UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q

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[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from ________to _________

Commission file number    0-21221



Microvision, Inc.



|Delaware                                                       | 91-1600822                             
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

6222 185th Avenue NE
Redmond, Washington      98052

(425) 936-6847

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days.  YES    x NO     ̈

Indicate by check mark whether the registrant has submitted electronically and posted
on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).  YES     ̈ NO     ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act. (Check one):

|Large accelerated filer      ̈ | Accelerated filer    x | Non-accelerated filer     ̈ (Do not check if a smaller reporting company) | Smaller reporting company     ̈
|----------------------------- | ---------------------- | ------------------------------------------------------------------------ | ------------------------------

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Securities Exchange Act of 1934). YES     ̈ NO    x

As of April 27, 2009, 68,080,000 shares of the Company's common stock, $0.001 par value, were outstanding.






|                                                                                                             | Page
|------------------------------------------------------------------------------------------------------------ | ----
|Part I: Financial Information                                                                                |     
|Item 1.  Financial Statements:                                                                               |     
|                                                                                                             |     
|Consolidated Balance Sheets as of  March 31, 2009 and
December 31, 2008 (unaudited)                          | 3   
|Consolidated Statements of Operations for the three
months ended March 31, 2009 and 2008 (unaudited)         | 4   
|Consolidated Statements of Comprehensive Loss
for the three months ended March 31, 2009 and 2008 (unaudited) | 5   
|Consolidated Statements of Cash Flows for the three
months ended March 31, 2009 and 2008 (unaudited)         | 6   
|Notes to Consolidated Financial Statements
(unaudited)                                                       | 8   
|                                                                                                             |     
|Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations               | 14  
|Item 3.  Quantitative and Qualitative Disclosures About Market
Risk                                          | 19  
|Item 4.  Controls and Procedures                                                                             | 20  
|                                                                                                             |     
|Part II: Other Information                                                                                   |     
|Item 1A. Risk Factors                                                                                        | 20  
|Item 6.  Exhibits                                                                                            | 27  
|Signatures                                                                                                   | 28  
|Exhibit Index                                                                                                | 29  

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Microvision, Inc.

                    Consolidated Balance Sheet

                  (In thousands, except per share data)

                            (Unaudited)

`March 31,     December 31,
                                                                                       2009           2008
                                                                                   -------------  -------------
Assets                                                                                                         
Current assets
   Cash and cash equivalents                                                      $      16,397  $      25,533
   Investment securities, available-for-sale                                              2,706          2,705
   Accounts receivable, net of allowances of $57 and $57                                    502            537
   Costs and estimated earnings in excess of billings on uncompleted contracts              325            695
   Inventory                                                                              1,439          1,525
   Other current assets                                                                     748            889
                                                                                   -------------  -------------
   Total current assets                                                                  22,117         31,884

Property and equipment, net                                                               3,671          3,701
Restricted investments                                                                    1,332          1,332
Other assets                                                                                 54             47
                                                                                   -------------  -------------
   Total assets                                                                   $      27,174  $      36,964
                                                                                   =============  =============
                                                                                                               
Liabilities and Shareholders' Equity                                                                           
Current liabilities
   Accounts payable                                                               $       2,299  $       3,487
   Accrued liabilities                                                                    3,574          3,545
   Billings in excess of costs and estimated earnings on uncompleted contracts               55             62
   Liability associated with common stock warrants                                          151            331
   Current portion of capital lease obligations                                              42             41
   Current portion of long-term debt                                                         72             71
                                                                                   -------------  -------------
   Total current liabilities                                                              6,193          7,537
Capital lease obligations, net of current portion                                            34             45
Long-term debt, net of current portion                                                      303            322
Deferred rent, net of current portion                                                     1,332          1,409
                                                                                   -------------  -------------
   Total liabilities                                                                      7,862          9,313
                                                                                   -------------  -------------
Commitments and contingencies                                                                --             --

Shareholders' equity
   Common stock, par value $.001; 125,000 shares authorized;
      68,080 and 68,080 shares issued and outstanding                                        68             68
   Additional paid-in capital                                                           320,187        319,662
   Accumulated other comprehensive loss                                                     (37)           (38)
   Accumulated deficit                                                                 (300,906)      (292,041)
                                                                                   -------------  -------------
   Total shareholders' equity                                                            19,312         27,651
                                                                                   -------------  -------------
   Total liabilities and shareholders' equity                                     $      27,174  $      36,964
                                                                                   =============  =============`

The accompanying notes are an integral part of these financial statements.

---



Microvision, Inc.

                     Consolidated Statement of Operations

                  (In thousands, except per share data)

                            (Unaudited)

`Three Months Ended
                                                                                   March 31,
                                                                             ----------------------
                                                                                2009        2008
                                                                             ----------  ----------                        
Contract revenue                                                            $      712  $    2,281
Product revenue                                                                    239         289
                                                                             ----------  ----------
    Total revenue                                                                  951       2,570
                                                                             ----------  ----------
Cost of contract revenue                                                           383         762
Cost of product revenue                                                            241         339
                                                                             ----------  ----------
    Total cost of revenue                                                          624       1,101
                                                                             ----------  ----------
Gross margin                                                                       327       1,469
                                                                             ----------  ----------


Research and development expense                                                 5,610       4,426
Sales, marketing, general and administrative expense                             3,814       4,135
                                                                             ----------  ----------
    Total operating expenses                                                     9,424       8,561
                                                                             ----------  ----------
Loss from operations                                                            (9,097)     (7,092)
Interest income                                                                     64         412
Interest expense                                                                   (11)        (13)
Gain on derivative instruments, net                                                180       1,673
Other expense                                                                       (1)        (18)
                                                                             ----------  ----------
Net loss                                                                    $   (8,865) $   (5,038)
                                                                             ==========  ==========

Net loss per share - basic and diluted                                      $    (0.13) $    (0.09)
                                                                             ==========  ==========

Weighted-average shares outstanding - basic and diluted                         68,080      56,730
                                                                             ==========  ==========`

The accompanying notes are an integral part of these financial statements.

---



Microvision, Inc.

                     Consolidated Statement of Comprehensive Income (Loss)

                             (In thousands)

                            (Unaudited)

`Three Months Ended
                                                                                   March 31,
                                                                             ----------------------
                                                                                2009        2008
                                                                             ----------  ----------                        
Net loss                                                                    $   (8,865) $   (5,038)

Other comprehensive gain (loss)
Unrealized gain on investment securities, available-for-sale                         1          38
                                                                             ----------  ----------
Comprehensive loss                                                          $   (8,864) $   (5,000)
                                                                             ==========  ==========`

The accompanying notes are an integral part of these financial statements.

---



Microvision, Inc.

                    Consolidated Statement of Cash Flows

                           (In thousands)

                            (Unaudited)

`Three Months Ended
                                                                                              March 31,
                                                                                        ----------------------
                                                                                           2009        2008
                                                                                        ----------  ----------
Cash flows from operating activities                                                                          
    Net loss                                                                           $   (8,865) $   (5,038)
    Adjustments to reconcile net loss to net cash used in operations:
        Depreciation                                                                          245         228
        Non-cash stock-based compensation expense                                             548       1,066
        Gain on derivative instruments, net                                                  (180)     (1,673)
        Net accretion of discount on short-term investments                                    --         (65)
        Non-cash deferred rent                                                                (69)        (68)
            Change in:
            Accounts receivable, net                                                           35       1,163
            Costs and estimated earnings in excess of billings on uncompleted contracts       370         169
            Inventory                                                                          86        (575)
            Other current assets                                                              118        (210)
            Other assets                                                                       (7)         (3)
            Accounts payable                                                               (1,049)        369
            Accrued liabilities                                                                21          27
            Billings in excess of costs and estimated earnings on uncompleted contracts        (7)       (695)
                                                                                        ----------  ----------
            Net cash used in operating activities                                          (8,754)     (5,305)
                                                                                        ----------  ----------
Cash flows from investing activities                                                                          
    Sales of investment securities                                                             --       8,000
    Purchases of investment securities                                                         --        (986)
    Purchases of restricted investment securities                                              --        (350)
    Purchases of property and equipment                                                      (354)       (137)
                                                                                        ----------  ----------
            Net cash provided by (used in) investing activities                              (354)      6,527
                                                                                        ----------  ----------
Cash flows from financing activities                                                                          
    Principal payments under capital leases                                                   (10)        (12)
    Principal payments under long-term debt                                                   (18)        (16)
                                                                                        ----------  ----------
            Net cash used in financing activities                                             (28)        (28)
                                                                                        ----------  ----------
Net increase (decrease) in cash and cash equivalents                                       (9,136)      1,194
Cash and cash equivalents at beginning of period                                           25,533      13,399
                                                                                        ----------  ----------
Cash and cash equivalents at end of period                                             $   16,397  $   14,593
                                                                                        ==========  ==========
Supplemental disclosure of cash flow information                                                              
    Cash paid for interest                                                             $       11  $       13
                                                                                        ==========  ==========
Supplemental schedule of non-cash investing and financing activities                                          
    Other non-cash additions to property and equipment                                 $       60  $        9
                                                                                        ==========  ==========`

The accompanying notes are an integral part of these financial statements.



