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 June 30, 2009

OR

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

For the transition period from ________to _________

Commission file number    0-21221



Microvision, Inc.



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

6222 185th Avenue NE
Redmond, Washington      98052

(425) 936-6847

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

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

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

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

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

As of July 30, 2009, 76,163,000 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  June 30, 2009 and
December 31, 2008 (unaudited)                                  | 3   
|Consolidated Statements of Operations for the three and six
months ended June 30, 2009 and 2008 (unaudited)         | 4   
|Consolidated Statements of Comprehensive Loss
for the three and six months ended June 30, 2009 and 2008 (unaudited) | 5   
|Consolidated Statements of Cash Flows for the six
months ended June 30, 2009 and 2008 (unaudited)                   | 6   
|Notes to Consolidated Financial Statements
(unaudited)                                                              | 8   
|                                                                                                                    |     
|Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations                      | 13  
|Item 3.  Quantitative and Qualitative Disclosures About Market
Risk                                                 | 19  
|Item 4.  Controls and Procedures                                                                                    | 19  
|                                                                                                                    |     
|Part II: Other Information                                                                                          |     
|Item 1A. Risk Factors                                                                                               | 20  
|Item 6.  Exhibits                                                                                                   | 26  
|Signatures                                                                                                          | 27  
|Exhibit Index                                                                                                       | 28  

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Microvision, Inc.

                    Consolidated Balance Sheets

                  (In thousands, except per share data)

                            (Unaudited)

`June 30,      December 31,
                                                                                       2009           2008
                                                                                   -------------  -------------
Assets                                                                                                         
Current assets
   Cash and cash equivalents                                                      $      23,616  $      25,533
   Investment securities, available-for-sale                                              2,709          2,705
   Accounts receivable, net of allowances of $57 and $57                                    342            537
   Costs and estimated earnings in excess of billings on uncompleted contracts              451            695
   Inventory                                                                              1,016          1,525
   Other current assets                                                                     596            889
                                                                                   -------------  -------------
   Total current assets                                                                  28,730         31,884

Property and equipment, net                                                               3,618          3,701
Restricted investments                                                                    1,332          1,332
Other assets                                                                                 53             47
                                                                                   -------------  -------------
   Total assets                                                                   $      33,733  $      36,964
                                                                                   =============  =============
                                                                                                               
Liabilities and Shareholders' Equity                                                                           
Current liabilities
   Accounts payable                                                               $       2,315  $       3,487
   Accrued liabilities                                                                    3,267          3,545
   Billings in excess of costs and estimated earnings on uncompleted contracts               55             62
   Liability associated with common stock warrants                                        1,133            331
   Current portion of capital lease obligations                                              66             41
   Current portion of long-term debt                                                         74             71
                                                                                   -------------  -------------
   Total current liabilities                                                              6,910          7,537
Capital lease obligations, net of current portion                                           187             45
Long-term debt, net of current portion                                                      284            322
Deferred rent, net of current portion                                                     1,243          1,409
                                                                                   -------------  -------------
   Total liabilities                                                                      8,624          9,313
                                                                                   -------------  -------------
Commitments and contingencies

Shareholders' equity
   Common stock, par value $.001; 125,000 shares authorized;
      76,163 and 68,080 shares issued and outstanding                                        76             68
   Additional paid-in capital                                                           336,367        319,662
   Accumulated other comprehensive loss                                                     (34)           (38)
   Accumulated deficit                                                                 (311,300)      (292,041)
                                                                                   -------------  -------------
   Total shareholders' equity                                                            25,109         27,651
                                                                                   -------------  -------------
   Total liabilities and shareholders' equity                                     $      33,733  $      36,964
                                                                                   =============  =============`

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

---



Microvision, Inc.

                     Consolidated Statements of Operations

                  (In thousands, except per share data)

                            (Unaudited)

`Three Months Ended       Six Months Ended
                                                                                   June 30,                June 30,
                                                                             ----------------------  ----------------------
                                                                                2009        2008        2009        2008
                                                                             ----------  ----------  ----------  ----------
Contract revenue                                                            $      813  $    1,006  $    1,525  $    3,287
Product revenue                                                                    174         616         413         905
                                                                             ----------  ----------  ----------  ----------
    Total revenue                                                                  987       1,622       1,938       4,192
                                                                             ----------  ----------  ----------  ----------
Cost of contract revenue                                                           527         374         910       1,136
Cost of product revenue                                                            543         529         784         868
                                                                             ----------  ----------  ----------  ----------
    Total cost of revenue                                                        1,070         903       1,694       2,004
                                                                             ----------  ----------  ----------  ----------
Gross margin                                                                       (83)        719         244       2,188
                                                                             ----------  ----------  ----------  ----------


Research and development expense                                                 5,716       5,881      11,326      10,307
Sales, marketing, general and administrative expense                             3,667       4,103       7,481       8,238
                                                                             ----------  ----------  ----------  ----------
    Total operating expenses                                                     9,383       9,984      18,807      18,545
                                                                             ----------  ----------  ----------  ----------
Loss from operations                                                            (9,466)     (9,265)    (18,563)    (16,357)
Interest income                                                                     79         279         143         691
Interest expense                                                                   (20)        (12)        (31)        (25)
Gain (loss) on derivative instruments, net                                        (982)       (254)       (802)      1,419
Other expense                                                                       (5)        (14)         (6)        (32)
                                                                             ----------  ----------  ----------  ----------
Net loss                                                                    $  (10,394) $   (9,266) $  (19,259) $  (14,304)
                                                                             ==========  ==========  ==========  ==========

Net loss per share - basic and diluted                                      $    (0.15) $    (0.16) $    (0.28) $    (0.25)
                                                                             ==========  ==========  ==========  ==========

Weighted-average shares outstanding - basic and diluted                         68,881      56,782      68,482      56,756
                                                                             ==========  ==========  ==========  ==========`

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

---



Microvision, Inc.

