Good day, and welcome to the MicroVision First Quarter 2023 Financial and Operating Results Conference Call. [Operator Instructions] Please also note that this event is being recorded. I would now like to turn the conference over to Drew Markham. Please go ahead.

Thank you. I'm pleased to be joined today by our Chief Executive Officer, Sumit Sharma; and our Chief Financial Officer, 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 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 such as potential, believes, expects, plans 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 report 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 8-K 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. 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 first quarter 2023 results. We started the quarter with the closing of our transaction of Ibeo assets and have been working diligently on integration and expanding customer engagements for our new product portfolio. We've made great progress and positioned the company well to achieve the business milestones I presented in our previous investor call. So let's dive into updates on our progress. We remain on target for full year revenues in the range of $10 million to $15 million from our expanded product portfolio. Our go-to-market strategy remains unchanged, and our team is executing on it. We have restarted the momentum of sales for the combined company with direct sales and royalties from lidar hardware from non-automotive OEM sales. With the current MOVIA sensor indirect sales, we expect to fulfill a market demand of stable sensors to enable development of software applications that deliver safety, security and smart city management for our potential customers. We remain on track to bring to market an industrialized product based on MOVIA to address various channels with a more cost-competitive industrial solution. This new product leverages the sensor developed and qualified by Ibeo team and is optimized for cost and performance for Industrial segment. We also expanded sales of our MOSAIK validation software suite with a new OEM customer. This product line is just starting its growth cycle, and we're excited about how it will develop deeper engagement with OEMs. OEMs and Tier 1 spend hundreds of millions of dollars annually, validating various sensors in their vehicles, and we intend to become the dominant player in this segment. Now let's talk about strategic sales for automotive OEM and RFI and RFQ in flight for MAVIN and MOVIA. As I recently updated on our…

Thanks, Sumit. I'm really pleased with what our combined teams have accomplished in the first quarter of 2023. The joining of forces with Ibeo has positioned us well to become 1 of the most experienced lidar hardware and software companies in the market. With over 50 years of combined operating history and 735 patents, MicroVision is uniquely positioned to win. I'm pleased to report that MicroVision had a solid first quarter 2023 with revenue coming in ahead of expectations. We recorded $782,000 in revenue, which represents impressive growth from Q4 and 123% growth year-over-year as compared to first quarter 2022. As a mature public company, we will continue to differentiate ourselves from our competitors through financial discipline, transparency, and guiding to metrics that we believe are realistic and achievable. Now before we talk about Q1 2023 financial results in a bit more detail, I would like to discuss and remind investors how the Ibeo acquisition significantly accelerates our trajectory and transforms our road map with new products and access to new customers. Following our completion of the Ibeo acquisition, MicroVision is indeed at an inflection point. Our teams have been working hard to execute the integration process ahead of our expectations. The integration between our sales and business development teams is also picking up momentum. And we recently added a very seasoned executive based in Detroit, Michigan to lead our U.S. sales and business development efforts, especially in the automotive sector. MicroVision's first quarter performance continues to demonstrate our financial rigor and discipline, along with strategic capital deployment. The investment in Ibeo brought us an experienced and highly talented team of engineers, targeted customer relationships and a broad product portfolio. We're now benefiting from the past R&D investments made by Ibeo of over EUR 200 million deployed over several years.…

[Operator Instructions] Our first question here will come from Andres Sheppard with Cantor Fitzgerald.

This is [ Anand ] for Andres here. I just wanted to touch on your liquidity status that you just mentioned. I know you mentioned that you have $67 million in liquidity, down from $82 million last year and you're funded through the middle of 2024. How are you thinking about the burn and what's going into this calculation? Just wanted to get more color there.

Yes. Thanks, Anand. So this year, as we had guided, we are on track to $50 million to $55 million cash burn, as we have previously stated. Obviously, we expect as we gather more momentum in the rest of the year for the sales to pick up, which we expect to continue in 2024, we expect there would be more inflows in the second half and early next year. So that's why we feel very comfortable with our current liquidity position and as well as what's coming down the pipe in terms of our wins, projects and some of the revenue opportunities that we're chasing. Please keep in mind, a bulk of this revenue, as we had described earlier, would be driven by MOSAIK and MOVIA, which obviously the high contribution margin revenue stream for the combined company.

Got you. And a follow-up to that. I wanted to see how you're thinking about capital raise opportunities potentially. Are you looking at equity or debt? Or how do you consider that in the future?

Yes. No, that's a great question. Look, I think we are -- I think we have demonstrated that we have always demonstrated a strong rigor for accessing the capital markets as and when needed. And we believe capital raising should always be accompanied with strategic purposes. For example, when we had closed the Ibeo acquisition, we tapped into the market to fund the acquisitions because we believe it would have -- it was a very good investment in the company's future. So we continue to execute the same discipline because I think 1 of the things that differentiates us from the lidar peers is, again, being a traditional public company, which has been -- which has over 20 years of public company experience. So that's sort of why I feel good about -- the options available to us as compared to some of our peers, just by the virtue of us being 1 of -- in fact, the only company in the space out there with no stack history. So that's why we feel good about the capital raising options for the company down the road.

Got you. And to switch gears a little bit. I was wondering how long it could potentially take for an OEM contract to materialize? Or how long do you think it would take for you to announce it? Or do you have plans to or do you have -- can you provide any color about your relationships with your OEMs for the MAVIN lidar?

