Perspectives from the CFO

We recently announced that we raised over $30 million through the sale of approximately 11 million shares of common stock in two transactions.  We are pleased that we continue to have the ability to raise money in a still-uncertain economic environment in order to support our efforts of bringing our PicoP technology to market.

I had a chance to chat with CFO Jeff Wilson regarding Microvision’s financing strategy and wanted to share his comments, which provide some context to the transaction, and answers to some of the most common questions that we received after the transaction announcements.

Why did you decide to raise money now?

“We consider decisions around the timing and structure of financing transaction to be some of the most important decisions management and the Board of Directors make regarding the Company.  After evaluating the current status of our operations, capital needs, and overall market conditions, we decided to move forward now to raise capital.

“With these most recent transactions we accomplished several goals.  We secured capital that should better position us to meet several planned milestones including ramping production of the SHOW WX and delivering initial samples of the embedded module to prospective OEM customers.  We have maintained our simple capital structure and completed our first major financing in recent years with no warrant coverage.”

Why did you select this structure?

“The current economic environment, while generally improving, is still very uncertain over the short term.  We believe it is in the best interest of our shareholders to maintain a strong, uncomplicated balance sheet as we work with our supply chain partners and customers to achieve the Company’s goals.  This structure allowed us to reach our near term financing goal while keeping our balance sheet uncomplicated.”

How was the pricing determined for this transaction?

“As with any underwritten public offering, the structure and pricing is negotiated by all parties involved.  We were pleased that with the support of three quality banks, Oppenheimer, Thomas Weisel, and Craig Hallum, we did not see price erosion in our stock as we were marketing this transaction.  The price erosion we have experienced in other financings over recent years had the effect of compounding the discount on the transaction, as the pricing discount is taken on the already eroded market price.  Additionally, by closing a financing without warrants, we were able to avoid increasing the overhang on our fully diluted shares outstanding created by unexercised warrants.”

What factors do you consider when deciding the details of a financing transaction?

“As part of our decision making process we consider the current status of our operations, our capital needs and the overall market conditions.  As we consider this complicated landscape, we continue to strive to act in the best interest of our shareholders.  During this management team’s tenure we have stated that our goal was to provide the capital needed to bring the PicoP technology to market while maintaining a simple capital structure.”

How long will this money last and will you need to raise more money?

“We continually monitor the overall market, our technology progress, the status of our operations, and our capital needs and will raise money when it makes sense for the company.  We ended Q3 with over $20 million in cash, cash equivalents, and investment securities and have added approximately $30 million with this recent raise.  As we have said, the capital we secured should better position us to meet several planned milestones including ramping production of the SHOW WX and delivering initial samples of the embedded module to prospective OEM customers.”

This entry was posted on Wednesday, December 2nd, 2009 at 6:21 pm and is filed under Investor Relations.
You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.