MicroVision, Inc. Price & Performance (MVIS)

Project developments, performance of our products, and solutions, product sales and future demand, projections of future operations, cash flow, and financial results, availability of funds and conditions for capital raising, well as statements containing words like believe, expect, plan, or other similar expressions. These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward looking statements. We encourage you to review our SEC filings including our most recently filed annual report on Form 10 k and our quarterly reports on Form 10 q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward looking statements. All forward looking statements are made as of the date of this call and except as required by law, we undertake no obligation to update this information. In addition, we will present certain financial measures on this call, that will be considered non GAAP under the SEC's Regulation G. For reconciliations of each non GAAP financial measure to the most directly comparable GAAP financial measure, as well as for all the financial data presented on this call, please refer to the information included in our press release and in our Form eight k dated and submitted to the SEC today.

Both of which can be found on our corporate website at microvision.com under the SEC filings tab. This conference call will be available for audio replay on the Investor Relations section of our website at www.microvision.com. Now I would like to turn the call over to our chief executive officer, Sumit Sharma. Sumit?

Thank you, Drew, and welcome, everyone, to this review of our first quarter twenty twenty five results. Want to thank everyone for joining today's call. I would provide an update on the progress we have made towards commercial agreements in automotive and industrial markets as well as expansion towards the military market with our existing products. I will also provide context about our already announced Investor Day event being hosted in Redmond. First, I would like to begin our update in engagements with automotive RFQ opportunities. We remain engaged in seven RFQs for automotive programs and make incremental progress. This has been really slow going because of OEMs focus shifting to their global plans. Lots of ebbs and flows we continue to deal with. On one hand, it is clear to us that the current global rebalancing of trade expected to have a huge refocus on automotive OEMs resources on their supply chain issues. Advanced ADAS rollout is expected to be delayed. With only very low volume LiDAR integration so far. On the other hand, we are engaged in new up upcoming RFQ and custom development opportunities. We continue to support these potential customers with patience, with the quickest path to on ramp for any type of project.

In previous years, we focused on winning programs targeted for production with several years of customization in play. These deals could be described as the ones our competitor signed. In each agreement, the challenge we faced was not our technology or capability, rather than the state of our balance sheet would always cause OEMs to pause. Let me elaborate a bit. Our competitors who went public as part of a despact collectively raised more than a billion dollars. OEMs required a strong balance sheet to feel confident that for the initial start, we had enough runway to fund their development. MicroVision has been running leaner on capital, so it was a huge challenge to get them comfortable with our cash on hand. Our competition has not fared well even after winning early engagements. We strongly believe it is greenfield in this space, with LiDAR apps required for advanced ADAS and autonomy. With the strengthening of our balance sheet with the Hytrail deal, we are in a stronger position than previously. So we continue to drive and make progress. But I do not expect any substantial projects to be awarded with material production revenues the near future. We intend to focus on finding custom development opportunities with OEMs.

Make no mistake with the ebbs and flows of the automotive demand. This will remain the largest opportunity that eventually could deliver millions of units shipped and billions of dollars of revenues generated from this segment. With our Movia, Maven, and Movia S slider products, we believe we have the entire suite of sensors to address all low increase. I remain very excited and optimistic about our industrial segment, though. Our in production Movial sensor integrated with onboard perception software is an advanced solution which is frictionless for our customers to integrate. We have delivered software integrated solutions to multiple potential partners since last year. These evaluations remain in flight. We continue to make progress in this space, I expect these engagements will lead to commercial wins for us. With our partnership with ZF, we have no exposure to China tariffs, and remain cost competitive with our economy of scales at Movia L and eventually Movia S. We remain fully engaged our potential customers as they evaluate their rollout. Up to this point, none of our potential customers have made us aware of any impact on their timing, to the ongoing global trade rebalancing or tariffs. As I shared in our last earnings call, in this segment, we started expanding with engagements in 2024 was mobile autonomous robots military, and commercial vehicles with our LiDAR product.

We have brought on a defense advisory board that will help us on opportunities to engage with Department of Defense with our software integrated sensor technology to potentially enable programs with drones and land vehicles as well as help us explore potential opportunities with larger companies in space for a partnership. As I also mentioned previously, our long history with delivering augmented reality for military, we remain focused on opportunities to leverage the large body of work. In this space, we expect to leverage our LIDAR products [indiscernible] and other third party technologies into our software. We expect to partner with existing military primes to deliver full sensor intelligence solutions. This segment benefits from all the hardware and software building blocks that already exist within MicroVision. We expect the first system and product prototypes for this segment to be available in six to nine months. Next week, we will host Investor Day in Redmond. We are planning to make this an event in lieu of annual CS attendance. At this event, investors will get an opportunity to interact with our various technology offerings as well as demos of how we plan to enable potential customers, including ride along our demo vehicle.

Investors could have a deeper discussion with management on all the ups and downs of our journey so far, as well as get confidence on the stronger path we expect moving forward. I'm going to keep my prepared remarks brief today as there are questions from several shareholders. And I'd like to address that as the main narrative. I would like to turn over the call to Anubhav. Anubhav? Thanks, Amit. I'd like to begin by reiterating Sumit's comments. We're absolutely aligned shareholders to quickly demonstrate step function progress towards our commercial engagements with industrial customers for near term high volume based revenue. We remain deeply engaged with them for testing and integration of our solutions into their fleet. Next, I'd like to discuss the impact of the recently announced global tariffs. While the situation continues to be dynamic and evolving, we believe MicroVision remains well positioned as we have our manufacturing partner in France. As announced late last year, we secured a production commitment with ZF in France to be able to meet the anticipated high volume demand from customers in the industrial space for our Movia L product. We believe this does offer yet another pricing and manage to some of our customers given our minimal exposure to China based manufacturing.

