Microvision: Equity or Debt Financing to Stay as Going Concern

During the month of August 2010, Microvision raised $12.5 million dollars from Azimuth Fund in order to prepare the 3rd Qtr 2010 financial on a “going concern basis.

Here's what they said in the 10-Q filing for the 3^rd Qtr earning report...

“In August 2010, we received a report from our independent public accounting firm regarding the consolidated financial statements for the year ended December 31, 2009 that includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. Our financial statements have been prepared on a going concern basis.

In August 2010, we entered into a committed equity financing facility under which we may sell up to the lesser of $60.0 million or 17,771,901 shares of our common stock to Azimuth Opportunity, Ltd over a 24-month term. In September 2010, we raised $12.5 million through the sale of approximately 6.3 million shares of our common stock under this facility. As of September 30, 2010 we have the lesser of approximately $47.5 million or 11.4 million shares of common stock remaining available under the facility, though we may not be able to sell shares under the facility in the amounts desired or at all. Based on our current operating plan, we anticipate that we have sufficient cash and cash equivalents to fund our operations through April 2011.”

Now three months later, in November 2010, I would expect Microvision to address the “going concern basis” issue again... because they probably burned another $12 million dollars during the three months from August to November leaving them essentially at the same financial spot they were in August of 2010.

Today is December 12^th and so far we have not heard a thing about any additional funding from Azimuth or any other form of equity or debt financing. We did, however, hear about the Memorandum of Understanding [MOU] with Pioneer Corporation of Japan...

MicroVision and Pioneer to Jointly Commercialize Innovative Laser Display Products

Here's the link to the news...
http://www.businesswire.com/news/home/20101208005686/en/MicroVision-Pioneer-Jointly-Commercialize-Innovative-Laser-Display

According to the news on MOU with Pioneer...

REDMOND, Wash.--(BUSINESS WIRE)--MicroVision, Inc. (NASDAQ: MVIS), a leader in innovative ultra-miniature laser display technology, announced today that it has entered into a memorandum of understanding (MOU) with Pioneer Corporation, one of the top original equipment manufacturers (OEMs) of high-performance audio, video and computer equipment for the home, car and business markets, to develop, manufacture and distribute display engines and display engine subsystems for consumer and in-vehicle head-up displays (HUDs) using the MicroVision PicoP^® laser display technology.

“We believe that by combining our respective market and product development capabilities, and leveraging best practices in manufacturing, MicroVision and Pioneer can accelerate introducing next-generation laser display products while reducing the total cost for both companies in getting there.”

Earlier this year, the two companies executed a joint development agreement to develop two critical components of the PicoP display engine: a laser light source module using direct red, blue, and green lasers and a separate display engine subsystem based on MicroVision’s patented PicoP laser scanning technology. Both are key pieces of the next-generation PicoP display engine that will offer OEMs significant commercial advantages in price, size, power, and performance for embedded solutions ranging from cell phones and eyewear, to airplanes and automobiles.”

Now this is what I'm wondering, just like thousands of other Microvision investors...

This is almost middle of December, and since there is no news of SEC filings on any funding from Azimuth or any other entity; there's the risk of “going concern” statement from the independent accounting firm in the 10-K Annual Report... unless the funding issue has been addressed, in some shape or form, by the MOU and soon to be announced details of some equity stake in Microvision by Pioneer Corporation.

If Pioneer Corporation were to share cost of future development, manufacture and distribution of whatever CE products and modular components they have agreed to; and also take an equity stake in Microvision; that would explain the silence on the funding front.

However, if Pioneer shares the cost of future engagement with Microvision, but does not take an equity position, then there would be some need for additional funding... possibly from the Azimuth Fund facility.

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 current MVIS stock price that dropped sharply after the CC.

“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 Pioneer Corporation is our “knight in shining armor” coming to Microvision rescue?

It surely looks that way from what I hear.

However, even with some equity funding and future cost shared with Pioneer, there is the impact of low MVIS stock price on Azimuth funding to flow. 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."

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 price group─ $1.75 to $2.00, the maximum fixed amount they can request is $2 million dollars per draw every three weeks.

Two million dollars every four weeks [including 5 days waiting period] is about $6 million a Qtr and that is not so bad when you consider that Microvision is able to share future development cost with Pioneer; and with some equity funding [from Pioneer] they can make the Azimuth funding facility last to the middle of 2011.

That's the good part of the story.

The bad part is...

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

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 $2 million per month─ with the stock price in $1.75 to $2.00 range, the math is simple to do. You would run out of cash by middle 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 adopting creative sources of alternate funding [like Pioneer] or dramatically cutting cost before shutting things down.

I see future cost sharing with Pioneer... with some equity funding as well.  What I don't see is any efforts to dramatically cut costs... and that has me wondering why?

At this point, it seems that any dilutive financing is pretty much priced into the stock.

Now consider this...

What would happen if the company issued debt instead?

Or, even better, what if a “white knight” like Pioneer took an equity stake in the company as Walsin Liwa did in 2009.

“Microvision could very well be the phoenix that rises from the ashes once the last remaining negative event [financing] is behind them.”

[… to quote Paul Marganski at http://www.picopros.com/]

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.”

*****

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.”

*****

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.

*****

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

Microvision: Announcement of OEM for High End Media Player with Embedded PicoP™ Projector

The question of an announcement, by Microvision, of the OEM for the HEMP is on everyone’s mind. Some of us feel this announcement is imminent; while others feel it could be delayed for CES 2011 in January.

Either way, it is important to understand the various generations of Microvision PicoP Display Engines that we have [or will have] floating around very shortly… and based on which one the OEM decides to embed in the HEMP could very well dictate the announcement date.

Here we go…

1st Generation PDEs: This is one that went inside the SHOWwx [Standard and the Limited Edition] units shipped in March 2010. Features include a native resolution of WVGA (848 X 480), ultra-simple plug-and-play use, fiddle-free infinite focus, very high-contrast ratio, and bright vivid colors generated from ultra-miniature laser light sources. Users simply connect the SHOWWX to any mobile device with TV or VGA out (iPod, laptop, etc.) and project DVD-quality images from a mobile device, up to 200" across, depending on the ambient light.

Here’s the link to the press release…
http://phx.corporate-ir.net/phoenix.zhtml?c=114723&p=irol-newsArticle&ID=1399816&highlight=

2nd Generation PDEs: Interestingly, on March 29th; Microvision announced the completion and shipment of initial samples of its new display engine that incorporates a proprietary ASIC chipset half the original size and weight and that consumes one third less power than its predecessor while delivering uniformly bright, vivid color WVGA (848 X 480) images up to 200 inches. It also provides a 5000:1 contrast ratio – 5 times greater than other pico projector engines in the market today and is always in focus without the need for focusing dials or optics – an especially desirable benefit for mobile consumers.

