Q1 2024 MicroVision Inc Earnings Call

Operator: Good afternoon, and welcome to the MicroVision First Quarter 2024 Financial and Operating Results Conference Call. At this time, all participants are in a listen-only mode. At the end of today's presentation, there will be an opportunity to ask questions via a chat line. Additionally, investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of their viewing screen. Analysts who publish research may ask questions on the phone line. To ask a question on the phone line, please press the star key followed by 1.

Good afternoon, and welcome to the Microvision first quarter 'twenty 'twenty, four financial and operating results conference call.

Operator: At this time all participants are in a listen only mode.

Operator: At the end of todays presentation, there will be an opportunity to ask questions via chat line.

Operator: Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of your viewing screen.

Operator: Analysts, who publish research may ask questions on the phone lines.

Operator: For analysts to ask question on the phone line.

Operator: Please press the star key followed by one.

Operator: Please note this event is being recorded.

Operator: Please note, this event is being recorded. I would now like to turn the conference over to Mr. Droom, Mr. Droomar. Please go ahead.

Operator: I would now like to turn the conference over to Mr. Drew.

Drew G. Markham: Drew Markham please.

Droom: Please go ahead.

Operator: Yeah.

Droom: Thank you.

Drew G. Markham: I'm pleased to be here today with our CEO, Sumit Sharma, and our CFO, Anubhav Verma. Following their prepared remarks, we will open the call to questions. Please note that some of the information you'll hear today will include forward-looking statements, including, but not limited to, statements regarding our customer and partner engagement, market landscape, opportunity, and program volume, product development and performance, comparisons to our competitors, product sales, and future demand, business and strategic opportunities, projections of future operations and financial results, availability of funds, as well as statements containing words like intend, believe, expect, plan, and other similar expressions

Droomar: I'm pleased to be here today, with our CEO Sumit Sharma and our CFO on about XOMA following their.

Drew G. Markham: Our prepared remarks, we will open the call to questions. Please note that some of the information you'll hear today will include forward looking statements, including but not limited to statements regarding our customer and partner engagement market landscape opportunity and program volume.

Drew G. Markham: Development and performance.

Drew G. Markham: Parison to our competitors' product sales and future demand business and strategic opportunities.

Drew G. Markham: Actions of future operations and financial results availability of funds as well as statements containing words like intend believe expect plan and other similar expressions.

Drew G. Markham: These statements are not guaranteed future performance. actual results could differ materially from the results implied or expressed in the forward-looking statement. We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q. These filings describe risk factors that could cause actual results to differ materially from those implied or expressed in our forward-looking statements. All forward-looking statements are made as of the date of this call, and, except as required by law, we undertake no obligation to update this information.

Drew G. Markham: These statements are not guarantees of future performance actual results could differ materially from the results results implied or expressed in the forward looking statements.

Drew G. Markham: We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K, and quarterly reports on Form 10-Q.

Drew G. Markham: These filings describe risk factors that could cause actual results to differ materially from those implied or expressed in our forward looking statements.

Drew G. Markham: All forward looking statements are made as of the date of this call and except as required by law. We undertake no obligation to update this information in.

Drew G. Markham: In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC's Regulation G. For reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure, as well as for all the financial data presented on this call, please refer to the information included in our press release and in our Form 8K dated and submitted to the SEC today, both of which can be found on our corporate website at The conference call will be available for audio replay on the investor relations section of our website. Now, I'd like to turn the call over to our CEO, Sumit Sharma.

Drew G. Markham: In addition, we will present certain financial measures on this call that will be considered non-GAAP under the Sec's regulation G for reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure as well as for all the financial data presented on this call. Please refer to the information included in our press.

Drew G. Markham: Our release and in our form 8-K dated and submitted to the SEC today, both of which can be found on our corporate website at IR, but that microvision dot com under the SEC filings tab.

Sumit Sharma: The conference call will be available for audio replay on the Investor Relations section of our website.

Drew G. Markham: Now I'd like to turn the call over to our CEO Sumit Sharma Sumit.

Sumit Sharma: Thank you, Drew, and welcome, everyone, to this review of our first quarter 2024 results. Let me start off by updating you on our progress on multiple RFQs in flight, which remain our primary focus to get automotive partnerships in place while adjusting to the OEM realities. Finally, I will provide an update on the broader view we are working on for partnerships and licensing. We believe that the best long-term opportunity for our technology in our company lies with automotive OEMs focusing on ADAS features in passenger vehicles.

Sumit Sharma: Thank you Joe and welcome everyone to this review of our first quarter 2024 results.

Sumit Sharma: Let me start off by updating you on our progress on multiple are accusing flight, which remain our primary focus is to get automotive partnerships in place.

Sumit Sharma: Adjusting to the OEM realities.

Sumit Sharma: Finally, I will provide an update on the broader view, we are working on four partnerships and licensing.

Sumit Sharma: We believe that the best long term opportunity for our technology and our company lies with automotive Oems focusing on Adas features ease of passenger vehicles.

Sumit Sharma: This segment will have the highest demand for millions of units, spread across several OEMs in North America and Germany. As I shared last time, to win and dominate in this space, a company needs, first, a ladder cost to scale in the low hundreds of dollars. Second, a smaller sensor size. Third, the highest resolution and range with the lowest power.

Sumit Sharma: This segment will have the highest demand and millions of units and it's spread across several Oems in North America and Germany.

Sumit Sharma: As I shared last time to win and dominating this space are pumping needs first lateral cost of scale in the low hundreds of dollars.

Sumit Sharma: Second smaller sensor side.

Sumit Sharma: Third highest resolution in range with lowest power.

Sumit Sharma: Fourth, Sensor Integrated Perception Software, and finally, the company operates as a financially stable tier one LiDAR supplier. I believe with conviction that our technology offerings with Maven, Movia, and Perception Software are aligned with OEM needs for existing RFQs and newly expected RFQs in 2024 that we are starting early engagement on. I understand the frustration and anxiety of our shareholders about the speed with which we can provide OEM validation of our technology. However, context is important.

Sumit Sharma: For sensor integrated perception software and finally, the company operates as a financially stable tier one lidar supplier.

Sumit Sharma: I believe with conviction that our technology offering with me, even Bolivia and perception software are aligned with OEM needs for existing argues and newly expected rfps in 'twenty 'twenty four and they are starting early engagement on.

Sumit Sharma: Yeah.

Sumit Sharma: I understand the frustration and anxiety of our shareholders on the speed with which we can provide OEM validation of our technology.

Sumit Sharma: Context is important.

Sumit Sharma: Okay.

Sumit Sharma: There's a big demand opportunity in this segment, but a wide range of challenges to meet OEM commercial requirements for successful passenger vehicle nomination. All OEMs evaluate our technology and how it fits into their individual specifications. In all cases, we need to exceed their technical requirements.

Sumit Sharma: There's a big demand opportunity in this segment, but a wide range of challenges to meet OEM commercial requirements for successful passenger vehicle nomination.

Sumit Sharma: All Oems are valued our technology and how it fits into their individuals' specifications.

Sumit Sharma: In all cases, we meet and exceed their technical requirements.

Sumit Sharma: Our team's experience and effectiveness is also a strength that OEMs often compliment us on. They find our cost structures compelling, given that we talk about wafer technology instead of rotating prisms and mechanical galvo steering. In each RFU, OEMs require significant customization of hardware, firmware, and perception software.

Sumit Sharma: Our team's experience and effectiveness is also strength that OEM often complement us all.

Sumit Sharma: They find our cost structures compelling given that we've talked about wafer technology instead of rotating prisms and mechanical gallegos steering.

Sumit Sharma: And these are a few Oems require significant customization of hardware firmware and perception software.

Sumit Sharma: Their timelines for customization and qualification are long and would require several hundred engineers for several years. Commercially, we would want them to cover the cost of this customization. But they expect these large costs to be amortized over a large volume of units to be shipped over five to seven years and borne by our investors at the risk of final volumes not being realized while flat volume pricing is provided year after year.

Sumit Sharma: Okay.

Sumit Sharma: The timelines for customization of qualification are long and would require several hundred engineers for several years.

Sumit Sharma: Commercially we would want them to cover the cost of this customization, but they expect these large cost to be amortized over a larger volume of units to be shipped over five to seven years and be borne by our investors or the risk of final volumes not being realized or flat volume pricing has provided year after year.

Sumit Sharma: Yeah.

Sumit Sharma: Any potential project we could take on would limit our ability to park or any other potential feature nomination. Some OEMs want to see our manufacturing strategy proposals to commit to factories in Asia and North America for volumes that would not justify two factory locations. Samoyed explicitly won a fact in the U.S. To be clear, they would not accept a NAFTA country but only a U.S. contract manufacturing factory while expecting cost structures that are only possible from Asia.

Sumit Sharma: Any potential project, we could take on would limit our ability to park.

Sumit Sharma: Well, if any other potential future nominations.

Sumit Sharma: Some Oems want to see our manufacturing strategy proposals Kermit two factories in Asia, and North America for volumes that would not justify two factory locations.

Sumit Sharma: Some Oems it's supposed to be one effect in the U S.

Sumit Sharma: To be clear it will not accept the naphtha country, but only a U S contract manufacturing factory.

Sumit Sharma: All expecting cost structures that are only possible from Asia.

Sumit Sharma: Others will only review proposals from Asia, while a small group wants to see a diversified operation strategy with multiple continents. Again, the expectation is that we will fund this with our investors. All OEMs want varying levels of perception. Some running within the LiDAR. Some running in their ECU. Some claiming they need no perception, but want our source.

Sumit Sharma: Others will only review proposals from Asia, while our small group wants to see a diversified operation strategy with multiple continents.

Sumit Sharma: Again, the expectation is that we will fund this with our investors.

Sumit Sharma: All Oems want varying levels of perception features some running within the lidar some running in their issue.

Sumit Sharma: So I'm, claiming they need no perception, but want our source code.

Sumit Sharma: Some OEMs want a ladder in the roof light, others want them integrated in the headlamp, and some others are only looking at behind the windshield integration. They want our core LiDAR to be flexible enough to fit into all their locations. They are aware of the trade-offs in each location, but will require updates to the core hardware. Some OEMs only want to work with us as a LiDAR Tier 1 with contract manufacturing agreements in place.

Sumit Sharma: Some Oems, while the leather and roofline, others want them integrated and headlines and some others are only looking at behind windshield integration.

Sumit Sharma: They want our core lidar to be flexible enough to fit into all their locations.

Sumit Sharma: They are aware of the trade offs in each location, but we will require updates for the core hardware.

Sumit Sharma: Okay.

Sumit Sharma: Some Oems or do you want to work with us as a lidar tier ones with contract manufacturing agreements in place.

Sumit Sharma: Others prefer a traditional Tier 1 with a diversified product portfolio and profitability with us in a partnership with them. And a smaller group wants to see our Tier 2 strategy, even if the volumes do not justify any licensing model.

Sumit Sharma: This preferred a traditional tier one with a diversified product portfolio and profitability with us and our partnership with them and a smaller group wants to see our tier three strategy, even if the volumes do not justify any licensing model.

Sumit Sharma: Yeah.

Sumit Sharma: OEMs who work very closely with us and are willing to compromise on their needs, but in general, there's a wide area we need to navigate on each RFQ. In addition, we often see OEMs that have nominated other Lidar companies in previous years actively working to evaluate us as an alternative, even though other projects have not gone into production. Additionally, other lidar companies that may have been awarded nominations for 30,000-50,000 sensors and instead represented that they were fleet-wide adoptions in their public comments on order books complicate market communication. But that is out of our control, and I expect public markets to take care of that.

