MicroVision (MVIS) 5 Aug 202020 Q2 Earnings call transcript

Thank you. Good afternoon, and welcome everyone to MicroVision's second quarter 2020 financial and operating results conference call.

Joining me on today's call are Sumit Sharma, Chief Executive Officer; and Steve Holt, Chief Financial Officer. The information in today's conference call includes forward-looking statements; including statements regarding exploration of strategic alternatives, sale of our product verticals or technology; sale or merger of the company; expressions of the interest regarding strategic alternatives; potential value of the company or product vertical; potential competitive advantages; ability to profitably scale modules to large volumes; capacity to generate free cash flow; future demand for consumer electronic, products; future monetization opportunities; expected capabilities of augmented reality and automotive LIDAR products and ability to develop and launch such products; potentially disruptive capabilities of our products; potential markets for our products; ability to execute potential strategic transactions; managing costs; cash to fund operations; potential forgiveness of a portion of loan proceeds under the Payroll Protection Program; future use of shares of common stock completing its strategic transaction; maximizing shareholder value; expected customer order; future royalties; progress under and benefits of existing contracts and license agreements and the negotiation of future agreement; customer product launches; advantages of our technology; litigation; business execution; projections of future operations and financial results; availability of funds; product development applications and benefits; availability and supply of products and key components; commercialization of our technology; market opportunities and future demand; effect of approvals of proposals contained in our preliminary Proxy Statement dated August 5, 2020 as well as statements containing words like; opportunity, potential, possibly, intend, believe, focus, paths, expects, plans, will, could, would, think, endeavoring, enabling, likely, resulting, and other similar expressions. These statements are not guarantees of future performance. materially forward-looking future statements. differ expressed implied could the in results from results the or Actual in filed associated XXXX, We time made SEC X, X, Annual we XX-K XXXX filings, which you XXXX, to including March with encourage to documents risk MicroVision. other discuss our time Report review Preliminary Proxy and on in filed on various XX-Q from filed Form our investing Statement various on factors May XX, August Form filings SEC These factors to from risk cause could differ our those results in expressed forward-looking implied or statements. as All forward-looking no statements the this are required we information. made call, as and undertake by this law, of except of update to obligation date in presented financial on today. the numbers release in The and X-K the are filed today included call our press of from available the website. section Relations Investor our are Both available call section Relations MicroVision's the conference also This will audio replay in www.microvision.com. Investor for website at of be to And call to turn like the over Sumit now Sharma. I'd Sumit?

Good Thank afternoon Lindsey. you, everyone.

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call to to Steve? turn Now quarter over the me second the let results. discuss Steve

Thank you, everyone. Sumit. Good afternoon,

was the $XXX,XXX the contract second revenue. from of quarter, revenue $XXX,XXX royalty For revenue balance and with

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in is lower royalty of second revenue the over million $X.X remainder the that in of we the last than million the in the related $X.X approximately $X.X slightly expenses result and all estimate comparison, be quarter. $X approximately million expenses our in in and range call. February million $X.X current in $X.X quarter, that the million provided the workforce to were quarter, and being to will of $X on were which expenses other reduction will million approximately in our million included recognized second nonrecurring the year for announced operating $XXX,XXX prior XXXX. Operating In quarter credit we Our charges

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our cash Given current believe fourth fund balance quarter. our current expense will we rate, the through operations

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to the quarter, appropriate the loan to amount the of forgiveness end rules the near expect for third apply the according of We program.

resolve many reach of The thought proposal. because shares those proposal approving understand to order if favor the requires We a are the be of period shares preliminary Proxy I know subsequently Statement concern. It SEC how that the important outstanding like the that are was will there proxy earlier that comments, everyone of those very the that SEC we Now to may That dilution that authorized own. will increase shareholders a to the comments, filed occur is after and some is more I begin shareholders address to the today. not majority If regardless number of a proxy appreciate and and any minimum comments to the of we and shareholders. XX will days. the for matters. issued. high reviewed the do no boat It shares shares want If by resolution. SEC shares mailing votes, vote all a of in proxy of every has is send you

