Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 348

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 3
Chunk 348
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. Transaction prices are normally fixed, as the Company does not include variable consideration or the exchange
of any other goods as part of the contract. Revenue is recognized upon shipment of the product to the customer, as control and title
of the product passes to the customer at the point of shipment. Product sales generally include acceptance provisions, however, as it
can be objectively determined that agreed-upon customer specifications have been met prior to shipment, control of the item passes at
the time of shipment.

License
and Royalty Revenue

License
and royalty revenue consists of revenue from the licensing of various software and intellectual property owned by MicroVision, and any
royalties generated from their use in products sold by customers.

Software
licenses sold are either a license to install and use, whether perpetual or fixed-term, or a license to access the software, which is
normally a volume-based license. Revenue from licenses to install is recognized at the point when the customer is granted the ability
to install the software, as these licenses represent functional intellectual property with significant standalone functionality. Revenue
from licenses to access is recognized over the period of time in which the Company has ongoing obligations under the agreement, as these
licenses represent symbolic intellectual property, which exclude significant standalone functionality. Revenue recognized each period
is based on the appropriate measure of progress, typically being the number of usage hours consumed.

Revenue
from sales-based royalties is recognized based on reports provided by customers which identify the number of royalty-bearing products
sold or otherwise distributed. For any customers that fail to provide timely reports, management estimates the number of royalty-bearing
products sold based on historical sales volume and available forecast data.

    42

Contract
Revenue

Contract
revenue in a particular period is dependent upon when the contract is entered into, the value of the contract, and the availability of
technical resources to perform work on the contract. Each performance obligation associated with development contracts is identified
at contract inception. The contracts generally include product development and customization specified by the customer. For contracts
with multiple product development or customization components, each component is evaluated to determine whether it is distinct within
the context of the contract and represents a standalone performance obligation. Components which are deemed not distinct at contract
inception are combined into a single performance obligation.

Development
contracts are primarily fixed-fee contracts. Contract revenue is recognized either at a point in time, or over time, depending upon the
characteristics of the individual contract. If control of the deliverable(s) passes to the customer over time