Sumit Sharma: Oh, yes, we work very closely with us and are willing to compromise their needs, but in general there's a wide area, we need to navigate on each are up Q.

Sumit Sharma: In addition, we also see Oems that have nominate other lidar companies in previous years actively working to evaluate us as an alternative even though other projects have not gone into production.

Sumit Sharma: Additionally, other larger companies than they had been awarded nominations were 30 to 50000 and sensors and instead represented they were fleet wide adoptions in their public comments on order books complicate market communication.

Sumit Sharma: But that is out of our control and expect public markets would take care of that.

Sumit Sharma: I believe this is context for our shareholders to understand why providing certainty on timing on any deal is hard to predict for MicroVision. With OEM startup production timelines moving out later in this decade and aligning to regulations that will be rolling out while the global product strategies are changing by region and powertrains, there are just too many variables that we face as we work with them to secure nominations. But let's not forget that these are the biggest opportunities in the automotive technology space with multiple OEMs and multiple regions with millions of units expected in the future. This is the best alignment for our technology and products. Getting through this complicated set of variables is first.

Sumit Sharma: I believe this is content for our shareholders to understand why providing certainty on timing on any deal is hard to predict for microvision.

Sumit Sharma: With Oems startup production timelines moving out later in this decade and aligning for regulations that will be rolling out while they're global product strategies are changing by region and powertrains. There are just too many variables that we face as we work with them to secure nominations.

Sumit Sharma: But let's not forget these are the biggest opportunities in automotive technology space with multiple Oems in multiple regions with millions of units expected in the future. This.

Sumit Sharma: This is the best alignment to our technology and products.

Sumit Sharma: Getting through this complicated set of variables is first to.

Sumit Sharma: Finding our first partnerships remains our primary focus, and I believe it represents the best way possible to build shareholder value. Based on past experiences with April 2017 OEM, we know that we must only agree to contract terms to support the long-term health of the company, as well as the interests of our shareholders. Currently, we're engaged in seven RFQs for our MAVEN product. Since the Q1 update, we have disengaged on two RFKs.

Sumit Sharma: You'll find our first partnerships remains a primary focus and I believe represents the best way possible to build shareholder value.

Sumit Sharma: Based on past experiences with April 2017, OEM, we know that we must only if you get contract terms to support the long term health of the company as well as the interest of our shareholders.

Sumit Sharma: Currently we remain engaged in seven Rfps for amazing product.

Sumit Sharma: Yeah.

Sumit Sharma: Since Q1 update we have disengaged onto our skus.

Sumit Sharma: In one RFQ for a passenger vehicle of our Movia S product, the OEM moved the decision point beyond 2024 as they look to realign their model year strategy. This decision has nothing to do with our technology but rather their product strategy. In another RFQ for our Movia L-sensor for a global trucking OEM, we were not able to reach a commercial agreement. However, we were told that our sensor and software proposal was the most mature and top-of-the-line.

Sumit Sharma: And one of our F Q4, our passenger vehicle of our movie as product. The OEM moved the decision point beyond 2024, as they look to realign their model year strategy.

Sumit Sharma: This decision has nothing to do with our technology, but rather their product strategy.

Sumit Sharma: Even though there are a few for a mogul sensor for a global trucking Oems who were not able to reach commercial agreement.

Sumit Sharma: We were told that our sensor and software <unk> was the most mature and top offering.

Sumit Sharma: Our manufacturing strategy was the highest level of maturity and went through the qualification process, reporting to us as being in the top 10th percentile of their suppliers. A commercial proposal was also accepted. Their preference was for a partner with a more diversified product and revenue portfolio. MicroVision cannot accept an agreement limited to B-sample only since we would have to take on significant financial risk for a full program with only a B-sample phase agreement. Ultimately, we could not reach a mutually beneficial agreement.

Sumit Sharma: Our manufacturing strategy was the highest level of maturity and went through the qualification.

Sumit Sharma: Reported to us as in the 10th percentile of all of their suppliers.

Sumit Sharma: Our commercial proposal was also accepted.

Sumit Sharma: Their preference for a partner with a more diversified product and revenue portfolio.

Sumit Sharma: Microvision cannot accept an agreement limited to be sample only since it would have to take on significant financial risk for a full program with only be sample phase agreement.

Sumit Sharma: Ultimately, we could not reach a mutually beneficial agreement.

Sumit Sharma: As I said earlier, with the wisdom that comes from experience, we know how important it is for us to avoid any partnership that gives outsized benefits to the significantly larger OEM while putting the long-term health of the company in jeopardy. We continue making progress on seven RFQs for our Maven products. Timelines for decisions from OEMs continue to shift, given that there are multiple configurations, mounting locations, integration, and model year needs. OEM teams acknowledge that a lot of internal decisions are in flight to reduce configurations, and they remain engaged with us.

Sumit Sharma: As I said earlier with the wisdom that comes from experience. We know how important it is for us to avoid any partnership that gives outsized benefit to the significantly larger OEM, while putting the long term health of the company in jeopardy.

Sumit Sharma: We continue making progress on seven hour accused for our main products.

Sumit Sharma: Timeline for a decision from Oems continue to shift given that there are multiple configurations mountain locations integration model their needs.

Sumit Sharma: Well, we have to acknowledge that a lot of internal decisions are in flight to reduce configurations and they remain engaged with us.

Sumit Sharma: On the Maven product development front, our H3 development and B sample design and pilot plans continue to move forward. We chose to fund these ahead of any nomination since demonstrating mature hardware is a requirement for all OEMs. We have not funded any new development for MOVIA-L or MOVIA-S up to this point.

Sumit Sharma: On our maven product development front, our ASIC development and be simple design and pilot plans continue to move forward.

Sumit Sharma: We chose to fund. These ahead of any nominations since demonstrating mature hardware is a requirement for all Oems.

Sumit Sharma: We have not funded any new development for <unk> L. Our movie as up to this point.

Sumit Sharma: Movia L-Hardware is in production now, and is a great demonstration point for OEMs to value partnerships from. The outcome of the Mobiel RFQ that I described was not what we wanted, but this was a great engagement for us. We remain able and willing to support the OES. From my perspective, their vision for autonomous trucking is uniquely positioned and I believe it is the most viable one I have seen. Ultimately, we understand their needs for the business, and we express our needs as suppliers.

Speaker Change: Oh hardware is in production now.

Sumit Sharma: And as a great demonstration point for OEM to value partnerships wrong.

Sumit Sharma: The outcome of the mobile RF Skus that I described was not what we wanted but this was a great engagement for our company.

Sumit Sharma: We remain able and willing to support the OEM.

Sumit Sharma: From my perspective their vision for autonomous trucking is uniquely positioned and I believe is the most viable one I've seen.

Sumit Sharma: Ultimately, we understand their needs for the business and we express our knees a supplier.

Sumit Sharma: As a company, we have lived through the lingering challenges resulting from a one-sided contract, and we have to make the right long-term choice. Please stand ready to support them in future programs. Given this landscape and the OEM timeline to decisions shifting for SOP in 2028, we're exploring other opportunities for partnerships and licensing in smaller industrial markets that would allow us to bring in non-dilutive capital into the company for the technology assets we have.

Sumit Sharma: As a company we have moved through the lingering challenges, resulting from a one sided contract and we have to make the right long term choice.

Sumit Sharma: We stand ready to support them on future programs.

Sumit Sharma: Given this landscape and OEM timeline decisions shifting for S&P in 2028 were exploring other opportunities for partnership and licensing in smaller industrial markets that will allow us to bring in non dilutive capital into the company.

Sumit Sharma: But the technology assets, we have.

Sumit Sharma: We will talk more about this as we make progress, but this is what we are also paying attention to generate revenue from industrial sales and partnerships and collaborate on potential licensing opportunities for Movia and Mosaic. We are fortunate that we have a wider portfolio of distinct products that address automotive and industrial needs. Given the market environment, I believe we are taking prudent steps to reach a sustainable path. I personally remain profoundly committed to the company and the vision. I would like to now turn the call over to Anubhav to talk about our finances.

Sumit Sharma: We will talk more about this as we make progress but this is what we are also getting attention too.

Anubhav: We generate revenue from industrial sales and partnerships and collaborate on perpetual license opportunities for mobile and mosaic.

Anubhav: We are fortunate that we have a wider portfolio of distinct products that address automotive and industrial needs.

Anubhav: Given the market environment I believe we are taking prudent steps to reach a sustainable path.

Anubhav: I personally remain profoundly committed to the company and division.

Anubhav: I would like to now turn the call over to unopposed could talk about our financials and above.

Anubhav: Thanks, so much.

Anubhav Verma: Thanks, Sumit. The challenges for the auto, mobility, and ADAS industries continue to persist amidst the current market conditions. Auto OEMs, tier 1s, and ADAS companies, and in particular, LiDAR companies, continue to experience market pressure. Specifically, the auto OEMs in the U.S. and Germany that remain our primary customer demographic are experiencing stronger pressure mainly due to two factors. Number one is stiff competition from Chinese OEMs in terms of both prices and features of SDVs, or software-defined vehicles.

Anubhav: The challenges for the auto mobility, and Adas industries continue to persist amidst the current market conditions.

Anubhav Verma: Auto Oems tier ones and Adas companies and in particular Lidar companies continue to experience market pressure.

Anubhav Verma: Particularly the auto Oems and U S and Germany that remain our primary customer demographic are experiencing stronger pressure, mainly due to two factors.

Anubhav Verma: These software-defined vehicles are being run on centralized computers with domain controllers, with 10-12 cameras, 1-5 lidars, and several radars, while the U.S. and German OEMs are still showcasing vehicles with ADAPT features enabled only by cameras and radars. The pressure to produce vehicles with advanced ADAS features continues to increase for U.S. and German OEMs to stay competitive. The second is the cost focus.

Anubhav Verma: One is stiff competition from the Chinese Oems in terms of both prices and features of F. D V or software defined vehicles.

Anubhav Verma: <unk> software defined vehicles are being run on centralized computers with domain controller with tend to dwarf cameras, one through five lidar and several radars.

Anubhav Verma: While the U S and German Oems are still showcasing vehicles with Adas features enabled only by cameras and radars.

Anubhav Verma: Pressure to produce vehicles with advanced Adas features continues to increase for U S and the German Oems to stay competitive.

Anubhav Verma: The second is the cost focus.

Anubhav Verma: OEMs here are also under pressure to realize returns on huge investments made for their transition from ICE, or Internal Combustion Engines, to EV products, as EV adoption is lagging in the North American market. Coupled with this, the recent UAW actions in North America are further driving OEMs to be laser-focused on cost to roll out the new model. Recently, one of the major OEMs pushed out their decision on LiDAR beyond 2024 as they internally aligned their Asia strategy.

Anubhav Verma: Yes here are also under pressure to realize returns on huge investments made for their transition from ice or internal combustion engines to EV products at EV adoption is logging into north American markets, coupled with this the recent UAW actions in North America are further driving.

Anubhav Verma: Oems to be laser focused on cost to rollout the new models.

Anubhav Verma: Recently, one of the major Oems pushed out their decision on Lidar beyond 'twenty 'twenty four as they internally aligned their Asia strategy.

