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Microvision, Inc. – ‘10-Q’ for 3/31/18 – ‘EX-101.INS’

On:  Wednesday, 5/9/18, at 8:34pm ET   ·   As of:  5/10/18   ·   For:  3/31/18   ·   Accession #:  1136261-18-123   ·   File #:  1-34170

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 5/10/18  Microvision, Inc.                 10-Q        3/31/18   48:1.9M                                   Meyer Harol… Gretchen/FA

Quarterly Report   —   Form 10-Q   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    271K 
 2: EX-31.1     CEO 302 Certficate                                  HTML     19K 
 3: EX-31.2     CFO 302 Certficate                                  HTML     19K 
 4: EX-32.1     CEO 906 Certficate                                  HTML     15K 
 5: EX-32.2     CFO 906 Certficate                                  HTML     15K 
12: R1          Document and Entity Information                     HTML     41K 
13: R2          Condensed Consolidated Balance Sheets               HTML    105K 
14: R3          Condensed Consolidated Balance Sheets               HTML     36K 
                (Parenthetical)                                                  
15: R4          Condensed Consolidated Statements of Operations     HTML     54K 
16: R5          Condensed Consolidated Statements of Cash Flows     HTML     77K 
17: R6          MANAGEMENT'S STATEMENT - Note 1                     HTML     24K 
18: R7          NET LOSS PER SHARE - Note 2                         HTML     23K 
19: R8          REVENUE RECOGNITION - Note 3                        HTML     70K 
20: R9          CONCENTRATION OF SALES TO MAJOR CUSTOMERS - Note 4  HTML     21K 
21: R10         INVENTORY - Note 5                                  HTML     22K 
22: R11         SHARE-BASED COMPENSATION - Note 6                   HTML     29K 
23: R12         COMMITMENTS AND CONTINGENCIES - Note 7              HTML     21K 
24: R13         COMMON STOCK AND WARRANTS - Note 8                  HTML     20K 
25: R14         RECENT ACCOUNTING PRONOUNCEMENTS - Note 9           HTML     20K 
26: R15         SUBSEQUENT EVENTS - Note 10                         HTML     19K 
27: R16         Summary of Significant Accounting Policies          HTML     56K 
                (Policies)                                                       
28: R17         Net Loss Per Share (Tables)                         HTML     23K 
29: R18         Revenue Recognition (Tables)                        HTML     64K 
30: R19         Inventory (Tables)                                  HTML     22K 
31: R20         Share-Based Compensation (Tables)                   HTML     33K 
32: R21         Net Loss Per Share (Details)                        HTML     29K 
33: R22         Net Loss Per Share (Convertible Securities and      HTML     21K 
                Options Excluded Narrative) (Details)                            
34: R23         Revenue Recognition - Disaggregated Revenue         HTML     31K 
                (Details)                                                        
35: R24         Revenue Recognition - Contract Balances with        HTML     32K 
                Contract Customers (Details)                                     
36: R25         Revenue Recognition - Schedule of Significant       HTML     35K 
                Changes in Contract Assets and Liabilities                       
                (Details)                                                        
37: R26         Revenue Recognition - Estimated Revenue Expected    HTML     27K 
                to be Recognized in Future Related to Performance                
                Obligations (Details)                                            
38: R27         Revenue Recognition - Summary of Impact of          HTML     58K 
                Adoption of Accounting Standards (Details)                       
39: R28         Concentration of Sales to Major Customers           HTML     31K 
                (Narrative) (Details)                                            
40: R29         Inventory Components (Details)                      HTML     23K 
41: R30         Share-Based Compensation (Schedule Of Stock-Based   HTML     23K 
                Compensation Expense By Statement Of Operations)                 
                (Details)                                                        
42: R31         Shared-Based Compensation (Options Activity and     HTML     36K 
                Position) (Details)                                              
43: R32         Share-Based Compensation (Narrative) (Details)      HTML     22K 
44: R33         Commitments and Contingencies (Lease and Purchase   HTML     25K 
                Commitments Narrative) (Details)                                 
45: R34         Common Stock and Warrants (Narrative) (Details)     HTML     45K 
47: XML         IDEA XML File -- Filing Summary                      XML     78K 
46: EXCEL       IDEA Workbook of Financial Reports                  XLSX     41K 
 6: EX-101.INS  XBRL Instance -- mvis-20180331                       XML    509K 
 8: EX-101.CAL  XBRL Calculations -- mvis-20180331_cal               XML    119K 
 9: EX-101.DEF  XBRL Definitions -- mvis-20180331_def                XML    168K 
10: EX-101.LAB  XBRL Labels -- mvis-20180331_lab                     XML    459K 
11: EX-101.PRE  XBRL Presentations -- mvis-20180331_pre              XML    348K 
 7: EX-101.SCH  XBRL Schema -- mvis-20180331                         XSD     94K 
48: ZIP         XBRL Zipped Folder -- 0001136261-18-000123-xbrl      Zip     64K

‘EX-101.INS’   —   XBRL Instance — mvis-20180331

This Exhibit is an XBRL XML File.

                                                                                                                                                                                
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b>2. NET LOSS PER SHARE</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Basic net loss per share is calculated using the weighted-average number of common shares outstanding during the period. Net loss per share, assuming dilution, is calculated using the weighted-average number of common shares outstanding and the dilutive effect of all potentially dilutive securities, including common stock equivalents and convertible securities. Net loss per share, assuming dilution, is equal to basic net loss per share because the effect of dilutive securities outstanding during the period, including options and warrants computed using the treasury stock method, is anti-dilutive.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The components of basic and diluted net loss per share were as follows (in thousands, except loss per share data):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="4" style="text-align: center"><font style="font-size: 10pt"><b>Three Months Ended</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="4" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>March 31,</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 74%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 11%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 11%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Numerator:</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Net loss available for common shareholders - basic and diluted</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(7,132)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(5,949)</font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Denominator:</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Weighted-average common shares outstanding - basic and diluted </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 2.25pt double; 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<us-gaap:IncreaseDecreaseInInventories contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 819000 </us-gaap:IncreaseDecreaseInInventories>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b>5. INVENTORY</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Inventory consists of the following:</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>March 31,</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>December 31,</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 66%"><font style="font-size: 10pt">(<i>in thousands</i>)</font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Raw materials</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">53 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">53 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Finished goods</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">4,466 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">4,488 </font></td></tr> <tr style="vertical-align: top"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">4,519 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">4,541 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Inventory consists of raw materials and finished goods assemblies. Inventory is computed using the first-in, first-out (FIFO) method and is stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required. Inventory that will not be consumed through the normal course of business during the next twelve months is classified as "other assets" on the balance sheet.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p>
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<us-gaap:InventoryNet contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 4541000 </us-gaap:InventoryNet>
<us-gaap:InventoryNet contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 4519000 </us-gaap:InventoryNet>
<us-gaap:InventoryWriteDown contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 4000 </us-gaap:InventoryWriteDown>
<us-gaap:InventoryWriteDown contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 0 </us-gaap:InventoryWriteDown>
<us-gaap:Liabilities contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 19681000 </us-gaap:Liabilities>
<us-gaap:Liabilities contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 19232000 </us-gaap:Liabilities>
<us-gaap:LiabilitiesAndStockholdersEquity contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 29767000 </us-gaap:LiabilitiesAndStockholdersEquity>
<us-gaap:LiabilitiesAndStockholdersEquity contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 22518000 </us-gaap:LiabilitiesAndStockholdersEquity>
<us-gaap:LiabilitiesCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 19074000 </us-gaap:LiabilitiesCurrent>
<us-gaap:LiabilitiesCurrent contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 18703000 </us-gaap:LiabilitiesCurrent>
<us-gaap:NetCashProvidedByUsedInInvestingActivities contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> -182000 </us-gaap:NetCashProvidedByUsedInInvestingActivities>
<us-gaap:NetCashProvidedByUsedInInvestingActivities contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> -755000 </us-gaap:NetCashProvidedByUsedInInvestingActivities>
<us-gaap:NetCashProvidedByUsedInOperatingActivities contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> -9556000 </us-gaap:NetCashProvidedByUsedInOperatingActivities>
<us-gaap:NetCashProvidedByUsedInOperatingActivities contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> -6729000 </us-gaap:NetCashProvidedByUsedInOperatingActivities>
<us-gaap:NetIncomeLoss contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> -7132000 </us-gaap:NetIncomeLoss>
<us-gaap:NetIncomeLoss contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> -5949000 </us-gaap:NetIncomeLoss>
<us-gaap:NetIncomeLoss contextRef="From2017-01-01to2017-03-31_us-gaap_AccountingStandardsUpdate201409Member_us-gaap_DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member" unitRef="USD" decimals="-3"> -302000 </us-gaap:NetIncomeLoss>
<us-gaap:NetIncomeLoss contextRef="From2017-01-01to2017-03-31_us-gaap_AccountingStandardsUpdate201409Member_us-gaap_CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member" unitRef="USD" decimals="-3"> -5647000 </us-gaap:NetIncomeLoss>
<us-gaap:OperatingExpenses contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 7435000 </us-gaap:OperatingExpenses>
<us-gaap:OperatingExpenses contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 5898000 </us-gaap:OperatingExpenses>
<us-gaap:OperatingIncomeLoss contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> -7120000 </us-gaap:OperatingIncomeLoss>
<us-gaap:OperatingIncomeLoss contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> -5946000 </us-gaap:OperatingIncomeLoss>
<us-gaap:OtherAssetsCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 1015000 </us-gaap:OtherAssetsCurrent>
<us-gaap:OtherAssetsCurrent contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 1547000 </us-gaap:OtherAssetsCurrent>
<us-gaap:OtherAssetsCurrent contextRef="AsOf2018-03-31_custom_ContractCustomerMember" unitRef="USD" decimals="-3"> 11000 </us-gaap:OtherAssetsCurrent>
<us-gaap:OtherAssetsCurrent contextRef="AsOf2017-12-31_custom_ContractCustomerMember" unitRef="USD" decimals="-3"> 70000 </us-gaap:OtherAssetsCurrent>
<us-gaap:OtherAssetsCurrent contextRef="AsOf2017-12-31_us-gaap_AccountingStandardsUpdate201409Member_us-gaap_DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member" unitRef="USD" decimals="-3"> 70000 </us-gaap:OtherAssetsCurrent>
<us-gaap:OtherAssetsCurrent contextRef="AsOf2017-12-31_us-gaap_AccountingStandardsUpdate201409Member_us-gaap_CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member" unitRef="USD" decimals="-3"> 945000 </us-gaap:OtherAssetsCurrent>
