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 utr:sqft

 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM

 (Mark
one)

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

 For
the fiscal year ended December 31, 2023

 OR

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

 For
the transition period from __________ to __________

 Commission
file number: 001-34170

Inc.

 (Exact
name of registrant as specified in its charter)

 Delaware

 91-1600822

 (State
 or Other Jurisdiction

 of Incorporation or Organization)

 (I.R.S.
 Employer

 Identification Number)

 18390
NE 68th Street

 Redmond,
 Washington 98052

 (Address
of Principal Executive Offices, including Zip Code)

 (425) 936-6847

 (Registrant's
Telephone Number, including Area Code)

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of Each Class

 Trading
 Symbol

 Name
 of Each Exchange on Which Registered

 Common
 Stock, $0.001 par value per share

 MVIS

 The
 Nasdaq Stock Market LLC

 Securities
registered pursuant to Section 12(g) of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
 No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
 No

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

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

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

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
 No

 The
aggregate market value of common stock held by non-affiliates of the registrant as of June 30, 2023 was approximately $ 859.3 million
(based upon the closing price of $4.58 per share for the registrant's common stock as reported by the Nasdaq Global Market on that
date).

 The
number of shares of the registrant's common stock outstanding as of February 26, 2024 was 195,267,385.

 DOCUMENTS
INCORPORATED BY REFERENCE

 Portions
of the registrant's definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation
14A in connection with the registrant's 2024 Annual Meeting of Shareholders (the "2024 Proxy
Statement") are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated
herein.

 MICROVISION,
INC.

 ANNUAL
REPORT ON FORM 10-K

 FOR
THE YEAR ENDED DECEMBER 31, 2023

 TABLE
OF CONTENTS

 Page

 Part I.

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 4A.

 Executive Officers of the Registrant

 Part II.

 Item 5.

 Market for Registrant's Common Equity, Related
 Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 Reserved

 Item 7.

 Management's Discussion and Analysis of Financial
 Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market
 Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting
 and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent
 Inspections

 Part III.

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security
 Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions and
 Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Part IV.

 Item 15.

 Exhibits, Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 Signatures

 PART
I.

 Preliminary
Note Regarding Forward-Looking Statements

 This
Annual Report contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is subject to the
safe harbor created by those sections. Such statements may include, but are not limited to, projections of revenues, income or loss,
capital expenditures, plans for product development and cooperative arrangements, acquisition activity and related integration efforts,
technology development by third parties, future operations, financing needs or plans of MicroVision, Inc. ("we," "our,"
or "us"), as well as assumptions relating to the foregoing. The words "anticipate," "could," "would,"
"believe," "estimate," "expect," "goal," "may," "plan," "project,"
"will," and similar expressions identify forward-looking statements. Factors that could cause actual results to differ materially
from those projected in our forward-looking statements include risk factors identified below in Item 1A.

 ITEM 1.

 BUSINESS

 Overview

Inc. is a global developer and supplier of lidar hardware and software solutions focused primarily on automotive lidar and advanced
driver-assistance systems (ADAS) markets where we can deliver safe mobility at the speed of life. We offer a suite of light
detection and ranging, or lidar, sensors and perception and validation software to automotive OEMs, for ADAS and
autonomous vehicle (AV) applications, as well as to complementary markets for non-automotive applications including industrial,
robotics and smart infrastructure. Our long history of developing and commercializing the core components of our lidar hardware and
related software, combined with the experience of the team acquired from Ibeo Automotive Systems (Ibeo) with
automotive-grade qualification, gives us a compelling advantage as a development and commercial partner.

 Founded
in 1993, MicroVision, Inc. is a pioneer in laser beam scanning, or LBS technology, which is based on our patented expertise in micro-electromechanical
systems, or MEMS, laser diodes, opto-mechanics, electronics, algorithms and software and how those elements are packaged into a small
form factor. Throughout our history, we have combined our proprietary technology with our development expertise to create innovative
solutions to address existing and emerging market needs, such as augmented reality microdisplay engines; interactive display modules;
consumer lidar components; and, most recently, automotive lidar sensors and software solutions for the automotive market.

 In
January, 2023, we acquired certain strategic assets of Germany-based Ibeo, which was founded in 1998 as a
lidar hardware and software provider. Ibeo developed and launched the first lidar sensor to be automotive qualified for serial
production with a Tier 1 automotive supplier and that is currently available in passenger cars by premium OEMs. Ibeo developed
software solutions, including perception and validation software, which are also used by premium OEMs. In addition, Ibeo sold its
products for non-automotive uses such as industrial, smart infrastructure and robotics applications.

 For
the automotive market, our integrated solution combines our MEMS-based dynamic-range lidar sensor and perception software, to be integrated
on our custom ASIC, targeted for sale to premium automotive OEMs and Tier 1 automotive suppliers. Our ADAS solution is intended to leverage edge computing and custom ASICs to enable our hardware
and perception software to be integrated into an OEM's ADAS stack.

 In
addition to our dynamic-range and long-range MAVIN sensor and perception software solution for the automotive market, our product suite
includes our short-range flash-based MOVIA lidar sensor, for automotive and industrial applications, including smart infrastructure,
robotics, and other commercial segments. Also, our validation software tool, the MOSAIK suite, is used by OEMs and other customers including
Tier 1s for validating vehicle sensors for ADAS and AV applications. The tool includes software that automates the manual data classification
or annotation process, significantly reducing the time and resources required by OEMs to validate their ADAS and AV systems.

 In
the recent past, we developed micro-display concepts and designs for use in head-mounted augmented reality, or AR, headsets and developed
a 1440i MEMS module supporting AR headsets. We also developed an interactive display solution targeted at the smart speakers market and
a small consumer lidar sensor for use indoors with smart home systems.

 We
completed the acquisition of assets from Ibeo Automotive Systems GmbH, which we refer to throughout this report as Ibeo, on January 31, 2023 pursuant to the terms and subject to the conditions of the Asset Purchase Agreement, dated December 1,
2022, and amended as of January 31, 2023, by and between our wholly owned subsidiary, MicroVision GmbH organized under the laws of
The Federal Republic of Germany, and Ibeo for a purchase price of EUR 15.0 million, or approximately $16.3 million, subject to
potential reduction on the terms set forth in the Asset Purchase Agreement. Pursuant to the Asset Purchase Agreement, the purchase
price also included advanced funds to Ibeo so that it could continue its operations while in insolvency during the period between
signing and closing. Specifically, we advanced to Ibeo EUR 3.9 million, or approximately $4.1 million in December 2022; EUR 2.7
million, or approximately $3.0 million in January 2023; and EUR 0.6 million, or approximately $0.7 million in February 2023 shortly
after the closing. These fund advances included amounts related to headcount reductions carried out by Ibeo management, decreasing
the number of employees to transfer in connection with the acquisition to approximately 250 employees. These headcount reduction
costs of approximately EUR 2.3 million, or approximately $2.5 million, were reimbursed to MicroVision by way of deduction from the
purchase price in accordance with the Asset Purchase Agreement.

 Although
our development and productization efforts are now solely focused on our lidar sensors and related software solutions, our revenue
in the fiscal year ended December 31, 2023 was largely derived from one customer, Microsoft Corporation, related to components that
we developed for a high-definition display system. Our arrangement with this customer generated royalty income, which will not continue in future periods.

 To
date, we have been unable to secure customers at the scale needed to successfully launch our products. We have incurred significant
losses since inception and we expect to continue to incur significant losses in the near term. 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.

Inc. was founded in 1993 as a Washington corporation and reincorporated in 2003 under the laws of the State of Delaware. Our headquarters
is located at 18390 NE 68th Street, Redmond, Washington 98052, and our telephone number is (425) 936-6847.

 Our
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available
free-of-charge from the investor page of our website, accessible at www.microvision.com, as soon as reasonably practicable after such
material is electronically filed with the Securities and Exchange Commission (SEC). Copies of these filings may also be obtained by visiting
the SEC's website, www.sec.gov, which contains current, quarterly and annual reports, proxy and information statements and other
information regarding issuers that file electronically.

 Our
Industry and Market Strategy

 We
are developing lidar sensors and perception software to address the needs of the Level 2+, or L2+, and Level 3, or L3, advanced driver-assistance
systems (ADAS) markets to be used in automotive safety and autonomous driving applications. Our micro-electromechanical systems, or MEMS-based
high-speed lidar sensors, which we call MAVIN, use our pioneering laser beam scanning (LBS) technology. Our solution-based development
approach recognizes two key realities of the L2+ and L3 markets: that safety is mission critical and that OEMs require cost efficiency
and integration adaptability. With these factors in mind, we believe that our best-in-class MAVIN lidar sensors support critical safety
needs by providing the highest resolution at range and velocity of moving objects with a dynamic field of view while running at 30 hertz,
thus enabling ADAS features, such as automatic emergency braking, forward collision warning, and automatic emergency steering, at higher
speeds of operation than most competing products.

 Moreover,
we tailor our solution to meet the needs of OEMs, integrating our MEMS-based lidar and edge computing to support Highway Pilot capabilities
up to 130km/h, save development cost and time for OEMs with no training required for our sensor-fused output, reduce system cost by requiring
fewer and cheaper sensors and reduced processing, and enable seamless integration with an OEM's existing architecture. Our unique
solution for the L2+ and L3 markets, we believe, has the potential to achieve our goal of enabling mission-critical safety systems while
solving for OEMs' cost and integration objectives.

 With
this customer-centric approach, our go-to-market strategy depends on building partnerships with OEMs and Tier-1 automotive suppliers,
as well as with silicon companies to support our solution on their compute platforms. Although we are working to establish direct marketing
and co-development relationships with OEMs, we could also derive revenue directly from Tier-1 suppliers in the form
of licensing revenue.

 Our
Technology and Competitive Strength

 We
believe a significant competitive strength for us today is our long history of delivering LBS- and MEMS-based hardware and related firmware
and software that meets reliability, predictability, and scalability standards of well-known OEMs and ODMs.

 Core
to our automotive lidar sensors, custom ASICs and perception software is proprietary technology that we have been developing, refining,
productizing and protecting for nearly 30 years. Our patented LBS technology combines a MEMS scanning mirror, laser diode light sources,
electronics, and optics that are controlled using our proprietary system control algorithms along with edge computing and machine learning
in some systems. The MEMS scanning mirror is a key component of our technology system and is one of our core competencies. Our MEMS scanning
mirror is a silicon device that oscillates in a precisely controlled closed loop pattern so that we can place a pixel of light at a precise
point. This allows us to generate a projected image pixel-by-pixel for use in lidar sensing and display. Scanning modules with our technology
can be designed to operate in one of three different modes: lidar sensing only, display and lidar sensing combined, and display only.
We believe that our proprietary technology offers significant advantages over other lidar sensing systems and traditional displays.

 Early
applications of our proprietary technology included heads up displays for the U.S. military and automotive systems. The contemplated
uses of our technology require incorporation of our components into the products of other companies or partners. Most recently, our technology
can be found in a Microsoft heads up display product. In the past, we have worked with other global brands to incorporate our core technology
into their consumer products.

 The
MAVIN DR, our dynamic-range automotive lidar sensor is designed to, and we believe can, meet or exceed OEM specifications, performing
to 220 meters of range with an output resolution of up to 15.0 million points per second. Our hardware delivers a high point cloud density for a single-channel sensor as compared to competitive products. In addition to providing a low-latency,
high-resolution point cloud at range, our sensor outputs axial, lateral, and vertical components of velocity of moving objects in the
field of view at 30 hertz. This allows our solution to support a detailed understanding of the velocity of moving objects in real time,
enabling fast and accurate path planning and maneuvering of the vehicle. Further, our proprietary scan locking feature ensures that our
sensor is immune from interference from sunlight and from other lidar sensors.

 Our
Products and Revenue Strategy

 Following
our acquisition of assets from Ibeo, our product suite includes our MEMS-based high-speed automotive lidar sensors, perception software, flash-based
automotive lidar sensor, lidar sensors for non-automotive industrial markets, and reference and validation software. We also provide
engineering services in connection with these hardware and software products.

 Central
to our development and commercialization efforts is our MAVIN DR dynamic view lidar system targeted for sale to automotive OEMs and
Tier 1 automotive suppliers. MAVIN DR combines short-, medium- and long-range sensing and fields of view into one form factor.
Dynamic range is key to enabling ADAS features at highway speeds. At speeds of up to 130 km/h (80 mph), ADAS systems need more time
to make decisions and react in order to take proactive action and hence need resolution at range. Our MAVIN DR sensor produces an
ultra-high-resolution point cloud showing drivable and non-drivable areas of the road ahead. With its low latency point cloud (30
hertz), we believe the MAVIN product line allows ADAS systems to respond more quickly, make split-second decisions and take action
at high speeds.

 Our
perception software integrated with our automotive lidar hardware, and eventually ported into our digital ASIC, is also targeted for
sale to automotive OEMs and Tier 1 automotive suppliers. This perception software, included in our acquisition of assets from Ibeo, was developed in collaboration with an OEM customer and
successfully passed through that OEM's development qualification processes.

 Also
stemming from our acquisition of assets are our flash-based sensors, suitable for short- and mid-range use by customers in the
automotive market, as well as non-automotive industrial markets. These solid-state sensors, comprising our MOVIA line of lidar sensors, are based on technology developed according to automotive-grade
standards, featuring variable scan frequency, high resolution, a modular optics concept, and low power consumption. The availability of
our MOVIA sensors support a revenue
strategy that includes royalty revenues from automotive production, as well as sales in multiple markets including industrial, smart
infrastructure, robotics, and commercial vehicles.

 Our
acquisition allows us to offer a system solution for validating vehicle sensors for ADAS and AV applications. This system, which we have branded MOSAIK, includes software
that automates the manual data classification or annotation process. We believe the MOSAIK solution significantly reduces the time and resources required by OEMs to
validate their ADAS and AV systems. In addition to the auto-annotation software, sales of this validation solution may include our lidar
sensors.

and Development

 We
believe our research and development efforts have earned us a leadership position in the field of lidar sensors, LBS technology and applications
as applied to automotive, consumer electronics and other markets. Our ability to attract customers and grow revenue will depend on our
ability to maintain our technology leadership, to continually improve performance, reduce costs, and ensure functional safety and flexible
design. Our research and development teams as of December 31, 2023 were located in Redmond, Washington, Hamburg, Germany and Nuremberg,
Germany and were comprised of approximately 270 engineering and technical staff in optics, software engineering, electrical engineering, product engineering,
and MEMS design.

 Sales
and Marketing

 Our
sales and marketing approach is account based, business-to-business targeting of automotive OEMs and Tier 1 suppliers and potential customers in several industrial markets. Our business
development efforts are headed by executive management and business development representatives and are supported by engineers that
assist customers during the design cycles of products. We have business development offices for our automotive and industrial solutions located in
Germany and the United States. We engage potential customers directly, participate in trade shows, and maintain a
website.

 Manufacturing

 We continue to invest in our manufacturing capabilities, evaluating long-term Tier 1 relationships and establishing
new relationships with contract manufacturers, as we drive toward our goal of serving as a Tier 1 supplier to automotive OEM customers.
While our current partner is manufacturing limited volumes and we are not otherwise manufacturing our products at significant volume at this time, in the past, when we have produced products or components, our
products were manufactured by a contract manufacturer based on our proprietary design, process, test, quality, and reliability standards
and incorporated our LBS technology and included MEMS and ASICs that were produced to order by semiconductor foundries. Our past manufacturing
has not been subject to seasonal variations as our shipments have been relatively small and were in the early stages of product introduction.
In the future, depending on our customers' product mix, we may be affected by seasonal fluctuations which could affect working
capital demands. Many of the raw materials used in our components are standard, although our MEMS, MEMS die,
and ASICs have historically been manufactured to our specifications by separate single-source suppliers.

 Competitive
Conditions

 Many
companies are attempting to develop lidar sensors and ADAS solutions; the competitive landscape is highly crowded and rapidly evolving.
We compete with pureplay lidar developers, some of which have recently completed de-SPAC transactions raising significant capital. Some
of these companies have announced partnerships with OEMs, Tier 1 suppliers, and contract manufacturers that, even if nonexclusive, may
appear more credible than we do in the marketplace. We also face competition from OEMs and Tier 1 suppliers that have internally developed
lidar sensors. All of these OEMs and Tier 1s are significantly larger, more well-resourced, have long operating histories and enjoy relevant
brand recognition. Many lidar developers are also building ADAS solutions with which our solution competes. Our competitors may succeed
in developing innovative technologies and products that could render our technology or products commercially infeasible or technologically
obsolete.

 The
lidar sensing industry has been characterized by rapid and significant technological advances. Our LBS technology
system and products may not be competitive with such advances, and we may not have sufficient funds to invest in new technologies, products
or processes. Although we believe our technology system and products could deliver higher performance and have other advantages, manufacturers
of competing technologies may develop improvements to their technology that could reduce or eliminate the anticipated advantages of our
products.

 Intellectual
Property and Proprietary Rights

 We
create intellectual property from three sources: internal research and development activities, technology acquisitions, and performance
on development contracts. The inventions covered by our patent applications generally relate to systems controls in our LBS technology,
component miniaturization, power reduction, feature enhancements, specific implementation of various system components, and design elements
to facilitate mass production. Protecting these key-enabling technologies and components is a fundamental aspect of our strategy to penetrate
diverse markets with unique products. As such, we intend to continue to develop our portfolio of proprietary and patented technologies
at the system, component, and process levels.

 We
believe our extensive patent portfolio is the largest, broadest, and earliest filed LBS technology portfolio. We currently have over
700 issued patents and pending patents worldwide, including approximately 330 patents we acquired in the acquisition from Ibeo in January
2023. As our technology develops, we periodically review our patent portfolio and eliminate patents that are deemed of low value. Due
to this ongoing portfolio management practice, the number of patents in our portfolio will vary at any given time.

 Since
our inception in 1993, we have acquired through portfolio purchases, patents that grant us exclusive rights to various LBS technologies.
From time to time some of these patents may expire or be abandoned to better utilize resources expended to maintain and generate new
intellectual property.

 Our
ability to compete effectively in automotive lidar or any other market we may enter may depend, in part, on our ability and the ability
of our licensors to maintain the proprietary nature of these technologies.

 We
also rely on unpatented proprietary technology. To protect our rights in these areas, we require all employees, and where appropriate,
contractors, consultants, advisors and collaborators, to enter into confidentiality and non-compete agreements. There can be no assurance,
however, that these agreements will provide meaningful protection for our trade secrets, know-how or other proprietary information in
the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information.

 We
have registered the name "MAVIN," "MOVIA," "MOSAIK, "SAFE MOBILITY AT THE SPEED
OF LIFE," "PicoP " and "MicroVision " with the United States Patent and Trademark Office and in
various foreign countries.

 Our
Employees, People Operations and Workplace Safety

 At
the end of fiscal year 2023, throughout our global offices, we had approximately 340 predominantly full-time employees. We do not hire seasonal workers and none of
our employees are represented by a labor union or works council.

 Our
principal objectives with respect to our workforce are to attract, retain, motivate, and reward our employees to achieve positive results
for our customers and for MicroVision. To achieve these objectives, our employee benefit programs seek to (i) support skill building
and prepare our employees for advancement through continuous learning, (ii) reward our employees through compensation awards and resources
intended to motivate our employees and promote well-being, and (iii) continuously identify opportunities for development through regular
employee input and engagement. We offer competitive compensation and benefits.