Anubhav Verma: This RFQ was for high-volume passenger cars that we were competing for. We believe that this could be in response to the growing competition from Chinese OEMs to realign their global strategy and expand the LiDAR RFQ scope in order to compete on a global basis to offer these advanced ADAS features. In addition to this, the high interest rate environment directly impacts the cost of capital available for both OEMs and Tier 1s to take on new sensor programs like LiDAR to enable advancement towards higher levels of autonomy in their vehicles.

Anubhav Verma: This RFP award for high volume passenger cars at Viva or competing for it.

Anubhav Verma: We believe that this could be in response to the growing competition from the Chinese Oems to realigned our global strategy and expand the Lidar RFG scope in order to compete on a global basis to offer these advanced Adas features.

Anubhav Verma: In addition to this the high interest rate environment further directly impacts the cost of capital available for both Oems and tier ones you take on new sensor programs like lidar to enable advancements towards higher levels of autonomy in their vehicles.

Anubhav Verma: As we mentioned last time, quite a few Tier 1s have publicly announced their intentions to shift their focus away from LiDAR. Also, in the recent past, we have seen many publicly announced delays and financial losses caused by immature LiDAR products and their expensive industrialization process. This has driven the OEMs to be more careful in selecting the LiDAR suppliers and cause longer selection timelines and more stringent evaluation criteria.

Anubhav Verma: As we mentioned last time quite a few tier ones have publicly announced their intention to shift their focus away from lidar.

Anubhav Verma: Also in the recent past, we have seen many publicly announced delays and financial losses caused by immature lidar products and they're expensive industrialization process.

Anubhav Verma: This has driven the Oems to be more careful in selecting the lidar suppliers and caused longer collection timelines and more stringent evaluation criteria.

Anubhav Verma: Simply put, with only a handful of Tier 1s interested in LiDAR, the business objective for OEMs is to find a high-fidelity LiDAR sensor provider acting as a Tier 1 themselves to enable the L2 plus L3 features for ADAS at the lowest price. Given the publicly announced delays and losses sustained in the LiDAR program so far, OEMs are taking longer to identify LiDAR suppliers who will be able to fund their own business and sustain on smaller projects, lower volumes, especially in the initial years, and scale accordingly when the volumes ramp up in the second half of this decade.

Anubhav Verma: Simply put with only a handful of tier ones interest and Lidar the business objective for Oems is to find a high fidelity lidar sensor provider acting as a tier ones themselves to enable the as do plus LTE features for <unk> at the lowest price.

Anubhav Verma: Given the publicly announced delays and losses sustained in the Lidar program. So far Oems are taking longer to identify lidar suppliers, who will be able to fund their own business and sustain on smaller projects lower volumes, especially in the initial years and scale of <unk>.

Anubhav Verma: When the volumes ramp up in the second half of this decade.

Anubhav Verma: On the supply side of the equation, the objective of the LiDAR players is to navigate these initial low production volume years to measure rate with their cash burn and be well positioned to scale up and become profitable when the volumes ramp up later in the decade. This is primarily the reason why LiDAR companies are under pressure from investors and markets, especially companies that have announced nomination wins or serial production awards from OEMs.

Anubhav Verma: On the supply side of the equation.

Anubhav Verma: The objective of the Lidar players is to navigate these initial low production volume years commensurate with their cash burn and be well positioned to scale up and become profitable when the volumes ramp up later in the decade.

Anubhav Verma: This is primarily the reason why lidar companies are under pressure from investors in markets.

Anubhav Verma: Especially lidar companies that have announced nomination wins or serial production awards from Oems.

Anubhav Verma: All lidar companies that have announced significant serial production award with sizable commitments are under more pressure because of three reasons number one the ramp of revenue from such perceived wins has been much slower than the pace initially communicated to the market.

Anubhav Verma: All LiDAR companies that have announced significant serial production awards with sizable commitments are under more pressure because of three reasons. Number 1, the ramp of revenue from such perceived wins has been much slower than the pace initially communicated to the market. Second, the volumes, even with the start of production, are nowhere near the publicly announced.

Anubhav Verma: The volumes, even with the startup production are nowhere near the publicly announced targets.

Anubhav Verma: And number three, higher cash costs for industrialized products and unexpected financial losses to their individual cash funds as they have to front higher costs for lower volume projects. The markets are penalizing these companies for producing results that are not even in the right zip code of the aggressive targets set by them at the onset. Most of these companies are trading at significantly lower values post-announcement of Serial Wind. The depressed market valuations are clearly indicating that all these LiDAR companies will need several hundreds of millions of dollars of funding given their pursuit of smaller volume projects. We saw this in play in one of the RFQs we were competing in with a global commercial trucking OEM, as Sumit described.

Anubhav Verma: And number three higher cash cost to industrialized products and unexpected financial losses do their individual cash burn as they have to fund the higher cost for lower volume projects.

Anubhav Verma: The markets are penalizing. These companies for producing results that are not even in the right ZIP code of the aggressive targets set by them at the onset.

Anubhav Verma: Most of these companies are trading at significantly lower values post announcement of theater wins.

Anubhav Verma: The depressed market valuations are clearly, indicating that all these lidar companies will need several hundreds of millions of dollars of funding given their pursuit of smaller volume projects.

Anubhav Verma: We saw this in play and one of the oddest used we were competing with from a global commercial trucking OEM some of this right.

Anubhav Verma: As we progressed through multiple rounds of evaluation and of technological and commercial aspects of our Movia L proposal spanning over six months, they were very impressed with our sensor proposal and our manufacturing strategy as it had the highest level of maturity. Our commercial proposal was also accepted, however, they preferred a more traditional partner with a more diversified revenue portfolio as their volumes were lower. They offered us to do a B-sample development only instead of a full nomination.

Anubhav Verma: As we progress through multiple rounds of evaluation and of technological and commercial off or move yet L proposal spanning over six months, Dave we're very impressed with our sensor proposal and our manufacturing strategy.

Anubhav Verma: It had the highest level of majority.

Anubhav Verma: Our commercial proposal was also accepted however, they prefer a more traditional partner with more diversified revenue portfolio as their volumes were lower.

Anubhav Verma: They offered us to do a b sample development all the instead of a full nomination.

Anubhav Verma: We could not reach a mutual agreement since MicroVision would be required to take on significant financial risks up front for the full program with only the B-sample phase agreement. Additionally, we would need to commit significant resources to a lower-volume project that would have kept us from competing with the other bigger-volume passenger car RFQs. If I can summarize all this, there is a huge demand for LiDAR in the second half of this decade, which is being driven by the global competition and market. The current business challenge, however, is low volume and projects and low revenue from the auto industry in the near term and the ability to sustain these initial years to emerge as one of the few standing LiDAR companies.

Anubhav Verma: We could not reach a mutual agreement since microvision would be required to take on significant financial risks upfront for the full program with only the b sample faced agreement.

Anubhav Verma: We would need to commit significant resources for a lower volume project that would have kept us from competing with the other bigger volume passenger car RF skus.

Anubhav Verma: If I can summarize all of this there is a huge demand for lidar in the second half of this decade, which is being driven by the global competition and marketplace.

Anubhav Verma: The current business challenge, however is low volume and projects and lower revenue from the auto in the near term and the ability to sustain these initial years to emerge as one of the few standing lidar companies.

Anubhav Verma: Now, what does this mean for MicroVision and our shareholders? And how do we plan to be successful in navigating this period of low volume? We have to adapt from what the financial markets are indicating to us and do the following three things. Number one, we focus our efforts only on big volume passenger car projects from OEMs. Making the right selection is very important for us.

Anubhav Verma: Now what does this mean for Microvision and our shareholders and how do we plan to be successful in navigating this period of low volume.

Anubhav Verma: We have to adapt from what the financial markets are indicating to us and do the following three things number one we focus our efforts only on big volume passenger car projects from Oems, making the right selection is very important for us.

Anubhav Verma: We want to commit resources only to large volume OEM projects as that will be the best use of our capital. In the meantime, bring in revenue streams from non-automotive verticals and accelerate their growth; pursue diversification of revenue streams of non-automotive industrial channels with shorter sales cycles to reduce the dependence on low volumes in the short to medium term. This is very essential as all serial production revenue will be material only with economies of scale, which won't happen until later this decade. 2.

Anubhav Verma: We want to commit resources only for large volume OEM projects that will be the best use of our capital.

Anubhav Verma: In the Meanwhile, bring in revenue streams from non automotive verticals and accelerate their growth.

Anubhav Verma: We're through diversification of revenue streams of non automotive industrial channels with shorter sales cycles to reduce the dependence on low volumes in the short to medium term.

Anubhav Verma: This is very essential at all see that production revenue will be material only with economies of scale, which won't happen until later this decade.

Anubhav Verma: Maintain our long-standing capital-light business model with a low cash burn to stay ahead of the curve compared to all other LiDAR players. Our products are mature, and we do not need to invest in the next generation of MAVEN or MOVIA, unlike our competition. Most of our competition that has announced CDER production wins will need significant capital in the next 12 to 18 months, including refinancing of over $600 million of convertible security.

Anubhav Verma: Number two maintain our long standing capital light business model with a low cash burn to stay ahead of the curve compared to all other lidar players.

Anubhav Verma: Our products are mature and we do not need to invest in the next generation of maybe an automobile unlike our competition.

Anubhav Verma: Most of our competition that has announced cedar production wins would need significant capital in the next 12 to 18 months, including refinancing of over $600 million of convertible securities.

Anubhav Verma: This is a very clear differentiation for MicroVision as our capital needs are not as intensive as others. With our 150 million ATM program, we can be very opportunistic in raising capital and in no rush to pressure the stock like other industry players have done. MicroVision has always demonstrated prudent management of expenses with a strong balance sheet that is scalable.

Anubhav Verma: This is a very clear differentiation for microvision as our capital needs are not as intensive as others.

Anubhav Verma: With our $150 million ATM program, we can be very opportunistic in raising capital and in no rush to pressured the stock like other industry players have done.

Anubhav Verma: Microvision has always demonstrated prudent management of expenses with a strong balance sheet that is scalable we believe that our mature product portfolio successfully meet all the RF requirements.

Anubhav Verma: We believe that our mature product portfolio successfully meets all the RFQ requirements. We will start investing in the next generation of products when the auto revenue stream is stronger and the time is right.

Anubhav Verma: Would start investing in the next generation products when the auto revenue stream is stronger and the time was right.

Anubhav Verma: Bring in non-dilutive cash into the business by pursuing meaningful licensing and partnership opportunities for Mobya products and their applications in specialized sub-verticals of the industrial market, including forklifts, warehouse automation, etc. This will further help in demonstrating to the market our financial prudence and intention to build long-term value in this company. Now, let's dive into the Q1 numbers.

Anubhav Verma: Number three bring in non dilutive cash into the business by pursuing meaningful licensing and partnership opportunities for <unk> products and their obligations in specialized sub war that goes under the industrial market, including forklifts warehouse automation et cetera.

Anubhav Verma: This will further has been demonstrating to the market our financial Prudence and intention to build long term value in this company.

Anubhav Verma: So let's dive into Q1 numbers.

Anubhav Verma: For the first quarter, we recorded $1 million in revenue, which is slightly ahead of our expectations. Revenue in Q1 was primarily attributable to the sale of Movia devices to a global commercial trucking OEM as part of their RFQ evaluation process. We also sold our sensors to a leading agricultural equipment company for industrial applications.

Anubhav Verma: For the first quarter, we recorded.