<us-gaap:OtherAssetsNoncurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 2262000 </us-gaap:OtherAssetsNoncurrent>
<us-gaap:OtherAssetsNoncurrent contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 2506000 </us-gaap:OtherAssetsNoncurrent>
<us-gaap:OtherNonoperatingExpense contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 12000 </us-gaap:OtherNonoperatingExpense>
<us-gaap:OtherNonoperatingExpense contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 3000 </us-gaap:OtherNonoperatingExpense>
<us-gaap:PaymentsToAcquireOtherPropertyPlantAndEquipment contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 182000 </us-gaap:PaymentsToAcquireOtherPropertyPlantAndEquipment>
<us-gaap:PaymentsToAcquireOtherPropertyPlantAndEquipment contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 755000 </us-gaap:PaymentsToAcquireOtherPropertyPlantAndEquipment>
<us-gaap:PreferredStockValue contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 0 </us-gaap:PreferredStockValue>
<us-gaap:PreferredStockValue contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 0 </us-gaap:PreferredStockValue>
<us-gaap:PropertyPlantAndEquipmentNet contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 3251000 </us-gaap:PropertyPlantAndEquipmentNet>
<us-gaap:PropertyPlantAndEquipmentNet contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 2950000 </us-gaap:PropertyPlantAndEquipmentNet>
<us-gaap:ResearchAndDevelopmentExpense contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 4828000 </us-gaap:ResearchAndDevelopmentExpense>
<us-gaap:ResearchAndDevelopmentExpense contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 3318000 </us-gaap:ResearchAndDevelopmentExpense>
<us-gaap:RetainedEarningsUnappropriated contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> -518866000 </us-gaap:RetainedEarningsUnappropriated>
<us-gaap:RetainedEarningsUnappropriated contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> -525998000 </us-gaap:RetainedEarningsUnappropriated>
<us-gaap:RetainedEarningsUnappropriated contextRef="AsOf2017-12-31_us-gaap_AccountingStandardsUpdate201409Member_us-gaap_DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member" unitRef="USD" decimals="-3"> 5220000 </us-gaap:RetainedEarningsUnappropriated>
<us-gaap:RetainedEarningsUnappropriated contextRef="AsOf2017-12-31_us-gaap_AccountingStandardsUpdate201409Member_us-gaap_CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member" unitRef="USD" decimals="-3"> -524086000 </us-gaap:RetainedEarningsUnappropriated>
<us-gaap:Revenues contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 2188000 </us-gaap:Revenues>
<us-gaap:Revenues contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 568000 </us-gaap:Revenues>
<us-gaap:SellingGeneralAndAdministrativeExpense contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 2607000 </us-gaap:SellingGeneralAndAdministrativeExpense>
<us-gaap:SellingGeneralAndAdministrativeExpense contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 2580000 </us-gaap:SellingGeneralAndAdministrativeExpense>
<us-gaap:ShareBasedCompensation contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 320000 </us-gaap:ShareBasedCompensation>
<us-gaap:ShareBasedCompensation contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 310000 </us-gaap:ShareBasedCompensation>
<us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 10086000 </us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest>
<us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 3286000 </us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest>
<us-gaap:WeightedAverageNumberOfSharesOutstandingBasic contextRef="From2018-01-01to2018-03-31" unitRef="sharesItemType" decimals="-3"> 78610000 </us-gaap:WeightedAverageNumberOfSharesOutstandingBasic>
<us-gaap:WeightedAverageNumberOfSharesOutstandingBasic contextRef="From2017-01-01to2017-03-31" unitRef="sharesItemType" decimals="-3"> 68113000 </us-gaap:WeightedAverageNumberOfSharesOutstandingBasic>
<us-gaap:AmortizationOfIntangibleAssets contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 29000 </us-gaap:AmortizationOfIntangibleAssets>
<us-gaap:AmortizationOfIntangibleAssets contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 29000 </us-gaap:AmortizationOfIntangibleAssets>
<us-gaap:CommitmentsAndContingencies contextRef="AsOf2018-03-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:IntangibleAssetsNetExcludingGoodwill contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 602000 </us-gaap:IntangibleAssetsNetExcludingGoodwill>
<us-gaap:IntangibleAssetsNetExcludingGoodwill contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 573000 </us-gaap:IntangibleAssetsNetExcludingGoodwill>
<us-gaap:CostOfGoodsSold contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 238000 </us-gaap:CostOfGoodsSold>
<us-gaap:CostOfGoodsSold contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 213000 </us-gaap:CostOfGoodsSold>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b>6. SHARE-BASED COMPENSATION </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We issue share-based compensation to employees in the form of stock options and restricted stock units (RSUs). We account for the share-based awards by recognizing the fair value of share-based compensation expense on a straight-line basis over the service period of the award, net of estimated forfeitures. The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model. The fair value of RSUs is determined by the closing price of our common stock on the grant date. Changes in estimated inputs or using other option valuation methods may result in materially different option values and share-based compensation expense.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following table summarizes the amount of share-based compensation expense by line item in the statements of operations:</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt"><b>Share-based compensation expense</b></font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="4" style="text-align: center"><font style="font-size: 10pt"><b>Three Months Ended</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="4" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>March 31,</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 66%"><font style="font-size: 10pt">(<i>in thousands</i>)</font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Cost of product revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">8 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Research and development expense</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">179 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">105 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Sales, marketing, general and administrative expense</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">141 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">197 </font></td></tr> <tr style="vertical-align: top"> <td> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">320 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">310 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><u>Options activity and positions</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following table summarizes shares, weighted-average exercise price, weighted-average remaining contractual term and aggregate intrinsic value of options outstanding and options exercisable as of March 31, 2018:</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Weighted-</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Weighted-</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Average</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Average</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Remaining</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Aggregate</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Exercise</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Contractual</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Intrinsic</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 38%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt"><b>Options</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 14%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Shares</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 14%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Price</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 14%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Term (years)</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 14%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Value</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Outstanding as of March 31, 2018</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">4,973,000 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">2.72 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">6.4 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">2,000 </font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Exercisable as of March 31, 2018</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">2,769,000 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">3.32 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">4.7 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">-  </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">As of March 31, 2018, our unrecognized share-based employee compensation related to stock options was $2.1 million which we plan to amortize over the next 2.5 years, and our unamortized share-based compensation related to RSUs was $204,000 which we plan to amortize over the next 3.2 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p>
</us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock>
<us-gaap:IncreaseDecreaseInOtherCurrentAssets contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> -702000 </us-gaap:IncreaseDecreaseInOtherCurrentAssets>
<us-gaap:IncreaseDecreaseInOtherCurrentAssets contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> -79000 </us-gaap:IncreaseDecreaseInOtherCurrentAssets>
<us-gaap:EarningsPerSharePolicyTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Basic net loss per share is calculated using the weighted-average number of common shares outstanding during the period. Net loss per share, assuming dilution, is calculated using the weighted-average number of common shares outstanding and the dilutive effect of all potentially dilutive securities, including common stock equivalents and convertible securities. Net loss per share, assuming dilution, is equal to basic net loss per share because the effect of dilutive securities outstanding during the period, including options and warrants computed using the treasury stock method, is anti-dilutive.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
</us-gaap:EarningsPerSharePolicyTextBlock>
<us-gaap:ShareBasedCompensationOptionAndIncentivePlansPolicy contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We issue share-based compensation to employees in the form of stock options and restricted stock units (RSUs). We account for the share-based awards by recognizing the fair value of share-based compensation expense on a straight-line basis over the service period of the award, net of estimated forfeitures. The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model. The fair value of RSUs is determined by the closing price of our common stock on the grant date. Changes in estimated inputs or using other option valuation methods may result in materially different option values and share-based compensation expense.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
</us-gaap:ShareBasedCompensationOptionAndIncentivePlansPolicy>
<us-gaap:ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The components of basic and diluted net loss per share were as follows (in thousands, except loss per share data):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="4" style="text-align: center"><font style="font-size: 10pt"><b>Three Months Ended</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="4" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>March 31,</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 74%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 11%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 11%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Numerator:</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Net loss available for common shareholders - basic and diluted</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(7,132)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(5,949)</font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Denominator:</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Weighted-average common shares outstanding - basic and diluted </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">78,610 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">68,113 </font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Net loss per share - basic and diluted</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(0.09)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(0.09)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