Based on certain triggers, we are planning to bring up another site for Movia L production later this year to meet the demand. We continue to closely monitor the tariff policy developments and will provide more updates on this later in the year. Now let me provide the progress in each of the verticals we're focused on. Number one, automotive. We continue to be engaged in the seven RFQs with automotive OEMs. However, the automotive industry is navigating a complex landscape shaped by actual and potential new tariffs. Some OEMs have suspended their annual guidance while some have quantified the potential impact of tariff related costs. While LIDAR adoption appears to be a lower priority given the macroeconomic landscape, The direct impact of tariffs has pushed OEMs to focus even more on component costs and the origin of subsets systems that go into their vehicles. OEMs will continue to go through the reformulation of existing and upcoming RFQs looking for cheaper LIDAR solutions that meet the desired performance criteria. Especially with Glenn joining us from the automotive industry we're excited to pursue our continued engagement with automotive OEMs. This vertical albeit slower, will be the primary driver for high volume recurring business.

That gets us to scale. Number two, industrial with a focus on AGV, AMR, and warehouse and factory automation. With various efforts in flight, the industrial space, our team is focused on deep engagement with customers including on-site working closely with their team to support evaluation, and integration of our solution into their feet.

We remain confident in the near term demand from this vertical especially after securing production capacity to meet this demand. We're seeing a lot of momentum in the AGV AMR space as these companies continue to embrace autonomy and AI faster than others. With our current Movia technology and secure production capabilities, we're well positioned to grow in this space. Number three, the defense vertical. In the last few months, we established a defense advisory board to execute our strategy in the defense vertical to map new opportunities for our products globally, and pursue monetization of our existing product portfolio through near term partnerships. Leveraging our existing product portfolio or formulating our go to market with the support and guidance of our distinguished industry advisers. The current the current administration has made the advancement of new technologies in defense a central priority emphasizing rapid innovation through public, private, partnerships. We will provide more updates on this at our upcoming Investor Day next week. We're thrilled to see our engineering team working closely with Glenn to align our technology portfolio and strategically advance our product road map. With a capital raise in the first quarter and a streamlined cash burn, our cash runway has extended into 2026.

MicroVision remains well positioned in the marketplace, with diversified near term revenue opportunities in the industrial and defense sectors. The expanded TAMs streamlined cost structure, and recent financings have solidified our position. Now let's review our q one financial performance. For the first quarter, we reported revenues of 600,000.0 This quarter's revenue was primarily driven by our sales in the industrial verticals. Expenses. Our first quarter twenty twenty five r and d and SG and A expenses were 14,100,000.0 including $1,900,000 of noncash charges related to stock based compensation expense, and 1,400,000.0 in noncash charges related to depreciation and amortization. Backing out these noncash charges, our r and d and SG and A expenses were only 11,000,000 in the quarter. On a Y Y basis, we have reduced our expenses by 45%. We expect the current level to be sustained through the rest of the year. We believe our existing workforce and level of expenses will allow us to execute on the current business strategy. We believe our current engineering teams can support continued engagement with automotive OEMs and simultaneously scale faster with industrial and defense revenue opportunities in the near term. We believe that the go forward annual run rate of our cash, r and d, and SG and A expense will be in line with our existing quarter.

Q4 CapEx was $100,000 in line with our expectations. Now let's talk about our balance sheet. We finished the quarter with 69,000,000 in cash and cash flow [indiscernible] In addition, the company has availability of hundred and 13,400,000.0 under the ATM facility and about 30,000,000 of undrawn capital under the current under the convertible note facility. Drawing on these facilities to their fullest extent requires additional authorized capital. As well as certain favorable market conditions. On the convertible note, we have approximately 33,000,000 outstanding that converts at a fixed price of a dollar 59 or approximately dollar 60. The thirty million second tranche remains undrawn and available for future drawdowns. Subject to certain limitations. We're pleased to have found a strategic partner whose confidence in MicroVision's future has motivated an alignment of economic interest in step our management team, employees, and shareholders. Now let's talk about 2025 targets. We remain relentlessly focused on our execution. We continue to have excellent engagement with industrial customers on their technology road maps. Based on the expected management and current customer engagement, along with targeted market opportunities, we believe we have line of sight to 30 to 50,000,000 in revenue over the next twelve to eighteen months.

Our production commitment from our manufacturing partner ZF allows us to commit to high volume deliveries to meet the anticipated demand from current customer projects. While we're not providing fiscal year twenty twenty five guidance, this should help investors under the size and level of engagement. With customers. For our Movia L sensors. As we expand our TAM into defense, and other related areas and expand the solutions portfolio and accelerate our go to market strategy we will provide more color on financial and business milestones for 2025 and 2026 and upcoming events. To summarize, we're really excited about 2025 and beyond. As MicroVision drives forward with significantly higher TAMs, including defense and industrial. Expansive and broadening solutions advancements, solid balance sheet and superior trading metrics, and a well experienced team to execute the strategy. Operator, I would like now like to open the line for questions. Thank you.

At this time, we are conducting a question and answer session. Investors can submit their questions within the meeting webcast by typing them into the Q and A button on the left side of their viewing screen. Analysts who wish analysts who publish research may ask questions through the phone line. For analysts to ask questions through the phone line, please press 1 on your telephone keypad. One moment please while we poll for questions.

