has determined that it operates in one operating segment and one reportable segment, relating to the sale and servicing of lidar hardware and software, as the CODM regularly reviews financial information presented on a consolidated basis.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to a concentration of credit risk are primarily cash, cash equivalents, and investment securities. As of September 30, 2024, cash and cash equivalents are comprised of operating checking accounts and short-term highly rated money market savings accounts. Short-term investments are comprised of highly rated corporate bonds and U.S. Treasury securities.

 

For the three months ended September 30, 2024, three customers accounted for 65%, 16%, and 11% of total revenue, respectively. For the same period in 2023, one customer accounted for 71% of total revenue.

 

For the nine months ended September 30, 2024, three customers accounted for 55%, 20%, and 10% of total revenue, respectively. For the same period in 2023, four customers accounted for 38%, 17%, 11%, and 10% of total revenue, respectively.

 

As of September 30, 2024, accounts receivable related to these customers accounted for 92% of total accounts receivable, net of allowances on the condensed consolidated balance sheets.

 

Typically, a significant concentration of components and the products sold are manufactured and obtained from single or limited-source suppliers. The loss of any single or limited-source supplier, the failure of any of these suppliers to perform as expected, or the disruption in the supply chain of components from these suppliers could subject the Company to risks and uncertainties including, but not limited to, increased cost of sales, possible loss of revenues, or significant delays in product development or product deliveries, any of which could adversely affect the Company’s financial condition and operating results.

 

Recently Issued Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update expand annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. All disclosure requirements under this standard will also be required for public entities with a single reportable segment. ASU 2023-07 is effective for the Company for annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. The ASU is not expected to have a material impact on the Company’s financial statement disclosures.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for the Company for annual periods beginning January 1, 2025, with early adoption permitted. The ASU is expected to result in incremental disclosures to the Company’s financial statements.

 

In March 2024, the FASB issued ASU No. 2024-01, Compensation: Stock Compensation (Topic 718). The amendments in this ASU clarify existing guidance related to profits interest and similar awards. ASU 2024-01 is effective for annual and interim periods for the Company beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact this ASU may have on its financial statements and related disclosures.

 

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this ASU require additional disclosure of specified information about certain costs and expenses in the notes to the financial statements. ASU 2024-03 is effective for annual periods for the Company beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the impact this ASU may have on its financial statement disclosures.

 

9
 

 

3. NET LOSS PER SHARE

 

Basic net loss per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated using the weighted-average number of common shares outstanding and the dilutive effect of all potentially dilutive securities, including common stock equivalents and convertible securities. As the effect of dilutive securities outstanding during the period is anti-dilutive, diluted net loss per share is equal to basic net loss per share.

 

The components of basic and diluted net loss per share are as follows (in thousands, except loss per share data):

 

   2024   2023   2024   2023 
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2024   2023   2024   2023 
Numerator:                
Net loss available for common shareholders - basic and diluted  $(15,517)  $(23,469)  $(65,760)  $(63,105)
                     
Denominator:                    
Weighted-average common shares outstanding - basic and diluted   213,004    188,306    206,164    180,156 
Net loss per share - basic and diluted  $(0.07)  $(0.12)  $(0.32)  $(0.35)

 

For the three and nine months ended September 30, 2024 and 2023, the following securities from net loss per share have been excluded as the effect of including them would have been anti-dilutive: outstanding options exercisable into a total of 0.7 million and 0.8 million shares of common stock, respectively, and 12.7 million and 10.3 million nonvested restricted and performance stock units, respectively.

 

4. BUSINESS COMBINATION

 

On January 31, 2023, the Company completed the acquisition of certain net assets of Ibeo, a lidar hardware and software provider based in Hamburg, Germany. The purpose of the acquisition was to acquire certain Ibeo assets, primarily intellectual property and personnel, which enabled the Company to expand their technology and product portfolio and diversify revenue streams.