the trying year cash best are to until end acquire are It the previously and price. essentially we interest own lowest the process is possible the interest. will that in the acquirers sell of we in of out However, shares of the we have to act try that stock. company company We at the of their their common possible indicated and to in

none closer So, end common the cash, the might lower thought a shares. forced get the a have as price very into of maybe as an and we funds, alternatives fire that get lower reason that unfavorable increase and we a accept constraints. common company. cash on a possible weaker that year. have investment a the without position until view proceed to to is from authorized by we second to due keep could may company of attempt another the negotiating we be we be also position. process raise lower which staff in available, minority Without appealing being shareholder to raising sale stock lower be additional authorized may to price. It accepting to cash approve There's in Having delaying by able the to allow the Their shares allows and process value shares of maximized to to few we the

example, rest purchase such percentage then was a If of more to MicroVision that or to to to potential need buyer shareholder customer MicroVision greatly place. company of investment had a might company. this of company strategic For as benefit takes a the transaction investing milestone purchase be sold shareholders reason But may the shares the the the the have for and a event now or without which want a be available approval from able delay to future investment. after the similar other do could

for Some allow minority investment number sufficient company that main purposes. other just ask of I if reason this of the is have and shares. needed. They issued. is still is Remember could the a they why available of that of year described a sold number as issued proxy. approved very few The that could may possible It only million for the would be be the you not as XX on XX be would issued to shares need million shares are that shares are shares

want period of you that know our working so to more could we that time hard last. cash I Finally, the close sale transaction current the a asking authorization are shares -- will lightly. for not We're our cash within

new takes However, meeting shareholder hold days a it special file proxy to for a XX around and shares.

of fourth won't in until So, will early -- result the this be quarter. known the

available Please electronics. As amazing the get reality, to technology and that consumer Sumit augmented place to our if automotive all late for via proxy email believe we mail, shares shareholders. developed pursue and for discussed, has in look favor has us value in highest LiDAR, a electronic either avenues additional an MicroVision opted Having in opportunity Thank gives in the your you. delivery vote August, or more for shares. authorizing of you've

now questions. will up for We open the call

Thank you.

question-and-answer begin session. [Operator audio with today's will We Mattson And go comes Ladenburg first now from Please Glenn Thalmann. the ahead. question Instructions]

Hi, thanks for my question. taking

Steve So, an just that just the balance on share you're interesting of and rate your that about. hit to the burn else. situation. issuance time everything is not cash the talking the Obviously, topic on with It's and side

capital you're wait you sense of be needs or So, an you $X to for perhaps down bit. leaving you give continue potentially investment there's little always thing there what to can could only of issue you But the that how kicking out balance can the could versus option a would then just the minute? that road you do raise regards And out. thought a a Can aside with $XX how if you people people the little million strategic process the much balance is a capital further that wait like negotiations? say raise and you million how

Right.

is cash about of of I a way through think us pretty to end think to the this get year. level Glenn it finite the there's

in Lincoln certainty the because to when available, ability million can ability that the to if goes time where process is so process is goes raise finite out shares you the the thing either have continue more run so more cash you the that the With right we the to away to and Park point start the away. would facility continue becomes of the say we're take available cash in available through a certainty to That becomes and that's to out away. we have of in and the uncertain and runs we're the go sale trying there raise $X.X

of sale shifting their All companies pulled questioning the guys right. little just about kind a process week All tech in Congress big just handful to with front the for of nature then of but of things. and bit, much, you And fair. watching regards -- practices That's right. that can't got realize competitive last I front kind drawn talk the in

was using wind away are like coming questions of investments some kicking of minute and things of on tactics up the around how and these doing that. the backing last some and One then kept such that the as guys tires sort work up

guys Now you home to perhaps ways. it when we large somewhat couple landing one, makes were getting process very while in of close contract you guys almost for through a guys a a it a the is speaker then task and me me just sounds the that through similar developed went type also giants you that Number for this for made not think you're there that think about and it going thought you've you're the you kind with and investments which these years you've easy as technology an process the how of over sure. makes that that negotiating now protect on device

on So maybe that some color perhaps.

