Microvision: What Does 15 Lumens Mean to SHOWwx+ Projected Image Brightness?

Here's the news...

MicroVision Unveils Second-Generation Laser Pico Projector, SHOWWX+

Press Release
Source: MicroVision, Inc.
Monday November 22, 2010, 1:00 pm EST

REDMOND, Wash.--(BUSINESS WIRE)-- MicroVision, Inc. (NASDAQ:MVIS - News), the leader in innovative ultra-miniature laser display technology, today unveiled SHOWWX+®, the second-generation of its award-winning laser pico projector. With a 50 percent brighter display within the same slim size, SHOWWX+ enables mobile device users to break free from the small screen and project large, clear 16:9 widescreen content wherever they are, on any surface.

“We’re on a mission to eliminate the squinting and huddling that occurs when mobile device users share content,” said Alexander Tokman, president and CEO of MicroVision. “SHOWWX+ is designed to simply and quickly connect to today’s hottest new portable devices so users can display and share large vibrant images and video with ease.”

Taking the Mobile Experience Beyond the Small Screen
SHOWWX+ is the first laser pico projector to offer a big-screen, movie-length experience that easily slips into a shirt pocket. Boasting two hours of battery life, 15 laser lumens, a contrast ratio up to five times higher than competing products, and the shortest throw ratio of any pico projector on the market, the SHOWWX+ is the perfect accessory for expanding viewing experiences beyond a palm or pad-sized screen. Its category-leading 5,000:1 native contrast ratio ensures the SHOWWX+ produces the deepest blacks and most brilliant whites.

Continues…

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Here’s the link to the news…
http://finance.yahoo.com/news/MicroVision-Unveils-bw-4077703968.html?x=0&.v=2

In all fairness, this is excellent news as it shows progress in the right direction to achieving a brighter and improved quality image from the tiny laser based PicoP Display Engine at the core of MicroVision’s second generation product SHOWwx+.

We have seen the first generation pico projector SHOWwx… and are really impressed by the 10-lumen brightness and the quality of projected image.

However, with the second generation SHOWwx+ there are lots of speculations and misinformation about what does it really mean to have 15-lumen brightness from the new PDEs?

Consider this in its utmost simplicity…

Lumen:
A lamp [LED or a laser diode] produces a certain amount of light that is measured in lumens. The lumen is the globally standardized SI unit of "luminous flux"--meaning that it measures just how much visible light is produced by an object such as, for example, a light bulb.

Typical indoor lamps have light outputs ranging from 50 to 10,000 lumens. You use lumens to order most types of lamps, to compare lamp outputs, and to calculate lamp energy efficiencies.

The luminous flux is a weighted sum of the power at all wavelengths in the visible band. Light outside the visible band does not contribute. Luminous flux is the total perceived power emitted in all directions. However, luminous intensity is the perceived power per unit solid angle… like as directed and projected on a screen and seen by the eye.

[Note that lumen output is not related to the light distribution pattern of the lamp. A large fraction of a lamp’s lumen output may be useless if it goes in the wrong directions… like as in diffused light from a lamp or LED source]

Luminous intensity:
It is a measure of the wavelength-weighted power emitted by a light source in a particular direction per unit solid angle, based on the luminosity function, a standardized model of the sensitivity of the human eye. The SI unit of luminous intensity is the candela (cd).

We are interested in the measurement of visible light as perceived by human eye; the human eye can only see light in the visible spectrum and has different sensitivities to light of different wavelengths within the spectrum. When adapted for bright conditions (photopic vision), the eye is most sensitive to greenish-yellow light at 555 nm. Light with the same radiant intensity at other wavelengths has a lower luminous intensity. For instance, the measured responses of the eye to violet light varied by a factor of ten.

Luminous intensity should not be confused with another photometric unit, luminous flux, which is the total perceived power emitted in all directions. Luminous intensity is the perceived power per unit solid angle.

