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, 2008

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 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 May 7, 2008, 56,750,000 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, 2008 and
December 31, 2007 (unaudited)                          | 3   
|Consolidated Statements of Operations for the three
months ended March 31, 2008 and 2007 (unaudited)         | 4   
|Consolidated Statements of Comprehensive Loss
for the three months ended March 31, 2008 and 2007 (unaudited) | 5   
|Consolidated Statements of Cash Flows for the three
months ended March 31, 2008 and 2007 (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,
                                                                                       2008           2007
                                                                                   -------------  -------------
Assets                                                                                                         
Current assets
   Cash and cash equivalents                                                      $      14,593  $      13,399
   Investment securities, available-for-sale                                             15,500         22,411
   Accounts receivable, net of allowances of $123 and $123                                  722          1,885
   Costs and estimated earnings in excess of billings on uncompleted contracts              274            443
   Inventory                                                                              1,336            761
   Other current assets                                                                   1,327          1,180
                                                                                   -------------  -------------
   Total current assets                                                                  33,752         40,079

Property and equipment, net                                                               3,919          4,047
Restricted investments                                                                    1,475          1,125
Other assets                                                                                 50             47
                                                                                   -------------  -------------
   Total assets                                                                   $      39,196  $      45,298
                                                                                   =============  =============
                                                                                                               
Liabilities and Shareholders' Equity                                                                           
Current liabilities
   Accounts payable                                                               $       2,478  $       2,146
   Accrued liabilities                                                                    4,190          4,154
   Billings in excess of costs and estimated earnings on uncompleted contracts              275            970
   Liability associated with common stock warrants                                          921          2,657
   Current portion of capital lease obligations                                              43             44
   Current portion of long-term debt                                                         66             65
                                                                                   -------------  -------------
   Total current liabilities                                                              7,973         10,036
Capital lease obligations, net of current portion                                            77             88
Long-term debt, net of current portion                                                      376            393
Deferred rent, net of current portion                                                     1,643          1,720
                                                                                   -------------  -------------
   Total liabilities                                                                     10,069         12,237
                                                                                   -------------  -------------
Commitments and contingencies                                                                --             --

Shareholders' equity
   Common stock, par value $.001; 125,000 shares authorized;
      56,730 and 56,730 shares issued and outstanding                                        57             57
   Additional paid-in capital                                                           293,440        292,374
   Accumulated other comprehensive income                                                    89             51
   Accumulated deficit                                                                 (264,459)      (259,421)
                                                                                   -------------  -------------
   Total shareholders' equity                                                            29,127         33,061
                                                                                   -------------  -------------
   Total liabilities and shareholders' equity                                     $      39,196  $      45,298
                                                                                   =============  =============`

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,
                                                                             ----------------------
                                                                                2008        2007
                                                                             ----------  ----------                        
Contract revenue                                                            $    2,281  $    1,902
Product revenue                                                                    289         333
                                                                             ----------  ----------
    Total revenue                                                                2,570       2,235
                                                                             ----------  ----------
Cost of contract revenue                                                           762       1,010
Cost of product revenue                                                            339         284
                                                                             ----------  ----------
    Total cost of revenue                                                        1,101       1,294
                                                                             ----------  ----------
Gross margin                                                                     1,469         941
                                                                             ----------  ----------


Research and development expense                                                 4,426       3,345
Sales, marketing, general and administrative expense                             4,135       3,550
                                                                             ----------  ----------
    Total operating expenses                                                     8,561       6,895
                                                                             ----------  ----------
Loss from operations                                                            (7,092)     (5,954)
Interest income                                                                    412         182
Interest expense                                                                   (13)       (468)
Gain (loss) on derivative instruments, net                                       1,673        (652)
Other expense                                                                      (18)         --
                                                                             ----------  ----------
Net loss                                                                    $   (5,038) $   (6,892)
                                                                             ==========  ==========

Net loss per share - basic and diluted                                      $    (0.09) $    (0.16)
                                                                             ==========  ==========

Weighted-average shares outstanding - basic and diluted                         56,730      43,098
                                                                             ==========  ==========`

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,
                                                                             ----------------------
                                                                                2008        2007
                                                                             ----------  ----------                        
Net loss                                                                  $   (5,038) $   (6,892)

Other comprehensive gain (loss)
Unrealized gain (loss) on investment securities, available-for-sale               38      (1,925)
                                                                             ----------  ----------
Comprehensive loss                                                        $   (5,000) $   (8,817)
                                                                             ==========  ==========`