                     Consolidated Statements of Comprehensive Loss

                             (In thousands)

                            (Unaudited)

`Three Months Ended       Six Months Ended
                                                                                   June 30,                June 30,
                                                                             ----------------------  ----------------------
                                                                                2009        2008        2009        2008
                                                                             ----------  ----------  ----------  ----------
Net loss                                                                    $  (10,394) $   (9,266) $  (19,259) $  (14,304)

Other comprehensive gain (loss)
Unrealized gain (loss) on investment securities, available-for-sale                  3         (77)          4         (39)
                                                                             ----------  ----------  ----------  ----------
Comprehensive loss                                                          $  (10,391) $   (9,343) $  (19,255) $  (14,343)
                                                                             ==========  ==========  ==========  ==========`

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

---



Microvision, Inc.

                    Consolidated Statements of Cash Flows

                           (In thousands)

                            (Unaudited)

`Six Months Ended
                                                                                               June 30,
                                                                                        ----------------------
                                                                                           2009        2008
                                                                                        ----------  ----------
Cash flows from operating activities                                                                          
    Net loss                                                                           $  (19,259) $  (14,304)
    Adjustments to reconcile net loss to net cash used in operations:
        Depreciation                                                                          556         481
        Non-cash stock-based compensation expense                                           1,924       1,604
        Loss (gain) on derivative instruments, net                                            802      (1,419)
        Inventory write-downs                                                                 340          --
        Net accretion of discount on short-term investments                                    --         (92)
        Non-cash deferred rent                                                               (138)       (137)
        Change in:
            Accounts receivable, net                                                          195       1,582
            Costs and estimated earnings in excess of billings on uncompleted contracts       244         277
            Inventory                                                                         169        (645)
            Other current assets                                                              270         (81)
            Other assets                                                                       (6)         (2)
            Accounts payable                                                               (1,006)       (276)
            Accrued liabilities                                                              (392)       (999)
            Billings in excess of costs and estimated earnings on uncompleted contracts        (7)       (879)
                                                                                        ----------  ----------
            Net cash used in operating activities                                         (16,308)    (14,890)
                                                                                        ----------  ----------
Cash flows from investing activities                                                                          
    Sales of investment securities                                                             --      12,800
    Purchases of investment securities                                                         --        (986)
    Purchases of restricted investment securities                                              --        (350)
    Purchases of property and equipment                                                      (544)       (215)
                                                                                        ----------  ----------
            Net cash provided by (used in) investing activities                              (544)     11,249
                                                                                        ----------  ----------
Cash flows from financing activities                                                                          
    Principal payments under capital leases                                                   (26)        (18)
    Principal payments under long-term debt                                                   (35)        (32)
    Net proceeds from issuance of common stock and warrants                                14,996         331
                                                                                        ----------  ----------
            Net cash provided by financing activities                                      14,935         281
                                                                                        ----------  ----------
Net decrease in cash and cash equivalents                                                  (1,917)     (3,360)
Cash and cash equivalents at beginning of period                                           25,533      13,399
                                                                                        ----------  ----------
Cash and cash equivalents at end of period                                             $   23,616  $   10,039
                                                                                        ==========  ==========
Supplemental disclosure of cash flow information                                                              
    Cash paid for interest                                                             $       31  $       25
                                                                                        ==========  ==========
Supplemental schedule of non-cash investing and financing activities                                          
    Property and equipment acquired under capital leases                               $       95  $       --
                                                                                        ==========  ==========
    Other non-cash additions to property and equipment                                 $       33  $       24
                                                                                        ==========  ==========`

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



MICROVISION, INC.
                           Notes to Consolidated Financial Statements
                           June 30, 2009
                  (Unaudited)

1.  MANAGEMENT'S STATEMENT AND PRINCIPLES OF CONSOLIDATION

Management's Statement

The Consolidated Balance Sheet as of June 30, 2009, the Consolidated
Statements of Operations and Comprehensive Loss for the three and six months
ended June 30, 2009 and 2008 and the Consolidated Statements of Cash Flows for
the six months ended June 30, 2009 and 2008 have been prepared by Microvision,
Inc. (the "Company" or "Microvision") and have not been
audited.  In the opinion of management, all adjustments necessary to state
fairly the financial position at June 30, 2009 and the results of operations,
comprehensive loss and cash flows for all periods presented have been made and
consist of normal recurring adjustments.  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules of the SEC.  You should read these condensed financial
statements in conjunction with the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2008.  The results of operations for the six months ended June 30,
2009 are not necessarily indicative of the operating results that may be
attained for the entire fiscal year.

At June 30, 2009, Microvision had $26.3 million in cash, cash equivalents and
investment securities, available-for-sale.  Microvision's operating plan for
2009 and 2010 includes the launch of its first accessory product, further
development of its PicoP display engine for embedded applications and further
development of automotive head-up display (HUD) and eyewear applications.  In
order to fully fund the Company's operating plan for 2009 and 2010, the Company
will require additional capital.  The Company plans to obtain additional cash
through the issuance of equity or debt securities.  There can be no assurance
that additional cash will be available or that, if available, it will be
available on terms acceptable to the Company on a timely basis.  If adequate
funds are not available by January 2010, the Company intends to consider
reducing the scope of its business to extend its operations as it pursues other
financing opportunities and business relationships.  This reduction in scope
could include delaying development projects resulting in reductions in staff,
operating costs, capital expenditures and investment in research and
development.  With these adjustments to its operating plan the Company believes
that it currently has sufficient cash, cash equivalents, and investment
securities to fund operations into June 2010.

2.  NET LOSS PER SHARE

Basic net loss per share is calculated on the basis of the weighted-average
number of common shares outstanding during the reporting periods.  Diluted net
loss per share is calculated on the basis of the weighted-average number of
common shares outstanding and taking into account the dilutive effect of all
potential common stock equivalents outstanding.  Potentially dilutive common
stock equivalents primarily consist of warrants, employee stock options and
nonvested equity shares.  Diluted net loss per share for the three and six
months ended June 30, 2009 and 2008 is equal to basic net loss per share because
the effect of all potential common stock outstanding during the periods,
including options, warrants and nonvested equity shares is anti-dilutive.  The
components of basic and diluted net loss per share were as follows (in
thousands, except loss per share data):

`Three Months Ended           Six Months Ended
                                                                                  June 30,                   June 30,
                                                                          --------------------------  --------------------------
                                                                              2009          2008          2009          2008
                                                                          ------------  ------------  ------------  ------------
Numerator:
Net loss available for common shareholders - basic and diluted           $    (10,394) $     (9,266) $    (19,259) $    (14,304)
                                                                          ============  ============  ============  ============

Denominator:
Weighted-average common shares outstanding - basic and diluted                 68,881        56,782        68,482        56,756
                                                                          ============  ============  ============  ============

Net loss per share - basic and diluted                                   $      (0.15) $      (0.16) $      (0.28) $      (0.25)
                                                                          ============  ============  ============  ============`

On June 30, 2009 and 2008, the Company excluded the following convertible
securities from diluted net loss per share as the effect of including them would
have been anti-dilutive: options and warrants convertible into a total of
20,241,000 and 10,992,000 shares of common stock, respectively, and 409,000 and
125,000 shares of nonvested equity shares, respectively.