Your first question for today is from Casey Ryan at Westpark Capital.

Good afternoon, everybody. It's a great update. Thank you for taking my questions.

So the first question, I think, Anubhav, you mentioned the revenue for Q1 was actually from commercial sales. Is this the first quarter we've had some commercial sales versus, say, NREs or R and D work?

No. We have had, commercial sales in the fourth quarter as well, Kate. So this just continues. Okay. This is just a continuing effort on that part.

Okay. Let me see something here. Okay. Good. And so, clearly, you you all are calling it out as being focused in the industrial vertical, I think, is what we're or at least what I'm typing the messaging. What's what's driving consumption, I guess? Not that you need to know, but you're able to kinda give us this 30,000,000 to $50,000,000 range of potential revenues over the next twelve to eighteen months. I'm just curious, what may be the what is the the thing that's controlling the pace of that, I guess. In terms of how fast those revenues come in. Yeah. Yeah.

I'll take that one, and, Bob, maybe you can help a little bit. So I think what, what would drive that is primarily industrial. And industrial space, there is, you know, automation, activities, and there's also activities to deploy ADAS with the lidar integrated onto everything integrated onto the sensor. So that's what's driving it, but it's primarily in the industrial space. You know, we Well, right. You know, we have of course, you know, all of us have, you know, very high hopes of what we wanna achieve. But, q one kind of froze up for almost everybody. Right? There was a lot of indecision. And, you know, we have worked through that now. Anubhav, do wanna add something? Yeah. And I think that think maybe, Casey, to add on, the trajectory of this 30 to 50,000,000 revenue is gonna be is primarily driven by the end customer's deployment and rollout in their internal [indiscernible] Which is again driven by their need to reduce cost and and, obviously, increase productivity. Right? So those are some of the primary driving factors behind our customers looking for these solutions to, achieve these objectives.

Yeah. Okay. So so it, like, doesn't it feels very closely connected to the end [indiscernible] say, the hardware manufacturer who's consuming your product isn't necessarily building up some large level of of inventory or sort of you know, preordering product yet. It doesn't sound like.

No. Yeah. So this is deployment across the customer's facilities and, you know, different environments that we are dealing with different customers in the AGV AMR space.

Yeah. But the customer and then the customer could be classified as OEMs. In this space. People are dealing with directly OEMs, so they don't build inventory there. Gonna roll it out Consuming. Technology platform. In, like, real time.

Yeah.

Yeah. That's right. I see. Okay. That's helpful. And then would you be would you be willing to characterize sort of the number of people you're dealing with It's sort of more than one and less than 10 or you care to characterize how many potential unique entities you guys are working with?

Yeah. Less than 10. Yeah. Definitely more than one, but less than 10.

Okay. Okay.

That's helpful.

Okay. So a couple other items very quickly. You mentioned military, and I think you have some partners for military. And you mentioned drones. What scope of the military opportunities as you see them? Is it is it sort of all vehicles across all branches? Is it potentially specific to to, like, one branch? Or No. We're we're you know, about our product base. Our product is basically a sensor and software. We also have things that we've done in the past, which allow us to sensor fusion with other technologies. We can provide that. We are not a prime in the military space. Also not bidding for in a planning group, you know, bid on, like, billion dollar contracts. We're gonna be a technology partner for somebody else that's a prime. To deliver something that needs to be solved. This really came back on our horizon last year. There was an opportunity where, existing things that we have on the shelf there may be interest for people to evaluate. And we could get to from a standstill to a working demo for them very quickly. So we we expanded on the existing set of products to engage as many folks as we can.

I think the new part that you would see in the earnings call today talks about drones. I think as we are have started looking into it, where the Department of Defense is focused on. And, of course, with the help of our advisory board that just has come on I mean, they just come online. Right? We're just starting the engagement, and they of them are not even fully familiar with our product portfolio yet. But they're getting us aligned with what the demand is. And one of the things that we will talk about next week and continue to talk about is things that we were doing in the automotive space with perception and sensor fusion. Also be extended to drones with some other mission that are in mind. That the that our potential customer, which is Department of Defense, and other sub smaller departments are evaluating. And they have engagements for that. So it was it was something that was natural to us that we could become part of that. And in this environment, you know, where automotive is kinda, like, dormant, or nearly dormant, but expected to come on in the future, Industrial is moving along, but, again, you know, it's it's at a pace that you know, source would like wanna go fast.

But know, we have to wait patiently for, you know, the engagements to get to the right level. This was an opportunity that came along. So, it was important for us to get into it. [indiscernible] how many primes should we think about you working with? Is there one significant prime, or do or do you have one now and you guys are are open to working with multiple? Or are there multiple now that that you guys are engaged with?

Well, what I from the amount of work that we've done under so far, there are multiple primes. We could think about primes differently. I think in the past, when we talked about primes, we were talking about Lockheed or Northrop Grumman. Those are different programs. Now the primes are, a lot of newer technology companies that are names that you know, are are new to the military space of the prime.

And know, they they have a different different DNA, so much faster engagement. And getting through, you know, I would say more more in line with tech companies, other tech companies, but they are know, they address revenues, you know, less than 10,000,000,000, less than a billion sometimes. Right? So and there's multiple of them, actually, not just one.