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,
                                                                                        ----------------------
                                                                                           2008        2007
                                                                                        ----------  ----------
Cash flows from operating activities                                                                          
    Net loss                                                                           $   (5,038) $   (6,892)
    Adjustments to reconcile net loss to net cash used in operations:
        Depreciation                                                                          228         214
        Non-cash stock-based compensation expense                                           1,066         304
        Non-cash interest expense                                                              --         371
        Loss(gain) on derivative instruments                                               (1,673)        652
        Net accretion of discount on short-term investments                                   (65)         --
        Non-cash deferred rent                                                                (68)        (69)
            Change in:
            Accounts receivable, net                                                        1,163         163
            Costs and estimated earnings in excess of billings on uncompleted contracts       169         (82)
            Inventory                                                                        (575)         74
            Other current assets                                                             (210)        431
            Other assets                                                                       (3)        (13)
            Accounts payable                                                                  369        (174)
            Accrued liabilities                                                                27        (547)
            Billings in excess of costs and estimated earnings on uncompleted contracts      (695)        (18)
                                                                                        ----------  ----------
            Net cash used in operating activities                                          (5,305)     (5,586)
                                                                                        ----------  ----------
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                                                      (137)       (232)
                                                                                        ----------  ----------
            Net cash provided by (used in) investing activities                             6,527        (232)
                                                                                        ----------  ----------
Cash flows from financing activities                                                                          
    Principal payments under capital leases                                                   (12)        (11)
    Principal payments under long-term debt                                                   (16)        (14)
    Payments on notes payable                                                                  --      (1,400)
    Net proceeds from issuance of common stock                                                 --          (4)
                                                                                        ----------  ----------
            Net cash used in financing activities                                             (28)     (1,429)
                                                                                        ----------  ----------
Net increase (decrease) in cash and cash equivalents                                        1,194      (7,247)
Cash and cash equivalents at beginning of period                                           13,399      14,552
                                                                                        ----------  ----------
Cash and cash equivalents at end of period                                             $   14,593  $    7,305
                                                                                        ==========  ==========
Supplemental disclosure of cash flow information                                                              
    Cash paid for interest                                                             $       13  $       46
                                                                                        ==========  ==========
Supplemental schedule of non-cash investing and financing activities                                          
    Other non-cash additions to property and equipment                                 $        9  $        2
                                                                                        ==========  ==========

    Issuance of common stock for payment of principal and interest
      on senior secured exchangeable convertible notes                                 $       --  $    1,388
                                                                                        ==========  ==========`

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

---



MICROVISION, INC.
                  Notes to Consolidated Financial Statements
                  March 31, 2008
                 (Unaudited)

1.  MANAGEMENT'S STATEMENT AND PRINCIPLES OF CONSOLIDATION

Management's Statement

The Consolidated Balance Sheet as of March 31, 2008, the Consolidated
Statements of Operations, Comprehensive Loss and Cash Flows for the three months
ended March 31, 2008 and 2007 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, 2008 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, 2007.  The results of operations for the three months ended March
31, 2008 are not necessarily indicative of the operating results that may be
attained for the entire fiscal year.

At March 31, 2008, Microvision had $30.1 million in cash, cash equivalents
and investment securities, available-for-sale.  Based on its current operating
plan, the Company believes that it has sufficient cash to fund operations
through at least March 2009.  Microvision will require additional cash to fund
its operating plan past that time. There can be no assurance that additional
cash will be available or that, if available, it will be available on terms
acceptable to Microvision on a timely basis.  If adequate funds are not
available to satisfy either short-term or long-term capital requirements,
Microvision will be required to limit its operations substantially.  This
limitation of operations may include reductions in staff, operating costs and
capital expenditures.

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 convertible debt, convertible preferred
stock, warrants and employee stock options.  Diluted net loss per share for the
three months ended March 31, 2008 and 2007 is equal to basic net loss per share
because the effect of all potential common stock outstanding during the periods,
including convertible debt, convertible preferred stock, options and warrants 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,
                                                                          --------------------------
                                                                              2008          2007
                                                                          ------------  ------------                            
Numerator:
Net loss - basic and diluted                                             $     (5,038) $     (6,892)
                                                                          ============  ============
Denominator:
Weighted-average common shares outstanding - basic and diluted                 56,730        43,098
                                                                          ============  ============

Net loss per share - basic and diluted                                   $      (0.09) $      (0.16)
                                                                          ============  ============`

On March 31, 2008 and 2007, 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 0 and
12,363,000 shares of common stock, options and private warrants convertible into
a total of 10,940,000 and 10,436,000 shares of common stock and 125,000 and 0
shares of nonvested equity shares, respectively.

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

The Company accounts for investment securities, available-for-sale in
accordance with the provisions of Statement of Financial Accounting Standards
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 all investments in
debt securities.  The Company's investment securities, available-for-sale are
comprised of commercial paper, U.S. government and commercial debt securities
and auction rate securities. The Company has classified its entire investment
portfolio as available-for-sale. Available-for-sale securities are stated at
fair value with unrealized gains and losses included in other comprehensive
income (loss). Dividend and interest income are recognized when earned. Realized
gains and losses are presented separately on the income statement. The cost of
securities sold is based on the specific identification method.

At March 31, 2008, $4.3 million of the Company's marketable securities
portfolio was invested in AAA rated investments in auction-rate debt securities.
Auction-rate securities are long-term variable rate bonds tied to short-term
interest rates. After the initial issuance of the securities, the interest rate
on the securities is reset periodically, at intervals established at the time of
issuance (generally every seven, twenty-eight, or thirty-five days), based on
market demand for a reset period. Auction-rate securities are bought and sold in
the marketplace through a competitive bidding process often referred to as a
"Dutch Auction". If there is insufficient interest in the securities
at the time of an auction, the auction may not be completed and the rates may be
reset to predetermined "penalty" or "maximum" rates.
Following such a failed auction, the holder would not be able to access its
funds that are invested in the corresponding auction-rate securities until a
future auction of these investments is successful or new buyers express interest
in purchasing these securities in between auctions.

