MicroVision (MVIS) 10-Q 7 Nov 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - $ / shares	9 Months Ended
	Sep. 30, 2019	Nov. 01, 2019
Contract with Customer, Liability, Current, Change
Entity Registrant Name	Microvision, Inc.
Trading Symbol	MVIS
Entity Listing, Security Trading Currency	USD
Entity Listing, Par Value Per Share	$ 0.001
Title of 12(b) Security	Common Stock
Security Exchange Name	NASDAQ
Entity Central Index Key	0000065770
Entity File Number	001-34170
Entity Incorporation, State or Country Code	DE
Interactive Data Current	Yes
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		119,417,078
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2019

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 6,642	$ 13,766
Accounts receivable, net of allowances of $0 and $0, respectively	505	476
Costs and estimated earnings in excess of billings on uncompleted contracts	0	987
Inventory	241	1,109
Other current assets	574	1,311
Total current assets	7,962	17,649
Property and equipment, net	2,111	2,993
Operating lease right-of-use asset	1,394	0
Restricted cash	435	435
Intangible assets	306	486
Other assets	186	1,470
Total assets	12,394	23,033
Current liabilities
Accounts payable	1,091	2,411
Accrued liabilities	4,064	5,602
Deferred revenue	28	0
Contract liabilities	10,000	0
Other current liabilities	8	10,154
Current portion of operating lease liability	651	0
Current portion of finance lease obligations	24	21
Total current liabilities	15,866	18,188
Operating lease liability, net of current portion	1,482	0
Finance lease obligations, net of current portion	15	33
Deferred rent, net of current portion	0	695
Total liabilities	17,363	18,916
Commitments and contingencies (Note 10)
Shareholders' equity (deficit)
Preferred stock, par value $0.001; 25,000 shares authorized; 0 and 0 shares issued and outstanding	0	0
Common stock, par value $0.001; 150,000 shares authorized; 119,417 and 100,105 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively	119	100
Additional paid-in capital	564,227	550,133
Accumulated deficit	(569,315)	(546,116)
Total shareholders' equity (deficit)	(4,969)	4,117
Total liabilities and shareholders' equity (deficit)	12,394	23,033
Reconciliation of cash, cash equivalents, and restricted cash balances
Cash and cash equivalents	6,642	13,766
Restricted cash	435	435
Cash, cash equivalents, and restricted cash	$ 7,077	$ 14,201

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets
Allowance for doubtful accounts receivable, current	$ 0	$ 26
Stockholders equity
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	25,000	25,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000	150,000
Common stock, shares issued	119,417	100,105
Common stock, shares outstanding	119,417	100,105

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues	$ 1,190	$ 11,572	$ 4,281	$ 15,774
Operating expenses:
Total cost of revenue	2,072	2,645	5,138	6,199
Gross profit	(882)	8,927	(857)	9,575
Research and development expense	3,566	6,386	15,484	17,905
Sales, marketing, general and administrative expense	1,697	2,253	6,851	6,953
Total operating expenses	5,263	8,639	22,335	24,858
Income (loss) from operations	(6,145)	288	(23,192)	(15,283)
Other income (expense), net	4	1	(7)	(19)
Net income (loss)	$ (6,141)	$ 289	$ (23,199)	$ (15,302)
Net income (loss) per share - basic	$ (0.05)	$ 0	$ (0.21)	$ (0.18)
Net income (loss) per share - diluted	$ (0.05)	$ 0	$ (0.21)	$ (0.18)
Weighted-average shares outstanding - basic	114,874	93,073	107,953	84,388
Weighted-average shares outstanding - diluted	114,874	93,204	107,953	84,388
Product revenue
Revenue from Contract with Customer, Including Assessed Tax	$ 999	$ 0	$ 1,198	$ 0
Operating expenses:
Cost of Goods and Services Sold	2,039	1,434	3,352	1,998
License and royalty
Revenue from Contract with Customer, Including Assessed Tax	17	10,000	17	10,011
Contract
Revenue from Contract with Customer, Including Assessed Tax	174	1,572	3,066	5,763
Operating expenses:
Cost of Goods and Services Sold	$ 33	$ 1,211	$ 1,786	$ 4,201

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Shareholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands	Common stock	Additional paid-in capital	Accumulated deficit	Total
Beginning balances at Dec. 31, 2017	$ 79	$ 528,873	$ (524,086)	$ 4,866
Beginning balances, shares at Dec. 31, 2017	78,597
Adoption of New Accounting Pronouncement, Revenue from Contracts with Customers	$ 0	0	5,220	5,220
Share-based compensation expense	$ 0	724	0	724
Share-based compensation expense, shares	76
Sales of common stock	$ 14	16,526	0	16,540
Sales of common stock, shares	14,400
Net income (loss)	$ 0	0	(15,302)	(15,302)
Ending balances at Sep. 30, 2018	$ 93	546,123	(534,168)	12,048
Ending balances, shares at Sep. 30, 2018	93,073
Beginning balances at Jun. 30, 2018	$ 93	545,978	(534,457)	11,614
Beginning balances, shares at Jun. 30, 2018	93,073
Share-based compensation expense	$ 0	181	0	181
Share-based compensation expense, shares	0
Sales of common stock	$ 0	(36)	0	(36)
Sales of common stock, shares	0
Net income (loss)	$ 0	0	289	289
Ending balances at Sep. 30, 2018	$ 93	546,123	(534,168)	12,048
Ending balances, shares at Sep. 30, 2018	93,073
Beginning balances at Dec. 31, 2018	$ 100	550,133	(546,116)	4,117
Beginning balances, shares at Dec. 31, 2018	100,105
Share-based compensation expense	$ 0	877	0	877
Share-based compensation expense, shares	250
Sales of common stock	$ 19	13,217	0	13,236
Sales of common stock, shares	19,062
Net income (loss)	$ 0	0	(23,199)	(23,199)
Ending balances at Sep. 30, 2019	$ 119	564,227	(569,315)	(4,969)
Ending balances, shares at Sep. 30, 2019	119,417
Beginning balances at Jun. 30, 2019	$ 110	558,334	(563,174)	(4,730)
Beginning balances, shares at Jun. 30, 2019	110,223
Share-based compensation expense	$ 0	258	0	258
Share-based compensation expense, shares	0
Sales of common stock	$ 9	5,635	0	5,644
Sales of common stock, shares	9,194
Net income (loss)	$ 0	0	(6,141)	(6,141)
Ending balances at Sep. 30, 2019	$ 119	$ 564,227	$ (569,315)	$ (4,969)
Ending balances, shares at Sep. 30, 2019	119,417