Okay. Alright. That's helpful. And then sort of last thing for me. I think you mentioned that you guys have have expanded your capacity again. And I think over the last twelve months, maybe the second time. You've done that. And so you know, I I I suppose we're looking sort of compared to the revenue. But but tell me why you're doing that. It sounds like your customers are asking you to ramp up No. We haven't we haven't expanded the capacity. What I think what I'm saying is that we expect to expand capacity later on this year based on Mhmm.

Agreements that we are able to get done. I think what capacity we have with ZRF right now is per perfectly adequate and sufficient, but we expect that if some agreements go a certain way, we are gonna expand our capacity.

Okay. That's that's helpful. I suppose one nuance on that is sort of you you talked about the 30 to 50.

If you do need to expand capacity, would it be fair to think that that somehow we're sort of at 50 or above? That sort of part of that. Opportunity.

Yeah. I'll have your answer to that. Yeah. So I I I do think that, yes, if we end up expanding our capacity, we would hit the upper bound of that range. Possibly beyond that.

Okay. Good. Good. That's something to look for then. Well, it's been an exciting update, so thank for taking all my questions. I appreciate it.

Oh, thank you, Casey.

Your next question is from Jesse Sobolson with Biborol Capital.

Hey, guys.

Thanks for the update here. Thanks for taking my questions.

You know, it's good to see some progress on expanding the addressable markets.

The first question I had was just on this defense piece of the business. You know, are you guys looking at strategic alliances, like, could potentially lead to equity investment, or are you currently solely focused on commercial arrangements?

We're primarily focused on commercial green agents right now.

Yeah. Hopeful to to understand a little bit detail there. I'm also just kind of curious. You know, we talked 30 to 50 in potential next twelve to eighteen months. It's definitely been reiterated here in Q and A so far, but I am kind of curious, DoD seems to be a little bit more of a focus this quarter than it was in the past when that 30 to 50 number was initially presented piggybacking off of that, conversation on, capacity. Is defense work included in this potential 30,000,000 to $50,000,000 loose figure, or is it something that's, incremental to current expectations for the business?

Yeah. I think that's a great question, Jesse. No. Look. I think the 30 to 50,000,000, we believe, is primarily driven from the industrial vertical. For the defense vertical, it's still early days. But I think as Sumit pointed out, we're working to formulate our strategy and have more clarity in the upcoming events where we could provide and upgrade our revenue targets. Based on quantifying what kind of projects, we're gonna take part in, through these partnerships like Sumit described. And I think one thing I would like to also highlight is obviously, MicroVision does have an existing intellectual property portfolio related to the AR piece. That we have. Obviously, we're, at this point, looking at all possible options as to how we can partner with other bigger flares to accelerate their deployment and go to market as well. So that could result in monetization of that to different structures. But like I said, you know, at this point, early days, and we would have more clarity on the revenue targets for this, in the upcoming event. Events.

Right. So so it sounds like you're open to such as co development agreements and potential technology licensing in addition to know, manufacturing products to be used in end market equipment. Is that fair to say?

Right. So I think, mostly the, the way the defense contracts will be expected to work through the partnership structure that I described would be typically in the form of ED and T revenue, which is engineering design and testing revenue which is essentially the work or if I could draw an analogy for you, that's a NRE equivalent to what we have been talking about in in the automotive world. Where the the government entities that we are directly engaged with the government or the prime as someone described. They would pay for the project where we are developing this Keep in mind, we already have the building blocks of the technology. So it's really just putting together the solution, like the drone solution that Sumit mentioned, etcetera. But what it essentially translates into is the ED and T revenue that would start flowing through the system and that's what I plan to update the numbers with. Once we have more clarity and more visibility, into the sector.

Right. Well, I appreciate the call here.

And it sounds like it's a little bit of a a wait and see approach for the time being, but you know, excited to see what happens here. So thanks for taking my questions.

Thank you, Jesse.

I will now turn the call back over to Anabhav Verma to read questions submitted through the webcast. Thank you.

Thank you, operator. All right. The first question if we have the best in class sensor with the lowest price point, why are we not winning these industrial RFQs?

That's a good question. Actually actually, I think this a reaction to some of the announcements that are coming from our other customer our competitors. I can tell you that, you know, we are engaged with multiple customers. They're evaluating. One of the challenges that always happens in here is that you have software, now that you have hardware, you know, I think, like, our investors, but also a lot of people just think about it as lighter company. Know, when you think about automotive, you just output a LiDAR with a point cloud. In that sense, it's a LiDAR company. And there's a bunch of us competing in that space. In the industrial space, it is LiDAR plus a perception software on board. So there's integration. There's validation. There's I would say, 90% of all the discussions that we've been part of for the last eight months with a group of customers It's all about what the software does and how the software will connect to their software. How the qualification is going to happen. Actually, than that, eight months. If you think about the evaluation part of it, it's not the hardware anymore. It is really how the software solves a specific problem for them.

I get it. You know, I think investors are frustrated, but I can assure you nobody's more frustrated than I am about this. But, you know, it takes whatever time it takes, but I don't think it's gonna take forever. I think, things will converge, you know, sometime soon. So you have to think about it right now. You can have the best price point you also have to find an opportunity that you can actually sign a business that's profitable. Now I'll give you a great example. Recently, you know, of more than one less than 10 customers, there was one. That we actually lost. Was a small project. It was, you know, less than, I would say, 500 sensors is what they wanted. But what it require what was requirement for us to win that was to absorb something like almost a million dollars worth of development. And so pretty much at that point, yeah, you can say you can get announcement done. But it is not a sustainable model where you're actually burning through cash win these things to just get the share price up. So long term, it was not the the smartest thing to take care of.