Anubhav Verma: $1 million in revenue, which is slightly ahead of our expectations.

Anubhav Verma: Revenue in Q1 was primarily attributable to the sale of mobile devices due to the global Cup to a global commercial trucking Oems as part of their RFP evaluation process.

Anubhav Verma: We also sold our sensors to a leading agricultural equipment company for industrial applications.

Anubhav Verma: From a gross margins profile standpoint, on an adjusted basis after adding back the amortization of the acquired intangibles and adjusting for one-time licensees, the gross margins were approximately 25%. We continue to differentiate ourselves significantly from our peers who have either upside down negative growth margins or near zero margins in both the industrial and automotive worlds to support momentum in direct sales last fall in 2023. We also placed an order to build the new Movia inventory with ZF Auto Cruise to help satisfy demand from non-automotive customers. We're beginning to see medium- to long-term partnerships with significant multi-year revenue opportunities in the industrial sector, especially in forklifts and warehouse automation applications. Expenses

Anubhav Verma: From a gross margin profile standpoint on an adjusted basis after adding back the amortization of the acquired intangibles and adjusting for onetime license fee. The gross margins were approximately 25%.

Anubhav Verma: We continue to differentiate ourselves significantly from our peers, who have either upside down negative growth margins are near zero margins in both industrial and automotive verticals.

Anubhav Verma: To support momentum in direct sales last fall in 2023, we also placed in order to build the new mobile inventory.

Anubhav Verma: <unk> auto crews to help satisfy demand from non automotive customers.

Anubhav Verma: We're beginning to see medium to long term partnerships with significant multiyear revenue opportunities in the industrial sector, especially in forklifts and warehouse automation obligations.

Anubhav Verma: In terms of expenses, we had approximately $26.4 million in R&D and SG&A expenses in Q1. This is $2.4 million higher than last quarter because in Q1 we rationalized our workforce and eliminated positions related to the sensor fusion development work primarily in Germany. The higher human expenses are driven by the one-time restructuring charges associated with these actions.

Anubhav Verma: Expenses in terms of expenses, we had approximately $26 4 million of R&D and SG&A in Q1.

Anubhav Verma: This is $2 4 million higher than last quarter.

Anubhav Verma: Because in Q1, we rationalized our workforce eliminated positions related to the sensor fusion development work primarily in Germany.

Anubhav Verma: The higher Q1 expenses are driven by the one time restructuring charges associated with these actions.

Anubhav Verma: These actions were taken in line with our business strategy to focus on revenue-generating opportunities in the near term. The expenses also include $3.7 million of non-cash, stock-based compensation and $1.8 million of depreciation and amortization. For the first quarter, $20.8 million of cash was used in operating activities, which is in line with our communicated expectations. To remind our investors, we continue to show financial discipline with our cash currents being within our expectations and on a healthy trajectory.

Anubhav Verma: These actions were taken in line with our business strategy to focus on revenue generating opportunities in the near term.

Anubhav Verma: The expenses also include $3 7 million of noncash stock based compensation and $1 8 million of depreciation and amortization.

Anubhav Verma: For the first quarter $28 million cash was used in operating activities, which is line with our communicated expectations.

Anubhav Verma: To remind our investors we continue to show financial discipline with our cash burn being within our expectations and on a healthy trajectory of expected Q1, Capex was $5 1 million in line with our expectations as well.

Anubhav Verma: As expected, Q1 CapEx was 0.1 million euros, in line with our expectations as well. Let's talk about our balance sheet. As of March 31, the 3 million euro payment was released from the escrow related to the IBAO acquisition. This was earmarked as a restricted cash asset on our books. This asset was released in the last quarter.

Anubhav Verma: So let's talk about our balance sheet as of March 31, the three.

Anubhav Verma: 3 million payment was released from the escrow related to the IBM acquisition. This was earmarked as a restricted cash asset on our books. This asset was released in the last quarter.

Anubhav Verma: The final payment for the IBO acquisition will be paid out in Q2, roughly in line with the remaining accrued liability on the balance sheet of $3 million as of March 31, 2024. Our liquidity was $201.3 million as of March 31, including $73 million of cash and cash equivalents and investment securities and $128 million availability under the current ATM facility. We believe we have sufficient cash and cash equivalents, along with our ATM facility, to have an adequate runway.

Anubhav Verma: The final payment for the <unk> acquisition will be paid out in Q2 roughly in line with the remaining accrued liability on the balance sheet of $3 million as of March 31 2024.

Anubhav Verma: Our liquidity was $201 3 million as of March 31, including $73 million of cash and cash equivalents and investment securities.

Anubhav Verma: And in $128 million of availability under the current ATM facility.

Anubhav Verma: We believe we have sufficient cash and cash equivalents, along with our ATM facility to have an adequate runway.

Anubhav Verma: We have one of the cleanest capital structures amongst our peers. MicroVision continues to stand out and beat competition in terms of maintaining one of the lowest cash burns in the industry with a highly talented pool of engineers in both the U.S. and Germany.

Anubhav Verma: We have one of the cleanest capital structures amongst our peers.

Anubhav Verma: Microvision continues to stand out and beat the competition in terms of maintaining one of the lowest cash burn in the industry with a highly talented pool of engineers in both U S and Germany.

Anubhav Verma: We sold 10.4 million shares for a net proceeds of 20.6 million under the current ATM in the last quarter. The ability to strategically and opportunistically raise money via ATMs positions MicroVision very favorably as compared to its peers, some of which had to resort to structured finance transactions to raise capital at significant discounts.

Anubhav Verma: We sold 10 4 million shares for net proceeds of $20 6 million under the current ATM in the last quarter.

Anubhav Verma: The ability to strategically and opportunistically raise money via Atms position microvision very favorably as compared to our peers.

Anubhav Verma: Some of which would had to resort to structured finance transactions to raise capital at significant discounts.

Anubhav Verma: We believe that with our current cash and our ATM facility, we are well situated to deliver. Let's talk about the 2024 outlook. We're expecting at least between $8 to $10 million in revenue from the following streams. As of December, we already had a backlog of 3.1 million. The revenue is expected to come from... the sales of LiDAR sensors to both automotive and non-automotive customers as the volume ramps up. Number two, direct channel sales, which include the sale of our hardware to non-automotive customers and software to our customers, which include forklifts, warehouse automation robots, agricultural, and mining equipment companies.

Anubhav Verma: We believe that with our current cash and our ATM facility, we are well situated to deliver.

Anubhav Verma: Now, let's talk about 2024 outlook, we're expecting at least between $8 million to $10 million in the revenue from the following streams.

Anubhav Verma: As of December we have already a backlog of $3 $1 million. The revenue is expected to come from this.

Anubhav Verma: Sales of Lidar sensors, do both automotive and non automotive customers as the volume ramps up.

Anubhav Verma: Number two a direct sales channel sales, which include sales of our hardware to non automotive customers and software to our customers that include forklifts warehouse automation robots agricultural and mining equipment companies.

Anubhav Verma: From a cash flow standpoint, we expect the cash flow for 2024 to be similar to 2023, between $65 to $70 million. We believe we have all the necessary engineering resources to deliver on our customer projects. To summarize, we're really excited about 2024 and beyond. Alberta, I would now like to open the line for questions.

Anubhav Verma: From a cash flow standpoint, we expect the gastro <unk> for 2024 to be similar to 2023 between $65 million to $70 million. We believe we have all the necessary engineering resources to deliver on our customer projects summarized we're really excited about 2024 and beyond Alberta, I would now like to open the line for questions.

Anubhav Verma: <unk>.

Alberta: Thank you.

Operator: Thank you. At this time, we are conducting our question and answer session. Investors can submit their questions within the meeting webcast by typing them into the question and answer button on the left side of your screen and hitting submit. Additionally, analysts who publish research may ask questions on the phone line. For analysts to ask questions on the phone line, please press the star key followed by the number 1. Thank you. Our first question is coming from Andre Sheppard on Counterfeit. Your line is live.

Alberta: At this time, we are conducting our question and answer session.

Operator: Investors can submit their questions within the meeting webcast by typing them into the question and answer button on the left side of your screen.

Andre Sheppard: Hedging suddenness.

Operator: Analysts, who publish research math questions on the phone line.

Operator: For analysts to ask questions on the phone line. Please press the Starkey followed by the number one.

Andre Sheppard: Thank you.

Andre Sheppard: Our first question is coming from.

Andre Sheppard: Andres Sheppard with Cantor Fitzgerald your line is nice.

Operator: Hi, everyone. Good afternoon, and thanks for taking our questions. Can you hear me okay? Yes, Anand. Please speak in.

Andre Sheppard: Hello, everyone. Good afternoon, and thanks for taking our questions can you hear me okay.

Anand: Yes, I'll just briefly.

Operator: Okay, wonderful. Thank you. You know, Sumit, I want to maybe start with OEMs.

Andre Sheppard: Okay wonderful thank you.

Operator: Sumit I wanted to maybe start with with Oems.

Operator: You know, last quarter you mentioned you expected to announce an OEM contract win by March 31st. So, I guess, can you help us understand what happened with this particular contract? Was the contract award lost to a competitor, or was the timeline kind of delayed further? Just, I guess, trying to understand what might have happened there. Thank you.

Andre Sheppard: Last quarter, you had mentioned I think you expect it to announce an OEM contract win by March 31.

Operator: So I guess can you help us understand what happened with this particular contract was the contract award lost to a competitor or whats the timeline kind of delayed further just just I guess trying to understand what what might have happened there. Thank you.

Speaker Change: Yes, I think.

Sumit Sharma: I think that, you know, there's other announcements in public from somebody else, you know, so I'll let people sort of ferret that out. To be honest with you, we were on the call where we were talking about, you know, timelines for RFQ completion and nomination, talking about MOUs, talking about all the things that go during the contract right the day after the earnings call. I mean, our confidence was that high; we were that engaged in it.

Operator: I think.

Speaker Change: Further analysis and public from somebody else, so I'll, let people sort of ferret that out.

Sumit Sharma: We are honest with you we were on the call.

Sumit Sharma: We're talking about timelines to RFU completion of nomination talking about Mou is talking about all the things that goal during the contract. The day after the earnings call I mean, our confidence was that high fluid that engaged in it.

Sumit Sharma: You know, but ultimately, you cannot reach an agreement when, you know, as I mentioned in my prepared remarks, there's a huge asymmetry. And, of course, we have previous experience that if you have a contract that's so asymmetric, all our people will be dedicated to it. Even though, you know, we have a great relationship with them, they acknowledge that the volume is not big enough. They, you know, say that they're concerned about that.

Sumit Sharma: But ultimately you cannot reach an agreement wherein.

Sumit Sharma: As I mentioned in my prepared remarks, there's a huge asymmetry and of course, we have had previous experience that if you have a contract that's always symmetric all our people will be dedicated to it even we have a good relationship with them. They acknowledged that the volume is not big enough, but they are concerned about that and we're concerned also that you know of.

Sumit Sharma: And they're concerned also that, you know, if a nomination like that happens, do we have the talent to actually go after something bigger that would actually right the ship for us? So, you know, like anything else, right? You're discussing, you're confident, you have to, you know, earnings calls happen when they happen, right? You have to give the most realistic, you get the most realistic view to our investors of where we are. And then, you know, our expectations were clearly stated, and we just could not reach an initial agreement.

Sumit Sharma: The nomination like that happens do we have the talent to actually go out for something bigger that would actually write the shift for us. So.

