Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 51

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 51
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Restricted
cash is held in money market savings accounts and serves as collateral for irrevocable letters of credit related to our facility
lease agreements. The restricted cash balance as of December 31, 2024 includes $0.5
million and $0.2
million of collateral under two letters of credit, issued in connection with lease agreements for the Company’s headquarters
and general office and lab space, respectively, in Redmond, Washington. The restricted cash balance also includes approximately
$1.0
million for a security deposit associated with a lease agreement for office space in Hamburg,
Germany.

Inventory

Inventory
consists of raw materials, work in process and finished goods assemblies. Inventory is computed using the first-in, first-out (FIFO)
method and is stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence
of inventory and adjusts the carrying value of 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