MICROVISION, INC.

                    Notes to Consolidated Financial Statements

                           March 31, 2009

                            (Unaudited)

1.  MANAGEMENT'S STATEMENT AND PRINCIPLES OF CONSOLIDATION

Management's Statement

The Consolidated Balance Sheet as of March 31, 2009, the Consolidated
Statements of Operations, Comprehensive Loss and Cash Flows for the three months
ended March 31, 2009 and 2008 have been prepared by Microvision, Inc. (the
"Company" or "Microvision") and have not been audited.  In
the opinion of management, all adjustments necessary to state fairly the
financial position at March 31, 2009 and the results of operations,
comprehensive loss and cash flows for all periods presented have been made and
consist of normal recurring adjustments.  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules of the SEC.  You should read these condensed financial
statements in conjunction with the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2008.  The results of operations for the three months ended March
31, 2009 are not necessarily indicative of the operating results that may be
attained for the entire fiscal year.

At March 31, 2009, Microvision had $19.1 million in cash, cash equivalents
and investment securities, available-for-sale.  Microvision's operating plan for
2009 includes the launch of the first accessory product, further development of
its PicoP display engine for embedded applications and further development of
automotive HUD and eyewear applications.  In order to fully fund its product
launch and its other development efforts, the Company will require additional
capital in 2009.  Microvision plans to obtain additional cash through the
issuance of equity or debt securities.  There can be no assurance that
additional cash will be available or that, if available, it will be available on
terms acceptable to the Company on a timely basis.  If adequate funds are not
available in the next couple of months to fully implement its plan the Company
will begin to reduce the scope of its business to extend its operations as it
pursues other financing opportunities and business relationships.  This
reduction in scope could include delaying product launch and development
projects resulting in reductions in staff, operating costs, capital expenditures
and investment in research and development.  With these adjustments to its
operating plan, the Company believes it currently has sufficient cash, cash
equivalents, and investment securities to fund operations through at least
February 28, 2010.

2.  NET LOSS PER SHARE

Basic net loss per share is calculated on the basis of the weighted-average
number of common shares outstanding during the reporting periods.  Diluted net
loss per share is calculated on the basis of the weighted-average number of
common shares outstanding and taking into account the dilutive effect of all
potential common stock equivalents outstanding.  Potentially dilutive common
stock equivalents primarily consist of warrants, employee stock options,
and nonvested equity shares.  Diluted net loss per share for the
three months ended March 31, 2009 and 2008 is equal to basic net loss per share
because the effect of all potential common stock outstanding during the periods,
including options, warrants and nonvested equity shares is
anti-dilutive.  The components of basic and diluted net loss per share were as
follows (in thousands, except loss per share data):

`Three Months Ended
                                                                                 March 31,
                                                                          --------------------------
                                                                              2009          2008
                                                                          ------------  ------------                            
Numerator:
Net loss - basic and diluted                                             $     (8,865) $     (5,038)
                                                                          ============  ============
Denominator:
Weighted-average common shares outstanding - basic and diluted                 68,080        56,730
                                                                          ============  ============

Net loss per share - basic and diluted                                   $      (0.13) $      (0.09)
                                                                          ============  ============`

On March 31, 2009 and 2008, the Company excluded the following convertible
securities from diluted net loss per share as the effect of including them would
have been anti-dilutive: publicly traded warrants convertible into 6,703,000 and
0 shares of common stock, respectively, options and private warrants convertible
into a total of 9,686,000 and 10,940,000 shares of common stock, respectively,
and 125,000 shares of nonvested equity shares for both periods.

3.  CASH EQUIVALENTS, INVESTMENT SECURITIES AVAILABLE-FOR-SALE AND FAIR VALUE
MEASUREMENTS

The Company accounts for cash equivalents and investment securities in
accordance with the provisions of Statement of Financial Accounting Standards
(FAS) No. 115, Accounting for Certain Investments in Debt and Equity
Securities (FAS 115).  FAS 115 addresses the accounting and reporting for
investments in equity securities that have readily determinable fair values and
for investments in debt securities.

The Company applies guidance in FAS No. 157, Fair Value Measurements
(FAS 157) when estimating fair values of its cash equivalents, investment
securities and liability associated with common stock warrants.  The Company
adopted FAS 157 on January 1, 2008 for financial assets and liabilities and for
nonfinancial assets and liabilities measured at fair value on a recurring basis.
It elected to defer the adoption of FAS 157 for nonfinancial assets and
liabilities accounted for on a nonrecurring basis until January 1, 2009 as
permitted by FAS Board Staff Position No. FAS 157-2, Effective Date of FAS
157.  Neither of the two stages of adopting FAS 157 resulted in a material
impact on the Company's consolidated financial position, results of operations
or cash flows.

As of March 31, 2009, the Company held $3.0 million par value student loan
auction rate securities (SLARS), fair valued at approximately $2.7 million.  The
SLARS owned by the Company are investment grade long-term bonds, structured with
variable interest rate resets, purchases and sales to be determined via a Dutch
Auction process every 28 days.  They were issued to fund U.S. government
guaranteed student loans.  Beginning in February 2008 as global credit markets
significantly deteriorated, insufficient clearing bids have been submitted for
the SLARS.  The auctions have thus failed, the interest rates have been reset to
"maximum rates" instead of "auction rates" and the SLARS
have been and continue to be illiquid through the auction process and secondary
ARS markets.

At the time of the Company's initial investment, and through March 31, 2009,
the SLARS held by the Company have maintained the following positive credit
factors:

- guaranteed by the Federal Family Education Loan Program (FFELP) and
other federal and state student loan guarantee programs,
- paying interest in accordance with agreements,
- collateralized by the student loans funded with the SLARS proceeds and
collections thereon,
- no declines in the credit ratings of the issuers; and,
- no material changes in loan collection rates.

At the time of the Company's initial investment, the SLARS and AMBAC, the
insurer of half of the SLARS, held AAA ratings.  As of March 31, 2009, one major
service rated both SLARS AAA, while two other services rated the SLARS in the
lower A range.  AMBAC is rated A and Baa1. The Company considers the breadth
of the services' ratings opinions among other contextual factors when evaluating
the impacts of ratings changes.

The valuation inputs hierarchy classification for assets and liabilities
measured at fair value on a recurring basis in accordance with FAS 157 are
summarized below as of March 31, 2009:

`Level 1       Level 2       Level 3        Total
                                               ------------  ------------  ------------  ------------
Assets
    Corporate debt and equity securities      $         --  $  1,006,000  $         --  $  1,006,000
    Auction rate securities                             --            --     2,700,000     2,700,000
                                               ------------  ------------  ------------  ------------
                                              $         --  $  1,006,000  $  2,700,000  $  3,706,000
                                               ============  ============  ============  ============
Liabilities
    Liability associated with
        common stock warrants                               $    151,000                $    151,000
                                                             ============                ============`

The corporate debt securities and liability associated with common stock
warrants are classified within Level 2 of the fair value hierarchy because they
are valued using valuation inputs and common methods with sufficient levels of
transparency and observability.  The SLARS are classified in Level 3 of the fair
value hierarchy because of the significance of sufficiently unobservable
assumptions and inputs developed by the Company and used in the valuations.
Financial assets and liabilities are classified in their entirety based on the
lowest level of input that is significant to the fair value measurement.