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<us-gaap:ScheduleOfInventoryCurrentTableTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Inventory consists of the following:</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>March 31,</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>December 31,</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 66%"><font style="font-size: 10pt">(<i>in thousands</i>)</font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Raw materials</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">53 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">53 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Finished goods</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">4,466 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">4,488 </font></td></tr> <tr style="vertical-align: top"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">4,519 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">4,541 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
</us-gaap:ScheduleOfInventoryCurrentTableTextBlock>
<us-gaap:ScheduleOfEmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following table summarizes the amount of share-based compensation expense by line item in the statements of operations:</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt"><b>Share-based compensation expense</b></font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="4" style="text-align: center"><font style="font-size: 10pt"><b>Three Months Ended</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="4" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>March 31,</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 66%"><font style="font-size: 10pt">(<i>in thousands</i>)</font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Cost of product revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">8 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Research and development expense</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">179 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">105 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Sales, marketing, general and administrative expense</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">141 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">197 </font></td></tr> <tr style="vertical-align: top"> <td> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">320 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">310 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
</us-gaap:ScheduleOfEmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsTextBlock>
<us-gaap:ScheduleOfShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingTableTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following table summarizes shares, weighted-average exercise price, weighted-average remaining contractual term and aggregate intrinsic value of options outstanding and options exercisable as of March 31, 2018:</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Weighted-</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Weighted-</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Average</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Average</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Remaining</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Aggregate</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Exercise</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Contractual</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Intrinsic</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 38%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt"><b>Options</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 14%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Shares</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 14%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Price</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 14%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Term (years)</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 14%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Value</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Outstanding as of March 31, 2018</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">4,973,000 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">2.72 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">6.4 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">2,000 </font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Exercisable as of March 31, 2018</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">2,769,000 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">3.32 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">4.7 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">-  </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
</us-gaap:ScheduleOfShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingTableTextBlock>
<us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount contextRef="From2018-01-01to2018-03-31_StockCompensationPlanMember" unitRef="sharesItemType" decimals="INF"> 6946000 </us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount>
<us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount contextRef="From2017-01-01to2017-03-31_StockCompensationPlanMember" unitRef="sharesItemType" decimals="INF"> 8997000 </us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount>
<us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount contextRef="From2018-01-01to2018-03-31_RestrictedStockMember" unitRef="sharesItemType" decimals="INF"> 185000 </us-gaap:AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount>
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<us-gaap:InventoryRawMaterials contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 53000 </us-gaap:InventoryRawMaterials>
<us-gaap:InventoryRawMaterials contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 53000 </us-gaap:InventoryRawMaterials>
<us-gaap:InventoryFinishedGoods contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 4488000 </us-gaap:InventoryFinishedGoods>
<us-gaap:InventoryFinishedGoods contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 4466000 </us-gaap:InventoryFinishedGoods>
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<us-gaap:AllocatedShareBasedCompensationExpense contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 310000 </us-gaap:AllocatedShareBasedCompensationExpense>
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<us-gaap:AllocatedShareBasedCompensationExpense contextRef="From2017-01-01to2017-03-31_ResearchAndDevelopmentExpenseMember" unitRef="USD" decimals="-3"> 105000 </us-gaap:AllocatedShareBasedCompensationExpense>
<us-gaap:AllocatedShareBasedCompensationExpense contextRef="From2018-01-01to2018-03-31_SalesMarketingGeneralAndAdministrativeExpenseMember" unitRef="USD" decimals="-3"> 141000 </us-gaap:AllocatedShareBasedCompensationExpense>
<us-gaap:AllocatedShareBasedCompensationExpense contextRef="From2017-01-01to2017-03-31_SalesMarketingGeneralAndAdministrativeExpenseMember" unitRef="USD" decimals="-3"> 197000 </us-gaap:AllocatedShareBasedCompensationExpense>
<us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber contextRef="AsOf2018-03-31" unitRef="sharesItemType" decimals="INF"> 4973000 </us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber>
<us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice contextRef="AsOf2018-03-31" unitRef="perShareItemType" decimals="INF"> 2.72 </us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice>
<us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue contextRef="AsOf2018-03-31" unitRef="USD" decimals="0"> 2000 </us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue>
<us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber contextRef="AsOf2018-03-31" unitRef="sharesItemType" decimals="INF"> 2769000 </us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber>
<us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice contextRef="AsOf2018-03-31" unitRef="perShareItemType" decimals="INF"> 3.32 </us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice>
<us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableIntrinsicValue1 contextRef="AsOf2018-03-31" unitRef="USD" decimals="0"> 0 </us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableIntrinsicValue1>
<us-gaap:RestrictedCashAndCashEquivalentsNoncurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 435000 </us-gaap:RestrictedCashAndCashEquivalentsNoncurrent>
<us-gaap:RestrictedCashAndCashEquivalentsNoncurrent contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 435000 </us-gaap:RestrictedCashAndCashEquivalentsNoncurrent>
<dei:EntityRegistrantName contextRef="From2018-01-01to2018-03-31"> Microvision, Inc. </dei:EntityRegistrantName>
<dei:EntityCentralIndexKey contextRef="From2018-01-01to2018-03-31"> 0000065770 </dei:EntityCentralIndexKey>
<dei:DocumentType contextRef="From2018-01-01to2018-03-31"> 10-Q </dei:DocumentType>
<dei:DocumentPeriodEndDate contextRef="From2018-01-01to2018-03-31"> 2018-03-31 </dei:DocumentPeriodEndDate>
<dei:AmendmentFlag contextRef="From2018-01-01to2018-03-31"> false </dei:AmendmentFlag>
<dei:CurrentFiscalYearEndDate contextRef="From2018-01-01to2018-03-31"> --12-31 </dei:CurrentFiscalYearEndDate>
<dei:EntityWellKnownSeasonedIssuer contextRef="From2018-01-01to2018-03-31"> No </dei:EntityWellKnownSeasonedIssuer>
<dei:EntityVoluntaryFilers contextRef="From2018-01-01to2018-03-31"> No </dei:EntityVoluntaryFilers>
<dei:EntityCurrentReportingStatus contextRef="From2018-01-01to2018-03-31"> Yes </dei:EntityCurrentReportingStatus>
<dei:EntityFilerCategory contextRef="From2018-01-01to2018-03-31"> Accelerated Filer </dei:EntityFilerCategory>
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<us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 26000 </us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent>
<us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 26000 </us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent>
<us-gaap:PreferredStockParOrStatedValuePerShare contextRef="AsOf2017-12-31" unitRef="perShareItemType" decimals="INF"> 0.001 </us-gaap:PreferredStockParOrStatedValuePerShare>
<us-gaap:PreferredStockParOrStatedValuePerShare contextRef="AsOf2018-03-31" unitRef="perShareItemType" decimals="INF"> 0.001 </us-gaap:PreferredStockParOrStatedValuePerShare>
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<us-gaap:PreferredStockSharesIssued contextRef="AsOf2017-12-31" unitRef="sharesItemType" decimals="-3"> 0 </us-gaap:PreferredStockSharesIssued>
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<us-gaap:CommonStockParOrStatedValuePerShare contextRef="AsOf2017-12-31" unitRef="perShareItemType" decimals="INF"> 0.001 </us-gaap:CommonStockParOrStatedValuePerShare>
<us-gaap:CommonStockParOrStatedValuePerShare contextRef="AsOf2018-03-31" unitRef="perShareItemType" decimals="INF"> 0.001 </us-gaap:CommonStockParOrStatedValuePerShare>
<us-gaap:CommonStockSharesAuthorized contextRef="AsOf2017-12-31" unitRef="sharesItemType" decimals="-3"> 100000000 </us-gaap:CommonStockSharesAuthorized>
<us-gaap:CommonStockSharesAuthorized contextRef="AsOf2018-03-31" unitRef="sharesItemType" decimals="-3"> 100000000 </us-gaap:CommonStockSharesAuthorized>
<us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedPeriodForRecognition1 contextRef="From2018-01-01to2018-03-31_EmployeeStockOptionMember"> P2Y180D </us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedPeriodForRecognition1>
<us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedPeriodForRecognition1 contextRef="From2018-01-01to2018-03-31_RestrictedStockRightsMember"> P3Y72D </us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedPeriodForRecognition1>
<us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1 contextRef="From2018-01-01to2018-03-31"> P4Y252D </us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1>
<us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeOutstandingOptionsWeightedAverageRemainingContractualTerm2 contextRef="From2018-01-01to2018-03-31"> P6Y144D </us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeOutstandingOptionsWeightedAverageRemainingContractualTerm2>
<us-gaap:ConcentrationRiskPercentage1 contextRef="From2018-01-01to2018-03-31_us-gaap_CustomerConcentrationRiskMember" unitRef="Pure" decimals="INF"> 0.95 </us-gaap:ConcentrationRiskPercentage1>
<us-gaap:ConcentrationRiskPercentage1 contextRef="From2018-01-01to2018-03-31_custom_AccountsReceivableConcentrationRiskMember" unitRef="Pure" decimals="INF"> 0.999 </us-gaap:ConcentrationRiskPercentage1>
<us-gaap:ConcentrationRiskPercentage1 contextRef="From2017-01-01to2017-03-31_us-gaap_CustomerConcentrationRiskMember" unitRef="Pure" decimals="INF"> 0.38 </us-gaap:ConcentrationRiskPercentage1>