On April 5th; Microvision announced that it had received an $8.5 million purchase order for its new ultra-miniature PicoP laser projection display engine from a consumer electronics customer. The OEM plans to [in my opinion] embed this 2nd generation PicoP Display Engine inside the high-end mobile media player for release in late 2010 and plans to announce its launch at that time.

Here’s the link to the press release…

http://phx.corporate-ir.net/phoenix.zhtml?c=114723&p=irol-newsArticle&ID=1407100&highlight=

http://phx.corporate-ir.net/phoenix.zhtml?c=114723&p=irol-newsArticle&ID=1409371&highlight=

3rd Generation PDEs: On May 24th; Microvision unveiled the increased brightness 15-lumen 720p HD-ready laser pico projector demonstrator at The Society for Information Display Conference.

According to Microvision press release, the 720p HD-ready prototype pico projector outputs 15 lumens of brightness while still maintaining its compact, low profile form factor, very similar to Microvision's current WVGA product. The company plans a commercial product version of a 720p HD PicoP display engine in the second half of 2011. The new 720p, higher brightness prototype highlights the capability of PicoP technology to support new performance levels while still maintaining the compelling attributes of the existing PicoP platform, including:

• Infinite focus;
• Wide throw angle that offers an immersive visual experience;
• Superior brightness uniformity;
• High optical efficiency resulting in low power requirements;
• 5000:1 contrast ratio; and
• Vivid colors of up to 200% greater than standard broadcast television.

Here’s the link to the press release…
http://phx.corporate-ir.net/phoenix.zhtml?c=114723&p=irol-newsArticle&ID=1430235&highlight=

4th Generation PDEs: These 4th generation PDEs will have to wait till first generation diode green lasers become available in 2012. Initially, the first generation diode green lasers are expected to be expensive compared to possibly the 3rd generation SHG green lasers that may be around… but still may find their way into the 4th generation PDEs as premium modules with higher brightness and resolution with lower power needs.

5th Generation PDEs: These 5th generation PDEs are expected to find their way into millions of PicoP projector in 2013; when 2nd generation diode green lasers would have dropped dramatically in price and reached optimum performance and efficiency levels.

All that is great news but for now let’s get back to the question of the OEM for the HEMP?

In my opinion, there is always the possibility that the OEM may go with the 2nd generation PDEs, as originally announced, and launch the product tomorrow on November 1, 2010.

However, if the 3rd generation PDEs are available now, or will be available shortly, I would change my bet and go with the CES 2011 in January as the possible announcement date.

If we were to pay attention to Microvision press release of April 5th; we may have the surprise announcement at the 3rd Qtr earnings conference call at 4:30pm on November 1, 2010…

“The unidentified customer plans to embed the PicoP engine inside a high-end mobile media player for release in late 2010 and plans to announce its launch at that time."

We just have to wait and see!

Anant Goel

Microvision: What Business Growth Strategy?

Every business has to plan for growth and executives should make sure their growth plans are consistent with their dynamic business plan. A dynamic business plan is an updated version that is kept current to reflect the ever-changing business-operating environment. Especially in the technology and DOT.com businesses, where the product cycles are so short and consumer preferences are mostly dependent on the next hot product or service.

When it comes to growth plans, the two ends of the spectrum are, for example, should a company grow quickly and unprofitably, like Amazon and Hotmail─ before it got acquired by Microsoft for $480 million, or slowly with a careful eye on the bottom line, like Ben & Jerry's ice cream parlors? It all depends on how much venture capital you have access to and what the competition is doing!

The worst thing you can do is fail to decide whether you're going to be a Ben & Jerry's company, or a Hotmail company, or an Amazon company.

There are three possible scenarios when focusing on the challenges of growing a business and picking the right growth model that is consistent with your business plan and positions you for whatever your ultimate goal is…

Number one: you want to be the gorilla of your industry in a hurry like Amazon.
Number two: you want to ramp-up your business fast and position for an acquisition like Hotmail.
Number three: you want to be a brick and mortar company producing steady profits like Ben & Jerry’s.

Regardless of what your business model is, the CEO and the CFO of the company need to formalize their business growth strategy and evangelize to the man in-charge of running the day-to-day operation of the business. Building a company is no small task? You've got one very important decision to make, because it affects everything else you do. No matter what else you do, you absolutely must figure out which camp you're in, and gear everything you do accordingly, or you're going to have a disaster on your hands.

THE DECISION MAKING PROCESS:

Whether to grow slowly, organically, and profitably, or whether to have a big bang with very fast growth with lots of capital spent in a hurry, that is the question?

The first model, popularly called "Get Big Fast" (a.k.a. "Land Grab"), requires you to raise a lot of capital, and work as quickly as possible to get big fast without concern for profitability. I'm going to call this the “Amazon”, because Jeff Bezos, the founder of Amazon, has practically become the celebrity spokes-model for Get Big Fast.

The second model is called "Hotmail for Sale or Fail". As for the name of our model “Hotmail for Sale or Fail”, I just made it up to make the point. This model requires you to raise only a small amount of capital, position for acquisition, and work as quickly as possible to build momentum to show there is promise of getting big fast… without concern for profitability. I'm going to call this “Hotmail” model, because Hotmail fits this model very well.

The third model, organic growth model, is to start small, with limited goals, and slowly build a business over a long period of time. I'm going to call this “Ben & Jerry’s” model, because Ben & Jerry’s fit this model pretty well.

Now the question is: “where on earth does the Microvision business model fit-in?"

The short answer is...

 "Nowhere"

Microvision’s current business growth strategy is either non-existent or is severely flawed after the green laser debacle of late… that still continues to haunt Microvision even after 4 years.

Here’s one clue to the non-existent, or flawed, business growth strategy…

In early 2007, Alex Tokman, CEO of Microvision, was quite aware of the following facts…

*  Embedded pico projector was to be the holly grail for Microvision.
*  Without diode RGB lasers; the power, size, and cost of the laser light source based on SHG green lasers would be prohibitive for embedded applications.
*  In 2007, diode green lasers were 4 to 5 years away… as like in 2011/2012 time frame.

If you were to assume correctly, and AT was aware of these facts as early as in 2007, then why in hell his management team carried-on with an army of personnel in SG&A [and R&D] to continually spend over $12 million dollars every Qtr for the last four years. If AT had used this readily available information and some gumption to control costs to say $6 million per Qtr… today there would be lot less pressure to raise money to continue with operations─ while still waiting for diode/SHG green lasers, because Microvision would have saved over $96 million dollars in costs without sacrificing much.

