Dawn Goetter – Director-Marketing Communications Alex Tokman – President and Chief Executive Officer Stephen Holt – Chief Financial Officer.

Mike Latimore – Northland Capital Henry James – State of Michigan Randy Hough – Pro Equities Mike Scott – Stephens Randy Hough – Pro Equities.

Welcome to the Third Quarter 2015 Microvision Incorporated Financial and Operating Results Conference Call. My name is Alin, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

I will now turn the call over to Dawn Goetter. Ms. Goetter, you may begin..

Thank you. I'd like to welcome everyone to MicroVision's third quarter 2015 financial and operating results conference call. In addition to me, participants on today’s call include Alexander Tokman, President and Chief Executive Officer; and Stephen Holt, Chief Financial Officer.

The information in today’s conference call may include forward-looking statements, including statements regarding; benefits under existing contracts and the negotiation of future agreements; our competitive advantages; progress with prospective customers; projections of future operations and financial results; product development, applications and benefits; availability and supply of product and key components; market opportunities and growth in demand, plans to manage cash used in operations, as well as statements containing words like believe, goal, path, expects, plan, will, could, would and other similar expressions.

These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statements.

Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements are included in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission under the heading Risk Factors relating to the Company’s business and our other reports filed with the commission from time to time.

Except as expressly required by the Federal Securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changes in circumstances or any other reason. The agenda for today’s call will be as follows, Alex will report on the operation results.

Steve will then report the financial results. There will be a question-and-answer session, and then Alex will conclude the call with some final remarks. I now would like to turn the call over to Alex Tokman..

Thank you, Dawn. Good morning. Thank you for joining us today for an update on MicroVision’s third quarter 2015 results. We have made important progress during the last quarter as both Sony and Sharp announced exiting new products incorporating our technology.

Our revenue for the first nine months and for the quarter is approximately 2.5 times higher than a year prior. We continued supplying product to our primary customer and we’re proceeding with our plans to expand production. In Q3, we did encounter some unexpected supply challenge with one of the components.

However, the issue was promptly addressed by one of our key suppliers, I will cover both the market related activities and supply chain situation shortly. Q3 was exciting time for – with two product introductions. In September, Sony announced the introduction of a new companion product, targeted for mobile users, called MPCL-1.

The product has gotten its very favorable media reviews, highlighting product’s salient features, which include infinite focus, high definition, long battery life, small form factor and great image quality. All of which are hallmarks of Microvision’s PicoP technology. The product rolled out in Americas and most parts of Asia in October.

Also in early October, Sharp announced a new and exciting smartphone product called RoBoHoN, a small robot with integrated smartphone and projection functionality. The product received huge buzz and very positive media coverage after its launch at the Ceatec Conference in Japan.

Sharp’s exhibit specifically with RoBoHoN had a lot of traffic during the show because of this new product. We announced our collaboration with Sharp in 2014 to design a display engine based on MicroVision’s PicoP display technology tailored for the specific needs of Sharp’s mobile robot phone.

MicroVision’s technology, an approach to laser beam scanning, delivers all of the required capabilities such as infinite focus, high definition, large screen from short distances, ability to project on any surface all from a compact and low power display engine. This combination of performance and size was essential for Sharp’s product.

The team has addressed a unique set of requirements and form factor challenges to give the robot ability to project information from short distances. Sharp has indicated that the product is expected to be available in Japan in the first half of 2016. We have received an initial purchase order; Steve will tell you more on this.

For the key components for Sharp’s display engine, these components are for early production units and we expect to ship them in early 2016. MicroVision’s technology inclusion, as an integral feature of RoBoHoN is an excellent case study in the versatility of our solution.

In addition to these product announcements, we continue to engage with other OEMs to facilitate adoption of PicoP technology inside their products through the display engines produced by our engine partner Sony. Since Sony made their engine available to others, the commercialization cycle of new products have been simplified and shortened.