<us-gaap:ConcentrationRiskPercentage1 contextRef="From2017-01-01to2017-03-31_custom_SecondCustomerConcentrationRiskMember" unitRef="Pure" decimals="INF"> 0.36 </us-gaap:ConcentrationRiskPercentage1>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b>8. COMMON STOCK AND WARRANTS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In August 2017, we raised approximately $11.5 million before issuance costs of approximately $1.1 million through an underwritten public offering of 5.5 million shares of our common stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In August 2017, we raised approximately $3.2 million before issuance costs of approximately $26,000 through a private placement of 1.5 million shares of our common stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">During the second quarter of 2017, we received $906,000 from the exercise of warrants to purchase 460,000 shares of common stock, which warrants were issued in connection with earlier financing transactions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In May 2017, we entered into an At-The-Market (ATM) agreement with IFS Securities (DBA Brinson Patrick). During the second quarter of 2017, we received gross proceeds of $3.7 million before issuance costs of approximately $125,000 from the sale of approximately 1.7 million shares of our common stock. The agreement was terminated in June 2017 at our election without penalty.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">During the second quarter of 2017, we received proceeds of $2.2 million from the sale of 1.2 million shares of our common stock as part of the Common Stock Purchase agreement we entered into with Lincoln Park Capital Fund, LLC (Lincoln Park) in September 2016. The agreement was terminated in August 2017 at our election without penalty.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The Condensed Consolidated Balance Sheets as of March 31, 2018, the Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017, have been prepared by MicroVision, Inc. ("we" or "our") and have not been audited. In the opinion of management, all adjustments necessary to state fairly the financial position at March 31, 2018 and the results of operations and cash flows for all periods presented have been made and consist of normal recurring adjustments. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules of the Securities and Exchange Commission (SEC). The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. You should read these condensed consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results that may be attained for the entire fiscal year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We have incurred significant losses since inception. We have funded our operations to date primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales and licensing activities. At March 31, 2018, we had $7.2 million in cash and cash equivalents.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Based on our current operating plan that includes expected proceeds from a development contract signed in April 2017 with a major technology company and including expected payments totaling $10.0 million under a licensing agreement that was executed with a customer in May 2018, we anticipate that we have sufficient cash and cash equivalents to fund our operations through December 2018. Our receipt of proceeds under our April 2017 development contract is subject to our completion of certain milestones, and we can provide no assurance that such milestones will be completed. We will require additional capital to fund our operating plan past that time. We plan to obtain additional capital through the issuance of equity or debt securities, product sales and/or licensing activities. There can be no assurance that additional capital will be available to us or, if available, will be available on terms acceptable to us or on a timely basis. If adequate capital resources are not available on a timely basis, we intend to consider limiting our operations substantially. This limitation of operations could include reducing investments in our production capacities, research and development projects, staff, operating costs, and capital expenditures.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We are introducing new technology and products into an emerging market which creates significant uncertainty about our ability to accurately project revenue, costs and cash flows. Our capital requirements will depend on many factors, including, but not limited to, the commercial success of our laser beam scanning (LBS) engines, the rate at which original design manufacturers (ODMs) or original equipment manufacturers (OEMs) introduce products incorporating our PicoP® scanning technology and the market acceptance and competitive position of such products. If revenues are less than we anticipate, if we fail to meet milestones for future payments or have to repay amounts already received under our April 2017 development contract, if the mix of revenues and the associated margins vary from anticipated amounts or if expenses exceed the amounts budgeted, we may require additional capital earlier than expected to fund our operations. In addition, our operating plan provides for the development of strategic relationships with suppliers of components and systems and equipment manufacturers that may require additional investments by us.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">These factors raise substantial doubt regarding our ability to continue as a going concern. 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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b>4. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><u>Concentration of credit risk</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Financial instruments that potentially subject us to a concentration of credit risk are primarily cash equivalents and accounts receivable. We typically do not require collateral from our customers. As of March 31, 2018, our cash and cash equivalents are comprised of short-term highly rated money market savings accounts.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><u>Concentration of major customers and suppliers </u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">For the three months ended March 31, 2018, one commercial customer accounted for $2.1 million in revenue, representing 95% of our total revenue. For the three months ended March 31, 2017, one commercial customer accounted for $215,000 in revenue, representing 38% of our total revenue, a second commercial customer accounted for $204,000 in revenue, representing 36% of our total revenue, and a third commercial customer accounted for $97,000 in revenue, representing 17% of our total revenue. One commercial customer accounted for $2.5 million, or 99.9% of our net accounts receivable balance at March 31, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">A significant concentration of our components and the products we sell are currently manufactured and obtained from single or limited-source suppliers. The loss of any single or limited-source supplier, the failure of any of these suppliers to perform as expected, or the disruption in the supply chain of components from these suppliers could subject us to risks and uncertainties including, but not limited to, increased cost of sales, possible loss of revenues, or significant delays in product deliveries, any of which could adversely affect our financial condition and operating results.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b>9. RECENT ACCOUNTING PRONOUNCEMENTS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use asset and lease liability in the balance sheet for all leases, including operating leases, with terms of more than twelve months. Recognition, measurement and presentation of expenses and cash flows from a lease by a lessee have not significantly changed from previous guidance. The amendments also require qualitative disclosures along with specific quantitative disclosures. The new guidance will be effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The amendments must be applied on a modified retrospective basis. We anticipate the adoption of this standard will have a material impact on our financial statements. While we are continuing to assess all the potential impacts of the standard, we currently believe the most significant impact relates to our accounting for our office lease. Under the new guidance, the net present value of the obligation for our office lease will appear on the balance sheet. Currently, it is classified as an operating lease and payments are expensed in the period incurred.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b>1. MANAGEMENT’S STATEMENT </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The Condensed Consolidated Balance Sheets as of March 31, 2018, the Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017, have been prepared by MicroVision, Inc. ("we" or "our") and have not been audited. In the opinion of management, all adjustments necessary to state fairly the financial position at March 31, 2018 and the results of operations and cash flows for all periods presented have been made and consist of normal recurring adjustments. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules of the Securities and Exchange Commission (SEC). The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. You should read these condensed consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results that may be attained for the entire fiscal year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We have incurred significant losses since inception. We have funded our operations to date primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales and licensing activities. At March 31, 2018, we had $7.2 million in cash and cash equivalents.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Based on our current operating plan that includes expected proceeds from a development contract signed in April 2017 with a major technology company and including expected payments totaling $10.0 million under a licensing agreement that was executed with a customer in May 2018, we anticipate that we have sufficient cash and cash equivalents to fund our operations through December 2018. Our receipt of proceeds under our April 2017 development contract is subject to our completion of certain milestones, and we can provide no assurance that such milestones will be completed. We will require additional capital to fund our operating plan past that time. We plan to obtain additional capital through the issuance of equity or debt securities, product sales and/or licensing activities. There can be no assurance that additional capital will be available to us or, if available, will be available on terms acceptable to us or on a timely basis. If adequate capital resources are not available on a timely basis, we intend to consider limiting our operations substantially. This limitation of operations could include reducing investments in our production capacities, research and development projects, staff, operating costs, and capital expenditures.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We are introducing new technology and products into an emerging market which creates significant uncertainty about our ability to accurately project revenue, costs and cash flows. Our capital requirements will depend on many factors, including, but not limited to, the commercial success of our laser beam scanning (LBS) engines, the rate at which original design manufacturers (ODMs) or original equipment manufacturers (OEMs) introduce products incorporating our PicoP® scanning technology and the market acceptance and competitive position of such products. If revenues are less than we anticipate, if we fail to meet milestones for future payments or have to repay amounts already received under our April 2017 development contract, if the mix of revenues and the associated margins vary from anticipated amounts or if expenses exceed the amounts budgeted, we may require additional capital earlier than expected to fund our operations. In addition, our operating plan provides for the development of strategic relationships with suppliers of components and systems and equipment manufacturers that may require additional investments by us.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">These factors raise substantial doubt regarding our ability to continue as a going concern. Our unaudited consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might be necessary should we be unable to continue as a going concern.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Inventory consists of raw materials and finished goods assemblies. Inventory is computed using the first-in, first-out (FIFO) method and is stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required. Inventory that will not be consumed through the normal course of business during the next twelve months is classified as "other assets" on the balance sheet.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b>3. REVENUE RECOGNITION</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09 (ASU 2014-09), Revenue from Contracts with Customers (Topic 606), an updated standard on revenue recognition. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. We implemented ASU 2014-09 as of January 1, 2018 using the full retrospective approach, meaning we will restate each prior reporting period presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We performed a review of our revenue generating contracts with customers subject to ASU 2014-09, and implementation of this standard has the following material impacts on our financial statements:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">i. Timing of revenue recognition under the PicoP® scanning technology license agreement we signed with Sony in March 2015. Under previous guidance, we had been recognizing the upfront license fee payment of $8.0 million on a straight-line basis over a period of eight years. Under the new guidance, the entire $8.0 million upfront license fee payment was recognized in the first quarter of 2015. The result of this change in timing resulted in a decrease of $7.2 million in our beginning 2016 accumulated deficit balance and a reduction in our short- term deferred revenue balance of $1.0 million and long-term deferred revenue balance of $6.1 million. Royalty revenue for each of the years ended December 31, 2016 and 2017 was reduced by approximately $1.0 million.