 

Total consideration related to this transaction was approximately EUR 20.0 million or $21.6 million, consisting of approximately (i) EUR 7.0 million or $7.6 million in cash paid at closing, (ii) EUR 6.6 million or $7.1 million in cash advanced to Ibeo prior to closing, (iii) EUR 3.0 million or $3.3 million released from escrow during the quarter ended March 31, 2024, (iv) EUR 0.6 million or $0.7 million in costs paid on behalf of the seller, and (v) EUR 2.7 million or approximately $3.0 million after calculating the deduction in purchase price agreed between both the parties. The remaining balance of approximately EUR 2.7 million was paid during the three months ended June 30, 2024 and was previously recorded as an accrued liability for Ibeo business combination on the condensed consolidated balance sheet. In addition, the Company incurred $0.6 million of acquisition-related costs associated with the acquisition during the three months ended March 31, 2023, which were included in Sales, marketing, general and administrative expense.

 

The transaction was accounted for as a business combination. The results of operations for the acquisition are included in the condensed consolidated financial statements from the date of acquisition onwards.

 

10
 

 

The following table summarizes the final purchase price allocation to assets acquired and liabilities assumed (in thousands):

  

       Weighted Average 
   Amount   Useful Life
(in Years)
 
Total purchase consideration  $21,611      
           
Inventory  $1,197      
Other current assets   703      
Operating lease right-of-use assets   234      
Property and equipment, net   5,330      
Intangible assets:          
 Acquired technology(1)   17,987    13 
 Order backlog   26    1 
Contract liabilities   (1,178)     
Operating lease liabilities   (234)     
Deferred tax liabilities   (785)     
Total identifiable net assets  $23,280      
Bargain purchase gain(2)   (1,669)     

 

(1)During the three months ended June 30, 2024, the Company recognized a $3.0 million impairment charge on certain identified intangible assets acquired in this business combination. See Note 7. Financial Statement Components.
(2)The bargain purchase gain represents the excess of the fair value of the underlying net assets acquired and liabilities assumed over the purchase consideration and is included in bargain purchase gain, net of tax in the condensed consolidated statements of operations. The bargain purchase gain was attributable to the negotiation process with Ibeo during its insolvency proceedings resulting in cash consideration paid being less than the fair value of the net assets acquired.

 

The estimated fair value of acquired technology was calculated through the income approach using the multi-period excess earnings and relief from royalty methodologies. The estimated fair value of the order backlog was calculated through the income approach using the multi-period excess earnings methodology.

 

5. REVENUE RECOGNITION

 

The following is a description of principal activities from which the Company generates revenue. Revenues are recognized when control of the promised goods or services are transferred to customers, in an amount that reflects the consideration that the Company expect to receive in exchange for those goods or services.

 

The Company evaluates contracts based on the 5-step model as stated in Topic 606 as follows: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price, and (v) recognize revenue when (or as) performance obligations are satisfied.

 

A contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group of promises) that is distinct, as defined in the revenue standard.

 

The transaction price is the amount of consideration an entity expects to be entitled to from a customer in exchange for providing the goods or services. A number of factors should be considered to determine the transaction price, including whether there is variable consideration, a significant financing component, noncash consideration, or amounts payable to the customer. The determination of variable consideration will require a significant amount of judgment. In estimating the transaction price, the Company will use either the expected value method or the most likely amount method.

 

The transaction price is allocated to the separate performance obligations in the contract based on relative standalone selling prices. Determining the relative standalone selling price can be challenging when goods or services are not sold on a standalone basis. The revenue standard sets out several methods that can be used to estimate a standalone selling price when one is not directly observable. Allocating discounts and variable consideration must also be considered. Allocating the transaction price can require significant judgement on the Company’s part.

 

Revenue is recognized when (or as) the customer obtains control of the good or service/performance obligations are satisfied. Topic 606 provides guidance to help determine if a performance obligation is satisfied at a point in time or over time. Where a performance obligation is satisfied over time, the related revenue is also recognized over time.