It is also important to point out that Sony with global reach much broader than ours owns the sales and marketing process for their engine to OEMs. We’re supporting them on a need basis in a number of design win and design in activities. There are no material updates related to customers in the automotive or industrial segment during last quarter.

Now let’s switch gears, so let’s talk about year-over-year growth. Our Q3 and nine months revenue was significantly higher year-over-year representing 150% and 160% increase respectively and the product and the royalty revenue was on par with what we did in last quarter, in the second quarter.

Recall that in Q2, we have 3x increase in shipments of Microvision components, our shipments we did in Q1, which contributed to the increased product revenue over that period. Our internal plan was to further increase the volume in Q3.

However, we maintained similar to Q2 volume in the quarter due to unexpected supply issue that reduce the quantity of parts deliver to us from one of our key suppliers. The good news is that after the issue was discovered early in the process, the supplier diagnose and fix it probably more on this later in the supply chain segment update.

Our gross margin for product and royalty has improved from 17% in the second quarter to 24% in the third quarter, reduce scrap was the major contributing factor. We’re pleased with this trend, but we are not done yet. Our goal is to continue to improve gross margin as we increase volume moving forward.

Steve obviously will provide further financial details and revenue margin and other key metrics in a moment, but first let me talk about our progress of ramp in the production capacity of our key components including more color on the temporary supply issue we encountered in the third quarter and addressed.

Just as a background even before we began ramping volume of our components with the suppliers, we made a strategic decision to prioritize quality over all other metrics until a steady operating state is reached. Our supply chain priorities, therefore, are our first quality, second output volume, and third internal efficiencies and cost.

To ensure high quality component delivers to Sony, we implemented additional quality control screens for components received from our suppliers at these early stages. In early August, one of these quality control screens for MEMS die discovered an anomaly that appeared in a component manufactured by one of our suppliers.

This anomaly was not observed previously; hence we have to understand what it is, its severity and frequency. Our initial analysis indicated that the newly observed anomaly could have a possible, possible future quality impact on some percentage of products.

We decided not to take any chances, so we acted quickly and decisively and told our component supplier to stop shipments to us until the problem was properly diagnosed and corrected. At the same time, we immediately engage them to establish the severity, route cause, develop a solution to the problem in their process before restarting the deliveries.

Within few weeks, after the initial diagnosis, our supplier identify the route cause and their fabrication process and implemented a solution in September that fix the problem. Starting this month, we expect to receive a higher quality of die based on the improved supplier process.

The timing difference between when they address the problem, which was September at their fab and that’s receiving higher quantities in November is gated by the cycle time at the wafer fabrication processes and normal lead time – normal cycle time.

Until November, we’ve continued to receiving die from this supplier, albeit at lower volumes than we had planned particularly in September and October. Sony is fully informed of this situation. They understand and agree with our plan, priorities and actions.

For us and for you, the most important take away from the insurance story is that the decisions and investment we’ve made early in the process allowed us to catch the problem before it became a real problem, contain it and correct it at the source without impacting customer future product quality.

With this I will now turn over to Steve for a recap of Q3 and nine months financials..

Thank you, Alex. The numbers I’m about to share are included in our press release and in the 8-K filed today, both are available from the investor page of our website. In the third quarter, we continued to show solid year-over-year revenue growth. Q3 revenue was $2.4 million, which is well above the $1 million of revenue we had in Q3 of last year.

Additionally, revenue for the first three quarters of this year was $7.3 million, which is up 160% from $2.8 million in the first three quarters of last year. We do want to note that product revenue in Q3 was below our expectations, due to the component shortage Alex discussed.

Q3 product revenue was $2.1 million, which is about on par with the $2.2 million of product revenue we had in Q2. Gross margin for the quarter was 24%, down from 29% last quarter.

The decrease in overall margin is due to the fact that Q2 included margin on contract revenue and there’s only a very small amount of contract revenue in margin this quarter.

The good news is that product gross margin did improve in Q3, Q3 product gross margin was 13%, up from 5% last quarter, and product and royalty margin combined was 24%, up from 17% last quarter. The improvement in product gross margin was driven primarily by less scrap in the manufacturing process.

