Company: MVIS
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021931
Chunk: 147

Company: MICROVISION, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 147
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 of convertible notes to the Holder, subject to certain limitations. 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.

On
February 3, 2025, the Company entered into a Letter Agreement with the Holder related to the Note. As a result of the Letter Agreement,
the Holder elected to early convert $8.8 million of outstanding principal into 11,725,337 shares of the Company’s common stock.
Additionally, as a result of the Letter Agreement, the Holder agreed to defer $11.6 million of principal repayments to seven monthly
payments of $1.7 million beginning on September 1, 2025 and concluding on March 1, 2026. The Letter Agreement represented 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 for the nine months ended September 30, 2025 were recorded on the condensed consolidated
statement of operations.

On
September 2, 2025, the Company repaid $5.5 million principal in accordance with the Holder’s redemption election pursuant to the
terms of the Note. Subsequent to the date of these financial statements, on October 1, 2025 and November 3, 2025, the Company repaid an additional $5.5 million
principal on each date, resulting in $19.5 million remaining principal outstanding, inclusive of the 10% repayment premium.

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