know But line them. time about successful we if they right? in for a think is the be I year for have themselves IP we've been head. what broader to any about that need been right? right? how what verticals I this not they me right? they is proud to It's now. actually that that's They This right? markets focus just the once valuation But that different like present. think of take the will on pick unfortunately a don't behave IP years right? the MicroVision so persevere there want mature. But we've intact. are that talking you so feels if happens one one it to this about has very So bought many is we think itself have right I desire think change able for everybody we it to But inflection everything want successful focused We are some think bake I of right? I'm that to tech in strategic several the drive Kavaler all have expensively also have them do if grid them So right? is done say your a acquire true you're This value. call So, is didn't because the you created it we on is probably right? survived this The to and what right? Yes? rules times, those right? look and we We of you right point They definitely at all heard have point right do. happen. know of It on been thing we're not I that alternatives a be People obligated us has is But So, you're to by There things have may rule ultimately the that think you're

factors. significantly more acquire potentially So better doing all own, So that's the companies on their a always right? choice is been path versus to money collaborate the those at actually of or Is even risky right it about it right?

all positioned the But just we're rules. right? those it -- -- actually. well knowing are like of all the So things it We're

of have something we value. So

answer IP, you. have right? it. give And we just We get to to only We've through IP have the lot best done grid a We just That's here. have we start have have people. We we That's can have right? way designs not the I right?

Yes.

last process. Have obviously one. can through Maybe inside the -- that public going just you the firm. on talent you're the seen this So any comment you it's

go So, sale people you a if there that are the is people big the any elsewhere of talent the it or do looking process thing kind you as part see probably well? because do -- the of through value of

Yes.

and I potential to that have to key to make personnel happy think, that all given the is to everything sure we've we a we've been sensitive that possible comfortable and done At the to moment secure. that very this staff that have tools all required been the us all transaction. complete feel share

Great.

Thanks. Okay. That’s in process. for luck the it me. Good

you. Thank

with And comes Dede audio our ahead. next question Please go HCW. from Kevin

behind could the it's speak color what how sequentially. the know quarter clear that, end you helpful. don't it's so market. and unit really it. what not But job, is much for appreciate XX but year or volume did much I gentlemen, if right can great with nuances what's not I I give think expanding Steve, million really -- contract, taking my highlighting us there question. Good clear to afternoon happening gross especially think you thank be this to a in of the this Steve, you some I it you would $XXX $XX,XXX Sumit, April the profit

Yes.

that production low volumes. that per did information the said one to transferred said not unit things disclosed we that have -- have we this us we We responsibility back we was and in QX the any drove customer to when the of and the

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expectation and wondering if and of you Okay. year? for to the sequential But to all of how $X.X and between half what your I'm realize bit entire expect to million -- second in little read have June the of a seem change grasp a the for you between March

will usage the what of indication some have We be.

recognized is royalty I think we over half expect the revenue we year. last million of as the said, what to be $X.X

the the customer. So and interacting have indication with we that's the have we knowledge from

estimate for why we it that's people to us is see are in that an I there. estimate know what's that's in footnote and that's and what the course Of interested required disclosed because I

our whole half to royalty first where $X.X $X.X million the revenue the billion second for the given we estimate the are would So come, be year. about half plus in

Okay. or deal? explain how Fair interfere you Appreciate either might it. benefit liability strategic with that enough. potential Can

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commercial market deal? whether if can CES, demo factor Okay. and the Fair on to that of that was used into acceptance. have small my you AR you done you a might or speak for that I interest know LIDAR. closer guys you just you to wondering, I'm at on not potential job thank see understanding in field was -- was But was emphasis you think getting auto showed that And where think enough. module the evidence great the and a I and Sumit, great that tracking in that and in

Yes.

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Right.

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but -- I in you interest Glenn was maybe development you I your Yes. final differ, I about terms display of touched where potential further prepared kind in I mentioned too, guess, you you I'm it talk know just of suitors. could hoping interactive and And talked on know to those could to bit might I technology was and Okay. mean, this their which commercialization. review versus the I in a go closer back but specifically just hoping to No display little terms think their of remarks, was -- technology, I

Yes.

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