 We
also strive for continuous improvement in diversity and inclusivity among our employees, management, and board of directors, and seek
to promote job opportunities to a diverse pool of qualified candidates. We are also committed to providing an inclusive work environment
free of discrimination or harassment of any kind, supported by policies, communications, and reporting and resolution resources.

 Protecting
the safety, health, and well-being of our employees is also a key priority and we have implemented policies and practices to support
this. Throughout the COVID-19 pandemic, we remained focused on the health and safety of our employees by implementing appropriate
safety protocols.

 We
work with third party independent experts in the field of laser safety to assist in meeting safety specifications. In addition, we monitor
developments in the area of permissible laser exposure limits as established by International Electrotechnical Commission (IEC) and others.
Independent experts have concluded that laser exposure to the eye resulting from use of LBS devices under normal operating conditions
would be below the calculated maximum permissible exposure level set by the IEC.

 ITEM 1A.

 RISK FACTORS

 You
should carefully consider the risks described below together with the other information set forth in this report, which could materially
affect our business, financial condition and future results. The risks described below are not the only risks facing our company. Risks
and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business,
financial condition and operating results.

 Risk
Factors Related to Our Business

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

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

 As
 of December 31, 2023, we had an accumulated deficit of $765.4 million.

 We
 had an accumulated deficit of $586.2 million from inception through December 31, 2020, a net loss of $43.2 million in 2021, a net
 loss of $53.1 million in 2022, and a net loss of $82.8 million in 2023.

 The
likelihood of our success must be considered in light of the expenses, difficulties and delays frequently encountered by companies formed
to develop and commercialize new technologies. In particular, our operations to date have focused primarily on research and development
of our LBS technology system, including products built around that technology such as our automotive lidar sensor, and development of
demonstration units. We are unable to accurately estimate future revenues and operating expenses based upon historical performance.

 We
cannot be certain that we will succeed in obtaining development revenue or commercializing our technology or products at scale. In light of
these factors, we expect to continue to incur significant losses and negative cash flow at least through 2024 and likely thereafter.
There is significant risk that we will not achieve positive cash flow at any time in the future.

 We
will require additional capital to fund our operations at the level necessary to implement our business plan. Raising additional capital will dilute the value
of current shareholders' investment in us.

 Based
on our current operating plan, we anticipate that we have sufficient cash and cash equivalents to fund our operations for at least the
next 12 months. We will, however, require additional capital to fund our operating plan past that time. We will seek to obtain additional
capital through the issuance of equity or debt securities, development revenue, product sales and/or licensing activities. There can be no assurance that
any such efforts to obtain additional capital would be successful.

 We
are currently focused on developing and commercializing our automotive lidar solution. This involves introducing new technologies
into an emerging market which creates significant uncertainty about our ability to accurately project the amounts and timing of
revenue, costs and cash flows. Our capital requirements will depend on many factors, including, but not limited to, the commercial
success of our technologies, the rate at which OEMs introduce systems incorporating our products and technologies and the market
acceptance and competitive position of such systems. Our expenses have increased significantly as a result of the January 2023 Ibeo
acquisition and related headcount increase. If revenues continue to be 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, products and systems, and equipment manufacturers that may require additional investments by us.

 Additional
capital may not be available to us or, if available, may not be available on terms acceptable to us or on a timely basis. Raising additional
capital may involve issuing securities with rights and preferences that are senior to our common stock and may dilute the value of our
current shareholders' investment in us. 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 research and development projects, staff, operating costs, and capital expenditures which could jeopardize our ability
to achieve our business goals or satisfy our customer requirements.

 Risks
Related to our Financial Statements and Results

 Our
revenue is generated from a small number of customers, and losing a significant customer will have a negative impact on our revenue.

 In
2023, one commercial customer, Customer A accounted for $4.6 million in revenue, representing 63% of our total revenue, a second
commercial customer accounted for $0.8 million in revenue, representing 11% of our total revenue and a third commercial customer
accounted for $0.4 million in revenue, representing 5% of our total revenue. In 2022, Customer A accounted for $0.7 million in
revenue, representing 100% of our total revenue. No revenue was recognized from this customer during the second half of 2022 or for
the first three quarters of 2023 as no shipments of our components were reported by the customer during that period. In 2021, Customer A accounted for $2.5 million in revenue, representing 100% of our total revenue. Subsequent to fiscal year 2023, we do not expect to recognize further revenue from Customer A, which will negatively
affect our future revenue.

 We
have, in the past, identified a material weakness in our internal controls.

 In
the second quarter of 2021, we identified a material weakness in the controls that support our determination of the grant date of equity
awards. If we identify further material weaknesses in our internal controls, our failure to establish and maintain effective disclosure
controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements
and a failure to meet our reporting obligations. Any such failure could cause investors to lose confidence in the accuracy of our financial
reports, harm our reputation and adversely affect the market price of our common stock.

 The audit of our internal controls over financial reporting for fiscal year 2024 will include controls of our subsidiary,
MicroVision GmbH, which became a significant subsidiary upon the closing of our acquisition of assets from Ibeo in 2023. Accordingly,
our internal control environment will become more complex and, therefore, the risk of a material weakness in internal controls will be
higher.

 Our
stock price has fluctuated in the past, has recently been volatile and may be volatile in the future, and as a result, investors in our
common stock could incur substantial losses.

 Our
stock price has fluctuated significantly in the past, has recently been volatile, and may be volatile in the future. Over the 52-week
period ending February 26, 2024, our common stock has traded at a low of $1.82 and a high of $8.20. We may continue to experience sustained
depression or substantial volatility in our stock price in the foreseeable future unrelated to our operating performance or prospects.
For the fiscal year ended December 31, 2023, we incurred a loss per share of $(0.45).

 As
a result of this volatility, investors may experience losses on their investment in our common stock. The market price for our common
stock may be influenced by many factors, including the following:

 investor
 reaction to our business strategy;

 the
 success of competitive products or technologies;

 strategic
 developments;

 the
 timing and results of our development and commercialization efforts with respect to our lidar sensors and ADAS solutions;

 changes
 in regulatory or industry standards applicable to our technologies;

 variations
 in our or our competitors' financial and operating results;

 developments
 concerning our collaborations or partners;

 developments
 or disputes with any third parties that supply, manufacture, sell or market any of our products;

 developments
 or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent
 protection for our technology;

 actual
 or perceived defects in any of our products, if commercialized, and any related product liability claims;

 our
 ability or inability to raise additional capital and the terms on which we raise it;

 declines
 in the market prices of stocks generally;

 trading
 volume of our common stock;

 sales
 of our common stock by us or our stockholders;

 general
 economic, industry and market conditions; and

 the
 effects of other events or factors, including war, terrorism and other international conflicts, public health issues including health
 epidemics or pandemics, such as the COVID-19 outbreak, and natural disasters such as fire, hurricanes, earthquakes, tornados or other
 adverse weather and climate conditions, whether occurring in the United States or elsewhere.

 Since
the price of our common stock has fluctuated in the past, has suffered recent declines and may be volatile in the future, investors in
our common stock could incur substantial losses. In the past, following periods of volatility in the market, securities class-action
litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs
and diversion of management's attention and resources, which could materially and adversely affect our business, financial condition,
results of operations and growth prospects. There can be no guarantee that our stock price will remain at current levels or that future
sales of our common stock will not be at prices lower than those sold to investors.

 Additionally,
securities of certain companies have in the past few years experienced significant and extreme volatility in stock price due to short
sellers of shares of common stock, known as a "short squeeze." These short squeezes have caused extreme volatility in both
the stock prices of those companies and in the market, and have led to the price per share of those companies to trade at a significantly
inflated rate that is disconnected from the underlying value of the company. Many investors who have purchased shares in those companies
at an inflated rate face the risk of losing a significant portion of their original investment, as in many cases the price per share
has declined steadily as interest in those stocks have abated. There can be no assurance that our shares will not be subject to a short
squeeze in the future, and investors may lose a significant portion or all of their investment if they purchase our shares at a rate
that is significantly disconnected from our underlying value.

 If
we are unable to maintain our listing on The Nasdaq Global Market, it could become more difficult to sell our stock in the public market.

 Our
common stock is listed on The Nasdaq Global Market. To maintain our listing on this market, we must meet Nasdaq's listing maintenance
standards. If we are unable to continue to meet Nasdaq's listing maintenance standards for any reason, our common stock could be
delisted from The Nasdaq Global Market. If our common stock were delisted, we may seek to list our common stock on The Nasdaq Capital
Market, the NYSE American or on a regional stock exchange or, if one or more broker-dealer market makers comply with applicable requirements,
the over-the-counter (OTC) market. Listing on such other market or exchange could reduce the liquidity of our common stock. If our common
stock were to trade in the OTC market, an investor would find it more difficult to dispose of, or to obtain accurate quotations for the
price of, the common stock.

 A
delisting from The Nasdaq Global Market and failure to obtain listing on another market or exchange would subject our common stock to
so-called penny stock rules that impose additional sales practice and market-making requirements on broker-dealers who sell or make a
market in such securities. Consequently, removal from The Nasdaq Global Market and failure to obtain listing on another market or exchange
could affect the ability or willingness of broker-dealers to sell or make a market in our common stock and the ability of purchasers
of our common stock to sell their securities in the secondary market.

 On
February 26, 2024, the closing price of our common stock was $2.09 per share.

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

 Our
products and solutions compete with other pureplay lidar developers, many of which have recently gone public through de-SPAC
transactions and therefore have substantially greater financial resources than we have. We also face competition from OEMs and Tier
1 suppliers that have internally developed lidar sensors. All of these OEMS and Tier 1s are significantly larger, more
well-resourced, have long operating histories and enjoy relevant brand recognition. Because of their greater resources, our
competitors may develop or commercialize products more quickly than us and have access to more entrenched sales channels. This
imbalance in financial resources and access could result for us in reduced revenues, lower margins or loss of market share, any of
which could reduce the value of our business. Additionally, for a variety of reasons, customers may choose to purchase from
suppliers that have substantially greater financial or other resources than we have.

 Risks
Related to Our Operations

 Difficulty
in qualifying a contract manufacturer, Tier 1 partner, or foundry for our products, or experiencing changes in our supply chain, could
cause delays that may result in lost future revenues and damaged customer relationships.

 Historically,
we have relied on single or limited-source suppliers to manufacture our products. Establishing and maintaining a relationship with a
contract manufacturer, automotive Tier 1 partner, or foundry is a time-consuming process, as our unique technologies may require
significant manufacturing process adaptation to achieve full manufacturing capacity. To the extent that we are not able to establish
or maintain a relationship with a contract manufacturer, Tier 1 partner, or foundry in a timely manner or at prices or on other
terms that are acceptable to us, we may be unable to meet contract or production milestones. Moreover, changes in our supply chain
could result in increased cost and delay and subject us to risks and uncertainties regarding, but not limited to, product warranty,
product liability and quality control standards. 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 cause significant
delays in product deliveries, which could result in lost future revenues and damaged customer relationships.

 Historically,
we have been dependent on third parties to develop, manufacture, sell and market products incorporating our technology.

 Our
business strategy for commercializing our technology in products has historically included entering into development, manufacturing,
licensing, sales and marketing arrangements with OEMs, ODMs and other third parties. These arrangements reduce our level of control over
production and distribution and may subject us to risks and uncertainties regarding, but not limited to, product warranty, product liability
and quality control standards.

 We
cannot be certain that we will be able to negotiate arrangements on acceptable terms, if at all, or that these arrangements will be
successful in yielding commercially viable products. If we cannot establish or maintain these arrangements, we would require
additional capital to undertake such activities on our own and would require extensive manufacturing, sales and marketing expertise
that we do not currently possess and that may be difficult to obtain.

 In
addition, we could encounter significant delays in introducing our products and technology or find that the development, manufacture
or sale of products incorporating our technology would not be feasible. To the extent that we enter into development, manufacturing,
licensing, sales and marketing or other arrangements, our revenues will depend upon the performance of third parties. We cannot be certain
that any such arrangements will be successful.

 We
could face lawsuits related to our use of LBS technology or other technologies, which would be costly, and any adverse outcome could
limit our ability to commercialize our technology or products.

 We
are aware of several patents held by third parties that relate to certain aspects of light scanning displays, 3D sensing products, and
other technologies that are core to our sensor hardware. These patents could be used as a basis to challenge the validity, limit the
scope or limit our ability to obtain additional or broader patent rights of our patents. A successful challenge to the validity of our
patents could limit our ability to commercialize our technology or products incorporating our LBS technology and, consequently, materially
reduce our ability to generate revenues. Moreover, we cannot be certain that patent holders or other third parties will not claim infringement
by us with respect to current and future technology. Because U.S. patent applications are held and examined in secrecy, it is also possible
that presently pending U.S. applications could eventually be issued with claims that could be infringed by our products or our technology.

 The
defense and prosecution of a patent suit would be costly and time-consuming, even if the outcome were ultimately favorable to us. An
adverse outcome in the defense of a patent suit could subject us to significant costs, require others and us to cease selling products
incorporating our technology, require us to cease licensing our technology or require disputed rights to be licensed from third parties.
Such licenses, if available, would increase our operating expenses. Moreover, if claims of infringement are asserted against our future
co-development partners or customers, those partners or customers may seek indemnification from us for any damages or expenses they incur.

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

 Our
ability to successfully offer products incorporating our technologies and implement our business plan in a rapidly evolving market
requires an effective planning and management process. The growth in business and relationships with customers and other third
parties has placed, and will continue to place, a significant strain on our management systems and resources. We will need to
continue to improve our financial and managerial controls, reporting systems and procedures, and will need to continue to train and
manage our work force. We continue to strengthen our compliance programs, including our compliance programs
related to product certifications (in particular, certifications applicable to the automotive market), export controls, privacy and cybersecurity and anti-corruption. We may not be able to implement
improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs, systems and procedures,
which could have an adverse effect on our business, reputation and financial results.

 We
target customers that are large companies with substantial negotiating power and potentially competitive internal solutions; if we are
unable to sell our products to these customers, our prospects will be adversely affected.

 Our
potential customers, automotive OEMs in particular, are large, multinational companies with substantial negotiating power relative to
us and, in some instances, may have internal solutions that are competitive to our products. These large, multinational companies also
have significant resources, which may allow them to acquire or develop competitive technologies either independently or in partnership
with others. Accordingly, even after investing significant resources to develop a product, we may not secure a series production award
or, even after securing a series production award, may not be able to commercialize a product on profitable terms. If our products are
not selected by these large companies or if these companies develop or acquire competitive technology or negotiate terms that are disadvantageous
to us, it will have an adverse effect on our business prospects.

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

 Our
technology and products could become subject to environmental, health and safety regulations or amendments that could negatively impact
our ability to commercialize our technology and products. Compliance with any such current or new regulations would likely increase the
cost to develop and commercialize products, and violations may result in fines, penalties or suspension of production. If we become subject
to any environmental, health, or safety laws or regulations that require us to cease or significantly change our operations to comply,
our business, financial condition and operating results could be adversely affected.

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

 At various times in our history, including in
the recent past, general worldwide economic conditions have experienced downturns due to slower economic activity, concerns
about inflation, increased energy costs, decreased consumer confidence, reduced corporate profits and capital spending, and adverse business
conditions. Any continuation or worsening of global economic and financial conditions could materially adversely affect:
(i) our ability to raise, or the cost of, needed capital, (ii) demand for our current and future products, and (iii) our ability to commercialize
products. Additionally, the outbreaks of wars or infectious diseases, as recently experienced, may cause an unexpected deterioration in economic
conditions. We cannot predict the timing, strength, or duration of any economic slowdown or subsequent economic recovery, worldwide,
regionally or in the automotive or technology industries.

 Because
we have recently expanded and plan to continue expanding our international operations and using foreign suppliers and manufacturers, our operating
results could be harmed by economic, political, regulatory and other factors in foreign countries.

2021, we established an office in Germany and on January 31, 2023 we completed our acquisition of certain assets of Ibeo, with the
result that we now have more employees and operations in Germany than in the U.S. In addition, we currently use foreign suppliers
and partners and plan to continue to do so to manufacture current and future components and products, where appropriate. These
international operations are subject to inherent risks, which may adversely affect us, including, but not limited to:

 Political
 and economic instability, international terrorism and the outbreak of war, such as Russia's invasion and continuing war against
 Ukraine and the ongoing conflict in Gaza;

 High
 levels of inflation, as has historically been the case in a number of countries in Asia;

 Burdens
 and costs of compliance with a variety of foreign laws, regulations and sanctions;

 Foreign
 taxes and duties;

 Changes
 in tariff rates or other trade, tax or monetary policies;

 Changes
 or volatility in currency exchange rates and interest rates;

 Global
 or regional health crises, such as COVID-19 or other epidemics; and

 Disruptions
 in global supply chains.

 We
have recently and may in the future make acquisitions. If we fail to successfully select, execute or integrate our acquisitions, then
our business, results of operations and financial condition could be materially adversely affected.

 On
December 1, 2022, we entered into an Asset Purchase Agreement to acquire certain assets from Ibeo Automotive Systems GmbH. We expended
significant management time and effort, as well as capital, identifying, evaluating, negotiating, and executing this transaction and,
since the closing of the acquisition on January 31, 2023, we have invested additional time and capital working to integrate our new Hamburg-
and Detroit-based teams and operations. We cannot guarantee that these integration efforts will be successful, that the goals of the
acquisition will be realized, or that the increase to our operating expenses or cash requirements will be manageable.

 In
the future, we may again undertake acquisitions to add new products and technologies, acquire talent, gain new sales channels or enter
into new markets or sales territories. In addition to possible stockholder approval, we may need approvals and licenses from relevant
government authorities for the acquisitions and to comply with any applicable laws and regulations, which could result in increased delay
and costs, and may disrupt our business strategy if we fail to do so. Furthermore, acquisitions and the subsequent integration of new
assets, businesses, key personnel, customers, vendors and suppliers require significant attention from our management and could result
in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations. Acquired assets
or businesses may not generate the financial results we expect. Acquisitions could result in the use of substantial amounts of cash,
potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses
for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying
and consummating acquisitions may be significant.

 Before
our acquisition of assets from Ibeo, we had no experience with acquisitions or the integration of acquired technology and personnel.
Failure to successfully identify, complete, manage and integrate acquisitions could materially and adversely affect our business, financial
condition and results of operations and could cause our stock price to decline.

 Our
suppliers' or manufacturing partners' facilities could be damaged or disrupted by a natural disaster or labor strike,
either of which would materially affect our financial position, results of operations and cash flows.

 A
major catastrophe, such as an earthquake, monsoon, flood, infectious disease including the COVID-19 virus, or other natural
disaster, labor strike, or work stoppage at our suppliers' or manufacturers partners' facilities or our customers, could
result in a prolonged interruption of our business. A disruption resulting from any one of these events could cause significant
delays in product shipments and the loss of sales and customers, which could have a material adverse effect on our financial
condition, results of operations, and cash flows.

 If
we are unable to obtain effective intellectual property protection for our products, processes and technology, we may be unable to compete
with other companies.

 Intellectual
property protection for our products, processes and technology is important and uncertain. If we do not obtain effective intellectual
property protection for our products, processes and technology, we may be subject to increased competition. Our commercial success will
depend, in part, on our ability to maintain the proprietary nature of our key technologies by securing valid and enforceable patents
and effectively maintaining unpatented technology as trade secrets.

