MicroVision, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Financial statements are unaudited. MicroVision develops lidar hardware and software for automotive ADAS and other markets. It completed its acquisition of selected Ibeo Automotive Systems assets on January 31, 2023.
Financial results and position
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | $0.782 million | $0.350 million |
| Gross profit (margin) | $0.238 million (30.4%) | $0.346 million (98.9%) |
| Operating expenses | $21.429 million | $13.470 million |
| Operating loss | $21.191 million | $13.124 million |
| Net loss | $19.027 million | $13.168 million |
| Loss per share, diluted | $0.11 | $0.08 |
| Cash used in operating activities | $13.482 million | $10.907 million |
- Revenue increased 123.4%, mainly from Ibeo-acquired contracts. Q1 2023 revenue included $0.590 million of product revenue and $0.192 million of contract revenue; no royalty revenue. Gross margin fell substantially as cost of revenue rose, including amortization of acquired intangible assets.
- Research and development expense increased 67.2% to $12.692 million, primarily reflecting approximately $4.0 million in compensation for transferred Ibeo employees. Sales, marketing, general and administrative expense rose 48.7% to $8.737 million, including higher acquired-employee costs and professional fees.
- At March 31, cash and cash equivalents were $23.187 million and short-term investments were $44.544 million, totaling $67.731 million in reported liquidity. The company separately held $4.224 million of restricted cash. Current assets were $76.990 million and current liabilities $22.155 million.
- Total liabilities were $36.724 million. The filing reports no outstanding long-term borrowings; operating lease liabilities totaled $15.939 million, and finance lease liabilities $0.015 million.
- Financing provided $12.685 million, including $12.5 million net proceeds from issuing 5.0 million shares through the ATM program. Approximately $43.5 million remained available under the $140 million ATM authorization.
Material changes, outlook and risks
- The Ibeo asset acquisition had approximately $21.6 million of total consideration, subject to working-capital settlement. The preliminary purchase-price allocation recognized $23.262 million of identifiable net assets and a $1.706 million bargain-purchase gain. Allocation remains preliminary. Acquired Ibeo operations contributed $0.8 million of revenue and $5.5 million of net loss through March 31.
- Shares issued and outstanding rose to 176.026 million from 170.503 million at year-end, reflecting the ATM issuance and other share activity.
- Management expects current cash and cash equivalents to fund operations for at least 12 months under its current plan. The company nevertheless expects significant losses and negative cash flow at least through 2023 and likely thereafter; operating expenses are expected to increase following the Ibeo acquisition. No specific revenue or earnings guidance is provided.
- Management says it has been unable to secure the customers needed to launch its products. Results depend on product development, customer adoption and winning automotive series-production awards, which can take years. The company warns that additional capital may be needed and may dilute shareholders.
- Customer concentration remains high: three customers accounted for 46%, 24% and 10% of Q1 revenue, respectively. MicroVision also cites limited-source supplier dependence, competition and alternative technologies, integration and execution risks, and uncertainty in automotive lidar demand. Management reported effective disclosure controls and no material adverse legal proceedings known to it.
Important facts for investors to verify
- Progress toward OEM or Tier 1 production awards, commercialization, and revenue growth beyond the current small customer base.
- Cash burn, liquidity and financing needs against management’s stated 12-month funding outlook; monitor ATM use and resulting dilution.
- Integration of Ibeo, acquired-asset performance, and final purchase-price allocation or working-capital adjustments.
- Customer concentration, supplier availability, and the timing and economics of converting development activity into recurring sales.