We do want to make everyone aware that during production ramps, supplier issues like the one we experienced in Q3 can happen or plan to mitigate these risks as to appropriate processes in place to protect product quality. Q3 operating expenses were $4.1 million compared to $4 million in operating expenses in Q3 of 2014.

Operating expenses for the first three quarters of 2015 were $11.9 million down from $12.1 million for the same period last year. Our third quarter operating loss was $3.5 million. Our third quarter operating loss last year was $3.4 million.

Operating loss the first three quarters of 2015 is $10.3 million and compares to a loss of $9.8 million in the same period last year. Our third quarter 2015 net loss was $3.5 million, or $0.07 per share, compared to $3.4 million, or $0.08 per share, in the third quarter of 2014. Our year-to-date net loss was $10.2 million, or $0.22 per share.

Our 2014 net loss for the same period was $14.8 million, or $0.36 per share. Cash used in operating activities was $3.6 million in the third quarter, compared to $3.2 million in the same quarter last year.

Operating cash for the first three quarters of this year – the cash usage for the first three quarters of this year was $2.2 million, which is significantly better than the $9.9 million used in the first three quarters of last year. The improvement this year is mainly due to the $8 million license fee we received from Sony in Q1.

Cash and cash equivalents on hand at September 30 were $11.2 million. In the third quarter, we did not use our ATM facility or have any other significant equity related transactions. And finally, backlog at the end of the quarter was $13.5 million, most of the backlog is related to Sony orders, but there is approximately 350,000 of Sharp orders.

We plan on fulfilling these orders over the remainder of 2015 and in 2016. That concludes the financial results. We will now open it up to questions..

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Mike Latimore from Northland Capital..

Great, thanks. Congratulations on the Sony and Sharp launches.

Just on the supplier topic here, Holt, could you say that the issue have been fixed and are you back to the volume capacity you thought you were or is it fixed but still a little bit lower volume capacity than you thought you would be at?.

Yes, Mike. So basically a couple of things. First of all, the issue that lowered the volume has been fixed. And we will start receiving the higher output of MEMS die [ph] this month. Until then we were utilizing, so specifically in September and October we had lower volumes coming due to that specific anomaly.

And our goal basically is to get back on track..

Okay, sometime in November, you will be back on the volume [indiscernible]..

Get back to our internal plan, that’s correct..

Yes, okay, guys.

And – I mean, what is the sort of volume amounts that you should be producing let’s say you are exactly producing on a monthly or quarterly basis?.

We basically don’t share this information at this point in time, but just simple math shows our internal goal was higher than what we produced. What we produced in Q3 was equivalent to Q2. And our goal is obviously to use this as a starting baseline to improve further and to increase the volume..

Yes. And then obviously the last couple of years you put a lot of your efforts into Sony that module launched your, can redirect those to new prospects.

I guess as you look at the new prospect list is the idea that maybe you’re getting other Sony that would or you would put a lot of effort behind that or was the prospects to be more diversified?.

It’s a great question. Actually, I hate to use this word [indiscernible] but here’s what’s happening. Now that Sony engine is commercialized, we have already distributed our technical resources into several growth areas that we are interested in.

They include not only pico projection applications, but also augmented reality, 3D sensing and obviously head-up display. And in terms of the type of collaboration or business model with prospective future customers, it’s just going to dependent on application.

And on their level of commitment and involvement, because Sony is more vertically integrated, that’s why we went really deep with them. Some people just want the off-the-shelf solution. If they want off-the-shelf solution, they would go to our primary customers such as Sony to get the engine to build whatever products they want to build..

Okay.

And then you mentioned you’re supporting Sony on designing and designing wins, I guess has there been new design wins in the last quarter or so here and then if so what’s the sort of total number of design wins you had?.

We have a number of activities in the pipeline and they’re making progress. And again we’re not really privy to discuss other customer launches and dates. But what we can tell you is that we actually working on several new opportunities. When they come to market its going, be up to the OEMs to provide the data or information.

