Special Meeting of Stockholders – Sept 13, 2013

We filed an 8-K with the results from the special meeting of stockholders held today, September 13, 2013. The stockholders approved the registered direct offering of common stock and warrants to purchase common stock that the company completed on May 20, 2013. 95% of the votes cast were to approve the transaction. The vote count was as follows:

For: 13,928,112

Against: 510,776

Abstain: 133,211

We thank all shareholders who took the time to vote. The 8-K and other material filed with the SEC related to this matter can be found on our website in the Investors section.

Business Update

Since our last earnings call, the MicroVision team has been busy in our efforts to secure design wins for our patented PicoP® display technology and to strengthen our supply chain – two of our main operational goals for 2013. As we cross the threshold from summer into fall and with nearly two months before our next earnings call when we typically provide an in-depth update, we wanted to share some recent news and revisit our progress year-to-date.

We continue to focus on two primary markets for PicoP display technology – consumer electronics and automotive Head Up displays (HUD) with a focus on embedded applications.  MicroVision announced yesterday that we have made significant progress with a leading global Tier-One Automotive supplier as we move further in the design win process with them. We have been engaged with this Tier-One for some time in the multi-phase design win process for qualifying our HUD solution to be adopted as part of their embedded HUD application for at least one major automotive OEM. This recent milestone achievement includes supplying them with multiple prototype Scanned Engine Subsystems (SES) for reliability testing. The process for adopting new technology into an embedded automotive system is a rigorous one and we are pleased to move to this stage with a leading Tier-One supplier. In addition to providing the SESs we are supporting the Tier-One with engineering services and expect to deliver the systems and commence the testing before the end of the year.

One question we received about this announcement is whether it is the same company as the auto manufacturer we announced a development agreement with in 2011 or the Fortune Global 100 electronics brand we announced a development agreement with in April of this year– it is not the same company nor is it related to either of those development agreements. In the automotive market, in addition to the engagement with this leading global tier-one auto supplier, we continue to support the major auto manufacturer from the 2011 announcement in its ongoing evaluation of PicoP display technology, and we are also in discussions with other auto manufacturers and Tier-One suppliers for embedded HUD.

 In the Aftermarket HUD arena, Pioneer Corp. earlier this summer launched an updated version of its augmented reality CYBER Navi that incorporates PicoP display technology. They added crowd sourced traffic data features to the product called “Smart Loop Eye” and continue to market the product in Japan. As our first commercial deployment of PicoP® Gen 2 based on direct green lasers, we were very pleased with the high quality of the components that we delivered to Pioneer, achieving a return rate of below 1 percent.  We also were happy to receive Pioneer’s feedback that direct green lasers, in their commercial debut, were readily available and performed very well.  We continue to evaluate aftermarket HUD opportunities but believe that embedded HUD is the long term play in this segment. Multiple analyst reports published recently forecast double digit growth in HUD in the next five years.

On the consumer electronics front, we also continue to make progress. In April we announced a multi-million dollar development agreement with a Fortune Global 100 electronics company. We are extremely focused on supporting this company’s development of a display engine based on PicoP display technology. Our engineering team is working closely with their engineers as they develop a display engine that capitalizes on the reference design we have for PicoP display technology and advances the solution to meet their unique requirements. We can’t discuss in any detail the products they are considering, but from what they have shared with us, we are excited by the possibilities.

We are also actively pursuing additional business opportunities with other consumer electronics OEMs that are interested in including PicoP display technology as part of their product roadmaps. Some of these companies are candidates for vertical integration of our components for their own display engine under a licensing agreement. Some OEMs are interested in integrating a complete display engine solution from a design manufacturer for a quicker time to market. For this latter group of OEMs, we are working with supply partners to offer these go-to-market options.  We are working closely with these partners but like to keep these activities “under the radar”. Ours is a competitive industry and maintaining confidential relationships while in the development phase is insurance against disruption by the competition. 