But we are getting closer to the point for the right customer, for the right volume, You know, it is time for us to push our chips in and actually take a risk. For the right customer with the right volume, and we're getting closer to that. And, again, you want not just one customer. You want multiple of them, so you have to reserve your capital based on who's the one that you wanna make a bet behind. That's gonna be advantageous long term. That could actually turn into a sustainable business, because there'll be others that will come on faster. So that's how we focus ourselves. I get this thing, the best in class sensor. But what's best in class for MobileL? It's in production. It's very robust, solid state. Movia s, it's a you know, I think we're gonna talk about that in q three this year when we're gonna announce it publicly. But it's a 80 degree sensor. Whereas you have you know, our competition from China and The US talking about they're making a 80 degree sensor, but if you know anything about physics, you'll know that their sensor there's no way it can achieve a 80 degrees because it's not know, they're just showing some rendering.

Or we actually have, you know, samples that we will show next week, mechanical samples. What we expect out of that. So, yeah, having the great sensor is the building block that is important. Now comes the software for industrial that how can we actually enable them with a, let's say, some of the ADAS features that were developed by our team in Hamburg. Long time ago. And deploy that into industrial.

So it's gonna take a you know, some time, but I don't think it's gonna take a very long time to get to some conclusion here.

So Thank you, Sumit.

Of the prospective industrial customers that engage with MicroVision how many are no longer involved? Have you lost some programs in your pipeline? Why? I guess you partly answered that. So maybe let me skip to the next one. How do you plan to compete with the existing players like Alster and Sick? In the industrial vertical.

That's a good question. The two ways we're gonna compete is number one, we're gonna sell our sensor with software onboard. And since we have, you know, spent a lot of capital already developing this, And, you know, the same software is gonna go across multiple customers as a standard. We're gonna offer these features on there. So no more customers have to worry about, you know, custom NREs for some features. Because the the core development is all actually MicroVision's assets. So that's important because what they're getting is not just a sensor that will require a software team from us or from them to integrate. But they get a full blown solution. So we have to start engaging with industrial customers, that are kinda focused on that. You know? Not just a LIDAR, but they want a solution. The other one is economy of scale. We have to start hitting price points that are significantly lower than any other competition that means we have to aggregate a lot of volume. We have to be competitive there. I think, you know, I think, you know, other lighter companies are public as well. You know their ASP. I mean, the clear indication from everybody is that those ASPs are not sustainable.

I think in the safety sensor space, Sik has got a very unique position. You know, they they have deployed that for many, many years. Ultimately, you know, when we described our safety center last year, eventually, our intention is to, you know, go after that market as well. At the moment, we wanna just focus on the nonsafety industrial market, with the software. I'm pretty sure that we can take take on Alstair and I don't think there's any doubt that, you know, we have a better product I think the spinners, ours is the spinners. They may have some sort of reliability, but ultimately, mechanical sensors. Right? And sick is that mechanical sensor. But in, you know, in limited life applications, perhaps they're okay. But if you want something robust that has to go for a long period of time, I think the solid state sensor would be very competitive. And even Maven, you know, as we start transitioning it towards you know, while automotive is doing its own thing, finding applications for it in commercial vehicle or military or, you know, agriculture mining. I think the robustness of the technology, we just have to make competitive. Sign smart deals, so we're not, you know, starting off in the hole by financing somebody else's development.

I think long term, we're gonna be okay and be very competitive. And probably more profitable because our expenses are gonna be low and our profit margins per project. Gonna be much more compelling, in my opinion. Glenn, would you like to add some color on this? I think you've been on board. And Yeah. Had a chance to look at this as well.

Yeah. Thanks, Sumit. Appreciate the, opportunity And and I think to build on your comments, one, the sensor being a solid state sensor, not only does it have know, greater reliability and other sensing modalities, we got away from electromechanical sensors for just that reason as well as as you scale, having a solid state solution gives you better positioning relative to reducing hardware costs while you scale. It's a it's a basically, it's a silicon solution. And it really allows you to achieve lower hardware costs than simply scaling up electromechanical solutions. So I think that's an important part of it. But as you said, it it's not just a LiDAR sensor that delivers a point cloud. It's it has a significant amount of processing capability on board. And why that's important, it means that we can provide not just the point cloud, but we can provide perception, localization, as well as the you know, the LCAS or the driver assistance feature sets. And and do that in a way that's essentially a bolt on solution to the vehicle. So whether it's a forklift or a Tugger or some other type of vehicle, you don't have to cut into the vehicle or disturb the vehicle architecture.

You can simply bolt this solution on, and that's tremendous you know, from an ease of implementation standpoint, that's very good. You don't have to add another ECU for so from a for a system cost standpoint, it's very good. And then, ultimately, from a TAM it's great because it means it opens up existing existing vehicles to your solution where you can essentially retrofit all of which means time to revenue is reduced. So I think our our the solution that we have with a with a smart sensor going into industrial will be very compete competitive. And very compelling for the OEMs. Anubhav, I'll turn it back over to you.

Thanks, Glenn. Let me take the next question. What are the twenty twenty five milestones that shareholders should track? In each market including industrial, defense, and automotive, design wins, custom development agreements, partnership agreements, ideas, Yeah.