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities
Net loss	$ (23,199)	$ (15,302)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization	1,382	1,381
Impairment of intangible assets	97	0
Impairment of property and equipment	204	0
Share-based compensation expense	877	721
Inventory write-downs	2,203	1,139
Other non-cash adjustments	0	99
Change in:
Accounts receivable, net	(29)	(5,029)
Costs and estimated earnings in excess of billings on uncompleted contracts	987	(400)
Inventory	(1,335)	55
Other current and non-current assets	2,021	(98)
Accounts payable	(982)	(1,416)
Accrued liabilities	(1,360)	(188)
Deferred revenue	28	0
Billings on uncompleted contracts in excess of related costs	0	(4)
Other currrent liabilities	(146)	(115)
Operating lease liabilities	(481)	0
Other long-term liabilities	0	(305)
Net cash used in operating activities	(19,733)	(19,462)
Cash flows from investing activities
Purchases of property and equipment	(671)	(971)
Net cash used in investing activities	(671)	(971)
Cash flows from financing activities
Principal payments under finance leases	(15)	(2)
Increase in deferred rent	0	139
Net proceeds from issuance of common stock	13,295	16,540
Net cash provided by financing activities	13,280	16,677
Change in cash and cash equivalents, and restricted cash	(7,124)	(3,756)
Cash, cash equivalents and restricted cash at beginning of period	14,201	17,401
Cash, cash equivalents and restricted cash at end of period	7,077	13,645
Supplemental schedule of non-cash investing and financing activities
Property and equipment acquired under finance leases	0	42
Non-cash additions to property and equipment	48	149
Issuance of common stock for commitment fee	$ 258	$ 0

MANAGEMENT'S STATEMENT - Note 1

MANAGEMENT'S STATEMENT - Note 1	9 Months Ended
	Sep. 30, 2019
Management Disclosure
MANAGEMENT'S STATEMENT - Note 1	1. MANAGEMENT’S STATEMENT The Condensed Consolidated Balance Sheets as of September 30, 2019, the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Shareholders' Equity (Deficit) for the three and nine months ended September 30, 2019 and 2018, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018, have been prepared by MicroVision, Inc. ("we" or "our") and have not been audited. In the opinion of management, all adjustments necessary to state fairly the financial position at September 30, 2019 and the results of operations 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 Securities and Exchange Commission (SEC). The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. You should read these condensed consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operating results that may be attained for the entire fiscal year. We have incurred significant losses since inception. We have funded our operations to date primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales and licensing activities. At September 30, 2019, we had $6.6 million in cash and cash equivalents. Based on our current operating plan that includes anticipated future proceeds from the sale of shares under our existing Purchase Agreement with Lincoln Park Capital Fund, LLC (Lincoln Park), we anticipate that we have sufficient cash and cash equivalents to fund our operations into the first quarter of 2020. We will require additional capital to fund our operating plan past that time. We plan to obtain additional capital through the issuance of equity or debt securities, product sales and/or licensing activities. There can be no assurance that additional capital will be available to us or, if available, will be available on terms acceptable to us or on a timely basis. If adequate capital resources are not available on a timely basis, we may consider limiting our operations substantially and we may be unable to continue as a going concern. This limitation of operations could include reducing investments in our production capacities, research and development projects, staff, operating costs, and capital expenditures. We are introducing new technology and products into an emerging market which creates significant uncertainty about our ability to accurately project revenue, costs and cash flows. Our capital requirements will depend on many factors, including, but not limited to, the commercial success of our laser beam scanning (LBS) engines, the rate at which original equipment manufacturers (OEMs) or original design manufacturers (ODMs) introduce products incorporating our PicoP® scanning technology and the market acceptance and competitive position of such products. If revenues are less than we anticipate, if the mix of revenues and the associated margins vary from anticipated amounts or if expenses exceed the amounts budgeted, we may require additional capital earlier than expected to fund our operations. In addition, our operating plan provides for the development of strategic relationships with suppliers of components and systems and equipment manufacturers that may require additional investments by us. These factors raise substantial doubt regarding our ability to continue as a going concern. Our unaudited consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might be necessary should we be unable to continue as a going concern.

NET INCOME (LOSS) PER SHARE - N

NET INCOME (LOSS) PER SHARE - Note 2	9 Months Ended
	Sep. 30, 2019
Earnings Per Share [Abstract]
Net Income (Loss) Per Share - Note 2	2. NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated using 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 options, warrants and nonvested restricted stock units (RSUs). Net loss per share for the three months ended September 30, 2019 and the nine months ended September 30, 2019 and 2018, assuming dilution, is equal to basic net loss per share because the effect of dilutive securities outstanding during the period, including options and RSUs computed using the treasury stock method, is anti-dilutive. Basic net income per share for the three months ended September 30, 2018 is diluted by the potentially dilutive outstanding securities per the table below. The components of basic and diluted net income (loss) per share were as follows (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net income (loss) available for common shareholders - basic $ (6,141) $ 289 $ (23,199) $ (15,302) Denominator: Weighted-average common shares outstanding - basic 114,874 93,073 107,953 84,388 Dilutive incremental share effect from: Options - 1 - - Nonvested restricted stock units - 130 - - Weighted-average common shares outstanding - diluted 114,874 93,204 107,953 84,388 Net income (loss) per share - basic $ (0.05) $ 0.00 $ (0.21) $ (0.18) Net income (loss) per share - diluted $ (0.05) $ 0.00 $ (0.21) $ (0.18) For the three and nine months ended September 30, 2019, we excluded the following securities from net income (loss) per share as the effect of including them would have been anti-dilutive: options outstanding exercisable into a total of 5,206,000 shares of common stock and 1,247,000 nonvested RSUs. For the three and nine months ended September 30, 2018, we excluded the following securities from net income (loss) per share as the effect of including them would have been anti-dilutive: options outstanding and warrants exercisable into a total of 7,586,000 and 7,587,000 shares of common stock, respectively, and 1,050,000 and 1,180,000 nonvested RSUs, respectively.

LONG-TERM CONTRACTS - Note 3

LONG-TERM CONTRACTS - Note 3	9 Months Ended
	Sep. 30, 2019
Notes To Financial Statements Abstract
Long-term contracts - Note 3	3. LONG-TERM CONTRACTS In May 2018, we signed a five-year license agreement with a customer granting them exclusive license to our LBS technology for display-only applications. As part of the agreement, we received a first payment of $5.0 million in June 2018 and the second payment of $5.0 million in October 2018. The contract includes requirements that must be met in order to maintain exclusivity. If this licensee acquires a customer, the agreement requires the licensee to buy any needed components from us. During the year ended December 31, 2018 we completed the performance obligations required by the contract. As a result, we recognized $10.0 million in license and royalty revenue during the year ended December 31, 2018. In April 2017, we signed a contract with a major technology company to develop an LBS display system. Under the agreement, we received an upfront payment of $10.0 million in 2017 and, as of September 30, 2019, have also received $15.0 million, net of early payment discounts, representing all payment due for development work. The original contract was for $14.0 million in fees for development work, but we and our customer agreed to add $1.1 million in additional work to total $15.1 million. After applying early payment discounts, we recognized revenue of $15.0 million in development fees over time based on the proportion of total cost expended (under Topic 606, the "input method") to the total cost expected to complete the contract performance obligation. For the three and nine months ended September 30, 2019, we recognized $47,000 and $2.9 million, respectively, of contract revenue from development fees on this agreement compared to $1.5 million and $5.6 million, respectively, during the three and nine months ended September 30, 2018. The $10.0 million upfront payment will be recognized as revenue at the point in time future component sales are transferred to the customer. Based on current pricing and cost estimates, the amount of the per unit upfront payment would be greater than our estimated per unit gross profit. We have an amount equal to the $10.0 million upfront payment classified as a contract liability on the balance sheet. We have received initial purchase orders from our customer under the product supply agreement signed in April 2017. We expect to apply $877,000 of the upfront payment over the two quarters ended December 31, 2019 and March 31, 2020. To the extent that the component purchases do not fully expend the $10.0 million upfront payment, there is no repayment provision to the customer.