Sumit Sharma: Like anything else right Youre discussing your confidence.

Sumit Sharma: Earnings call happened when it happened right you have to give the most realistic if you get the most realistic view to our investors into the market of where we were.

Sumit Sharma: And then.

Sumit Sharma: Our expectations were clearly stated and just could not reached a mutual agreement.

Operator: I see. Okay. I appreciate that. That's a helpful context.

Speaker Change: I see okay. I appreciate that that's helpful context, I guess.

Operator: You know, to follow up on that, you know, by now, I think, you know, some of your competitors have won some OEM contracts out there. You have, I think, Innovis with BMW, Luminar with Polestar, I think, Aeva with Dambler, you know, and some of these are producing material revenues for the year. You know, Ouster is on pace for $116 million in revenue this year with a 30% gross margin. Innovis is on pace for, I think, about $40 million in revenue for the year.

Speaker Change: Follow up on that but.

Speaker Change: By now I think it's.

Operator: Some of your competitors have won some OEM contracts out there you have I think into this with BMW illumina with Costar I think Eva with gambler.

Operator: Some of these are producing material revenues for the year you know Alastair is on pace for $116 million in revenue. This year with 30% gross margin in a is on pace for things above $40 million in revenue for the year. So I guess what is the can you give us maybe a firm timeline as to when you might expect.

Operator: So, I guess, what is the, you know, can you give us maybe a firm timeline as to when you might expect an announcement win from an OEM? You know, is this something we can target for Q3, for Q4, or is this maybe a 2025 story? Thank you.

Speaker Change: It's been a win from from from an OEM. You know is this something now we can target for Q3 for Q4 or is this maybe a 2025 storey. Thank you well I think well I think you've matched a few things there. So the OEM wins are the first I'll start does not have any automotive OEM win so let's separate that let's be clear okay.

Sumit Sharma: Well, I think you've mixed up a few things there. So, the OEM wins are the first. Ouster does not have any automotive OEM wins. So, let's just separate that. Okay. Anything they've announced for BMW, right? I will let them defend it. You know, what was the first and last order that was received?

Sumit Sharma: Anything they have announced for BMW right I will let them defend it what was the first in the last quarter that was received I think you probably know more than that because you are an analyst there.

Sumit Sharma: I think you probably know more than that because you're an analyst there. And on top of that, like the other companies you mentioned, their burn rate versus revenue, I mean, we would want to be in that position, yeah, if it was big enough. But it's clear the ones that anybody signed are between $30,000 to $50,000, and they have this thing called an order book that actually complicates our conversation with the OEM about what we would expect for an announcement.

Sumit Sharma: And on top of that as in other countries you mentioned their burn rate versus revenue I mean, we would want to be in that position. Yes. If it was a big enough, but it is clear the ones that anybody's signings between 30 to 50000 and they have to thank all the order book, but actually complicates our conversation with the OEM of what we would expect for an announcement.

Sumit Sharma: So, I think it's great to say numbers out there, but it would be wonderful to see what revenues actually come from BMW, right? And, you know, we look forward to hearing from that, you know, in the coming months. But when you think about these RFPs that we're talking about right now, they're in it. I'm pretty sure they're in it.

Sumit Sharma: So I think it's great to see numbers out there, but it would be wonderful to see what revenue is actually coming from BMW right and we look forward to getting from that in the coming months, but.

Sumit Sharma: When you think about these rfps that we're talking about right now they are in it I'm pretty sure there isn't it.

Sumit Sharma: And these are substantial volumes that were not offered before. So whatever communication we've done in the past is not accurate, but I think the market has to figure that out, you know, for those companies. It's not our place to, you know, clear that up. But as far as I'm concerned...

Sumit Sharma: And these are substantial volumes that were not offered before so whatever communications. We've done in the past is not accurate, but I think the market has to figure that out to those companies got its not our place to nuclear that up.

Sumit Sharma: But as far as I'm concerned.

Sumit Sharma: If I knew something, I think our investors know me for a while, I'd be the first one out there, okay? But you can't sign agreements that are going to just, you know, handicap the company. It's clear, you know, from those guys, you need hundreds of people to have one OEM, and then there is no guarantee you're going to get any kind of revenue on the back end of it, right? So all of us are in the same mashup here.

Sumit Sharma: If I lose something I think our investors normally for a while I'll be the first one out there okay, but you can't find agreement that's going to just you know handicap. The company is clear from those guys you need hundreds and more people to have one OEM and then there is no guarantee you're going to get any kind of revenue towards the back end of it right. So all of US are in the same mashup here rich.

Sumit Sharma: We're going to find a way possible, you know, a way to make it possible. So it's not so simple to say that, you know, it's going to be $20 to $70 million worth of revenue by the end of the year and blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah So I think we just have to, you know, wait and see, but clearly, you know, I don't sleep much because, you know, I would love to have one of those contracts, but a contract that would choke the company out long term, you got to be careful given the fact that OEMs are clearly stating that they're moving things out and clearly stating that.

Sumit Sharma: By the way a possible way to a possible. So it's not so simple to say that you know it could be $20 million to $70 million of revenue by the end of the year and blah Blah Blah blah blah.

Sumit Sharma: <unk> already only from something that is not large but the stuff that are already launched there's no revenue coming from start of production. So I think we just have to wait and see but clearly.

Sumit Sharma: I don't sleep much because I would love to have one of those contracts, but a contract that would choke the company out long term you've got to be careful for given the fact that Oems are clearly, stating there moving things out.

Sumit Sharma: Out of the gate, they tell you, you're going to have to sustain yourself for those years because our project timing could shift. So, I think with all that information, right? We tend to, you know, share, you know, share everything that we have with them and kind of, you know, come up with a path that is sustainable. Yeah, but I guess that's helpful.

Sumit Sharma: Really setting that out of the gate. They tell you you're going to have to hold a sustained yourself to those years, because our project timing could shift.

Sumit Sharma: So I think like with all of that information right we tend to.

Sumit Sharma: Sure sure everything that we have with them and try to.

Sumit Sharma: Come up with a path that will be sustainable.

Sumit Sharma: Yeah, but I guess the that's helpful. The last part of the question is is there may be a some sort of timeline that you might be able to give us as to when you might expect a contract when is that something in the second half of this year or is that something next year, obviously, none of us have both.

Operator: You know, the last part of the question is, is there maybe some sort of timeline that you might be able to give us as you win, you know, you might expect a contract win. Is that something in the second half of this year? Is that something next year? Obviously, none of us have a crystal ball, but just, yeah, go ahead.

Operator: But just yes.

Sumit Sharma: Well, I'm cautious about this, Andres, because if I just go by what I'm being told, the OEMs are saying that, ah, you know, we expect to make a decision in Q2 and Q3. But I did not say that in my prepared remarks because, again, we're discounting the fact that we've been told those things before, and they keep moving them out because they don't move at the timelines that we have to report to the market. That's an anomaly for us.

Speaker Change: It's about this andreas because if.

Sumit Sharma: If I just go by what I'm being told Oems are saying that we expect to make a decision in Q2 and Q3, but I did not say that in my prepared remarks, because again, we're discounting. The fact that we've been told those pigs before and to keep moving it out because they will move to the timelines that we have to report to the market. That's an anomaly for us to them they deal with tier ones that never have to do this right the traditional tier ones.

Sumit Sharma: To them, they deal with Tier 1s that never have to do this, right? The traditional Tier 1s, that's huge business. This is just part of, like, an ongoing business. So I'm being cautious here. It's like, you know, when we know something for certain, you know, we're going to go out there.

Sumit Sharma: <unk> business. This is just part of ongoing business, so I'm being cautious here is like.

Sumit Sharma: When we know something for certain we're going to go out there, but yeah of course, you know the expectation sales are that sometime in 2020 for some key decisions would be made.

Operator: But yeah, of course, you know, the expectations still are that sometime in 2024, some key decisions will be made. But personally, when I look at it, the expectation is when an OEM says, yeah, I'm going to make a decision, yet they have multiple configurations they're looking at in multiple models for multiple brands within their groups. And it's clear that they are not all in agreement within the OEM, right? We just have to kind of be cautious about what they're telling us, you know, within their company, you know, their people tell us that, you know, they're not so certain how they're going to come to those decision points fast enough, right?

Operator: But firstly when I look at it the expectation is when the OEM Sanjay I'm going to make a decision yet they have multiple configurations, they're looking at in multiple models for multiple brands within their group.

Operator: And it's clear that they're not all in agreement within the OEM right. We just have to kind of be cautious that what they are telling us we didn't even their company their people tell us that they are not so certain how they're going to come to those decision points fast enough right.

Operator: So, I can't give anything away, but the most current one that we have is that sometime in 2024, they expect to start making these decisions for these big, large volumes, so they'll have four years to start production. And, you know, we're going to focus on the information that we're given. Got it. No, I appreciate that. That's helpful. Maybe one last one for Anubhav, you know, so assuming an OEM contract when it's announced, maybe in this year at some point, can you just maybe remind us, you know, how do you foresee the revenue recognition from that contract taking place? Like, I guess. How would that contract ramp up in terms of revenues, and what would be the timeframe for that? Thank you.

Speaker Change: So I can't give you anything.

Anubhav Verma: Most current one.

Speaker Change: That we have is that sometime in 2024, they expect to start making decisions for these big large volumes, but they will have four years to start of production.

Anubhav Verma: And we're going to focus on what information that we're giving.

Speaker Change: Got it no I appreciate that that's helpful. Maybe one last one for antibody so assuming an OEM contract when it's announced maybe in this year at some point can you just maybe remind us how do you foresee the revenue recognition from that contract like taking place I guess.

Anubhav Verma: Like how like how would that contract ramp up in terms of revenues and kind of what would be the timeframe for that thank you.

Anubhav Verma: Right. Thanks, Andres.

Anubhav Verma: Right. Thanks, Andreas the way I think about this is I think.

Speaker Change: The passenger because I think on 100, maybe let me sort of.

Anubhav Verma: The way I think about this is I think the passenger car because, Andres, maybe I can sort of go back to your prior question as well, because clearly, I think the markets are discounting whatever, you know, the other competition is saying, which partly comes from, I think, what Sumit described as the complications within the OEM ecosystem, right? Because there is a lot that needs to be done from industrialization of the product and then ramping up the volume.

Anubhav Verma: Go back to your prior question is that because clearly I think the markets are discounting whatever the other competition is saying, which partly come from I think what some would describe as the obligations within the OEM ecosystem right. Because there is a lot that needs to be done from the industrialization of the process the product.

Anubhav Verma: So, obviously, any logical OEM contract will have NRE revenues first and then gradually going into the ramp-up of the volumes as the cars come out with the sensors across multiple locations. So, the cadence of the revenue would be, again, NRE in the beginning, then coming out with the volumes, the revenue volumes that are expected to hit the market. And the RFP that we have been part of, again, like I said, the OEMs have been burned in the past.

Anubhav Verma: And then ramping of the volume so obviously any logical OEM contract will have and already revenues first and then.

Anubhav Verma: Gradually.

Anubhav Verma: Going into the ramp up of the volumes as the cars come out with the with the sensors across multiple locations. So the cadence of the revenue would be again NRT.

Anubhav Verma: In the beginning then come in Elbit.

Anubhav Verma: The volumes the revenue volumes that are expected to hit the markets and what the RFP that we have been a part.