I think in industrial space, I think it's all about taking our sensors that we've talked about and signing commercial deals. You know, certainly, we make as many sales as possible of the, you know, less than you know, less than 50. You know? Let's call them spot sales. I think that's how we refer to them always. But our focus, of course, is to finding a group of anchor customers that essentially take up all the capacity that we have deployed already. That's primarily the way you can gauge that, you know, industrial market is moving along. You should be able to announce deals, and you'll start seeing backlogs and revenues and normal business on Movia. L. Movia S, I think we're gonna announce it publicly and there's, you know, again, engagement with Chart. Pilot line will be sometime next year and then some sort of ramp. But we expect to start, engaging some customers with that technology. But it's not something that's gonna have a material impact on the revenues that Anubhav talked about. On the defense side, I think the best way to imagine is, again, we're going to be a subcontractor to a prime. There will be most likely, as Anurag has already mentioned, we would engage in some sort of customized development.

With some partial funding from them while we still maintain all the IP. Or exploration of our existing portfolio of technologies that we have shipped in the past and some sort of, you know, development agreements of what they wanna see. Because anybody that wants to work deeply with the technology that's new to them always do a small project together. To understand the team, understand the technology, and the viability before they jump to the next one. So defense would be that. And longer term, I think, opportunity in defense is there are smaller contracts. I'm saying sub 500, maybe sub two hundred million dollar contracts. Where, you know, maybe a pilot program of maybe several hundred units or something has to be built or several several hundred units have to be built. And you're part of those contracts, where you have to deliver integrated piece of hardware and software that kinda plugs into some device. So that's much more intimate. So the best way to engage in defense would be that. And automotive, I think I'm gonna have Glenn actually comment on this. But not about the best way to think about it is some sort of development agreement or early advanced prototyping.

For a future program that's coming. Or a, you know, RFQ that, again, will roll on for about a year before they'll award it. So that's about all we can do, but I don't expect, you know, meaningful revenues coming from it, but certainly some sort of partnership announcements for much smaller size, opportunities.

Yeah. I can add to that. Yeah. I can add to that that [indiscernible] The I think you you know, the the OEMs and and talking to them as recently, as last week, and the OEMs are going through a bit of a reformulation on, you know, level three. And and the good news is all level three platforms, you know, still need LIDAR.

So there's no there's no change in approach in that regard. Well, you know, really, the first generation had limited success. Very low volumes and take rates. And and so now there's a bit of a kind of a refocusing on, well, what is that right solution? And I think predevelopment contracts are normally how you know, the next step in in that environment where know, they test out and show showcasing what the solution could look like and validate cost models as well as performance models and really trying to get to a value prop that the end consumer will buy. And what's exciting for us is in in those discussions and like I mentioned as as recently as last week, we have the portfolio that, you know, between long range as well as short range, you know, wide field of view, know, extended range field of view. We have the portfolio that can really, I think, deliver a solution for them. So you'd probably have seen the predevelopment contract prior to any big production contracts, but that's exactly where we are today.

Thank you, Glenn. Alright. Next question. Given that MicroVision is engaged in seven automotive RF and the typical timeline suggests OEMs might be making decisions for model year 2028 programs, around this time Can you provide any update on the status of these engagements and whether there has been any significant progress or indications of timelines accelerating or solidifying during the first quarter this year?

Glenn, do you wanna take that since you have the most contact with the OEMs now?

Yeah. I think timing timing wise, that's certainly the the target is to be able to have you know, solutions implemented in the model year or during calendar year '28. You know, that that, generally speaking, is the timing that we've been talking about. And so you know, what that means is if you think about it, it's already virtually midyear '25. That means you have to have solutions that are are fairly mature and ready to go. And as I mentioned earlier, that's what know, that's what's exciting about where we are in terms of the portfolio offering that we have, the software maturity that we have, and and the different solutions that we can provide. And I would say, you know, those are active discussions right now. Once the OEMs kinda settle in on the technical solution, then it can move very quickly.

Twenty model year twenty eight. It would you know, it's still aggressive. But it's still it's still feasible. And if the OEMs move quickly over the next really over the next I would say, three months or so.

Thank you, Glenn. Alright. Next question is defense related. Why will MicroVision successfully secure business the defense industry after years of unsuccessful in the automotive and industrial market?

Yeah. Well, maybe I can start.

Yeah. Go ahead. Go ahead. Go ahead, Yeah. Maybe maybe I'll just start and then turn it back over to you. A couple things to highlight. One are these are very different markets. And you think about automotive, there's really one application for LiDAR at this point in time. It's really level three know, driver assistance. And maybe some level two functions. But it's really, really around ADAS. When you look at the defense industry, there's multiple avenues for the application of the technology. There's drones. There's the you know, unmanned autonomous vehicles. There's also, you know, AR headsets. There's terrain mapping. So you have multiple areas where the technology is either being applied today in a very limited fashion or the defense industry is looking for solutions in a very aggressive fashion. So you have a much greater number of opportunities to apply our portfolio. And what's also really good is it's same technology that we would be applying, broadly speaking, to automotive or to industrial. It it is in a whole different field a technology standpoint for MicroVision. Really applying those assets that we have effectively across those other verticals. Sumit, I'll turn it back to you.

Yeah. I think, you know, part of the question is, like, you know, why you know, after years of unsuccessful in automotive and industrial, I think, I get the frustration, but let's let's always focus on the reality of it. Let me be honest about this. Now last year, we were deep into it with DimeRev most of you know. And you know, at that point, we chose to stop at a certain point because going forward, what it meant more than 20,000,000 of OpEx with them not covering anything, when the economy was going in the wrong direction. And it was clear maldenication, that the OEMs by themselves were struggling with the long term [indiscernible] Deliver what they had said.