Lux:
Lux is the unit that indicates the density of light that falls on a surface. This is what light meters measure. For example, average indoor lighting ranges from 100 to 1,000 lux, and average outdoor sunlight is about 50,000 lux.

One Lux, for example, is measured as one lumen per square meter. The general term for lux is “luminance”.

Lux versus lumen:
The difference between the lux and the lumen is that the lux takes into account the area over which the luminous flux is spread. A flux of 100 lumens, concentrated into an area of one square meter, lights up that square meter with a luminance of 100 lux. However, the same 100 lumens, spread out over ten square meters, produce a dimmer luminance of only 1 lux.

Now consider this…
A person looking at the screen sees different areas of his visual field in terms of levels of brightness, or luminance, measured in candelas [the measure of luminous intensity] per square meter.

With that clarity on the difference between lumen and lux; conversion between the two is simple.

Lux is a measure of how many lumens are present in a given area. It's essentially a measure of "photon density" or "light concentration." A "denser" cloud of photons [like a 10 lumen laser light pixel] means there are more lumens present in a pixel space… producing more brightness and higher lux as perceived by the eye.

A "lighter" cloud of photons [like a 10 lumen LED lighting the one square meter of the screen] means fewer lumens are present in a pixel space… leading to dimmer conditions and lower lux as perceived by the eye.

To achieve a desired lux level in a given space it may be necessary to use brighter bulbs with higher lumen rating or use many light bulbs, each producing a given number of lumens.

Do the Conversion…
Measure the dimensions of the space that you wish to illuminate, and write down how many square meters of surface area it has. In case of SHOWwx with 10 lumens, it is 10 lumens over the size of a pixel. In case of 10 lumen LED based pico projectors, it is 10 lumens over the one square meter of the screen.

The fundamental ratio of conversion from desired lux level to required lumens is:

1 lux = 1 lumen per square meter.

Since perceived brightness corresponds to a logarithmic function, depending on the shape of the function's graph, close to the x axis (where pico projector brightness is now), you would tend to see more difference from smaller amounts of change. That's because close to the axis, the curve is relatively steep. The technical projector literature, the ANSI definitions and viewers personal experience says…

“… In case of pico projectors, as you double the ANSI lumens you double the brightness."

However, as the lumen numbers get bigger─ like 2,000 to 4,000 lumens for lamp based projectors, the curve flattens out, so you need relatively more change in lumens to get the same perceived change in brightness.

"For pico projectors, depending on where you are on that curve, it might even be possible to get a “more” than double brightness increase from a smaller than double lumen increase."

In summary…
Lumen for lumen, the laser pico projectors have higher perceived brightness as compared to those using other light sources… and as you increase the ANSI lumens by 50% [going from 10 lumens to 15 lumens] you more or less increase the brightness by 50%.

Anant Goel

Microvision: White Knight in Shining Armor

In my last post─ on the subject of “Microvision: $48 million in Additional Funding”─ I wrote…

“The terms of Azimuth funding are quite complicated to say the least. However, one thing seems clear that with MVIS stock trading at $1.25 or lower, there may not be any funding available from Azimuth?

Does that mean some other “knight in shining armor” coming to Microvision rescue?

It surely looks that way from what I hear.”

First, here’s what the terms of Azimuth funding say in the 8-K filing…

"“Threshold Price” is the lowest price at which the Company may sell Shares during the applicable Pricing Period as set forth in a Fixed Request Notice (not taking into account the applicable percentage discount during such Pricing Period determined in accordance with Section 3.2); provided, however, that at no time shall the Threshold Price be lower than $1.25 per share."

Yeah, that seems like it could be a problem…

Microvision's first draw was allowed to be up to 12.5 million, but the subsequent draws are not. Subsequent draw limits are tied to the price of the stock. Since MVIS is currently in the last price group─ $1.25 to $1.50, the maximum fixed amount they can request is $1 million dollars per draw every three weeks.

That's a problem, because they can only do one request every three weeks, and making them that often (followed by the short selling Azimuth would be doing) risks dropping the MVIS price below $1.25.

