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Microvision Inc. Message Board

  • matthewsrobert@att.net matthewsrobert Mar 26, 2013 4:06 PM Flag

    Re: Volume Drying Up For Easter

    I am expecting a financing announcement this Thursday or Friday of a 10M private placement with Farhi and his Canadian friends. IMO it is very unrealistic to expect our anticipated OEM contracting partner to finance and capitalize us so that we can enter into a longterm embeded auto HUD development contract with them. If anything it is very likely the other way around. Adequate funding for at least 1 year on our part is very likely a prerequisite to their signing any contract with us. They also probably told us to beaf up our supply chain since AT said that was one of this year's goals. They probably want at least 2 qualified MEMS mirrow suppliers before they give us any orders which I would think would be for the 2015 model year. My 2 favorite candidates are Ford or Toyota or their Tier 1 suplier. Any upfront cash they give us will be modest and since this is the real world we are talking about and any cash we get will be with strings attached like 2M to 3M for prepaid engineering fees or prepaid royalty, or both. Because of the strings attached the cash will go into our checking account but it will not drop to our bottom line until we earn it over the next 12 to 15 months. So it does not help us with our need to stay listed on the NASDAQ which is the other reason we need to do a 10M financing before the end of this quarter.
    The financing will put a floor under our stk because it will be done at probably a ten percent discount to our recent market price and several months before we sign a large embed auto HUD contract. It will show the market that private investors were willing to buy lets say 20% of the company for lets say 1.45/sh. The rest of the market is not going to immediately discount us 20% to the 1.15 to 1.20 range when they know that in 6 or 8 weeks we may be signing a contract with Ford or Toyota and our stk could jump 75% to 100%. Also a lot of MVIS followers have been waiting for this financing to go down before getting back in our stk.

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    • Your analysis is interesting. Just doing some reasonable analysis makes your post worth more than about 99% of the YMB posts, That having been said I'm pretty sure your analysis has a few major flaws. One is that the delisting notice gives them 180 days - to August 26, to remedy their deficiency. So you seem to be making up an end of quarter deadline out of whole cloth, unless I'm missing something. Second, if we assume they have access to $10M from Farhi, that money is probably available regardless of whether or not they stay listed. The biggest inconvenience of being delisted as I understand it is that it makes it more difficult to do a secondary offering. But if Farhi is ready to pull his checkbook out that voids the issue and makes a potential delisting fairly toothless. But anyway they have until August to put deal(s) together for come combination of upfront dollars and stock sale to raise capital.

      Your suggestion that income from a deal might not be recognizable is interesting. I had not thought about that. Not being an accountant I can only say that I can guess there are ways around that eg a one time license fee which is not against specific product shipments and hence does become immediate profit. Heck, even as deferred revenue for all I know it is immediately in their treasury as far as the nasd listing requirement is concerned, I would need to consult a very knowledgeable accountant, but I'm pretty sure there are ways and I assume the paying OEM would be flexible in allowing a deal for the same X dollars to be structured however MVIS wants it if it does not diminish the OEM's rights.

      I''m expecting an initial OEM dealer to be with an electronic maker and not auto, based on the emphasis AT has put as well as the fact where I agree with you that an auto HUD would more likely be for 2015 model year. It would not surprise me at all if an OEM took a stake in MVIS for themselves.

      • 1 Reply to kabunushi
      • The problem is that they can announce all the hokey deals they like and they can fudge the numbers any way they like but deferred revenues, even announced orders have zero effect on the market cap. That is a function of the share price. With all that's gone before just announcing an order or two will have no effect at all on the share price. They need to demonstrate that they have an actual business. Otherwise no one is going to buy the shares. No one believes that an "order" will be worth anything after Esplus, Woweeone, Seeser, Uniden and now even Pioneer. All announced orders that have resulted in virtually zero revenues.

    • Slumpymat, did they ever solve that problem with mange in your room at Sunset Vistas? Hope so, though your writing suggests that it may still persist.

      Sentiment: Strong Buy

    • Sure hope that doesn't come true :) It would be negligent, at best, for them to sell off parts of the gold mine they got from the RS, when the pps is under 20 cents. If, big if, there are really 50 kits out, and if, big if, there are really some companies sniffing around for a deal...and, if, big, big if, there is really a top tier fish, or 5, tugging the bait, then they best be announcing at least an MOI, before they go giving shares away again. They should be waiting up to the very scary last for something to up the pps, before they dilute.
      Sure, I agree, even with design wins, they'll have to dilute a time or two more, but they best be getting a much bigger price, if things are really coming to a nexus. If the diodes aren't really there in volume, and the deals are still a year away, well, ok, they do they must, but if any of this potential is real, then it would be very shifty indeed to sell off big chunks at under a quarter each, then announce a deal within a couple of months.

      Sentiment: Buy

    • I did not like reading what you wrote. But it makes sense. Thank you for this perspective.

      Sentiment: Strong Buy

 
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