Anubhav Verma: Part of it again like I said, the Oems have been burned in the past. So they are making sure that this time that the volumes. There is enough time between now and the volume ramp up so most of the programs that we're talking about our 2028 29, when the major volume really kicks in and I think that that's a very important point to highlight because.

Anubhav Verma: So, they are making sure that this time, the volumes, there's enough time between now and when the volumes ramp up. So, most of the programs that we're talking about are 2028, 2029, when the major volume really kicks in. And I think that's a very important point to highlight because you may have trickle revenue, you know, here and there, but the cash burn is just not enough to cover that revenue, right? And I think that's the business problem that I stated in my remarks as well, that all of us, not just Microvision, but all LiDAR companies have to navigate this period when revenues will be disproportionate to the cash burn.

Anubhav Verma: You may have trickled revenue.

Anubhav Verma: Here and there, but the cash burn is just not enough to cover that revenue right and I think thats. The business problem that I stated in my remarks, as well that all of US not just micro vision, but all lidar companies have to navigate this period when the revenues would be disproportionate to the cash burn and I think we all have.

Anubhav Verma: And I think we all have to navigate these years successfully because a bunch of LiDAR companies will fall off the map for signing up for the wrong deals, as Sumit mentioned. So, long answer, but I'm hoping that gives context to why this is not a very simple answer. And maybe that's why you're also seeing this across LiDAR companies that most of the LiDAR companies are also stopping short of giving, you know, guidance beyond 2025, 2026 onward. So, which again is a direct result of the business problem that both OEMs as well as us are facing. Got it, thanks.

Anubhav Verma: To navigate this year successfully because a bunch of lidar companies both fall off the map for signing up for the wrong deals as I mentioned, so long answer, but I am hoping that puts context of why this is not a very simple answer and maybe that's why you're also seeing that the growth lidar companies that most of the liner companies are also stopping.

Anubhav Verma: Short of giving you know.

Anubhav Verma: Our guidance beyond 2025, 26 onboard so which again is a direct result of the the business problem that both Oems as well as us are facing.

Operator: Got it. Thanks, Anubhav. That's super detailed and helpful. I appreciate that. Okay, that's it for me. Thank you so much. Congratulations on the quarter. I'll pass it on.

Speaker Change: Got it thanks, that's super detailed and helpful. I appreciate that.

Speaker Change: Okay. That's it for me. Thank you so much congrats on the quarter I'll pass it on.

Speaker Change: Thanks Andreas.

Operator: Thank you. Our next question is coming from Kevin Garrigan with Westpire Capital. Your line is live.

Operator: Thank you. Our next question is coming from Kevin Garrigan with West Park Capital. Your line is live.

Operator: Yeah, hey guys, thanks for taking my questions. Just to start out, in the seven RFQs that you mentioned, are there other automotive trucking customers in there, or are all seven RFQs now just passenger vehicle OEM?

Kevin Garrigan: Yeah, Hey, guys. Thanks for taking my questions just to start out in the southern Rfps that you mentioned are there other automotive trucking customers and there are all seven of our acute now just passenger vehicle Oems.

Sumit Sharma: All seven are passenger vehicles.

Kevin Garrigan: Also in our passenger vehicle.

Operator: Okay, perfect. And then this is kind of a two-part question, but I think you noted that, in addition to industrial sensor sales, Mosaic is going to be pretty important going forward. And then last quarter you had called out sales kind of were slowing there. So are you expecting kind of any revenues here from Mosaic with sensor supply agreements kind of being pushed out? And then, you know, the second part, it seems like others in the automotive industry are either kind of creating partnerships or developing their own validation software. So can you kind of give us your thoughts on why you believe the Mosaic software would have a competitive advantage against other solutions?

Kevin Garrigan: Okay perfect.

Operator: And then this is kind of a two part question, but I think you noted in addition to industrial sensors sales mosaic is going to be pretty important going forward and then last quarter you had called out sales kind of a slowing there. So are you expecting kind of any revenues from mosaic with sensor supply agreements kind of being pushed out and then.

Operator: The second part of it it seems like others in the automotive industry are either.

Operator: Creating partnerships or developing their own validation software. So can you kind of give us your thoughts on why you believe the mosaic software would have a competitive advantage against other solutions.

Sumit Sharma: I think the thing about Mosaic software is, if you think about all the sensors, you know, when they are going to go into a vehicle, they require validation. In one of the RFQs that we're working on, just to give you an example, this team, the OEM team, you know, has some very specific requirements and very specific KPIs. And, I mean, these were like really, really high levels.

Operator: Thanks.

Speaker Change: Think about mosaic software is if you think about all sensors when theyre going to go into a vehicle that requires validation.

Sumit Sharma: One of the Rfps that we're working on but just to give you an example.

Sumit Sharma: The OEM team has some very specific requirements in some very specific kpis.

Sumit Sharma: And I mean, these were really really high level I mean, just a contract like that would be more than $100 million. You know, we just told them that we can validate where you're saying it's at about $100 million just giving an example, right and then of course they scale exactly like Okay. I think we asked for too much and this is part of what happened to your Q, but as just an example that the costs associated with validating a solution.

Sumit Sharma: I mean, just a contract like that would be more than $100 million. You know, we just told them that you could validate what you're saying, and it's going to cost $100 million. Just to give you an example, right?

Sumit Sharma: And then, of course, they scale it back like, okay, I think we asked for too much. This is part of what happens in the RFQ. But it's just an example that the cost associated with validating a solution, not just the sensor, a solution is that high for an OEM. So there's, you know, and a lot of it is, you know, driving, collecting data, people, you know, lots of things that go into it. What Mosaic does is, of course, automates a big portion of that that could be savings. So your first question was, you know, do we expect any revenues from Mosaic through the year?

Sumit Sharma: Not just a sensor a solution are that high for an OEM.

Sumit Sharma: So there's a lot of it is you know driving collecting data on people.

Sumit Sharma: Lots of things that go into it.

Sumit Sharma: Mosaic does is of course automates, a big portion of that that could be savings.

Sumit Sharma: So your first question was do we expect any revenues from mosaiq through the year. The answers to that is yes, but it all depends upon who is in what cycle of validation and.

Sumit Sharma: Yeah, the answer to that is yes, but it all depends upon, you know, who is in what cycle of validation and, you know, any software that we would give them, software tools we would give them, they'd have to commit to for several years. But of course, we do smaller deals now where we give them access to certain portions of their validation rather than the whole suite.

Sumit Sharma: Any software that we would give themselves because we give them they would have to commit to for several years, but.

Sumit Sharma: But of course, we do smaller deals now where we give them access for certain portion of their validation rather than the whole suite. So again, our team keeps working with our customers what their needs are some of them you know.

Sumit Sharma: So again, our team keeps working with the customers, what their needs are, you know, some of them, you know, recently, about a month ago, I was in a meeting, and we talked about it, and, you know, they said, yeah, this is great. This is, you know, I wish I had known about this, but, you know, right now, I have a process where we send it over to Southeast Asia, and it's done manually.

Sumit Sharma: Recently about a month ago I was in a meeting and we talked about it and they said yes. This is great. This is you know I wish I had known about this but you know right now have a process, where we send it over to southeast Asia and it manually done nobody likes it but it's cheap and it's kind of there, but you know we want to keep an eye on this thing, but again those are slow developing relationships that I don't know.

Sumit Sharma: Nobody likes it, but it's cheap, and it's kind of there, but, you know, we want to keep an eye on this thing. But again, those are slow, developing relationships that, you know, at an OEM, by the way, that does not do the validation all by themselves, that they would make the choice and they would get, you know, the partners that are supporting their validation to accept this, right?

Sumit Sharma: OEM by the way that does not does the validation all by themselves that they would make the choice that they would get.

Sumit Sharma: The partners that are supporting their validation to acceptance right. So I think thats, how we have to think about how.

Sumit Sharma: So I think that's how we have to think about, you know, how Mosaic will be, but validation is required at a system level. It is not just a LIDAR thing. It is done for radar. It's done for a camera module. It's done across the board, the sensor suite that goes into ADAR.

Sumit Sharma: Mosaic will be but validation is required for a system level. It is not just a lidar thing. It has done for radar is done for a camera module is done across the board.

Sumit Sharma: The sensor suite that goes into for Adas.

Sumit Sharma: Yep, got it. Got it. Okay, I appreciate that color. And then just last question, you know, we've heard from a few other lidar companies kind of speaking about the recent NHTSA ruling for automatic Emergency Braking Systems. I'd love to, you know, hear your thoughts on it and what it kind of means what you guys think it means for lidar.

Speaker Change: Yep got it got it okay I appreciate that color.

Sumit Sharma: And then just last question we've heard from a few other other liner companies kind of speaking about the recent nyssa ruling for automatic emergency braking systems I'd love to hear your guys' thoughts on that and what economy. What do you guys think it means for lidar.

Sumit Sharma: You know, my personal view is... Automatic emergency braking has been in Europe quite a lot already, and now it's starting to become law across the board.

Speaker Change: My personal view is.

Sumit Sharma: Automatic emergency braking has been in Europe quite a lot now starting become regulation across the board more and more cars will have it.

Sumit Sharma: More and more cars will have them. Some limited levels of features have been shown with camera modules and radar. And, of course, think about mass adoption.

Sumit Sharma: Some limited level of features have been showing the camera modules and radar but of course as we think about mass adoption you want a feature that is across the board safe reliable long term.

Sumit Sharma: You want a feature that is across the board, safe, reliable, and long term. LiDAR can play a part in it. There are Tier 1s and 1 OEMs that will say, hey, we don't need LiDAR for that. We're going to do it with other technology. But all the other OEMs are clearly saying that's part of what they want to get done, that it has to be part of it.

Sumit Sharma: <unk> can play a part of it there are tier ones and one OEM that will say, hey, we don't need lidar for that we're going to do with other technology.

Sumit Sharma: But all the other Oems are clearly, saying thats part of what they want to get done right that that has to be part of it.

Sumit Sharma: Most of the LiDAR that you talk about. I mean, that's the key to LiDAR, right? That if you had a LiDAR sensor within your car, 360 degrees and a long-range LiDAR, all these features are kind of just part of it. You don't have to have another subsystem that provides that level of safety while you're doing active maneuvering, and active safety. These features would also be part of the suite that the OEMs would develop on this sensor stack.

Sumit Sharma: Most of Lidar that you talk about.

Sumit Sharma: I mean, that's the key is a lighter right that if you had a lighter sensor with the new products <unk> hundred 60 in our long range Lidar. All of these features are kind of just part of it you don't have to have a another sub system that provides that level of safety.

Sumit Sharma: While you're doing active maneuvering active safety. These features would be also part of the suite that they always will develop on this sensors stack.

Sumit Sharma: So as more adoption happens, there's more opportunity because now the product does more than just highway, high-speed highway piloting. It has got actual safety features required by regulation that will be part of it. So it makes it more of an intimate product that's needed to meet the long-term requirements for the product capability of NCAP. So it's good news for LiDAR because it's something that is natural to it. I'm going to be very, very good at it.

Sumit Sharma: So as you know more adoption happens right theres more opportunity because now the product does more than just you know highway high speed Highway piloting. It has got actual safety features required by regulation that will be part of it. So it makes it more of a intimate product as needed to meet the long term requirements.

Sumit Sharma: The product capability for end cap. So it is good news for Lidar, because it's something that it's natural to it it's going to be very very good at it and as economy of scales start coming in more and more as you can imagine like you know the big volumes, you're talking about now.