Given the current negative liquidity conditions in the global credit markets,
auctions for $4.3 million of original par value of the Company's auction-rate
securities have failed rendering these securities temporarily illiquid through
the normal auction process. At the time of its initial investment and through
the date of filing this report, all of the Company's auction-rate securities in
which it invests remain AAA rated, collateralized and there have been
no declines in the credit ratings of the issuers. Subsequent to March 31, 2008,
the Company successfully liquidated into cash equivalents, $1.1 million of the
$4.3 million of auction-rate securities held at March 31, 2008. The $1.1 million
equaled the original purchase value. The collateral for the Company's student
loan auction-rate securities ("SLARS") are the student loans and
collections thereon.  The collateral for the municipal auction-rate securities
is the user fees collected on the public works project that was funded.  In
addition, the underlying loans in the SLARS are guaranteed by the Federal Family
Education Loan Program and other federal and state student loan guarantee
programs.  AMBAC is the insurer on a majority of the auction-rate securities that
the Company holds.  As of March 31, 2008, AMBAC was rated AAA by Moody's and
Standard and Poor's and AA by Fitch Ratings. Although these insurers are highly
rated, they are reported to be experiencing financial difficulty, which could
negatively affect their ratings and thus the ratings of the auction-rate
securities that the Company holds. If the issuers are unable to successfully
clear future auctions or if the insurer's credit rating deteriorates and the
deterioration is deemed to be other-than-temporary, the Company would be
required to adjust the carrying value of the auction-rate securities through a
realized loss on its investments to the consolidated statement of operations.
Any of these events could affect the Company's results of operations and
financial condition. In the event the Company needs to access these funds, it
could be required to sell these securities at an amount below its original
purchase value. However, based on the Company's ability to access its cash and
cash equivalents and its other liquid investments, totaling $25.8 million at
March 31, 2008, it does not expect to be required to sell these securities at a
loss.  If the Company were required to sell the securities at a loss, the
Company believes the loss would be immaterial to its results of operations,
comprehensive loss and cash flows.  The auction-rate securities remain AAA
rated, collateralized and there have been no declines in the credit
ratings of the issuers.  In addition, all of the auction-rate securities that
the Company has liquidated have been sold at par value. Therefore, the Company
believes that it will be able to liquidate its remaining auction rate securities
within one year and has classified them as short-term.

In September 2006, the FASB issued Statement of Financial Accounting
Standards 157, Fair Value Measurements ("FAS 157").  FAS 157 defines
fair value, establishes a framework and gives guidance regarding the methods
used for measuring fair value, and expands disclosures about fair value
measurements.  FAS 157 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods of those fiscal
years.  The Company adopted FAS 157 effective January 1, 2008.  The adoption of
FAS 157 for financial assets and liabilities did not have a material impact on
the Company's consolidated financial position, consolidated results of
operations or consolidated cash flows.

FAS 157 defines fair value as the exchange price that would be received for
an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date.  FAS 157 also establishes a
three level fair value inputs hierarchy which requires an entity to maximize the
use of observable inputs and minimize the use of unobservable inputs when
measuring fair value.  The hierarchy is shown below:

Level 1 - Observable inputs such as quoted prices in active markets for
identical assets or liabilities,

Level 2 - Observable inputs, other than Level 1 prices, such as quoted prices
for similar assets or liabilities, quoted prices in markets that are not
sufficiently active to qualify as level 1, other observable inputs, or inputs
that can be corroborated by observable market data for substantially the full
term of the assets or liabilities.

Level 3 - Unobservable inputs in which there is little or no market data,
which requires the company to develop its own assumptions which are significant
to the measurement of the fair values of the assets or liabilities.

When measuring fair value, FAS 157 requires an entity to maximize its use of
observable inputs and market data, when available at reasonable cost, and
minimize its use of unobservable inputs.  It must also utilize market data and
assumptions it believes market participants would use in measuring the fair
value of the asset or liability, including assumptions about risks, the risks
inherent in the inputs and the valuation techniques.

The market approach is used to measure fair values of debt and equity
securities and the income approach for derivatives.  The market approach uses
prices and other relevant information generated by market transactions involving
identical or comparable assets or liabilities.  The income approach uses
valuation techniques to convert future amounts to a single present amount.

The Company utilizes valuations reported by a major valuation services
company ("Service") for its debt securities.  The valuations are
reviewed for reasonableness before being accepted for financial reporting.  The
Company has reviewed the inputs and methodologies used by the Service as a basis
for its accounting and disclosures in accordance with FAS 157.