Once they do that, we will provide more color..

And just last question, the target gross margins you talked about in the past, is that – are those still kind of logical ones has that changed?.

Absolutely, 40% is our target and we believe with increased volumes and reduced [indiscernible] efficiencies we can get there..

All right, great. Thanks. Good luck..

The next question is from Henry James with State of Michigan..

Good morning, gentlemen. My first question has to do with the gross margin and whether you would expect sort of sequential gross margin improvement..

We expect margin to improve over time, but as we’re ramping up the production process, we can encounter events that they could make it so it’s not a liner or a constant improvement. But we’re working on improving it every quarter. With that said events can happen that, it may not always be improving from quarter-to-quarter..

Henry on the positive side, as the volume increased on the key contributing components to cost and margin as you know is the manufacturing overhead. As the volume increases our cost per unit reduces and that they should give us a boost.

But as you said sometimes you cannot predict, you may run in terms of some temporary situations like we’ve done last quarter, that had to be fixed and quality is above all..

Okay, okay. And also I know, last quarter with respect to royalty revenue, you highlighted the potential with this early stage for a sort of irregular patterns in the royalty revenue.

And so would you say this quarter is a more indicative of the normal pattern or should we still be sort of operating on this potential for irregular patterns and royalty revenue..

Not yet, remember Steve was consistent over the past couple calls, he said there’s Bob. I pushed the quarter lag between one component revenue recognized versus one royalty actually received, so that’s one component. Second component, because these are the early stages, there’s no consistency right now.

To be able to say this is what I expect the following quarter. I think, you’re going to see when we reach a steady state, higher volumes and steady state, you will be able to be more predictive around this specific metric..

Okay….

We’re still in that variable stage. .

Okay, okay, because I know that if we looked at sort of your product revenue and I know this is not a sort of necessarily a proxy for what some market business is doing or the marginal business is doing, but it’s sort of – has been on – at least in this quarter has been on an increasing trend.

But your royalty revenue was actually smaller this quarter than it was the prior quarter. So that was just a little bit of a concern to me..

Yes, well I said there is just lags and fluctuations from the time that we ship components, to when those components are made into display engines, and then when those engines are shipped to customers and then reported to MicroVision.

So again, we’re early and I would caution you to draw too much of conclusions from what you’re seeing from the last two quarters. The numbers are very similar we see that, as well. But I would not drop conclusions yet..

Okay.

And so my question, I’m just curious Alex as to your opinion as to sort of what are the sort of most important things that have to happen or for your business to go to a significant increase in run rate, from where we are now?.

Yes, so on our side this basic blocking and tackling that we know how to do, basically stabilize this flight, increase the volumes, maintain obviously highest level of quality for Sony and others. That’s what we control and we believe we can do this. In terms of the other factor is – general market awareness, because these products are new.

Even though you know and most of the people on this call understand what pico projection is, believe it or not 97% of people that we studied do not – have not heard about this. So market awareness is going to be huge to get the sell-through rates increased.

And partnering with Sony, and Sony having much larger sales and marketing team, much more resources that MicroVision ever had, we believe that that will help to proliferate this to the next step.

Because again remember Sony is not just selling products, they sell – their main product is actually engine that they want to sell to as many OEMs as possible in and outside of Sony..

And so you would say market awareness and it’s not so much an issue I would say cost or improvement in the technology?.

No if you look at – if you use the existing evidence, its limited, but it’s factual. Sony just introduced their product a month ago. And Celluon has been selling products since March we believe. And if you look at just example, one channel Amazon, they are top in all the pico projectors sold, all, and there are quite a few.

Those two that based on our technology are in top five and they are $300..

Okay. All right, thank you..

The next question is from Randy Hough from Pro Equities..

Good morning, fellows. Let me frame my question as kind of a follow-on or dovetailing into the last sequence of questions from the fellow from Michigan.