In other supply chain news, we are asked frequently about the supply and cost of direct green lasers. Direct green lasers became commercially available in mid-2012 from two suppliers as we had discussed in many communications before that time. We are not procuring lasers directly now as we did when we were manufacturing SHOWWX™ pico projectors, but we do maintain a relationship with the laser manufacturers and participate in discussions and negotiations in support of our customer and supply chain partners. As we forecast, the pricing of direct green lasers is significantly lower than the earlier synthetic green lasers – a mere fraction of the price in fact. As volume ramps up and additional suppliers come into the market, we expect that the prices can come down even more. And like any new, cutting edge technology, the companies pioneering their introduction in the market continue to make advances with them. Recently Adrian Avramescu from Osram Opto Semiconductors revealed significant advances in the performance of the company’s green and blue laser diodes while speaking at the International Conference on Nitride Semiconductors. This progress for direct green lasers comes less than a year after they first announced commercial availability.

The remainder of 2013 promises to be as busy for MicroVision as the earlier part of the year. We have reached multiple milestones in our development agreement with the Fortune Global 100 electronics company and remain focused on achieving the remaining milestones and negotiating the supply and licensing agreements. We are readying the SES systems for delivery for reliability testing with the global Tier-One automotive supplier as a precursor to additional development and commercialization activities, and we are in discussions and evaluation with multiple consumer electronics and HUD prospects. We are also preparing to speak at multiple investor conferences in the coming weeks and we are scheduled to exhibit in October at the SID Vehicle Display Symposium in Michigan – the hub of the auto market in the US. And of course we also continue to develop enhanced features and capabilities for PicoP display technology.

MicroVision and Pioneer

MicroVision has received follow-up questions after our August 8, 2013 earnings conference call regarding our relationship with Pioneer Corporation. So we wanted to expand on the discussion here.

We are very pleased with our relationship with Pioneer and to be part of the CYBER NAVI HUD – a world’s first on many levels. It was the world’s first HUD to project augmented reality and to use direct green lasers. And of course for MicroVision it was the first commercial product with PicoP Gen2 technology and Pioneer was our first customer to go to market under our “Image by PicoP®” ingredient brand business model.

As the automotive industry continues to evolve the role and integration of information systems in cars, Pioneer is also evolving its business model and focus for car navigation systems to align with the changing market.  They recently launched a 2013 edition of the CYBER NAVI HUD with updated features that are all about information integration and sharing. The display engine for the augmented reality HUD in the latest CYBER NAVI is based on MicroVision’s PicoP display technology and incorporates parts we have supplied to Pioneer. You can read more about the latest features in the CYBER NAVI in Pioneer’s Press Release and a recent Engadget article reviewing the new 2013 edition. And of course, as a visual display company we are all about seeing things in images, so the latest CYBER NAVI video Pioneer has posted to You Tube is worth a look as well. Even if you don’t understand Japanese, you get the idea of the way the product is taking in information and displaying it for the driver. The bright clear images that can be seen in daylight are hallmarks of PicoP display technology in HUD deployment.

 As for our business relationship with Pioneer, we have received orders of $ $5.8 million from Pioneer which we fulfilled from Q2 2012 through Q2 2013. The quality of the components has been extremely high and the display engine based on PicoP display technology has performed well. We have several of the commercial CYBER NAVI systems and they get a “wow” response when we show them off. As we discussed on the conference call, we continue to engage in discussions with Pioneer on future business opportunities, with focus on embedded HUD as that is where we see the highest potential as we believe this is where the automotive industry is also focusing for HUD.  We have been a proud partner of Pioneer’s and look forward to continued opportunities to be part of future innovative products they may bring to market.

 If you are interested in learning more about the business changes Pioneer is making, they have recently issued multiple press releases talking about their restructuring, business model updates, and business alliances.

About The Displayground

The Blog for commentary, insights, cool facts, and overall information about our company, products and services.

Read our Charter >

Sign up for Email Alerts >