Microvision management should have either changed their business growth strategy to “hunker down” and coast on a low cost/low profile basis until the green laser technology was mature enough with more plausible cost and performance metrics… or let someone else run the company, instead of pushing the company hard on the downward spiral of financial gloom and doom while waiting for diode/SHG green lasers.

Microvision’s current business growth strategy assures that they will continue to lose money-- as they are now… and continue to do so all of the next year and five years from now. The cost and availability of green lasers today, or a year or two from now, plays a role but its financial impact on the bottom-line profitability is very small when you consider the vicious [large volume/lower cost/lower absolute dollar margin] cycle associated with commodity products such as PDEs and IPMs that are sold to consumer product OEMs.

As long as Microvision corporate management is fixated on just selling their laser light based PDEs and IPMs in an OEM market that has all the makings of a commodity market… they will be at the mercy of the OEMs; for consumer product introduction time-lines, consumer product pricing, product marketing, and commodity component pricing with no pricing power.

Just look around and tell me if you see any embedded mobile phone camera makers or the touch screen makers [for things like iPad or iPhone] making any money worth crowing about. On the other hand, consumer product OEMs like Apple, with vision and gumption, come to market with one consumer product at a time─ on their terms, and rake-in billions in revenue and profits.

The current Microvision business model calls for hundreds of millions in sales of PDEs and IPMs to make a few millions dollars in net profit in a commodity type pricing environment … and that too, if and when the OEM customers let that happen.

Microvision still has time to re-configure its business growth model and seriously consider launching its own branded consumer products ─ possibly in partnership with large OEMs; and be the shaker, baker, and maker of its own destiny.

Just take the current situation of Microvision patiently waiting on its hands and feet─ and spending $12 million dollars per Qtr; while the OEM for the High End Media Player (HEMP) procrastinates on product configuration, product introduction time-lines, and product marketing and pricing issues.

In the best case scenario, the current Microvision business model can, in a year or two, only produce modest earnings growth of perhaps 12% per years for many years to come… and may never come even close to the hyper growth in revenue and earnings that we once believed was possible.

Anant Goel

Microvision: Pico Projector Consumer is Well and Alive

Economists and investors cheered the 2nd Qtr 2010 earnings results from Apple Inc. (AAPL), saying it was a sign that the global consumer is alive and well. The company sold a mind boggling 2.94 million Mac PCs, 10.89 million iPods, and close to 8.75 million iPhones in a three-month time span. And these numbers do not include the 3 million iPads sold since April.

First, here’re the Apple numbers for the 2nd Qtr 2010…

• Total sales: $13.5 billion, up 48.6% year over year
• Earnings: $3.33 per share. up 86%
• Profit: $3.07 billion, up 89.5%
• Mac sales: 2.94 million units, up 33%
• iPhone sales: 8.75 million units, up 131%
• iPod sales: 10.89 million units, down 1%
• iPod touch sales: up 66%; iPod revenue up 12%
• Apple store visitors: 47 million in 286 retail outlets, up 20%
• Gross margin: 41.7%, up from 39.9% last year
• Cash and marketable securities: $41.7 billion, up $1.9 billion since December
• Guidance for the third fiscal quarter: revenue between $13 and $13.4 billion, EPS between $2.28 and $2.39, gross margin 36%

Wow, that doesn’t sound like a recession. But is that really good news or is there something unnerving about all that spending in this harsh recession that we should be concerned about?

Could it be that people spent money in a haphazard manner? Or they spent money [just to keep-up with the Jones] when they really should have been saving?

Either way, I expect the laser based PicoP Projector to follow the same buying pattern as the iPods, iPhones, and iPads.

[Note: Just to be sure we are on the same page; let me qualify that statement with a caveat… it’s the first second half of 2011 that I’m talking about; when the green lasers have become plentiful and their price has come down significantly from the current levels.]

Here’s a story [that I read somewhere] to explain why…

“In the 1970s, Harlem was one of the poorest neighborhoods in the nation, but it was a money making machine for people selling expensive clothes, sneakers, and cars. Before it opened, there was much concern that a McDonald’s in the hood would be an abject failure.

As it turns out, the first McDonald’s in Harlem became the number one selling restaurant for the chain in the entire world for years. Back then, there were street vendors who lived in the community and the money they made circulated among the people that earned it. However, for the most part it was like there was a giant vacuum cleaning hose sucking up all disposable, and not-so-disposable, money out of the hood.

Nothing was more peculiar than the need to own “Air Jordan” sneakers. Mothers that scrubbed floors for minimum wage had to drop $200 to make sure their children fit-in and were part of the hip crowd. Households that sustained themselves on welfare checks also felt the same pressure. Demand for these overpriced shoes never waned even after waves of violence, even murder, was being committed to own them. It was the ultimate status symbol, one that made you cool and one that also made you a potential candidate for the morgue. It was American consumerism at its best. It brought out what John Maynard Keynes called “animal spirits.” The desire to own these ultra expensive sneakers also brought out what sociologists might also brand “animal spirits”, too.

After fueling the growth of the world for decades, it is clear that the American consumer is now struggling. One lesson we’ve all learned over the years is that prosperity can be fleeting. In fact, in a blink of an eye it seems like all of our wealth vanished and somehow landed in China. It’s such a fascinating reversal of fortunes, but it underscores the notion of fiscal prudence. Those “Air Jordan” sneakers that were all the rage in Harlem were made by peasants in China whose annual income was so small they couldn’t afford to live [in Harlem] for one week. China isn’t the financial juggernaut it is because there are 1.3 billion people there; the cheap labor source of the world belies the notion of becoming wealthy. Their secret was saving. Saving money for years, living on the bare minimum, fixated on the future.

With that in mind, iPods, iPhones, and iPads are today’s “Air Jordan” sneakers… hip, stylish, and must have gadgets… but not a necessity.

Stuff We (don’t) Need but Must Have:

Ironically, the Pew Research Center released its latest survey on things that the public believes are  necessities. The results are somewhat shocking. There were huge percentage decreases for clothes dryers, home air conditioning (maybe it will be higher in July than April), television sets, and microwaves. In fact, there were only a few items listed that more people believe are necessities now versus 2006. High speed internet access increased 2%, but only 31% said it was a necessity. Flat screen televisions increased the most, up 3%. Then, there were those iPods, again, increasing 1% to 4%. Like many surveys, much could be made of the results. On one hand, it could suggest less materialism.

But this list isn’t about chasing the Jones; rather it’s about basic stuff that is within reach of most Americans… like iPods, iPhones, and iPads. There is no doubt that income, or lack thereof, played a major role as respondents are certainly feeling the pinch. A whopping 57% said that they’ve bought less expensive brands or shopped more at discount stores… this is evident in the moves of stocks such as Family Dollar Store, 99 Cents Only Stores, and CitiTrends. Perhaps a silver lining is the 28% that said they’ve cut back on alcohol and cigarettes.