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">ii. Timing of revenue recognition on product sales. Previously, we recognized revenue after expiration of the contractual acceptance period. Under the new guidance, we recognize revenue when control of the product transfers to the buyer, which may occur before the expiration of the contractual acceptance period. The result of this change was a net decrease in our beginning 2016 accumulated deficit of $527,000, as well as a shift in revenue and cost recognition to earlier quarters in 2016 and 2017.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b><u>Accounting policy as a result of adopting Topic 606</u></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. We generate all of our revenue from contracts with customers.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We evaluate contracts based on the 5-step model as stated in Topic 606 as follows: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price, and (v) recognize revenue when (or as) performance obligations are satisfied.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">A contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group of promises) that is distinct, as defined in the revenue standard.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The transaction price is the amount of consideration an entity expects to be entitled to from a customer in exchange for providing the goods or services. A number of factors should be considered to determine the transaction price, including whether there is variable consideration, a significant financing component, noncash consideration, or amounts payable to the customer. The determination of variable consideration will require a significant amount of judgment. In estimating the transaction price we will use either the expected value method or the most likely amount method.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The transaction price is allocated to the separate performance obligations in the contract based on relative standalone selling prices. Determining the relative standalone selling price can be challenging when goods or services are not sold on a standalone basis. The revenue standard sets out several methods that can be used to estimate a standalone selling price when one is not directly observable. Allocating discounts and variable consideration must also be considered. Allocating the transaction price can require significant judgement on our part.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Revenue is recognized when (or as) the customer obtains control of the good or service/performance obligations are satisfied. Topic 606 provides guidance to help determine if a performance obligation is satisfied at a point in time or over time. Where a performance obligation is satisfied over time, the related revenue is also recognized over time.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><i>Product revenue</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We sell our products to customers under a contract or by purchase order. We consider the sale of each individual item to be one performance obligation. The transaction price is generally either at stated product price per quantity or at a fixed amount at contract inception. Revenue is recognized under Topic 606 when the product is shipped to the customer because control passes to the customer at the point of shipment. Our product sales generally include acceptance provisions, however, because we generally can objectively determine that we have met agreed-upon customer specifications prior to shipment, control of the item passes at the time of shipment.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><i>Royalty revenue</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We recognize revenue on upfront license fees at a point in time if the nature of the license granted is a right-to-use license, representing functional intellectual property with significant standalone functionality. If the nature of the license granted is a right-to-access license, representing symbolic intellectual property, which excludes significant standalone functionality, we recognize revenue over the period of time we have ongoing obligations under the agreement. We will recognize revenue from sales-based royalties on the basis of the quarterly reports provided by our customer as to the number of royalty-bearing products sold or otherwise distributed. In the event that reports are not received, we will estimate the number of royalty-bearing products sold by our customers.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><i>Contract revenue</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Our contract revenue in a particular period is dependent upon when we enter into a contract, the value of the contracts we have entered into, and the availability of technical resources to perform work on the contracts. We recognize contract revenue either at a point in time, or over time, depending upon the characteristics of the individual contract. If control of the deliverable(s) occur over time, the revenue is recognized in proportion to the transfer of control. If control passes to the customer only upon completion and transfer of the asset, revenue is recognized at the completion of the contract. In contracts that include significant customer acceptance provisions, we recognize revenue only upon acceptance of the deliverable(s).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We identify each performance obligation in our development contracts at contract inception. The contracts generally include product development and customization specified by the customer. In contracts with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligations are distinct within the context of the contract. Performance obligations that are not distinct at contract inception are combined.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Our development contracts are primarily fixed-fee contracts. If control of deliverables occurs over time, we recognize revenue on fixed fee contracts on the proportion of total cost expended (under Topic 606, the `input method') to the total cost expected to complete the contract performance obligation. For contracts that require the input method for revenue recognition, the determination of the total cost expected to complete the performance obligations on fixed fee contracts involves significant judgment. We incorporate revisions to hour and cost estimates when the causal facts become known.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b><u>Disaggregation of revenue</u></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following table provides information about disaggregated revenue by timing of revenue recognition, (in thousands):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Three Months Ended March 31, 2018</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Product</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Royalty</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Contract</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 40%"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Total</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Timing of revenue recognition:</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">     Products transferred at a point in time</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">11 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">99 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">110 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">     Product and services transferred over time</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">2,078 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">2,078 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">     Total</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">11 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,177 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,188 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Three Months Ended March 31, 2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Product</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Royalty</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Contract</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 40%"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Total</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Timing of revenue recognition:</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">     Products transferred at a point in time</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">97 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">257 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">354 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">     Product and services transferred over time</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">214 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">214 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">     Total</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">97 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">471 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">568 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b><u>Contract balances</u></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in thousands):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>March 31,</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>December 31,</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 66%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Accounts receivable, net</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">2,502 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">15 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Costs and estimated earnings in excess of billings on uncompleted contracts</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">258 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">680 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Other current assets</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">11 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">70 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Billings on uncompleted contracts in excess of related costs</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">4 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">5 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Other current liabilities</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">10,000 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">10,000 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Under Topic 606, our rights to consideration are presented separately depending on whether those rights are conditional or unconditional. We will present our unconditional rights to consideration as "accounts receivable" in our Consolidated Balance Sheet.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Contract assets will represent rights to consideration that are subject to a condition other than the passage of time, and will be comprised primarily of costs and estimated profits in excess of billings on uncompleted contracts and estimated accrued sales-based royalty revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Contract costs in excess of billing will be included in the "Costs and estimated earnings in excess of billings on uncompleted contracts" line of our Consolidated Balance Sheet, and sales-based royalties will be included in "Other current assets". This does not represent a change in presentation for contract fulfillment costs; however, for sales-based royalty revenue, this revenue was previously not recognized until quarterly royalty reporting had been received from our customer. Under Topic 606, once quarterly royalty reporting has been received, the related contract assets will be transferred to accounts receivable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Significant changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands, except percentages):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr> <td style="width: 41%"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; text-align: center"><font style="font-size: 10pt"><b>March 31,</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; text-align: center"><font style="font-size: 10pt"><b>December 31,</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; text-align: center"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; text-align: center"> </td></tr> <tr> <td> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>$ Change</b></font></td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>% Change</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Contract assets</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">258 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">680 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(422)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(62.1)</font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Contract liabilities</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(4)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(5)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">1 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(20.0)</font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Net contract assets (liabilities)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">254 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">675 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(421)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(62.4)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In the first quarter of 2018, we recognized revenue of $2.1 million related to the contract with a major technology company we entered into in April 2017. Of this amount $680,000 was included in contract assets at January 1, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b><u>Contract acquisition costs</u></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Regarding the adoption of Topic 606, we are required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed. We currently do not pay any commissions upon the signing of a contract; therefore, no commission cost has been incurred as of March 31, 2018.  