REVENUE RECOGNITION - Note 4

REVENUE RECOGNITION - Note 4	9 Months Ended
	Sep. 30, 2019
Revenue from Contract with Customer [Abstract]
REVENUE RECOGNITION - Note 4	4. REVENUE RECOGNITION The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. We generate all of our revenue from contracts with customers. We evaluate contracts based on the 5-step model as stated in Topic 606 as follows: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price, and (v) recognize revenue when (or as) performance obligations are satisfied. A contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group of promises) that is distinct, as defined in the revenue standard. The transaction price is the amount of consideration an entity expects to be entitled to from a customer in exchange for providing the goods or services. A number of factors should be considered to determine the transaction price, including whether there is variable consideration, a significant financing component, noncash consideration, or amounts payable to the customer. The determination of variable consideration will require a significant amount of judgment. In estimating the transaction price we will use either the expected value method or the most likely amount method. The transaction price is allocated to the separate performance obligations in the contract based on relative standalone selling prices. Determining the relative standalone selling price can be challenging when goods or services are not sold on a standalone basis. The revenue standard sets out several methods that can be used to estimate a standalone selling price when one is not directly observable. Allocating discounts and variable consideration must also be considered. Allocating the transaction price can require significant judgement on our part. Revenue is recognized when (or as) the customer obtains control of the good or service/performance obligations are satisfied. Topic 606 provides guidance to help determine if a performance obligation is satisfied at a point in time or over time. Where a performance obligation is satisfied over time, the related revenue is also recognized over time. Disaggregation of revenue The following table provides information about disaggregated revenue by timing of revenue recognition, (in thousands): Three Months Ended September 30, 2019 License and Product royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ 999 $ 17 $ 121 $ 1,137 Product and services transferred over time - - 53 53 Total $ 999 $ 17 $ 174 $ 1,190 Nine Months Ended September 30, 2019 License and Product royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ 1,198 $ 17 $ 173 $ 1,388 Product and services transferred over time - - 2,893 2,893 Total $ 1,198 $ 17 $ 3,066 $ 4,281 Three Months Ended September 30, 2018 License and Product royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ - $ 10,000 $ 26 $ 10,026 Product and services transferred over time - - 1,546 1,546 Total $ - $ 10,000 $ 1,572 $ 11,572 Nine Months Ended September 30, 2018 License and Product royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ - $ 10,011 $ 182 $ 10,193 Product and services transferred over time - - 5,581 5,581 Total $ - $ 10,011 $ 5,763 $ 15,774 Contract balances The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in thousands): September 30, December 31, 2019 2018 Accounts receivable, net $ 505 $ 476 Costs and estimated earnings in excess of billings on uncompleted contracts - 987 Deferred revenue 28 - Contract liabilities 10,000 - Other current liabilities - 10,000 Under Topic 606, our rights to consideration are presented separately depending on whether those rights are conditional or unconditional. We present our unconditional rights to consideration as "accounts receivable" in our Consolidated Balance Sheet. Contract assets represent rights to consideration that are subject to a condition other than the passage of time and will be comprised primarily of costs and estimated profits in excess of billings on uncompleted contracts and estimated accrued sales-based royalty revenue. Contract costs in excess of billing are included in the "Costs and estimated earnings in excess of billings on uncompleted contracts" line of our Consolidated Balance Sheet. Significant changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands, except percentages): September 30, December 31, 2019 2018 $ Change % Change Contract assets $ - $ 987 $ (987) (100.0) Contract liabilities (10,028) - (10,028) - Net contract assets (liabilities) $ (10,028) $ 987 $ (11,015) (1,116.0) During the nine months ended September 30, 2019, we billed $3.9 million on our development contract. Of this amount, $987,000 was included in contract assets at December 31, 2018. We also recognized revenue of $2.9 million on development contract during the nine months ended September 30, 2019. Contract acquisition costs We are required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed. We currently do not pay any commissions upon the signing of a contract; therefore, no commission cost has been incurred as of September 30, 2019. Transaction price allocated to the remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The $10.0 million upfront payment received from a major technology company will be recognized as revenue at the point in time future component sales are transferred to the customer. We have received initial purchase orders from our customer under the product supply agreement signed in April 2017. We expect to apply $877,000 of the $10.0 million contract liability over the two quarters ended December 31, 2019 and March 31, 2020 and this amount is included in revenue below. Because there is uncertainty about the timing of the application of the remainder of the $10.0 million contract liability, it has been excluded from future estimated revenue in the table below. The $10.0 million contract liability is classified as a current liability on our balance sheet. Due to the uncertainty of the timing, it is possible that recognition of revenue may extend beyond the next twelve months. The following table provides information about the estimated timing of revenue recognition (in thousands): Remainder of 2019 2020 Product revenue $ 3,482 $ 2,796 License and royalty revenue 84 57 Contract revenue 9 19

CONCENTRATION OF CREDIT RISK AN

CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS - Note 5	9 Months Ended
	Sep. 30, 2019
Risks and Uncertainties [Abstract]
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS - Note 5	5. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS Concentration of credit risk Financial instruments that potentially subject us to a concentration of credit risk are primarily cash equivalents and accounts receivable. We typically do not require collateral from our customers. As of September 30, 2019, our cash and cash equivalents are comprised of short-term highly rated money market savings accounts. Concentration of major customers and suppliers For the three and nine months ended September 30, 2019, one customer accounted for $823,000 and $3.7 million in revenue, representing 69% and 86% of our total revenue, respectively. A second customer accounted for $360,000 and $559,000 in revenue, representing 30% and 13% of our total revenue, respectively. For the three and nine months ended September 30, 2018, one customer accounted for $10.0 million in revenue, representing 86% and 63% of our total revenue, respectively. A second customer accounted for $1.5 million and $5.6 million in revenue, representing 13% and 35% of our total revenue, respectively. One customer accounted for $505,000, or 100% of our net accounts receivable balance at September 30, 2019. A significant concentration of our components and the products we sell are currently manufactured and obtained from single or limited-source suppliers. The loss of any single or limited-source supplier, the failure of any of these suppliers to perform as expected, or the disruption in the supply chain of components from these suppliers could subject us to risks and uncertainties including, but not limited to, increased cost of sales, possible loss of revenues, or significant delays in product deliveries, any of which could adversely affect our financial condition and operating results.

INVENTORY - Note 6

INVENTORY - Note 6	9 Months Ended
	Sep. 30, 2019
Inventory Disclosure
Inventory - Note 6	6. INVENTORY Inventory consists of the following: September 30, December 31, ( in thousands 2019 2018 Raw materials $ - $ 32 Finished goods 241 1,077 $ 241 $ 1,109 Inventory consists of raw materials and finished goods assemblies. Inventory is computed using the first-in, first-out (FIFO) method and is stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required. During the three and nine months ended September 30, 2019, we recorded $1.4 million and $2.2 million, respectively, in inventory write-downs. As of September 30, 2019 and December 31, 2018, $168,000 and $1.4 million, respectively, of materials that are not expected to be consumed during the next twelve months are classified as "other assets" on the balance sheet.