Here’s the link to Pew Research Center survey database…

http://people-press.org/reports/pdf/395.pdf

There are so many other things people are doing to adjust to their current circumstances. The sharp decline in what people think they need, however, is remarkable. Maybe there is something else afoot in this story.

Still, there is another way to look at the results. In some ways I believe that people may be taking many things for granted… things like iPods, iPhones, and iPads. I kind of lean that way, and it’s not just that we think an air conditioner is less important but some people think we don’t need more ships and jet fighters to protect us. Heck, this weekend we fired up the air conditioners in our house. If asked a week earlier I may have been inclined to say air conditioning wasn’t a necessity, but after a two hour bike ride in the blazing sun I felt like a walking volcano and at that moment the ice cube maker and AC were right up there with Guttenberg’s printing press as the greatest inventions ever.

One of the side effects of a horrific economic slide is a sense of defeat as well. However, we can’t be so down in the dumps as to become vulnerable to so many things, including the shifting away from the things that made the nation great in the first place… our innovation and the high tech industry to fuel the future prosperity.”

Yes, I do expect to see the global consumers buying millions upon millions of more iPods, iPhones, iPads… and of course, the PicoP projectors.

The next popular product categories that integrate PicoP projectors would be fixed and mobile computing devices, and a whole range of multi-functional consumer electronic products such as smartphones, digital photo frames, personal media players, digital cameras, and digital camcorders.

“As mobile devices add more multimedia capabilities, embedded picoprojectors can add a big-screen experience to a very small device,” said David Chamberlain, Author of the report and Principal Analyst, Cellular Devices, Mobile Consumer and Mobile Video Services, In-Stat.

In-Stat found that illumination technologies are rapidly and continuously evolving by the day with manufacturers able to produce and supply Light Emitting Diodes (LED’s) and green lasers, and that the demand for such gizmos integrated within other devices will be so huge that the volumes will easily drive down modular costs to the extent that pico projectors will become part and parcel of billions of relatively low cost cell phones and media players.

“Technological advances in miniaturization, signal processing, and light sources—including green laser—are making pico projectors a realistic feature for small battery powered devices like cell phones, media players, computing devices, and other consumer electronics,” said Chamberlain.

The future for pico projectors is guaranteed since there is evidence of consumers willing to pay more for additional technologies such as good quality cameras, reported TMCnet, to be included in a single hand held mobile device.

Anant Goel
[Edited By]

Microvision: Growth Stock with 50,000% Profit Potential

I have always believed investing in companies that ride the wave of change or bring about the paradigm shift; with an eye on the long term growth prospects of the company.

In the last 30 odd years that I have been investing, I have had my share of good fortune and misfortune. However, what’s important is the fact that I managed to secure my financial future and live today to talk about my strategy of investing in companies that ride the wave of change or bring about a paradigm shift. Some of these companies─ like Intel, Dell, Qualcomm, and Cisco─ have grown to be huge enterprises and have made their early investors over 10,000% or more since their inception.

A while back I wrote a post about my 14,000% profit experience with Intel during its growth phase from early 80’s to the end of Dot.com era in the year 2000. Here’s the link to that post…

http://mirro7.blogspot.com/2009/09/intel-i-made-over-14000-profit-since.html

I’m one of those old timers that invested in Intel during its early days as a company… in the early 80’s. I recall buying some shares for a total cost of $1,000 dollars. I had to liquidate all my position in Intel during the Dot Com bust of 2000… around May of that year. However, it was not all that bad, because I managed to sell pretty close to the all time high and I remember bragging about my good fortune and fortitude to have stayed the course to make over 14,000% profit… for a net gain of over $140,000 dollars including dividends and the stock splits.

The past performers in my portfolio have served well. However, these companies like Intel, Dell, Qualcomm, Cisco, and Microsoft are past their hyper growth phase and are now too big and are just slow earnings growth vehicles. No disrespect to these fine companies… it’s just that they don’t fit the “hyper growth” company model any more.

One of my stocks holding now, besides an options income portfolio, is Microvision. I believe Microvision has the makings of the next 50,000% profit producer in the next 5 years or so.

Here’s why…

On Wall Street, you often hear terms like “top dog” or “first mover” in the context of a growth stock presentation to institutional clients. It’s quite interesting really…

A "top dog" is a company that dominates its industry... and a "first mover" is a company with a technology or product so revolutionary that it disrupts an existing industry and creates an entirely new one.

On the rare occasion that you find a company that is both─ both a top dog and a first mover ─ the chances are pretty good that you've found your next big winner...

Just think of eBay in the online auction market... Amazon in the online retail market... Netflix in the DVD-rental market… and Cisco in the router market… etc.

These companies redefined the way business was done, launched entirely new industries, and continue to dominate those industries to this day. And you don't need me to tell you how handsomely they've rewarded shareholders along the way.

In order to find companies that will deliver truly life-changing investment returns, you have to find growth companies early in their life cycle and truly believe that they are indeed the ones to ride the wave of change or bring about the paradigm shift… with potential of sustained long term growth.

Before we talk about Microvision as the growth company of the future with a 50,000% profit potential, let’s first consider…

Is now really a good time to be buying growth stocks?

The fact is; it takes guts to make money in this market.

But here's some good news…

For one thing, our current economic conditions bear a striking similarity to the economic downturn of the early 1990s. And Morningstar reports that during that recession, “growth” stocks more than doubled the return of "value" stocks.

For another thing, "growth” stocks can excel even if the broad market continues to stumble. In fact, the analysts expect better profit prospects for growth stocks than for value stocks.

Money for nothing...
We have to be realistic in our expectations when searching or investing in growth companies. The purpose of looking at the great companies listed above is not to show that growth investing is an all-win situation. Far from it!

The purpose of the illustration is to demonstrate how well great companies perform over a long period. If you can identify just one great company early, and then hold on for the long term, you can do pretty well for yourself.

Growth investing is highly volatile, and it will fray the nerves of those individuals with a low risk tolerance. Having said that, all investors should devote a portion of their portfolios to growth stocks. For those traveling in the fast lane, an allocation of 30% of their portfolios might make sense. More conservative types should allocate at least 10% in order to provide a little juice for their investments. I'm somewhere in between, so I devote about 20% of my portfolio to growth.

Microvision: Growth Stock with 50,000% Profit Potential

I believe Microvision has the makings of the next 50,000% profit producer in the next 5 years or so.

In order to become a very successful, profitable and huge company [in terms of market capitalization] you need the following pre-requisites:

Management: with expertise, vision, support network, past record, communicative and persuasive skills and a will to succeed.