The following table summarizes the activity for those financial assets where
fair value measurements are estimated utilizing Level 3 inputs:

`Balance, December 31, 2008                                                    $ 2,700,000
Transfer to (from)  Level 3, March 31, 2009                                            --
Recognized loss included in earnings                                                   --
                                                                               -----------
Balance, March 31, 2009                                                       $ 2,700,000
                                                                               ===========`

The Company's investments and liability associated with common stock warrants
are summarized below as of March 31, 2009 and December 31, 2008:

`Classification on Balance Sheet
                                                                                             -----------------------------------------------
                                                                                                                                  Liability
                                                                                                                                  Associated
                                                                                                          Investment                 With
                                              Cost/       Gross       Gross                               Securities,    Other      Common
                                            Amortized   Unrealized  Unrealized   Estimated      Cash      Available-    Current     Stock
                                              Cost        Gains       Losses    Fair Value   Equivalents   For-Sale     Assets     Warrants
                                           -----------  ----------  ----------  -----------  -----------  -----------  ---------  ----------
As of March 31, 2009:
  Assets
    Corporate debt and equity securities  $ 1,043,000  $       --  $  (37,000) $ 1,006,000  $ 1,000,000  $     6,000  $      --  $       --
    Auction rate securities                 2,700,000          --          --    2,700,000           --    2,700,000         --          --
                                           -----------  ----------  ----------  -----------  -----------  -----------  ---------  ----------
                                          $ 3,743,000  $       --  $  (37,000) $ 3,706,000  $ 1,000,000  $ 2,706,000  $      --  $       --
                                           ===========  ==========  ==========  ===========  ===========  ===========  =========  ==========
  Liabilities
    Liability associated with
       common stock warrants                                                   $   151,000                                       $  151,000
                                                                                ===========                                       ==========


                                                                                                       Classification on Balance Sheet
                                                                                             -----------------------------------------------
                                                                                                                                  Liability
                                                                                                                                  Associated
                                                                                                          Investment                 With
                                              Cost/       Gross       Gross                               Securities,    Other      Common
                                            Amortized   Unrealized  Unrealized   Estimated      Cash      Available-    Current     Stock
                                              Cost        Gains       Losses    Fair Value   Equivalents   For-Sale     Assets     Warrants
                                           -----------  ----------  ----------  -----------  -----------  -----------  ---------  ----------
As of December 31, 2008:
  Assets
    Corporate debt and equity securities  $ 5,022,000  $       --  $  (38,000) $ 4,984,000  $ 4,979,000  $     5,000  $      --
    Auction rate securities                 2,700,000          --          --    2,700,000           --    2,700,000         --
                                           -----------  ----------  ----------  -----------  -----------  -----------  ---------
                                          $ 7,722,000  $       --  $  (38,000) $ 7,684,000  $ 4,979,000  $ 2,705,000  $      --
                                           ===========  ==========  ==========  ===========  ===========  ===========  =========
  Liabilities
    Liability associated with
        common stock warrants                                                  $   331,000                                       $  331,000
                                                                                ===========                                       ==========`

As of March 31, 2009, the unrealized losses on the Company's investments in
debt securities were due primarily to changes in interest rates and credit
market conditions.  The realized gains and losses resulting from the liability
associated with common stock warrants were primarily due to changes in the
Microvision stock price and decreasing terms to expiration.

The Company's significant nonfinancial assets and liabilities that are
subject to consideration for recognition and disclosure at fair value in the
financial statements on a nonrecurring basis primarily includes property and
equipment, long-term debt and deferred rent.  Under FAS 157, the fair value of
an asset or liability determined on a nonrecurring basis should be based on a
hypothetical transaction at the measurement date, with a valuation premise of
either "in-use" or "in-exchange" based on the highest and
best use of the asset from the perspective of market participants other than the
Company itself.  The highest and best use of an asset is in-use if the asset
would provide maximum value to market participants principally through its use
with other assets as a group, and in-exchange if maximum value is derived
principally on a stand-alone basis.  When valuing liabilities, instead of using
a valuation premise concept, one assumes the liability is transferred to a
market participant as a single unit of account, in a transaction that replicates
the credit conditions of the obligor.  The company applies guidance contained in
FAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets
(FAS 144) when evaluating the recoverability of its property and equipment.  FAS
144 requires a long-lived asset be tested for recoverability upon the occurrence
of an indicating event, and absent such potential indications, periodically.  If
an impairment is indicated, the Company applies the guidance in FAS 157 to
determine fair value and records the adjustment in the period of impairment
determination.

4.  INVENTORY

Inventory at March 31, 2009 and December 31, 2008 consisted of the
following:

`March 31,     December 31,
                                                                              2009          2008
                                                                          ------------  ------------                            
Raw materials                                                            $     47,000  $     45,000
Finished goods                                                              1,392,000     1,480,000
                                                                          ------------  ------------
                                                                         $  1,439,000  $  1,525,000
                                                                          ============  ============`

The inventory at March 31, 2009 and December 31, 2008 consisted of raw
materials and finished goods for ROV, the Company's hand-held bar code scanner.
Inventory is stated at the lower of cost or market, with cost determined on a
weighted-average basis.  Management periodically assesses the need to provide
for obsolescence of inventory and adjusts the carrying value of inventory to its
net realizable value when required.  In addition, Microvision reduces the value
of its inventory to its estimated scrap value when management determines that it
is not probable that the inventory will be consumed through normal production
during the next twelve months.

5.  SHARE-BASED COMPENSATION

The Company accounts for stock-based employee compensation arrangements in
accordance with the provisions of FAS 123(R). The Company accounts for equity
instruments issued to non-employees in accordance with the provisions of
Emerging Issues Task Force Issue No. 96-18 and FAS No. 123. The following table
shows the amount of stock-based employee compensation expense included in the
Consolidated Statements of Operations:

`Three Months Ended
                                                                                 March 31,
                                                                          --------------------------
                                                                              2009          2008
                                                                          ------------  ------------                            
Cost of contract revenue                                                       10,000        50,000
Cost of product revenue                                                         6,000        11,000
Research and development expense                                              194,000       281,000
Sales, marketing, general and administrative expense                          365,000       724,000
                                                                          ------------  ------------
Share-based employee compensation cost charged against income            $    575,000  $  1,066,000
                                                                          ============  ============`

Options Activity and Positions

The following table summarizes shares, weighted average exercise price,
weighted average remaining contractual term and aggregate intrinsic value of
options outstanding and options exercisable as of March 31, 2009:

`Weighted
                                                                  Average
                                                      Weighted   Remaining
                                                       Average  Contractual   Aggregate
                                                      Exercise      Term      Intrinsic
Options                                  Shares         Price     (years)       Value
---------------------------------------- -----------  --------- ------------  ----------
Outstanding as of March 31, 2009          6,879,000  $    3.99          7.1  $    1,000

Exercisable as of March 31, 2009          3,649,000  $    4.79          6.2  $    1,000`

As of March 31, 2009, the Company's unamortized share-based compensation was
$4.0 million.  The Company plans to amortize this share-based compensation cost
over the next 2.1 years.

As of March 31, 2009, the Company's unamortized nonvested equity share-based
compensation was $158,000.  The Company plans to amortize this nonvested equity
share-based compensation cost over the next 2.0 years.

6.  LONG-TERM NOTES

Tenant Improvement Loan Agreement

During 2006, the Company entered into a loan agreement with the lessor of the
Company's corporate headquarters in Redmond to finance $536,000 in tenant
improvements.  The loan carries a fixed interest rate of 9% per annum, is
repayable over the initial term of the lease, which expires in 2013, and is
secured by a letter of credit.  The balance of the loan was $375,000 at March
31, 2009.

7.  RECEIVABLES FROM RELATED PARTIES

In 2000, 2001 and 2002, the Board of Directors authorized the Company to
provide unsecured lines of credit to each of the Company's three officers. The
lines of credit carry interest rates of 5.4% to 6.2% and were due within one
year of the officer's termination.

In January 2006, two officers with outstanding loans left the Company and
their loans became due in January 2007.  In May 2007, the Company foreclosed on
50,000 shares of Lumera common stock pledged as collateral for one of the
officer's loans and sold the shares for net proceeds of $227,000.  Under the
terms of a settlement agreement with one of the former officers who left in
January 2006, the Company received payments of $241,000 in 2008.

The Company has sued its former CEO and President Richard Rutkowski and his
spouse to collect $1,733,000 in outstanding loans that remain unpaid.
Counterclaims were filed by Mr. Rutkowski and his spouse, seeking to recover
damages in an amount in excess of $15,000,000. The Company believes these claims
are without merit and intends to defend them vigorously. However, an adverse
outcome could have a material adverse affect on the Company's financial
condition.

A third officer with outstanding loans left the Company in August 2007 and
his loans became due in August 2008.  The Company is pursuing collection of the
remaining outstanding balance from the former officer.

As of March 31, 2009 and December 31, 2008, the total amount outstanding
under the lines of credit was $1,851,000.  As of March 31, 2009 and December 31,
2008, the allowance for receivables from related parties was $1,851,000.

8.  COMMITMENTS AND CONTINGENCIES

Litigation

The Company is subject to various claims and pending or threatened
lawsuits in the normal course of business. Other than that described above in
Note 7, the Company is not currently party to any such legal proceedings that
management believes would have a material adverse effect on the Company's
financial position, results of operations or cash flows.

9.  NEW ACCOUNTING PRONOUNCEMENTS

In April 2009, the Financial Accounting Standards Board
(FASB) issued FASB Staff Position No. FAS 115-2 and FAS 124-2,
Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS
115-2 and FAS 124-2).  FSP FAS 115-2 and FAS 124-2 amend the other-than-temporary
impairment guidance for debt securities to make the guidance more
operational and to improve the presentation and disclosure of other-than-temporary
impairments on debt and equity securities in the financial statements.
FSP FAS 115-2 and FAS 124-2 do not amend existing recognition and measurement
guidance related to other-than-temporary impairments of equity securities.  FSP
FAS 115-2 and FAS 124-2 is effective for interim and annual reporting periods
ending after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009; however, early adoption is only permitted in conjunction
with the early adoptions of FSP FAS 157-4 and FSP FAS 107-1 and APB 28-1. The
Company is currently evaluating the impact that FSP FAS 115-2 and FAS 124-2 will
have on its financial statements.