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

The Company accounts for cash equivalents and investment securities in
accordance with the provisions of Statement of Financial Accounting Standards
(FAS) No. 115, Accounting for Certain Investments in Debt and Equity
Securities (FAS 115) and FAS Board Staff Position (FSP) No. FAS 115-2 and
FAS 124-2, Recognition and Presentation of Other-Than-Temporary
Impairments.  FAS 115 addresses the accounting and reporting for investments
in equity securities that have readily determinable fair values and debt
securities.  FSP FAS 115-2 and FAS 124-2 provides guidance on accounting and
presentation of investments with other-than-temporary impairments.  The Company
adopted FSP FAS 115-2 and FAS 124-2 effective April 1, 2009.  The Company
applies guidance in FAS No. 157, Fair Value Measurements (FAS 157) and
FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity
for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly
when estimating fair values of its cash equivalents, investment
securities and liability associated with common stock warrants.  FAS 157 and FSP
FAS 157-4 address estimating fair values and related disclosures.  The Company
adopted FAS 157 on January 1, 2008 for financial assets and liabilities and for
nonfinancial assets and liabilities measured at fair value on a recurring basis.
It elected to defer the adoption of FAS 157 for nonfinancial assets and
liabilities accounted for on a nonrecurring basis until January 1, 2009 as
permitted by FSP No. FAS 157-2, Effective Date of FAS 157.  Neither of
the two stages of adopting FAS 157 resulted in a material impact on the
Company's consolidated financial position, results of operations or cash flows.

As of June 30, 2009, the Company held $3.0 million par value student loan
auction rate securities (SLARS), fair valued at $2.7 million.  The SLARS owned
by the Company are investment grade long-term bonds with variable interest rate
resets, purchases and sales to be determined via a Dutch Auction process every
28 days.  They were issued to fund U.S. government guaranteed student loans.
Beginning in February 2008 as global credit markets significantly deteriorated,
insufficient clearing bids have been submitted for the SLARS. In accordance with
the bond terms, the interest rates have been reset to "maximum rates"
instead of "auction rates."  Since that time, the SLARS have been
illiquid through the auction process and secondary markets.

The valuation inputs hierarchy classification for assets and liabilities
measured at fair value on a recurring basis are summarized below as of June 30,
2009:

`Level 1       Level 2       Level 3        Total
                                               ------------  ------------  ------------  ------------
Assets
Corporate debt and equity securities          $         --  $      9,000  $         --  $      9,000
Auction-rate securities                                 --            --     2,700,000     2,700,000
                                               ------------  ------------  ------------  ------------
                                              $         --  $      9,000  $  2,700,000  $  2,709,000
                                               ============  ============  ============  ============
Liabilities
    Liability associated with
        common stock warrants                               $  1,133,000                $  1,133,000
                                                             ============                ============`

The corporate debt securities and liability associated with common stock
warrants are classified within Level 2 of the fair value hierarchy because they
are valued using valuation inputs and common methods with sufficient levels of
transparency and observability.  The SLARS are classified in Level 3 of the fair
value hierarchy because of the significance of sufficiently unobservable
assumptions and inputs developed by the Company and used in the valuations.

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

`Balance, December 31, 2008                $ 2,700,000
Transfer to (from) Level 3, June 30, 2009          --
Recognized loss included in earnings               --
                                           -----------
Balance, June 30, 2009                    $ 2,700,000
                                           ===========`

The Company's investments and liability associated with common stock warrants
are summarized below as of June 30, 2009 and December 31, 2008:

`Classification on Balance Sheet
                                                                                            ----------------------------------------------
                                                                                                                                Liability
                                                                                                                               Associated
                                                                                                        Investment                With
                                              Cost/       Gross       Gross                             Securities,   Other      Common
                                            Amortized   Unrealized  Unrealized  Estimated      Cash     Available-   Current      Stock
                                              Cost        Gains       Losses    Fair Value  Equivalents  For-Sale    Assets     Warrants
                                           -----------  ----------  ----------  ----------  ----------  ----------  ---------  -----------
As of June 30, 2009:
  Assets
    Corporate debt and equity securities  $    43,000  $       --  $  (34,000) $    9,000  $       --  $    9,000  $      --
    Auction rate securities                 2,700,000          --          --   2,700,000          --   2,700,000         --
                                           -----------  ----------  ----------  ----------  ----------  ----------  ---------
                                          $ 2,743,000  $       --  $  (34,000) $2,709,000  $       --  $2,709,000  $      --
                                           ===========  ==========  ==========  ==========  ==========  ==========  =========
  Liabilities
    Liability associated with
       common stock warrants                                                   $1,133,000                                     $ 1,133,000
                                                                                ==========                                     ===========


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

As of June 30, 2009, the unrealized losses on the Company's investments in
equity securities were due primarily to declines in the stock prices of the
equity securities.  The realized gains and losses resulting from the liability
associated with common stock warrants were primarily due to changes in the
Microvision stock price and decreasing terms to expiration.  The maturities
of the debt investment securities available-for-sale as of June 30, 2009
are greater than 5 years.

The guidance in FAS 115-2 requires that impairments determined to be other
than temporary be classified into one of two categories, "credit" or
"other factors".  Upon adoption, one is to apply this guidance on an
as-if basis to investments currently held.  As of September 30, 2008,
based on continuing low market liquidity and auction failures with significant
uncertainty as to when such conditions would improve, the Company determined
that the estimated fair value of the SLARS no longer approximated par value, and
the impairments were other-than-temporary.  An "impairment of investment securities,
available-for-sale" of $300,000 was recorded on the consolidated statement of
operations.  The Company used a discounted cash flow model, with rates adjusted
for liquidity, to determine that the present value of estimated cash collections
was less than the adjusted cost.  Upon adopting FAS 115-2 effective April 1, 2009,
the other-than-temporary impairment that was recorded during the period ended
September 30, 2008 was categorized as credit type and no transition adjustments
were recorded.