If the price drops below $1.25, then they can't raise anything, and that's obviously bad.

But even if the price stabilizes, they'll still likely run out of money and be out of business by fall of 2011.

When you have only $21 million in cash─ as of September 30, 2010, spend $3 to $4 million per month, but you can only raise a maximum of about $1 million per month─ with the stock price in $1.25 to $1.50 range, the math is simple to do. You would run out of cash by fall of 2011… even though there would theoretically still be cash left on the Azimuth funding deal.

Not that I think the BODs would let them get all the way down to zero before shutting things down.

I know that is disheartening and financially devastating to lots of us. But unless BODs can find a buyer for the company, or get a source of funding other than Azimuth, or get a $1+ run in the stock price over the next 30-60 days, there is not much hope for changing the course of events that usually follow when a company runs out of cash.

For a company like Microvision, with huge future potential but running out of cash while waiting for cheap diode lasers, the “knight in shining armor” could be the friendly enterprise that comes-on-board upon invitation of the management… and offers cash for the next 36 months in exchange for progressively increasing number of shares and warrants─ as the PPS would in all probability be flat or drop every Qtr on news of more and more dilution of unknown proportions.

If you were to assume that cheap diode lasers would be available in the next 24 months and then it takes another 12 months to generate enough profits to self- sustain as a going concern… there is ample time of 36 months for our “knight in shining armor” to accumulate enough shares and warrants to not only cause massive dilution but also become the majority owner.

Having said that…

Microvision’s current financial situation leaves them vulnerable to possible “hostile takeover” and the corporate management may be exploring every possible cost saving and additional funding strategy for the company in an effort to continue as an independent enterprise.

The only problem is; it may be too late to conserve available capital, including additional funds raised thru Azimuth─ if any, and make it last another 36 months as an independent “going concern”.

I’m sure the recent purchase of a patent portfolio from Motorola is a good deal; as it further strengthens Microvision’s patent portfolio. However, it’s not more patents and diversity of products that Microvision needs at this stage. What they need is fiscal responsibility to conserve capital for the next 24 to 36 months while they patiently wait for cheap diode green lasers… because without cheap diode green lasers, Microvision will not survive as a financially viable independent entity.

I’m sure Microvision’s technology and IP portfolio would be of interest to some seasoned business entity with few hundred million dollars to burn.

The only other source of funding, other than a secondary IPO offered thru major investment banks, would be the “rights offering”…

“Cash-strapped companies can turn to rights issue to raise money when they really need it. In these rights offerings, companies grant shareholders a chance to buy new shares at a discount to the current trading price.

Let's look at how rights issue work, and what they mean for all shareholders.

Defining a Rights Issue and Why It's Used
A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. More specifically, this type of issue gives existing shareholders securities called "rights", which, well, give the shareholders the right to purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price.

But until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way they would trade ordinary shares. The rights issued to a shareholder have a value, thus compensating current shareholders for the future dilution of their existing shares' value.

Troubled companies typically use rights issues to pay down debt, especially when they are unable to borrow more money. But not all companies that pursue rights offerings are shaky. Some with clean balance sheets use them to fund acquisitions and growth strategies. For reassurance that it will raise the finances, a company will usually, but not always, have its rights issue underwritten by an investment bank.

Be Warned
It is awfully easy for investors to get tempted by the prospect of buying discounted shares with a rights issue. But it is not always a certainty that you are getting a bargain. But besides knowing the ex-rights share price, you need to know the purpose of the additional funding before accepting or rejecting a rights issue. Be sure to look for a compelling explanation of why the rights issue and share dilution are needed as part of the recovery plan. Sure, a rights issue can offer a quick fix for a troubled balance sheet, but that doesn't necessarily mean management will address the underlying problems that weakened the balance sheet in the first place. Shareholders should be cautious.”

