Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 67

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 67
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 to the Holder, subject to certain limitation.

The
Note will rank senior to all outstanding and future indebtedness of the Company. Beginning on January 1, 2025, the Holder may elect to
require the Company to partially repay the Notes up to $1.8 million monthly prior to April 1, 2025, and up to $3.5 million monthly on
and after April 1, 2025, plus a 10% premium. In lieu of electing a partial repayment in each of the stated months, the Holder has the
right to convert the Note to shares of the Company’s common stock at a conversion price of $0.7462 prior to June 1, 2025 and $1.5960
on or after June 1, 2025, subject to certain conditions.

Additionally,
the Company has the option to require the Holder to convert the entire Note to shares of common stock if the share price exceeds $2.3940
on each of 20 consecutive VWAP Trading Days, subject to certain other equity conditions. If not fully repaid or converted, the end of
term maturity balance is the outstanding principal balance of the Note multiplied by 110% and matures on October 1, 2026. The Note bears
zero coupon. Pursuant to terms of the Note, the Company will maintain minimum liquidity of $30.0 million for the duration of the Note
term, subject to decreases beginning on May 1, 2025.

On
October 23, 2024, the Purchase Agreement closed and the Note was issued for net proceeds of approximately $38.1 million, inclusive of
all discounts, fees, and expenses related to the transaction.

On
December 30, 2024, pursuant to the terms of the Note, the Holder elected to convert $1.8 million of outstanding principal into 2,345,068
shares of the Company’s common stock. See Note 16. Subsequent Events for details of additional conversions subsequent to the date
of these financial statements.

    49

Components

The
Note is a convertible debt instrument with multiple redemption, conversion, and put features. Certain features qualify as embedded derivatives
requiring bifurcation. Therefore, the bifurcated features are accounted for separately as a compound embedded derivative in accordance
ASC 815, “Derivatives and Hedging” and are included in the derivative liability on the consolidated balance sheets. The host
contract, which