Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 467

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 4A
Chunk 467
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. Direct costs include labor, materials,
reserves for estimated warranty expenses, and other costs incurred directly, or charged to us by our contract manufacturers, in the manufacture
of these products. Indirect costs include labor, overhead, and other costs associated with operating our manufacturing capabilities.
Overhead includes the costs of procuring, inspecting and storing material, facility and other costs, and is allocated to cost of revenue
based on the proportion of indirect labor which supported revenue activities.

Cost
of revenue can fluctuate significantly from period to period, depending on the product mix and volume, the level of overhead expense
and the volume of direct material purchased. The increase in cost of revenue for the year ended December 31, 2024 compared to the same
period in 2023 was primarily due to inventory write-downs primarily associated with older configurations of the MOVIA L sensors.

Research
and development expense

    2024  
    2023  
    $
    change  
    %
    change 
  
    (In thousands) 

    Research and development expense 
    $49,015  
    $56,707  
    $(7,692) 
     (13.6)

Research
and development expense consists of compensation related costs of employees and contractors engaged in internal research and product
development activities, direct material to support development programs, laboratory operations, outsourced development and processing
work, and other operating expenses. We assign our research and development resources based on the business opportunity of the available
projects, the skill mix of the resources available and the contractual commitments we have made to our customers. We believe that a substantial
level of continuing research and development expenses will be required to further develop our scanning technology.

The
decrease in research and development expense during the year ended December 31, 2024 compared to the same period in 2023 was
primarily due to lower salary and benefits expense and non-cash compensation of $11.2 million as a result of 2024 restructuring
events (see Part II, Item 8, Note 14. Restructuring Charges), lower depreciation expense of $0.8 million, lower freight costs
of $0.2 million, lower direct materials and equipment costs of $0.2 million, and lower travel expenses of $0.2 million. These
decreases were partially offset by restructuring charges of $5.4 million, and higher IT and software costs of $0.5
million.

Sales