SEVERANCE ARRANGEMENTS - Note 7

SEVERANCE ARRANGEMENTS - Note 7	9 Months Ended
	Sep. 30, 2019
Notes To Financial Statements Abstract
SEVERANCE ARRANGEMENTS - Note 7	7. SEVERANCE ARRANGEMENTS In the nine months ended September 2019, we completed the development work under the April 2017 contract, therefore, to better align our resources to support our business needs, we reduced our workforce by approximately 27%. In the three months ended June 30, 2019, we recorded expenses related to severance of approximately $300,000 to research and development expense and approximately $90,000 to sales, marketing, and general and administrative expense. We paid $284,000 during the three months ended September 30, 2019 related to the severance agreements for these employees. We plan to make the remaining severance payments during the fourth quarter of 2019.

SHARE-BASED COMPENSATION - Note

SHARE-BASED COMPENSATION - Note 8	9 Months Ended
	Sep. 30, 2019
Disclosure Of Compensation Related Costs
Share-Based Compensation - Note 8	8. SHARE-BASED COMPENSATION We issue share-based compensation to employees in the form of stock options, RSUs, and performance stock units (PSUs). We account for the share-based awards by recognizing the fair value of share-based compensation expense on a straight-line basis over the service period of the award, net of estimated forfeitures. The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model. The fair value of RSUs is determined by the closing price of our common stock on the grant date. The PSUs are valued using a binomial option pricing model using the following inputs: stock price, volatility, and risk-free interest rates. Changes in estimated inputs or using other option valuation methods may result in materially different option values and share-based compensation expense. The following table summarizes the amount of share-based compensation expense by line item on the statements of operations: Share-based compensation expense Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2019 2018 2019 2018 Cost of product revenue $ 25 $ - $ 26 $ - Research and development expense 84 109 283 377 Sales, marketing, general and administrative expense 149 73 568 344 $ 258 $ 182 $ 877 $ 721 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 September 30, 2019: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Shares Price Term (years) Value Outstanding as of September 30, 2019 5,206,000 $ 1.65 7.7 $ - Exercisable as of September 30, 2019 2,315,000 $ 2.46 5.9 $ - During the nine months ended September 30, 2019 we issued 475,000 stock options and 195,000 PSUs to our executive officers. These PSUs have performance vesting criteria that would require the Company's stock price to appreciate by more than 100% of the stock price on the grant date before they become earned. Earned PSUs are eligible to vest as to one-third of the PSUs subject to the Award on each of the first three anniversaries of May 22, 2019, subject to the recipient's employment on the above vesting dates. PSUs that become earned prior to a vesting date that would have vested on any earlier vesting date would become immediately vested. As of September 30, 2019, our unrecognized share-based employee compensation related to stock options was $1.4 million which we plan to amortize over the next 2.2 years, our unrecognized share-based compensation related to RSUs was $394,000 which we plan to amortize over the next 1.6 years, and our unrecognized share-based compensation related to the PSUs was $17,000, which we plan to amortize over the next 2.0 years.

LEASES - Note 9

LEASES - Note 9	9 Months Ended
	Sep. 30, 2019
Notes To Financial Statements Abstract
LEASES - Note 9	9. LEASES In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use (ROU) asset and lease liability in the balance sheet for all leases, including operating leases, with terms of more than twelve months. Recognition, measurement and presentation of expenses and cash flows from a lease by a lessee have not significantly changed from previous guidance. The amendments also require qualitative disclosures along with specific quantitative disclosures. We adopted this guidance using the cumulative-effect adjustment method on January 1, 2019, meaning we did not restate prior periods. Current year financial information is presented under the guidance in Topic 842, while prior year information will continue to be presented under Topic 840. Adoption of the standard resulted in the recognition of an operating ROU asset of approximately $1.6 million, a lease liability of approximately $2.5 million, and a reduction in other short-term and long-term liabilities of $873,000. Adoption of the standard did not have a material impact on our Statement of Operations or Statement of Cash flows. Accounting for our finance leases remains substantially unchanged. We determine if an arrangement is a lease at inception. On our balance sheet, our office lease is included in Operating lease right-of-use asset, Current portion of operating lease liability and Operating lease liability, net of current portion. On our balance sheet, finance leases are included in Property and equipment, Current portion of finance lease obligations and Finance lease obligations, net of current portion. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Significant judgment may be required when determining whether a contract contains a lease, the length of the lease term, the allocation of the consideration in a contract between lease and non-lease components, and the determination of the discount rate included in our office lease. We review the underlying objective of each contract, the terms of the contract, and consider our current and future business conditions when making these judgments. Our leases have remaining lease terms of two to four years. Our office space lease contains an option to extend the lease for one period of five years. This extension period is not included in our ROU asset or lease liability amounts. Our office lease agreement includes both lease and non-lease components, which are accounted for separately. Our finance leases contain options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless we are reasonably certain to exercise the purchase option. The components of lease expense were as follows: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2019 2019 Operating lease expense $ 116 $ 348 Finance lease expense: Amortization of leased assets 4 12 Interest on lease liabilities 2 5 Total finance lease expense 6 17 Total lease expense $ 122 $ 365 Supplemental cash flow information related to leases was as follows: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2019 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 160 $ 481 Operating cash flows from finance leases 2 5 Financing cash flows from finance leases 6 15 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ - $ 1,638 Finance leases - - Supplemental balance sheet information related to leases was as follows: (in thousands) September 30, 2019 Operating leases Operating lease right-of-use assets $ 1,394 Current portion of operating lease liability 651 Operating lease liability, net of current portion 1,482 Total operating lease liabilities $ 2,133 Finance leases Property and equipment, at cost $ 66 Accumulated depreciation (21) Property and equipment, net $ 45 Current portion of finance lease obligations $ 24 Finance lease obligations, net of current portion 15 Total finance lease liabilities $ 39 Weighted Average Remaining Lease Term Operating leases 4 years Finance leases 2 years Weighted Average Discount Rate Operating leases 6.0% Finance leases 13.8% As of September 30, 2019, maturities of lease liabilities were as follows: Operating Finance (in thousands) leases leases 2019 $ 160 $ 7 2020 656 27 2021 676 9 2022 696 - 2023 175 - Thereafter - - Total minimum lease payments 2,363 43 Less: amount representing interest (230) (4) Present value of lease liabilities $ 2,133 $ 39

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Note 10	9 Months Ended
	Sep. 30, 2019
Commitments And Contingencies Disclosure Footnote
Commitments and Contingencies - Note 10	10. COMMITMENTS AND CONTINGENCIES Litigation In March 2019, we filed a Notice of Arbitration in Hong Kong against Ragentek as a result of its failure to perform its obligations under a purchase order with us. The relief sought is $4.0 million dollars plus interest and arbitration costs. At this time we cannot predict the likelihood of a favorable outcome. We are subject to various claims and pending or threatened lawsuits in the normal course of business. We are not currently party to any legal proceedings that management believes are reasonably possible to have a material adverse effect on our financial position, results of operations or cash flows. Purchase commitments At September 30, 2019, we had $2.6 million in open purchase obligations that represent commitments to purchase inventory, materials, capital equipment, and other goods used in the normal operation of our business.

