REDMOND, WA - MicroVision, Inc. (NASDAQ:MVIS), known for its MEMS-based solid-state automotive lidar and ADAS solutions, has announced the closure of a $75 million convertible note facility with High Trail Capital. The agreement, signed on October 14, 2024, aims to bolster the company’s financial position as it anticipates revenue growth from industrial and automotive sectors.
The financing arrangement includes an initial sale of $45 million in senior secured convertible notes and the option for MicroVision to sell up to an additional $30 million of notes under certain conditions. These notes, issued with an 8% original issue discount, are convertible into common stock at $1.596 per share and mature on October 1, 2026. The company retains the right to convert the notes if its stock price sustains a certain level, and it has agreed to customary registration rights for the resale of shares upon conversion. If not converted, the notes must be repaid at 110% of the face value, with the possibility of partial repayments starting January 1, 2025.
CEO Sumit Sharma expressed enthusiasm about the financing, which aligns with MicroVision's efforts to secure additional revenue through partnerships in the heavy equipment segment. Sharma highlighted the company’s ongoing engagement with global automotive OEMs for high-volume RFQs and custom development, positioning MicroVision as a frontrunner in lidar solutions.
CFO Anubhav Verma noted that the new facility offers competitive financing costs and strengthens the company’s balance sheet. MicroVision ended the third quarter with $43 million in cash and, after accounting for the net proceeds from the first tranche of the financing, expects approximately $81 million in cash and equivalents. The company also has access to an additional $153 million in capital, including the remaining commitment from the convertible debt facility and an existing ATM program.
MicroVision's technology integrates MEMS, lasers, optics, hardware, algorithms, and machine learning software, catering to automotive lidar sensors for ADAS as well as industrial, smart infrastructure, and robotics applications.
The closing of the transaction is subject to customary conditions, and further details are available in the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission. WestPark Capital, Inc. and EF Hutton LLC served as co-lead agents for the transaction.
This news is based on a press release statement.
In other recent news, MicroVision has reported noteworthy developments. The company announced the retirement of long-standing board member and former chair, Brian Turner, who has been a significant figure in the company since 2006. His strategic insights and contributions have been instrumental in guiding the company through various market conditions.
MicroVision has also reported a Q2 2024 revenue of $1.9 million, primarily from non-automotive customers. With a gross margin of 39% and reduced operating expenses, the company anticipates a decrease in its cash burn by 20-25%. Furthermore, the company has total liquidity of $179 million and expects revenues between $8 million to $10 million for the remainder of the year.
The CEO of MicroVision highlighted the potential of 905 nanometer lidar over 1550 nanometer alternatives for the long-term automotive market. The company is strategically focusing on American lidar to meet the demand in the US and EU markets. These developments underscore MicroVision's position in the lidar market and its focus on high-volume passenger car projects.
InvestingPro Insights
MicroVision's recent $75 million convertible note facility comes at a crucial time for the company, as reflected in its financial metrics and market performance. According to InvestingPro data, MicroVision's revenue growth has been impressive, with a 710.44% increase in the last twelve months as of Q2 2024. This aligns with CEO Sumit Sharma's optimism about securing additional revenue through partnerships in the heavy equipment segment.
However, investors should note that despite the strong top-line growth, MicroVision is not yet profitable. The company's operating income margin stands at -967.54%, indicating significant operational costs. This is consistent with an InvestingPro Tip that suggests the company is "quickly burning through cash."
On a positive note, another InvestingPro Tip highlights that MicroVision "holds more cash than debt on its balance sheet," which is reinforced by the company's statement about ending Q3 with $43 million in cash. The new financing is expected to further strengthen this position.
The stock's recent performance has been volatile but positive in the short term, with a 34.63% return over the last month. This volatility is captured in an InvestingPro Tip, which notes that "stock price movements are quite volatile."
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for MicroVision, providing a deeper understanding of the company's financial health and market position.
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