K?

I would argue that if he had actually done that deal, we're not here right now. We would have been in a much worse position in my opinion. The example of that in that example, really, if you look at what happened to Septon, I'm pretty sure investors want us to sign a deal, but we also have to evaluate because some of those investors wanna just trade on that information and move on to the next thing. But we really have to support the thesis that company's gonna be around to finish these contracts. That's a very important one. And Daimler, for example, was not the right one for us. It was not big enough. And I will tell you that, the technical review and acceptance happened the year before in 2023. And I was Anubhav and I actually were going to these meetings four months into it, four to five months into it, trying to convince them our balance was gonna be okay, that the ATM was a medium that was gonna allow us to raise, and they wanted more capital because they wanted to make sure that if the ATM was not gonna be exercised, that their project would not be in trouble, and they would have to come in fund it.

You know, you think about all of this, right, I mean, those kind of projects so you can say I was unsuccessful in automotive. I wouldn't say that. It's just you wanna get a deal done, but, know, it's worse to get a bad deal done that's gonna cause you to fail. So, yeah, I you know, I expect you guys to come in next week and have some very, direct questions. You're gonna get direct answers with me. As always. But just think in think in these terms. At some point, the company has survive. It's not just by renounce something and trade on it and move on. And if you have a customer that's really giving an indication that they're not so certain about their time line, but they expect you to put all your money in and all your investors to come along with it, You gotta really value it. Right? So automotive has just been tough. Industrial market is just going you know, I mean, I would say, it's going really, really well. I think, you know, we have we started you know, we had the acquisition of Iveo happened. All the asset transfer took a while.

Production started late in 2023, in 2024. We did some work, which is anytime you go into industrial space, can expect somewhere between twelve to twenty four months for adoption. We got the samples out. This is a very mature product. Started working on software, as I said, for the last nine months or more rather than hardware. So it's moving along. So I would not say that, you know, industrial, you know, not been demonstrated. I know everybody in every earnings call they want something announced that we can go forward. And you know, we have tried to navigate. But now we're to the point where we have the group of target customers, and it's time for us to push our chips in and take a risk with the customers that are high enough volume, And they're trustworthy because the things that they're saying they understand and acknowledge who we are. They see the balance sheet. They see the strength of it. And they they see that, you know, we can solve their problem right now without any investment from them. So, so I think, like, keep that in context. Right? I think, like so think, like, you know, what Glenn is representing is the future where we're gonna take it.

Things you know, things that we cannot imagine as MicroVision by itself where the product is gonna go. I'm happy to answer all the questions about the past about automotive and industrial. Certainly, whatever frustration investors have, we can cover that. But I think, you know, the opportunity that we have if we sort sort of break it out, the defense is not something we just entered into because it was kinda cool. It's we were given some indications that it was kinda important for us to be in this space because it's opening up. And we have the opportunity with no extra expenses to go address that.

Of things that we've already created. So, certainly, you know, we're expanding rather than just, you know, going towards the success. And and I think in defense, we've done it in the past. We've had success there with projects, multiple announcements. So defense is probably something that we're more confident on. And with Glenn's help, of course, we can expand where we can be relevant in defense, specifically in drones and other military vehicles. Of course, AR. Thanks, Ahmed.

Next question. Would you say if you're a LiDAR company, or have you fully morphed into an autonomous systems company? And if we're now more of a systems company, how has that retooled our approach to securing these new opportunities mentioned specifically industrial and defense. I think that's a really good question.

Think about the three segments, I'll start on one end, high volume automotive, They will think of us as a LiDAR company. For now. That provides clean point cloud and some software support really, they wanna be the software company they go develop. So we're just a lighter company there. Lot of our competition is in that space as well. Industrial, we have already graduated to the next level where we are gonna be we are shipping. Product, and eventually, expect to ship it in volume with software integrated on it. So the LIDAR is no longer LIDAR. It is an actual LiDAR solution. Software that does something specific, you know, like, terms that we talk about like automotive ADAS, think about industrial ADAS. Those kind of features are enabled in this space for our customers. So, therefore, they don't have to have huge investments in software development. Get a solution. They plug it, and that solves a specific problem for them. When you think about the industrial space, you know, now we are going much lower volume. Decent margins. Now we're integrating our LIDAR, RADAR, other things that Glenn will, of course, talk about as we go move forward.

And significant more amount of software, but it's a full blown solution. That you could, you know, strap this thing onto a drone or strap this thing onto a military vehicle, and it could do autonomous RAIDUS. So we have, in my opinion, you know, broadened through all three segments. In each segment, we are offering higher and higher value proposition. So we are transitioning towards more of a software solutions company based on our hardware, from LiDAR, but also the capability of integrating other hardware from radar and other technologies. Into a few systems that we can provide to the military and to industry. So I think, you know, our differentiation is naturally happening because the strength of our team in developing software is gonna be highlighted more and more. We're gonna talk about partnerships that we are enabling. It's not just because of our LiDAR and competitive price. It's our LiDAR competitive price and the software what it enables for folks. Glenn, do you want to add something to this?

I think you you really said it well, Simone. And and depending on the end market, you know, we have the right solution. We're a high performance LiDAR sensor for the automotive space. And on the other extreme where we can provide a complete not just the lighter perception, but multimodal perception the the, you know, the full localization and and environmental mapping as well as features on file. And it's it's what's really impressive is that we have those assets across the entire company. And so we can we're not having to develop that from ground up. We're really just having to integrate and apply it. And so I'm really excited about what we'll be able to do across all of those verticals with the technology that we have.