Assets and liabilities measured at fair value on a recurring basis in
accordance with FAS 157 are summarized below:

`Level 1       Level 2       Level 3        Total
                                               ------------  ------------  ------------  ------------
Assets
    Corporate debt and equity securities      $     71,000  $  6,589,000  $         --  $  6,660,000
    U.S. government and agency securities        4,540,000            --            --     4,540,000
    Auction rate securities                             --     4,300,000            --     4,300,000
    Warrants in Lumera                                  --        66,000            --        66,000
                                               ------------  ------------  ------------  ------------
                                              $  4,611,000  $ 10,955,000  $         --  $ 15,566,000
                                               ============  ============  ============  ============
Liabilities
    Liability associated with
        common stock warrants                               $    921,000                $    921,000
                                                             ============                ============`

The Company's investments available-for-sale and liability associated with
common stock warrants are classified within Level 1 or Level 2 of the fair value
hierarchy because they are valued using quoted market prices, broker or dealer
quotations, or alternative pricing sources with sufficient levels of price
transparency.  The types of instruments valued based on quoted market prices in
active markets include U.S. government and agency securities and equity
investments.  Such instruments are classified within Level 1 of the fair value
hierarchy.  The types of instruments valued based on other observable inputs
include investment-grade corporate bonds, auction rate securities, Lumera
warrants, and liability associated with common stock warrants.  Such instruments
are classified within Level 2 of the fair value hierarchy.  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 principal markets for the debt securities are dealer markets which have a
relatively high level of price transparency.  The principal market for Lumera
common stock is NASDAQ.  The market participants for debt securities are
typically large money center banks and regional banks, brokers, dealers, pension
funds, and companies with debt investment portfolios.

The Company's investments available-for-sale, warrants in Lumera, and
liability associated with common stock warrants are summarized below as of March
31, 2008 and December 31, 2007:

`Classification on Balance Sheet
                                                                                           ------------------------------------
                                                                                                                     Liability
                                                                                                                     Associated
                                                                                             Investment                 With
                                              Cost/       Gross       Gross                  Securities,    Other      Common
                                            Amortized   Unrealized  Unrealized   Estimated   Available-    Current     Stock
                                              Cost        Gains       Losses    Fair Value    For-Sale     Assets     Warrants
                                           -----------  ----------  ----------  -----------  -----------  ---------  ----------
As of March 31, 2008:
  Assets
    Corporate debt and equity securities    6,619,000      41,000          --    6,660,000    6,660,000         --          --
    U.S. government and agency securities   4,492,000      48,000          --    4,540,000    4,540,000         --          --
    Auction rate securities                 4,300,000          --          --    4,300,000    4,300,000         --          --
    Warrants in Lumera                             --          --          --       66,000           --     66,000          --
                                           -----------  ----------  ----------  -----------  -----------  ---------  ----------
                                          $15,411,000  $   89,000  $       --  $15,566,000  $15,500,000  $  66,000  $       --
                                           ===========  ==========  ==========  ===========  ===========  =========  ==========
  Liabilities
    Liability associated with
       common stock warrants                                                   $   921,000                          $  921,000
                                                                                ===========                          ==========


                                                                                             Classification on Balance Sheet
                                                                                           ------------------------------------
                                                                                                                     Liability
                                                                                                                     Associated
                                                                                             Investment                 With
                                              Cost/       Gross       Gross                  Securities,    Other      Common
                                            Amortized   Unrealized  Unrealized   Estimated   Available-    Current     Stock
                                              Cost        Gains       Losses    Fair Value    For-Sale     Assets     Warrants
                                           -----------  ----------  ----------  -----------  -----------  ---------  ----------
As of December 31, 2007:
  Assets
    Corporate debt and equity securities    9,074,000      54,000      (5,000)   9,123,000    9,123,000         --          --
    U.S. government and agency securities   4,486,000       3,000      (1,000)   4,488,000    4,488,000         --          --
    Auction rate securities                 8,800,000          --          --    8,800,000    8,800,000         --          --
    Warrants in Lumera                             --          --          --      130,000           --    130,000          --
                                           -----------  ----------  ----------  -----------  -----------  ---------  ----------
                                          $22,360,000  $   57,000  $   (6,000) $22,541,000  $22,411,000  $ 130,000  $       --
                                           ===========  ==========  ==========  ===========  ===========  =========  ==========
  Liabilities
    Liability associated with
        common stock warrants                                                  $ 2,657,000                          $2,657,000
                                                                                ===========                          ==========`

Unrealized gains or losses on investments available-for-sale are recorded in
accumulated other comprehensive loss (income) at each measurement date.  Changes
in the fair values of the warrants in Lumera and the liability associated with
common stock warrants are realized in the period of remeasurement and recorded
in Gain (loss) on derivative instruments, net in the Consolidated Statement of
Operations.

As of March 31, 2008, all debt and equity securities subject to FAS157 have
been in continuous unrealized gain or loss positions.

As of March 31, 2008, the investments held by the Company are investment
grade debt securities, publicly traded Lumera common stock (NASDAQ: LMRA) and
Lumera warrants.  The unrealized losses on our investments in debt securities
were due primarily to changes in interest rates and credit market.  The
unrealized and realized gains and losses associated investments in Lumera were
primarily due to its stock price changes.  Because we have the ability to hold
investments with unrealized losses until a recovery of fair value, we do not
consider these investments to be other-than-temporarily impaired as of March 31,
2008.

The realized gains and losses associated with the liability associated with
common stock warrants were primarily due to changes in the Microvision stock
price and decreasing terms to expiration.

