Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 69

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 69
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, 2024, the partial repayment amounts and maturity schedule were modified (see Note 16. Subsequent Events).

Derivative
Liability

The
derivative liability was initially recorded at its fair value of $7.5 million as of the issuance date of October 23, 2024. The derivative
liability is subsequently remeasured and reported at fair value each reporting period, with the changes in fair value recorded as an
unrealized gain or loss and recognized in earnings.

The
fair value of derivatives not designated as hedging instruments are as follows:

 SCHEDULE
OF DERIVATIVES INSTRUMENTS

    (in thousands) 
    2024  
    2023 

    Year Ended December 31, 
  
    (in thousands) 
    2024  
    2023 
  
    Derivative liability 
    $14,581  
    $- 
  
    Total 
    $14,581  
    $- 

    50

Unrealized
gains and losses associated with derivatives not designated as hedging instruments are as follows:

 SCHEDULE OF UNREALIZED GAIN AND LOSS INSTRUMENTS

    (in thousands) 
    2024  
    2023  
    2022 

    Year Ended December 31, 
  
    (in thousands) 
    2024  
    2023  
    2022 
  
    Unrealized loss on derivative liability 
    $(8,866) 
    $-  
    $- 
  
    Total 
    $(8,866) 
    $-  
    $- 

Fair
Value Measurements

The
fair value of the derivative liability is determined utilizing a “with and without” method, in which the fair value is calculated
as the difference in the fair value of the entire hybrid instrument and the fair value of the instrument excluding the bifurcated derivative
features.

The
fair value of the hybrid instrument is estimated using a binomial lattice model, which projects future movements of the underlying instrument
over the remaining term. The model then calculates the fair value of the instrument by discounting projected cash flows based on the
optimal action at each point in time. Optimal actions for both the Company and the Holder are determined by the projected stock price
at a point in time, in addition to the probabilities of the occurrence of certain events. At initial measurement