In April 2009, the FASB released a FASB Staff Position - Determining
Whether a Market Is Not Active and a Transaction Is Not Distressed(FSP FAS
157-4), to provide additional guidance for estimating fair value when
there has been a significant decrease in market activity for a financial asset
or liability.  FSP FAS 157-4 is effective for interim and annual reporting
periods ending after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009; however, early adoption is only permitted in
conjunction with the early adoptions of FSP FAS 115-2 and FAS 124-2 and FSP FAS
107-1 and APB 28-1.  The Company is currently assessing the financial impact of
FSP FAS 157-4 on its financial statements.

In April 2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB
28-1, Interim Disclosures about Fair Value of Financial Instruments (FSP
FAS 107-1 and APB 28-1).  FSP FAS 107-1 and APB 28-1 requires disclosures about
fair value of financial instruments for interim reporting periods of publicly
traded companies as well as in annual financial statements. FSP FAS 107-1 and
APB 28-1 are effective for interim and annual reporting periods ending after
June 15, 2009, with early adoption permitted for periods ending after March 15,
2009; however, early adoption is only permitted in conjunction with the early
adoptions of FSP FAS 115-2 and FAS 124-2 and FSP FAS 157-4.  The Company is
currently evaluating the impact that FSP FAS 107-1 and APB 28-1 will have on its
financial statements.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The information set forth in this report in Item 2, "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
and Item 3, "Quantitative and Qualitative Disclosure about Market
Risk," includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and is subject to the safe harbor created by
that section.  Such statements may include, but are not limited to, projections
of revenues, income or loss, capital expenditures, plans for product development
and cooperative arrangements, future operations, financing needs or plans of
Microvision, as well as assumptions relating to the foregoing.  The words
"anticipate," "believe," "estimate,"
"expect," "goal," "may," "plan,"
"project," "will," and similar expressions identify
forward-looking statements, which speak only as of the date the statement was made.
Factors that could cause actual results to differ materially from those
projected in our forward-looking statements include the following: our ability
to obtain financing; market acceptance of our technologies and products; our
financial and technical resources relative to those of our competitors; our
ability to keep up with rapid technological change; government regulation of our
technologies; our ability to enforce our intellectual property rights and
protect our proprietary technologies; the ability to obtain additional contract
awards and to develop partnership opportunities; the timing of commercial
product launches; the ability to achieve key technical milestones in key
products; and other risk factors identified in this report under the caption
"Item 1A - Risk Factors."

Overview

We are developing high-resolution miniature display and imaging engines based
upon our technology platform.  Our technology platform utilizes our expertise in
two dimensional Micro-Electrical Mechanical systems (MEMS), lasers, optics and
electronics to create a high quality video or still image from a small form
factor device with lower power needs than conventional display technologies.

Our strategy is to develop and supply a proprietary display engine called
PicoP to potential OEM customers who will embed them into a variety of consumer
and automotive products.  The primary objective for consumer applications is to
provide users of mobile devices with a large screen viewing experience produced
by a small embedded projector. Mobile devices may include cell phones, PDA's,
gaming consoles and other consumer electronics products.  These potential
products would allow users to watch movies, play videos, display images, and
other data onto a variety of flat or curved surfaces.

We are currently developing a small accessory projector that would be the
first commercial product based on the PicoP display engine.  The accessory
projector is expected to display images from a variety of video sources
including cell phones, portable media players, PDAs, gaming consoles, laptop
computers, digital cameras, and other consumer electronics products.  We expect
that the accessory product will be commercially available during 2009.

The PicoP with some modification could be embedded into a vehicle or
integrated into a portable standalone aftermarket device to create a high-resolution
head-up display (HUD) that could project point-by-point navigation,
critical operational, safety and other information important to the driver or
pilot. The PicoP could be further modified to be embedded into a pair of glasses
to provide the mobile user with a see-through or occluded personal display to
view movies, play games or access other content.

Results of Operations

Contract revenue.

`% of                  % of
                                                contract              contract
(in thousands)                         2009      revenue     2008      revenue   $ change  % change
                                     ---------  ---------  ---------  ---------  --------- ---------
Three months ended March 31                                                                         
Government revenue                  $     420       59.0  $     908       39.8  $    (488)    (53.7)
Commercial revenue                        292       41.0      1,373       60.2     (1,081)    (78.7)
                                     ---------             ---------             ---------
Total contract revenue              $     712             $   2,281             $  (1,569)    (68.8)
                                     =========             =========             =========`

We earn contract revenue from performance on development contracts with the
U.S. government and commercial customers and from the sale of prototype units
and evaluation kits based on our PicoP display engine.

Our contract revenue from development contracts in a particular period is
dependent upon when we enter into a contract, the value of the contracts we have
entered into, and the availability of technical resources to perform work on the
contracts.

We recognize contract revenue as work progresses on long-term, cost plus
fixed fee and fixed price contracts using the percentage-of-completion method,
which relies on estimates of total expected contract revenue and costs.  Our
revenue contracts generally include a statement of the work we are to complete
and the total fee we will earn from the contract.  When we begin work on the
contract and at the end of each accounting period, we work with the members of
our technical team to estimate the labor and material and other cost required to
complete the statement of work compared to cost incurred to date.  We use
information provided by project mangers, vendors, outside consultants and others
as we deem necessary to develop our cost estimates.  Since our contracts
generally require some level of technology development to complete, the actual
cost required to complete a statement of work can vary from our estimated cost
to complete.   We have developed processes that allow us to make reasonable
estimates of the cost to complete a contract.  Historically, we have made only
immaterial revisions in the estimates to complete the contract at each reporting
period. Recognized revenues are subject to revisions as the contract progresses
to completion and actual revenue and cost become certain.  Revisions in revenue
estimates are reflected in the period in which the facts that give rise to the
revision become known.  In the future, revisions in these estimates could
significantly impact recognized revenue in any one reporting period.  If the
U.S. government cancels a contract, we would receive payment for work performed
and costs committed to prior to the cancellation.

During the three months ended March 31, 2009, we began selling prototype
units and evaluation kits based on our PicoP display engine.  We recognize
contract revenue on the sales of prototype units and evaluation kits upon
acceptance of the deliverables by the customer or expiration of the contractual
acceptance period.  While we anticipate future sales of these units, revenue may
vary substantially due to the timing of orders from customers and potential
constraints on resources.

Contract revenue was substantially lower during the three months ended March
31, 2009 than the same period in 2008, due to reduced contract activity and
lower beginning backlog in 2009 compared to the prior year.  We expect that we
will have fewer opportunities to enter into new development contracts as we move
closer to the commercialization of products based on our PicoP display engine.

As long as most of our revenue is earned from performance on development
contracts, we believe there may be a high degree of variability in revenue from
quarter to quarter.

Our backlog of development contracts, including orders for prototype units,
at March 31, 2009 was $479,000 compared to $1.5 million at March 31, 2008, all
of which is scheduled for completion during the next twelve months.

Product revenue.

`% of                  % of
                                                 product               product
(in thousands)                         2009      revenue     2008      revenue   $ change  % change
                                     ---------  ---------  ---------  ---------  --------- ---------
Three months ended March 31                                                                         
Bar code revenue                    $     239      100.0  $     289      100.0  $     (50)    (17.3)`

Our bar code sales generally include acceptance provisions.  We recognize
revenue for bar code shipments upon acceptance of the product by the customer or
expiration of the contractual acceptance period.  Our quarterly bar code revenue
may vary substantially due to the timing of product orders from customers.

Bar code revenue was lower during the three months ended March 31, 2009 than
the same period in 2008, due to decreased purchasing volume of small and
mid-sized businesses as a result of the global economic conditions.

The backlog of bar code orders at March 31, 2009 was approximately $138,000,
compared to $338,000 at March 31, 2008, all of which is scheduled for delivery
during the next twelve months.

Cost of contract revenue.

`% of                  % of
                                                contract              contract
(in thousands)                         2009      revenue     2008      revenue   $ change  % change
                                     ---------  ---------  ---------  ---------  --------- ---------
Three months ended March 31         $     383       53.8  $     762       33.4  $    (379)    (49.7)`

Cost of contract revenue includes both the direct and allocated indirect
costs of performing on development contracts.  Direct costs include labor,
materials and other costs incurred directly in performing on a contract.
Indirect costs include labor and other costs associated with operating our
research and development department and building our technical capabilities and
capacity.  Cost of contract revenue is determined both by the level of direct
costs incurred on development contracts and by the level of indirect costs
incurred in operating and building our technical capabilities and capacity.
Both the direct and indirect costs can fluctuate substantially from period to
period.