COMMON STOCK AND WARRANTS - Not

COMMON STOCK AND WARRANTS - Note 11	9 Months Ended
	Sep. 30, 2019
Common Stock And Warrants - Note 11
COMMON STOCK AND WARRANTS - Note 11	11. COMMON STOCK AND WARRANTS In July 2019, we raised $2.0 million before issuance costs of approximately $24,000 through a registered direct offering of 3.0 million shares of our common stock to a private investor. In April 2019, we raised $2.0 million before issuance costs of approximately $34,000 through a registered direct offering of 2.3 million shares of our common stock to a private investor. In April 2019, we entered into a Common Stock Purchase Agreement with Lincoln Park Capital Fund, LLC (Lincoln Park) granting us the right to sell shares of our common stock having an aggregate value of up to $11.0 million. Under the terms of the agreement, Lincoln Park made an initial purchase of $1.0 million in shares of common stock at a purchase price of $0.98 per share. Subject to various limitations and conditions set forth in the agreement, we may sell up to an additional $10.0 million in shares of common stock, from time to time, at our sole discretion to Lincoln Park over a 24-month period beginning April 2019. In consideration for entering into the agreement, we issued 250,000 shares of our common stock, having a value of $258,000, based on the closing stock price at the date of grant, to Lincoln Park as a commitment fee. We incurred an additional $92,000 in issuance costs. As of September 30, 2019, we have issued 11.8 million shares and raised a total of $8.3 million under this agreement. In January 2019, we raised $1.2 million before issuance costs of approximately $26,000 through a registered direct offering of 2.0 million shares of our common stock to a private investor. In December 2018, we raised $4.2 million before issuance costs of approximately $524,000 through an underwritten public offering of 7.0 million shares of our common stock. In June 2018, we raised $18.0 million before issuance costs of approximately $1.4 million through an underwritten public offering of 14.4 million shares of our common stock.

Summary of Significant Accounti

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2019
Notes To Financial Statements Abstract
Management's Statement	The Condensed Consolidated Balance Sheets as of September 30, 2019, the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Shareholders' Equity (Deficit) for the three and nine months ended September 30, 2019 and 2018, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018, have been prepared by MicroVision, Inc. ("we" or "our") and have not been audited. In the opinion of management, all adjustments necessary to state fairly the financial position at September 30, 2019 and the results of operations 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 Securities and Exchange Commission (SEC). The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. You should read these condensed consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operating results that may be attained for the entire fiscal year. We have incurred significant losses since inception. We have funded our operations to date primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales and licensing activities. At September 30, 2019, we had $6.6 million in cash and cash equivalents. Based on our current operating plan that includes anticipated future proceeds from the sale of shares under our existing Purchase Agreement with Lincoln Park Capital Fund, LLC (Lincoln Park), we anticipate that we have sufficient cash and cash equivalents to fund our operations into the first quarter of 2020. We will require additional capital to fund our operating plan past that time. We plan to obtain additional capital through the issuance of equity or debt securities, product sales and/or licensing activities. There can be no assurance that additional capital will be available to us or, if available, will be available on terms acceptable to us or on a timely basis. If adequate capital resources are not available on a timely basis, we may consider limiting our operations substantially and we may be unable to continue as a going concern. This limitation of operations could include reducing investments in our production capacities, research and development projects, staff, operating costs, and capital expenditures. We are introducing new technology and products into an emerging market which creates significant uncertainty about our ability to accurately project revenue, costs and cash flows. Our capital requirements will depend on many factors, including, but not limited to, the commercial success of our laser beam scanning (LBS) engines, the rate at which original equipment manufacturers (OEMs) or original design manufacturers (ODMs) introduce products incorporating our PicoP® scanning technology and the market acceptance and competitive position of such products. If revenues are less than we anticipate, if the mix of revenues and the associated margins vary from anticipated amounts or if expenses exceed the amounts budgeted, we may require additional capital earlier than expected to fund our operations. In addition, our operating plan provides for the development of strategic relationships with suppliers of components and systems and equipment manufacturers that may require additional investments by us. These factors raise substantial doubt regarding our ability to continue as a going concern. Our unaudited consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might be necessary should we be unable to continue as a going concern.
Net Income (Loss) Per Share	Basic net income (loss) per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated using 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 options, warrants and nonvested restricted stock units (RSUs).
Revenue recognition	The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. We generate all of our revenue from contracts with customers. We evaluate contracts based on the 5-step model as stated in Topic 606 as follows: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price, and (v) recognize revenue when (or as) performance obligations are satisfied. A contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group of promises) that is distinct, as defined in the revenue standard. The transaction price is the amount of consideration an entity expects to be entitled to from a customer in exchange for providing the goods or services. A number of factors should be considered to determine the transaction price, including whether there is variable consideration, a significant financing component, noncash consideration, or amounts payable to the customer. The determination of variable consideration will require a significant amount of judgment. In estimating the transaction price we will use either the expected value method or the most likely amount method. The transaction price is allocated to the separate performance obligations in the contract based on relative standalone selling prices. Determining the relative standalone selling price can be challenging when goods or services are not sold on a standalone basis. The revenue standard sets out several methods that can be used to estimate a standalone selling price when one is not directly observable. Allocating discounts and variable consideration must also be considered. Allocating the transaction price can require significant judgement on our part. Revenue is recognized when (or as) the customer obtains control of the good or service/performance obligations are satisfied. Topic 606 provides guidance to help determine if a performance obligation is satisfied at a point in time or over time. Where a performance obligation is satisfied over time, the related revenue is also recognized over time.
Inventory	Inventory consists of raw materials and finished goods assemblies. Inventory is computed using the first-in, first-out (FIFO) method and is stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required. During the three and nine months ended September 30, 2019, we recorded $1.4 million and $2.2 million, respectively, in inventory write-downs. As of September 30, 2019 and December 31, 2018, $168,000 and $1.4 million, respectively, of materials that are not expected to be consumed during the next twelve months are classified as "other assets" on the balance sheet.
Share-based Compensation	We issue share-based compensation to employees in the form of stock options, RSUs, and performance stock units (PSUs). We account for the share-based awards by recognizing the fair value of share-based compensation expense on a straight-line basis over the service period of the award, net of estimated forfeitures. The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model. The fair value of RSUs is determined by the closing price of our common stock on the grant date. The PSUs are valued using a binomial option pricing model using the following inputs: stock price, volatility, and risk-free interest rates. Changes in estimated inputs or using other option valuation methods may result in materially different option values and share-based compensation expense.
Leases	In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use (ROU) asset and lease liability in the balance sheet for all leases, including operating leases, with terms of more than twelve months. Recognition, measurement and presentation of expenses and cash flows from a lease by a lessee have not significantly changed from previous guidance. The amendments also require qualitative disclosures along with specific quantitative disclosures. We adopted this guidance using the cumulative-effect adjustment method on January 1, 2019, meaning we did not restate prior periods. Current year financial information is presented under the guidance in Topic 842, while prior year information will continue to be presented under Topic 840. Adoption of the standard resulted in the recognition of an operating ROU asset of approximately $1.6 million, a lease liability of approximately $2.5 million, and a reduction in other short-term and long-term liabilities of $873,000. Adoption of the standard did not have a material impact on our Statement of Operations or Statement of Cash flows. Accounting for our finance leases remains substantially unchanged. We determine if an arrangement is a lease at inception. On our balance sheet, our office lease is included in Operating lease right-of-use asset, Current portion of operating lease liability and Operating lease liability, net of current portion. On our balance sheet, finance leases are included in Property and equipment, Current portion of finance lease obligations and Finance lease obligations, net of current portion. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Significant judgment may be required when determining whether a contract contains a lease, the length of the lease term, the allocation of the consideration in a contract between lease and non-lease components, and the determination of the discount rate included in our office lease. We review the underlying objective of each contract, the terms of the contract, and consider our current and future business conditions when making these judgments. Our leases have remaining lease terms of two to four years. Our office space lease contains an option to extend the lease for one period of five years. This extension period is not included in our ROU asset or lease liability amounts. Our office lease agreement includes both lease and non-lease components, which are accounted for separately. Our finance leases contain options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless we are reasonably certain to exercise the purchase option.