In terms of volumes Alex, to launch the company into levels that we had all set expectations on years ago that we derive from applications in mobile devices and smartphones, cell phones at that times, smartphones now.

And my question is this, it appears, on the one hand that the engineering and form factor targets over the past several years for Microvision has been to reduce the size of the pico projector of the integrated photonic module, down to where its represented the website, it’s something on the order of the size of the quarter.

However, in these final form factors, in particular let’s talk about the Sony standalone projector. It appears that the final platform is considerably larger than that. In fact the device measures five inches in length over the peers that their projector platform is considerably larger.

And when we talk to Steve here a couple of weeks ago, it was mentioned that the current platform from Sony would not fit in a smartphone and its questionable about whether or not it will fit in a mobile device.

So what I’m asking then is with that premise for you to explain why it appears – what appears to be the case is true, why Sony had to increase the form factor significantly in order to make the device work?.

Okay, I understand your question Randy. So first, I’ll start with most important thing. The smartphone is still very much target for us. Let’s start with this premise, nothing has changed.

We believe that a smartphone with our technology would be a great product that would be embrace by consumers, because lower power, small size, Sony is just one of the examples of the engine that they chose to pursue with specific markets that they want to target, it doesn’t mean that this is the limit. We actually know that it’s not the limit.

And it can’t and would be much small. We believe the advantages we have in these areas, which Sharp is a perfect example.

Sharp really wanted a tiny engine that can offer focus-free, high-definition, large screen size from short distances and it’s an evidence that, if you target a specific application and optimize your engine for that application, you’re going to achieve it with our technology.

I can and Steven can answer for why Sony made certain decisions for what – how to optimize. But the point is that there are several players that are looking at different technologies in different markets and may make the ultimate choice how to structure this.

Remember in this life, you cannot have everything, you always have to tradeoff depending on what is more important and less important to you.

And Sony decided, based in their internal analysis and external feedback that that specific engine that they developed has ability to penetrate many more markets than they chose to do something potentially smaller, lower power, but had a limitation related to other attributes that they deemed to be less important..

Okay. But then can I infer from that Alex that with respect to Sony and tailing back into your comment about Sony reselling their engine to a number of other OEMs. If their engine is larger than the form factor that we’ve been expecting to be necessary for application to mobile devices including smartphones.

If that engine being sold or marketed to other OEMs, will not be the proper form factor or insertion to be embedded into mobile device such as a smartphone or….

Randy it depends on the specific use case, this engine absolutely – I personally, this is my opinion, there’s no reason this specific engine cannot fit inside most of the tablets, for example. There is no reason why this would not fit in larger form factor smartphones. So again, all of the possibilities are still up open.

Sony chose to do the first generation, obviously they have a strategic road map, just like we do, they have a strategic road map, we are aware of what their strategic road map, can’t share it with you, but I understand that they’re aware about embedded market, companion market, attachment market and they point in accordingly.

So this is – don’t view this as end of all, this is just a beginning..

Okay.

And then just to follow-up last thing on this line of questioning, in that list of other OEMs that you’re talking about potential, remember we started with 50 and you broken into groups of five or ten, are we in fact talking to any large OEMs about an embedded device in a smartphone and table to some degree or another?.

We’re actually, remember, when we discussed this two and half years ago, so when we said we had 50 and we have to prioritize by top five, second top five because our bandwidth was limited..

Right..

Well now our bandwidth has increased order of magnitude because Sony is doing that with much larger team..

Okay and then last question and I’ll get back in the queue.

With respect to the glitch in the manufacturing that you identified earlier, are there any – I hope we’re in a situation where some of the components we took on that had to be anomaly and they are something that we’re going to get stuck with as unusable components? Or does that go back to the manufacturer and we aren’t though get stuck with inventory risk like that?.

The good news is, you heard it Steve, our margin has improved from Q2 to Q3 that means that supplier took responsibility of that, for majority of the cost..

Okay. Great. Thank you, Alex..

The next question is from Mike Scott with Stephens..