In my opinion, we have the best possible management with all the pre-requisite attributes necessary for managing Microvision at this stage of the company’s growth. Here’s a link for your review…

http://www.microvision.com/about_microvision/team.html

Financially Sound: with money to support on-going operations, R&D expenditures, product development and commercialization.

According to the latest annual report for period ending December 2009, Microvision had $45.7 million in cash and short term cash instruments. Looking at the financials, the company is burning about $11 million per Qtr. At this rate, the company has about 4 Qtr worth of cash… assuming no additional revenue from product sales or contract payments.

Since we already have a SHOWwx product lunched in the US, Europe and the Asia Pacific region… I would venture to say that most R&D expenses have already been incurred [almost $300 million to date] and net profit from sales could reduce the cash burn by 3-4 million dollars per Qtr. That would stretch the available cash reserves to 7 Qtr or so. It’s ironic, but the investors of the past have funded this massive R&D undertaking to-date. However, the current investors will reap the benefits and are assured the company has cash to fund the on-going operations, product development and embedded PDEs commercialization.

Here’re some links…
http://phx.corporate-ir.net/phoenix.zhtml?c=114723&p=irol-newsArticle&ID=1400178&highlight=

http://finance.yahoo.com/q/is?s=MVIS

Disruptive Technology: that can bring about massive shifts in “technology paradigm” and “social paradigm”. Each of the five products that Microvision is offering has the potential to cause massive paradigm shift in its own space of product applications.

Microvision’s core technology [PicoP Display Engine] is weaved into five product offerings and each of the product line has the potential of generating billions in revenue:

Vehicle Displays: for automobiles.
http://www.microvision.com/vehicle_displays/index.html

Wearable Displays: a see-through, high-resolution display platform that enables lightweight and fashionable eyewear displays for mobile devices. Microvision’s Color Eyewear platform allows mobile users to access their personal content and services while keeping their vision of the outside world free and clear, letting mobile users stay on the move.

http://www.microvision.com/wearable_displays/mobile.html

Pico Projector Displays: brings big screens to small devices. The Pico Projector or “PicoP Display Engine” can be embedded in mobile phones, laptop or similarly-sized mobile devices to enable upto 100” full color projection display [with DVD resolution] for applications such as streaming video, digital TV, high resolution photographs, and surfing the net.

Standalone Laser PicoP Projector SHOWwx:
http://www.microvision.com/pico_projector_displays/standalone.html

Embedded Unit:
http://www.microvision.com/pico_projector_displays/embedded.html

Applications Gallery:
http://www.microvision.com/pico_projector_displays/application_gallery.html

Military Displays: are used across various branches of the U.S. Military including the U.S. Army, and U.S. Army Reserve.
http://www.microvision.com/wearable_displays/military.html

Laser Bar Code Scanner: features a patent-pending, low-cost, shock-resistant, mechanical/magnetic laser scan engine.
http://www.microvision.com/barcode/index.html

Competitive Advantage: Microvision has over 115 U.S. Patents issued and 79 Patents pending to protect its intellectual property… giving it a huge competitive edge.

http://www.microvision.com/about_microvision/index.html

Technologically Feasible: Microvision has five different products in its portfolio. Each product has been demonstrated to be technologically feasible… with some being offered commercially.

PicoP Display Engine technology is based on the proven and mature silicon MEMS laser scanning mirror technology… as demonstrated by their commercially marketed “ROV” bar code scanner system.

http://www.microvision.com/technology/index.html
http://www.microvision.com/barcode/rov.html

The company recently launched the world’s first laser based PicoP projector SHOWwx in the US in March of 2010.

http://www.microvision.com/showwx/

Microvision has teamed-up with Asia Optical, a global leader in optical component solutions and contract manufacturing, speaks highly of the technological feasibility of the PicoP product. This collaboration focuses on leveraging Asia Optical experience in high-volume design and manufacturing to create a compact, manufacture able and affordable PicoP Display Engine product for Microvision customers. Ultimately, it is expected that PicoP Display Engine will be incorporated into a variety of applications and products in the automotive and mobile consumer electronic products.

The development agreement with Vodafone and Motorola is big for the following reasons…

The deal with the top tier cell-phone companies [Vodafone and Motorola] validates the Microvision technology and its business model.

The deal with Vodafone and Motorola are not exclusive [at this stage] and possibly is the beginning of a relationship that can easily grow into these companies taking equity interest in MVIS… or a possible buyout in the future. As the company [MVIS] has indicated, they are talking to several other large mobile phone and consumer electronics firms.

The top tier cell-phone companies [like Vodafone and Motorola] see value in announcing the relationship with Microvision at this stage of the product development… meaning that the product is within the spec for an embedded device for the cell-phones… and on schedule for early introduction in 2011.

Microvision launched the standalone PicoP projector SHOWwx in the US in March of 2010 and is on schedule to deliver the embedded unit for commercial production in early 2011.

Market Size: The market for PicoP Display Engine is huge. The potential markets are automobiles, mobile phones, smartphones, laptops, PDAs, iPods, iPhones, Pads, digital cameras, camcorders, personal mobile TVs, and the fashion eyewear.

Here are some world-wide statistics...
New autos: sales for 2007 … 49 million units
http://www.metrics2.com/blog/2006/12/28/world_auto_sales_flat_in_2007_china_becomes_no3_re.html

New Mobile Phone Sales: for 2007… 1.15 billion units
http://www.itbusinessedge.com/item/?ci=29702

New Laptop Sales: for 2007 … 207 million units
http://www.pcworld.com/article/id,132861-pg,1/article.html

New “PDA’s, iPods, iPhones, Digital Cameras and Camcorders”… over 300 million units

New Eyewear Sale: for 2008… 1 billion units

Personal Mobile TV/Projectors… new market opens up with potential 1 billion units
http://www.microvision.com/pico_projector_displays/application_gallery.html

Technology and Business Partnerships: Microvision has partnered with the biggest [financially], the most respected [for over 100 years] and the best in the business to design and manufacture its PicoP Display Engine for the automotive and consumer electronic markets.

Now what we need is a few more commercial business partners and OEM agreements for the PicoP Display Engine and Wearable Display product line. I am sure it will happen soon and when it does happen the MVIS stock will run up the charts as we have never seen before.

Microvision has the potential of being the “Top Dog” and the “First Mover” in the global PicoP projection market…

When investing in technology, always look for the “killer app”—yes, the software program, piece of hardware, product improvement or whatever—that makes the product stand out.

Take Internet browsers for example. Now, for a while there it took everyone some time to figure out what exactly an Internet browser was. Today, many of us can’t imagine what life was like before we had Google. These days, if you need information on any topic under the sun, you simply “Google” it! What would we ever do without Google?