Cost of contract revenue was lower during the three months ended March 31,
2009 than March 31, 2008 as a result of the decreased activity on development
contracts.  The increase in cost of contract revenue as a percentage of contract
revenue was the result of differences in the cost mix of the contracts during
those periods.  During the three months ended March 31, 2008, cost of contract
revenue included contracts with more favorable cost structures and higher gross
margins.

The cost of revenue as a percentage of revenue can fluctuate significantly
from period to period, depending on the contract cost mix and the levels of
direct and indirect costs incurred.  However, over longer periods of time we
expect modest fluctuations in the cost of contract revenue, as a percentage of
contract revenue.

Cost of product revenue.

`% of                  % of
                                                 product               product
(in thousands)                         2009      revenue     2008      revenue   $ change  % change
                                     ---------  ---------  ---------  ---------  --------- ---------
Three months ended March 31         $     241      100.8  $     339      117.3  $     (98)    (28.9)`

Cost of product revenue includes both the direct and allocated indirect costs
of manufacturing bar code scanners sold to customers.  Direct costs include
labor, materials and other costs incurred directly in the manufacture of bar
code scanners.  Indirect costs include labor and other costs associated with
operating our manufacturing capabilities and capacity.

Our overhead, which includes the costs of procuring, inspecting and storing
material, facility and depreciation costs, is allocated to inventory, cost of
product revenue, cost of contract revenue, and research and development expense
based on the proportion of direct material purchased for the respective
activity.  During the three months ending March 31, 2009 and 2008, we expensed
approximately $73,000 and $47,000, respectively, of manufacturing overhead
associated with production capacity in excess of production requirements.

The cost of product revenue as a percentage of product revenue can fluctuate
significantly from period to period, depending on the product mix, the level of
overhead expense and the volume of direct materials purchased.

Research and development expense.

`(in thousands)                         2009       2008     $ change   % change
                                     ---------  ---------  ---------  ---------                     
Three months ended March 31         $   5,610  $   4,426  $   1,184       26.8`

Research and development expense consists of:

- Compensation related costs of employees and contractors engaged in internal
research and product development activities,
- Laboratory operations, outsourced development and processing work, and
- Other operating expenses.

We have increased spending in research and development as part of our
strategy to accelerate the time to market for products based on the PicoP.   The
increase in cost is primarily attributable to increases in payroll costs and
contracted services.

We believe that a substantial level of continuing research and development
expense will be required to develop additional commercial products using the
scanned beam display technology.  Accordingly, we anticipate our level of
research and development spending will continue to be substantial.

Sales, marketing, general and administrative expense.

`(in thousands)                         2009       2008     $ change   % change
                                     ---------  ---------  ---------  ---------                     
Three months ended March 31         $   3,814  $   4,135  $    (321)      (7.8)`

Sales, marketing, general and administrative expense includes compensation
and support costs for marketing, sales, management and administrative staff, and
for other general and administrative costs, including legal and accounting
services, consultants and other operating expenses.

The decrease in sales, marketing, general and administrative expense for the
three months ended March 31, 2009 compared to the same period in 2008 was
primarily the result of decreased payroll due to reduction in staffing
levels.

We continue to aggressively manage these costs as part of our strategy to
accelerate the development of PicoP-based products while controlling our cash
used in operations.

Interest income.

`(in thousands)                         2009       2008     $ change   % change
                                     ---------  ---------  ---------  ---------                     
Three months ended March 31         $      64  $     412  $    (348)     (84.5)`

The decrease in interest income for the three months ended March 31, 2009
compared to the same period in 2008 resulted primarily from lower average cash,
investment securities balances, and interest rates.

Interest expense.

`(in thousands)                         2009       2008     $ change   % change
                                     ---------  ---------  ---------  ---------                     
Three months ended March 31         $      11  $      13  $      (2)     (15.4)`

Gain on derivative instruments, net.

`(in thousands)                         2009       2008     $ change   % change
                                     ---------  ---------  ---------  ---------                     
Three months ended March 31         $     180  $   1,673  $  (1,493)     (89.2)`

In March and December 2005, we issued convertible notes (the
"Notes") with an aggregate principal amount of $20 million.  The last
payment on the Notes was made in March 2007.  In connection with the issuance of
the Notes we issued warrants to purchase 2,302,000 shares of common stock.  The
warrants met the definition of derivative instruments that must be accounted for
as liabilities under the provisions of Emerging Issues Task Force Issue No. 00-19,
Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Company's Own Stock,because we cannot engage in
certain corporate transactions affecting the common stock unless we make a cash
payment to the holders of the warrants.  We record changes in the fair values of
the warrants in the statement of operations each period.  In July 2008, warrants
to purchase 750,000 shares of common stock expired unexercised.
We valued the remaining warrants to
purchase 1,552,000 shares of common stock at March 31, 2009 using the
Black-Scholes option-pricing model with the following assumptions: expected
volatilities of 75%; expected dividend yields of 0%; risk free interest rates of
from 0.6% to 0.7%; and contractual lives ranging from 1.0 year to 1.7 years.
The change in value of the warrants of $180,000 for the three months ended March
31, 2009 was recorded as a non-operating gain and is included in "Gain on
derivative instruments, net" in the consolidated statement of
operations.  We valued the warrants at March 31, 2008 using the Black-Scholes
option-pricing model with the following assumptions:  expected
volatilities ranging from 65% to 67%; expected dividend yields of 0%; risk free
interest rates ranging from 1.4% to 1.7%; and contractual lives ranging from 0.3
years to 2.7 years.  The change in value of the warrants of $1,736,000 for the
three months ended March 31, 2008 was recorded as a non-operating gain and is
included in "Gain on derivative instruments, net" in the consolidated statement
of operations.

Prior to December 9, 2008, we held warrants to purchase 170,500 shares of
Lumera common stock.  On December 9, 2008, Lumera merged with GigOptix, LLC and
the combined company now conducts business as GigOptix, Inc.  Our Lumera
warrants were exchanged for warrants to purchase shares of the new company's
common stock, after applying a 0.125 exchange ratio and exercise price
escalation.  As of December 31, 2008, the fair value of the warrants was
determined to be zero.  As of March 31, 2008, the warrants were valued using the
Black-Scholes option-pricing model with the following assumptions:  expected
volatility of 83%; expected dividend yields of 0%; risk free interest rates of
1.78%; and contractual lives of 3.0 years.  The change in value of $64,000 for
the three months ended March 31, 2008 was recorded as a non-operating loss and
is included in "Gain on derivative instruments, net" in the
consolidated statement of operations.

Liquidity and Capital Resources

We have funded our operations to date primarily through the sale of equity
and debt securities and, to a lesser extent, from development contract revenues
and product sales.  At March 31, 2009, we had $19.1 million in cash, cash
equivalents and investment securities, available-for-sale.  Our operating plan
for 2009 includes the launch of the first accessory product, further development
of our PicoP display engine for embedded applications and further development of
automotive HUD and eyewear applications.  In order to fully fund our product
launch and our other development efforts, we will require additional capital in
2009.  We plan to obtain additional cash through the issuance of equity or debt
securities.  There can be no assurance that additional cash will be available or
that, if available, it will be available on terms acceptable to us on a timely
basis.  If adequate funds are not available in the next couple of months to fully
implement our plan we will begin to reduce the scope of the business to extend
our operations as we pursue other financing opportunities and business
relationships.  This reduction in scope could include delaying product launch
and development projects resulting in reductions in staff, operating costs,
capital expenditures and investment in research and development.  With these
adjustments to our operating plan, we believe we currently have sufficient cash,
cash equivalents, and investment securities to fund operations through at least
February 28, 2010.

Cash used in operating activities totaled $8.8 million during the three
months ended March 31, 2009, compared to $5.3 million during the same period in
2008.  During the three months ended March 31, 2009, the increase in cash used in
operating activities was primarily driven by lower contract activity and higher research
and development costs as we move closer to the commercialization of PicoP based products.

We had the following material gains and charges, and changes in assets during
the three months ended March 31, 2009:

- "Gain on derivative instruments, net"
- "Accounts payable"

Cash used in investing activities totaled $354,000 for the three months ended
March 31, 2009 compared to cash provided by investing activities of $6.5 million
during the three months ended March 31, 2008.  During the three months ended
March 31, 2009, we used cash of $354,000 for capital expenditures, compared to
$137,000 during the same period in 2008.  During the three months ended March
31, 2008, we had net sales of investment securities totaling
$7.0 million.