Sumit Sharma: And as the economy of scale starts coming in more and more, as you can imagine, the big volumes we talk about now are in the millions of units. And surprisingly, it's the same 2028, 2029 timeline, right about the time.

Sumit Sharma: Are in the millions of units and surprisingly, it's the same 2028 and 20009 timeline.

Sumit Sharma: Right.

Sumit Sharma: So yeah, more OEMs are getting active about what all the features that LiDAR can actually incorporate. And to be clear, we make the LiDAR. We do perception software that aids it. They develop the automatic emergency braking and those kind of safety features, plus the high-speed highway driving features, right? So we support them, but LiDAR naturally can support them much easier than other technologies. But other technologies have been around for a while. If they operate at lower speeds and OEMs want higher speeds, they're going to evaluate those technologies as well in LiDAR.

Speaker Change: You're right about the time. So you have more Oems are getting active of water. All the features that our lidar can actually incorporate in there.

Sumit Sharma: And to be clear can I make a lidar, we do redo perception software into that age it they they develop the automatic emergency braking and those kind of safety features plus even.

Sumit Sharma: The highest good highway driving features right. So we support them, but lidar naturally can support them much easier than other technologies, but other technologies have been around if the they operate at lower speeds and Oems want higher speed, they're gonna valuable new technologies, as well and lidar, but I very strongly believe that if you've ever really work with the lidar data stream if you've been around.

Sumit Sharma: But I very strongly believe that if you've ever really worked with a LiDAR data stream, if you've been around engineers that work with LiDAR, it is so much easier to do it with a LiDAR data stream. Okay.

Sumit Sharma: Engineers that worked with Lidar. It is so much easier to do it with the murder data stream.

Operator: Okay, got it, got it. That makes sense. Okay, perfect. Thanks, guys.

Speaker Change: Okay got it got it that makes sense, okay perfect. Thanks, guys.

Speaker Change: Thanks, Kevin.

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

Speaker Change: Thank you I will now turn this call back over to Andrew Baum Verma to read questions submitted through the webcast.

Anubhav Verma: Thank you.

Anubhav Verma: The first question is, why has there been a lack of any communication from the company since February 29th? And are there expectations of further delays in the RFQ decision-making timeline? And how is MicroVision adapting to these changes do you expect to add to the RFQ pipeline? Well, I'll answer the last one first.

Anubhav Verma: So I think the first question is.

Anubhav Verma: Why has there been a lack of any communication from the company since.

Anubhav Verma: <unk> 2009.

Anubhav Verma: And are there expectations of further delays at the <unk> decision, making timeline and how is microvision adapting to these changes do you expect to add to the RFP pipeline.

Anubhav Verma: Yes, we do expect to add to the RFQ pipeline. We already have, you know, a couple of lines of sight to RFQs for both MOVIA and MAVEN that we're starting to engage. Our teams are going to be flying globally to go support the OEM in the early stages as they start developing their plan. As far as like what's the delay since February 29th, you know, we had our earnings call, and as I mentioned early on when Andrea asked the question, we were engaged very actively working with them.

Anubhav Verma: Well I'll answer the last one first yes, we do expect to add to the RFP pipeline, we already have.

Anubhav Verma: You know a couple of lineup.

Anubhav Verma: Your line of sight storm excuse for both mortgage Nathan that we're starting to engage our team that can be flying globally to go.

Anubhav Verma: To support the OEM in the early stages they start developing their plans.

Anubhav Verma: As far as like what's the delay since October 29th.

Anubhav Verma: We had our earnings call and as I mentioned early on when Andreas asked the question. We were engaged very actively working with them you really have to stay silent till we know what's going on and.

Anubhav Verma: You really have to stay silent, you know, till you know what's going on and, you know, it was just, you can imagine, like, if you go back and read the transcript, where they are, you know, the things that they're offering. It was, it was a very, very confusing time.

Anubhav Verma: It was just you can imagine like if you if you go back and read the transcript.

Anubhav Verma: Where they are.

Anubhav Verma: Things that they're offering it is it was very very confusing times, we really wanted to make sure that you got to a point, where you can get some sort of agreement or really understand what is on the table.

Anubhav Verma: So you really wanted to make sure that you got to a point where you could get some sort of agreement or really understand what is on the table and then communicate. And as we got closer to the earnings call, here we are, you know, to announce, to let you know exactly what that one RFQ is. The other one was, you know, for the Movia S. I think that was, to be honest with you, it was, OEM was pretty clear about it, that it was their product strategy for different regions.

Anubhav Verma: And that one, you know, perhaps was, it could come up live, it could change, because their own strategy is changing, right? It's not clear. You know, they just wanted to give us like, hey, don't call me every week and ask me what this is gonna be, but just give us some time to figure that out, right? So I think it made the most sense to, you know, get on the earnings call and talk about it in color because you can't really do that much with color in a short press release or a small comment. Thanks a lot.

Anubhav Verma: And then communicated and as we got closer to the earnings call you know where we are.

Anubhav Verma: <unk>.

Anubhav Verma: Yeah.

Anubhav Verma: To let you know exactly what that one I'll ask you is the other one is actually was.

Anubhav Verma: <unk> I think that was to be honest with you. It was you know OEM was pretty clear about it that it's their product strategy for.

Anubhav Verma: For different regions and that one really.

Anubhav Verma: Perhaps was it.

Anubhav Verma: It could come up live it could change that goes their own strategy is changing with Ed right, it's not clear.

Anubhav Verma: I wanted to give us like Hey don't call Me every week and asked me. What this is gonna be but just give us some time to go figure that out right. So I think it made the most sense to get on the earnings call and I'll talk about it with the color because you can't really do that muscle color in a short press release or a small comment.

Speaker Change: Thanks, so much.

Anubhav Verma: The next question is, last year at Retail Investor Day, MicroVision reiterated that the company is very far ahead of the competition, and it would take years for them to catch up. Does the statement still hold true? And if it does, are the OEMs still keeping their bar standard high, or are they lowering it to accommodate more choice in suppliers? Yeah, it is 100% true.

Anubhav Verma: The next question is last year at the retail Investor day, Microvision reiterated that.

Anubhav Verma: The company is very far ahead of the competition and it would take years for them to catch up.

Anubhav Verma: Does that statement still hold true.

Anubhav Verma: And if it does the Oems are still keeping their bar standard high or are they lowering it to accommodate more choice and suppliers.

Speaker Change: Yeah. It is 100% true and I'll give you. An example, the seminars because we're talking about.

Sumit Sharma: And I'll give you an example. These seven RFPs we're talking about, you know, that Maven is part of, we have to dumb down Maven to be in the middle of them. I mean, it's... Anubhav Verma, Sumit Sharma, Kevin Garrigan, Anand Balaji, MicroVision Inc. Anubhav Verma, Sumit Sharma, Kevin Garrigan, Anand Balaji, MicroVision Inc., in case there was an actual incumbent and with that, you know, the specs that we have to meet.

Sumit Sharma: That may have been as part of we have two dumbed down David to be in the middle of it I mean, it's.

Sumit Sharma: There's things that we have to do but we could certainly do it right. I mean, there is nothing new development is just no new calibration, new firm, where new development for us as part of our ASIC. So it's not that big of a deal, but as you can imagine right as I always said right. It is best in class. So far ahead. When you get into these are a few as you know nothing has been thrown at us that requires us to meet it if anything else where and broad.

Sumit Sharma: Towards the mean.

Sumit Sharma: One end of the Bell curve anymore, right, what kind of brought towards the median towards everybody else. They can go how would you do this what's your cost structure with the size what's it.

Sumit Sharma: Performance right. So you have to compete in that range because you know they.

Sumit Sharma: They want to make sure that the advantage of your solutions are of course size and power things like that but the base specifications of range.

Sumit Sharma: The range of resolution they want to make sure that you meet and exceed it.

Sumit Sharma: Whereas all of the requirements that we have we don't really look for exceptions, whereas I believe.

Sumit Sharma: What I believe is like others have to have some exceptions into some of the things that they're asking for it.

Sumit Sharma: In case that there wasn't actually encumbered with that so we have to meet so it's clear to us like the <unk>.

Sumit Sharma: So it's clear to us, like, you know, the gap that our competition sometimes has because the spec that we see that was created for the incumbent, right? You know, and we, it appears that we can do that. And this was your original requirement. We can meet that as well. So again, you have to be humble.

Sumit Sharma: GAAP that our competition is sometimes because the spec is we see that was created for the incumbent right.

Sumit Sharma: It appears that we can do that and this was your original department, who can meet that as well so again, yes.

Sumit Sharma: You work with them. They are the customer. You have to, you know, whatever their strategy is, you know, if they develop a very specific software, like, for example, the Dynamics and LiDAR offer something, a huge advantage, a very, very huge advantage. But it would take a period of time for people to actually, you know, realize that advantage because they would have to work on software slightly different.

Sumit Sharma: You have to be humble you worked with them. They are the customer you have to whatever their strategy is to develop a very specific software like for example, the dominant dynamics in lidar offer something a huge advantage.

Sumit Sharma: Very very huge advantage, but it will take US a period of time for people to actually realize that advantage because they would have to work on software slightly differently, but if they want us to do.

Sumit Sharma: But if they want us to do one single static field of view, because that's how their software has been written so far, and they don't want to rewrite companies with the software, we can do that. We can give them the best that is ever going to be, but if they need something else that actually eases their path for integration, of course, we support that. So, yeah, what was said about Maven, right? I mean, that's gonna stand the test of time.

Sumit Sharma: Static one single static field of view because that's how their software has been driven so far and they don't want to read right companies with the sulfur. We can do that we can give them the best that it's ever going to be but if they need something else that actually eases their pass through integration of course, we support that so yeah. What was said about David right. I mean, that's going to stand the test of time, it's going to be a long.

Sumit Sharma: It's gonna be a long, long, long time before we have to redesign it. You know, I think there's a question I recently got from somebody that I met about, you know, the monostatic ladder I may have mentioned a long time ago. You know, are you guys developing that? And at this OEM meeting, I clearly said, "What I have far exceeds what you need."

Sumit Sharma: Long long time before we have to redesign if you know I think there is a question I recently got from somebody that I met about they know a.

Sumit Sharma: Monothetic Louder I may have mentioned long time ago.

Sumit Sharma: Are you guys developing and in this meeting I've already said.

Sumit Sharma: I can meet your cost structures. I can meet your power structures. There's no need for that, right? So it's a futuristic product that, you know, if there was volume, then we would invest in it. But right now, we need size, performance, and to exceed everything that you have. So therefore, at this moment for Maven, you know, we want to finish our B sample. We want to get the industrialization done. We have the automation that's going to be placed in. We can get some samples for you, and get the reliability tests started.

Sumit Sharma: What I have far exceeds what you need I can meet your cost structure that could meet your power structures.

Sumit Sharma: <unk>.

Sumit Sharma: There is no need for that right because the futuristic products that you know if there was volume then we would invest in it but right now we need size performance exceed everything that you have so therefore at this moment for me then you know we want to finish our b sample you're going to get the internalization done.

Sumit Sharma: The automation, that's going to be placed and we can get some samples for you get the reliability test has started.

Sumit Sharma: And that's the basis from which we're going to do it. We're not going to enter into a new redesign for that because there's no need for it at the moment, right? And I didn't get much pushback.

Sumit Sharma: And thats the basis from which we are going to do we're not going to enter a new redesigned for that because there is no need for that at the moment right and I didn't get much pushback. So.