When looking to buy the latest tech stock, investors [you] need to scrutinize the product and the unique ability it offers to its users. Google is a great example of a “killer app” that revolutionized the Internet.

So what’s Microvision’s “killer app”?

It’s the “Disruptive Technology”; that can bring about massive shifts in “technology paradigm” and “social paradigm”. Each of the five products that Microvision is offering has the potential to cause massive paradigm shift in its own space of product applications.

What makes Microvision’s PicoP Display Engine technology as "Killer app" in simple terms?

1. Always in-focus image that needs no adjustment when on the move or when moving to change the projected image size… due to inherent feature of laser projection.

2. Longer projection periods per battery charge… by switching-off the laser light source during periods of dark picture segments.

3. Cool to the touch and no waste heat generated… due to modulating lasers as light source.

4. Large projected images [up to 100”] in widescreen aspect ratio of 16:9.

5. High resolution image [848x480] at 10 lumen brightness… with pathways to high definition images at 20 lumens or more brightness.

6. Dramatic cost reduction [with huge profit margin improvements] as the laser light technology matures and economies of scale are achieved.

7. Small physical size that starts out small and gets even smaller from one generation to the next.

The PicoP Display Engine can be embedded in hundreds of different products representing a huge market share for entire product line-up. It has the potential of adding billions of new dollars to Microvision—expanding what I like to call the “halo effect” from the PDE to the rest of Microvision product line of applications that are currently under development.

Yes, investing in technology can get complicated. Many advisors compare the stock price to the company’s earnings and cash flow, and then look at earnings growth trends and the company’s debt levels in comparison to its competitors. This is some in-depth analysis for the average investor!

Well, Microvision has very little earnings and cash flow from current sales; so you have nothing to analyze. Consider yourself in good company: Billionaire Warren Buffet doesn’t invest in technology because he doesn’t understand the fundamentals of the business. That is why he has missed out on billions of dollars in potential profits from the likes of e-bay, Google and Apple. So, if you’re waiting for revenue and current cash flow from your Microvision investment, there is none for all analytical purposes.

But that will change in the next Qtr when the earnings report will show increasing sales of SHOWwx projector from the US, Europe and Asia Pacific region.

When it comes to emerging technology from companies with small capitalization, don’t do what Warren Buffet does. Do your own DD and then take a small position in Microvision for its emerging technology and huge profit potential in the next 5 years.

Is Microvision ready for prime time SHOWwx time and worthy of your investment dollars, consider this…

Five years from now in 2014, the stock could easily trade in the $300 to $500 range.

Here’s an educated projection…

• Worldwide Market Size: 2 billion units [cell phones, laptops, smartphones, iPods, iPhones, iPads, camcorders, digital cameras, gaming devices, and mobile TV/Projectors etc.]

• Worldwide Market Size: 1 billion units [wearable see thru displays]

• Market Adoption Rate: 10%... 300 million units

• Microvision Market share: 15% of 300 million units… 45 million units

• OEM price: $90 per PicoP Display Engine

• Revenue: $4 billion

• Net Profit Margin: 40%

• Net Profit: $1.6 billion

• EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization: $1.5 billion [with operating expenses at $100 million]

• Interest Expense: $0 million

• Interest Income: $20 million

• Tax: $220million

• Depreciation: non cash and very small

• Amortization: non cash and very small

• Net Operating Income: $1.3 billion

• Earning Per Share: $13 on a fully diluted basis [100 million shares]

• Price Earning Ratio: 30 for a hyper growth company

• Price Per Share: $390 per share

In my book, the “Risk” is insignificant [may be 2% per year interest in treasury bills as the lost opportunity] as compared to the potential of making over 100 times your money in the next year 4 to 5 years.

Anant Goel
http://www.wealthbyoptions.com/

Microvision: Viral Marketing Channel Strategy at Work

I don’t think I’m alone in saying that …

“Viral Marketing is a valid distribution channel in this Internet age and should be part of every company’s product and services marketing strategy.”

In case of Microvision, the concept of creating VIP membership is in effect the company’s viral marketing strategy... and it is already in place.

The viral effect will come into more aggressive play once the VIPs [about 10,000 of us] get our SHOWwx PicoP projectors. Each one of us has at least 100 people in our center of influence. So, over 1 million people [10,000 x 100 = 1,000,000] will get to know SHOWwx first hand from us... the VIPs. And those 1 million people have, I'm sure, 50 people in their center of influence. Well, now that’s 50 million people that would come to know about SHOWwx and Microvision... the company behind this amazing laser PicoP projection technology.

In about six months there could be over a billion people that have been touched by SHOWwx… and have also come to know about Microvision.

Here’s another example of super-charged viral marketing at work…

One gentleman investor of Microvision, Mr. Henderson, bought his SHOWwx laser PicoP projector from Spain and paid a premium for it. Now that is the act of a highly motivated investor who wanted to, as part of his due diligence, see the product first hand to continue or not, I guess, with his investment in the MVIS stock.

In summary, this is what he did after he received his SHOWwx in the mail…

“He received his SHOWwx from the distributor in Spain yesterday or the day before. He then single handedly produced a You Tube video of his experience with SHOWwx and then published it over the Internet for us to experience and share his enthusiasm.”

A picture speaks a thousand words. So, without further ado, here’s the link to the video…

http://www.youtube.com/watch?v=LQMmMzV3WD0

That's an example of highly motivated and focused viral marketing. In this case, Mr. Henderson has gone beyond his center of influence [of say hundreds] to touch tens of thousands on the Internet.

Bravo Mr. Henderson, you just set the viral marketing rolling in the second gear.

At this stage, Microvision can further enhance this viral marketing strategy by adding the following programs to its marketing arsenal...

• An affiliate program to embrace thousands of web site owners... by offering a 3% commission on such web site originated sales.

• An "opt-in" e-mail marketing campaign to a few hundred million... similar to the e-mail that was sent to VIPs recently.

• Sign-up network marketers like "Market America" that has over 500,000 networking sales reps.

That's a good start to viral marketing channel... and it doesn't have to cost much to implement.

Results could be wildly huge… in terms of product demand created and the enhanced margins opportunity due to limited intervention by the middlemen.

Anant Goel
http://www.wealthbyoptions.com/

Microvision: SHOWwx Grabs [and some more] Macworld Expo 2010 “Best of Show” Award

That’s right... we got it... we’re not hot...  we’re so cool.

But first, let’s get the “... Macworld Expo 2010 Best of Show Award” part out of the way.

In the words of Matt Nichols of Microvision; comes the first coverage of his exciting news at the company’s blog site The Displayground...

Microvision’s SHOWwx Grabs Macworld Expo 2010 “Best of Show” Award
February 12th, 2010
by Matt Nichols

The New Year may be young, but SHOWWX already has earned three big industry awards in 2010, we’re proud to report.

