Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 215

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1C
Chunk 215
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 stock if the share price exceeds $2.3940
on each of 20 consecutive VWAP Trading Days, subject to certain other equity conditions. If not fully repaid or converted, the end of
term maturity balance is the outstanding principal balance of the Note multiplied by 110% and matures on October 1, 2026. The Note bears
zero coupon. Pursuant to terms of the Note, the Company will maintain minimum liquidity of $30.0 million for the duration of the Note
term, subject to decreases beginning on May 1, 2025.

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. See Note 16. Subsequent Events for details of additional conversions subsequent to the date
of these financial statements.

    49

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
ASC 815, “Derivatives and Hedging” and are included in the derivative liability on the 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 payable, current and notes payable, net of current portion on the consolidated balance sheets.

Notes
Payable

The
host contract is recorded at the total amount repayable at maturity of $49.5 million, comprised of $45.0 million principal plus a $4.5
million 10% repayment premium, less any conversions of outstanding principal, net of debt discount and issuance costs. The debt discount
is equal to the amount repayable at maturity, net of cash proceeds received at issuance and the initial fair value of the bifurcated
derivative liability. Debt issuance costs are comprised of qualifying expenses resulting directly from the transaction. During the year
ended December 31, 2024, conversions reduced the amount repayable at maturity to $47.6 million.

Sup