Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 590

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 8
Chunk 590
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 with only the option to redeem partial principal payments prior to maturity. The estimated fair
value of the derivative liability was $14.6 million as of December 31, 2024.

We
identified the valuation of derivative liability as a critical audit matter. Performing audit procedures to evaluate the reasonableness
of the fair value estimates and underlying inputs and assumptions required especially challenging and subjective auditor judgment and
an increased extent of effort, including the need to involve of our valuation professionals.

Addressing
the matter involved performing procedures and evaluating audit evidence in connection with forming an overall opinion on the consolidated
financial statements. Our audit procedures related to the matter included the following, among others:

  ●
  Testing management’s process used in determining the
estimated fair value of the derivative liability by:

●Involving
                                            our valuation professionals with specialized skills and knowledge who assisted in evaluating
                                            the valuation methodologies and the reasonableness of significant assumptions.

●Testing
                                            the mathematical accuracy of management’s calculations.

●Testing
                                            the completeness, accuracy and reliability of the underlying data used in the estimate, such
                                            as historical volatility, stock price, and daily trading volume.

Impairment
of Intangible Assets

As
described in notes 2 and 8 to the consolidated financial statements, intangible assets are reviewed for impairment whenever events or
changes in circumstances indicate the carrying value may not be recoverable. 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. The carrying value of intangible assets was $11.0 million as of December 31, 2024.

We
identified the impairment assessment of intangible assets as a critical audit matter. Performing audit procedures to evaluate the significant
assumptions used by management when developing the undiscounted cash flows to be generated by the assets required a high degree of auditor
judgment, subjectivity and effort when performing and evaluating the results of those procedures.

Addressing
the matter involved performing procedures and evaluating audit evidence in connection with forming an overall opinion on the consolidated
financial statements. Our audit procedures related to the matter included the following, among others:

●Testing
                                            management’s process for developing the estimated future undiscounted cash flows used
                                            in the impairment assessment.

●E