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 2019
Contract with Customer, Asset, Net, Current, Percent Change
Net Loss Per Share (Tables)	The components of basic and diluted net income (loss) per share were as follows (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net income (loss) available for common shareholders - basic $ (6,141) $ 289 $ (23,199) $ (15,302) Denominator: Weighted-average common shares outstanding - basic 114,874 93,073 107,953 84,388 Dilutive incremental share effect from: Options - 1 - - Nonvested restricted stock units - 130 - - Weighted-average common shares outstanding - diluted 114,874 93,204 107,953 84,388 Net income (loss) per share - basic $ (0.05) $ 0.00 $ (0.21) $ (0.18) Net income (loss) per share - diluted $ (0.05) $ 0.00 $ (0.21) $ (0.18)

Revenue Recognition (Tables)

Revenue Recognition (Tables)	9 Months Ended
	Sep. 30, 2019
Revenue Recognition
Schedule of disaggregation of revenues	The following table provides information about disaggregated revenue by timing of revenue recognition, (in thousands): Three Months Ended September 30, 2019 License and Product royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ 999 $ 17 $ 121 $ 1,137 Product and services transferred over time - - 53 53 Total $ 999 $ 17 $ 174 $ 1,190 Nine Months Ended September 30, 2019 License and Product royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ 1,198 $ 17 $ 173 $ 1,388 Product and services transferred over time - - 2,893 2,893 Total $ 1,198 $ 17 $ 3,066 $ 4,281 Three Months Ended September 30, 2018 License and Product royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ - $ 10,000 $ 26 $ 10,026 Product and services transferred over time - - 1,546 1,546 Total $ - $ 10,000 $ 1,572 $ 11,572 Nine Months Ended September 30, 2018 License and Product royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ - $ 10,011 $ 182 $ 10,193 Product and services transferred over time - - 5,581 5,581 Total $ - $ 10,011 $ 5,763 $ 15,774
Costs in excess of billings and billings in excess of costs	The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in thousands): September 30, December 31, 2019 2018 Accounts receivable, net $ 505 $ 476 Costs and estimated earnings in excess of billings on uncompleted contracts - 987 Deferred revenue 28 - Contract liabilities 10,000 - Other current liabilities - 10,000
Schedule of contract assets and liabilities	Significant changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands, except percentages): September 30, December 31, 2019 2018 $ Change % Change Contract assets $ - $ 987 $ (987) (100.0) Contract liabilities (10,028) - (10,028) - Net contract assets (liabilities) $ (10,028) $ 987 $ (11,015) (1,116.0)
Transaction price allocated to the remaining performance obligations, expected timing	The following table provides information about the estimated timing of revenue recognition (in thousands): Remainder of 2019 2020 Product revenue $ 3,482 $ 2,796 License and royalty revenue 84 57 Contract revenue 9 19

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2019
Inventory Tables Abstract
Inventory (Tables)	Inventory consists of the following: September 30, December 31, ( in thousands 2019 2018 Raw materials $ - $ 32 Finished goods 241 1,077 $ 241 $ 1,109

Share-Based Compensation (Table

Share-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2019
Canceled/expired
Stock-based employee compensation expense	The following table summarizes the amount of share-based compensation expense by line item on the statements of operations: Share-based compensation expense Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2019 2018 2019 2018 Cost of product revenue $ 25 $ - $ 26 $ - Research and development expense 84 109 283 377 Sales, marketing, general and administrative expense 149 73 568 344 $ 258 $ 182 $ 877 $ 721
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 September 30, 2019: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Shares Price Term (years) Value Outstanding as of September 30, 2019 5,206,000 $ 1.65 7.7 $ - Exercisable as of September 30, 2019 2,315,000 $ 2.46 5.9 $ -

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2019
Leases [Abstract]
Components of lease expense	The components of lease expense were as follows: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2019 2019 Operating lease expense $ 116 $ 348 Finance lease expense: Amortization of leased assets 4 12 Interest on lease liabilities 2 5 Total finance lease expense 6 17 Total lease expense $ 122 $ 365
Cash flow supplemental disclosures for leases	Supplemental cash flow information related to leases was as follows: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2019 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 160 $ 481 Operating cash flows from finance leases 2 5 Financing cash flows from finance leases 6 15 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ - $ 1,638 Finance leases - -
Schedule of future minimum operating lease payments	As of September 30, 2019, maturities of lease liabilities were as follows: Operating Finance (in thousands) leases leases 2019 $ 160 $ 7 2020 656 27 2021 676 9 2022 696 - 2023 175 - Thereafter - - Total minimum lease payments 2,363 43 Less: amount representing interest (230) (4) Present value of lease liabilities $ 2,133 $ 39
Supplemental balance sheet information related to leases	Supplemental balance sheet information related to leases was as follows: (in thousands) September 30, 2019 Operating leases Operating lease right-of-use assets $ 1,394 Current portion of operating lease liability 651 Operating lease liability, net of current portion 1,482 Total operating lease liabilities $ 2,133 Finance leases Property and equipment, at cost $ 66 Accumulated depreciation (21) Property and equipment, net $ 45 Current portion of finance lease obligations $ 24 Finance lease obligations, net of current portion 15 Total finance lease liabilities $ 39 Weighted Average Remaining Lease Term Operating leases 4 years Finance leases 2 years Weighted Average Discount Rate Operating leases 6.0% Finance leases 13.8%
Lease guarantee future commitments finance leases	As of September 30, 2019, maturities of lease liabilities were as follows: Operating Finance (in thousands) leases leases 2019 $ 160 $ 7 2020 656 27 2021 676 9 2022 696 - 2023 175 - Thereafter - - Total minimum lease payments 2,363 43 Less: amount representing interest (230) (4) Present value of lease liabilities $ 2,133 $ 39

Net Income (Loss) Per Share (De

Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Numerator:
Net income (loss) available for common shareholders	$ (6,141)	$ 289	$ (23,199)	$ (15,302)
Denominator:
Weighted-average common shares outstanding - basic	114,874	93,073	107,953	84,388
Dilutive incremental share effect from:
Options	0	1	0	0
Nonvested restricted stock units	0	130	0	0
Weighted-average shares outstanding - diluted	114,874	93,204	107,953	84,388
Net income (loss) per share - basic	$ (0.05)	$ 0	$ (0.21)	$ (0.18)
Net income (loss) per share - diluted	$ (0.05)	$ 0	$ (0.21)	$ (0.18)