[Excerpt from… http://www.investopedia.com/articles/stocks/05/062905.asp?partner=answers]

Something is cooking at Microvision; and considering the available options at this stage, and knowing how Microvision management operates, it could be the “knight in shining armor” knocking at the door shortly.

Anant Goel

[I must attribute part credit for this post to Paul Anderson from the Yahoo Message Board]

Microvision: $48 Million in Additional Funding

At the most recent 3rd Qtr earnings conference call, Mr. Jeff Wilson, Microvision CFO addressed the $48 million funding that is still available from Azimuth… but left some of us wondering how that may play-out in view of MVIS stock price that dropped sharply after the CC.

I know a few VCs and hedge fund managers who have participated in secondary financings… the kind Microvision has engaged most recently with Azimuth.

Let me explain, using a hypothetical example, how this additional $48 million funding may be in play already and running its course…

• Microvision wants to raise $48 million and the stock was trading at $2.00 on November 1, 2010.

• If the deal was done, without the average price over 20 day period, there would be 26.7 million shares offered at $1.80 [$2.00 at 10% discount]. However, that is not the case… the investor [fund] is going with the average over 20 days clause… for a reason of course.

• After the agreement, the hedge fund would short sell the stock starting at $2.00 and go as far down as the most recent support level at $1.45… to raise $20 million and be 10 million shares [more or less] short… thereby limiting the net invested capital outlay to only $28 million. The $28 million net being the comfortable level of investment the hedge fund may want to make in the current financial market.

• Let’s assume the average price over a 20 day period, as a direct result of this short selling, is now $1.50. However, the conversion price will be $1.35 considering the 10% discount. That gives the hedge fund 35.6 million shares in exchange for $28 million net invested [$48 million - $20 million] vs. the 26.7 million shares they would have gotten for $48 million invested without the manipulation.

• In time, the hedge fund would cover the 10 million short shares from the 35.6 million shares received from Microvision treasury.

• The net result, the hedge fund got 25.6 million shares [35.6 million – 10 million] for a net investment of only $28 million [$48 million – $20 million].

So, the hedge fund just improved their average cost to $1.10 per share… and invested a total of only $28 million in these cash constrained financial environment.

Is it illegal? No.

Is it immoral? No.

Is it the American way? Oh YES.

On a more important note; the dilution from raising the additional $48 million to stay as a going concern─ while Microvision waits for cheap diode green lasers─ is only about 35.6 million additional shares… possibly increasing the total to 130.6 million shares from the current 95 million before this funding.

That’s not all that bad considering the dilution is only about 37% from $2.05 trading range... and seems to be already baked-in the $1.45 price as of this day.

Unfortunately, life is not that simple. The terms of Azimuth funding are lot more complicated than that and there are limits to the progressively lower amounts that can be funded as the stock price goes down.

The terms of Azimuth funding are quite complicated to say the least. However, one thing seems clear that with MVIS stock trading at $1.25 or lower, there may not be any funding available from Azimuth?

Does that mean some other “knight in shining armor” coming to Microvision rescue?

It surely looks that way from what I hear.

Anant Goel

Microvision: Take Over Candidate

Microvision will do fine in the year 2012/2013… but it may not be with its current management still in place or with AT as the CEO of the company. In all probability, Microvision will be taken over in the next 12 to 15 months… to put an end of this sad story in the hands of an ineffective management team.

If the BODs continue with the same old... same old for another 6 to 9 months, the game is over for Microvision as an independent entity. Fortunately, the current PIPE funding thru Azimuth may provide enough money to last another 6 to 9 months as a going concern… without having to worry about breaching the “loan or equity covenants” with their spend thrift lavish operating life style at Microvision.

You may not like what I say, but the current management has no vision, gumption, business strategy or ability to execute at Microvision. Microvision CEO looks like fish out of water and he operates the company like a rough riding cowboy shooting from the hip pocket. Under his leadership over the last four years, everything that’s done at Microvision seems like “reactive” and not something that was part of the plan or “pro-active”. Over the last sixteen quarterly earnings CC, this management team has exposed themselves to their short comings in managing most all aspects of financial and business affairs of the company.