4.  INVENTORY

Inventory at March 31, 2008 and December 31, 2007 consisted of the
following:

`March 31,     December 31,
                                                                              2008          2007
                                                                          ------------  ------------                            
Raw materials                                                            $     29,000  $    122,000
Work-in-process                                                                13,000        10,000
Finished goods                                                              1,294,000       629,000
                                                                          ------------  ------------
                                                                         $  1,336,000  $    761,000
                                                                          ============  ============`

The inventory at March 31, 2008 and December 31, 2007 consisted of raw
materials, work-in-process, and finished goods for ROV and Flic, the Company's
hand-held bar code scanners.  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 Statement of Financial Accounting Standards
No. 123, as revised December 2004 ("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 Statement of Operations:

`Three Months Ended
                                                                                 March 31,
                                                                          --------------------------
                                                                              2008          2007
                                                                          ------------  ------------                            
Cost of contract revenue                                                       50,000        23,000
Cost of product revenue                                                        11,000         8,000
Research and development expense                                              281,000        82,000
Sales, marketing, general and administrative expense                          724,000       178,000
                                                                          ------------  ------------
Share-based employee compensation cost charged against income            $  1,066,000  $    291,000
                                                                          ============  ============`

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, 2008:

`Weighted
                                                                  Average
                                                      Weighted   Remaining
                                                       Average  Contractual   Aggregate
                                                      Exercise      Term      Intrinsic
Options                                  Shares         Price     (years)       Value
---------------------------------------- -----------  --------- ------------  ----------
Outstanding as of March 31, 2008          7,258,000  $    3.96          7.5  $  519,000

Exercisable as of March 31, 2008          2,783,000  $    5.17          5.7  $  186,000`

As of March 31, 2008, the Company's unamortized share-based compensation was
$6,014,000.  The Company plans to amortize this share-based compensation cost
over the next 2.8 years.

As of March 31, 2008, the Company's unamortized nonvested equity share-based
compensation was $237,000.  The Company plans to amortize this nonvested equity
share-based compensation cost over the next 3.0 years.

6.  LONG-TERM NOTES

Tenant Improvement Loan Agreement

In February 2006, the Company entered into a loan agreement with the lessor
of the Company's corporate headquarters 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, including interest
added to principal, was $442,000 at March 31, 2008.

7.  RECEIVABLES FROM RELATED PARTIES

In 2000, the Board of Directors authorized the Company to provide
unsecured lines of credit to each of the Company's three senior officers.  The
limit of the line of credit was three times the executives' base salary less any
amounts outstanding under the Executive Option Exercise Note Plan.  In 2002 and
2001, the Board of Directors authorized additions totaling $700,000, to the
limit for one senior officer.  The lines of credit carry interest rates of 5.4%
to 6.2%.  The lines of credit must be repaid within one year of the senior
officer's termination or within thirty days of demand by the Company in the
event of a plan termination, provided that in the event of such a demand the
senior officer may elect to deliver a promissory note with a one-year term in
lieu of payment.

In 2002, the Company determined that certain of its senior officers may have
insufficient net worth and short-term earnings potential to repay loans
outstanding under the Company's lines of credit.  In 2003 and 2002, the Company
recorded allowances for doubtful accounts for receivables from senior officers
totaling $900,000.

In January 2006, two senior officers with outstanding loans from the Company
left the Company.  Because the lines of credit were not fully secured and
collection was uncertain, the Company increased the allowance by $1,031,000 in
December 2005.   In accordance with the terms, the loans were due in January
2007.  Neither of the officers has repaid their loans.  One of the officers
pledged 50,000 shares of Lumera common stock as collateral for the loans.  In
May 2007, the Company foreclosed on the collateral and sold the shares for net
proceeds of $227,000.  The Company is pursuing collection of the remaining
outstanding balances.  A third executive with outstanding loans from the Company
left the Company in August 2007 and his loans will be due in August 2008.  As a
result of a review of the financial position of the former executives and the
potential difficulty in collecting loans from former employees, the Company
recorded additional allowances for doubtful accounts for the receivables from
senior officers of $23,000 during 2007.  As of March 31, 2008 and December 31,
2007, the total amount outstanding under the lines of credit was $2,496,000.  As
of March 31, 2008 and December 31, 2007, the allowance for receivables from
related parties was $2,496,000.

8.  ACCOUNTING FOR LUMERA WARRANTS

The Company owns a warrant to purchase 170,500 shares of Lumera common
stock and records the warrant at fair value in "Other current assets".
On the original transaction date, the warrant was valued using the Black-Scholes
option-pricing model with the following assumptions:  expected volatility of
83%; expected dividend yield of 0%; risk free interest rate of 4.6%; and
contractual life of 5.1 years.

Changes in the fair value of the warrants are recorded in the statement of
operations each period.  At March 31, 2008, the warrant was revalued using the
Black-Scholes option-pricing model with the following assumptions; expected
volatility of 83%; expected dividend yield of 0%; risk free interest rate of
1.8%; and contractual life of 3.0 years.  The fair value of the warrant
decreased to $66,000 from $130,000 at December 31, 2007 and the change in value
for the three months ended March 31, 2008 of $64,000 was recorded as a non-operating
loss and is included in "Gain (loss) on derivative instruments,
net" in the consolidated statement of operations.