The Company's significant nonfinancial assets and liabilities that are
subject to consideration for recognition and disclosure at fair value in the
financial statements on a nonrecurring basis primarily include property and
equipment, long-term debt and deferred rent.  If the Company concludes there has
been an event indicating the potential impairment of a nonfinancial asset or
liability, or periodically if no such indicating event is deemed to have
occurred, it utilizes guidance contained in FAS 157 to determine the fair value,
test for the existence of an impairment, and record significant impairments in
the period of determination.

4.  INVENTORY

Inventory at June 30, 2009 and December 31, 2008 consisted of the
following:

`June 30,     December 31,
                                                                              2009          2008
                                                                          ------------  ------------                            
Raw materials                                                            $     28,000  $     45,000
Finished goods                                                                988,000     1,480,000
                                                                          ------------  ------------
                                                                         $  1,016,000  $  1,525,000
                                                                          ============  ============`

The inventory at June 30, 2009 and December 31, 2008 consisted of raw
materials and finished goods for ROV, the Company's hand-held bar code scanner.
Inventory is stated at the lower of cost or market, with cost determined on a
weighted-average basis.  Management periodically assesses the need to provide
for obsolescence of inventory and adjusts the carrying value of inventory to its
net realizable value when required.  In addition, Microvision reduces the value
of its inventory to its estimated scrap value when management determines that it
is not probable that the inventory will be consumed through normal production
during the next twelve months.  During the second quarter of 2009, the Company
recorded inventory write-downs of $318,000.

5.  SHARE-BASED COMPENSATION

The Company accounts for stock-based employee compensation arrangements in
accordance with the provisions of Statement of FAS 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 Statements of
Operations:

`Three Months Ended            Six Months Ended
                                                                                    June 30,                    June 30,
                                                                          --------------------------  --------------------------
                                                                              2009          2008          2009          2008
                                                                          ------------  ------------  ------------  ------------
Cost of contract revenue                                                 $     58,000  $     14,000  $     72,000  $     64,000
Cost of product revenue                                                         7,000         1,000        14,000        12,000
Research and development expense                                              522,000       165,000       711,000       447,000
Sales, marketing, general and administrative expense                          779,000       356,000     1,145,000     1,081,000
                                                                          ------------  ------------  ------------  ------------
Share-based employee compensation cost charged against income            $  1,366,000  $    536,000  $  1,942,000  $  1,604,000
                                                                          ============  ============  ============  ============`

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 June 30, 2009:

`Weighted
                                                                  Average
                                                      Weighted   Remaining
                                                       Average  Contractual   Aggregate
                                                      Exercise      Term      Intrinsic
Options                                  Shares         Price     (years)       Value
---------------------------------------- -----------  --------- ------------  ----------
Outstanding as of June 30, 2009           8,712,000  $    3.53          7.4  $4,606,000

Exercisable as of June 30, 2009           5,011,000  $    4.23          6.5  $1,921,000`

As of June 30, 2009, the Company's unamortized share-based compensation was
$4,698,000.  The Company plans to amortize this share-based compensation cost
over the next 2.7 years.

As of June 30, 2009, the Company's unamortized nonvested equity share-based
compensation was $504,000.  The Company plans to amortize this nonvested equity
share-based compensation cost over the next 2.4 years.

6.  LIABILITY ASSOCIATED WITH COMMON STOCK WARRANTS

In March and December 2005, the Company issued warrants to purchase 2,302,000
shares of common stock.  The warrants met the definition of derivative
instruments that must be accounted for as liabilities under the provisions of
Emerging Issues Task Force Issue No. 00-19, Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
Stock,because the Company cannot engage in certain corporate transactions
affecting the common stock unless it makes a cash payment to the holders of the
warrants.  The Company records changes in the fair values of the warrants in the
statements of operations each period.  In July 2008, warrants to purchase
750,000 shares of common stock expired unexercised.  The Company valued the
remaining warrants to purchase 1,552,000 shares of common stock at June 30, 2009
using the Black-Scholes option-pricing model with the following assumptions:
expected volatilities of 78%; expected dividend yields of 0%; risk free interest
rates of from 0.4% to 0.8%; and contractual lives ranging from 0.7 year to 1.4
years.  The change in value of the warrants of $982,000 for the three and
$802,000 for the six months ended June 30, 2009 was recorded as a non-operating
loss and is included in "Gain (loss) on derivative instruments, net" in the
consolidated statements of operations.  The Company valued the warrants at June
30, 2008 using the Black-Scholes option-pricing model with the following
assumptions:  expected volatilities ranging from 65% to 68%; expected dividend
yields of 0%; risk free interest rates ranging from 1.3% to 2.8%; and
contractual lives ranging from 0.1 years to 2.4 years.  The change in value of
the warrants of $202,000 for the three months ended June 30, 2008 was recorded
as a non-operating loss and is included in "Gain (loss) on derivative
instruments, net" in the consolidated statements of operations.  The change
in value of the warrants of $1,535,000 for the six months ended June 30, 2008
was recorded as a non-operating gain and is included in "Gain (loss) on
derivative instruments, net" in the consolidated statements of operations.

7.  LONG-TERM NOTES

Tenant Improvement Loan Agreement

During 2006, the Company entered into a loan agreement with the lessor of the
Company's corporate headquarters in Redmond to finance $536,000 in tenant
improvements.  The loan carries a fixed interest rate of 9% per annum, is
repayable over the initial term of the lease, which expires in 2013, and is
secured by a letter of credit.  The balance of the loan was $358,000 at June 30,
2009.

