Company: MVIS
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001641172-25-009765
Chunk: 187

Company: MICROVISION, INC.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 187
---
 of revenues, or significant delays in product development or product deliveries, any of which
could adversely affect the Company’s financial condition and operating results.

Warrant
Liability

The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance included in Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives
and Hedging. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants
meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification
under ASC 815. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as
of each subsequent reporting period end date while the warrants are outstanding.

Warrants
that meet all of the criteria for equity classification are required to be recorded as a component of additional paid-in capital at the
time of issuance, or when the conditions for equity classification are met, and are not remeasured. Warrants that do not meet the required
criteria for equity classification are classified as liabilities. The Company adjusts such warrants to fair value at each reporting period
until the warrants are exercised or expire. Changes in fair value are recognized in the Company’s condensed consolidated statements
of operations.

    9

Recently
Adopted Accounting Pronouncements

In
March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-01, Compensation: Stock Compensation (Topic 718). The amendments in this ASU clarify existing
guidance related to profits interest and similar awards. ASU 2024-01 was adopted by the Company beginning January 1, 2025. The adoption
of the new standard did not have a material impact on the Company’s condensed consolidated financial statements.

Recently
Issued Accounting Pronouncements

In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this
update require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on
income taxes paid. ASU 2023-09 is effective for the Company for annual periods beginning January 1, 2025, with early adoption permitted.
The ASU