9.  COMMITMENTS AND CONTINGENCIES

Litigation

The Company is subject to various claims and pending or threatened
lawsuits in the normal course of business. The Company is not currently party to
any legal proceedings that management believes would have a material adverse
effect on the Company's financial position, results of operations or cash flows.
The Company has sued its former CEO and President Richard Rutkowski and his
spouse to collect $1,733,000 in outstanding loans from the Company that were due
in January 2007 and 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
its financial condition.

10.  NEW ACCOUNTING PRONOUNCEMENTS

In February 2008, the FASB released a FASB Staff Position,
FSP FAS 157-2 - Effective Date of FASB Statement No. 157, which delays the effective date of FAS
157 for all nonfinancial assets and liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually) to fiscal years beginning after November 15, 2008.
The Company is currently assessing the financial impact of FSP FAS 157-2 on its
financial statements.

In June 2007, the Emerging Issues Task Force (EITF) reached a final consensus
on EITF Issue No. 07-1, Accounting for Collaborative Arrangements (EITF 07-1).
EITF 07-1 discusses how to determine whether an arrangement constitutes a
collaborative arrangement, how costs incurred and revenue generated on sales to
third parties should be reported by the participants, how an entity should
characterize payments made between participants and what participants should
disclose in the notes to the financial statements about a collaborative
arrangement. EITF 07-1 is effective for financial statements issued for fiscal
years beginning after December 15, 2008 and interim periods within those fiscal
years. The Company is currently assessing the financial impact of EITF07-1 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 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 surfaces. The PicoP with some modification could be
embedded into the dashboard of an automobile or an airplane to create a heads 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)                         2008      revenue     2007      revenue   $ change  % change
                                     ---------  ---------  ---------  ---------  --------- ---------
Three months ended March 31                                                                         
Government revenue                  $     908       39.8  $   1,609       84.6  $    (701)    (43.6)
Commercial revenue                      1,373       60.2        293       15.4      1,080     368.6
                                     ---------             ---------             ---------
Total contract revenue              $   2,281             $   1,902             $     379      19.9
                                     =========             =========             =========`

We earn contract revenue from performance on development contracts with the
United States government and commercial customers.

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.

Our contract revenue 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.  Contract
revenue was higher during the three months ended March 31, 2008 than the same
period in 2007, due to higher beginning commercial contract backlog and the
availability of resources to perform work on the contracts.

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 at March 31, 2008 was $1.5 million
compared to $6.5 million at March 31, 2007, all of which is scheduled for
completion during the next twelve months.

Product revenue.

`% of                  % of
                                                 product               product
(in thousands)                         2008      revenue     2007      revenue   $ change  % change
                                     ---------  ---------  ---------  ---------  --------- ---------
Three months ended March 31                                                                         
Bar code revenue                    $     289      100.0  $     283       85.0  $       6       2.1
Nomad revenue                              --         --         50       15.0        (50)   (100.0)
                                     ---------             ---------             ---------
Total product revenue               $     289             $     333             $     (44)    (13.2)
                                     =========             =========             =========`

Our quarterly product revenue may vary substantially due to the timing of
product orders from customers, production constraints and raw material
availability.

The backlog of product orders at March 31, 2008 was approximately $338,000,
compared to $410,000 at March 31, 2007, all of which is scheduled for delivery
during the next twelve months.

Cost of contract revenue.

`% of                  % of
                                                contract              contract
(in thousands)                         2008      revenue     2007      revenue   $ change  % change
                                     ---------  ---------  ---------  ---------  --------- ---------
Three months ended March 31         $     762       33.4  $   1,010       53.1  $    (248)    (24.6)`

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.

The cost of contract revenue as a percentage of revenue was lower during the
three months ended March 31, 2008 than March 31, 2007 as a result of negotiating
better terms on contracts entered into in late 2007.  We target a gross margin
for each contract of at least 40%; however, the gross margin can vary based on
the technical challenges encountered in completing the contract.

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)                         2008      revenue     2007      revenue   $ change  % change
                                     ---------  ---------  ---------  ---------  --------- ---------
Three months ended March 31         $     339      117.3  $     284       85.3  $      55      19.4`

Cost of product revenue includes both the direct and allocated indirect costs
of manufacturing ROVs and Flics sold to customers.  Direct costs include labor,
materials and other costs incurred directly in the manufacture of ROV and Flic.
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, 2008 and 2007, we expensed
approximately $47,000 and $73,000, respectively, of manufacturing overhead
associated with production capacity in excess of production requirements.

We expect that cost of product revenue on an absolute dollar basis will
increase in the future.  This increase will likely result from expected sales of
commercial products.  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)                         2008       2007     $ change   % change
                                     ---------  ---------  ---------  ---------                     
Three months ended March 31         $   4,426  $   3,345  $   1,081       32.3`

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)                         2008       2007     $ change   % change
                                     ---------  ---------  ---------  ---------                     
Three months ended March 31         $   4,135  $   3,550  $     585       16.5`

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 increase in sales, marketing, general and administrative expense for the
three months ended March 31, 2008 compared to the same period in 2007 was the
result of increased payroll costs and marketing costs associated with our
commercial products.

Interest income.