8.  COMMON STOCK

In June 2009, the Company raised approximately $15,000,000, before issuance
costs of approximately $179,000, from the sale of 8,076,239 shares of common
stock and warrants to purchase 2,019,060 shares of its common stock to Max
Display Enterprises Limited, a subsidiary of Walsin Lihwa.  Walsin Lihwa is the
parent company of Touch Micro-system Technology Corp. (TMT).  Microvision has
worked for a number of years with both Walsin Lihwa and then TMT, as
manufacturers of Microvision's Micro-Electrical Mechanical systems (MEMS) chips.
The warrants have an exercise price of $2.1850 per share, a three year term, and
are exercisable on the date of issuance. The Company can call the warrants after
six months and once the shares are registered if the average closing bid price
of its stock is over $8.74 for any 20 consecutive trading days.  The warrants
were accounted for as permanent equity 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.  As of
June 30, 2009, Max Display Enterprises Limited beneficially owned 12.9% of
Microvision's common stock, as determined in accordance with the rules of
the Securities Exchange Commission.

9.  RECEIVABLES FROM RELATED PARTIES

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

In January 2006, one officer left the Company and his outstanding loans
became due in January 2007.  In May 2007, the Company foreclosed on 50,000
shares of Lumera common stock pledged as collateral for the loans and sold the
shares for net proceeds of $227,000.  The Company has sued the officer and his
spouse to collect $1,733,000 in outstanding loans that remain unpaid.
Counterclaims were filed by the officer and his spouse, seeking to recover
damages in an amount in excess of $15,000,000. The Company believes these claims
are without merit and intends to defend them vigorously. However, an adverse
outcome could have a material adverse affect on the Company's financial
condition.

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

As of June 30, 2009 and December 31, 2008, the total amount outstanding under
the lines of credit and the allowance for receivables from related parties was
$1,851,000.

10.  COMMITMENTS AND CONTINGENCIES

Litigation

The Company is subject to various claims and pending or threatened
lawsuits in the normal course of business. Other than described above in Note 9,
the Company is not currently party to any such legal proceedings that management
believes would have a material adverse effect on the Company's financial
position, results of operations or cash flows.

11.  NEW ACCOUNTING PRONOUNCEMENTS

In May 2009, the Financial Accounting Standards Board (FASB) issued SFAS
No. 165, Subsequent Events(FAS 165).  This standard sets forth the
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements, the circumstances under
which an entity should recognize events or transactions occurring after the
balance sheet date in its financial statements, and the disclosures that an
entity should make about events or transactions that occurred after the balance
sheet date.  FAS 165 is effective for fiscal years and interim periods ended
after June 15, 2009.  The Company adopted this standard during the quarter ended
June 30, 2009 and has evaluated any subsequent events through the date of this
filing.  The Company does not believe there are any material subsequent events
which would require further disclosure.

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles
(FAS 168).  FAS 168 replaces FASB Statement No. 162, The Hierarchy of
Generally Accepted Accounting Principles, and establishes the FASB
Accounting Standards Codification TM (the Codification) as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with generally accepted accounting principles (GAAP).  FAS 168 is
effective for interim and annual periods ending after September 15, 2009.  The
Company will begin to use the new guidelines and numbering system prescribed by
the Codification when referring to GAAP during the quarter ended September 30,
2009.  The Codification will not have an impact on the results of the Company.

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

Forward-Looking Statements

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

Overview

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

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

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

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

Results of Operations

Contract revenue.

`% of                  % of
                                                contract              contract
                                       2009      revenue     2008      revenue   $ change  % change
(in thousands)                       ---------  ---------  ---------  ---------  --------- ---------
Three months ended June 30                                                                          
Government revenue                  $     622       76.5  $     661       65.7  $     (39)     (5.9)
Commercial revenue                        191       23.5        345       34.3       (154)    (44.6)
                                     ---------             ---------             ---------
Total contract revenue              $     813             $   1,006             $    (193)    (19.2)
                                     =========             =========             =========

Six months ended June 30
Government revenue                  $   1,042       68.3  $   1,569       47.7  $    (527)    (33.6)
Commercial revenue                        483       31.7      1,718       52.3     (1,235)    (71.9)
                                     ---------             ---------             ---------
Total contract revenue              $   1,525             $   3,287             $  (1,762)    (53.6)
                                     =========             =========             =========`

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

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

We recognize contract revenue as work progresses on long-term, cost plus
fixed fee and fixed price contracts using the percentage-of-completion method,
which relies on estimates of total expected contract revenue and costs.  Our
revenue contracts generally include a statement of the work we are to complete
and the total fee we will earn from the contract.  When we begin work on the
contract and at the end of each accounting period, we work with the members of
our technical team to estimate the labor and material and other cost required to
complete the statement of work compared to cost incurred to date.  We use
information provided by project mangers, vendors, outside consultants and others
as we deem necessary to develop our cost estimates.  Since our contracts
generally require some level of technology development to complete, the actual
cost required to complete a statement of work can vary from our estimated cost
to complete.   We have developed processes that allow us to make reasonable
estimates of the cost to complete a contract.  Historically, we have made only
immaterial revisions in the estimates to complete the contract at each reporting
period. Recognized revenues are subject to revisions as the contract progresses
to completion and actual revenue and cost becomes 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.

We recognize contract revenue on the sales of prototype units and evaluation
kits upon acceptance of the deliverables by the customer or expiration of the
contractual acceptance period.  While we anticipate future sales of these units,
revenue may vary substantially due to the timing of orders from customers and
potential constraints on resources.

Contract revenue was substantially lower during the three and six months
ended June 30, 2009 than the same period in 2008, due to reduced contract
activity and lower beginning backlog in 2009 compared to the prior year.  We
expect that we will have fewer opportunities to enter into new development
contracts as we move closer to the commercialization of products based on our
PicoP display engine.

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

In July 2009, Microvision entered into a 9 month $1.0 million subcontract
with Lockheed Martin Corporation to supply two full-color, daylight readable,
see-through display systems as part of the U.S. government's Urban Leader
Tactical Response, Awareness & Visualization program.  Lockheed Martin holds
a prime contract with the U.S. government for development of the soldier worn
display.

Our backlog of development contracts, including orders for prototype units,
at June 30, 2009 was $719,000 compared to $526,000 at June 30, 2008, all of
which is scheduled for completion during the next twelve months.

Product revenue.

`% of                  % of
                                                 product               product
                                       2009      revenue     2008      revenue   $ change  % change
(in thousands)                       ---------  ---------  ---------  ---------  --------- ---------
Bar code revenue                                                                                    
Three months ended June 30          $     174      100.0  $     616      100.0  $    (442)    (71.8)
Six months ended June 30                  413      100.0        905      100.0       (492)    (54.4)`

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

Bar code revenue was lower during the three and six months ended June 30,
2009 than the same period in 2008, due to decreased purchasing volume of small
and mid-sized businesses as a result of the global economic conditions.