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b><u>Transaction price allocated to the remaining performance obligations</u></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The estimated revenue does not include the $10 million upfront payment received from a major technology company to develop an LBS display system due to uncertainty around the timing of recognition. Additionally, the estimated revenue does not include amounts of variable consideration attributable to royalties or unexercised contract renewals (in thousands):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 52%; text-align: right"> </td> <td style="width: 2%; text-align: right"> </td> <td style="width: 2%; text-align: right"> </td> <td style="width: 23%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Remainder of 2018</b></font></td> <td style="width: 2%; text-align: right"> </td> <td style="width: 2%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2019</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Product revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">4,308 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Contract revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">6,358 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">884 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b><u>Impacts to Previously Reported Results</u></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In accordance with Topic 606, the disclosure of the impact of adoption to our condensed consolidated statements of operations and balance sheets was as follows (in thousands, except per share data):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="7" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Three Months Ended March 31, 2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>As previously</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>New revenue</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>As</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 43%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>reported</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>standard adjustment</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>restated</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Royalty revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">535 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(438)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">97 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Contract revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">257 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">214 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">471 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Cost of contract revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">325 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">78 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">403 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Net loss</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(5,647)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(302)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(5,949)</font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Net loss per share - basic and diluted</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(0.08)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(0.01)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(0.09)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="7" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>December 31, 2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>As previously</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>New revenue</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>As</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 43%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>reported</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>standard adjustment</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>restated</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Costs and estimated earnings incurred on uncompleted contracts</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">680 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">680 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Other current assets</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">945 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">70 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">1,015 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Billings on uncompleted contracts</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">5 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">5 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Deferred revenue - current</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">999 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(999)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Deferred revenue - noncurrent</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">4,151 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(4,151)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Shareholders' equity:</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Accumulated deficit</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(524,086)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">5,220 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(518,866)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Adoption of the standards related to revenue recognition had no impact to cash from or used in operating, investing, or financing activities on our consolidated cash flows statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="margin: 0pt"> </p>
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<us-gaap:DisaggregationOfRevenueTableTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following table provides information about disaggregated revenue by timing of revenue recognition, (in thousands):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Three Months Ended March 31, 2018</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Product</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Royalty</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Contract</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 40%"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Total</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Timing of revenue recognition:</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">     Products transferred at a point in time</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">11 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">99 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">110 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">     Product and services transferred over time</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">2,078 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">2,078 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">     Total</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">11 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,177 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,188 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Three Months Ended March 31, 2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Product</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Royalty</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>Contract</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 40%"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>revenue</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Total</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Timing of revenue recognition:</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">     Products transferred at a point in time</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">97 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">257 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">354 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">     Product and services transferred over time</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">214 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">214 </font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">     Total</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">97 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">471 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">568 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
</us-gaap:DisaggregationOfRevenueTableTextBlock>
<us-gaap:CostsInExcessOfBillingsAndBillingsInExcessOfCostsTableTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in thousands):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>March 31,</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>December 31,</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 66%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Accounts receivable, net</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">2,502 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">15 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Costs and estimated earnings in excess of billings on uncompleted contracts</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">258 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">680 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Other current assets</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">11 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">70 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Billings on uncompleted contracts in excess of related costs</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">4 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">5 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Other current liabilities</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">10,000 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">10,000 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
</us-gaap:CostsInExcessOfBillingsAndBillingsInExcessOfCostsTableTextBlock>
<us-gaap:ContractWithCustomerAssetAndLiabilityTableTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Significant changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands, except percentages):</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr> <td style="width: 41%"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; text-align: center"><font style="font-size: 10pt"><b>March 31,</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; text-align: center"><font style="font-size: 10pt"><b>December 31,</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; text-align: center"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 13%; text-align: center"> </td></tr> <tr> <td> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2018</b></font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2017</b></font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>$ Change</b></font></td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>% Change</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Contract assets</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">258 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">680 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(422)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(62.1)</font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Contract liabilities</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(4)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(5)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">1 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(20.0)</font></td></tr> <tr style="vertical-align: top"> <td><font style="font-size: 10pt">Net contract assets (liabilities)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">254 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">675 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(421)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(62.4)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
</us-gaap:ContractWithCustomerAssetAndLiabilityTableTextBlock>
<us-gaap:RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionTableTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Additionally, the estimated revenue does not include amounts of variable consideration attributable to royalties or unexercised contract renewals (in thousands):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 52%; text-align: right"> </td> <td style="width: 2%; text-align: right"> </td> <td style="width: 2%; text-align: right"> </td> <td style="width: 23%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Remainder of 2018</b></font></td> <td style="width: 2%; text-align: right"> </td> <td style="width: 2%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>2019</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Product revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">4,308 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Contract revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">6,358 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">884 </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