 We
protect our proprietary technology by seeking to obtain United States and foreign patents in our name, or licenses to third party patents,
related to proprietary technology, inventions, and improvements that may be important to the development of our business. However, our
patent position involves complex legal and factual questions. The standards that the United States Patent and Trademark Office and its
foreign counterparts use to grant patents are not always applied predictably or uniformly and can change.

 Additionally,
the scope of patents is subject to interpretation by courts and their validity can be subject to challenges and defenses, including challenges
and defenses based on the existence of prior art. Consequently, we cannot be certain as to the extent to which we will be able to obtain
patents for our new products and technology or the extent to which the patents that we already own, protect our products and technology.
Reduction in scope of protection or invalidation of our licensed or owned patents, or our inability to obtain new patents, may enable
other companies to develop products that compete directly with ours on the basis of the same or similar technology.

 We
also rely on the law of trade secrets to protect unpatented know-how and technology to maintain our competitive position. We try to protect
this know-how and technology by limiting access to the trade secrets to those of our employees, contractors and partners, with a need-to-know
such information and by entering into confidentiality agreements with parties that have access to it, such as our employees, consultants
and business partners. Any of these parties could breach the agreements and disclose our trade secrets or confidential information, or
our competitors might learn of the information in some other way. If any trade secret not protected by a patent were to be disclosed
to or independently developed by a competitor, our competitive position could be negatively affected.

 We
could be subject to significant product liability claims that could be time-consuming and costly, divert management attention and adversely
affect our ability to obtain and maintain insurance coverage.

 We
could be subject to product liability claims if any of the product applications are alleged to be defective or cause harmful effects.
For example, because some of the scanning modules incorporating our LBS technology could scan a low power beam of colored light into
the user's eye, the testing, manufacture, marketing and sale of these products involve an inherent risk that product liability
claims will be asserted against us.

 Additionally,
any misuse of our technology or products incorporating our technology by end users or third parties that obtain access to our technology,
could result in negative publicity and could harm our brand and reputation. Product liability claims or other claims related to our products
or our technology, regardless of their outcome, could require us to spend significant time and money in litigation, divert management
time and attention, require us to pay significant damages, harm our reputation or hinder acceptance of our products. Any successful product
liability claim may prevent us from obtaining adequate product liability insurance in the future on commercially desirable or reasonable
terms. An inability to obtain sufficient insurance coverage at an acceptable cost or otherwise to protect against potential product liability
claims could prevent or inhibit the commercialization of our products and technology.

 Our
operations could be adversely impacted by information technology system failures, network disruptions, or cyber security incidents.

 We
rely on information technology systems to process, transmit, store, and protect electronic data between our employees, customers, manufacturing partners
and suppliers. Our systems and the third parties we rely on for related services are vulnerable to actual or attempted cybersecurity
incidents, such as attacks by hackers, acts of vandalism, malware, social engineering, denial or degradation of service attacks, computer
viruses, software bugs or vulnerabilities, supply chain attacks, phishing attacks, ransomware attacks, misplaced or lost data, human
errors, malicious insiders or other similar events. Such systems are also susceptible to other disruptions due to events beyond our control,
including, but are not limited to, natural disasters, power loss, and telecommunications failures. Our system redundancy may be inadequate
and our disaster recovery planning may be ineffective or insufficient to account for all eventualities.

 As
security incidents have become more prevalent across industries we will need to continually examine, modify and update our systems. These
updates or improvements may require implementation costs. In addition, we may not be able to monitor and react to all developments in
a timely manner. The measures we do adopt may prove ineffective.

 Any
failure, or perceived failure, by us to comply with current and future regulatory or customer-driven privacy, data protection, and information
security requirements, or to prevent or mitigate cyber incidents, could harm our business and expose us to potential litigation, liability,
remediation costs, investigation costs, loss of revenue, damage to our reputation and loss of customers. While we maintain insurance
coverage to address certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses or all claims that
may arise, should such an event occur.

 We,
and certain of our third-party vendors, collect and store personal information in connection with human resources operations and other
aspects of our business. While we obtain assurances that any third parties we provide data to will protect this information and, where
we believe appropriate, monitor the protections employed by these third parties, there is a risk the confidentiality of data held by
us or by third parties may be compromised and expose us to liability for such breach.

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

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

 Risks
Related to Development for the Automotive Industry

 If
our products and solutions are not selected for inclusion in ADAS systems by automotive OEMs or automotive Tier 1 suppliers, our future
prospects will be materially and adversely affected.

 Automotive
OEMs and Tier 1 suppliers design and develop ADAS technology over several years, undertaking extensive testing and qualification processes
prior to selecting a product such as our lidar sensors and software for use in a particular system, product or vehicle model because such products
will function as part of a larger system or platform and must meet certain other specifications. We have invested and will continue to
invest significant time and resources to have our products considered and possibly selected by OEMs or Tier 1 suppliers for use in a
particular system, product or vehicle model, which is known as a "series production win" or a "series production award."
In the case of ADAS technology, a series production award would mean that our lidar sensor and/or ADAS solution had been selected for
use in a particular vehicle model. However, if we are unable to achieve a series production award with respect to a particular vehicle
model, we may not have an opportunity to supply our products to the automotive OEM for that vehicle model for a period of many years.
In many cases, this period can be as long as five to seven or more years. If our products are not selected by an automotive OEM or our
suppliers for one vehicle model or if our products are not successful in that vehicle model, it is unlikely that our product will be
deployed in other vehicle models of that OEM. If we fail to win a significant number of vehicle models from one or more of automotive
OEMs or their suppliers, our future business prospects will be materially and adversely affected.

 The
complexity of our products and the limited visibility into the various environmental and other conditions under which potential customers
may use the products could result in unforeseen delays or expenses from undetected defects, errors or reliability issues in hardware
or software which could reduce the market adoption of our products, damage our reputation with prospective customers, expose us to product
liability and other claims, and adversely affect our operating costs.

 Our
products are highly technical and complex and require high standards to manufacture and may experience defects, errors or reliability
issues at various stages of development. We may be unable to timely manufacture or release products, or correct problems that have arisen
or correct such problems to the customer's satisfaction. Additionally, undetected errors, defects or security vulnerabilities could
result in serious injury to the end users or bystanders of technology incorporating our products, inability of customers to commercialize
technology incorporating our products, litigation against us, negative publicity and other consequences. These risks are particularly
prevalent in the highly competitive ADAS market. These problems may also result in claims, including class actions, against us that could
be costly to defend. Our reputation or brand may be damaged as a result of these problems and potential customers may be reluctant to
buy our products, which could adversely affect our financial results.

 Adverse
conditions in the automotive industry or the global economy more generally could have adverse effects on our results of operations.

 While
we make our strategic planning decisions based on the assumption that the markets we are targeting will grow, our business is dependent,
in large part on, and directly affected by, business cycles and other factors affecting the global automobile industry and global economy
generally. Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including
consumer spending and preferences, changes in interest rates and credit availability, consumer confidence, fuel costs, fuel availability,
environmental impact, governmental incentives and regulatory requirements, and political volatility, especially in energy-producing countries
and growth markets. In addition, automotive production and sales can be affected by our automotive OEM customers' ability to continue
operating in response to challenging economic conditions and in response to labor relations issues, regulatory requirements, trade agreements
and other factors. The volume of automotive production in North America, Europe and the rest of the world has fluctuated, sometimes significantly,
from year to year, and we expect such fluctuations to give rise to fluctuations in the demand for our products. Any significant adverse
change in any of these factors may result in a reduction in automotive sales and production by our automotive OEM customers and could
have a material adverse effect on our business, results of operations and financial condition.

 Developments
in alternative technology may adversely affect the demand for our lidar technology.

 Significant
developments in alternative technologies, such as cameras and radar, may materially and adversely affect our business prospects in ways
we do not currently anticipate. Existing and other camera and radar technologies may emerge as OEMs' preferred alternative to our
solution, which would result in the loss of competitiveness of our lidar solution. Our R&D efforts may not be sufficient to adapt
to these changes in technology and our solution may not compete effectively with these alternative systems.

 ADAS
features may be delayed in adoption by OEMs, which would negatively impact our business prospects.

 The
ADAS market is fast evolving and there is generally a lack of an established regulatory framework. Vehicle regulators globally continue
to consider new and enhanced emissions requirements, including electrification, to meet environmental and economic needs as well as pursue
new safety standards to address emerging traffic risks. To control new vehicle prices, among other concerns, OEMs may need to dedicate
technology and cost additions to new vehicle designs to meet these emissions and safety requirements and postpone the consumer cost pressures
of new ADAS features. As additional safety requirements are imposed on vehicle manufacturers, our business prospects may be materially
impacted.

 Because
the lidar and ADAS markets are rapidly evolving, it is difficult to forecast customer adoption rates, demand, and selling prices for
our products and solutions.

 We
are pursuing opportunities in rapidly evolving markets, including technological and regulatory changes, and it is difficult to predict
the timing and size of the opportunities. For example, lidar-based ADAS solutions require complex technology and because these automotive
systems depend on technology from many companies, commercialization of ADAS products could be delayed or impaired on account of certain
technological components of ours or others not being ready to be deployed in vehicles. In addition, the selling prices we are able to
ultimately charge in the future for the products we are currently developing may be less than what we currently project. Our future financial
performance will depend on our ability to make timely investments in the correct market opportunities. If one or more of these markets
experience a shift in prospective customer demand, our products may not compete as effectively, if at all, and they may not be designed
into commercialized products. Given the evolving nature of the markets in which we operate, it is difficult to predict customer demand
or adoption rates for our products, selling prices or the future growth of our target markets. If demand does not develop or if we cannot
accurately forecast it, the size of our markets, inventory requirements or future financial results will be adversely affected.

 Because
lidar is new in the markets we are seeking to enter, our market forecasts may not materialize as anticipated.

 Our
market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that
may not materialize as anticipated. These forecasts and estimates relating to the expected size and growth of the markets for lidar-based
technology may prove to be inaccurate. Even if these markets experience the forecasted growth we anticipate, we may not grow our business
at similar rates, or at all. Our future growth is subject to many factors, including market adoption of our products, which is subject
to many risks and uncertainties. Accordingly, we cannot assure you that these forecasts will not be materially inaccurate.

 ITEM 1B.

 UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C.

 CYBERSECURITY

 Risk
Management and Strategy

 Our
Cybersecurity Processes

 We continue to strengthen our cybersecurity measures to safeguard our information systems based on industry standards. Our measures include policies
to promote internal compliance by our employees, policies and procedures to regularly evaluate the security of our information systems
and implementation of third-party products, including intrusion prevention and detection solutions, multifactor identification and anti-virus
software, to help detect and protect against potential cybersecurity threats. We educate our staff on cybersecurity matters with periodic
risk awareness information, phishing awareness campaigns, and training materials. Moreover, given the rapid growth of our global operations
in 2023 due to the Ibeo acquisition, and our expectations for near- and long-term strategic growth, our Information Technology, or IT,
team is prioritizing enhancements to our response system and continuity plans.

 A
key dimension to the security and effectiveness of our information system is our compliance with standards that are unique to the industries
in which we operate. For instance, it is critical that our information system achieves TISAX certification. Established by the German
Association of the Automotive Industry, Trusted Information Security Assessment Exchange, or TISAX, is a globally recognized assessment
and exchange mechanism for information security in the automotive industry. Automotive OEMs rely on the TISAX label to ensure that suppliers
and partners have a solid information security management system in place. To successfully complete the TISAX assessment process in our
German and U.S. operations, we are actively evaluating our cybersecurity measures and seeking enhancements, including engaging a third-party auditor and global standardization
of our cybersecurity training program, to ensure a comprehensive and robust system.

 We evaluate
our third-party information system providers, as well as any other provider that may have access to our data, for their maturity and
reliability, and as a matter of policy we choose to only work with reputable vendors.

 Risks
from Cybersecurity Threats

 We
have not encountered cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, including
our operations or financial condition. Any material cybersecurity incident could have a material impact on our operations by causing
a disruption to our ability to function as a global organization, by interrupting our internal and external communications and reporting
or managing our operations. Refer to "Item 1A. Risk Factors" in this annual report on Form 10-K, including "Our operations
could be adversely impacted by information technology system failures, network disruptions, or cybersecurity breaches," for additional
discussion about cybersecurity-related risks.

 Governance

 Board
of Directors and Audit Committee

 With
delegated authority from our Board of Directors and in accordance with its charter, our Audit Committee is charged with the oversight
of enterprise risk, including risk related to cybersecurity threats. Our Audit Committee Chair is expected to report regularly to our
Board of Directors about our Audit Committee's oversight of enterprise risk. Beginning in 2024, our Audit Committee Chair will
report quarterly to our Board of Directors specifically about our cybersecurity incident management and governance.

 Management,
and specifically our Chief Financial Officer, reports to our Audit Committee on cybersecurity, including initiatives and strategies,
and incident reporting and any lessons learned. Beginning in 2024, our Chief Financial Officer will make this report on a quarterly basis.
From time to time, management will also engage in informal discussions with members of the Audit Committee about our cybersecurity practices
and risks, including informing our Audit Committee Chair in a timely manner about any cybersecurity incidents that management determines
may have a significant impact on our operations or that may trigger any reporting obligations.

 Our
Audit Committee will conduct an annual review of our cybersecurity measures and the effectiveness of our risk management strategies.

 Management

 Anubhav
Verma, joined MicroVision in 2021 as our Chief Financial Officer. He is an experienced risk management professional and currently oversees
the Company's accounting and finance strategies, including risk management. Mr. Verma also oversees our IT team and, with regular
communication with the team, is responsible for approving the IT budget, hiring of IT personnel, including third-party consultants, and
approving cybersecurity processes and other cybersecurity-related matters. Although we do not currently employ a chief information security
officer, we are working with an outside consulting firm that is serving in this role and assisting our internal team with the primary
responsibility of overseeing our cybersecurity measures and risks.

 The
day-to-day responsibility for assessing, monitoring and managing our cybersecurity risks resides with our IT team. Across the IT team
we have employees who have in-depth knowledge and decades of cybersecurity industry experience, including prior experience with developing
and overseeing cybersecurity polices and processes for companies required to comply with NIST SP800-171, cybersecurity standards for
companies that store sensitive unclassified information on behalf of the United States government, and former Ibeo employees having experience
with TISAX compliance. Yet, we recognize the evolving and increasing threat that cybersecurity will have on our operations. As part of
our long-term growth strategy, we expect to establish a dedicated cybersecurity team to oversee our cybersecurity risk management.

 The
IT Team Director regularly meets with the Chief Financial Officer and as appropriate the Chief Executive Officer to discuss cybersecurity
risks. This ensures that management is informed about our current cybersecurity measures and aware of any potential risks facing our
operations. In the event of a cybersecurity incident, we have put in place a reporting structure to inform the Chief Financial Officer,
Chief Executive Officer and General Counsel promptly of any incident so that they may assess the appropriate response to the incident
and any reporting concerns that may be triggered by the incident.

 ITEM 2.

 PROPERTIES

 In
September 2021, we entered into a lease on approximately 16,681 square feet of space located in Redmond, Washington that we use primarily
for general office space. The lease provides for an initial term of 128 months that commenced November 1, 2021.

 In
September 2021, we entered into a second lease on approximately 36,062 square feet of space located in Redmond, Washington that we use
primarily for product testing and lab space. The lease provides for an initial term of 120 months and commenced on December 1, 2022.

 In
April 2022, we entered into a lease on approximately 3,533 square feet of space located in Nuremberg, Germany that we use primarily for
general office space for business development activities. The lease provides for a term of 60 months that commenced May 1, 2022.

 In
September 2022, we entered into a second lease on approximately 3,810 square feet of space located in Nuremberg, Germany that we use
primarily for product testing for engineering and development activities. The lease provides for a term of 60 months that commenced November
15, 2022.

 In
connection with our January 2023 acquisition of assets from Ibeo, we assumed three leases in Hamburg, Germany covering approximately
45,208 square feet of office space, garages to house test and demonstration vehicles, space for IT network equipment, and long-range
laser testing space.

 In
December 2023, we entered into a lease on approximately 60,000 square feet of space located in Hamburg, Germany that we will use primarily
for general office space and product testing. This lease is intended to replace the office space described in the immediately preceding
paragraph. The lease provides for a term of 60 months and will commence on the date the property is delivered to us, which is expected
to occur between August 1, 2024 and December 31, 2024.

 We
believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional
or substitute space will be available to accommodate any such expansion of our operations. For a further description of our leased properties,
see Note 11, Leases, of the notes to our consolidated financial statements included elsewhere in this Annual Report, which is incorporated
by reference in response to this item.

 ITEM 3.

 LEGAL PROCEEDINGS

 We
are subject to various claims and pending or threatened lawsuits in the normal course of business. We are not currently party to any
other legal proceedings that management believes are reasonably possible to have a material adverse effect on our financial
position, results of operations or cash flows.

 ITEM 4.

 MINE SAFETY DISCLOSURES

 Not
applicable.

 ITEM 4A.

 EXECUTIVE OFFICERS OF THE REGISTRANT

 Executive
officers are appointed by our Board of Directors and hold office until their successors are elected and duly qualified. The following
persons serve as executive officers of MicroVision, Inc.:

 Sumit
Sharma, age 50, was appointed Chief Executive Officer in February 2020 and served as Chief Operating Officer from June 2018 to February
2020, after serving as Vice President of Product Engineering and Operations since February 2017 and Vice President and Senior Director
of Operations since September 2015. Prior to MicroVision, from April 2015 to September 2015, he was a Product Development and Operations
consultant at BlueMadison Consulting. From November 2013 to March 2015, he was the Senior Director, Advanced Manufacturing Operations
and Technology Development at Jawbone. From March 2011 to October 2013, he was the Head of Manufacturing Operations for project GLASS
at Google. Mr. Sharma has extensive experience in optics, wearable technology, product development and qualification for automotive industry.
Mr. Sharma also has deep experience in global operations and developing strategic partnerships. A patent holder, Mr. Sharma received
his baccalaureate degree in engineering from New Jersey Institute of Technology.

 Anubhav
Verma, age 38, joined MicroVision in November 2021 as Chief Financial Officer. Prior to MicroVision, from October 2016 to November 2021,
he led several growth initiatives including M&A and Capital Market transactions as Senior Vice President Finance of Exela Technologies.
From November 2013 to October 2016, he was an Investment Professional of Hands On Global Management driving end-to-end M&A deals including
post-merger integration along with several rounds of capital market financings. From July 2009 to October 2013, he advised several Fortune
500 companies as an Investment Banker at Credit Suisse in their New York and Mumbai offices. Mr. Verma has extensive experience in Mergers
and Acquisitions (M&A), Capital Markets and Strategic Finance roles for publicly listed and privately held companies. Mr. Verma received
a Bachelor of Technology degree in engineering and a Masters of Technology degree in engineering from the Indian Institute of Technology,
Bombay.

 Drew
Markham, age 56, joined MicroVision in June 2021 as Vice President, General Counsel and Secretary. Before joining MicroVision, from January
2017 through June 2021, Ms. Markham was President at Avis, a social purpose corporation, where she was a legal consultant to
publicly traded technology companies. From January 2013 to December 2016, she was Vice President, Deputy General Counsel & Assistant
Secretary at RealNetworks, Inc. From June 1999 to December 2012, she was an attorney with Wilson Sonsini Goodrich & Rosati. Ms. Markham
received her Juris Doctor degree from the University of Washington School of Law and her Bachelor of Science degree in Accounting from
the University of Florida.