The backlog of product orders at June 30, 2009 was approximately $135,000,
compared to $153,000 at June 30, 2008, all of which is scheduled for delivery
during the next twelve months.

Cost of contract revenue.

`% of                  % of
                                                contract              contract
                                       2009      revenue     2008      revenue   $ change  % change
(in thousands)                       ---------  ---------  ---------  ---------  --------- ---------
Three months ended June 30          $     527       64.8  $     374       37.2  $     153      40.9
Six months ended June 30                  910       59.7      1,136       34.6       (226)    (19.9)`

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

Cost of contract revenue was higher during the three months ended June 30,
2009 than the same period in 2008 as a result of the cost mix of the contracts
during those periods.  During the three months ended June 30, 2008, cost of
contract revenue included contracts with more favorable cost structures and
higher gross margins.  Cost of contract revenue was lower during six months
ended June 30, 2009 than June 30, 2008 as a result of the decreased activity on
development contracts.  The increase in cost of contract revenue as a percentage
of contract revenue during the three and six month periods ended June 30, 2009
compared to the same periods in 2008 was also the result of differences in the
cost mix of the contracts during those periods.

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
                                       2009      revenue     2008      revenue   $ change  % change
(in thousands)                       ---------  ---------  ---------  ---------  --------- ---------
Three months ended June 30          $     543      312.1  $     529       85.9  $      14       2.6
Six months ended June 30                  784      189.8        868       95.9        (84)     (9.7)`

Cost of product revenue includes both the direct and allocated indirect costs
of manufacturing products sold to customers.  Direct costs include labor,
materials and other costs incurred directly in the manufacture of these
products.  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 June 30, 2009 and 2008, we expensed
approximately $62,000 and $27,000, respectively, of manufacturing overhead
associated with production capacity in excess of production requirements.  For
the six months ending June 30, 2009 and 2008, we expensed approximately $134,000
and $72,000, respectively, of manufacturing overhead associated with production
capacity in excess of production requirements.

The Company has periodically entered into noncancelable purchase contracts in
order to ensure the availability of materials to support bar code scanner
production.  Management periodically assesses the need to provide for the
impairment on these purchase contracts and records a loss on purchase
commitments when required.  Cost of product revenue for the three and six month
periods ending June 30, 2009 includes approximately $318,000 and $340,000 of
inventory write-downs, respectively.  In addition, cost of product revenue for
the six months ended June 30, 2009 included $19,000 for noncancelable purchase
contracts that were in excess of estimated future proceeds from the sale of the
ROV scanners.

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.

`2009       2008     $ change   % change
(in thousands)                       ---------  ---------  ---------  ---------                     
Three months ended June 30          $   5,716  $   5,881  $    (165)      (2.8)
Six months ended June 30               11,326     10,307      1,019        9.9`

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 during the six months ended June 30, 2009 as compared to the
six months ended June 30, 2008 is primarily attributable to increases in payroll
costs and contracted services.

As discussed above, the cost of contract revenue was higher during the three
months ended June 30, 2009 compared to the same period in 2008 as a result of
differences in the cost mix of the contracts during those periods.  As a result
there was an increase in overhead applied to cost of contract revenue during the
three months ended June 30, 2009 compared to the same period in 2008.  The
decrease in research and development expense for the three months ended June 30,
2009 as compared to the same period in 2008 is primarily attributable to an
increase in overhead allocated to cost of contract revenue as well as a decrease
in operating expenses for the period.

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.

`2009       2008     $ change   % change
(in thousands)                       ---------  ---------  ---------  ---------                     
Three months ended June 30          $   3,667  $   4,103  $    (436)     (10.6)
Six months ended June 30                7,481      8,238       (757)      (9.2)`

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

The decrease in sales, marketing, general and administrative expense for the
three and six months ended June 30, 2009 compared to the same periods in 2008
was primarily the result of decreased payroll costs due to reductions in
staffing levels.

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

Interest income.

`2009       2008     $ change   % change
(in thousands)                       ---------  ---------  ---------  ---------                     
Three months ended June 30          $      79  $     279  $    (200)     (71.7)
Six months ended June 30                  143        691       (548)     (79.3)`

The decrease in interest income for the three and six months ended June 30,
2009 compared to the same period in 2008 resulted primarily from lower average
cash, investment securities balances, and interest rates.

Interest expense.

`2009       2008     $ change   % change
(in thousands)                       ---------  ---------  ---------  ---------                     
Three months ended June 30          $      20  $      12  $       8       66.7
Six months ended June 30                   31         25          6       24.0`

Gain (loss) on derivative instruments, net.

`2009       2008     $ change   % change
(in thousands)                       ---------  ---------  ---------  ---------                     
Three months ended June 30          $    (982) $    (254) $    (728)     286.6
Six months ended June 30                 (802)     1,419     (2,221)    (156.5)`

In March and December 2005, we issued warrants to purchase 2,302,000
shares of common stock.  The warrants met the definition of derivative
instruments that must be accounted for as liabilities under the provisions of
Emerging Issues Task Force Issue No. 00-19, Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
Stock,because we cannot engage in certain corporate transactions affecting
the common stock unless we make a cash payment to the holders of the warrants.
We record changes in the fair values of the warrants in the statements of
operations each period.  In July 2008, warrants to purchase 750,000 shares of
common stock expired unexercised.  We valued the remaining warrants to purchase
1,552,000 shares of common stock at June 30, 2009 using the Black-Scholes
option-pricing model with the following assumptions: expected volatilities of
78%; expected dividend yields of 0%; risk free interest rates of from 0.4% to
0.8%; and contractual lives ranging from 0.7 year to 1.4 years.  The change in
value of the warrants of $982,000 for the three and $802,000 for the six months
ended June 30, 2009 was recorded as a non-operating loss and is included in
"Gain (loss) on derivative instruments, net" in the consolidated statements of
operations.  We valued the warrants at June 30, 2008 using the Black-Scholes
option-pricing model with the following assumptions:  expected volatilities
ranging from 65% to 68%; expected dividend yields of 0%; risk free interest
rates ranging from 1.3% to 2.8%; and contractual lives ranging from 0.1 years to
2.4 years.  The change in value of the warrants of $202,000 for the three months
ended June 30, 2008 was recorded as a non-operating loss and is included in
"Gain (loss) on derivative instruments, net" in the consolidated
statements of operations.  The change in value of the warrants of $1,535,000 for
the six months ended June 30, 2008 was recorded as a non-operating gain and is
included in "Gain (loss) on derivative instruments, net" in the consolidated
statements of operations.

