MicroVision, Inc.

Good day and welcome to the Microvision fourth quarter and full year 2022 financial operating results and conference call. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. At this time, all participants are in a listen-only mode. At the end of today's presentation, there will be an opportunity to ask questions via chat line Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the right side of your viewing screen. Analysts who publish research may ask questions on the phone line. For analysts to ask a question on the phone line, please press star one, and to withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Drew Markham. Please go ahead.

Thank you, MJ. I'm pleased to be joined today by our CEO, Sumit Sharma, and our CFO, Anubhav Verma. Following their prepared remarks, we will open the call to questions. Please note that some of the information you'll hear in today's discussion will include forward-looking statements, including, but not limited to, statements regarding our acquisition synergies, product development and performance, comparisons to our competitors, market opportunity, product sales and future demand, business and strategic opportunities, customer and partner engagement, projections of future operations and financial results, availability of funds, as well as statements containing words like potential, believe, expect, plan, and other similar expressions. These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statements. We encourage you to review our SEC filings including our most recently filed annual reports on Form 10-K and quarterly reports on Form 10-Q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking statements. All forward-looking statements are made as of the date of this call, and except as required by law, we undertake no obligation to update this information. In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC's Regulation G. For reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure, as well as for all the financial data presented on this call, please refer to the information included in our press release and in our Form 8K dated and submitted to the SEC today, both of which can be found on our corporate website at ir.microvision.com under the SEC Filings tab. This conference call will be available for audio replay on the investor relations section of our website at www.microvision.com. Now, I'd like to turn the call over to our CEO, Sumit Sharma. Sumit?

Thank you, Drew, and welcome, everyone, to this review of our 2022 fourth quarter and full year results. 2022 was an exciting and eventful year for Microvision, and I expect 2023 to be an even more pivotal year in our journey. I would like to update you on three areas. First, our product portfolio. Second, our momentum for partnerships and revenue. And third, our competitive outlook. First, let's dive into our product portfolio for 2023. 2022 was the most important year in MicroVision's history. Through relentless execution, our team matured our Maven product to align to automotive OEM expectations for high volume RFQs happening in 2023. We also executed on our strategy to become a full spectrum ADAS solutions company by joining forces with Iberia Automotive and acquiring assets. The combination of Maven and our balance sheet puts the combined company in the best position to help realize the true potential of the IBAO team. Let me start with MAVEN update. For long-range LIDAR, MAVEN meets and exceeds OEM expectations for seamless roofline integration for high-speed highway pilot. Nobody is offering a mature product with the size, performance, or cost to challenge MAVEN best-in-class status, period. Let's just put any speculation to rest. Roofline integration is the dominant requirement across RFQ for long range LIDAR for 2023. While our competition is starting to redesign cycles to deliver on size, cost, and performance, we are ready with the product now that goes to production over the next several years. Programs announced by competitors years ago are still not shipping either from their own factories or their Tier 1 partners in any meaningful volumes. As I look at the RFQ in-flight across Europe, North America, and Asia, we are engaged in multiple RFI RFQ opportunities with outlook for more than 20 million long and short-range LIDARs by the end of this decade. These opportunities, while massive, represent less than 10% of the entire fleet expected to ship globally by the end of decade with a LIDAR. OEMs are publicly embracing LIDAR as the future of ADAS. Automotive OEMs in Europe, North America, and Asia are looking for a long-range LIDAR that is ready for roofline integration, as well as a cost-competitive solution but short-range LiDAR. Microvision is the only company that will offer both. The current cycle is significantly higher in volume than the early small volume partnerships announced to date by all OEMs combined. None of the current partnerships are exclusive as evident in the multiple solutions being announced yearly by OEMs. This current high-volume opportunity is just the level of big prize we have developed our sensor for. With billions of dollars of revenue potential, the review of technology and partnerships takes a long