In addition to the Last Gadget Standing and Innovation awards at the Consumer Electronics Show in Las Vegas last month, SHOWWX took away top honors as a “Best of Show” winner at the Macworld 2010 conference this week at Moscone Center in San Francisco. Estimated attendance is in the 30K+ range by the show organizers. So, while attendance may be down from the high a few years ago, this is still a very active show. The Macworld Best of Show awards, selected by the editors of Macworld, are given to the best products, innovations and upgrades.

Only a few companies — Microvision among them — were chosen to spotlight award-winning products on the Main Stage during “Macworld DEMO: Best of Show.” This was a feature presentation for conference attendees, in front of about 1,000 people on Thursday morning. Myself, Ben Averch and Nick Andron gave the SHOWWX pitch and demo on stage. It was exhilarating to listen to the ‘ooohs’ and ‘ahhhs’ of delight from the audience when we turned the projector on! Here’s just one of the many blogs about the event, entitled: Six Products To Watch From MacWorld.

Active link: http://mashable.com/2010/02/11/macworld-best-of-show/

It’s also been very busy in the Microvision booth during the first day of the exhibitions, and many conference attendees are excited to hear that the product is planned to arrive in the U.S. for distribution in the March time frame.

If you are in the San Francisco area, come visit us at booth #1486.

*****

Here’s the link...
http://www.microvision.com/displayground/

Now let’s look at a few facts to see what this Macworld Expo 2010 “Best of Show” award means to Microvision...

• There are over 120 million Apple users worldwide... 20+ million Mac users... 100+ million iPod and iPhone users. Not only that, Mac and Apple consumer product owners tend to very devoted to Apple; unlike the PC product owners that are very fragmented just like the PC industry itself. Remember, there is only one Apple whereas there are thousands of PC manufactures of all shape and sizes. So, when you grab the “Best of Show” at Macworld Expo 2010, you surly are going to get some serious attention, sooner or later, from the Apple user community worldwide. Millions of those from the Apple cult will become buyers of SHOWwx and quite possibly also become the investors of Microvision stock MVIS.

• Millions of Apple user eyeballs get the opportunity to see what makes laser based PicoP projector a compelling companion product for the iPod, iPhone, iPad and the Mac. Immediate attention that SHOWwx receives during the MacWorld Expo 2010 will be nothing compared to the slow sizzle that would spread throughout the Apple user community in the months to come. This is just the beginning, wait till we get to the embedded PicoP Display Engine part in 2nd Qtr of 2010 with dozens of applications catering to the worldwide Apple user community. It will be a real sizzler!

• For those Apple users that may be somewhat familiar with pico projectors, it could mean a wake-up call to SHOWwx as a better choice pico projector compared to other technologies currently being offered.

Microvision Stock Reacts Positively to the News:
We saw the immediate stock price reaction to this news, in the form of new investors taking long position in MVIS stock, about the same time [11:40 am PST or 2:40pm EST] when Microvision got its turn to make the of SHOWwx presentation to the 1,000 or so present at the live Expo 2010 Main Stage.

“At about 2:40 pm EST [11:40 am PST] MVIS stock moved very quickly from $2.07 to $2.22 and closed the day at $2.24... the new high for the day."

Here’s the link to the stock chart...
http://www.google.com/finance?client=ig&q=MVIS

This is the part that most of us may or may not realize...

The next day on Friday, following the “Best of Show” award on Thursday, the MVIS stock kept moving higher... while the rest of the market stayed down over 100 pts on the Dow most of the day. At the end of the day, MVIS closed at $2.55... that’s 31 cents higher on the day while the rest of the market closed lower.

The MacWorld Expo continues for another day on Saturday. Then on Monday, it’s a holiday for President’s Day. In other words, there is much more pent-up demand building for MVIS stock during the long weekend of due diligence from thousands of Apple devotees. Tuesday, when the market opens, it will be a very interesting day for the long investors of Microvision stock.

Microvision stock is an opportunity of a lifetime in our lifetime.

Here’s the link to part 5 of the story...
http://mirro7.blogspot.com/2009/11/microvision-opportunity-of-lifetime-in.html

[Warning: There are four more parts to this story. I know brevity is a virtue... but I didn’t learn that lesson until recently]

Once this “opportunity of a lifetime...” part sinks-in the minds of thousands of Apple investors and consumers, we could see the MVIS stock move back-up to its glory days of over $3.28 in the next few days.

Also, there is confluence of evidence that Microvision will launch its laser based PicoP projector SHOWwx in the US market sometime in the month of March. It is also evident that SHOWwx will be sold directly from Microvision website... perhaps as an addendum to the existing corporate web site currently at...

http://www.microvision.com/

Over the last few days, there have been several favorable [to Microvision] news events and they are worthy of mention.... and that will be the subject of my next post.

Enjoy the recovery because it is sustainable; and is a clear skies evidence of superior PicoP technology that not only validates Microvision’s business model but is also a prerequisite to becoming a true financial success.

Anant Goel
http://www.wealthbyoptions.com/

Microvision: New Board Member Perry Mulligan and His Solectron Connection

Perry Mulligan is a perfect choice for replacing the outgoing Board of Director at Microvision. His expertise and industy connections are exactly what Microvision needs at this stage of its growth... that is, a company on the verge of “hyper growth”.

“Prior to joining QLogic, Mr. Mulligan spent nine years in the Electronic Manufacturing Services industry where he held senior executive positions at both Solectron and Celestica. These positions included the role of Chief Procurement Officer and Senior Vice President of Materials for Solectron Corporation, Vice President of customer solutions at Celestica, and VP of Asia sourcing for Celestica. Before entering the Electronics Manufacturing Services industry, Mr. Mulligan held a number of management positions at Nortel in operations, IT and materials management.”

Here’s the link to the Press Release...
http://finance.yahoo.com/news/Perry-Mulligan-Joins-bw-2376595991.html?x=0&.v=1

These are very interesting and revealing choice of words from the Press Release...

“On behalf of the entire Board of Directors and management team, I am pleased to welcome an accomplished operations strategist, supply chain builder, and manager of large work teams as we rapidly ramp Microvision’s go-to-market strategy.”

"Microvision is clearly one of the most innovative companies in the emerging category of pico projection,” said Mr. Mulligan. “I feel privileged to join this exciting and dynamic opportunity and look forward to working closely with the other Directors and CEO Alexander Tokman and his team, during this next phase of Microvision’s growth.”

Yes, Microvision’s next phase of growth is indeed “hyper growth” and the management will have to deal with the challenges and issues that come with the territory... as early as in the 1st Qtr 2011.

You may ask what hyper growth is...