I'll take that on the top. I think we've talked about that quite a lot. That's our corporate milestones for this year, and we continue to make progress on it. I think the key there, of course, to think about is other people have announced it. They've taken the mirrors. There's no products out there. But the current tranche of projects that are in the RFQ, these are the high-volume ones that are for consumer vehicles. I mean these are not for trucking. These are for vehicles, and they are not as options. So the volume is a lot higher. So therefore the rigor required is significantly more. But based on our engagement with the engineering teams and of course, also with the -- their purchasing team, feel pretty confident that we remain on track.

I will now turn this call back over to Anubhav Verma to read questions submitted through the webcast.

Thank you. Let me take some of the questions that we're getting from our investors. The first question is management has mentioned automotive RFQs want dynamic-view lidar and only MAVIN offers this feature. Why do you think that you won't win all the deals this year? And are there any RFQs out there that MicroVision is not a part of?

I guess I'll take that. I'll answer the last 1 first. I'm not really sure. There's no like public listing of all the different RFQs that are out there that you can bid on. We engage with all the OEMs. We look for projects, we look for alignment. In some cases, they're fielding the most advanced sensor they need because of the highest volume. It has to be integrated within the body of the car, that these requirements. So certainly, right, the dynamic-view lidar is the perfect one for that because it kind of meets all the requirements. I think recently, you've seen that in the last, I would say, 3 months. Our competitors are doing Photoshop and some other CAD images and all sorts of prototype level stuff demonstrate that they are headed in that direction. But of course, we have that. So in that -- in those specific ones, we feel pretty confident. But there are still other RFQs that were, let's call it legacy, that it was not that important to have a [ route plan ] integration. Maybe it's for some sort of small, small truck 4x4 or something like that kind of project. So it's not in load with the ground and they were just leveraging what somebody else has already done. So there's nothing innovative there. So those kind of RFQs certainly, we can be competitive there, but that's not the big volume stuff. So we focus on everything. We focus on many RFI, RFQ that comes along. We -- the team gets dedicated to that. In fact, every week is very eventful at the moment. And we're very fortunate that we have such a large team between Redmond and Hamburg, that is at Nuremberg, of course, that allows us to address these. So as far as the dynamics-view lidar is concerned, it's looking for projects that require long range, high resolution closer range. Yes, we're pretty well positioned for that. As far as ones that are not looking for that and they're just looking for a feature and there may be some sort of a trucking application or something like that, they can probably take a lower specified product as well as a starting point. But all the high-volume stuff is, as I mentioned, the dynamic-view lidar.

Thanks, Sumit. The next question is, over the last few days, there was a significant shakeup at CARIAD. How do you think this impacts the lidar players, including MicroVision?

All right. I think it would be inappropriate to speculate -- if there were a fact that I knew that I could share, I would share. But as you can imagine, this is all new news that is coming along and how that's going to roll out. There's a lot of speculation what it means for the individual brands at VW taking over versus CARIAD versus -- it's all speculation, nothing has been announced yet. But certainly, as you can imagine, this was not a huge surprise for a lot of folks because since the change of the CEO, changes were expected. But I think I've been pretty consistent about it for about a year now that if you look at some of the early agreements that people have signed that they're trying to defend now, the stack of that is it was never part of the entire fleet. Nobody should have ever projected that. The different brands want different things. And a high-end vehicle that requires roofline integration would never have a big bump up on the top of the roof. I think I've been pretty consistent about that. But besides that, the shakeup that's happened at CARIAD, I would say that it's unclear what it really means. And I've heard a lot of speculation in the last 48 hours, I have to be honest with you. Some facts, but mostly speculation, but I think we just have to wait until the plans are made clear of how the brands are going to deploy lidar by themselves or as a team.

Okay. Thanks, Amit. And I think this is -- you have a one box lidar solution with multiple sensor solutions software, now MicroVision is a one-stop shop for OEMs. Could you give us some color on the cost benefits this has for OEMs versus having to piece together solutions from multiple partners? Is this 1 box, 1 shop approach was received by the OEMs?

The 1 box solution, of course, means there's 1 box would include the perception inside. So you can imagine that will require 2 ASIC. There's 1 ASIC that would be point-cloud only if somebody just wanted that because they want to use their software. Certainly, we would provide that as a product. But the perception as it gets integrated into real products would really enable more efficient development at OEMs. And this is our [indiscernible] effectively, right? And we're pretty clear about it. I think I'm pretty enthusiastic that recently we got our first engagement with somebody a very large entity, OEM entity, that's looking for a 1 box solution. And I think with all the features that have been developed about Ibeo team. So it's kind of exciting. But again, it's early stages because something like this, you can imagine evaluating a lidar takes a long time, imagine lidar plus software is going to take more time to evaluate. I think this is pretty consistent of what the selling cycle for automotive is. But it's exciting that the thesis behind it is getting traction because it does make a lot of sense. Now as you think about economy of scale to bring price down and it's all about giving the customer the most advantageous price for them. Most of the hardware inside the lidar would be leverage the same. The optics are the same, the sensors, the lasers, some of the electronics are the same. And some of the electronics will be different based on the perception that's in there. But again, it's all on the electronic side. So you could really leverage, I would say, 3/4 of the entire design and you can aggregate it across. So even if you had different model years that have, let's say,…

Thanks, Sumit. I think we're now out of time. We appreciate your participation in our results call and your continued support for MicroVision.

This concludes today's conference call. All parties may disconnect and have a wonderful day.