Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 101

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1B
Chunk 101
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Liability

We
evaluate our financial instruments, specifically, our notes payable, to determine if such instruments are derivatives or contain features
that qualify as embedded derivatives in accordance with ASC 815, “Derivatives and Hedging”. For derivative financial instruments
that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the issuance date and is
then re-valued at each reporting date, with changes in the fair value reported as an unrealized gain or loss in earnings on the consolidated
statements of operations.

Results
of Operations 

Revenue

    2024  
    2023  
    $
    change  
    %
    change 
  
    (In thousands) 

    Revenue 
    $4,696  
    $7,259  
     (2,563) 
     (35.3)

Revenues
are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration
that we expect to receive in exchange for those goods or services. We recognize revenue either at a point in time, or over time, depending
upon the characteristics of the individual contract. If control of the deliverable(s) transfers over time, the revenue is recognized
in proportion to the transfer of control. If control passes to the customer only upon completion and transfer of the asset, revenue is
recognized at the completion of the contract.

The
decrease in revenue for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to revenue associated
with the Microsoft contract partially offset by the sale of sensors to an existing industrial customer for agricultural equipment and
service parts, an increase in shipments of MOVIA L sensors to Daimler Truck North America and affiliates as part of their RFQ evaluation
process, and increased sales to a second industrial customer.

25

Cost
of revenue

    2024  
    %
    of revenue  
    2023  
    %
    of revenue  
    $
    change  
    %
    change 
  
    (In thousands) 

    Cost of revenue 
    $7,530  
     160.3  
    $2,772  
     38.2  
    $4,758  
     171.6 

Cost
of revenue includes the direct and allocated indirect costs of products and services sold to customers. Direct costs include labor,