</us-gaap:RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionTableTextBlock>
<us-gaap:ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In accordance with Topic 606, the disclosure of the impact of adoption to our condensed consolidated statements of operations and balance sheets was as follows (in thousands, except per share data):</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="7" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Three Months Ended March 31, 2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>As previously</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>New revenue</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>As</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 43%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>reported</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>standard adjustment</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>restated</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Royalty revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">535 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">(438)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">97 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Contract revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">257 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">214 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">471 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Cost of contract revenue</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">325 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">78 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">403 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Net loss</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(5,647)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(302)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(5,949)</font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Net loss per share - basic and diluted</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(0.08)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(0.01)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(0.09)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td colspan="7" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>December 31, 2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>As previously</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>New revenue</b></font></td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"><font style="font-size: 10pt"><b>As</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="width: 43%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>reported</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>standard adjustment</b></font></td> <td style="width: 1%; text-align: right"> </td> <td style="width: 1%; text-align: right"> </td> <td style="width: 17%; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>restated</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Costs and estimated earnings incurred on uncompleted contracts</font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">680 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">680 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Other current assets</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">945 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">70 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">1,015 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Billings on uncompleted contracts</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">5 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">5 </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Deferred revenue - current</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">999 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(999)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Deferred revenue - noncurrent</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">4,151 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(4,151)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">- </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Shareholders' equity:</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"> </td></tr> <tr style="vertical-align: bottom"> <td><font style="font-size: 10pt">Accumulated deficit</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(524,086)</font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">5,220 </font></td> <td style="text-align: right"> </td> <td style="text-align: right"> </td> <td style="text-align: right"><font style="font-size: 10pt">(518,866)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
</us-gaap:ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock>
<us-gaap:RevenueRecognitionPolicyTextBlock contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09 (ASU 2014-09), Revenue from Contracts with Customers (Topic 606), an updated standard on revenue recognition. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. We implemented ASU 2014-09 as of January 1, 2018 using the full retrospective approach, meaning we will restate each prior reporting period presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We performed a review of our revenue generating contracts with customers subject to ASU 2014-09, and implementation of this standard has the following material impacts on our financial statements:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">i. Timing of revenue recognition under the PicoP® scanning technology license agreement we signed with Sony in March 2015. Under previous guidance, we had been recognizing the upfront license fee payment of $8.0 million on a straight-line basis over a period of eight years. Under the new guidance, the entire $8.0 million upfront license fee payment was recognized in the first quarter of 2015. The result of this change in timing resulted in a decrease of $7.2 million in our beginning 2016 accumulated deficit balance and a reduction in our short- term deferred revenue balance of $1.0 million and long-term deferred revenue balance of $6.1 million. Royalty revenue for each of the years ended December 31, 2016 and 2017 was reduced by approximately $1.0 million.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">ii. Timing of revenue recognition on product sales. Previously, we recognized revenue after expiration of the contractual acceptance period. Under the new guidance, we recognize revenue when control of the product transfers to the buyer, which may occur before the expiration of the contractual acceptance period. The result of this change was a net decrease in our beginning 2016 accumulated deficit of $527,000, as well as a shift in revenue and cost recognition to earlier quarters in 2016 and 2017.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b><u>Accounting policy as a result of adopting Topic 606</u></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. We generate all of our revenue from contracts with customers.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We evaluate contracts based on the 5-step model as stated in Topic 606 as follows: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price, and (v) recognize revenue when (or as) performance obligations are satisfied.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">A contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group of promises) that is distinct, as defined in the revenue standard.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The transaction price is the amount of consideration an entity expects to be entitled to from a customer in exchange for providing the goods or services. A number of factors should be considered to determine the transaction price, including whether there is variable consideration, a significant financing component, noncash consideration, or amounts payable to the customer. The determination of variable consideration will require a significant amount of judgment. In estimating the transaction price we will use either the expected value method or the most likely amount method.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The transaction price is allocated to the separate performance obligations in the contract based on relative standalone selling prices. Determining the relative standalone selling price can be challenging when goods or services are not sold on a standalone basis. The revenue standard sets out several methods that can be used to estimate a standalone selling price when one is not directly observable. Allocating discounts and variable consideration must also be considered. Allocating the transaction price can require significant judgement on our part.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Revenue is recognized when (or as) the customer obtains control of the good or service/performance obligations are satisfied. Topic 606 provides guidance to help determine if a performance obligation is satisfied at a point in time or over time. Where a performance obligation is satisfied over time, the related revenue is also recognized over time.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><i>Product revenue</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We sell our products to customers under a contract or by purchase order. We consider the sale of each individual item to be one performance obligation. The transaction price is generally either at stated product price per quantity or at a fixed amount at contract inception. Revenue is recognized under Topic 606 when the product is shipped to the customer because control passes to the customer at the point of shipment. Our product sales generally include acceptance provisions, however, because we generally can objectively determine that we have met agreed-upon customer specifications prior to shipment, control of the item passes at the time of shipment.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><i>Royalty revenue</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We recognize revenue on upfront license fees at a point in time if the nature of the license granted is a right-to-use license, representing functional intellectual property with significant standalone functionality. If the nature of the license granted is a right-to-access license, representing symbolic intellectual property, which excludes significant standalone functionality, we recognize revenue over the period of time we have ongoing obligations under the agreement. We will recognize revenue from sales-based royalties on the basis of the quarterly reports provided by our customer as to the number of royalty-bearing products sold or otherwise distributed. In the event that reports are not received, we will estimate the number of royalty-bearing products sold by our customers.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><i>Contract revenue</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Our contract revenue in a particular period is dependent upon when we enter into a contract, the value of the contracts we have entered into, and the availability of technical resources to perform work on the contracts. We recognize contract revenue either at a point in time, or over time, depending upon the characteristics of the individual contract. If control of the deliverable(s) occur over time, the revenue is recognized in proportion to the transfer of control. If control passes to the customer only upon completion and transfer of the asset, revenue is recognized at the completion of the contract. In contracts that include significant customer acceptance provisions, we recognize revenue only upon acceptance of the deliverable(s).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">We identify each performance obligation in our development contracts at contract inception. The contracts generally include product development and customization specified by the customer. In contracts with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligations are distinct within the context of the contract. Performance obligations that are not distinct at contract inception are combined.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Our development contracts are primarily fixed-fee contracts. If control of deliverables occurs over time, we recognize revenue on fixed fee contracts on the proportion of total cost expended (under Topic 606, the `input method') to the total cost expected to complete the contract performance obligation. For contracts that require the input method for revenue recognition, the determination of the total cost expected to complete the performance obligations on fixed fee contracts involves significant judgment. We incorporate revisions to hour and cost estimates when the causal facts become known.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p>
</us-gaap:RevenueRecognitionPolicyTextBlock>
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<us-gaap:PaymentsOfStockIssuanceCosts contextRef="From2018-01-01to2018-03-31_custom_PrivateAugust2017Member" unitRef="USD" decimals="0"> 26000 </us-gaap:PaymentsOfStockIssuanceCosts>