Prior to December 9, 2008, we held warrants to purchase 170,500 shares of
Lumera common stock.  On December 9, 2008, Lumera merged with GigOptix, LLC and
the combined company now conducts business as GigOptix, Inc.  Our Lumera
warrants were exchanged for warrants to purchase shares of the new company's
common stock, after applying a 0.125 exchange ratio and exercise price
escalation.  As of December 31, 2008, the fair value of the warrants was
determined to be zero.  As of June 30, 2008, the warrants were valued using the
Black-Scholes option-pricing model with the following assumptions:  expected
volatility of 107%; expected dividend yields of 0%; risk free interest rates of
2.83%; and contractual lives of 2.7 years.  The change in value of $52,000 for
the three months and $116,000 for the six months ended June 30, 2008 was
recorded as a non-operating loss and is included in "Gain (loss) on
derivative instruments, net" in the consolidated statements 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 June 30, 2009, we had $26.3 million in cash, cash
equivalents and investment securities, available-for-sale.  Our operating plan
for 2009 and 2010 includes the launch of the first accessory product, further
development of our PicoP display engine for embedded applications and further
development of automotive HUD and eyewear applications.  In order to fully fund
our operating plan for 2009 and 2010, we will require additional capital.  We
plan to obtain additional cash through the issuance of equity or debt
securities.  There can be no assurance that additional cash will be available or
that, if available, it will be available on terms acceptable to us on a timely
basis.  If adequate funds are not available by January 2010, we intend to
consider reducing the scope of our business to extend our operations as we
pursue other financing opportunities and business relationships.  This reduction
in scope could include delaying development projects resulting in reductions in
staff, operating costs, capital expenditures and investment in research and
development.  With these adjustments to our operating plan, we believe that we
currently have sufficient cash, cash equivalents, and investment securities to
fund operations into June 2010.

Cash used in operating activities totaled $16.3 million during the six months
ended June 30, 2009, compared to $14.9 million during the same period in 2008.
During the six months ended June 30, 2009, the increase in cash used in
operating activities was primarily driven by lower contract activity and higher
research and development costs as we move closer to the commercialization of
PicoP based products.

We had the following material gains and charges, and changes in assets and
liabilities during the six months ended June 30, 2009:

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

Cash used in investing activities totaled $544,000 for the six months ended
June 30, 2009 compared to cash provided by investing activities of $11.2 million
during the six months ended June 30, 2008.  During the six months ended June 30,
2009, we used cash of $544,000 for capital expenditures, compared to $215,000
during the same period in 2008.  During the six months ended June 30,
2008, we had net sales of investment securities totaling
$11.8 million.

Cash provided by financing activities totaled $14.9 million for the six
months ended June 30, 2009 compared to $281,000 during the same period in 2008.
In June 2009, we raised approximately $15.0 million, before issuance costs of
approximately $179,000, from the sale of 8,076,239 shares of common stock and
warrants to purchase 2,019,060 shares of our common stock. The warrants have an
exercise price of $2.1850 per share, a three year term, and are exercisable on
the date of issuance. We can call the warrants after six months and once the
shares are registered if the average closing bid price of its stock is over
$8.74 for any 20 consecutive trading days.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate and Market Liquidity Risks

As of June 30, 2009, 90% of our total cash, cash equivalents and
investment securities, available-for-sale have variable interest rates or are
very short-term discount notes traded in active markets.  Therefore, we believe
our exposure to the market and interest rate risk is not material.  The
remaining 10% is composed of $3.0 million par student loan auction-rate
securities (SLARS).  The SLARS owned by the Company are investment grade
long-term bonds, structured with variable interest rate resets, purchases and sales
to be determined via a Dutch Auction process every 28 days.  They were issued to
fund U.S. government guaranteed student loans.  Beginning in February 2008 as
global credit markets significantly deteriorated, insufficient clearing bids
have been submitted for the SLARS.  The auctions have thus failed and the
interest rates have been reset to "maximum rates" instead of
"auction rates".  The SLARS have been illiquid through the auction
process and through inactive secondary ARS markets.

Given the adverse credit market conditions, the fair value of the principal
of these bonds has become affected by changes in interest rates, the spread
between short and long rates, and credit market liquidity.  As a result, at
December 31, 2008, we estimated the fair value of our SLARS to be approximately
$2.7 million.  If market conditions worsen, we may have to further adjust the
estimated fair value of the SLARS, including additional charges to earnings, if
we believe the adjustment is other than temporary.  In the event we need access
to the funds invested in the SLARS, we could be required to sell these
securities at an amount below our original purchase value.  Any of these events
could affect our consolidated financial condition, results of operations and
cash flows.  However, based on our current operating plan and ability to access
our $23.6 million held in cash and cash equivalents and other investment
securities available for sale held as of June 30, 2009, we do not expect to be
required to sell these securities materially below their current estimated
values.

Our investment policy generally directs that the investment managers should
select investments to achieve the following goals: principal preservation,
adequate liquidity and return.  As of June 30, 2009, our cash and cash
equivalents and investments available-for-sale securities portfolio are
comprised of short-term highly rated money market funds, corporate bonds and the
SLARS.

`Amount      Percent
                                     ---------  ---------
Cash                                  $ 6,677      25.36%
Less than one year                   $ 16,948      64.38%
One to two years                           --          --
Greater than five years                 2,700      10.26%
                                     ---------  ---------
                                    $  26,325     100.00%
                                     =========  =========`

Foreign Exchange Rate Risk

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

ITEM 4.	CONTROLS AND PROCEDURES

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

PART II

OTHER INFORMATION

ITEM 1A - RISK FACTORS

Risk Factors Relating to the Microvision Business

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

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

- As of June 30, 2009, we had an accumulated deficit of $311.3 million.
- We incurred consolidated net losses of $239.6 million from inception through
2006, $19.8 million in 2007, $32.6 million in 2008, and consolidated net loss of
$19.3 million in the six months ended June 30, 2009.