 PART
II.

 ITEM 5.

 MARKET
 FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market
Information

 Our
common stock began trading publicly on August 27, 1996. Our common stock trades on The Nasdaq Global Market under the ticker symbol "MVIS."
We have never declared or paid cash dividends on our common stock. We currently anticipate that we will retain all future earnings to
fund the operations of our business and do not anticipate paying dividends on the common stock in the foreseeable future.

 As
of February 26, 2024, there were approximately 144 holders of record of 195,267,385 shares of common stock outstanding. As many of our shares of
common stock are held by brokerages and institutions on behalf of shareholders, we are unable to estimate the total number of beneficial
holders of our common stock represented by these record holders.

 Stock
Performance Graph

 This
performance graph shall not be deemed to be "soliciting material" or "filed" or incorporated by reference in
future filings with the Securities and Exchange Commission, or subject to the liabilities of Section 18 of the Securities Exchange Act
of 1934, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 The
following graph shows a comparison from 2018 through 2023 of the cumulative total return for our common stock, the Russell 2000 Index
and the Dow Jones US Electronic and Electrical Equipment Index. Our prior annual reports had included cumulative total return from the
NASDAQ Electrical Components Index, however it is not included on this graph because the index has been discontinued. The comparisons
in the graph are historical and are not intended to forecast or be indicative of possible future performance of our common stock.

 Recent
Sales of Unregistered Securities

 On
November 21, 2023, pursuant to subscription agreements dated as of November 14, 2023, between us and each of the purchasers, we sold
in the aggregate 50,761 shares of our common stock, par value $0.001 per share ("Common Stock"), at $1.97 per share, for
an aggregate purchase price of approximately $0.1 million. The purchasers consisted of our Chief Executive Officer, Chief Financial Officer, General
Counsel and certain members of our Board of Directors.

 On
March 13, 2023, pursuant to a subscription agreement dated as of March 13, 2023, we sold to our Chief Executive Officer 100,000 shares
of Common Stock, at $2.14 per share, for an aggregate purchase price of $0.2 million.

 The
sales of our Common Stock described above were each undertaken in reliance upon an exemption from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2).

 ITEM 6.

 RESERVED

 ITEM 7.

 MANAGEMENT'S
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
 OPERATIONS

 The
following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated
financial statements and the related notes included in Part II, Item 8 of this Form 10-K. The following discussion focuses on the results
of our operations for the year ended December 31, 2023 compared to the year ended December 31, 2022. Similar discussion of the results
of our operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 can be found in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K
for the year ended December 31, 2022.

 Overview

 Currently,
our development and commercialization efforts are focused primarily on automotive lidar and advanced driver-assistance systems
(ADAS) markets where we can deliver safe mobility at the speed of life. Our integrated solution combines our lidar sensors,
including our MEMS-based dynamic-range and flash-based short/mid-range, with perception software, to be integrated on our custom
ASIC, targeted for sale to premium automotive OEMs and Tier 1 automotive suppliers.

 Although
automotive lidar is our priority now, we have developed solutions for Augmented Reality, Interactive Displays, and Consumer Lidars.
In the recent past, our strategy had been to sell AR displays or components, Interactive Displays, or Consumer Lidars to
original equipment manufacturers (OEMs) and original design manufacturers (ODMs) for incorporation into their products.

 We
have incurred substantial losses since inception and expect to incur a significant loss during the fiscal year ending December 31, 2024.
We have funded 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. There can be no
assurance that additional capital will be available or that, if available, it will be available on terms acceptable to us on a timely
basis. We cannot be certain that we will succeed in commercializing our technology or products.

 Key
accounting policies and estimates

 Our
discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial
statements requires us to make estimates and judgments that materially affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent liabilities. We evaluate our estimates on a continuous basis. We base our estimates on
historical data, terms of existing contracts, our evaluation of trends in the consumer display and 3D sensing industries, information
provided by our current and prospective customers and strategic partners, information available from other outside sources and on various
other assumptions we believe to be reasonable under the circumstances. The results form the basis for making judgments regarding the
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.

 We
believe the following key accounting policies require significant judgments and estimates used in the preparation of our consolidated
financial statements.

 Business
combination

 Our
business combination is accounted for under the acquisition method. We allocate the fair value of purchase consideration to the tangible
and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the
fair value of the underlying net assets acquired and liabilities assumed over the purchase consideration is included in bargain purchase
gain in the Consolidated Statement of Operations. Such valuations require management to make significant estimates and assumptions, especially
with respect to intangible assets.

 Intangible
assets

 Our
intangible assets consist of acquired technology from the January 2023 Ibeo asset purchase and purchased patents. The estimated fair
value of acquired technology was calculated through the income approach using the multi-period excess earnings and relief from royalty
methodologies. The intangible assets are amortized using the straight-line method over their estimated period of benefit, ranging from
one to seventeen years. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying
value may not be recoverable. Recoverability of these assets is measured by comparison of their carrying values to the projected undiscounted
net cash flows associated with the related intangible assets or group of assets over their remaining lives. Measurement of an impairment
loss for our intangible assets is based on the difference between the fair value of the asset and its carrying value.

 Share-based compensation

 We issue share-based compensation to employees in the form of stock options,
restricted stock units (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 and non-executive
PSUs is determined by the closing price of our common stock on the grant date or the period end date for the awards that are being measured
by the service inception date. For performance-based awards, expense is recognized when it is probable the performance criteria will be
achieved. If the likelihood becomes improbable that the performance criteria will be achieved, the expense is reversed. Executive PSUs
that have market-based performance criteria 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

 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.

 Results
of Operations

 YEAR
ENDED DECEMBER 31, 2023 COMPARED TO YEAR ENDED DECEMBER 31, 2022.

 2023

 2022

 $

 %

 (In

 $
 7,259

 $

 6,595

 993.2

 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 recognize revenue either at a point in time, or over time, depending
upon the characteristics of the individual contract. If control of the deliverable(s) transfers over time, the revenue is recognized in proportion
to the transfer of control. If control passes to the customer only upon completion and transfer of the asset, revenue is recognized at
the completion of the contract.

 In
April 2017, we signed a contract with Microsoft Corporation to develop an LBS display system; the contract terminated effective
December 31,2023. Under the agreement, we received an upfront payment of $10.0 million. In March 2020, Microsoft took over
production of components that we had been producing for them. As a result, beginning in March 2020, we earned a royalty on each
component shipped approximately equal to the gross profit we would have earned if we had continued to produce and ship the
components. The increase in revenue for the year ended December 31, 2023 compared to the same period in 2022 was primarily due to
the recognition of the remaining $4.6 million of revenue as we believe the likelihood of further deliveries under the contract is remote. We do not expect to recognize any
further revenue in connection with this contract.

 The
remaining increase in revenue during the twelve months ended December 31, 2023 compared to the prior year was primarily a result of
customer contracts assumed in connection with our January 2023 acquisition of assets from Ibeo.

 The revenue backlog during the twelve months ended December 31, 2023 was $3.1 million as compared to $0.0 million
in 2022.

 Cost
of revenue

 %
 of

 %
 of

 2023

 2022

 $

 %

 (In

 Cost of

 $
 2,772

 38.2

 $

 n/a

 $
 2,672

 2,672.0

 Cost
of revenue includes the direct and allocated indirect costs of products and services sold to customers. Direct costs include labor, materials,
reserves for estimated warranty expenses, and other costs incurred directly, or charged to us by our contract manufacturers, in the manufacture
of these products. Indirect costs include labor, overhead, and other costs associated with operating our manufacturing capabilities. Overhead includes the costs of procuring, inspecting and storing material, facility and other
costs, and is allocated to cost of revenue based on the proportion of indirect labor which supported revenue activities.

 Cost
of revenue can fluctuate significantly from period to period, depending on the product mix and volume, the level of overhead expense
and the volume of direct material purchased. The increase in cost of revenue for the twelve months ended December 31, 2023 compared to
the same period in 2022 was primarily due to the amortization of intangible assets obtained in the acquisition of Ibeo assets of $1.4
million. The increase in 2023 was also driven by materials and labor associated with the corresponding increase in revenue this year.

and development expense

 2023

 2022

 $

 %

 (In

 and development expense

 $
 56,707

 $
 30,413

 $
 26,294

 86.5

and development expense consists of compensation related costs of employees and contractors engaged in internal research and product
development activities, direct material to support development programs, laboratory operations, outsourced development and processing
work, and other operating expenses. We assign our research and development resources based on the business opportunity of the available
projects, the skill mix of the resources available and the contractual commitments we have made to our customers. We believe that a substantial
level of continuing research and development expenses will be required to further develop our scanning technology.

 The
increase in research and development expense during the year ended December 31, 2023 compared to the same period in 2022 was primarily
due to the Ibeo acquisition that resulted in higher salary and benefits expenses as a result of increased headcount of $21.2 million,
increased depreciation expenses of $1.6 million, increased facilities and information technology expenses of $1.6 million compared to
the prior year.

 Sales,
marketing, general and administrative expense

 2023

 2022

 $

 %

 (In

 Sales,
 marketing, general and administrative expense

 $
 36,689

 $
 24,041

 $
 12,648

 52.6

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

 The
increase in sales, marketing, general and administrative expense during the year ended December 31, 2023 as compared to the same period
in 2022 was primarily due to the Ibeo acquisition that resulted in increased salary and benefits expenses as a result of increased headcount
of approximately $7.0 million, increased professional services of $1.3 million incurred in connection with the Ibeo acquisition, increased non-cash
compensation expense of $1.1 million, increased depreciation expense of $1.1 million and increased purchased labor of $0.7 million.

 Bargain
purchase gain, net of tax

 2023

 2022

 $ change

 % change

 (In thousands)

 Bargain purchase gain, net of tax

 $
 1,669

 $
 -

 $
 1,669

 -

the twelve months ended December 31, 2023, we recorded a bargain purchase gain related to the acquisition of assets from Ibeo. The bargain
purchase gain represents the excess of the fair value of the underlying net assets acquired and liabilities assumed over the purchase
consideration paid in the transaction.

 Other
income (expense), net

 2023

 2022

 $ change

 % change

 (In thousands)

 Other income (expense), net

 $
 5,510

 $

 $
 4,711

 589.6

 The
increase in other income during the twelve months ended December 31, 2023 compared to the same period in 2022 is due to a payment of
$3.0 million as an incentive to terminate our previous building lease. The remainder of the increase is primarily due to income from
investment securities.

 Income
taxes

the years ended December 31, 2023 and 2022, we recognized tax expense of $1.1 million and $0.0 million, respectively, mainly related
to income in foreign jurisdictions offset, partially offset by a deferred income tax benefit generated by the reduction to a deferred
tax liability created as a result of the acquisition of Ibeo in Q2 2023. The change in income tax expense during the year ended December
31, 2023 was largely the result of profitability in foreign jurisdictions related to the Ibeo acquisition. As of December 31, 2023, we
had net operating loss carryforwards of approximately $463.1 million for federal income tax reporting purposes. In addition, we have
research and development tax credits of $10.1 million. During 2023, $23.1 million federal net operating losses and $0.3 million general
business credits expired unused. A majority of the net operating loss carryforwards and research and development credits available to
offset future taxable income, if any, will expire in varying amounts from 2024 to 2043, if not previously used.

 In
certain circumstances, as specified in the Internal Revenue Code, a 50% or more ownership change by certain combinations of our shareholders
during any three-year period would result in a limitation on our ability to use a portion of our net operating loss carryforwards.

 We
recognize interest accrued and penalties related to unrecognized tax benefits in tax expense. We did not have any unrecognized tax benefits
at December 31, 2023 or at December 31, 2022.

 Liquidity
and Capital Resources

 We
have incurred significant losses since inception. We have funded 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 December 31, 2023, we had $45.2 million in cash and cash equivalents and $28.6 million in investment securities.
We also have approximately $19.0 million availability left on our existing $35.0 million ATM facility that was put in place in the third quarter of 2023. Based
on our current operating plan for 2024 and beyond, we anticipate that we have sufficient cash and cash equivalents to fund our operations
for at least the next 12 months.

 Cash
used in operating activities totaled $67.1 million during 2023, compared to $38.0 million in 2022. Cash used in operating activities
resulted primarily from cash used to fund our net loss, after adjusting for non-cash charges such as share-based compensation, depreciation
and amortization charges and changes in operating assets and liabilities. The changes in cash used in operating activities were primarily
attributed to the Ibeo acquisition that resulted in increased operating expenses to support the development of our lidar sensors. During
the second half of 2023, we made a payment of $3.1 million to our contract manufacturing partner in connection with the buildup of MOVIA
sensor inventory for direct sales to both automotive and non-automotive customers. Moreover, we expect to make additional payments to
this partner totaling approximately $6.2 million over the first six months of 2024 in line with agreed-upon deliveries.

 Investing

 Cash
provided by investing activities totaled $21.8 million in 2023, compared to cash used in investing activities of $38.1 million in
2022. During the twelve months ended December 31, 2023, we purchased short-term investment securities totaling $41.7 million and
sold short-term investment securities totaling $76.7 million. During the twelve months ended December 31, 2022, we purchased
short-term investment securities totaling $90.2 million and sold short-term investment securities totaling $60.6 million. Purchases
of property and equipment during the twelve months ended December 31, 2023 and 2022 were $2.0 million and $4.4 million,
respectively. During the twelve months ended December 31, 2023, we made payments totaling $11.2 million related to the acquisition
of Ibeo assets. We expect to make the final payment related to the Ibeo acquisition of approximately $3.0 million and we expect
restricted cash of $3.3 million to be released from escrow to Ibeo during the first quarter of 2024. In 2022, operating funds
advanced to Ibeo during the pre-closing period totaling $4.1 million were included in cash used in investing activities.

 Financing

 Cash
provided by financing activities totaled $72.4 million in 2023, compared to $14.3 million in 2022. During the year ended December 31,
2022, we made principal payments under long-term debt totaling $0.4 million related to the loan under the Paycheck Protection Program
of the 2020 CARES Act (PPP) administered by the Small Business Administration compared to $0.5 million in the prior year. Proceeds received
from stock option exercises totaled $0.3 million during 2023 compared to $0.7 million during 2022.

 The
following is a list of our financing activities during 2023 and 2022.

 In
 August 2023, we entered into a $35.0 million ATM equity offering agreement with Craig-Hallum. Under the agreement, we are able, at
 our discretion, to offer and sell shares of our common stock having an aggregate value of up to $35.0 million through Craig-Hallum.
 As of December 31, 2023, we had completed sales under such sales agreement, having sold 6.1 million shares for net proceeds of $15.5
 million. As of December 31, 2023, we have approximately $19.0 million available under this ATM agreement.

 In
 June 2023, we entered into a $45.0 million ATM equity offering agreement with Craig-Hallum. Under the agreement, we were able, at
 our discretion, to offer and sell shares of our common stock having an aggregate value of up to $45.0 million through Craig-Hallum.
 As of June 30, 2023, we had completed sales under such sales agreement, having sold 10.9 million shares for net proceeds of $43.9
 million. No further shares are available for sales under this agreement.

 In
 June 2021, we entered into a $140.0 million ATM equity offering agreement with Craig-Hallum. Under the agreement we were able, at
 our discretion, to offer and sell shares of our common stock having an aggregate value of up to $140.0 million through Craig-Hallum.
 As of December 31, 2022, we had issued 8.3 million shares of our common stock for net proceeds of $81.8 million under this ATM
 agreement. During the quarter ended March 31, 2023, we issued 5.0 million shares of our common stock for net proceeds of $12.5
 million under the agreement. The sales agreement was terminated in June 2023.

 Our
capital requirements will depend on many factors, including, but not limited to, the rate at which OEMs and other potential customers
introduce products incorporating our technology and the market acceptance and competitive position of such products. Our ability to raise
capital will depend on numerous factors, including the following:

 Perceptions
 of our ability to continue as a going concern;

 Market
 acceptance of products incorporating our technology;

 Changes
 in evaluations and recommendations by any securities analysts following our stock or our industry generally;

 Announcements
 by other companies in our industry;

 Changes
 in business or regulatory conditions;

 Announcements
 or implementation by our competitors of technological innovations or new products;

 The
 status of particular development programs and the timing of performance under specific development agreements;

 Economic
 and stock market conditions;

 The
 cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

 Our
 ability to establish cooperative development or licensing arrangements; or

 Other
 factors unrelated to our company or industry.

 If
we are successful in establishing OEM co-development arrangements, we may receive full or partial funding for certain non-recurring engineering
costs for technology development and/or product development. Nevertheless, we expect our capital requirements to remain high as we expand
our activities and operations with the objective of commercializing our technology.

 Contractual
obligations

 The
following table lists our contractual obligations as of December 31, 2023 (in thousands):

 Payments
 Due By Period

 Contractual Obligations

 <
 1 year

 1-3
 years

 3-5
 years

 >
 5 years

 Total

 Open purchase obligations *

 $
 10,414

 $

 $
 -

 $
 -

 $
 10,734

 Minimum payments under finance leases

 -

 -

 -

 -

 -

 Minimum payments under operating
 leases +

 2,951

 6,819

 6,686

 8,527

 24,983

 $
 13,365

 $
 7,139

 $
 6,686

 $
 8,527

 $
 35,717

 *
Open purchase obligations represent commitments to purchase materials, capital equipment, maintenance agreements and other goods used
in the normal operation of our business.

 +
Minimum payments under operating leases included payments associated with the forward-starting lease of MicroVision GmbH with a target
commencement date of August 1, 2024.

 Recent
accounting pronouncements

 See
Note 2, "Summary of significant accounting policies," in the Notes to the consolidated financial statements found in Part
II, Item 8 of this Form 10-K.

 ITEM
 7A.

 QUANTITATIVE AND QUALITATIVE
 DISCLOSURES ABOUT MARKET RISK

 Interest
Rate and Market Liquidity Risks

 As
of December 31, 2023, all of our cash and cash equivalents have variable interest rates; however, we believe our exposure to market and
interest rate risks is not material. Due to the generally short-term maturities of our investment securities, we believe that the market
risk arising from our holdings of these financial instruments is not significant. We do not believe that inflation has had a material
effect on our business, financial condition or results of operations; however, we do anticipate our labor costs to increase as a result
of inflationary pressures.

 Our
investment policy generally directs that the investment managers should select investments to achieve the following goals: principal
preservation, adequate liquidity, and return. As of December 31, 2023, our cash and cash equivalents are comprised of short-term highly
rated (A rated securities and above) money market savings accounts and our short-term investments are comprised of highly rated corporate
and government debt securities (A rated securities and above). The values of cash and cash equivalents and investment securities, available-for-sale
as of December 31, 2023, are as follows (in thousands):

 Percent

 Cash and cash equivalents

 $
 45,167

 61.2
 %

 Less than one year

 38.8

 $
 73,778

 100.0
 %

 Foreign
Exchange Rate Risk

 Our
major contract and collaborative research and development agreements, product sales, and licensing activity payments are currently made
in U.S. dollars or Euros. Changes in the relative value of the U.S. dollar to the Euro and other currencies may affect revenue and other
operating results as expressed in U.S. dollars. In addition, our international subsidiary financial statements are denominated in Euros.
As such, the consolidated financial statements will continue to remain subject to the impact of foreign currency translation as our international
operations continue to expand. We may enter into foreign currency hedges to offset material exposure to currency fluctuations when we
can adequately determine the timing and amounts of the exposure.