`(in thousands)                         2008       2007     $ change   % change
                                     ---------  ---------  ---------  ---------                     
Three months ended March 31         $     412  $     182  $     230      126.4`

The increase in interest income for the three months ended March 31, 2008
compared to the same period in 2007 resulted primarily from higher average cash
and investment securities balances.

Interest expense.

`(in thousands)                         2008       2007     $ change   % change
                                     ---------  ---------  ---------  ---------                     
Three months ended March 31         $      13  $     468  $    (455)     (97.2)`

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, resulting in a decrease in interest
expense for the three months ended March 31, 2008 compared to the same period in
2007.

Gain (loss) on derivative instruments, net.

`(in thousands)                         2008       2007     $ change   % change
                                     ---------  ---------  ---------  ---------                     
Three months ended March 31         $   1,673  $    (652) $   2,325     (356.6)`

We issued warrants to purchase 2,302,000 shares of common stock in
connection with the issuance of the Notes.  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.  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 (loss) on derivative instruments, net" in the consolidated
statement of operations.  We valued the warrants at March 31, 2007 using
the Black-Scholes option-pricing model with the following assumptions:  expected
volatilities of 68%; expected dividend yields of 0%; risk free interest rates
ranging from 4.6% to 4.8%; and contractual lives ranging from 1.3 years to 3.7
years.  The change in value of the warrants of $560,000 for the three months
ended March 31, 2007 was recorded as a non-operating loss and is included in
"Gain (loss) on derivative instruments, net" in the consolidated statement of
operations.

In January 2006, we acquired warrants to purchase 170,500 shares of Lumera
common stock.  The warrants were valued using the Black-Scholes option-pricing
model with the following assumptions:  expected volatility of 83%; expected
dividend yield of 0%; risk free interest rate of 4.55%; and contractual life of
5.1 years.  Changes in the fair value of the warrants are recorded in the
statement of operations each period.  As of March 31, 2008, the warrants were
valued using the Black-Scholes option-pricing model with the following
assumptions:  expected volatilities of 83%; expected dividend yields of 0%; risk
free interest rates of 1.78%; and contractual lives of 3.0 years.  As of March
31, 2008, the fair value of the warrants decreased to $66,000 from $130,000 at
December 31, 2007 and the change in value of $64,000 was recorded as a non-operating
loss and is included in "Gain (loss) on derivative instruments,
net" in the consolidated statement of operations.  As of March 31, 2007,
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 4.5%; and contractual lives of 4.0 years.  The
change in value of $160,000 for the three months ended March 31, 2007 was
recorded as a non-operating loss and is included in "Gain (loss) 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, 2008, we had $30.1 million in cash, cash
equivalents and investment securities, available-for-sale.  Based on
ourcurrent operating
plan, we believe we have sufficient cash to fund operations through at least
March 2009.  We will require additional cash to fund our operating plan past
that time.  There can be no assurance that additional financing will be
available to us or that, if available, it will be available on terms acceptable
to us on a timely basis.  If adequate funds are not available to satisfy either
short-term or long-term capital requirements, we will be required to limit our
operations substantially.  This limitation of operations may include reductions
in staff, operating costs and capital expenditures.

Cash used in operating activities totaled $5.3 million during the three
months ended March 31, 2008, compared to $5.6 million during the same period in
2007.  In both periods, cash used in operating activities for both periods
resulted primarily from the loss from operations.

We had the following material gains and charges, and changes in assets during
the three months ended March 31, 2008:

- "Non-cash stock-based compensation expense"
- "Loss (gain) on derivative instruments"
- "Accounts receivable"

Cash provided by investing activities totaled $6.5 million during the three
months ended March 31, 2008, compared to cash used in investing activities of
$232,000 during the same period of 2007.  During the three months ended March
31, 2008, we had net sales of investment securities totaling $7.0 million.  In
addition, we used cash of $137,000 for capital expenditures during the three
months ended March 31, 2008, compared to $232,000 during the same period in
2007.

Cash used in financing activities totaled $28,000 during the three months
ended March 31, 2008, compared to $1.4 million during the same period in 2006.
The last scheduled payment on our December Notes of $1.4 million was made in
March of 2007.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Of our total cash equivalents and investment securities available-for-sale
balance, 62% have variable interest rates and, as such, the fair values of the
principal of these instruments are not affected by changes in market interest
rates.  The remaining 38% of our cash equivalents and investment securities
available-for-sale balance are at fixed interest rates and, as such, the fair
values of these instruments are affected by changes in market interest rates.
Due to the generally short-term maturities of these investment securities, we
believe that the market risk arising from our holdings of these financial
instruments is not material.

Our investment policy restricts investments to ensure principal preservation
and liquidity.  The investment securities portfolio is comprised of short-term
highly rated commercial paper, U.S. government agency notes and auction rate
securities.

At March 31, 2008, $4.3 million of our marketable securities portfolio was
invested in AAA rated investments in auction-rate debt securities. Auction-rate
securities are long-term variable rate bonds tied to short-term interest rates.
After the initial issuance of the securities, the interest rate on the
securities is reset periodically, at intervals established at the time of
issuance (generally every seven, twenty-eight or thirty-five days), based on
market demand for a reset period. Auction-rate securities are bought and sold in
the marketplace through a competitive bidding process often referred to as a
"Dutch Auction". If there is insufficient interest in the securities
at the time of an auction, the auction may not be completed and the rates may be
reset to predetermined "penalty" or "maximum" rates.
Following such a failed auction, the holder would not be able to access its
funds that are invested in the corresponding auction-rate securities until a
future auction of these investments is successful or new buyers express interest
in purchasing these securities in between auctions.

