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MicroVision 4Q18 results ?3

19:30 05-Mar-19


MicroVision has announced its results for the fourth quarter:

Management continues to claim that it will deliver technology to multiple OEMs this year.  I've just finished reviewing the conference call, and it does appear that product development has progressed.  Management anticipates finalizing a new agreement to support a new product launch based on the $24M April 2017 development agreement in the coming weeks.  This contract has been expanded with an additional $1.2M of development work, and the $10M portion of the contract reserved for component purchases should be realized in the first half.  This is for a second half launch, but management was unable to give any further color on timing or quantities.  Reading between the lines, though, I think we might expect a slow ramp.  Separately, a new display-only design award is also anticipated.  The company also reported that it has initiated legal proceedings against Ragentek, which is not taking any of the components it ordered.  MicroVision is now seeking to sell those components elsewhere.

The Q&A was virtually useless, with management unable to provide any further detail on anything.  In particular, there was no guidance on current quarter cash flow.  It was negative $3.1M in the fourth quarter, but that was aided by multiple one-off payments.  There is a little under $14M in cash and equivalents on the books now.  The recently announced Explorer kits won't really help at only 2000 units or so.  Maybe a customer comes through with the $20-25M in quarterly revenue that MicroVision needs to start breaking even in the next quarter or so.  Otherwise I don't see how MicroVision avoids a capital raise and reverse split.  I'm still surprised that hasn't happened already.