Cash generated and used in financing activities during the three months ended
March 31, 2009 and 2008 was not significant.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate and Market Liquidity Risks

As of March 31, 2009, 86% of our total cash, cash equivalents and
investment securities, available-for-sale have variable interest rates or are
very short-term discount notes traded in active markets.  Therefore, we believe
our exposure to the market and interest rate risk is not material.  The
remaining 14% is composed of $3.0 million par student loan auction-rate
securities (SLARS).  The SLARS owned by the Company are investment grade
long-term bonds, structured with variable interest rate resets, purchases and sales
to be determined via a Dutch Auction process every 28 days.  They were issued to
fund U.S. government guaranteed student loans.  Beginning in February 2008 as
global credit markets significantly deteriorated, insufficient clearing bids
have been submitted for the SLARS.  The auctions have thus failed and the
interest rates have been reset to "maximum rates" instead of
"auction rates".  The SLARS have been illiquid through the auction
process in addition to through inactive secondary ARS markets.

Given the adverse credit market conditions, the fair value of the principal
of these bonds has become affected by changes in interest rates, the spread
between short and long rates, and credit market liquidity.  As a result, at
December 31, 2008, we estimated that the fair value of our SLARS to be
approximately $2.7 million.  If market conditions worsen, we may have to further
adjust the estimated fair value of the SLARS, including additional charges to
earnings, if we believe the adjustment is other than temporary.  In the event we
need access to the funds invested in the SLARS, we could be required to sell
these securities at an amount below our original purchase value.  Any of these
events could affect our consolidated financial condition, results of operations
and cash flows.  However, based on our current operating plan and ability to
access our $16.4 million held in cash and cash equivalents and other investment
securities available for sale held as of March 31, 2009, we do not expect to be
required to sell these securities materially below their current estimated
values.

Our investment policy generally directs that the investment managers should
select investments to achieve the following goals: principal preservation,
adequate liquidity and return.  As of March 31, 2009, our cash and cash
equivalents and investments available-for-sale securities portfolio are
comprised of short-term highly rated money market funds, corporate bonds and the
SLARS.

`Amount      Percent
                                     ---------  ---------
Cash                                  $14,506      75.94%
Less than one year                     $1,897       9.93%
One to two years                           --         --
Greater than five years                $2,700      14.13%
                                     ---------  ---------
                                       19,103     100.00%
                                     =========  =========`

Foreign Exchange Rate Risk

All of our development contract payments are made in U.S. dollars.
However, in the future we may enter into additional development contracts in
foreign currencies that may subject us to foreign exchange rate risk.  We intend
to enter into foreign currency hedges to offset material exposure to currency
fluctuations when we can adequately determine the timing and amounts of the
foreign currency exposure.

ITEM 4.	CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we have
evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by
this report and, based on this evaluation, our principal executive officer and
principal financial officer have concluded that these disclosure controls and
procedures are effective.  There were no changes in our internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)) that occurred
during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

PART II

OTHER INFORMATION

ITEM 1A - RISK FACTORS

Risk Factors Relating to the Microvision Business

We have a history of operating losses and expect to incur significant
losses in the future.

We have had substantial losses since our inception.  We cannot assure you
that we will ever become or remain profitable.

- As of March 31, 2009, we had an accumulated deficit of $300.9 million.
- We incurred consolidated net losses of $239.6 million from inception through
2006, $19.8 million in 2007, $32.6 million in 2008, and consolidated net loss of
$8.9 million in the three months ended March 31, 2009.

The likelihood of our success must be considered in light of the expenses,
difficulties and delays frequently encountered by companies formed to develop
and market new technologies.  In particular, our operations to date have focused
primarily on research and development of the scanned beam technology and
development of demonstration units.  We are unable to accurately estimate future
revenues and operating expenses based upon historical performance.

We cannot be certain that we will succeed in obtaining additional development
contracts or that we will be able to obtain substantial customer orders for our
products.  In light of these factors, we expect to continue to incur substantial
losses and negative cash flow through 2009 and likely thereafter.  We cannot be
certain that we will achieve positive cash flow at any time in the future.

We will require additional capital to fund our operations and to implement
our business plan.  If we do not obtain additional capital, we may be required
to curtail our operations substantially.  Raising additional capital may dilute
the value of current shareholders' shares.

Our operating plan for 2009 includes the launch of our first accessory
product, further development of the PicoP display engine for embedded
applications and further development of automotive HUD and eyewear applications.
In order to fully fund our product launch and our other development efforts, we
will require additional capital in the next couple of months.  We plan to obtain
additional cash through the issuance of equity or debt securities. We will
require additional capital in the future to fund our operations, including to:

- Further develop the technology platform and PicoP display engine,
- Develop and protect our intellectual property rights, and
- Fund long-term marketing and business development opportunities.

Our capital requirements will depend on many factors, including, but not
limited to, the rate at which we can, directly or through arrangements with
original equipment manufacturers, introduce products incorporating the PicoP
display engine and image capture technologies and the market acceptance and
competitive position of such products.  If revenues are less than we anticipate,
if the level and mix of revenues vary from anticipated amounts and allocations
or if expenses exceed the amounts budgeted, we may require additional capital
earlier than expected to further the development of our technologies, for
expenses associated with product development, and to respond to competitive
pressures or to meet unanticipated development difficulties.  In addition, our
operating plan provides for the development of strategic relationships with
systems and equipment manufacturers that may require additional investments by
us.

Additional capital may not be available to us, or if available, on terms
acceptable to us or on a timely basis.  Raising additional capital may involve
issuing securities with rights and preferences that are senior to our common
stock and may dilute the value of current shareholders' shares.  If adequate
funds are not available in the next couple of months to fully implement our plan
we will begin to reduce the scope of our business to extend our operations as we
pursue other financing opportunities and business relationships.  This reduction
in scope could include delaying product launch and projects resulting in
reductions in staff and operating costs as well as reductions in capital
expenditures and investment in research and development.  With these adjustments
to our operating plan, we believe we currently have sufficient cash, cash
equivalents, and investment securities to fund operations through at least
February 28, 2010.

If we cannot manufacture products at competitive prices, our financial
results will be adversely affected.

We are currently negotiating component pricing with suppliers for our future
products.  The cost per unit for PicoP based accessory projectors currently
exceeds the level at which we could expect to profitably sell these products.
If we cannot lower our cost of production, we may face increased demands on our
financial resources, possibly requiring additional equity and/or debt financing
to sustain our business operations.

We cannot be certain that our technology platform or products incorporating
our PicoP display engine will achieve market acceptance.  If products
incorporating the PicoP display engine do not achieve market acceptance, our
revenues may not grow.

Our success will depend in part on customer acceptance of the PicoP display
engine.  The PicoP display engine may not be accepted by manufacturers who use
display technologies in their products, by systems integrators who incorporate
our products into their products or by end users of these products.  To be
accepted, the PicoP display engine must meet the expectations of our potential
customers in the consumer, defense, industrial and medical markets.  If our
technology fails to achieve market acceptance, we may not be able to continue to
develop our technology platform.

Our planned future products are dependent on advances in technology by
other companies.

We rely on and will continue to rely on technologies, such as light sources,
MEMS and optical components that are developed and produced by other companies.
The commercial success of certain of our planned future products will depend in
part on advances in these and other technologies by other companies.  We may,
from time to time, contract with and support companies developing key
technologies in order to accelerate the development of them for our specific
uses.  There are no guarantees that such activities will result in useful
technologies or components for us.

It may become more difficult to sell our stock in the public market.

Our common stock is listed for quotation on The NASDAQ Global Market.  To
keep our listing on this market, we must meet NASDAQ's listing maintenance
standards.  If we are unable to continue to meet NASDAQ's listing maintenance
standards, our common stock could be delisted from The NASDAQ Global Market.  If
our common stock were delisted, we likely would seek to list the common stock on
the NASDAQ Capital Market, the American Stock Exchange or on a regional stock
exchange.  Listing on such other market or exchange could reduce the liquidity
for our common stock.  If our common stock were not listed on the Capital Market
or an exchange, trading of our common stock would be conducted in the
over-the-counter market on an electronic bulletin board established for unlisted
securities or directly through market makers in our common stock.  If our common
stock were to trade in the over-the-counter market, an investor would find it
more difficult to dispose of, or to obtain accurate quotations for the price of,
the common stock.  A delisting from The NASDAQ Global Market and failure to
obtain listing on such other market or exchange would subject our securities to
so-called penny stock rules that impose additional sales practice and
market-making requirements on broker-dealers who sell or make a market in such
securities.  Consequently, removal from The NASDAQ Global Market and failure to
obtain listing on another market or exchange could affect the ability or
willingness of broker-dealers to sell or make a market in our common stock and
the ability of purchasers of our common stock to sell their securities in the
secondary market.  In addition, when the market price of our common stock is
less than $5.00 per share, we become subject to penny stock rules even if our
common stock is still listed on The NASDAQ Global Market.  While the penny stock
rules should not affect the quotation of our common stock on The NASDAQ Global
Market, these rules may further limit the market liquidity of our common stock
and the ability of investors to sell our common stock in the secondary market.
The market price of our stock has mostly traded below $5.00 per share during
2008 and 2007.  On April 27, 2009, the closing price of our stock was $1.81.