Yes, thank you for taking the call. The questions I’ve got, number one, is obviously, there’s a lot of – well all things that we’ve tried to glean as far as potential business and potential clients from ours and from Sony is kind of – I guess a waste of time and sorry for discussing that, because we’re not going to may be talk about that.

But one thing I’d do want to see if you could provide for us specifically since it’s an existing product has Sony given us any, or you got any ideas on MCD01 actual product. They are producing currently, as far as volumes, they’re expecting to sell worldwide. I mean that product is actually exist today and be purchased today.

And while nothing is – no numbers are sat and stoned. Have they give us any idea what they think they can do as far as sales of that product, first question.

And second question, just to check with the financing, I know, you’ve got $13 million roughly in backlog, which you expect to fulfill, I suspect, what you said I think for the rest of 2015 and then 2016, and cash on hand of $11 million.

Is it feasible to say that – financially speaking, we’re going to be okay as far as [indiscernible] financing equity or otherwise for the foreseeable future, and I’ll get back in the queue also..

All right, Mike, I think you had three separate questions. Question number one, where has Sony introduced this new product, MPCL-1 and how are they selling, I think I got this; the second question was when we expect to fulfill the backlog; and the third question was do we have enough cash and….

No, one of the questions I did – had they given us any idea on their projections on sales volume, not specifically to the unit, but what is their overall expectation to what they can sell worldwide whether it’d be standalone through Amazon of any retailer? And then again, there has been talk about it’s been a product used through the playstation unit.

We given any – I mean, they’re clients of ours that gives any idea as far as this – those products are actually used – actually producing as far as what kind of volume we might look – expecting on those items?.

The easy answer to your first question is their total volume should be predicted by the backlog that we have to fulfill, since it’s basically they would not order something if they didn’t think they would sell it. So that’s number one.

And specific to all other products that they’re looking at to put the engine in, so this is not only inside Sony, but also outside Sony. In terms of the specific product, MPCL-1, they launched it broadly. They launched it in Americas, in U.S., South America, and most parts of Asia, which are the primary markets.

So because they just begun in October, it’s too early to see the numbers as we go through the year and next year. We will have better feeling, how are they doing? If early facts are – I predict are then this product has been great, perceived well.

I mean, if you look right now at Amazon, as I mentioned, it’s a number one best selling Pico projector on Amazon right now and they just arrived. If that is repeated in other channels that they pushing these products, so then – then we should smile, but again we have to wait and see the results.

In terms of the backlog, again, we expect to continue fulfill backlog in Q4 into 2016, and obviously, our expectation is that this is just the beginning. On your third question about the cash, Steve mentioned we have $11.2 million.

As you know our average burn over the past X number of years has been about $1 million, plus, minus couple of hundred thousand per month. We’re continually evaluating options available to us. And we usually – when we make a decision to do something, it’s something that we believe in the best interest of shareholders in Microvision..

All right, thank you for your time..

The next question is from [indiscernible], Private Investor..

Hi, gentlemen. Thank you for taking the call. My understanding is that someone had reported that the Sony unit has a variable key fan to [indiscernible].

Have you guys been able to verify if that is true and does that also open the door to being able to increase the lumens of the projector because of that dissipation?.

That’s a great question, Tom. Our technology does not need fans, so this one has something. We just know this because it’s too early just been released, so we haven’t had a chance to actually look inside, but it does appear it has some opening. Why they did it probably to enable in the next generations of products that may be brighter. That’s correct.

We don’t have. They obviously don’t tell us why they did this, we just speculating at this point..

Right..

But it looks like you would create something for the future opportunity, yes..

Has your supply chain disruptions changed and altered their rollout plans in other words has it caused them to slowdown their rollout because of the lack of products coming through you?.

No. The temporary supply issue that we experienced has no impact on any of our customers including Sony..

Okay, perfect, very good.

The other thing is cash wise, you did not use any of your ATM during the last quarter, was that correct that I heard?.