time. But I'm confident that things will start converging in 2023 for a 2026 production readiness for long-range LiDAR and 2025 for short-range LiDAR. We have the right products and experience team in U.S. and Germany to deliver not only the technology, but also strong industrialization know-how with tier one manufacturing partners. As we look forward to 2023, here are the key objectives we expect to achieve. Full year revenue in the range of 10 to 15 million for our expanded product line portfolio. Design win for LiDAR product with automotive OEM. Start of non-automotive sales with sequential flash LiDAR. Partnership with Automotive OEM for the sale of auto annotation software and customization. Demonstrate a scalable drive-by-wire solution for high-speed L3 and L4 safety in November 2023. With our teams now working as a single company, I believe one plus one equals five. Microvision is the only company to offer multiple LiDAR technology nodes with software for automotive and non-automotive markets. I want to repeat that. Microvision is the only company that will offer both long-range LiDAR that is ready for roofline integration as well as a cost-competitive short-range LiDAR. I expect us to generate revenues from five sources moving forward. First source of revenue, long-range LiDAR with Maven. In Maven and the mature perception software as a one-box solution, we have the ideal product for high-speed highway pilot. This product is in review for multiple RFI RFQ currently in flight. Immediately after we acquired IBO-S in January, we updated our technology demos to highlight the significant advantage the one-box solution represents with detection ranges of 300 meters for Maven. This is the most important opportunity for recurring revenue, and we believe that we are clearly ahead of our competition technology. I expect 2023 to be an exciting year of partnerships for this product. In the current RFQ cycle, recurring revenues for this product is likely to start arriving in 2026, 2027, based on several OEM programs. I can't emphasize enough how well we are positioned with Maven with current RFQ. Second source of revenue would be from flash LiDAR industrial sales. Our acquisition of IBAO assets included their sequential flash-based sensor developed for automotive standards. We expect to bring to market an industrial product based on this LiDAR to address various channels with a more cost-competitive industrial solution. We believe this is a substantial near-term market that can start revenue cycles faster and allow us to offer a competitive performance and price to the industrial market. This flash sensor has a fully developed custom ASIC, which makes this cost competitive and ready for scale. We expect non-automotive sales to start in 2023 and grow significantly from there. Third source of revenue, automotive short-range LIDAR. the current asic development for flash sensor we expect to offer a 180 degree field of view short range lidar sensor in a compact format for rfq from multiple automotive oems in 2023 long term this product would have higher volume than maven at a lower asp i expect this product to run an existing manufacturing line with some customization Several OEMs on multiple continents have RFQ opportunities in 2023 for this product. I'm very excited about this LiDAR product and the revenue opportunities made possible with our asset acquisition. With these two technology nodes, we cover the full spectrum of sensors in RFQs we're currently seeing. We are truly a one-stop shop for OEMs LiDAR sensor needs. We can provide them the right sensor for each problem with an experienced team that has a history of delivering with manufacturing partners that OEMs prefer. Fourth source of revenue comes from validation software suite acquired as part of the asset purchase. OEMs in Tier 1 spend hundreds of millions of dollars annually validating various sensors in their vehicles. Real-life driving data is required to validate each product. Our validation software suite, which includes auto annotation, helps reduce OEM's development costs versus using manual annotation. There are two important strategic advantages for this product. First, it lets us connect with OEM on their needs for validation in customizing the software, which informs us of perception features that will be required well in advance of our competition. Second, we generate revenue through sale of software and have direct contact with OEM teams on upcoming programs. This is an important product line and we expect to generate meaningful revenue for us annually. Fifth source of potential revenue will be our drive-by-wire software and silicon product in the future. Maven also unlocks huge potential with the drive-by-wire sensor fusion software developed in Hamburg. I expect us to demonstrate a scalable solution for L3 and L4 in November 2023. This is beyond the rudimentary low-speed demonstrations being made by our competition. The advantage of this solution is to offer a sensor fusion chip in the future that would fuse two MAVEN LiDAR and an array of radar to enable safety at the lowest cost. This will open opportunities with OEMs that have not heavily invested in ADAS technologies and help advance their adoption