Company: MVIS
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000783
Chunk: 488

Company: MICROVISION, INC.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 4A
Chunk 488
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 the purchase consideration was included
in bargain purchase gain, net of tax in the consolidated statements of operations. Such valuations require management to make significant
estimates and assumptions, especially with respect to intangible assets.

Cash
and Cash Equivalents and Fair Value of Financial Instruments

Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction
between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market
participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes
a three level fair value inputs hierarchy and requires an entity to maximize the use of observable valuation inputs and minimize the
use of unobservable inputs. The Company uses market data, assumptions and risks that market participants would use in measuring the fair
value of the asset or liability, including the risks inherent in the inputs and the valuation techniques.

Financial
instruments include cash and cash equivalents, investment securities, accounts receivable, accounts payable and accrued liabilities.
The carrying value of financial instruments approximate fair value due to their short maturities. Cash equivalents are comprised of short-term
highly rated (A rated securities and above) money market savings accounts.

Short-term
investment securities primarily consist of debt securities. The Company has classified its entire investment portfolio as available-for-sale.
Available-for-sale securities are stated at fair value with unrealized gains and losses included in other comprehensive income (loss).
Dividend and interest income are recognized when earned. Realized gains and losses, if any, are presented separately on the income statement.

Restricted
Cash

Restricted
cash is held in money market savings accounts and serves as collateral for irrevocable letters of credit related to our facility
lease agreements. The restricted cash balance as of December 31, 2024 includes $0.5
million and $0.2
million of collateral under two letters of credit, issued in connection with lease agreements for the Company’s headquarters
and general office and lab space, respectively, in Redmond, Washington. The restricted cash balance also includes approximately
$1.0
million for a security deposit associated with a lease agreement for office space in Hamburg,
Germany.

Inventory

Inventory
consists of raw materials, work in process and finished goods assemblies. Inventory is computed using the first-in, first-out (FIFO)
method and is stated at the lower of cost and net realizable value. Management periodically assess