 ITEM
 8.

 FINANCIAL STATEMENTS AND
 SUPPLEMENTARY DATA

TO CONSOLIDATED FINANCIAL STATEMENTS

 Page

 Report
 of Independent Registered Public Accounting Firm (Moss Adams LLP, Seattle, Washington, PCAOB ID: 659)

 Balance Sheets as of December 31, 2023 and 2022

 Statements of Operations for the years ended December 31, 2023, 2022 and 2021

 Statements of Comprehensive Loss for the years ended December 31, 2023, 2022 and 2021

 Statements of Shareholders' Equity (Deficit) for the years ended December 31, 2023, 2022 and 2021

 Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021

 Notes
 to Consolidated Financial Statements

 Report
of Independent Registered Public Accounting Firm

 To
the Shareholders and the Board of Directors of

Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of MicroVision, Inc. (the "Company") as of December 31, 2023 and
2022, the related consolidated statements of operations, comprehensive loss, shareholders' equity (deficit) and cash flows for
each of the three years in the period ended December 31, 2023, and the related notes and schedule (collectively referred to as the "consolidated
financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States
of America.

 We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"),
the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control
- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February
29, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

 Basis
for Opinion

 These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.

 Critical
Audit Matters

 The critical
audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required
to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements,
taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.

 Business
Combination – Valuation of Acquired Intangible Assets

 As described in Note 3 to the
consolidated financial statements, the Company acquired certain net assets of Ibeo Automotive Systems (Ibeo), a lidar hardware and
software provider based in Hamburg, Germany for total consideration of approximately EUR 20.0 million or $21.6 million, subject to
settlement of working capital adjustments. The acquisition was accounted for as a business combination and included acquired intangible assets.

 We identified the business combination, and in particular, the valuation of acquired intangible assets, as a critical
audit matter because determining the fair value of acquired intangible assets required management to use complex valuation models based
on underlying assumptions to estimate future cash flows. This, in turn, required significant and subjective auditor judgment, including
the need to involve fair value specialists, in performing procedures and evaluating audit evidence obtained.

 The
primary procedures we performed to address this critical audit matter included:

 Testing
the design, implementation, and operating effectiveness of internal controls over the valuation of acquired
intangible assets, including controls surrounding the valuation methodology and selection of assumptions used in the determination
of the fair value of acquired intangible assets.

With the assistance of valuation specialists, testing the reasonableness of the valuation methodology, discount rate,
royalty rate, contributory asset rate, internal rate of return, and weighted average cost of capital used to estimate the fair value
of acquired intangible assets.

 Testing
the significant assumptions used to estimate future cash flows by testing the underlying data to supporting the assumptions and
comparing the assumptions to industry trends and subsequent results to evaluate the reasonableness of management's estimates
as of the date of the acquisition.

 /s/
 Moss Adams LLP

 Seattle,
Washington

 February
29, 2024

 We
have served as the Company's auditor since 2012.

Inc.

Balance Sheets

 (In

 2023

 2022

 31,

 2023

 2022

 Current assets

 Cash and cash
 equivalents

 $
 45,167

 $
 20,536

 Investment securities,
 available-for-sale

 Restricted cash, current

 3,263

 -

 Accounts receivable, net
 of allowances

 -

 3,874

 1,861

 Advance to Ibeo

 -

 4,132

 Other current assets

 4,890

 2,306

 Total current assets

 86,754

 91,008

 Property and equipment,
 net

 9,032

 6,830

 Operating lease right-of-use
 asset

 13,758

 14,579

 Restricted cash, net of current portion

 1,418

 Intangible assets, net

 17,235

 Other assets

 1,895

 1,086

 Total assets

 $
 129,635

 $
 114,996

 Liabilities and shareholders'

 Current liabilities

 Accounts payable

 $
 2,271

 $
 2,061

 Accrued liabilities

 8,640

 2,058

 Accrued liability for Ibeo
 business combination

 6,300

 -

 Contract liabilities

 4,601

 Current portion of operating
 lease liability

 2,323

 1,846

 Current portion of finance
 lease obligations

 -

 Other current liabilities

 Total current liabilities

 20,503

 11,426

 Operating lease liability,
 net of current portion

 12,714

 13,829

 Other long-term liabilities

 -

 Total liabilities

 33,831

 25,255

 Commitments and contingencies (Note 13)

 -

 -

 Shareholders' equity

 Preferred stock, par value
 $ 0.001; 25,000 shares authorized; zero and zero shares issued and outstanding, respectively

 -

 -

 Common stock, par value
 $ 0.001; 310,000 shares authorized; 194,736 and 170,503 shares issued and outstanding at December 31, 2023 and 2022, respectively

 Additional paid-in capital

 860,765

 772,221

 Accumulated other comprehensive
 gain (loss)

 ( 127
)

 Accumulated deficit

 ( 765,366
)

 ( 682,524
)

 Total shareholders'

 95,804

 89,741

 Total liabilities and shareholders'

 $
 129,635

 $
 114,996

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

Inc.

Statements of Operations

 (In
thousands, except per share data)

 2023

 2022

 2021

 Year

 2023

 2022

 2021

 $
 7,259

 $

 $
 2,500

 Cost of revenue

 2,772

 Gross profit

 4,487

 2,498

 Research and development expense

 56,707

 30,413

 24,111

 Sales, marketing, general and administrative

 36,689

 24,041

 22,256

 Gain on disposal of fixed assets

 ( 34
)

 -

 -

 Total operating expenses

 93,362

 54,454

 46,367

 Loss from operations

 ( 88,875
)

 ( 53,890
)

 ( 43,869
)

 Bargain purchase gain, net of tax

 1,669

 -

 -

 Gain on debt extinguishment

 -

 -

 Other income (expense), net

 5,510

 ( 23
)

 Net loss before taxes

 $
 ( 81,696
)

 $
)

 $
)

 Income tax expense

 ( 1,146
)

 -

 -

 $
)

 $
)

 $
)

 Net loss per share - basic and diluted

 $
 ( 0.45
)

 $
 ( 0.32
)

 $
 ( 0.27
)

 Weighted-average shares outstanding - basic
 and diluted

 182,802

 165,958

 160,662

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

Inc.

Statements of Comprehensive Loss

 (In

 2023

 2022

 2021

 Year

 2023

 2022

 2021

 $
)

 $
)

 $
)

 Other comprehensive loss

 Unrealized gain (loss)
 on investment securities, available-for-sale

 ( 108
)

 ( 19
)

 Unrealized gain on translation

 -

 -

 Comprehensive loss

 $
 ( 82,505
)

 $
 ( 53,199
)

 $
 ( 43,219
)

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

Inc.

Statements of Shareholders' Equity (Deficit)

 (In

 Shares

 Par
 value

 capital

 receivable

 comprehensive
 loss

 deficit

 (deficit)

 Additional

 Total

 Common
 Stock

 paid-in

 Subscriptions

 other

 shareholders'

 Shares

 Par
 value

 capital

 receivable

 comprehensive
 loss

 deficit

 (deficit)

 Balance at December 31, 2020

 152,926

 601,224

 ( 6,135
)

 -

 ( 586,233
)

 9,009

 Share-based compensation expense

 2,365

 15,282

 -

 -

 -

 15,284

 Exercise of options

 1,518

 2,652

 -

 -

 -

 2,654

 Sales of common stock, net of issuance costs

 7,554

 122,884

 6,135

 -

 -

 129,026

 -

 -

 -

 -

 -

)

)

 Other comprehensive loss

 -

 -

 -

 -

 ( 19
)

 -

 ( 19
)

 Balance at December 31, 2021

 164,363

 742,042

 -

 ( 19
)

 ( 629,433
)

 112,754

 Share-based compensation expense

 1,294

 15,460

 -

 -

 -

 15,461

 Exercise of options

 -

 -

 -

 Sales of common stock, net of issuance costs

 4,321

 13,994

 -

 -

 13,999

 -

 -

 -

 -

 -

)

)

 Other comprehensive loss

 -

 -

 -

 -

 ( 108
)

 -

 ( 108
)

 Balance at December 31, 2022

 170,503

 $

 $
 772,221

 $
 -

 ( 127
)

 $
 ( 682,524
)

 $
 89,741

 Balance

 170,503

 $

 $
 772,221

 $
 -

 ( 127
)

 $
 ( 682,524
)

 $
 89,741

 Share-based compensation expense

 1,946

 16,139

 -

 -

 -

 16,141

 Exercise of options

 -

 -

 -

 -

 Sales of common stock, net of issuance costs

 22,096

 72,230

 -

 -

 -

 72,252

 -

 -

 -

 -

 -

)

)

 Other comprehensive gain

 -

 -

 -

 -

 -

 Other comprehensive gain (loss)

 -

 -

 -

 -

 -

 Balance at December 31, 2023

 194,736

 $

 $
 860,765

 $
 -

 $
 ( 765,366
)

 $
 95,804

 Balance

 194,736

 $

 $
 860,765

 $
 -

 $
 ( 765,366
)

 $
 95,804

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

Inc.

Consolidated Statements of Cash Flows

 (In

 2023

 2022

 2021

 Year

 2023

 2022

 2021

 Cash flows from operating

 $
)

 $
)

 $
)

 Adjustments to reconcile
 net loss to net cash used in operations:

 Depreciation and amortization

 7,864

 2,246

 1,464

 Impairment of property
 and equipment

 Bargain purchase gain

 ( 1,669
)

 -

 -

 Gain on disposal
 of fixed assets

 ( 34
)

 Share-based compensation

 16,141

 15,461

 15,284

 Non-cash interest income

 -

 -

 ( 10
)

 Inventory write-downs

 Net accretion of premium
 on short-term investments

 ( 1,275
)

 Gain on debt extinguishment

 -

 -

 ( 692
)

 Change in:

 Accounts receivable

 ( 949
)

 -

 -

 ( 892
)

 ( 168
)

 ( 1,828
)

 Other current and non-current assets

 ( 2,096
)

 ( 217
)

 ( 2,552
)

 Accounts payable

 ( 1,737
)

 2,520

 Accrued liabilities

 6,571

 Contract liabilities and other current liabilities

 ( 6,452
)

 ( 293
)

 ( 1,319
)

 Operating lease liabilities

 ( 2,500
)

 ( 1,280
)

 ( 762
)

 Other long-term liabilities

 -

 -

 Net cash used in operating activities

 ( 67,090
)

 ( 38,019
)

 ( 29,404
)

 Cash flows from investing

 Sales of investment securities

 76,700

 60,576

 -

 Purchases of investment

 ( 41,710
)

 ( 90,158
)

 ( 32,825
)

 Purchases of property and
 equipment

 ( 1,935
)

 ( 4,359
)

 ( 2,493
)

 Advance to Ibeo

 -

 ( 4,132
)

 -

 Cash paid for Ibeo business
 combination

 ( 11,233
)

 -

 -

 Net cash provided by (used
 in) investing activities

 21,822

 ( 38,073
)

 ( 35,318
)

 Cash flows from financing

 Principal payments under
 finance leases

 ( 21
)

 ( 26
)

 ( 28
)

 Principal payments under
 long-term debt

 -

 ( 392
)

 ( 488
)

 Payments received on subscriptions
 receivable

 -

 -

 6,135

 Proceeds from stock option
 exercises

 2,654

 Net proceeds from issuance
 of common stock

 72,284

 13,999

 122,891

 Net cash provided by financing

 72,438

 14,307

 131,164

 Effect of exchange rate changes on cash and
 cash equivalents

 -

 -

 Change in cash, cash equivalents, and restricted
 cash

 27,437

 ( 61,785
)

 66,442

 Cash, cash equivalents, and restricted cash
 at beginning of period

 21,954

 83,739

 17,297

 Cash, cash equivalents, and restricted cash
 at end of period

 $
 49,391

 $
 21,954

 $
 83,739

 Supplemental schedule of
 non-cash investing and financing activities

 Non-cash additions to property
 and equipment

 $
 -

 $

 $

 Accrued liability for Ibeo business combination

 $
 6,300

 $
 -

 $
 -

 Acquisition of right-to-use
 asset operating lease

 $
 1,338

 $
 10,184

 $
 5,097

 Accrued financing fees

 $
 ( 32
)

 $
 -

 $
 -

 Currency gain in
 translation

 $

 $
 -

 $
 -

 Unrealized gain in investment securities, available-for-sale

 $

 $
 ( 108
)

 $
 ( 19
)

 The
following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of December 31, 2023, 2022 and
2021:

 2023

 2022

 2021

 Year

 2023

 2022

 2021

 Cash and cash equivalents

 $
 45,167

 $
 20,536

 $
 82,647

 Restricted cash

 4,224

 1,418

 1,092

 Cash, cash equivalents
 and restricted cash

 $
 49,391

 $
 21,954

 $
 83,739

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

Inc.

 Notes
to Consolidated Financial Statements

 For
the year ended December 31, 2023

 1.
 THE COMPANY AND LIQUIDITY

Inc. is developing and commercializing lidar sensors and software to be used in automotive safety and autonomous driving
applications. Our dynamic-range lidar sensor uses our pioneering laser beam scanning (LBS) technology. Our LBS technology is based
on our patented expertise in systems that include micro-electrical mechanical systems (MEMS), laser diodes, opto-mechanics,
electronics, algorithms and software, and how those elements are packaged into a small form factor. This lidar sensor also utilizes
edge computing and machine intelligence as part of the solution. Though automotive lidar is our priority now, we have developed
solutions for Augmented Reality, Interactive Displays, and Consumer Lidars.

 In
the recent past, our strategy had been to sell AR displays or components, Interactive Displays, or Consumer Lidars to OEMs
and ODMs for incorporation into their products. In fiscal years 2021 and 2022, our sole customer was Microsoft Corporation; in 2023, this customer accounted for a significant portion of our total revenue. Our arrangement with this
customer generated royalty income; however, the volume of sales and resulting royalties from that arrangement were not significant.
A few years ago, we shifted our focus to increase the value of the Company by completing development of our 1st Generation long-range lidar
module to a level that would be ready to scale in the market. We believe our technology and designs for automotive lidar can be
successful in the market, and our solutions will have features and performance that exceed those of competitors and will provide a
sustainable strategic advantage in the market.

 We
completed the acquisition of Ibeo Automotive Systems GmbH ("Ibeo") assets on January 31, 2023 pursuant to the terms and subject
to the conditions of the Asset Purchase Agreement, dated December 1, 2022, and amended as of January 31, 2023, by and between our wholly
owned subsidiary, MicroVision GmbH organized under the laws of The Federal Republic of Germany, and Ibeo for a purchase price of EUR
 15.0 million, or approximately $ 16.3 million, subject to potential reduction on the terms set forth in the Asset Purchase Agreement.
Pursuant to the Asset Purchase Agreement, the purchase price also included advanced funds to Ibeo so that it could continue its operations
while in insolvency during the period between signing and closing. Specifically, we advanced to Ibeo EUR 3.9 million, or approximately
$ 4.1 million in December 2022; EUR 2.7 million, or approximately $ 3.0 million in January 2023; and EUR 0.6 million, or approximately
$ 0.7 million in February 2023 shortly after the closing. These fund advances included amounts related to headcount reductions carried
out by Ibeo management, decreasing the number of employees to transfer in connection with the acquisition to approximately 250 employees.
These headcount reduction costs of EUR 2.3 million, or approximately $ 2.5 million, were reimbursed to MicroVision by way of deduction
from the purchase price in accordance with the Asset Purchase Agreement.

 We
have incurred significant losses since inception and expect to incur a significant loss during the fiscal year ending December 31, 2024.
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
December 31, 2023, we had total liquidity of $ 73.8
million including $ 45.2
million in cash and cash equivalents and $ 28.6
million in short-term investment securities. As of December 31, 2023, we have approximately $ 19.0 million available under an
existing ATM agreement. Based on our current operating plan, we anticipate that we have sufficient cash and cash equivalents to fund
our operations for at least the next 12 months. We will require additional capital to fund our operating plan past that time. We will seek to obtain additional capital
through the issuance of equity or debt securities, product sales and/or licensing activities. There can be no assurance that any such
efforts to obtain additional capital would be successful.

 2.
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Use
of estimates

 The
preparation of financial statements in conformity with generally accepted accounting principles of the United States requires us to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from our estimates. We have identified the following areas where estimates and assumptions have been
made in preparing the financial statements: business combinations, valuation of intangibles, revenue recognition, inventory
valuation, valuation of share-based payments, income taxes, depreciable lives assessment and related disclosure of contingent assets
and liabilities.

 Cash
and cash equivalents and fair value of financial instruments

 Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction
between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market
participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes
a three level fair value inputs hierarchy, and requires an entity to maximize the use of observable valuation inputs and minimize the
use of unobservable inputs. We use market data, assumptions and risks we believe market participants would use in measuring the fair
value of the asset or liability, including the risks inherent in the inputs and the valuation techniques.

 Our
financial instruments include cash and cash equivalents, investment securities, accounts receivable, accounts payable and accrued liabilities.
The carrying value of our financial instruments approximates fair value due to their short maturities. Our cash equivalents are comprised
of short-term highly rated (A rated securities and above) money market savings accounts.

 Our
short-term investment securities are primarily debt securities. The Company has classified its entire investment portfolio as available-for-sale.
Available-for-sale securities are stated at fair value with unrealized gains and losses included in other comprehensive income (loss).
Dividend and interest income are recognized when earned. Realized gains and losses are presented separately on the income statement.

 Principles
of Consolidation

 The consolidated financial statements include the accounts of MicroVision, Inc. and MicroVision GmbH. MicroVision GmbH is a wholly
owned subsidiary of MicroVision, Inc. All material intercompany accounts and transactions have been eliminated in consolidation.

 Business
Combination

 Our
business combination is accounted for under the acquisition method. We allocate the fair value of purchase consideration to the tangible
and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the
fair value of the underlying net assets acquired and liabilities assumed over the purchase consideration is included in bargain purchase
gain in the Consolidated Statement of Operations. Such valuations require management to make significant estimates and assumptions, especially
with respect to intangible assets.

 Foreign
Currency Translation

 The
functional currency for our German operation is the Euro, which represents the currency of its primary economic environment. The results
of operations for the German operation are translated from the local currency into U.S. dollars using the average exchange rates during
each period. All assets and liabilities are translated using exchange rates at the end of each period, with foreign currency translation
adjustments included as a component of other comprehensive loss. All equity transactions and certain assets are translated using historical
rates. The consolidated financial statements are presented in U.S. dollars.

 Segment
Information

 We
determine operating segments based on how our chief operating decision maker ("CODM") manages the business, makes operating
decisions around the allocation of resources, and evaluates operating performance. Our CODM is our Executive Management team, who reviews
our operating results on a consolidated basis. We operate as one segment, which relates to sale and servicing of lidar hardware and software.
The profitability of our product group is not a determining factor in allocating resources and the CODM does not evaluate profitability
below the level of the consolidated company.

consists of raw materials, work in process 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.

 Intangible
assets

 Our intangible assets consist of acquired technology from the January 2023 Ibeo asset purchase and purchased patents.
As part of the Ibeo asset acquisition, we acquired primarily two intangible assets in the form of Perception software and Reference software
with a useful life of 15 years and 8 years, respectively. The estimated fair value of acquired technology was calculated through the income
approach using the multi-period excess earnings and relief from royalty methodologies. The intangible assets are amortized using the straight-line method over their estimated
period of benefit, ranging from one to seventeen years. Intangible assets are reviewed for impairment whenever events or changes in circumstances
indicate the carrying value may not be recoverable. Recoverability of these assets is measured by comparison of their carrying values
to the projected undiscounted net cash flows associated with the related intangible assets or group of assets over their remaining lives.
Measurement of an impairment loss for our intangible assets is based on the difference between the fair value of the asset and its carrying
value.