Our lack of the financial and technical resources relative to our
competitors may limit our revenues, potential profits, overall market share or
value.

Our current products and potential future products will compete with
established manufacturers of existing products and companies developing new
technologies.  Many of our competitors have substantially greater financial,
technical and other resources than we have.  Because of their greater resources,
our competitors may develop products or technologies that are superior to our
own.  The introduction of superior competing products or technologies could
result in reduced revenues, lower margins or loss of market share, any of which
could reduce the value of our business.

We may not be able to keep up with rapid technological change and our
financial results may suffer.

The information display industry has been characterized by rapidly changing
technology, accelerated product obsolescence and continuously evolving industry
standards.  Our success will depend upon our ability to further develop our
technology platform and to cost effectively introduce new products and features
in a timely manner to meet evolving customer requirements and compete with
competitors' product advances.

We may not succeed in these efforts because of:

- delays in product development,
- lack of market acceptance for our products, or
- lack of funds to invest in product development and marketing.

The occurrence of any of the above factors could result in decreased
revenues, market share and value.

We could face lawsuits related to our use of the PicoP display engine or
other technologies.  Defending these suits would be costly and time consuming.
An adverse outcome in any such matter could limit our ability to commercialize
our technology and products, reduce our revenues and increase our operating
expenses.

We are aware of several patents held by third parties that relate to certain
aspects of light scanning displays and image capture products.  These patents
could be used as a basis to challenge the validity, limit the scope or limit our
ability to obtain additional or broader patent rights of our patents or patents
we have licensed.  A successful challenge to the validity of our patents or
patents we have licensed could limit our ability to commercialize our technology
and the PicoP display engine and, consequently, materially reduce our revenues.
Moreover, we cannot be certain that patent holders or other third parties will
not claim infringement by us with respect to current and future technology.
Because U.S. patent applications are held and examined in secrecy, it is also
possible that presently pending U.S. applications will eventually be issued with
claims that will be infringed by our products or our technology.  The defense
and prosecution of a patent suit would be costly and time consuming, even if the
outcome were ultimately favorable to us.  An adverse outcome in the defense of a
patent suit could subject us to significant cost, to require others and us to
cease selling products that incorporate the PicoP display engine, to cease
licensing our technology or to require disputed rights to be licensed from third
parties.  Such licenses, if available, would increase our operating expenses.
Moreover, if claims of infringement are asserted against our future co-development
partners or customers, those partners or customers may seek
indemnification from us for damages or expenses they incur.

Our products may be subject to future health and safety regulations that
could increase our development and production costs.

Products incorporating the PicoP display engine could become subject to new
health and safety regulations that would reduce our ability to commercialize the
PicoP display engine.  Compliance with any such new regulations would likely
increase our cost to develop and produce products using the PicoP display engine
and adversely affect our financial results.

Our dependence on sales to distributors increases the risks of managing
our supply chain and may result in excess inventory or inventory shortages.

Currently, the majority of our distributor relationships for the ROV Scanner
and its accessories involve the distributor taking inventory positions and
reselling to multiple customers.  With these distributor relationships, we do
not recognize revenue until the distributors sell the product through to their
end user customers.  Our distributor relationships do reduce our ability to
forecast sales and increases risks to our business. Since our distributors act
as intermediaries between us and the end user customers, we must rely on our
distributors to accurately report inventory levels and production forecasts.
This requires us to manage a more complex supply chain and monitor the financial
condition and credit worthiness of our distributors and the end user customers.
Our failure to manage one or more of these risks could result in excess
inventory or shortages that could adversely impact our operating results and
financial condition.

We do not have long-term commitments from our ROV customers, and plan
purchases based upon our estimates of customer demand, which may require us to
contract for the manufacture of our products based on inaccurate estimates.

Our ROV sales are made on the basis of purchase orders rather than long-term
commitments.  Our customers may cancel or defer purchases at any time.  This
requires us to forecast demand based upon assumptions that may not be correct.
If our customers or we overestimate demand, we may create inventory that we may
not be able to sell or use, resulting in excess inventory, which could become
obsolete or negatively affect our operating results.  Conversely, if our
customers or we underestimate demand, or if sufficient manufacturing capacity is
not available, we may lose revenue opportunities, damage customer relationships,
and we may not achieve expected revenues.

Our future growth will suffer if we do not achieve sufficient market
acceptance of our products to compete effectively.

Our success depends, in part, on our ability to gain acceptance of our
current and future products by a large number of customers.  Achieving market
based acceptance for our products will require marketing efforts and the
expenditure of financial and other resources to create product awareness and
demand by potential customers.  We may be unable to offer products consistently
or at all that compete effectively with products of others on the basis of price
or performance.  Failure to achieve broad acceptance of our products by
potential customers and to effectively compete would have a material adverse
effect on our operating results.

Our operating results may be adversely impacted by worldwide political and
economic uncertainties and specific conditions in the markets we address.

In the recent past, general worldwide economic conditions have
experienced a downturn due to slower economic
activity, concerns about inflation, increased energy costs, decreased consumer
confidence, reduced corporate profits and capital spending, and adverse business
conditions. Any continuation or

Because we plan to continue using foreign contract manufacturers, our
operating results could be harmed by economic, political, regulatory and other
factors in foreign countries.

We currently use a contract manufacturer in Asia to manufacture our ROV
product, and we plan to use foreign manufacturers to manufacture future
products, where appropriate.  These international operations are subject to
inherent risks, which may adversely affect us, including:

- political and economic instability;
- high levels of inflation, historically the case in a number of countries in
Asia;
- burdens and costs of compliance with a variety of foreign laws;
- foreign taxes;
- changes in tariff rates or other trade and monetary policies; and
- changes or volatility in currency exchange rates.

If we have to qualify a new contract manufacturer or foundry for our
products, we may experience delays that result in lost revenues and damaged
customer relationships.

We rely on single suppliers to manufacture our ROV Scanner product and our
MEMS chips in wafer form.  The lead time required to establish a relationship
with a new contract manufacturer or foundry is long, and it takes time to adapt
a product's design to a particular manufacturer's processes.  Accordingly, there
is no readily available alternative source of supply for these products and
components in high volumes.  This could cause significant delays in shipping
products if we have to change our source of supply and manufacture quickly,
which may result in lost revenues and damaged customer relationships.

If we experience delays or failures in developing commercially viable
products, we may have lower revenues.

We have developed demonstration units incorporating the PicoP display engine.
However, we must undertake additional research, development and testing before
we are able to develop additional products for commercial sale.  Product
development delays by us or our potential product development partners, or the
inability to enter into relationships with these partners, may delay or prevent
us from introducing products for commercial sale.  We intend to rely on third
party developments or to contract with other companies to continue development
of green laser devices we will need for our products.

Our success will depend, in part, on our ability to secure significant
third party manufacturing resources.

We are developing our capability to manufacture products in commercial
quantities.  Our success depends, in part, on our ability to provide our
components and future products in commercial quantities at competitive prices.
Accordingly, we will be required to obtain access, through business partners or
contract manufacturers, to manufacturing capacity and processes for the
commercial production of our expected future products.  We cannot be certain
that we will successfully obtain access to sufficient manufacturing resources.
Future manufacturing limitations of our suppliers could result in a limitation
on the number of products incorporating our technology that we are able to
produce.

If our licensors and we are unable to obtain effective intellectual
property protection for our products and technology, we may be unable to compete
with other companies.

Intellectual property protection for our products is important and uncertain.
If we do not obtain effective intellectual property protection for our products,
processes and technology, we may be subject to increased competition.  Our
commercial success will depend in part on our ability and the ability of the
University of Washington and our other licensors to maintain the proprietary
nature of the PicoP display and other key technologies by securing valid and
enforceable patents and effectively maintaining unpatented technology as trade
secrets.  We try to protect our proprietary technology by seeking to obtain
United States and foreign patents in our name, or licenses to third-party
patents, related to proprietary technology, inventions, and improvements that
may be important to the development of our business.  However, our patent
position and the patent position of the University of Washington and other
licensors involve complex legal and factual questions.  The standards that the
United States Patent and Trademark Office and its foreign counterparts use to
grant patents are not always applied predictably or uniformly and can change.
Additionally, the scope of patents are subject to interpretation by courts and
their validity can be subject to challenges and defenses, including challenges
and defenses based on the existence of prior art.  Consequently, we cannot be
certain as to the extent to which we will be able to obtain patents for our new
products and technology or the extent to which the patents that we already own
or license from others protect our products and technology.  Reduction in scope
of protection or invalidation of our licensed or owned patents, or our inability
to obtain new patents, may enable other companies to develop products that
compete with ours on the basis of the same or similar technology.