Sumit Sharma: So, you know, I still believe the statement that's been made is totally valid. I have no reservations in saying that. Thanks, Sumit. So, over a year later since Investor Day, how does MicroVision feel about its market position given that both InnoViz and Luminar have publicized new slimmer units to fit behind the window? Sumit, let me give you a market perspective, and maybe you can handle a technical perspective. Anubhav Verma, Sumit Sharma, Kevin Garrigan, Anand Balaji, MicroVision Inc. And if I can simply, you know, that's a lot of complicated financial jargon, but if I can simply break it down, you know, how the game is going to be played is about how do you navigate these years So, at this point, I don't think any LIDAR company can afford to spend on new developments because they have to perfect what they've got.

Sumit Sharma: You know.

Sumit Sharma: I still believe the system that's made is totally valid.

Sumit Sharma: I have no reservations in saying that.

Sumit Sharma: Yeah.

Sumit Sharma: Thanks, Amit.

Sumit Sharma: So.

Sumit Sharma: Over a year later since Investor day, how does microvision feel about its market position given both innovative and alumina have publicized new slimmer units to effect behind the windshield.

Speaker Change: So let me let me give the market perspective, and maybe you can handle a technical perspective.

Sumit Sharma: I think what the markets the way markets are reacting to these announcements are I think it's evident in the stock price rises and I think this was also in response to my to respond to the question Kantor is before that I don't think the market is giving any credit to anything thats being said for publicity.

Sumit Sharma: Because at the end of the day the numbers are speaking for themselves right. As I described the market cap of these lighter copies, which have announced.

Sumit Sharma: Billion awards, they are trading lower than the market value of the for the awards right. What that means is the market is discounting. The fact these awards and as predicting that no. This is destruction in value since that time, they signed up for the award.

Sumit Sharma: And if I can simply.

Sumit Sharma: That's a lot of complicated financial jargon, but if I can simply break it down.

Sumit Sharma: How the game is going to be played it is about how do you navigate these years when your revenue and your costs are mismatched.

Sumit Sharma: So at this point I don't think any lidar company can afford to spend on new developments because they have to perfect. What they've got recently, we saw in the Q1 announcement that companies are.

Anubhav Verma: Recently, we saw in the Cuban announcement that, you know, companies are spending more on industrialization by depending on third parties rather than doing it in-house. So, in my mind, this model is unsustainable, and that's sort of why it's reflective in the valuation of these companies. However, you know, I think the question, I keep going back to the point that, yes, even while that's happening with the other players, what we have got to do is sign up for good deals and make sure our survivability, or we make sure our runway, our cost structure is palatable, which can support the scaling of the business.

Anubhav Verma: Spending more.

Anubhav Verma: On the industrial ambition by depending on third parties rather than doing it in house. So in my mind. This model becomes unsustainable and that's sort of why it's reflected in the valuation of this company. However, I think the question I keep going back to the point that yes, even while that is happening with the other players what we have got to do is make sure sign.

Anubhav Verma: For good deals and making sure our survivability are we make sure our run way our cost structure.

Anubhav Verma: <unk>, which can support the scaling of the business because when these millions of volumes of units units are right you want to be there to catch them all.

Anubhav Verma: Because when these millions of units arrive, you want to be there to catch them all when some, you know, because you have seen a few LIDAR companies fall off the map, and this will continue to happen.

Anubhav Verma: Because you have seen a few lidar company fall off the map and this will continue to happen. We've just got to be there. When this happens because estimate described our product in my mind is still beats and meets the expectations of all of the Rfps that we are in it.

Anubhav Verma: You just have to be there when this happens, because as Sumit described, our product, in my mind, still beats and meets the expectations of all the RFQs that we get. Yeah, and I think, you know... I'll compare it to the other side and stuff.

Anubhav Verma: Yeah, and I think.

Anubhav Verma: <unk>.

Speaker Change: To us compared to the other side and stuff I think everybody wants me to comment on that first of all I would like to say this is our earnings call for Microvision right I would rather talk about us I would love to come out here to talk about a partnership that has formed and what that all means right I think.

Sumit Sharma: I think, you know, everybody wants me to comment on that. But first of all, I would like to say, this is our earnings call from MicroVision, right? I would rather talk about us. You know, I would love to come out here and talk about a partnership that has formed and what that all means, right? I think, you know, I would welcome that date.

Sumit Sharma: I would welcome that day.

Sumit Sharma: The problem we have right now is not technology; it's a business problem we're working on. I'll get back to the business problem in a second. If you look at our technology... Hands down, what it's going to win is when I walk into a room like that, and I talk about a wafer.

Sumit Sharma: The problem, we have right now is that technology, it's a business problem we are working on.

Sumit Sharma: As far as like let me separate then I'll get back to the business problems in the second.

Sumit Sharma: If you look at our technology.

Sumit Sharma: <unk> found whether it is going to win is when I walk into a room like that I talk about a wafer that our men's comes from a wafer and you know we have lasers coming from this and these are all semiconductor.

Sumit Sharma: That our lens comes from a wafer. And, you know, we have, you know, lasers coming from this. And these are all semiconductor technologies for Movia and Maven. Those guys are still coming in with a box that has got a glass prism rotating and a little galvan moving. You know, what is the steering technology? So everybody talks about it, right? But can everybody talk about what's under the hood? You know, some of them are still, you know, doing CAD and Photoshop, and they're talking about, you know, samples. Others have actually started with MEMS, and it was too hard, so they, you know, they went away, and now they're in the galvan space in their next generation.

Sumit Sharma: <unk> four <unk> and maven.

Sumit Sharma: Those guys are still coming in with a box, which has got a glass prism rotating in a little galvo moving.

Sumit Sharma: What does the steering technology, so everybody talks about it right, but can everybody talk what's under the hood some of them ourselves doing cabinets photoshop and they're talking about samples.

Sumit Sharma: Others have actually started with the Mems and pursue higher so they went away and now they are in the Calvert based on their next generation. So what you don't know who's going to win long term. So that people have made announcements at all.

Sumit Sharma: So what you don't know is who's going to win long term. So you have people that make announcements, you know, you know, you know, they have market support, they've added support, like whatever they have. At the end of the day,

Sumit Sharma: They have market support the bandwidth support like whatever they have at the end of the day.

Sumit Sharma: You have to have the product to win, and the simplest product, the simplest product, should win in the market. But the hard thing is, you know, those companies who are D-SPAC were able to raise a significant amount of money, right? We still go trickle by trickle, year by year, right? Because we are an older company. Anubhav Verma, Sumit Sharma, Kevin Garrigan, Anand Balaji, MicroVision Inc. Thanks so much.

Sumit Sharma: After the product win in.

Speaker Change: And the product simpler product should win in the market, but the hard thing as you know those companies through this back we're able to raise a significant amount of money. We still go a critical electrical year by year end, because we are an older company and we have to think Australia and to be honest with you I'm sure. You guys are sick of hearing about it and I'm pretty sick of Todd is talking about it I don't want to talk about anybody else I really want to talk about what we're working on right.

Sumit Sharma: And this is a business problem now that when you deal with the Oems.

Sumit Sharma: You had lots of people in the company lots of money to be.

Sumit Sharma: The sitting around in a bank then you could probably go on strike a deal and then you can let you know.

Sumit Sharma: Turn it up and talk about it any way to the market because you can't really talk about what's underneath it and you make it complicated for others, but I focus myself and my energies in the company's energy to focus on the real proud to solve to get a real customer that is actually going to turn things around for us long term right and I'm certain of it the technology and the work that's been done for our team in Hamburg and the team here in Redmond.

Sumit Sharma: Can stand the test of time and at the end of the day. When you think about who wins, it's going to be somebody that is talking about a wafer level stuff, it's not talking about like galbo.

Sumit Sharma: It's as open as I am talking about the technology right now I'll ask you to get to know yet agreed to these things and move on to that end.

Sumit Sharma: That's what I want to focus on.

Speaker Change: Thanks, so much.

Anubhav Verma: Can you provide more detail on Cash Runway and does the company anticipate it will have to issue shares in 2024? So let's talk some numbers here. Our cash balance at the end of March 31st was $73 million. We have $128 million available under the ATM. You know, while I cannot share out exact plans, but I think our history indicates that we would only opportunistically raise capital when needed. Because I think it's very evident that to navigate this, you have to be very financially literate; you have to be prudent financially.

Sumit Sharma: Okay.

Speaker Change: Can you provide more.

Anubhav Verma: Detail on cash runway and does the company envisioned it would have to issue shares.

Anubhav Verma: In 2024.

Anubhav Verma: And to bring in cash, as Sumit described, we would be accelerating our industrial revenue stream from our Mobia product because that's something which is short-term, which brings in cash faster than the automotive revenue. And also some of the licensing and partnership opportunities in the sub-verticals within the industrial market. So some of these opportunities are what we are gonna help to resort to to monetize this asset and bring in non-dilutive cash to further support the cash flow and the sustainability of the company.

Speaker Change: Let me take that question, so, let's let's talk some numbers here.

Anubhav Verma: Our cash balance at the end of March 31 $73 million.

Anubhav Verma: We have $128 million available under the ATM.

Anubhav Verma: While I cannot share out exact math, but I think.

Anubhav Verma: Our history indicates that we would only opportunistically raise capital when needed because I think it's very evident that do navigate. This you have to be very financially you have to recruit and financially and bring in cash as some have described we would be accelerating our industrial revenue stream from.

Anubhav Verma: Our mobile product because thats something with the short term, which brings in cash faster.

Anubhav Verma: Then the automotive revenue and also some of the.

Anubhav Verma: License licensing and partnership opportunities in the.

Anubhav Verma: The sub verticals within the industrial market. So some of these opportunities is what we are going to help too.

Anubhav Verma: Resorted to monetize this asset and bring in non dilutive cash to further support the cash burn and the sustainability of the company and I think it is the most critical ingredient at this point how do you survive.

Anubhav Verma: And I think it is the most critical ingredient at this point: how do you survive these couple of years to emerge as one of the few remaining businesses in the LIDAR industry? Because, as I mentioned earlier, the demand is huge, which is waiting at the end of this decade.

Anubhav Verma: A couple of years to emerge as one of the few last standing businesses in the lidar industry, because as I mentioned earlier the demand has huge which is waiting at the end of this decade, and we just want to make sure that we are one of the few handful of players that won't make it to the finish line.

Anubhav Verma: And we just wanna make sure that we are one of the handful of players that will make it to the finish. I think with that, we're coming up to our time here. I, again, thank all our investors for your support, and I think your support is truly reflective of how the market perceives our strategy and our execution. And we continue to work towards the objective that Sumit outlined, and we look forward to hearing about our 2-2 call in August for the next quarter. Thank you so much.

Anubhav Verma: I think with that we're coming up to our.

Anubhav Verma: Time here I again, thank all our investors for our for your support.

Anubhav Verma: And I think we are your support it's really reflective in how the market perceives our strategy and our execution and we continue to work towards.

Anubhav Verma: The objective that summit outline.

Anubhav Verma: And we look forward to here.

Anubhav Verma: Hearing.

Anubhav Verma: Towards our Q2 call in August for the next quarter. Thank you so much.

Speaker Change: Thank you.

Operator: Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect at this time and have a wonderful day. We thank you for your participation.

Speaker Change: Thank you ladies and gentlemen, this does conclude todays event you may disconnect at this time and have a wonderful day, we thank you for your participation.