 Property
and equipment

 Property
and equipment is stated at cost and depreciated over the estimated useful lives of the assets (two to five years) using the straight-line
method. Our property and equipment may include assets related to future product lines. As our production needs change, we periodically
assess the remaining estimated useful life of our production equipment. If necessary, we adjust the depreciation on our production equipment
to reflect the remaining estimated useful life. Leasehold improvements are depreciated over the shorter of estimated useful lives or
the lease term. Costs for repairs and maintenance are charged to expense as incurred and expenditures for major improvements are capitalized
at cost. Gains or losses on the disposition of assets are reflected in the income statements at the time of disposal.

 Restricted
cash

 Restricted
cash, current includes $ 3.3 million related to the Ibeo asset acquisition that has been withheld from the Purchase Price and held in
escrow for a maximum period of 13 months post-Closing as partial security for potential claims arising out of or in connection with the
Asset Purchase Agreement.

 In
addition, as of December 31, 2023 and 2022, restricted cash, net of current portion was in money market savings accounts and serves as
collateral for irrevocable letters of credit related to our facility lease agreements. The restricted cash balance at December 31, 2023
includes $ 0.7 million related to a letter of credit that was issued in connection with a lease agreement entered into in September 2021
for our company headquarters in Redmond, Washington. The new lease commenced on December 1, 2022, and the required balance of the letter
credit periodically decreases over the term of the 120-month lease. The restricted cash balance also includes $ 0.3 million related to
a letter of credit that was issued in connection with a lease agreement entered into in September 2021 for our general office and lab
space in Redmond, Washington, and the required balance of the letter of credit periodically decreases over the term of the 120-month
lease.

 Leases

 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
(ROU) 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.

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.

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.

 We
sell our products to customers under a contract or by purchase order. We consider the sale of each individual item to be one performance
obligation. The transaction price is generally either at stated product price per quantity or at a fixed amount at contract inception.
Revenue is recognized under Topic 606 when the product is shipped to the customer because control passes to the customer at the point
of shipment. Our product sales generally include acceptance provisions, however, because we generally can objectively determine that
we have met agreed-upon customer specifications prior to shipment, control of the item passes at the time of shipment.

 License
and royalty revenue

 We
recognize revenue on upfront license fees at a point in time if the nature of the license granted is a right-to-use license, representing
functional intellectual property with significant standalone functionality. If the nature of the license granted is a right-to-access
license, representing symbolic intellectual property, which excludes significant standalone functionality, we recognize revenue over
the period of time we have ongoing obligations under the agreement. We will recognize revenue from sales-based royalties on the basis
of the quarterly reports provided by our customer as to the number of royalty-bearing products sold or otherwise distributed. In the
event that reports are not received, we will estimate the number of royalty-bearing products sold by our customers.

 Our
contract revenue in a particular period is dependent upon when we enter into a contract, the value of the contracts we have entered into,
and the availability of technical resources to perform work on the contracts. We recognize contract revenue either at a point in time,
or over time, depending upon the characteristics of the individual contract. If control of the deliverable(s) occur over time, the revenue
is recognized in proportion to the transfer of control. If control passes to the customer only upon completion and transfer of the asset,
revenue is recognized at the completion of the contract. In contracts that include significant customer acceptance provisions, we recognize
revenue only upon acceptance of the deliverable(s).

 We
identify each performance obligation in our development contracts at contract inception. The contracts generally include product development
and customization specified by the customer. In contracts with multiple performance obligations, we identify each performance obligation
and evaluate whether the performance obligations are distinct within the context of the contract. Performance obligations that are not
distinct at contract inception are combined.

 Our
development contracts are primarily fixed-fee contracts. If control of deliverables occurs over time, we recognize revenue on fixed fee
contracts 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 contracts that require the input method for revenue recognition, the determination of the total
cost expected to complete the performance obligations on fixed fee contracts involves significant judgment. We incorporate revisions
to hour and cost estimates when the causal facts become known.

 Cost
of product revenue

 Cost
of product revenue includes the direct and allocated indirect costs of products sold to customers. Direct costs include labor, materials,
reserves for estimated warranty expenses, and other costs incurred directly, or charged to us by our contract manufacturers in the manufacture
of these products. Indirect costs include labor, manufacturing overhead, and other costs associated with operating our manufacturing
capabilities and capacity. Manufacturing overhead includes the costs of procuring, inspecting and storing material, facility and other
costs, and is allocated to cost of product revenue based on the proportion of indirect labor which supported production activities. The
cost of product revenue can fluctuate significantly from period to period, depending on the product mix and volume, the level of manufacturing
overhead expense and the volume of direct material purchased.

 Cost
of contract revenue

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

 Our
overhead, which includes the costs of procuring, inspecting and storing material, and facility and depreciation costs, is allocated to
inventory, cost of product revenue, cost of contract revenue, and research and development expense based on the level of effort supporting
production or research and development activity.

 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 December 31, 2023, our cash and cash equivalents are comprised of short-term
highly rated (A rated securities and above) money market savings accounts.

 Concentration
of major customers and suppliers

 In
2023, one commercial customer ("Customer A") accounted for $ 4.6
million in revenue, representing 63 %
of our total revenue, a second commercial customer accounted for $ 0.8
million in revenue, representing 11 %
of our total revenue and a third commercial customer accounted for $ 0.4
million in revenue, representing 5 %
of our total revenue. In 2022, Customer A accounted for $ 0.7
million in revenue, representing 100 %
of our total revenue. No revenue was recognized from Customer A during the second half of 2022 or the first three quarters of 2023
as no shipments of our components were reported by the customer during that period. In 2021, Customer A accounted for $ 2.5
million in revenue, representing 100 %
of our total revenue. Subsequent to fiscal year 2023, we do not expect to recognize further revenue from Customer A, which will negatively affect our
future revenue.

 Typically,
a significant concentration of our components and the products we have sold are 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 development or product deliveries, any of which could adversely
affect our financial condition and operating results.

 Income
taxes

 Deferred
tax assets and liabilities are recorded for differences between the financial statement and tax bases of the assets and liabilities that
will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets
to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable for the period increased or
decreased by the change in deferred tax assets and liabilities during the period.

 Net
loss per share

 Basic
net loss per share is calculated using the weighted-average number of common shares outstanding during the periods. Net loss per share,
assuming dilution, is calculated using the weighted-average number of common shares outstanding and the dilutive effect of all potentially
dilutive securities, including common stock equivalents and convertible securities. Net loss per share, assuming dilution, is equal to
basic net loss per share because the effect of dilutive securities outstanding during the periods, including options and warrants computed
using the treasury stock method, is anti-dilutive.

 The
components of basic and diluted net loss per share were as follows (in thousands, except loss per share data):

OF BASIC AND DILUTED NET LOSS PER SHARE

 Year

 2023

 2022

 2021

 Numerator:

 Net loss available for common shareholders

 $
)

 $
)

 $
)

 Denominator:

 Weighted-average common shares outstanding

 182,802

 165,958

 160,662

 Net loss per share - basic and diluted

 $
 ( 0.45
)

 $
 ( 0.32
)

 $
 ( 0.27
)

each of the years ended December 31, 2023, 2022 and 2021, we excluded the following securities from net loss per share as the effect
of including them would have been anti-dilutive. The shares shown represent the number of shares of common stock which would be issued
upon conversion in the respective years shown below (in thousands):

 SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

 2023

 2022

 2021

 Year

 2023

 2022

 2021

 Options outstanding

 1,533

 Nonvested restricted stock units

 9,983

 8,866

 2,625

 Antidilutive Securities Excluded from Computation
 of Earnings Per Share, Amount

 10,735

 9,811

 4,158

and development

and development expense consists of compensation related costs of employees and contractors engaged in internal research and product
development activities, direct material to support development programs, laboratory operations, outsourced development and processing
work, and other operating expenses. We assign our research and development resources based on the business opportunity of the available
projects, the skill mix of the resources available and the contractual commitments we have made to our customers. Research and development
costs are expensed as incurred. We believe that a substantial level of continuing research and development expense will be required to
further develop our technology.

 Share-based
compensation

 We
issue share-based compensation to employees in the form of restricted stock units (RSUs), and performance stock units (PSUs) and stock
options. 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 RSUs and non-executive PSUs is determined by the
closing price of our common stock on the grant date. For performance-based awards, expense is recognized when it is probable the performance
criteria will be achieved. If the likelihood becomes improbable that the performance criteria will be achieved, the expense is reversed.
Executive PSUs that have market-based performance criteria 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 fair value of stock options is estimated on the grant
date using the Black-Scholes option pricing model.

 The
following table summarizes the amount of share-based compensation expense by line item on the Statement of Operations (in thousands):

OF SHARE-BASED COMPENSATION EXPENSE

 2023

 2022

 2021

 Year

 2023

 2022

 2021

 Research and development expense

 6,531

 6,933

 6,125

 Sales, marketing, general and administrative

 9,610

 8,528

 9,159

 Total Share-based compensation

 $
 16,141

 $
 15,461

 $
 15,284

 Reclassifications

 Certain
reclassifications have been made to prior year financial statements to conform to classifications used in the current year. These reclassifications
had no impact on net loss, shareholders' equity or cash flows, as previously reported.

 3.
 BUSINESS COMBINATION

 On
January 31, 2023, we completed the acquisition of certain net assets of Ibeo, a lidar hardware and software provider based in
Hamburg, Germany. The purpose of the acquisition was to acquire certain Ibeo assets, primarily intellectual property, and personnel,
to enable us to expand our technology and product portfolio and diversify our revenue profile.

 Total
consideration related to this transaction was approximately EUR 20.0 million or $ 21.6 million, consisting of approximately (i) EUR 7.0
million or $ 7.6 million in cash paid at closing, (ii) EUR 6.6 million or $ 7.1 million in cash advanced to Ibeo prior to closing, (iii)
EUR 3.0 million or $ 3.3 million held in escrow for 13 months to be available to cover properly established claims by MicroVision, (iv)
EUR 0.6 million or $ 0.7 million in costs paid on behalf of the seller, and (v) EUR 2.7 million or approximately $ 3.0 million after calculating
the deduction in purchase price agreed between both the parties. The remaining balance of approximately EUR 2.7 million is expected to
be paid during the first quarter of 2024. In addition, we incurred $ 0.6 million of acquisition-related costs associated with the acquisition
during the twelve months ended December 31, 2023, which were included in Sales, marketing, general and administrative expense. We incurred $ 0.5 million of acquisition-related costs associated with the acquisition during the three twelve months
ended December 31, 2022.

 The accrued liability for Ibeo business combination on our balance sheet in the amount of $ 6.3 million includes $ 3.3
million that was withheld from the Purchase Price and held in escrow for a maximum period of 13 months post-Closing as partial security
for potential claims arising out of or in connection with the Asset Purchase Agreement is intended to be released and $ 3.0 million holdback
amount that is expected to be paid in first quarter of 2024.

 The
transaction has been accounted for as a business combination. The results of operations for the acquisition are included in our consolidated
financial statements from the date of acquisition onwards.

 The
following table summarizes the final purchase price allocation to assets acquired and liabilities assumed (in thousands):

OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED

 Weighted Average

 Useful
 Life (in years)

 Purchase consideration:

 Cash
 paid at closing (1)

 $
 8,245

 Payable to Ibeo (2)

 6,246

 Advances
 to Ibeo (3)

 7,120

 Total purchase consideration

 $
 21,611

 $
 1,197

 Other current assets

 Operating lease right-of-use asset

 Property and equipment, net

 5,330

 Intangible assets:

 Acquired technology

 17,987

 Order backlog

 Contract liabilities

 ( 1,178
)

 Operating lease liabilities

 ( 234
)

 Deferred tax liabilities

 ( 785
)

 Total identifiable net assets

 $
 23,280

 Bargain purchase gain (4)

 ( 1,669
)

 (1)
 Represents
 $ 7.6 million in cash paid at closing and $ 0.7 million in cash paid shortly after close.

 (2)
 Recorded
 as accrued liability to Ibeo in our consolidated balance sheet.
 Pursuant to the terms of the Asset Purchase Agreement, $ 3.3 million will be withheld from
 the Purchase Price and held in escrow for a maximum period of 13 months post-closing as partial
 security for potential claims arising out of or in connection with the Asset Purchase Agreement and $ 3.0 million holdback amount is expected to be paid in first quarter
of 2024.

 (3)
 Represents
 $ 4.1 million and $ 3.0 million in cash advanced to Ibeo in December 2022 and January 2023,
 respectively.

 (4)
 The
 bargain purchase gain represents the excess of the fair value of the underlying net assets
 acquired and liabilities assumed over the purchase consideration and is included in bargain
 purchase gain in the Consolidated Statement of Operations. The bargain purchase
 gain was attributable to the negotiation process with Ibeo during its insolvency proceedings
 resulting in cash consideration paid being less than the fair value of the net assets acquired.

 The
estimated fair value of acquired technology was calculated through the income approach using the multi-period excess earnings and relief
from royalty methodologies. The estimated fair value of the order backlog was calculated through the income approach using the multi-period
excess earnings methodology.

 Supplemental
Unaudited Pro Forma Information

 The
below unaudited pro forma financial information summarizes the combined results of operations for the Company and Ibeo as if the acquisition
had been completed on January 1, 2022. The unaudited pro forma information presented below is for informational purposes only and is
not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at
the beginning of fiscal year 2022 or the results of our future operations of the combined businesses. Nonrecurring pro forma adjustments
include:

 Recognition
 of the bargain purchase gain as if incurred in the first quarter of 2022;

 Acquisition-related
 costs of $ 1.1 million are assumed to have been incurred on January 1, 2022.

 The
following table summarizes the unaudited pro forma results (in thousands):

OF BUSINESS ACQUISITION, PRO FORMA INFORMATION

 Year

 2023

 2022

 Total revenue

 $
 7,808

 6,957

 ( 80,243
)

 ( 115,786
)

 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.

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):

OF DISAGGREGATION OF REVENUE

 Year
 Ended December 31, 2023

 License and

 Total

 Timing of revenue recognition:

 Products transferred
 at a point in time

 $
 1,019

 4,888

 1,106

 $
 7,013

 Product and services transferred
 over time

 -

 -

 Total

 $
 1,019

 $
 4,888

 $
 1,352

 $
 7,259

 Year
 Ended December 31, 2022

 License and

 Total

 Timing of revenue recognition:

 Products transferred
 at a point in time

 $
 -

 $

 $
 -

 $

 Product and services transferred
 over time

 -

 -

 -

 -

 Total

 $
 -

 $

 $
 -

 $

 Year
 Ended December 31, 2021

 License and

 Total

 Timing of revenue recognition:

 Products transferred
 at a point in time

 $
 -

 $
 2,500

 $
 -

 $
 2,500

 Product and services transferred
 over time

 -

 -

 -

 -

 Total

 $
 -

 $
 2,500

 $
 -

 $
 2,500

balances

 The
following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in thousands):

 SIGNIFICANT CHANGES IN CONTRACT ASSETS AND CONTRACT LIABILITIES

 2023

 2022

 2021

 31,

 2023

 2022

 2021

 Accounts receivable, net

 $

 $
 -

 $
 -

 Accrued liabilities

 -

 -

 -

 Contract liabilities

 4,601

 5,265

 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 Balance Sheet.

 Significant
changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands, except percentages):

OF CONTRACT WITH CUSTOMER, CONTRACT ASSET, CONTRACT LIABILITY, AND RECEIVABLE

 December 31,

 December 31,

 2023

 2022

 $
 Change

 %
 Change

 Contract assets

 $

 $
 -

 $

 -

 Contract liabilities

 ( 300
)

 ( 4,601
)

 4,301

 93.5

 Net contract assets (liabilities)

 $

 $
 ( 4,601
)

 $
 5,250

 114.1

 In
April 2017, we signed a contract with Microsoft Corporation to develop an LBS display system; the contract terminated effective
December 31, 2023. Under the agreement, we received an upfront payment of $ 10.0
million. As of December 31, 2022, we had applied $ 5.4
million against the contract liability. During the year ended December 31, 2023, we applied the remaining $ 4.6
million against the contract liability with this customer since we believe the likelihood of further deliveries under the contract
is remote. We do not expect to recognize any further revenue in connection with this 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 December 31,
2023.

 In
connection with our January 2023 acquisition of assets from Ibeo, we assumed contract liabilities totaling approximately $ 1.2
 million. During the twelve months ended December
31, 2023, we recognized revenue totaling $ 1.0
 million against the contract liability.

 Transaction
price allocated to the remaining performance obligations

 The
following table provides information about the estimated timing of revenue recognition (in thousands):

OF ESTIMATED TIMING OF REVENUE RECOGNITION

 2024

 2025

 $

 $
 -

 5.
 INVESTMENT SECURITIES, AVAILABLE-FOR-SALE AND FAIR VALUE MEASUREMENTS

 Our
investment securities, available-for-sale are comprised of corporate debt securities. The principal markets for the debt securities are
dealer markets which have a high level of price transparency. The market participants for debt securities are typically large money center
banks and regional banks, brokers, dealers, pension funds, and other entities with debt investment portfolios.

 Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction
between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market
participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes
a three level fair value inputs hierarchy and requires an entity to maximize the use of observable valuation inputs and minimize the
use of unobservable inputs. We use market data, assumptions and risks we believe market participants would use in measuring the fair
value of the asset or liability, including the risks inherent in the inputs and the valuation techniques. The hierarchy is summarized
below.

 Level
1 – Quoted prices in active markets for identical assets and liabilities at the measurement date that the reporting entity has
the ability to access.

 Level
2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in
active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data.

 Level
3 – Unobservable inputs for which there is little or no market data, which requires us to develop our own assumptions, which are
significant to the measurement of the fair values.

 The
valuation inputs hierarchy classification for assets measured at fair value on a recurring basis are summarized below as of December
31, 2023 and 2022 (in thousands). These tables do not include cash held in our money market savings accounts.

 SCHEDULE OF FAIR VALUE HIERARCHY ASSETS AND LIABILITIES

 Level

 Level

 Level

 Total

 $
 -

 $
 8,471

 $
 -

 $
 8,471

 -

 20,140

 -

 20,140

 $
 -

 $

 $
 -

 $

 Level

 Level

 Level

 Total

 $
 -

 $
 15,500

 $
 -

 $
 15,500

 -

 46,673

 -

 46,673

 $
 -

 $

 $
 -

 $

 Our
short-term investments are summarized below as of December 31, 2023 and 2022 (in thousands).