We also rely on the law of trade secrets to protect unpatented know-how and
technology to maintain our competitive position.  We try to protect this know-how
and technology by limiting access to the trade secrets to those of our
employees, contractors and partners with a need to know such information and by
entering into confidentiality agreements with parties that have access to it,
such as our employees, consultants and business partners.  Any of these parties
could breach the agreements and disclose our trade secrets or confidential
information, or our competitors might learn of the information in some other
way.  If any trade secret not protected by a patent were to be disclosed to or
independently developed by a competitor, our competitive position could be
materially harmed.

We could be exposed to significant product liability claims that could be
time-consuming and costly, divert management attention and adversely affect our
ability to obtain and maintain insurance coverage.

We may be subject to product liability claims if any of our product
applications are alleged to be defective or cause harmful effects.  For example,
because some of our PicoP displays are designed to scan a low power beam of
colored light into the user's eye, the testing, manufacture, marketing and sale
of these products involve an inherent risk that product liability claims will be
asserted against us.  Product liability claims or other claims related to our
products, regardless of their outcome, could require us to spend significant
time and money in litigation, divert management time and attention, require us
to pay significant damages, harm our reputation or hinder acceptance of our
products.  Any successful product liability claim may prevent us from obtaining
adequate product liability insurance in the future on commercially desirable or
reasonable terms.  An inability to obtain sufficient insurance coverage at an
acceptable cost or otherwise to protect against potential product liability
claims could prevent or inhibit the commercialization of our products.

We rely heavily on a limited number of development contracts with the U.S.
government, which are subject to immediate termination by the government for
convenience at any time, and the termination of one or more of these contracts
could have a material adverse impact on our operations.

During the first quarter of 2009 and the full year of 2008, 44% and 34%,
respectively, of our revenue was derived from performance on a limited number of
development contracts with the U.S. government.  Therefore, any significant
disruption or deterioration of our relationship with the U.S. government would
significantly reduce our revenues.  Our government programs must compete with
programs managed by other contractors for limited amounts and uncertain levels
of funding.  The total amount and levels of funding are susceptible to
significant fluctuations on a year-to-year basis.  Our competitors continuously
engage in efforts to expand their business relationships with the government and
are likely to continue these efforts in the future.  Our contracts with the
government are subject to immediate termination by the government for
convenience at any time.  The government may choose to use contractors with
competing display technologies or it may decide to discontinue any of our
programs altogether.  In addition, those development contracts that we do obtain
require ongoing compliance with applicable government regulations.  Termination
of our development contracts, a shift in government spending to other programs
in which we are not involved, a reduction in government spending generally, or
our failure to meet applicable government regulations could have severe
consequences for our results of operations.

Our development agreements have long sales cycles, which make it difficult
to plan our expenses and forecast our revenues.

Our development agreements have lengthy sales cycles that involve numerous
steps including determination of a product application, exploring the technical
feasibility of a proposed product, evaluating the costs of manufacturing a
product and manufacturing or contracting out the manufacturing of the product.
Our long sales cycle, which can last several years, makes it difficult to
predict the quarter in which contract signing and revenue recognition will
occur.  Delays in entering into development agreements could cause significant
variability in our revenues and operating results for any particular quarterly
period.

Our development contracts may not lead to products that will be
profitable.

Our development contracts, including without limitation those discussed in
this document are exploratory in nature and are intended to develop new types of
products for new applications.  These efforts may prove unsuccessful and these
relationships may not result in the development of products that will be
profitable.

Our revenues are highly sensitive to developments in the defense
industry.

Our revenues to date have been derived principally from product development
research relating to defense applications of our technology.  We believe that
development programs and sales of potential products in this market will
represent a significant portion of our future revenues.  Developments that
adversely affect the defense sector, including delays in government funding and
a general economic downturn, could cause our revenues to decline
substantially.

If we lose our rights under our third party technology licenses, our
operations will be adversely affected.

Our business depends in part on technology rights licensed from third
parties.  We could lose our exclusivity or other rights to use the technology
under our licenses if we fail to comply with the terms and performance
requirements of the licenses.    In addition, certain licensors may terminate a
license upon our breach and have the right to consent to sublicense
arrangements.  If we were to lose our rights under any of these licenses, or if
we were unable to obtain required consents to future sublicenses, we would lose
a competitive advantage in the market, and may even lose the ability to
commercialize our products completely.  Either of these results could
substantially decrease our revenues.

We are dependent on third parties in order to develop, manufacture, sell
and market our products.

Our strategy for commercializing our technology and products incorporating
the PicoP display engine includes entering into cooperative development,
manufacturing, sales and marketing arrangements with corporate partners,
original equipment manufacturers and other third parties.  We cannot be certain
that we will be able to negotiate arrangements on acceptable terms, if at all,
or that these arrangements will be successful in yielding commercially viable
products.  If we cannot establish these arrangements, we would require
additional capital to undertake such activities on our own and would require
extensive manufacturing, sales and marketing expertise that we do not currently
possess and that may be difficult to obtain.  In addition, we could encounter
significant delays in introducing the PicoP display engine or find that the
development, manufacture or sale of products incorporating the PicoP display
engine would not be feasible.  To the extent that we enter into cooperative
development, sales and marketing or other joint venture arrangements, our
revenues will depend upon the performance of third parties.  We cannot be
certain that any such arrangements will be successful.

Loss of any of our key personnel could have a negative effect on the
operation of our business.

Our success depends on our executive officers and other key personnel and on
the ability to attract and retain qualified new personnel.  Achievement of our
business objectives will require substantial additional expertise in the areas
of sales and marketing, research and product development and manufacturing.
Competition for qualified personnel in these fields is intense, and the
inability to attract and retain additional highly skilled personnel, or the loss
of key personnel, could reduce our revenues and adversely affect our
business.

We are dependent on a small number of customers for our revenue.  Our
quarterly performance may vary substantially and this variance, as well as
general market conditions, may cause our stock price to fluctuate greatly and
potentially expose us to litigation.

Our revenues to date have been generated primarily from a limited number of
development contracts with U.S. government entities and commercial partners.
Our quarterly operating results may vary significantly based on:

- reductions or delays in funding of development programs involving new
information display technologies by the U.S. government or our current or
prospective commercial partners;
- changes in evaluations and recommendations by any securities analysts
following our stock or our industry generally;
- announcements by other companies in our industry;
- changes in business or regulatory conditions;
- announcements or implementation by our competitors of technological
innovations or new products;
- the status of particular development programs and the timing of performance
under specific development agreements;
- economic and stock market conditions; or
- other factors unrelated to our company or industry.

In one or more future quarters, our results of operations may fall below the
expectations of securities analysts and investors and the trading price of our
common stock may decline as a consequence.  In addition, following periods of
volatility in the market price of a company's securities, shareholders often
have instituted securities class action litigation against that company.  If we
become involved in a class action suit, it could divert the attention of
management, and, if adversely determined, could require us to pay substantial
damages.

If we fail to manage expansion effectively, our revenue and expenses could
be adversely affected.

Our ability to successfully offer products and implement our business plan in
a rapidly evolving market requires an effective planning and management process.
The growth in business and relationships with customers and other third parties
has placed, and will continue to place, a significant strain on our management
systems and resources.  We will need to continue to improve our financial and
managerial controls, reporting systems and procedures and will need to continue
to train and manage our work force.

ITEM 6.	Exhibits

|10.1 | Employment Agreement effective as of April 7, 2009 between
Microvision, Inc. and Alexander Y. Tokman                                                                            
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 | Chief Executive Officer Certification Pursuant to Rule 13a-14 of
the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002      
|31.2 | Chief Financial Officer Certification Pursuant to Rule 13a-14 of
the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002      
|32.1 | Chief Executive Officer Certification pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
|32.2 | Chief Financial Officer Certification pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

| | MICROVISION, INC.
| | -----------------

|Date: May 7, 2009 | BY: | /s/  Alexander Y. Tokman                             
|----------------- | --- | -----------------------------------------------------
|                  |     | Alexander Y. Tokman                                  
|                  |     | Chief Executive Officer
(Principal Executive Officer)



|Date:  May 7, 2009 | BY: | /s/  Jeff Wilson                                     
|------------------ | --- | -----------------------------------------------------
|                   |     | Jeff Wilson                                          
|                   |     | Chief Financial Officer
(Principal Financial Officer)



EXHIBIT INDEX

The following documents are filed.

|Exhibit Number | Description                                                                                                                                                                     
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1           | Employment Agreement effective as of April 7, 2009 between
Microvision, Inc. and Alexander Y. Tokman                                                                            
|31.1           | Chief Executive Officer Certification Pursuant to Rule 13a-14 of
the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002      
|31.2           | Chief Financial Officer Certification Pursuant to Rule 13a-14 of
the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002      
|32.1           | Chief Executive Officer Certification pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
|32.2           | Chief Financial Officer Certification pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002