 

11
 

 

Disaggregation of Revenue

 

The following table provides information about disaggregated revenue by timing of revenue recognition (in thousands):

 

   Revenue   Revenue   Revenue   Total 
   Three Months Ended September 30, 2024 
       License and         
   Product   Royalty   Contract     
   Revenue   Revenue   Revenue   Total 
Timing of revenue recognition:                    
Products transferred at a point in time  $65    125           -   $190 
Product and services transferred over time   -    -    -    - 
Total  $65   $125   $-   $190 

 

   Revenue   Revenue   Revenue   Total 
   Nine Months Ended September 30, 2024 
       License and         
   Product   Royalty   Contract     
   Revenue   Revenue   Revenue   Total 
Timing of revenue recognition:                    
Products transferred at a point in time  $2,617    323    106   $3,046 
Product and services transferred over time   -    -    -    - 
Total  $2,617   $323   $106   $3,046 

 

   Revenue   Revenue   Revenue   Total 
   Three Months Ended September 30, 2023 
       License and         
   Product   Royalty   Contract     
   Revenue   Revenue   Revenue   Total 
Timing of revenue recognition:                    
Products transferred at a point in time  $1,047   $    -   $        -   $1,047 
Product and services transferred over time   -    -    -    - 
Total  $1,047   $-   $-   $1,047 

 

   Revenue   Revenue   Revenue   Total 
   Nine Months Ended September 30, 2023 
       License and         
   Product   Royalty   Contract     
   Revenue   Revenue   Revenue   Total 
Timing of revenue recognition:                    
Products transferred at a point in time  $1,898   $-   $-   $1,898 
Product and services transferred over time   -    -    260    260 
Total  $1,898   $-   $260   $2,158 

 

Contract Balances

 

Under Topic 606, the Company’s rights to consideration are presented separately depending on whether those rights are conditional or unconditional. Unconditional rights to consideration are included within accounts receivable, net of allowances in the condensed consolidated balance sheets.

 

12
 

 

Significant changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands, except percentages):

 

   September 30,   December 31,         
   2024   2023   $ Change   % Change 
                 
Contract assets and accounts receivable  $232   $949   $(717)   (75.6)
Contract liabilities   (180)   (300)   120    (40.0)
Net contract assets (liabilities)  $52   $649   $(597)   (92.0)

 

Contract Acquisition Costs

 

The Company is required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed. As the Company currently does not pay any commissions upon the signing of a contract, no commission cost has been incurred as of September 30, 2024.

 

Transaction Price Allocated to the Remaining Performance Obligations

 

The remaining balance of the contract liabilities was approximately $0.2 million as of September 30, 2024. The Company expects to recognize 100% of this revenue over the next 12 months.

 

6. INVESTMENT SECURITIES, AVAILABLE-FOR-SALE AND FAIR VALUE MEASUREMENTS

 

Investment securities, available-for-sale is comprised of corporate and government debt securities. The principal markets for the debt securities are dealer markets which have a high level of price transparency. The market participants for debt securities are typically large money center banks and regional banks, brokers, dealers, pension funds, and other entities with debt investment portfolios.

 

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes a three level fair value inputs hierarchy and requires an entity to maximize the use of observable valuation inputs and minimize the use of unobservable inputs. The Company uses market data, assumptions, and risks that market participants would use in measuring the fair value of the asset or liability, including the risks inherent in the inputs and the valuation techniques. The hierarchy is summarized below.

 

Level 1 - Quoted prices in active markets for identical assets and liabilities at the measurement date that the reporting entity has the ability to access.

 

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

 

Level 3 - Unobservable inputs for which there is little or no market data, which requires us to develop our own assumptions, which are significant to the measurement of the fair values.

 

The valuation inputs hierarchy classification for assets measured at fair value on a recurring basis are summarized below as of September 30, 2024 and December 31, 2023 (in thousands). These tables do not include cash held in money market savings accounts.