 SCHEDULE OF UNREALIZED GAIN OR LOSS ON SHORT-TERM INVESTMENTS

 Investment

 Cost/

 Gross

 Gross

 Securities,

 Amortized

 Available-

 Cost

 Gains

 For-Sale

 $
 8,466

 $

 $
 ( 1
)

 $
 8,471

 20,119

 -

 20,140

 $
 28,585

 $

 $
 ( 1
)

 $

 $
 15,538

 $
 -

 $
 ( 38
)

 $
 15,500

 46,762

 ( 91
)

 46,673

 $
 62,300

 $

 $
 ( 129
)

 $

 The
maturities of the investment securities available-for-sale as of December 31, 2023 and 2022 are shown below (in thousands):

OF MATURITY DATE OF AVAILABLE-FOR-SALE SECURITIES

 Gross

 Gross

 Amortized

 Estimated

 Cost

 Gains

 Fair
 Value

 Maturity date

 Less than one
 year

 $
 28,585

 $

 $
 ( 1
)

 $

 Less than one year

 $
 62,300

 $

 $
 ( 129
)

 $

 The
following table summarizes investments that have been in a continuous unrealized loss position for less than 12 months and those that
have been in a continuous unrealized loss position for more than 12 months as of December 31, 2023 and 2022 (in thousands):

 SCHEDULE OF
UNREALIZED LOSS ON INVESTMENTS SECURITIES

 Less
 than Twelve Months

 Twelve
 Months or Greater

 Total

 Gross

 Gross

 Gross

 Fair

 Fair

 Fair

 Value

 Value

 Value

 $
 1,488

 $
 ( 1
)

 $
 -

 $
 -

 1,488

 ( 1
)

 1,486

 -

 -

 -

 1,486

 -

 $
 2,974

 $
 ( 1
)

 $
 -

 $
 -

 $
 2,974

 $
 ( 1
)

 Corporate debt securities

 $
 12,295

 $
 ( 38
)

 $
 -

 $
 -

 12,295

 ( 38
)

 34,530

 ( 91
)

 -

 -

 34,530

 ( 91
)

 $
 46,825

 $
 ( 129
)

 $
 -

 $
 -

 $
 46,825

 $
 ( 129
)

 6.
 INVENTORY

consists of the following (in thousands):

 COMPONENTS
OF INVENTORY

 31,

 2023

 2022

 Raw materials

 $
 1,574

 $
 1,556

 Work in process

 Finished Goods

 1,995

 -

 Total inventory

 $
 3,874

 $
 1,861

 7.
 PROPERTY AND EQUIPMENT

 Property
and equipment consists of the following (in thousands):

 COMPONENTS
OF PROPERTY, PLANT AND EQUIPMENT

 2023

 2022

 31,

 2023

 2022

 Production equipment

 $
 6,140

 $
 6,140

 Leasehold improvements

 3,843

 3,789

 Computer hardware and software/lab equipment

 12,149

 10,515

 Office furniture and
 equipment

 5,367

 1,804

 Property and equipment, gross

 27,499

 22,248

 Less: Accumulated depreciation

 ( 18,467
)

 ( 15,418
)

 Property and equipment,
 net

 $
 9,032

 $
 6,830

 Depreciation
expense was $ 3.1 million in 2023, $ 0.7 million in 2022 and $ 0.9 million in 2021.

 8.
 INTANGIBLE ASSETS

 The
components of intangible assets were as follows:

 SUMMARY OF COMPONENTS OF INTANGIBLE ASSETS

 Gross Carrying

 Net

 Carrying

 Weighted

 Average
 Remaining

 Amortization

 Period
 (Years)

 Acquired technology

 $
 20,172

 $
 2,940

 $
 17,232

 Backlog

 -

 $
 20,198

 $
 2,963

 $
 17,235

 Gross

 Carrying

 Net

 Carrying

 Weighted

 Average
 Remaining

 (in

 Amortization

 Period
 (Years)

 Acquired technology

 $

 $

 $

 $

 $

 $

 Amortization
expense was $ 2.1 million in 2023, $ 0.0 million in 2022 and $ 0.0 million in 2021.

 The
following table outlines our estimated future amortization expense related to intangible assets held at December 31, 2023 (in thousands):

 ESTIMATED FUTURE AMORTIZATION EXPENSE RELATED TO INTANGIBLE ASSETS

 Research and

 Cost of

 Development

 Years Ended December
 31,

 Expense

 Total

 2024

 $
 1,548

 $
 2,132

 2025

 1,548

 1,602

 2026

 1,548

 1,573

 2027

 1,508

 -

 1,508

 Thereafter

 10,420

 -

 10,420

 Total

 $
 16,572

 $

 $
 17,235

 9.
 ACCRUED LIABILITIES

 Accrued
liabilities consists of the following (in thousands):

 SCHEDULE OF ACCRUED LIABILITIES

 2023

 2022

 31,

 2023

 2022

 Bonuses

 $
 1,359

 $

 Payroll and payroll taxes

 3,704

 Income taxes payable

 2,111

 -

 Accrued professional fees

 Liabilities to suppliers

 Other

 Total accrued liabilities

 $
 8,640

 $
 2,058

 In
addition, the accrued liability for Ibeo business combination on our balance sheet in the amount of $ 6.3
 million includes $ 3.3
 million that was withheld from the Purchase Price
and held in escrow for a maximum period of 13 months post-Closing as partial security for potential claims arising out of or in connection
with the Asset Purchase Agreement and $ 3.0
 million holdback amount that is expected to be
paid in first quarter of 2024.

 10.
 COMMON STOCK

 In
August 2023, we entered into a $ 35.0
million ATM equity offering agreement with Craig-Hallum. Under the agreement, we are able, at our discretion, to offer and sell
shares of our common stock having an aggregate value of up to $ 35.0
million through Craig-Hallum. As of December 31, 2023, we had completed sales under such sales agreement, having sold 6.1
million shares for net proceeds of $ 15.5
million. As of December 31, 2023, we have approximately $ 19.0
million available under this ATM agreement.

 In
June 2023, we entered into a $ 45.0 million ATM equity offering agreement with Craig-Hallum. Under the agreement, we were able, at our
discretion, to offer and sell shares of our common stock having an aggregate value of up to $ 45.0 million through Craig-Hallum. As of
June 30, 2023, we had completed sales under such sales agreement, having sold 10.9 million shares for net proceeds of $ 43.9 million.
No further shares are available for sales under this agreement.

 In
June 2021, we entered into a $ 140.0 million ATM equity offering agreement with Craig-Hallum. Under the agreement we were able, at our
discretion, to offer and sell shares of our common stock having an aggregate value of up to $ 140.0 million through Craig-Hallum. As of
December 31, 2022, we had issued 8.3 million shares of our common stock for net proceeds of $ 81.8 million under this ATM agreement. During
the quarter ended March 31, 2023, we issued 5.0 million shares of our common stock for net proceeds of $ 12.5 million under the agreement.
The sales agreement was terminated in June 2023.

 11.
 SHARE-BASED COMPENSATION

 We
use the straight-line attribution method to allocate the fair value of share-based compensation awards over the requisite service period
for each award. The valuation of and accounting for share-based awards includes a number of complex and subjective estimates. These estimates
include, but are not limited to, the future volatility of our stock price, future stock option exercise behaviors, estimated employee
turnover, and award forfeiture rates.

 Description
of Incentive Plan

 Our
2022 Incentive Plan has 20.0 million shares authorized, which includes 3.5 million shares not issued pursuant to any awards granted under
the 2020 Incentive Plan. There were 9.4 million shares available for awards as of December 31, 2023.

 Options
Valuation Methodology and Assumptions

 We
use the Black-Scholes option valuation model to determine the fair value of options granted and use the closing price of our common stock
as the fair market value of our stock on that date.

 We
consider historical stock price volatilities, volatilities of similar companies and other factors in determining estimates of future
volatilities.

 We
use historical lives, including post-termination exercise behavior, as the basis for estimating expected lives.

 Risk-free
rates are based on the U.S. Treasury Yield Curve, as published by the U.S. Treasury.

 The
following table summarizes the weighted-average valuation assumptions and weighted-average grant date fair value of options granted during
the periods shown below:

 SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS

 Year

 Assumptions (weighted-average)

 2023

 2022

 2021

 Volatility

 %

 %

 %

 Expected term (in years)

 -

 -

 4.0

 Risk-free rate

 0.0
 %

 0.0
 %

 0.9
 %

 Expected dividends

 0.0
 %

 0.0
 %

 0.0
 %

 Pre-vest forfeiture rate

 0.0
 %

 0.0
 %

 8.5
 %

 Grant date fair value of options granted

 $
 -

 $
 -

 $
 11.72

 Options
Activity and Positions

 The
following table summarizes activity and positions with respect to options for the periods shown below (in thousands):

 SCHEDULE OF VALUATION ASSUMPTIONS FOR STOCK OPTIONS

 Weighted-average

 remaining

 Aggregate

 Weighted-average

 contractual

 intrinsic

 Options

 Shares

 exercise
 price

 term
 (in years)

 value

 Outstanding as of December 31, 2020

 3,281

 1.51

 6.6

 $
 12,784

 14.04

 Exercised

 ( 1,519
)

 1.75

 Forfeited or expired

 ( 237
)

 1.23

 Outstanding as of December 31, 2021

 1,533

 1.37

 5.6

 $
 5,645

 -

 -

 Exercised

 ( 525
)

 1.38

 Forfeited or expired

 ( 63
)

 3.00

 Outstanding as of December 31, 2022

 1.26

 5.7

 $
 1,137

 -

 -

 Exercised

 ( 191
)

 0.92

 Forfeited or expired

 ( 2
)

 0.28

 Outstanding as of December 31, 2023

 $
 1.35

 4.6

 $
 1,083

 Vested and expected to vest as of December
 31, 2023

 $
 1.35

 4.6

 $
 1,083

 Exercisable as of December 31, 2023

 $
 1.35

 4.6

 $
 1,083

 The
total grant date fair value of options vested during the years ended December 31, 2023, 2022 and 2021 was $ 0, $ 0.1 million and $ 0.5 million,
respectively. As of December 31, 2023, we have no unrecognized share-based compensation related to options.

 Restricted
stock activity and positions

 The
following table summarizes activity and positions with respect to RSUs and PSUs for the three years ended December 31, 2023 (in thousands):

 SHARE-BASED PAYMENT ARRANGEMENT RESTRICTED STOCK UNIT ACTIVITY

 Weighted-average

 Shares

 price

 Unvested as of December 31, 2020

 1,983

 $
 0.76

 4,179

 12.92

 Vested

 ( 2,380
)

 3.11

 Forfeited

 ( 1,157
)

 11.97

 Unvested as of December 31, 2021

 2,625

 13.05

 9,180

 2.46

 Vested

 ( 1,391
)

 9.16

 Forfeited

 ( 1,548
)

 6.42

 Unvested as of December 31, 2022

 8,866

 3.85

 3,491

 3.89

 Vested

 ( 1,872
)

 6.98

 Forfeited

 ( 502
)

 7.47

 Unvested as of December 31, 2023

 9,983

 $
 3.09

 In
2023, we issued 2.6 million PSUs to non-executive employees subject to the achievement of development goals. These shares are liabilities
subject to mark-to-market accounting as the number of shares was not fixed when issued. One-third of these shares will vest in connection
with 2023 achievement of the milestones and the remaining two-thirds will vest over two years from June 30, 2023.

 In
2023, we issued 0.1 million shares for the partial achievement of internal performance milestones during the fourth quarter of 2022.
These shares were valued based on the closing price of our common stock on the dates of grant and vest quarterly over two years. We had
canceled 0.4 million PSUs in the fourth quarter of 2022 related to the same internal performance milestones.

 In
2023, we issued 0.6 million time-based RSUs to non-executive employees for promotion, retention, and new hire grants. These shares were
valued based on the closing price of our common stock on the dates of grant. These shares vest over three or four years from the date
of grant.

 In
2023, we issued 0.3 million time-based RSUs to independent directors for annual equity compensation. These shares were valued based on
the closing price of our common stock on the dates of grant. These shares vest quarterly, with the final installment vesting the earlier
of the one year anniversary of the grant date or the day before the next annual meeting.

 In
June 2022, we issued 6.0 million PSUs to our executive officers. The PSUs are subject to the achievement of performance goals and time-based
vesting. The PSUs will become eligible to vest if the closing price of our common stock reaches or exceeds specified price thresholds
for at least 20 consecutive trading days during the performance period through December 31, 2025. If the performance goals are met, the
portion of the PSUs deemed earned will become subject to time-based vesting in equal quarterly installments over two years starting from
the date on which the goal is achieved. These PSUs were valued using a Monte Carlo simulation model using the following inputs: stock
price, volatility, and risk-free interest rates.

 In
2022, we issued 2.4 million PSUs to non-executive employees subject to the achievement of development goals. These shares were valued
based on the closing price of our common stock on the dates of grant. These shares vest quarterly over two years from the achievement
of established performance criteria. We canceled 0.4 million PSUs in the fourth quarter of 2022 and re-issued 0.1 million PSUs in the
first quarter of 2023 due to partial achievement of internal performance milestones.

 In
2022, we issued 0.6 million time-based RSUs to non-executive employees for promotion, retention, and new hire grants. These shares were
valued based on the closing price of our common stock on the dates of grant. These shares vest over three or four years from the date
of grant.

 In
2021, an equity award was granted to the Chief Executive Officer in the form of 1.2 million restricted stock units. These shares were
valued based on the closing price of our common stock on the dates of grant. On the date of grant, 0.3 million shares vested immediately,
0.3 million vested in April 2022 and subsequent grants of 0.3 million RSUs will be made on an annual basis in each of April 2023 and
April 2024.

 In
2021, we issued 1.5 million shares of performance stock units to non-executive employees. These shares were valued based on the closing
price of our common stock on the dates of grant. The shares vest one-eighth upon achievement of performance milestones with the remainder
vesting quarterly over the following seven quarters. In 2021, 1.1 million of the performance stock units were canceled because of modifications
to or failure to achieve performance milestones.

 In
2021, we issued 1.1 million RSUs to non-executive employees for promotion, retention and new hire grants. These shares were valued based
on the closing price of our common stock on the dates of grant. These shares vest annually over one to four years from the date of grant.

 As
of December 31, 2023, our unrecognized share-based compensation related to RSUs was $ 5.0 million, which we plan to expense over the next
 1.6 years, our unrecognized share-based compensation related to executive PSUs was $ 5.1 million, which we plan to expense over the next
 1.8 years, and our unrecognized share-based compensation related to the non-executive PSUs was $ 3.3 million, which we plan to expense
over the next 1.0 year.

 12.
 LEASES

 We
lease our office space and certain equipment under finance and operating leases. Our leases have remaining lease terms of one to ten
years. 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.

 In
September 2021, we entered into an office lease with Redmond East Office Park LLC, a Washington limited liability company, pursuant to
which we will lease approximately 16,681 square feet of space located in Redmond, Washington that we will use primarily for general office
space. The lease provides for an initial term of 128 months that commenced November 1, 2021. Pursuant to the lease, annual base rent
was approximately $ 0.5 million for the first year and is subject to annual increases of 3.0 %. In addition to base rent, we pay additional
rent comprised of our proportionate share of any operating expenses, real estate taxes, and management fees. We have the option to extend
the term for one ten-year renewal period, provided that the rent would be subject to market adjustment at the beginning of the renewal
term. The total minimum lease payments related to this lease is $ 6.4 million.

 In
September 2021, we entered into a second office lease with Redmond East Office Park LLC, pursuant to which we will lease approximately
 36,062 square feet of space located in Redmond, Washington that we will use primarily for product testing and lab space. The lease provides
for an initial term of 120 months that commenced on December 1, 2022. Pursuant to the lease, annual base rent will be approximately $ 1.1
million for the first year and is subject to annual increases of 3.0 %. In addition to base rent, we will pay additional rent comprised
of our proportionate share of any operating expenses, real estate taxes, and management fees. We have the option to extend the term for
one ten-year renewal period, provided that the rent would be subject to market adjustment at the beginning of the renewal term. The total
minimum lease payments related to this lease are $13.0 million. During the quarter ended June 30, 2023, we received a payment of $ 3.0
million as an incentive to terminate our previous building lease. The gain is recorded as other income in our statement of operations.

 In
April 2022, we entered into an office lease with Universal-Investment-Gesellschaft mbH, a German investment company, pursuant to which
we lease approximately 3,533 square feet of space located in Nuremberg, Germany that we use primarily for general office space for business development activities. The lease provides for a term of 60 months that commenced May 1, 2022. Pursuant to the lease, annual base
rent is approximately $ 76,000 per year. The total minimum lease payments related to this lease is approximately $ 0.4 million.

 In
September 2022, we entered into a second office lease with Universal-Investment-Gesellschaft GmbH, a German investment company, pursuant
to which we lease approximately 3,810 square feet of space located in Nuremberg, Germany that we use primarily for product testing
for engineering and development activities. The lease provides for a term of 60 months that commenced November 15, 2022. Pursuant to the lease,
annual base rent is approximately $ 92,000 per year. The total minimum lease payments related to this lease is approximately $ 0.5 million.

 In
connection with our January 2023 acquisition of assets from Ibeo, we assumed three leases in Hamburg, Germany covering approximately
 51,000 square feet.

 One
lease is with IntReal International Real Estate Kapitalverwaltungsgesellschaft and covers approximately 5,511 square feet of space for
IT network equipment through December 31, 2026. Pursuant to the lease, annual base rent is approximately $ 65,000 per year. The total
remaining minimum lease payments related to this lease are approximately $ 0.3 million. During the quarter ended March 31, 2023, we recorded
a right-of-use asset in the amount of $ 0.2 million on our balance sheet. A second lease is with Neuer Holtigbaum and covers approximately
 32,529 square feet of office space and long-range laser testing space through August 2023. During the quarter ended September 30, 2023,
we amended this lease and extended until August 2024. The total remaining minimum lease payments related to this lease are approximately
$ 0.2 million. The third lease is with BG BAU Berufsgenossenschaft der Bauwirtschaft and covers approximately 13,127 square feet of garage
space to house our test and demonstration vehicles through July 31, 2024. The total remaining minimum lease payments related to this
lease are approximately $ 0.1 million.

 In
December 2023, we entered into a lease on approximately 60,000 square feet of space located in central Hamburg in Germany. This lease
is intended to replace the office space described in the immediately preceding paragraph. The lease provides for a term of 60 months
and will commence on the date the property is delivered to us, which is expected to occur between August 1, 2024 and December 31, 2024.