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

We cannot be certain that we will succeed in obtaining additional development
contracts or that we will be able to obtain substantial customer orders for our
products.  In light of these factors, we expect to continue to incur losses and
negative cash flow at least through at least 2010 and likely thereafter.  We
cannot be certain that we will achieve positive cash flow at any time in the
future.

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

Our operating plan for 2009 and 2010 includes the launch of our first
accessory product, further development of the PicoP display engine for embedded
applications and further development of automotive HUD and eyewear applications.
In order to fully fund our operating plan for 2009 and 2010, we will require
additional capital. 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, the market acceptance and
competitive position of such products, and the revenues, volumes and margins of
such products.  If the level of revenues or margin are less than anticipated
amounts or if expenses exceed the amounts budgeted, the Company 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.

There can be no assurance that additional capital will 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 by January 2010, we intend to consider
reducing the scope of our business to extend our operations as we pursue other
financing opportunities and business relationships. This reduction in scope
could include reductions in staff and operating costs as well as reductions in
capital expenditures and investment in research and development.  With these
adjustments to our operating plan we believe that we currently have sufficient
cash, cash equivalents, and investment securities to fund operations into June
2010.

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

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

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

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

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

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

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

Our common stock is listed for quotation on The NASDAQ Global Market.  To
keep our listing on this market, we must meet NASDAQ's listing maintenance
standards.  If we are unable to continue to meet NASDAQ's listing maintenance
standards, our common stock could be delisted from The NASDAQ Global Market.  If
our common stock were delisted, we likely would seek to list the common stock on
the NASDAQ Capital Market, the American Stock Exchange or on a regional stock
exchange.  Listing on such other market or exchange could reduce the liquidity
for our common stock.  If our common stock were not listed on the Capital Market
or an exchange, trading of our common stock would be conducted in the over-the-
counter market on an electronic bulletin board established for unlisted
securities or directly through market makers in our common stock.  If our common
stock were to trade in the over-the-counter market, an investor would find it
more difficult to dispose of, or to obtain accurate quotations for the price of,
the common stock.  A delisting from The NASDAQ Global Market and failure to
obtain listing on such other market or exchange would subject our securities to
so-called penny stock rules that impose additional sales practice and market-
making requirements on broker-dealers who sell or make a market in such
securities.  Consequently, removal from The NASDAQ Global Market and failure to
obtain listing on another market or exchange could affect the ability or
willingness of broker-dealers to sell or make a market in our common stock and
the ability of purchasers of our common stock to sell their securities in the
secondary market.  In addition, when the market price of our common stock is
less than $5.00 per share, we become subject to penny stock rules even if our
common stock is still listed on The NASDAQ Global Market.  While the penny stock
rules should not affect the quotation of our common stock on The NASDAQ Global
Market, these rules may further limit the market liquidity of our common stock
and the ability of investors to sell our common stock in the secondary market.
The market price of our stock has mostly traded below $5.00 per share during
2008 and 2007.  On July 30, 2009, the closing price of our stock was $3.65.

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

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

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

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

We may not succeed in these efforts because of:

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

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

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

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

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

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

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

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

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

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

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

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

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

In the recent past, general worldwide economic conditions have
experienced a downturn due to slower economicactivity, concerns about inflation, increased energy costs, decreased consumer
confidence, reduced corporate profits and capital spending, and adverse business
conditions. Any continuation orworsening of the current
global economic and financial conditions could materially adversely affect our
ability to raise, or the cost of, needed capital and could materially adversely
affect our ability to commercialize products.We cannot predict the timing, strength, or duration of any economic
slowdown or subsequent economic recovery, worldwide, or in the display industry.

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 half of 2009 and the full year of 2008, 54% and 34%,
respectively, of our revenue was derived from performance on a limited number of
development contracts with the U.S. government.  Therefore, any significant
disruption or deterioration of our relationship with the U.S. government would
significantly reduce our revenues.  Our government programs must compete with
programs managed by other contractors for limited amounts and uncertain levels
of funding.  The total amount and levels of funding are susceptible to
significant fluctuations on a year-to-year basis.  Our competitors continuously
engage in efforts to expand their business relationships with the government and
are likely to continue these efforts in the future.  Our contracts with the
government are subject to immediate termination by the government for
convenience at any time.  The government may choose to use contractors with
competing display technologies or it may decide to discontinue any of our
programs altogether.  In addition, those development contracts that we do obtain
require ongoing compliance with applicable government regulations.  Termination
of our development contracts, a shift in government spending to other programs
in which we are not involved, a reduction in government spending generally, or
our failure to meet applicable government regulations could have severe
consequences for our results of operations.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ITEM 6.	Exhibits

|10.1 | Securities Purchase Agreement dated June 22, 2009 by and between
the Company and Max Display Enterprises Limited                                                                                           
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2 | Registration Rights Agreement dated June 22, 2009 by and between
the Company and Max Display Enterprises Limited                                                                                           
|10.3 | Warrant No. 120 to Purchase Common Stock of Microvision, Inc.
                                                                                      issued June 22, 2009 to Max Display Enterprises Limited
|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.
| | -----------------

|August 6, 2009 | BY: | /s/ Alexander Y. Tokman                                 
|-------------- | --- | --------------------------------------------------------
|               |     | Alexander Y. Tokman                                     
|               |     | Chief Executive Officer
   (Principal Executive Officer)



|August 6, 2009 | BY: | /s/ Jeff Wilson                                         
|-------------- | --- | --------------------------------------------------------
|               |     | Jeff Wilson                                             
|               |     | Chief Financial Officer
   (Principal Financial Officer)



EXHIBIT INDEX

The following documents are filed.

|Exhibit Number | Description                                                                                                                                                                     
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1           | Securities Purchase Agreement dated June 22, 2009 by and between
the Company and Max Display Enterprises Limited                                                                
|10.2           | Registration Rights Agreement dated June 22, 2009 by and between
the Company and Max Display Enterprises Limited                                                                
|10.3           | Warrant No. 120 to Purchase Common Stock of Microvision, Inc.
issued June 22, 2009 to Max Display Enterprises Limited                                                           
|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