<us-gaap:PaymentsOfStockIssuanceCosts contextRef="From2018-01-01to2018-03-31_custom_May2017Member" unitRef="USD" decimals="0"> 125000 </us-gaap:PaymentsOfStockIssuanceCosts>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In August 2017, we raised approximately $11.5 million before issuance costs of approximately $1.1 million through an underwritten public offering of 5.5 million shares of our common stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In August 2017, we raised approximately $3.2 million before issuance costs of approximately $26,000 through a private placement of 1.5 million shares of our common stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">During the second quarter of 2017, we received $906,000 from the exercise of warrants to purchase 460,000 shares of common stock, which warrants were issued in connection with earlier financing transactions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In May 2017, we entered into an At-The-Market (ATM) agreement with IFS Securities (DBA Brinson Patrick). During the second quarter of 2017, we received gross proceeds of $3.7 million before issuance costs of approximately $125,000 from the sale of approximately 1.7 million shares of our common stock. The agreement was terminated in June 2017 at our election without penalty.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">During the second quarter of 2017, we received proceeds of $2.2 million from the sale of 1.2 million shares of our common stock as part of the Common Stock Purchase agreement we entered into with Lincoln Park Capital Fund, LLC (Lincoln Park) in September 2016. The agreement was terminated in August 2017 at our election without penalty.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p>
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<us-gaap:PurchaseCommitmentRemainingMinimumAmountCommitted contextRef="AsOf2018-03-31" unitRef="USD" decimals="-5"> 5400000 </us-gaap:PurchaseCommitmentRemainingMinimumAmountCommitted>
<us-gaap:LossContingencyEstimateOfPossibleLoss contextRef="AsOf2018-03-31" unitRef="USD" decimals="-5"> 500000 </us-gaap:LossContingencyEstimateOfPossibleLoss>
<us-gaap:DescriptionOfLessorLeasingArrangementsOperatingLeases contextRef="From2018-01-01to2018-03-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In July 2017, we entered into a 65 month facility lease amendment on 31,142 square feet of combined use office, laboratory and manufacturing space at our headquarters facility in Redmond, Washington. The lease commenced in October 2017 and includes 7,225 square feet expansion space on our existing premise of 23,917 square feet. The lease agreement includes extension and rent escalation provisions over the term of the lease.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p>
</us-gaap:DescriptionOfLessorLeasingArrangementsOperatingLeases>
<us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognized contextRef="AsOf2018-03-31_EmployeeStockOptionMember" unitRef="USD" decimals="-5"> 2100000 </us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognized>
<us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognized contextRef="AsOf2018-03-31_RestrictedStockRightsMember" unitRef="USD" decimals="0"> 204000 </us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognized>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> 2188000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31" unitRef="USD" decimals="-3"> 568000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_us-gaap_TransferredAtPointInTimeMember_custom_ProductRevenueMember" unitRef="USD" decimals="-3"> 0 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_us-gaap_TransferredAtPointInTimeMember_custom_ProductRevenueMember" unitRef="USD" decimals="-3"> 0 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_us-gaap_TransferredAtPointInTimeMember_us-gaap_TransferredOverTimeMember_custom_ProductRevenueMember" unitRef="USD" decimals="-3"> 0 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_us-gaap_TransferredAtPointInTimeMember_us-gaap_TransferredOverTimeMember_custom_ProductRevenueMember" unitRef="USD" decimals="-3"> 0 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_us-gaap_TransferredAtPointInTimeMember_custom_ProductRevenueMember_custom_RoyaltyRevenueMember" unitRef="USD" decimals="-3"> 11000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_us-gaap_TransferredAtPointInTimeMember_custom_ProductRevenueMember_custom_RoyaltyRevenueMember" unitRef="USD" decimals="-3"> 97000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_us-gaap_TransferredAtPointInTimeMember_us-gaap_TransferredOverTimeMember_custom_ProductRevenueMember_custom_RoyaltyRevenueMember" unitRef="USD" decimals="-3"> 0 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_us-gaap_TransferredAtPointInTimeMember_us-gaap_TransferredOverTimeMember_custom_ProductRevenueMember_custom_RoyaltyRevenueMember" unitRef="USD" decimals="-3"> 0 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_us-gaap_TransferredAtPointInTimeMember_custom_ProductRevenueMember_custom_ContractRevenueMember" unitRef="USD" decimals="-3"> 99000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_us-gaap_TransferredAtPointInTimeMember_custom_ProductRevenueMember_custom_ContractRevenueMember" unitRef="USD" decimals="-3"> 257000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_us-gaap_TransferredAtPointInTimeMember_us-gaap_TransferredOverTimeMember_custom_ProductRevenueMember_custom_ContractRevenueMember" unitRef="USD" decimals="-3"> 2078000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_us-gaap_TransferredAtPointInTimeMember_us-gaap_TransferredOverTimeMember_custom_ProductRevenueMember_custom_ContractRevenueMember" unitRef="USD" decimals="-3"> 214000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_custom_ProductRevenueMember" unitRef="USD" decimals="-3"> 0 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_custom_ProductRevenueMember" unitRef="USD" decimals="-3"> 0 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_custom_RoyaltyRevenueMember" unitRef="USD" decimals="-3"> 11000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_custom_RoyaltyRevenueMember" unitRef="USD" decimals="-3"> 97000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_custom_ContractRevenueMember" unitRef="USD" decimals="-3"> 2177000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_custom_ContractRevenueMember" unitRef="USD" decimals="-3"> 471000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_us-gaap_TransferredAtPointInTimeMember" unitRef="USD" decimals="-3"> 110000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_us-gaap_TransferredAtPointInTimeMember" unitRef="USD" decimals="-3"> 354000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2018-01-01to2018-03-31_us-gaap_TransferredOverTimeMember" unitRef="USD" decimals="-3"> 2078000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax contextRef="From2017-01-01to2017-03-31_us-gaap_TransferredOverTimeMember" unitRef="USD" decimals="-3"> 214000 </us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax>
<us-gaap:ContractWithCustomerAssetNetCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 680000 </us-gaap:ContractWithCustomerAssetNetCurrent>
<us-gaap:ContractWithCustomerAssetNetCurrent contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 258000 </us-gaap:ContractWithCustomerAssetNetCurrent>
<mvis:ContractwithCustomerAssetNetCurrentChange contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> -422000 </mvis:ContractwithCustomerAssetNetCurrentChange>
<us-gaap:ContractWithCustomerLiabilityCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 5000 </us-gaap:ContractWithCustomerLiabilityCurrent>
<us-gaap:ContractWithCustomerLiabilityCurrent contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 4000 </us-gaap:ContractWithCustomerLiabilityCurrent>
<mvis:ContractwithCustomerLiabilityCurrentChange contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> -1000 </mvis:ContractwithCustomerLiabilityCurrentChange>
<mvis:ContractwithCustomerAssetsandLiabilitiesNet contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 675000 </mvis:ContractwithCustomerAssetsandLiabilitiesNet>
<mvis:ContractwithCustomerAssetsandLiabilitiesNet contextRef="AsOf2018-03-31" unitRef="USD" decimals="-3"> 254000 </mvis:ContractwithCustomerAssetsandLiabilitiesNet>
<mvis:ContractwithCustomerAssetsandLiabilitiesNetChange contextRef="From2018-01-01to2018-03-31" unitRef="USD" decimals="-3"> -421000 </mvis:ContractwithCustomerAssetsandLiabilitiesNetChange>
<mvis:ContractwithCustomerAssetsandLiabilitiesNetPercentChange contextRef="From2018-01-01to2018-03-31" unitRef="Pure" decimals="INF"> -0.624 </mvis:ContractwithCustomerAssetsandLiabilitiesNetPercentChange>
<mvis:ContractwithCustomerAssetNetCurrentPercentChange contextRef="From2018-01-01to2018-03-31" unitRef="Pure" decimals="INF"> -0.621 </mvis:ContractwithCustomerAssetNetCurrentPercentChange>
<mvis:ContractwithCustomerLiabilityCurrentPercentChange contextRef="From2018-01-01to2018-03-31" unitRef="Pure" decimals="INF"> -0.200 </mvis:ContractwithCustomerLiabilityCurrentPercentChange>
<us-gaap:RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod contextRef="From2018-01-01to2018-03-31_custom_ProductRevenueMember_custom_Remainder2018Member"> P1Y </us-gaap:RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod>
<us-gaap:RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod contextRef="From2018-01-01to2018-03-31_custom_ProductRevenueMember_custom_ContractRevenueMember_custom_Remainder2018Member"> P1Y </us-gaap:RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod>
<us-gaap:RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod contextRef="From2018-01-01to2018-03-31_custom_ProductRevenueMember_custom_Remainder2018Member_custom_Year2019Member"> P2Y </us-gaap:RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod>
<us-gaap:RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod contextRef="From2018-01-01to2018-03-31_custom_ProductRevenueMember_custom_ContractRevenueMember_custom_Remainder2018Member_custom_Year2019Member"> P2Y </us-gaap:RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod>
<us-gaap:RevenueRemainingPerformanceObligation contextRef="AsOf2018-03-31_custom_ProductRevenueMember_custom_Remainder2018Member" unitRef="USD" decimals="-3"> 4308000 </us-gaap:RevenueRemainingPerformanceObligation>
<us-gaap:RevenueRemainingPerformanceObligation contextRef="AsOf2018-03-31_custom_ProductRevenueMember_custom_Year2019Member" unitRef="USD" decimals="-3"> 0 </us-gaap:RevenueRemainingPerformanceObligation>
<us-gaap:RevenueRemainingPerformanceObligation contextRef="AsOf2018-03-31_custom_ContractRevenueMember_custom_Remainder2018Member" unitRef="USD" decimals="-3"> 6358000 </us-gaap:RevenueRemainingPerformanceObligation>
<us-gaap:RevenueRemainingPerformanceObligation contextRef="AsOf2018-03-31_custom_ContractRevenueMember_custom_Year2019Member" unitRef="USD" decimals="-3"> 884000 </us-gaap:RevenueRemainingPerformanceObligation>
<us-gaap:DeferredRevenue contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 0 </us-gaap:DeferredRevenue>
<us-gaap:DeferredRevenue contextRef="AsOf2017-12-31_us-gaap_AccountingStandardsUpdate201409Member_us-gaap_DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member" unitRef="USD" decimals="-3"> -999000 </us-gaap:DeferredRevenue>
<us-gaap:DeferredRevenue contextRef="AsOf2017-12-31_us-gaap_AccountingStandardsUpdate201409Member_us-gaap_CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member" unitRef="USD" decimals="-3"> 999000 </us-gaap:DeferredRevenue>
<us-gaap:DeferredRevenueNoncurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="-3"> 0 </us-gaap:DeferredRevenueNoncurrent>
<us-gaap:DeferredRevenueNoncurrent contextRef="AsOf2017-12-31_us-gaap_AccountingStandardsUpdate201409Member_us-gaap_DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member" unitRef="USD" decimals="-3"> -4151000 </us-gaap:DeferredRevenueNoncurrent>
<us-gaap:DeferredRevenueNoncurrent contextRef="AsOf2017-12-31_us-gaap_AccountingStandardsUpdate201409Member_us-gaap_CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member" unitRef="USD" decimals="-3"> 4151000 </us-gaap:DeferredRevenueNoncurrent>
<dei:EntityCommonStockSharesOutstanding contextRef="AsOf2018-05-07" unitRef="sharesItemType" decimals="INF"> 78613343 </dei:EntityCommonStockSharesOutstanding>
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<p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><b>10. SUBSEQUENT EVENTS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In May 2018, we signed a five-year license agreement with a customer granting them exclusive license to our LBS technology for display-only applications. As part of the agreement, we will receive $10 million in license fees in 2018. An initial payment of $5 million is scheduled to be paid in Q2 2018, and a second payment of $5 million is scheduled to be paid in October 2018. The contract includes requirements that must be met in order to maintain exclusivity. In addition to the up-front license fees, we expect payments for non-recurring engineering expenses associated with process and product transfer and qualification milestones, and component sales.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="margin: 0pt"> </p>
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</xbrli:xbrl>

2 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

12/29/20  Microvision, Inc.                 424B5                  1:221K                                   Donnelley … Solutions/FA
11/09/20  Microvision, Inc.                 424B5                  1:174K                                   Donnelley … Solutions/FA
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