At the time of our initial investment and through the date of the filing of
this report, all of our auction-rate securities in which we invest remain AAA
rated, collateralized and there have been no declines in the credit
ratings of the issuers. Subsequent to March 31, 2008, we successfully liquidated
into cash equivalents, $1.1 million of the $4.3 million of auction-rate
securities held at March 31, 2008. The $1.1 million equaled our original
purchase value.  The remaining $3.2 million of auction rate securities have been
subject to failed auctions in 2008 as a result of the current negative liquidity
conditions in the global credit markets.  The failed auctions have rendered
these securities temporarily illiquid through the normal auction process.  The
collateral for our student loan auction-rate securities ("SLARS") are
the student loans and collections thereon.  The collateral for the municipal
auction-rate securities is the user fees collected on the public works project
that was funded.  In addition, the underlying loans in the SLARS are guaranteed
by the Federal Family Education Loan Program and other federal and state student
loan guarantee programs.  AMBAC is the insurer on a majority of the auction-rate
securities that we hold.   As of March 3, 2008, AMBAC was rated AAA by Moody's
and Standard and Poor's and AA by Fitch Ratings. Although these insurers are
highly rated, they are reported to be experiencing financial difficulty, which
could negatively affect their ratings and thus the ratings of the auction-rate
securities that we hold. If the issuers are unable to successfully clear future
auctions or if the insurer's credit rating deteriorates and the deterioration is
deemed to be other-than-temporary, we would be required to adjust the carrying
value of the auction-rate securities through an impairment charge to earnings.
Any of these events could affect our results of operations and our financial
condition. In the event we need to access these funds, we could be required to
sell these securities at an amount below our original purchase value. However,
based on our ability to access our cash and cash equivalents and our other
liquid investments, totaling $25.8 million at March 31, 2008, we do not expect
to be required to sell these securities at a loss.  If we were required to
sell the securities at a loss, we believe the loss would be immaterial to our
results of operations, comprehensive loss and cash flows.  The auction-rate
securities remain AAA rated, collateralized and there have been no
declines in the credit ratings of the issuers.  In addition, all of the
auction-rate securities that we have liquidated have been sold at par value. Therefore,
we believe that we will be able to liquidate our remaining auction rate
securities within one year and have classified them as short-term.

The values of cash equivalents and investment securities, available-for-sale,
by maturity date as of March 31, 2008, are as follows (in thousands):

`Amount      Percent
                                     ---------  ---------
Cash                                     $710       2.36%
Less than one year                    $21,572      71.68%
One to two years                       $3,511      11.67%
Greater than five years                $4,300      14.29%
                                     ---------  ---------
                                       30,093     100.00%
                                     =========  =========`

All of the Company's development contract payments are made in U.S. dollars.
However, in the future the Company may enter into additional development
contracts in foreign currencies that may subject the Company to foreign exchange
rate risk.  The Company intends to enter into foreign currency hedges to offset
the exposure to currency fluctuations when it can 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, 2008, we had an accumulated deficit of $264.5 million.
- We incurred consolidated net losses of $215.7 million from inception through
2005, $24.0 million in 2006, $19.8 million in 2007, and consolidated net loss of
$5.0 million in the three months ended March 31, 2008.

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 at least through 2008 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.

Based on our current operating plan, we believe we have sufficient cash to
fund operations through at least March 2009.  We will require additional cash to
fund our operating plan past that time. 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 to satisfy long-term capital requirements, we may be
required to limit our operations substantially.  This limitation of operations
may include reductions in staff and operating costs as well as reductions in
capital expenditures and investment in research and development.

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 defense, industrial, medical and consumer markets.  If our
technology fails to achieve market acceptance, we may not be able to continue to
develop our technology platform.

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.
At some point during all four quarters of 2006 and 2007 and the first quarter of
2008, the market price of our stock traded below $5.00 per share.  On May 7,
2008, the closing price of our stock was $3.01.

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 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.

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.

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

To date, we have produced limited quantities of our ROV and Flic products for
commercial sale and demonstration units for research, development and
demonstration purposes.  The cost per unit for these units 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.

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.

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 2008 and the full year of 2007, 35% and 61%,
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

|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 9, 2008 | BY: | /s/  Alexander Y. Tokman                             
|------------------ | --- | -----------------------------------------------------
|                   |     | Alexander Y. Tokman                                  
|                   |     | Chief Executive Officer
(Principal Executive Officer)



|Date:  May 9, 2008 | BY: | /s/  Jeff Wilson                                     
|------------------ | --- | -----------------------------------------------------
|                   |     | Jeff Wilson                                          
|                   |     | Chief Financial Officer
(Principal Financial Officer)

---



EXHIBIT INDEX

The following documents are filed.

|Exhibit Number | Description                                                                                                                                                                     
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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

---