It is quite visible now, after four long years, that the current management lacks business growth strategy; lacks vision; lacks gumption; lacks risk management savvy; lacks contingency planning; lacks fiscal responsibility; and certainly lacks ability to execute as a business-for-profit company.

I will back-up every statement that I make here in more detail in later posts on the blog… but for now, mark my words that the current management of Microvision, contrary to what I may have said before, is the worst ensemble of novices under the “learn as you go” directionless leadership of AT.

At the risk of repeating myself, mark my words…

The current PIPE funding thru Azimuth may provide enough money to last another 6 to 9 months as a going concern… without having to worry about breaching the ‘loan or equity covenants’ with their spend thrift lavish operating life style at Microvision. However, the last stop funding is in motion... after that; game is over for Microvision as an independent company.

This PIPE funding costs Azimuth not a cent... because; it is nothing more than a conduit for MVIS shares from the treasury to be sold to investors-at-large─ with Azimuth acting as the facilitator.

However, once this money is flushed down at an elevated rate approaching $12 million per Qtr… what’s next?

I’m sure the recent purchase of a patent portfolio from Motorola is a good deal; as it further strengthens Microvision’s patent portfolio. However, it’s not more patents and diversity of products that Microvision needs at this stage. What they need is fiscal responsibility to conserve capital for the next 12 to 18 months while they patiently wait for cheap diode green lasers… because without cheap diode green lasers, Microvision will not survive as a financially viable independent entity.

I’m sure Microvision’s technology and IP portfolio would be of interest to some seasoned business entity with few hundred million dollars to burn.

Today’s stock price at $1.53, after having traded at $5.57 last year─ right after SHOWwx product launch, does not speak much for the current management of Microvision.

Anant Goel

Microvision: Hyper Growth in 2011

Rapid Development in Native [Diode] Green Laser Technology Sets PicoP™ Projector into Hyper Growth for Year 2011

In the emerging market for pico-projectors, as well as, other display techniques such as head-mounted display (HMD) or head-up display (HUD), the ideal light source would be a laser due to its capability to deliver highly saturated colors in the widest possible gamut.

Additional desirable features include focus-free operation, improvement in wall-plug efficiency─ reducing power consumption for battery operation, lower cost and high production scalability. The great advantage of laser projectors is a consistently sharp, always-in-focus, true-color, high-contrast image irrespective of the projection distance and projection surface

As we all know too well, the availability and cost of green lasers, both diode and SHG, has held back the progress in ramping-up production of laser based PicoP projectors.

However, there are three pieces of news, two from this morning and one from a year ago, that put the commercialization of laser based PicoP projectors from Microvision on steroids… for hyper growth in the year 2011.

First the old news from August 2009…

“Success in the laboratory: direct emitting green InGaN laser with 50 mW

OSRAM has set a new milestone for mobile laser projection

OSRAM Opto Semiconductors has achieved a major breakthrough in the laboratory with its direct emitting green indium-gallium-nitride laser. It already achieves an optical output of 50 mW and emits light in true green with a wavelength of 515 nm. Compared with semiconductor lasers based on current technology that operate with frequency doubling, direct emitting green lasers are more compact, offer greater temperature stability, are easier to control and have higher modulation capability.”

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Here’s the link to the Osram web site…

http://www.osram.com/osram_com/News/Trade_Press/LED_OptoSemiconductor/2009/090813_PM_R%26D_gruenerLaser_en.html

Over the last one year there have been several articles and white papers published indicating rapid improvement in the development of diode green lasers getting out of the lab approaching commercialization.

Today’s news from Corning confirms that…

Press Release
Source: Corning Incorporated
Monday November 1, 2010, 7:00 am EDT

CORNING, N.Y.--(BUSINESS WIRE)-- Corning Incorporated (NYSE:GLW - News) today announced its results for the third quarter of 2010.

