Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 201

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1C
Chunk 201
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 identify the
performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price, and (v) recognize revenue when (or
as) performance obligations are satisfied.

A
contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group
of promises) that is distinct, as defined in the revenue standard.

The
transaction price is the amount of consideration an entity expects to be entitled to from a customer in exchange for providing the goods
or services. A number of factors should be considered to determine the transaction price, including whether there is variable consideration,
a significant financing component, noncash consideration, or amounts payable to the customer. The determination of variable consideration
will require a significant amount of judgment. In estimating the transaction price, the Company will use either the expected value method
or the most likely amount method.

The
transaction price is allocated to the separate performance obligations in the contract based on relative standalone selling prices. Determining
the relative standalone selling price can be challenging when goods or services are not sold on a standalone basis. The revenue standard
sets out several methods that can be used to estimate a standalone selling price when one is not directly observable. Allocating discounts
and variable consideration must also be considered. Allocating the transaction price can require significant judgement on the Company’s
part.

Revenue
is recognized when (or as) the customer obtains control of the good or service/performance obligations are satisfied. Topic 606 provides
guidance to help determine if a performance obligation is satisfied at a point in time or over time. Where a performance obligation is
satisfied over time, the related revenue is also recognized over time.

Product
Revenue

Product
revenue is primarily derived from sales of lidar hardware and systems. While each contract is individually assessed to identify separate
performance obligations, a performance obligation generally consists of an individual sensor or sensor system, inclusive of all materials
and integrated software. 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