Net Income (Loss) Per Share (Co

Net Income (Loss) Per Share (Convertible Securities and Options Excluded Narrative) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Options and Private Warrants Exercisable
Anti-dilutive shares	5,206	7,586	5,206	7,587
Nonvested Equity Shares
Anti-dilutive shares	1,247	1,050	1,247	1,180

Long-Term Contracts (Narrative)

Long-Term Contracts (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Oct. 31, 2018	Jun. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Deferred revenue, classified within other currrent liabilities			$ 10,000		$ 10,000		$ 10,000
Display-Only
Upfront payment received	$ 5,000	$ 5,000
Deferred Revenue, Description					In May 2018, we signed a five-year license agreement with a customer granting them exclusive license to our LBS technology for display-only applications. As part of the agreement, we received a first payment of $5.0 million in June 2018 and the second payment of $5.0 million in October 2018. The contract includes requirements that must be met in order to maintain exclusivity. If this licensee acquires a customer, the agreement requires the licensee to buy any needed components from us. During the year ended December 31, 2018 we completed the performance obligations required by the contract. As a result, we recognized $10.0 million in license and royalty revenue during the year ended December 31, 2018.
LBS Display System
Contract revenue from development fees			$ 47	$ 1,500	$ 2,900	$ 5,600
Deferred Revenue, Description					In April 2017, we signed a contract with a major technology company to develop an LBS display system. Under the agreement, we received an upfront payment of $10.0 million in 2017 and, as of September 30, 2019, have also received $15.0 million, net of early payment discounts, representing all payment due for development work. The original contract was for $14.0 million in fees for development work, but we and our customer agreed to add $1.1 million in additional work to total $15.1 million. After applying early payment discounts, we recognized revenue of $15.0 million in development fees over time based on the proportion of total cost expended (under Topic 606, the "input method") to the total cost expected to complete the contract performance obligation. For the three and nine months ended September 30, 2019, we recognized $47,000 and $2.9 million, respectively, of contract revenue from development fees on this agreement compared to $1.5 million and $5.6 million, respectively, during the three and nine months ended September 30, 2018. The $10.0 million upfront payment will be recognized as revenue at the point in time future component sales are transferred to the customer. Based on current pricing and cost estimates, the amount of the per unit upfront payment would be greater than our estimated per unit gross profit. We have an amount equal to the $10.0 million upfront payment classified as a contract liability on the balance sheet. We have received initial purchase orders from our customer under the product supply agreement signed in April 2017. We expect to apply $877,000 of the upfront payment over the two quarters ended December 31, 2019 and March 31, 2020. To the extent that the component purchases do not fully expend the $10.0 million upfront payment, there is no repayment provision to the customer.

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregated Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregated revenue	$ 1,190	$ 11,572	$ 4,281	$ 15,774
Product revenue
Disaggregated revenue	999	0	1,198	0
Royalty revenue
Disaggregated revenue	17	10,000	17	10,011
Contract revenue
Disaggregated revenue	174	1,572	3,066	5,763
Transferred at Point in Time
Disaggregated revenue	1,137	10,026	1,388	10,193
Transferred at Point in Time | Product revenue
Disaggregated revenue	999	0	1,198	0
Transferred at Point in Time | License and royalty revenue
Disaggregated revenue	17	10,000	17
Transferred at Point in Time | Royalty revenue
Disaggregated revenue				10,011
Transferred at Point in Time | Contract revenue
Disaggregated revenue	121	26	173	182
Transferred over Time
Disaggregated revenue	53	1,546	2,893	5,581
Transferred over Time | Product revenue
Disaggregated revenue	0	0	0	0
Transferred over Time | License and royalty revenue
Disaggregated revenue	0	0	0
Transferred over Time | Royalty revenue
Disaggregated revenue				0
Transferred over Time | Contract revenue
Disaggregated revenue	$ 53	$ 1,546	$ 2,893	$ 5,581

Revenue Recognition - Contract

Revenue Recognition - Contract Balances with Contract Customers (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Accounts receivable, net	$ 505	$ 476
Costs and estimated earnings in excess of billings on uncompleted contracts	0	987
Other current assets	574	1,311
Contract liabilities	10,028	10,000
Billings on uncompleted contracts in excess of related costs	10,000	0
Other current liabilities	8	10,154
Contracts with Customers
Accounts receivable, net	505	476
Costs and estimated earnings in excess of billings on uncompleted contracts	0	987
Deferred revenue	28	0
Contract liabilities	10,000	0
Other current liabilities	$ 0	$ 10,000

Revenue Recognition - Schedule

Revenue Recognition - Schedule of Significant Changes in Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Contractors [Abstract]
Contract assets	$ 0	$ 987
Change in Contract Asset	$ (987)
Percent Change in Contract Asset	(100.00%)
Contract liabilities	$ (10,028)	(10,000)
Change in Contract Liability	$ (10,028)
Percent Change in Contract Liability	0.00%
Net contract assets (liabilities)	$ (10,028)	$ 987
Change in Net Contract Assets (Liabilities)	$ (11,015)
Percent Change in Net Contract Assets (Liabilities)	(1116.00%)

Revenue Recognition - Estimated

Revenue Recognition - Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations (Details) $ in Thousands	Sep. 30, 2019USD ($)
Product revenue | Remainder 2019
Revenue, Remaining Performance Obligation	$ 3,482
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	2019
Product revenue | 2020
Revenue, Remaining Performance Obligation	$ 2,796
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	2020
License and royalty revenue | Remainder 2019
Revenue, Remaining Performance Obligation	$ 84
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	2019
License and royalty revenue | 2020
Revenue, Remaining Performance Obligation	$ 57
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	2020
Contract Revenue | Remainder 2019
Revenue, Remaining Performance Obligation	$ 9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	2019
Contract Revenue | 2020
Revenue, Remaining Performance Obligation	$ 19
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	2020

Concentration of Sales to Major

Concentration of Sales to Major Customers) (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Total revenue	$ 1,190	$ 11,572	$ 4,281	$ 15,774
Customer Revenue Concentration
Total revenue	$ 823	$ 10,000	$ 3,700	$ 10,000
Concentration Risk, Percentage	69.00%	86.00%	86.00%	63.00%
Second Commercial Customer
Total revenue	$ 360	$ 1,500	$ 559	$ 5,600
Concentration Risk, Percentage	30.00%	13.00%	13.00%	35.00%
Accounts Receivable Concentration
Accounts receivable	$ 505		$ 505
Concentration Risk, Percentage			100.00%

Inventory Components (Details)

Inventory Components (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Inventory Components
Raw materials	$ 0	$ 32
Finished goods	241	1,077
Inventory, net	$ 241	$ 1,109

Inventory (Narrative) (Details)

Inventory (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2018
Inventory Narrative
Material classified as other assets	$ 168	$ 168	$ 1,400
Increase in inventory reserves	$ 1,400	$ 2,200

Severance Arrangements (Narrati

Severance Arrangements (Narrative) (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Restructuring and related activities description	In the nine months ended September 2019, we completed the development work under the April 2017 contract, therefore, to better align our resources to support our business needs, we reduced our workforce by approximately 27%. In the three months ended June 30, 2019, we recorded expenses related to severance of approximately $300,000 to research and development expense and approximately $90,000 to sales, marketing, and general and administrative expense. We paid $284,000 during the three months ended September 30, 2019 related to the severance agreements for these employees. We plan to make the remaining severance payments during the fourth quarter of 2019.
Payments for restructuring	$ 284,000
Research and Development
Restructuring charges		$ 300,000
Sales, Marketing and General and Administrative
Restructuring charges		$ 90,000