Unless you sit down and have a conversation with Warren Buffet (who breaks it down to simplicities), you're going to get a million different answers to this question. The point is that most analyst look for "ARG" - Accelerating Revenue Growth. And that’s what Microvison is gearing-up for... begining March of this year.

“ARG is when your revenue growth % is increasing year over year. Investors and savvy analysts like to see positive ARG... because, it's an indicator of good things. Google and Apple just blew the doors off earning estimates, yet didn't get a bump in stock price (actually it went down a little) because of lack of ARG. Then again, ARG doesn't tell the whole story because what company can continue to grow at 400% perpetually?”

Look for ARG and remember, ARG is only probable in the first few years of a company's existence. Sure, you can see it down the road but at that point the real $ has already been made.

There are four characteristics to look for in a hyper-growth company like Microvision...

1. Sustainable sales growth: This is easy to find and makes sense to any investor.

2. High operating margins: The profit from each widget today has to pay for the development of future widgets... and leave enough left over to enrich shareholders.

3. Small capital requirements: We don’t want to see all the profits going out the door to pay off big debts.

4. Scalability: We want a company that can handle many additional users [or sell millions of more widgets] at no extra cost other than the cost of goods.

Growth investing and value investing are two distinct styles of investing that when combined are the perfect reciepe for Hyper Growth... like in the future of Microvision.

When growth is combined with value, the product is GARP, or growth at a reasonable price, which looks for companies that are undervalued with sustainable growth potential... like Microvison currently trading at deep discounted prices and with a promising future ARG that will surely blow the lids-off the chart.

Anant Goel
http://www.wealthbyoptions.com/

Microvision: Capital Gains Tax for 2010 vs. 2011

I’m sure some of us will be making substantial profit on our holdings of MVIS stock in the year 2010.

I hope you are aware of Long Term Capital Gains Tax going up from 15% in 2010 to 20% in 2011.

Today is the last day to purchase Microvision stock so that when you sell some on the last trading day of 2010… you will still qualify for the 15% rate.

This is from Wikipedia…

“In the United States, individuals and corporations pay income tax on the net total of all their capital gains just as they do on other sorts of income, but the tax rate for individuals is lower on "long-term capital gains," which are gains on assets that had been held for over one year before being sold. The tax rate on long-term gains was reduced in 2003 to 15%, or to 5% for individuals in the lowest two income tax brackets (See progressive tax). Short-term capital gains are taxed at a higher rate: the ordinary income tax rate. The reduced 15% tax rate on eligible dividends and capital gains, previously scheduled to expire in 2008, has been extended through 2010 as a result of the Tax Increase Prevention and Reconciliation Act signed into law by President Bush on May 17, 2006 (P.L. 109-222). In 2011 these reduced tax rates will "sunset," or revert to the rates in effect before 2003, which were generally 20%. President Obama's budget, announced on February 25, 2009, calls for the Capital Gains Tax to be reverted to the 20% rate before the Sunset date of 2011.”

Its not a bad idea to buy today and sell on the last day of 2010 and pay only 15% Long Term Capital Gains Tax.

Anant Goel
http://www.wealthbyoptions.com/

Wealth: Creation and Preservation

 There are many proven ways to create wealth in our global economy. And I mean the legit ways of creating wealth… and not by the unscrupulous ways of “Madoff” of this world.

“Long term wealth is created by high rates of consistent returns accumulated over a period of time─ with prudent use of leverage, and allowing time for the compounding of gains to do their magic in creating wealth of legacy proportions.”

So, what differentiates one type of investment from the other?

Well if you are diversifying, and I strongly recommend that you do, then what matters is the allocation of investment funds across the various asset classes… like real estate, bonds, stocks, and a family business that gets passed from one generation to the next. Since each asset class has its own rate of investment returns, therefore time horizon for growth to create wealth will vary from few years to several decades.

I know what you’re thinking!

You want to be wealthy early in your lifetime to be able to enjoy the fruits of your labor and your good fortune. That makes sense. I mean, what good a billion dollars would do you at age 90?

So, what it boils down to is the speed of wealth creation so that we can enjoy the fruits of our lifetime of labor… during our lifetime. And that’s where the “high monthly rate of return” comes into play…

“Wealth creation of legacy proportions is the miracle of high monthly rate of return, compounding and leverage.”

It is, therefore, understandable why our strategy focus is on exceptional long term growth and earning monthly income while we wait for long term growth to unfold …

“We invest in companies that ride the wave of change or bring about a paradigm shift with lasting and exceptional long term growth. We hold our core position, unless the fundamentals change, and ignore the short term gyrations. During volatile periods, we limit the down side by buying or selling options and do not trade for the sake of few pennies earned from scalping the market. However, from time to time, we may buy calls or sell put premium to leverage core holdings... or to utilize the available portfolio margin to earn risk free income by selling OTM puts/calls... with probability skewed in our favor at 80:20.

High monthly returns are possible due to our ability to control risk and avoid getting trapped in positions that run counter to long term macro-economic or current business trends.”

Having stated our wealth creation [investment] strategy, now we go looking for companies that ride the wave of change or bring about a paradigm shift. In the past, we have had the good fortune of finding a few diamonds in the rough and made some exceptional rate of return with companies like Intel, Microsoft, Dell Computers, Cisco, Qualcomm, Google and Apple.

The high-growth train of the 1980s and 1990s has already left the station, and some of us were left behind, muttering obscenities to ourselves on the platform. We have two choices facing us today in 2010. One option is to mourn our bad fortune, admit that high-growth stocks demand too much hard work and more than a bit of luck, and then resign ourselves to index funds, hoping to eke out 7% per year over the next 20 years. The other option demands boldness and vision. It asks you to forget the past and plan for the future by joining in the search for the great companies of the next 20 years.

Technology, for one example, is rapidly evolving and from time to time the opportunity of a life time stares you in the face, only if you have your ears to the metal and have an open mind.

After trading over a billion dollars in stocks and options over a 27 year period, I have discovered one technology company that is on its way to bring about a paradigm shift in the way we entertain; communicate; collaborate; and network with friends, families and business associates. And yes, while we wait for our investment in this hyper growth company to unfold, we are also generating over 10% income per month [on the risk capital] on a consistent basis... with risk controlled investment strategies that leverage portfolio margins.

Search for Hyper Growth:

Searching for hype growth companies is an on-going process and currently I see another paradigm shift taking place in the technology arena… the prime mover of business and life style changes in our lifetime. Besides technology, the other prime movers of business [and life style] changes would be the “peak oil”, “permanent demand destruction”, and “carbon footprint”. There is “nano technology”, but that is obviously covered under technology.

For now we will focus on technology and discuss the others at another place and time.

Stay tuned for Part 2... it will be here beore you know it.
 
Anant Goel
http://www.wealthbyoptions.com/