Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 199

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1C
Chunk 199
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 inventory to its net realizable value when required.

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Intangible
Assets

Intangible
assets consist of acquired technology from the January 2023 Ibeo asset purchase and purchased patents. As part of the Ibeo asset acquisition,
two intangible assets were primarily acquired in the form of Perception software and Reference software, with initial useful lives of
15 years and 8 years, respectively. 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 intangible assets are amortized using the straight-line method
over their estimated period of benefit, ranging from one to seventeen years. Intangible assets are reviewed for impairment whenever events
or changes in circumstances indicate the carrying value may not be recoverable (see Note 8. Financial Statement Components – Intangible
Assets for discussion of impairment). Recoverability of these assets is measured by comparison of their carrying values to the projected
undiscounted net cash flows associated with the related intangible assets or group of assets over their remaining lives. Measurement
of an impairment loss for intangible assets is based on the difference between the fair value of the asset and its carrying value.

Property
and Equipment

Property
and equipment are stated at cost and depreciated over the estimated useful lives of the assets (two to five years) using the straight-line
method. Property and equipment may include assets related to future product lines. As production needs change, management will periodically
assess the remaining estimated useful life of production equipment. If necessary, depreciation on production equipment will be adjusted
to reflect the remaining estimated useful life. Leasehold improvements are depreciated over the lesser of the estimated useful life or
the lease term. Costs for repairs and maintenance are charged to expense as incurred and expenditures for major improvements are capitalized
at cost. Gains or losses on the disposition of assets are reflected in the consolidated statements of operations at the time of disposal.

Leases

Management
assesses all contracts executed to determine whether the agreements contain a lease component. Significant judgment may be required to
determine whether a contract contains a lease, the length of the lease term, the allocation of the consideration between lease and non-lease
components, and the appropriate discount rate to be applied. Management reviews the underlying objective of each contract, the terms
of the contract, and considers current and future business conditions when making these judgments.

The
Company’s lease obligations consist of various office and equipment operating leases. Operating lease assets are