Share-Based Compensation (Sched

Share-Based Compensation (Schedule Of Stock-Based Compensation Expense By Statement Of Operations) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based employee compensation expense	$ 258	$ 182	$ 877	$ 721
Cost of product revenue
Share-based employee compensation expense	25	0	26	0
Research and development expense
Share-based employee compensation expense	84	109	283	377
Sales, marketing, general and administrative expense
Share-based employee compensation expense	$ 149	$ 73	$ 568	$ 344

Shared-Based Compensation (Opti

Shared-Based Compensation (Options Activity and Position) (Details)	9 Months Ended
	Sep. 30, 2019USD ($)$ / sharesshares
Shared-based Compensation Options Activity And Position
Outstanding shares | shares	5,206,000
Weighted-average exercise price of options outstanding | $ / shares	$ 1.65
Weighted-average remaining contractual term (in years) of options outstanding	7 years 252 days
Aggregate intrinsic value of options outstanding | $	$ 0
Exercisable shares | shares	2,315,000
Weighted-average exercise price of options exercisable | $ / shares	$ 2.46
Weighted-average remaining contractual term (in years) of options exercisable	5 years 324 days
Aggregate intrinsic value of options exercisable | $	$ 0

Share-Based Compensation (Narra

Share-Based Compensation (Narrative) (Details)	9 Months Ended
	Sep. 30, 2019USD ($)
Employee Stock Options
Unrecognized compensation cost related to share-based compensation	$ 1,400,000
Weighted-average service period, years	2 years 72 days
Restricted Stock Rights
Unrecognized compensation cost related to share-based compensation	$ 394,000
Weighted-average service period, years	1 year 216 days
PSU
Unrecognized compensation cost related to share-based compensation	$ 17,000
Weighted-average service period, years	2 years

Components of Lease Expense (De

Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 116	$ 348
Finance lease expense:
Amortization of leased assets	4	12
Interest on lease liabilities	2	5
Total finance lease cost	6	17
Total lease expense	$ 122	$ 365

Supplemental Cash Flow Informat

Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 160	$ 481
Operating cash flows from finance leases	2	5
Financing cash flows from finance leases	6	15
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	0	1,638
Finance leases	$ 0	$ 0

Supplemental Balance Sheet Info

Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Operating Leases
Operating lease right-of-use assets	$ 1,394	$ 0
Total operating lease liabilities	2,133
Finance Leases
Property and equipment, net	2,111	$ 2,993
Total finance lease liabilities	$ 39
Weighted Average Remaining Lease Term
Operating leases	4 years
Finance leases	2 years
Weighted Average Discount Rate
Operating leases	6.00%
Finance leases	13.80%
Finance Lease [Member]
Finance Leases
Property and equipment, at cost	$ 66
Accumulated depreciation	(21)
Property and equipment, net	45
Other Noncurrent Liabilities [Member]
Finance Leases
Total finance lease liabilities	24
Other Current Liabilities [Member]
Operating Leases
Total operating lease liabilities	651
Finance Leases
Total finance lease liabilities	15
Operating Lease Liabilities [Member]
Operating Leases
Total operating lease liabilities	$ 1,482

Maturities of Lease Liabilities

Maturities of Lease Liabilities (Detail) $ in Thousands	Sep. 30, 2019USD ($)
Years Ended December 31,
Operating leases, 2019	$ 160
Operating leases, 2020	656
Operating leases 2021	676
Operating leases, 2022	696
Operating leases, 2023	175
Operating leases, thereafter	0
Operating leases, total mimimum lease payments	2,363
Operating leases, less amount representing interest	(230)
Operating leases present value	2,133
Finance leases, 2019	7
Finance leases, 2020	27
Finance leases, 2021	9
Finance leases, 2022	0
Finance leases, 2023	0
Finance leases, thereafter	0
Finance leases, total minimum lease payments	43
Finance leases, less amount representing interest	(4)
Finance leases present value	$ 39

Commitments and Contingencies (

Commitments and Contingencies (Adverse Purchase Commitments Narrative) (Details) $ in Millions	Sep. 30, 2019USD ($)
Contract with Customer, Assets and Liabilities, Net, Change
Open purchase obligations	$ 2.6

Common Stock Issuance (Narrativ

Common Stock Issuance (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Apr. 30, 2019
Cash received from stock sale, before issuance costs	$ 5,644,000	$ (36,000)	$ 13,236,000	$ 16,540,000
Private July 2019
Number of shares of common stock issued			3,000,000
Cash received from stock sale, before issuance costs			$ 2,000,000
Stock issuance costs			$ 24,000
Terms and provisions			In July 2019, we raised $2.0 million before issuance costs of approximately $24,000 through a registered direct offering of 3.0 million shares of our common stock to a private investor.
Registered April 2019
Number of shares of common stock issued			2,300,000
Cash received from stock sale, before issuance costs			$ 2,000,000
Stock issuance costs			$ 34,000
Terms and provisions			In April 2019, we raised $2.0 million before issuance costs of approximately $34,000 through a registered direct offering of 2.3 million shares of our common stock to a private investor.
Common Stock Purchase Agreement April 2019
Cash received from stock sale, before issuance costs			$ 1,000,000
Shares Issued, Price Per Share					$ 0.98
Stock issuance costs			$ 92,000
Terms and provisions			In April 2019, we entered into a Common Stock Purchase Agreement with Lincoln Park Capital Fund, LLC (Lincoln Park) granting us the right to sell shares of our common stock having an aggregate value of up to $11.0 million. Under the terms of the agreement, Lincoln Park made an initial purchase of $1.0 million in shares of common stock at a purchase price of $0.98 per share. Subject to various limitations and conditions set forth in the agreement, we may sell up to an additional $10.0 million in shares of common stock, from time to time, at our sole discretion to Lincoln Park over a 24-month period beginning April 2019. In consideration for entering into the agreement, we issued 250,000 shares of our common stock, having a value of $258,000, based on the closing stock price at the date of grant, to Lincoln Park as a commitment fee. We incurred an additional $92,000 in issuance costs. As of September 30, 2019, we have issued 11.8 million shares and raised a total of $8.3 million under this agreement.
Registered January 2019
Number of shares of common stock issued			2,000,000
Cash received from stock sale, before issuance costs			$ 1,200,000
Stock issuance costs			$ 26,000
Terms and provisions			In January 2019, we raised $1.2 million before issuance costs of approximately $26,000 through a registered direct offering of 2.0 million shares of our common stock to Shehnee Lawrence Farhi.
Public December 2018
Number of shares of common stock issued			7,000,000
Cash received from stock sale, before issuance costs			$ 4,200,000
Stock issuance costs			$ 524,000
Terms and provisions			In December 2018, we raised $4.2 million before issuance costs of approximately $524,000 through an underwritten public offering of 7.0 million shares of our common stock.
Public June 2018
Number of shares of common stock issued			14,400,000
Cash received from stock sale, before issuance costs			$ 18,000,000
Stock issuance costs			$ 1,400,000
Terms and provisions			In June 2018, we raised $18.0 million before issuance costs of approximately $1.4 million through an underwritten public offering of 14.4 million shares of our common stock.