 The
components of lease expense were as follows:

 SCHEDULE OF COMPONENTS OF LEASE EXPENSE

 Year

 2023

 2022

 2021

 lease expense

 $
 2,625

 $
 1,501

 $

 Finance lease expense:

 Amortization of leased
 assets

 Interest
 on lease liabilities

 -

 Total finance lease

 Total
 lease expense

 $
 2,646

 $
 1,529

 $

 Supplemental
cash flow information related to leases was as follows:

 SCHEDULE OF CASH FLOW INFORMATION RELATED TO LEASES

 Year

 2023

 2022

 2021

 Cash paid for amounts included in measurement
 of lease liabilities:

 Operating cash
 flows from operating leases

 $
 2,500

 $
 1,280

 $

 Operating cash flows from
 finance leases

 -

 Financing cash flows from
 finance leases

 Right-of-use assets obtained in exchange for
 new lease obligations:

 Operating leases

 $
 1,338

 $
 10,184

 $
 5,322

 Supplemental
balance sheet information related to leases was as follows:

OF BALANCE SHEET INFORMATION RELATED TO LEASES

 31,

 2023

 2022

 Operating leases

 lease right-of-use assets

 $
 13,758

 $
 14,579

 Current portion of operating
 lease liability

 2,323

 1,846

 lease liability, net of current portion

 12,714

 13,829

 Total
 operating lease liabilities

 $
 15,037

 $
 15,675

 Finance leases

 Property and equipment,
 at cost

 $

 $

 depreciation

 ( 97
)

 ( 80
)

 Property
 and equipment, net

 $

 $

 Current portion of finance
 lease obligations

 $
 -

 $

 Finance
 lease obligations, net of current portion

 -

 -

 Total
 finance lease liabilities

 $
 -

 $

 Weighted Average Remaining Lease Term

 Operating leases

 8.4
 years

 13.1
 years

 Finance leases

 -

 0.5
 years

 Weighted Average Discount Rate

 Operating leases

 4.6
 %

 9.0
 %

 Finance leases

 0.0
 %

 6.3
 %

 As
of December 31, 2023, maturities of lease liabilities were as follows:

 SCHEDULE OF MATURITIES OF LEASE LIABILITIES

 Finance

 Years Ended December
 31,

 leases

 leases

 2024

 2,373

 -

 2025

 2,019

 -

 2026

 2,032

 -

 2027

 1,971

 -

 Thereafter

 9,663

 -

 Total minimum lease payments

 18,058

 -

 Less: amount representing
 interest

 ( 3,021
)

 -

 Present value of lease liabilities

 $
 15,037

 $
 -

 13.
 COMMITMENTS AND CONTINGENCIES

 Purchase
commitments

the quarter ended September 30, 2023, we entered into a $ 9.3 million purchase commitment with a contract manufacturing partner for the
production of MOVIA sensor inventory to support direct sales to both automotive and non-automotive customers. We made a payment of $ 3.1
million during the third quarter and expect to make the remaining future payments by the end of the second quarter of 2024 based on an
agreed sensor delivery schedule.

 Litigation

 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.

 14.
 INCOME TAXES

 Components of income (loss) before income taxes (in thousands):

OF COMPONENTS OF INCOME (LOSS) BEFORE INCOME TAXES

 Year Ended December 31,

 2023

 2022

 2021

 United States

 $
 ( 86,730
)

 $
)

 $
)

 Foreign

 5,034

 -

 -

 Total

 $
 ( 81,696
)

 $
)

 $
)

 Components of income tax expense (benefit) (in thousands):

 SCHEDULE OF COMPONENTS
OF INCOME TAX EXPENSE (BENEFIT)

 Year Ended December 31,

 2023

 2022

 2021

 Current

 Federal

 $
 -

 $
 -

 $
 -

 State

 -

 -

 -

 International

 2,061

 -

 -

 Total Current Tax Expense

 2,061

 -

 -

 Deferred

 Federal

 -

 -

 -

 State

 -

 -

 -

 International

 ( 915
)

 -

 -

 Total Deferred Tax Expense

 ( 915
)

 -

 -

 Total Tax Expense

 $
 1,146

 $
 -

 $
 -

 The
effective tax rate of our provision (benefit) for income taxes differs from the Federal statutory rate as follows:

 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

 2023

 2022

 2021

 Year

 2023

 2022

 2021

 Statutory rate

 21.0
 %

 21.0
 %

 21.0
 %

 Permanent Items and adjustments

 0.1
 %

 0.0
 %

 0.0
 %

 Compensation related

 ( 0.4
)%

 ( 0.5
)%

 ( 8.2
)%

 Share-based compensation

 ( 1.7
)%

 ( 2.2
)%

 25.1
 %

 Net operating loss expiration

 ( 6.3
)%

 ( 9.0
)%

 ( 16.2
)%

 Tax credits

 1.0
 %

 1.5
 %

 1.4
 %

 Change in valuation
 allowance

 ( 15.0
)%

 ( 10.8
)%

 ( 23.1
)%

 Bargain Purchase gain

 0.9
 %

 0.0
 %

 0.0
 %

 Other

 ( 1.0
)%

 0.0
 %

 0.0
 %

 Total

 ( 1.4
)%

 0.0
 %

 0.0
 %

 Deferred
tax assets are summarized as follows (in thousands):

 SCHEDULE OF DEFERRED TAX ASSETS

 31,

 Deferred tax assets

 2023

 2022

 Reserves

 $

 $

 Net operating loss carryforwards

 97,254

 92,469

 R&D credit carryforwards

 10,114

 9,628

 Depreciation/amortization
 deferred

 26,079

 19,787

 Operating lease liabilities

 3,878

 3,292

 Other

 7,833

 7,360

 Total
 deferred tax assets

 145,790

 133,187

 Deferred tax liabilities:

 lease right-of-use assets

 ( 3,272
)

 ( 3,062
)

 Total
 deferred tax liabilities

 ( 3,272
)

 ( 3,062
)

 Net valuation allowances

 ( 142,376
)

 ( 130,125
)

 Deferred tax assets

 $

 $
 -

 As of December 31, 2023, we maintained a valuation allowance of $ 142.4 million for our deferred tax assets that we
believe are not more likely than not to be realized.

 As
of December 31, 2023, we have net operating loss carryforwards of approximately $ 463.1 million for federal income tax reporting
purposes. In addition, we have research and development tax credits of $ 10.1 million. During 2023, $23.1 million federal net
operating losses and $0.3 million general business credits expired unused. A majority of the net operating loss carryforwards and
research and development credits available to offset future taxable income, if any, will expire in varying amounts from 2024 to
2043, if not previously used.

 Certain
net operating losses arise from the deductibility for tax purposes of compensation under nonqualified stock options equal to the difference
between the fair value of the stock on the date of exercise and the exercise price of the options. For financial reporting purposes,
the tax effect of this deduction, when recognized, is accounted for as an income tax benefit.

 In
certain circumstances, as specified in the Internal Revenue Code, a 50% or more ownership change by certain combinations of our shareholders
during any three-year period would result in limitations on our ability to use a portion of our net operating loss carryforwards.

 We
had no unrecognized tax benefits at December 31, 2023 or 2022.

 We
recognize interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2023,
2022 and 2021 we recognized no interest or penalties.

 We
file income tax returns in the U.S. federal jurisdiction, Oregon and in Germany. Due to our operating loss and credit carryforwards, the U.S.
federal statute of limitations remains open for 1998 and onward. Tax years 2022 and forward remain open in Germany.

 15.
 RETIREMENT SAVINGS PLAN

 We
have a retirement savings plan that qualifies under Internal Revenue Code Section 401(k). The plan covers all qualified employees. Contributions
to the plan are made at the discretion of our Board of Directors. During the years ended December 31, 2023, 2022 and 2021 we contributed
$ 0.5 million, $ 0.4 million and $ 0.3 million to the plan, respectively.

 ITEM
 9.

 CHANGES
 IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 There
have been no changes in or disagreements with accountants on accounting or financial disclosure matters during our fiscal years ended
December 31, 2023, 2022 and 2021.

 ITEM
 9A.

 CONTROLS
 AND PROCEDURES

 (a)
 Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) evaluated
our disclosure controls and procedures (as defined in Rules 13a-15(e)) under the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), prior to the filing of this Form 10-K. Based upon that evaluation, our CEO and CFO concluded that, as of
December 31, 2023, our disclosure controls and procedures were effective.

(b) Management's Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and
maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Our management
conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control
— Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its
evaluation under the framework in Internal Control — Integrated Framework (2013), our management concluded that our internal
control over financial reporting was effective as of December 31, 2023.

 (c)
 Limitations on the Effectiveness of Controls. Because of inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

 (d)
 Changes in Internal Control Over Financial Reporting. We completed the acquisition of Ibeo assets on January 31, 2023. As part of the asset acquisition, we are in the
process of incorporating our controls and procedures with respect to MicroVision GmbH's operations, and we will include internal
controls with respect to their operations in our assessment of the effectiveness of our ICFR as of December 31, 2024. Other than changes
related to incorporating our controls and procedures with respect to MicroVision GmbH, there was no change in our internal control over
financial reporting during the period ended December 31, 2023 which has materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

 Report
of Independent Registered Public Accounting Firm

 To
the Shareholders and the Board of Directors of

Inc.

 Opinion
on Internal Control over Financial Reporting

 We
have audited Microvision Inc.'s (the "Company") internal control over financial reporting as of December 31, 2023,
based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission ("COSO"). In our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework
(2013) issued by COSO.

 We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"),
the consolidated balance sheets of Microvision Inc. as of December 31, 2023 and December 31, 2022, the related consolidated statements
of operations, comprehensive loss, changes in shareholders' equity (deficit) and cash flows for each of the three years in the
period ended December 31, 2023, and the related notes and schedule (collectively referred to as the "consolidated financial statements")
and our report dated February 29, 2024, expressed an unqualified opinion on those consolidated financial statements.

 Basis
for Opinion

 The
Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal
Control over Financial Reporting included in Item 9A. Our responsibility is to express an opinion on the Company's internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.

 We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis
for our opinion.

 As discussed in Management's Report on Internal Control Over Financial Reporting, in January 2023, the Company
acquired certain assets of IBEO Automotives (Microvision GmbH). For the purposes of assessing internal control over financial reporting,
management excluded Microvision GmbH, whose financial statements constitute approximately 10% of the Company's consolidated total
assets (excluding $18 million of intangible assets, which were integrated into the Company's control environment) and approximately
5% of consolidated net loss as of and for the year ended December 31, 2023. Accordingly, our audit did not include the internal controls
over the financial reporting of Microvision GmbH.

 Definition
and Limitations of Internal Control Over Financial Reporting

 A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

 Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.

 /s/
Moss Adams LLP

 Seattle,
Washington

 February
29, 2024

 We have served as the Company's auditor since 2012.

 ITEM
9B.
 OTHER
 INFORMATION

 (a)
None.

 (b)
During the three months ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) under the Securities
Exchange Act of 1934, as amended) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as
such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).

 ITEM
9C.
 DISCLOSURE
 REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 None.

 PART
III.

 ITEM
10.
 DIRECTORS,
 EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 Information
regarding executive officers is included in Part I of this Annual Report on Form 10-K in Item 4A. The information required by this Item
10 of Form 10-K and not provided in Item 4A will be included under the caption "Proposal One – Election of Directors"
and "Board of Directors & Governance Matters" in our 2024 Proxy Statement and is incorporated herein by reference. Our
2024 Proxy Statement will be filed with the SEC prior to our 2024 Annual Meeting of Shareholders.

 ITEM
11.
 EXECUTIVE
 COMPENSATION

 The
information required by this Item 11 of Form 10-K will be included under the captions "Executive Compensation," "Compensation
Committee Interlocks and Insider Participation," and "Director Compensation for 2023" in our 2024 Proxy Statement and
are incorporated herein by reference.

 ITEM
12.
 SECURITY
 OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 Information
as of December 31, 2023, regarding equity compensation plans approved and not approved by shareholders is summarized in the following
table (in thousands, except per share data):

 Equity
 Compensation Plan Information

 Number
 of
 to be
 issued
 upon
 exercise
 of
 outstanding

 options,
 warrants
 and
 rights

 Weighted-

 average
 exercise
 price
 of
 outstanding

 options,
 warrants
 and
 rights

 Number
 of securities
 remaining
 available for
 further
 issuance under
 compensation
 plans
 (excluding
 reflected in
 column
 (a))

 Plan
 Category

 (a)

 (b)

 (c)

 Equity compensation plans approved
 by shareholders

 9,422

 Options to purchase common
 stock

 $
 1.35

 Restricted stock units
 and performance stock units

 9,983

 -

 Equity compensation
 plans not approved by shareholders

 -

 -

 -

 Total

 10,735

 9,422

 The
other information required by this Item 12 of Form 10-K will be included under the caption "Information about MicroVision Common
Stock" in our 2024 Proxy Statement and is incorporated herein by reference.

 ITEM
13.
 CERTAIN
 RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 The
information required by this Item 13 of Form 10-K will be included under the captions "Certain Relationships and Related Transactions"
and "Board of Directors & Governance Matters" in our 2024 Proxy Statement and are incorporated herein by reference.

 ITEM
14.
 PRINCIPAL
 ACCOUNTING FEES AND SERVICES

 The
information required by this Item 14 of Form 10-K will be included under the caption "Independent Registered Public Accounting
Firm" in our 2024 Proxy Statement and is incorporated herein by reference.

 PART
IV.

 ITEM
15.
 EXHIBITS,
 FINANCIAL STATEMENT SCHEDULES

 (A)
Documents filed as part of this Annual Report on Form 10-K:

 1.
Consolidated Financial Statements

 Report
 of Independent Registered Public Accounting Firm

 Balance Sheets as of December 31, 2023 and 2022

 Statements of Operations for the years ended December 31, 2023, 2022 and 2021

 Statements of Comprehensive Loss for the years ended December 31, 2023, 2022 and 2021

 Statements of Shareholders' Equity (Deficit) for the years ended December 31, 2023, 2022 and 2021

 Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021

 Notes
 to Consolidated Financial Statements

 2.
Financial Statement Schedules

 Schedule
II

Inc.

 Valuation
and Qualifying Accounts and Reserves Schedule

 (In

 Additions

 Year Ended December
 31,

 Balance
 at
 beginning
 of
 fiscal
 period

 Charges
 to
 costs and
 expenses

 Charges
 to
 other
 accounts

 Deductions

 Balance
 at
 end of
 fiscal
 period

 2021

 Tax valuation allowance

 $
 114,407

 $
 9,973

 $
 -

 $
 -

 $
 124,380

 2022

 Tax valuation allowance

 $
 124,380

 $
 5,745

 $
 -

 $
 -

 $
 130,125

 2023

 Tax valuation allowance

 $
 130,125

 $
 12,252

 $
 -

 $
 -

 $
 142,377

 All
other schedules are omitted because they are not applicable, or because the information required is included in the consolidated financial
statements and notes thereto.

 3.
Exhibits

 The
following exhibits are referenced or included in this Annual Report on Form 10-K.

 Exhibit
 Number

 Description

 2.1

 Asset
 Purchase Agreement, dated December 1, 2022, by and between Ibeo Automotive Systems GmbH and MicroVision GmbH (14)

 2.2

 Amendment
 Agreement, dated January 31, 2023, to the Asset Purchase Agreement, dated December 1, 2022, by and between Ibeo Automotive Systems
 GmbH and MicroVision GmbH (14)

 3.1

 Amended
 and Restated Certificate of Incorporation of MicroVision, Inc., as amended. (2)

 3.2

 Certificate
 of Amendment to the Amended and Restated Certificate of Incorporation of MicroVision, Inc. (4)

 3.3

 Certificate
 of Amendment to the Amended and Restated Certificate of Incorporation of MicroVision, Inc. dated June 7, 2018. (6)

 3.4

 Certificate
of Amendment to the Amended and Restated Certificate of Incorporation of MicroVision, Inc. dated October 8, 2020.(8)

 3.5

 Certificate
 of Amendment to the Amended and Restated Certificate of Incorporation of MicroVision, Inc. dated May, 18, 2023. (7)

 3.6

 Amended
 and Restated Bylaws of MicroVision, Inc. (5)

 4.1

 Form
 of Specimen Stock Certificate for Common Stock. (1)

 4.2

 Description
 of Common Stock (9).

 10.1

 2022
 MicroVision, Inc. Incentive Plan. (13)*

 10.2

 Lease Agreement Concerning Office Premises between Victoria Immo Properties I S. r.l., dated December 15, 2023 (covering approximately 60,000 square feet).

 10.3

 Change
 of Control Severance Plan. (3) *

 10.4

 Employment
 Agreement between MicroVision, Inc. and Sumit Sharma dated April 8, 2021. (11)

 10.5

 At-the-Market
 Issuance Sales Agreement, dated August 29,2023, by and between the Company and Craig-Hallum Capital Group LLC (10)

 10.6

 Lease
 Agreement between Redmond East Office Park LLC and MicroVision, Inc. dated September 24, 2021 (covering approximately 16,681 square
 feet). (12)

 10.7

 Lease
 Agreement between Redmond East Office Park LLC and MicroVision, Inc. dated September 24, 2021 (covering approximately 36,062 square
 feet). (12)

 10.8

 Form
 of Performance-Based Restricted Stock Unit Agreement (13)*

 10.9

 Form of Restricted Stock Unit Agreement (15)*

 10.10

 At-the-Market Issuance Sales Agreement, dated June 16,2023, by and between the Company and Craig-Hallum Capital Group LLC (16)

 21.1

 List of Subsidiaries of the Registrant

 23.1

 Consent of Independent Registered Public Accounting Firm – Moss Adams LLP.

 31.1

 Principal Executive Officer Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2

 Principal Financial Officer Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1

 Principal Executive Officer Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350, Chapter 63 of Title 18, United States Code (18 U.S.C. 1350), as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

 32.2

 Principal Financial Officer Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350, Chapter 63 of Title 18, United States Code (18 U.S.C. 1350), as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

 97.1

 Policy on Recoupment of Incentive Compensation

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 Cover

 (1)

 by reference to the Company's Post-Effective Amendment to Form S-3 Registration Statement, Registration No. 333-102244.

 (2)

 by reference to the Company's Form 10-Q for the quarterly period ended September 30, 2009.

 (3)

 Incorporated by reference to the Company's Current Report on Form
8-K filed on May 24, 2022.

 (4)

 by reference to the Company's Current Report on Form 8-K filed on February 17, 2012.

 (5)

 by reference to the Company's Current Report on Form 8-K filed on July 14, 2023.

 (6)

 by reference to the Company's Amendment No. 2 to Form S-1 Registration Statement, Registration No. 333-222857.

 (7)

 by reference to the Company's Current Report on Form 8-K filed on May 19, 2023.

 (8)

 by reference to the Company's Form 10-Q for the quarterly period ended September 30, 2020.

 (9)

 by reference to the Company's Form 10-K for the year ended December 31, 2020.

 (10)

 by reference to the Company's Current Report on Form 8-K filed on August 29, 2023.

 (11)

 by reference to the Company's Form 10-Q for the quarterly period ended June 30, 2021.

 (12)

 by reference to the Company's Form 10-Q for the quarterly period ended September 30, 2021.

 (13)

 by reference to the Company's Form S-8 filed on June 8, 2022.

 (14)

 by reference to the Company's Current Report on Form 8-K filed on February 3, 2023.

 (15)

 Incorporated by reference to the Company's Form 10-K for the year ended December 31, 2022.

 (16)

 Incorporated by reference to the Company's Current Report on Form 8-K filed on June 16, 2023.

 *

 Management
 contracts and compensatory plans and arrangements required to be filed as exhibits pursuant to Item 15(b) of this Annual Report on
 Form 10-K.

 ITEM
16. FORM 10-K SUMMARY

 None.

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 MicroVision, Inc.

 By

 /s/
 Sumit Sharma

 Sumit
 Sharma

 Date:
 February 29, 2024

 Chief
 Executive Officer and Director

 POWER
OF ATTORNEY

 KNOW
ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Sumit Sharma and Anubhav Verma,
jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to
sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the following capacities on February 29, 2024.

 Signature

 Title

 /s/
 Sumit Sharma

 Chief
 Executive Officer and Director

 Sumit
 Sharma

 (Principal
 Executive Officer)

 /s/
 Anubhav Verma

 Chief
 Financial Officer

 Anubhav
 Verma

 (Principal
 Financial Officer and Principal Accounting Officer)

 /s/
 Simon Biddiscombe

 Simon
 Biddiscombe

 /s/
 Robert P. Carlile

 Robert
 P. Carlile

 /s/
 Judy Curran

 Judy
 Curran

 /s/
 Jeffrey Herbst

 Jeffrey
 Herbst

 /s/
 Mark Spitzer

 Mark
 Spitzer

 /s/
 Brian V. Turner

 Brian
 V. Turner