1. DESCRIPTION OF BUSINESS

MicroVision, Inc. is defining the next generation of lidar-based perception solutions for automotive, industrial, and security & defense markets. The Company delivers integrated hardware and software solutions designed for real-world performance, automotive-grade reliability, and economic scalability. The Company’s diverse portfolio of lidar sensors, with both short- and long-range lidar solutions, feature solid-state sensors with varying wavelengths, advanced sensor architectures, design-to-cost engineering, and open software solutions.

The Company’s solutions enable advanced driver assistance systems, or ADAS, and autonomy features for customers in a wide range of markets, including automotive, industrial, and security & defense. Target industrial sectors include robotics, automated warehouse, agriculture, and mining. The Company’s integrated hardware and software solutions enable intelligent autonomous, active safety, and automation systems which depend on secure, cost-effective, and energy-efficient solutions. Software has been developed in close collaboration with automotive customers and also has broad application in industrial, defense, and commercial vehicle sectors.

With engineering teams in the U.S. and Germany, the Company develops and supplies integrated solutions, incorporating application software and processing data from differentiated sensor systems. The Company’s extensive experience in developing and productizing core lidar hardware and software components, along with expertise in edge computing, positions the Company as a valuable commercial partner capable of delivering high-value, low-power products.

Liquidity

The Company has incurred significant losses since inception. Operations to date have been funded primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales, and licensing activities.

As of June 30, 2026, the Company had total liquidity comprised of $27.2 million of cash and cash equivalents, which excludes restricted cash, and approximately $41.2 million availability under its current at-the-market (“ATM”) facility as of June 30, 2026, subject to certain conditions. In October 2024, the Company issued to an institutional investor $45.0 million in senior secured convertible notes due March 2026 for gross proceeds of $41.4 million (the “Prior Note”). In February 2026, the Company entered into a securities purchase and exchange agreement with the same institutional investor, pursuant to which the Company issued two senior secured convertible notes due March 2028 (the “2026 Notes Financing”) – one for approximately $20.6 million in exchange for the Prior Note and the other for approximately $22.4 million. See Note 7. Notes Payable and Derivative Liability for additional discussion. Pursuant to terms of the securities purchase and exchange agreement, as amended, the Company must maintain minimum cash liquidity of the lesser of $17.5 million or 110% of the then outstanding balance of the senior secured convertible notes for the remaining duration of their term.

During the first quarter of 2026, the Company completed the strategic acquisition of certain assets related to the worldwide lidar business of Luminar Technologies, Inc. (“Luminar”). The purchase price of $33.0 million was funded with cash on hand and, following the closing of the acquisition, the Company completed the 2026 Notes Financing to support the cash funding. The acquisition resulted in a near-term increase in headcount and leased properties, thereby significantly increasing cash usage and decreasing available liquidity. In light of this increase in operating expenses and cash usage, in March 2026 the Company began the implementation of a consolidation plan, which included a workforce reduction and other operational efficiencies, thereby partially offsetting the increase in cash usage that resulted from the Luminar acquisition. See Note 4. Business Combinations and Note 15. Restructuring Charges for additional discussion. The operating expense and cash usage improvements resulting from the consolidation plan are expected to begin taking effect during the third quarter of 2026. In the meantime, however, the combination of the higher cash burn during the first half of 2026 with historical losses and current liquidity, when analyzed in the aggregate in accordance with Accounting Standards Codification (“ASC”) 205-40, raises substantial doubt about the Company’s ability to continue as a going concern through at least twelve months from the date the condensed consolidated financial statements are issued.

Bolstering its strategic plan driven by revenue generation and achievement of operational efficiencies, the Company intends to increase liquidity through financing activities, which could include utilization of the ATM facility or the issuance of equity, debt, or convertible securities. Notwithstanding such plans, there can be no assurance that financing activities will be successful or timely, or that capital can be raised on commercially acceptable terms, or at all. If the Company is unable to raise additional capital within the expected timeframe, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, streamlining operations and otherwise reducing operating expenses. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.