Thanks, Glenn.

Next question. Why is MicroVision asking for more shares? Why are you asking for more shares when approved shares before with the promise that it was needed to show OEMs? We had financial stability, but we never got deals. Why should investors vote to approve another 200,000,000 more shares when no meaningful deal had been announced in the last four years.

Yeah. I'll start with that. None of perhaps you can help me with this one. So I think know, there are certain tools that the company needs to be able to work with our partners. And as I've said, times, and this is not the first earnings call I've shared this, that the concern that always keeps coming up is the long term viability of the company. Now if you go back to my prepared remarks, right, I try to highlight that in there. Give context. Our competition, they raised significant more capital because they went public with a de SPAC. All along the way, we've been just raising as little as possible as we go forward. So I know, like, you know, the investors would love to hear, like, you know, how we're being competitive. But capital matters because, you know, most of the customers especially in the automotive, they expect you to invest $2,025,000,000 dollars of your money while they have zero risk. To get to some level of production and then, you know, have all the risk on top of that. So you don't have the cash on hand, like some of our competition did, it has always been hard for us to convince them that we have viability, that we have the support, that we have an anchor customer.

And since our investor base is so diverse, it's really hard for us to point that, you know, yeah, we have an investor that can actually come in and support us, with a high reputation. I think Unbhav has done a great job to try to get us to that point. We started with UPS. You know, that did not happen. You know, Deutsche Bank has been helping us a lot. And now if you think about Hytrail, I think we've done everything humanly possible to give them the confidence that we have anchor customers, anchor investors can step in at the right moment, you know, for any kind of deal. Because to get the deal done, it's not about technology. I can assure you that. You know, it'd be very hard for me to attract somebody like Glenn to a company if he was, like, a big cap in technology. Or what, you know, magical things that can be built on top of what we already have. I think our problem has always been, you know, that they have to have a high confidence the company's gonna survive for a period of time. To execute on these and be able to expand the revenue base faster than other lighter companies.

So to support that, the company needs certain tools. I think management is with very close counsel with our board of directors. Come up with what we believe is what we need as tools to go forward with.

And I think Sumit yeah. And I think, Sumit, to add to the point, obviously, 200,000,000 more shares doesn't need that, you know, we're gonna use those shares right away. It's more of an optics as well because when you are competing in defense contract, and big big contracts, people would like to see the authorized capital the the number of outstanding shares as a percentage of your authorized capital, to be some significant numbers. And I think we believe that 200,000,000 would get us there. But I think I would just like to summarize four things that why now hundred million. Right? I'd like to point out for the last seven, eight months, look at our consistently heavy trading volume. What that signifies is the visibility of MicroVision on not just retail, but institutional, radar screens. That sort of depicts the momentum that we already have generated which is the the most significant momentum that this company has ever seen. In its recent history. Number two, in the last seven months, we had a $90,000,000 investment commitment from one single investor. And I think you can count out on fingers how many other companies have been able to do that.

Number three, the quality of people who have joined MicroVision's executive team as well as the defense advisory board, that tells you that this is the time when people are looking to go all chips in and believe in the future of the company. That itself is very significant of why the 200,000,000 shares would get us to the stature of competing with the big boys. And I think the last thing is what I would say is, you know, this is more of an optic set. Which is a direct corollary of the first or or the the first three, you know, factors that I can just say is the the Investor Day event, we had to double our capacity since two years event since two years ago. That shows the interest of people interested in MicroVision and that's just retail. We have the second half of the day, lined up with quality financial institutions joining us to know more about MicroVision. So that highlights the visibility that MicroVision has generated and the momentum that we have seen in the past twelve to fifteen months, which is incredibly positive, And, obviously, given the geopolitics that we are seeing usher in across the globe.

So that's why I feel more confident and why this, 200,000,000 share authorization would get us in that lead. We're running out of time. So maybe one last question. Sumit, what to expect on the Investor Day next week? [indiscernible] I think it's kinda important that, you know, I think CS has not been really that super and it's not really been easy for us to connect with our our investors and analysts. We decided that we're gonna actually host it here annually. About the same time. And it's again, a great opportunity for us to show all the stuff, you know, we we spend money, what we have created, and what customers are gonna learn to. So, you know, without, you know, talking directly about any specific customer we've not announced, you can get a really good idea of where our technology is gonna be deployed and ask specific questions so you get confidence in the product portfolio. We certainly are also gonna talk about our future plans with all our products. Again, given the context that Anubhav has said that we're not expecting our cash expenses to increase, that we're going to run it tight. It'd be a good opportunity to really understand how we're gonna manage that and still create value.

And, of course, you know, longer term, I think I think we we get a lot of questions from our investors all the time. And to be honest, even on an earnings call, it's very hard to address them because sometimes they're kinda out of context. They're more conversational. Our intention is to have a a session like we did last time where you know, ask us, anything, and if you can answer it, in a public forum, that we've covered in previous earnings call, we will absolutely do it. And so we can have a more direct dialogue so you have a clear understanding of what we're facing and, you know, where we're headed with it. So look forward to meeting you all again next week.

Thank you, Sumit. With this, we'd like to wrap our first quarter earnings call. You again, everybody, for joining us. We look forward to seeing you next week.

Thank you. This concludes today's conference. All parties may disconnect and have a great day.