In the press release Corning stated…

“In other matters, Corning has decided to discontinue its development and commercialization of synthetic green lasers. Given the rapid development of native green technology, the company concluded that the market for synthetic green lasers is limited.”

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Here’s the link to the press release…
http://finance.yahoo.com/news/Corning-Announced-bw-2268286162.html?x=0&.v=1

This piece of news further confirms that rapid progress has been made with diode green lasers. And Osram, for example, has overcome the previous limits of the InGaN material system. At the pre-development stage─ in August 2009, the company succeeded in manufacturing the first direct emitting green laser diode from the InGaN (indium-gallium-nitride) material system with a high optical output. The diode emits a “true green”, which is defined by the spectral range of 515 to 535 nm. In this range, efficient high-quality semiconductor lasers have been commercially available only as frequency-doubled versions. In the medium term, however, direct emitting green lasers could replace frequency-doubled lasers for numerous applications. They are easier to control, and also offer greater temperature stability, a smaller form factor and higher modulation capability at several 100 MHz.

Now we come to the last piece of the news that confirms the rapid development of diode green lasers… and that puts the commercialization of laser based PicoP projectors from Microvision on steroids for hyper growth in the year 2011.

Here we go…

Press Release
Source: Microvision, Inc.
Monday November 1, 2010, 7:00 am EDT

REDMOND, Wash.--(BUSINESS WIRE)-- Microvision, Inc. (NASDAQ:MVIS - News), a leader in innovative ultra-miniature projection display technology, today announced it has successfully integrated the first “direct green” laser samples from two leading manufacturers into pico projector benchtop prototypes. This achievement represents an important first step toward the commercialization of PicoP® display engines using direct green lasers. The PicoP display engine utilizing a direct green laser is expected to offer significant commercial advantages in price, size, power, and performance.

“We are very pleased with the performance of these early direct green laser prototypes,” commented Sid Madhavan, Microvision vice president, R&D and Applications. “These encouraging results give us confidence that direct green laser diodes will be capable of meeting the performance requirements for integration into our PicoP display platform.”

Simplicity leads to lower costs
Microvision’s current pico projection engine uses red and blue laser diodes and a frequency-doubled “synthetic” green laser to create a full color image. Synthetic green lasers are infrared lasers that are manipulated to reduce their wavelength to produce a green light. This conversion process creates a complex system of multiple components held to tight tolerances making manufacturing more challenging.

Direct green lasers are capable of producing green light natively, greatly simplifying laser design and manufacturing processes. Direct green lasers are expected to be manufactured in a manner similar to red and blue lasers available today, facilitating lower cost and rapid scalability to commercial quantities. The combination of smaller size, lower power, and lower cost make direct green lasers an attractive alternative to synthetic green lasers for Microvision’s mobile display solutions.

Historically, availability of synthetic green lasers has been constrained due to their complexity and the existence of only two manufacturers. Today, there are at least five companies worldwide that have announced they are developing direct green lasers for late 2011 to mid 2012 commercial introduction. Industry researcher Yole Development forecasts that the direct green laser market size will reach about $500 million by 2016 and should represent more than 45 million devices.

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Here’s the link to the press release…
http://finance.yahoo.com/news/Microvision-Integrates-First-bw-2659567055.html?x=0&.v=1

Some would say that this press release from Microvision is damage control in view of Corning’s decision to discontinue its development and commercialization of synthetic green lasers.

But, I disagree… because of two simple reasons:

First: Corning has decided to discontinue development and commercialization of synthetic green lasers… but that doesn’t mean they will stop production of what’s on order and contracted with Microvision.

Second: Currently, SHG green laser diodes are available on the market from Corning, Osram and QD Laser… and each have their own proprietary solutions. Now if you take Corning out of the equation… you still have two other suppliers of SHG green lasers in the interim period from now to mid 2011.

The bottom line is…

“Next year, the commercialization of laser based PicoP projectors from Microvision gets into fast lane for hyper growth in the year 2011.”

We just have to wait and see how things unfold from here?

Anant Goel