 

As of September 30, 2024  Level 1   Level 2   Level 3   Total 
Investment securities, available for sale:                    
Corporate debt securities  $-   $15,045   $-   $15,045 
U.S. Treasury securities   -    11,634    -    11,634 
   $-   $26,679   $-   $26,679 

 

As of December 31, 2023  Level 1   Level 2   Level 3   Total 
Investment securities, available for sale:                    
Corporate debt securities  $-   $8,471   $-   $8,471 
U.S. Treasury securities   -    20,140    -    20,140 
   $-   $28,611   $-   $28,611 

 

Short-term investments are summarized below as of September 30, 2024 and December 31, 2023 (in thousands).

 

               Investment 
   Cost/   Gross   Gross   Securities, 
   Amortized   Unrealized   Unrealized   Available- 
   Cost   Gains   Losses   For-Sale 
As of September 30, 2024                    
Investment securities, available for sale:                    
Corporate debt securities  $15,006    39    -   $15,045 
U.S. Treasury securities   11,614    20    -    11,634 
   $26,620   $59   $-   $26,679 

 

               Investment 
   Cost/   Gross   Gross   Securities, 
   Amortized   Unrealized   Unrealized   Available- 
   Cost   Gains   Losses   For-Sale 
As of December 31, 2023                    
Investment securities, available for sale:                    
Corporate debt securities  $8,466   $6   $(1)  $8,471 
U.S. Treasury securities   20,119    21    -    20,140 
   $28,585   $27   $(1)  $28,611 

 

13
 

 

The maturities of the investment securities, available-for-sale as of September 30, 2024 and December 31, 2023 are shown below (in thousands):

 

       Gross   Gross     
   Amortized   Unrealized   Unrealized   Estimated 
   Cost   Gains   Losses   Fair Value 
As of September 30, 2024                    
Maturity date                    
Less than one year  $26,620    59    -   $26,679 
   $26,620             $26,679 

 

       Gross   Gross     
   Amortized   Unrealized   Unrealized   Estimated 
   Cost   Gains   Losses   Fair Value 
As of December 31, 2023                    
Maturity date                    
Less than one year  $28,585   $27   $(1)  $28,611 
   $28,585             $28,611 

 

The following table summarizes investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for more than 12 months as of September 30, 2024 and December 31, 2023 (in thousands):

 

   Less than Twelve Months   Twelve Months or Greater   Total 
       Gross       Gross       Gross 
   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
   Value   Losses   Value   Losses   Value   Losses 
As of September 30, 2024                              
Corporate debt securities  $599    -    -    -   $599   $- 
U.S. Treasury securities   -    -    -    -    -    - 
   $599   $-   $-   $-   $599   $- 

 

   Less than Twelve Months   Twelve Months or Greater   Total 
       Gross       Gross       Gross 
   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
   Value   Losses   Value   Losses   Value   Losses 
As of December 31, 2023                        
Corporate debt securities  $1,488   $(1)  $-   $-   $1,488   $(1)
U.S. Treasury securities   1,486    -    -    -    1,486    - 
   $2,974   $(1)  $-   $-   $2,974   $(1)

 

7. FINANCIAL STATEMENT COMPONENTS

 

The following financial statement components have significant balances as of September 30, 2024.

 

Restricted Cash

 

During the nine months ended September 30, 2024, Restricted cash, current decreased largely due to a $3.3 million release of escrow in connection with the Asset Purchase Agreement with Ibeo. In addition, Restricted cash, net of current portion increased by approximately $1.0 million related to cash that is held as collateral for a Hamburg, Germany lease.

 

Inventory

 

Inventory consists of the following:

 

   September 30,   December 31, 
(in thousands)  2024   2023 
Raw materials  $2,457   $1,574 
Work in process   -    305 
Finished goods   2,029    1,995 
Total inventory   $4,486   $3,874 

 

Inventory is computed using the first-in, first-out (FIFO) method and is stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required.

 

14
 

 

Property and Equipment

 

Property and equipment consists of the following:

 

   September 30,   December 31, 
(in thousands)  2024