Company: MVIS
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001641172-25-009765
Chunk: 195

Company: MICROVISION, INC.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 195
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ments to seven monthly payments
of $1.7 million beginning on September 1, 2025 and concluding on March 1, 2026. The Letter Agreement represents a modification requiring
extinguishment accounting in accordance with ASC 470. As a result of the modification, a realized loss on debt modification of $4.7 million
and interest expense of $2.1 million were recorded on the condensed consolidated statement of operations.

    13

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 with ASC 815, “Derivatives and Hedging” and are included in the derivative liability on the condensed
consolidated balance sheets. The host contract, which represents the Note excluding the derivative liability, is accounted for as
non-convertible debt under ASC 470, “Debt” and is included in notes payable, current and notes payable, net of current
portion on the condensed consolidated balance sheets.

Notes
Payable

Subsequent
to the modification, the host contract is recorded at the total amount repayable at maturity of $36.0 million, less any unamortized debt
discount. The debt discount is equal to the amount repayable at maturity, net of the initial fair value of the bifurcated derivative
liability. There were no material qualifying debt issuance costs resulting from the modification.

Supplemental
balance sheet information is as follows:

 SCHEDULE
OF SUPPLEMENT BALANCE SHEET

    March
    31,  
    December
    31, 
  
    (in
    thousands) 
    2025  
    2024 
  
    Amount repayable
    at maturity 
    $36,025  
    $47,575 
  
    Unamortized debt discount 
     (5,918) 
     (12,021)
  
    Unamortized
    issuance costs 
     -  
     (2,552)
  
    Net
    carrying amount 
     30,107  
     33,002 

Interest
expense related to the amortization of the debt discount and issuance costs was $3.5
million and $0.0
million for the three months ended March 31, 2025 and