of MAVEN. Another connection point with OEM that will expand our revenue from products and services while advancing Maven sales. With these five product lines, we are truly a unique company. Our expansive product portfolio and de-risked revenue outlook represents a new model for the LiDAR industry. Our near and midterm revenue outlook is strong and growing. Now I would like to provide an update on our market momentum. The size of the opportunities I've described would be in the billions of dollars for this decade. This requires a lot of reviews of our technology, manufacturability, cost, and value chain partnerships. It is a process every bidder needs to go through. The advantage we have is our technology is ready now and meets the size performance and costs expected from such large projects. In 2023, RFQs from multiple OEMs around the globe for both long- and short-range LiDAR are underway. To successfully execute on these opportunities, we plan to partner with an automotive Tier 1 manufacturing suitable for such projects. We inherited the Ibao ZF partnership with the flash-based sensor. We continue to explore potential partnership with our Maven product to consolidate and share economies of scale and other advantages. Finally, I would like to update you on our competitive outlook. There's a wide range of questions and concerns we get from investors that I would like to set the record straight. To understand the landscape, we need common context. Our main competitors have announced early deals with OEMs. This is true but they haven't delivered any real volume to market even after nearly five years of industrialization. Many went public through a de-SPAC process that is not as rigorous or scrutinized as a conventional IPO. These companies use unconventional communication tactics to the market, including terms like order book and backlog and other non-GAAP metrics without appropriate 8K filings or required reconciliations. The reality is that they take small projects for crocking and other development slash testing projects with OEM and spin them as a broad agreement. All this while their ASP is in the $1,000 range and experienced tier ones are not able to scale their technology. Regulatory bodies like the SEC have already begun to scrutinize and have recently demanded exclamation to these communications and disclosures to one such competitor. In response, the competitor admitted to the SEC that their technology has not shown viability yet and contracts are not guaranteed. These communications with SEC are public and can be easily obtained from the filings. They cause a lot of market confusion with extensive marketing events and press releases without filing related contracts with the SEC that are material and valuable. I expect right before IAA Munich this September, there will be a similar push with announcements, but again, no 8K filings. Their strategy is to fake it till you make it. These companies are well capitalized compared to us, but have not secured any big contracts that would align with the financial model they have stated publicly. Another sign that these so-called announced design wins, which seem to have material value for the marketing event, did not include any associated contracts filed with the SEC in the form of a case. These young companies raise huge amounts of capital from the market and have really set a bad precedent by immediately turning around and use the cash to launch stock buybacks without positive cash flow, as well as buying $80 million mansions in Pacific Palisades. All of us have seen this game off, fake it till you make it before. However, these are the rules of our free market, and it is important context to have. In contrast, Microvision is a more disciplined company. Our advantage is in the decades of experience innovating and maturing our technology, and our strength is the clarity we endeavor to provide to the market. I am confident about our path forward and the success our technology should generate. I'm humbled by our investors and their confidence in our company and the tools they have provided us to achieve success. We are up against companies that are capitalized well, but they do not have our technology or our path to success. Operating as a disciplined company in our execution and expenses is the ultimate act of defiance against immature companies that are well capitalized, but are in significantly weaker position than Microvision with OEM. I want to conclude my prepared remarks by reiterating a few key points. First, 2022 was a very important and productive year for Microvision, delivering on our strategy, groundbreaking technology, and relentless execution while providing clarity to investors. Second, We are gearing up for a pivotal year where we transition the business from technology development to partnerships and revenue focus. And finally, as a disciplined company that executes and delivers to what we communicate to the market, we expect 2023 to be an epic year in MicroVision's history. I want to conclude by saying how proud I am of our global team and allowing us to be well positioned for an incredible 2023 and beyond. I would like now to turn the call over to Anubhav to talk about our financials. Anubhav?