It’s not related to this. We continue to evaluate. We decide – we always – for us – as Steve and I were continually mentioned, for us financing, we view that as a process not an event. And we always, always continuously evaluate opportunities including when to use and not to use our ATM and we just decided not to do it last quarter..

Perfect. I was the shareholder I recommend you to that because I think it is an exciting time on to just raise capital if you see the things are progressing; I think it makes much more sense to have a little patience here.

Steve pertaining to the financials, the continuing operation segments at the present time and if you continue on this close to you anticipate, but that will not be in the financials anymore that the accountants – accountants statement about our ongoing concerns?.

Of ongoing concern statement, we will evaluate that, when we do the audit at the end of this year and look – depend on our cash position at that time. And so, I really don’t have a prediction on that..

Right, at the present time in the quarters, are you going to able to eliminate that clause at this point, is that correct?.

Well that’s part of the opinion, which is an annual item and quarterlies, our financial statements are reviewed and not audited. And so there is not a going – there is not an opinion on the quarters..

Okay, excellent.

Pertaining to the actual drive engine, now Sharp is not using Sony’s drive engine, is that correct?.

That is correct. So the PushSharp, we help them to develop their own engine for their application..

So Sharp is the actual manufacturer, can you disclose here where the lasers are coming from?.

Sharp and its suppliers manufacture the engine. We’re not allowed to disclose the specifics, but they obviously give red, blue, and green lasers from somebody although we’re not allowed to discuss..

And the lumens on that projector that’s in the RoBoHoN, could you talk about those specs?.

Tom, we will provide a little more color once the Sharp launches the product and actually we have the specification announcements, since they haven’t announced it publicly. They haven’t provided these details. We cannot comment on their future product at this point in time..

Okay. And internally with R&D few questions, number one, how is your progress towards – coming towards higher lumens, number one.

And number two, are you pursuing additional ways to decrease the size of your drive engine designs?.

We’re always looking.

We always focused on the innovation with completion of Sony program last year, a considerable amount of internal resources without increasing the OpEx were reallocated to strategic areas, which include platform, reducing the size, power, increasing brightness of the engine, as well as looking at other verticals or applications beyond projection, which include eyewear, and the 3D sensing, which are very hot areas..

And as far as lumens, can you talk about anything on the R&D front there as far as what do you think the limitations are for your technology?.

It’s a good question. It’s a good question. All we can tell you without providing the specific numbers is that we already show our ability to increase lumen well beyond where we are today.

The reason we’re not disclosing this unless we’ve shown strategic roadmap to our prospective customers because there is a market today that our customers were selling the existing technology.

We don’t want to compromise anything that – and create unnecessary wait period for somebody if they’re interested in metrics that we don’t have today, but we will have tomorrow. So essentially yes. We’ve increased brightness. We show our progress under NDA to prospective customers. They understand the roadmap.

And that’s one of the reasons they sign up to build products because they know they can launch something today with this brightness and tomorrow it’s going to be different..

Great, thank you for touching the problem early that puts us into disaster. Had we – in that products, we’ve gotten lot of products out. I know as a shareholder I love to see the growth, but having the ability to monitor the quality that that to me is number one. So it’s – that product launch would have been a disaster. So, great job, thank you guys.

I appreciate all your efforts..

Thank you, Tom..

Your next question is from Randy Hough with Pro Equities..

Alex, I got an inquiry from a – one of my clients, who is a shareholder. And about Lenovo’s Smart Cast concept phone, which if you watch their video clip shows a laser based technology embedded in a cellphone.

It’s always been the case that in my mind anyway – perhaps I read this wrong that we have our technology based on laser technology that’s patented every way from Sunday.

Could you comment on your understanding of what’s being used in the Lenovo concept phone vis-à-vis our patents?.

Unfortunately, Randy, we do not discuss a few related matters publicly. We do actually monitor the market for products and technologies that bow in the last year. And the best news about this specific [indiscernible] they choose to describe it’s not to be concerned that somebody or something may or may not have our technology.

The best news for you and for everybody else for us included is that different major OEMs are experimenting with the new applications that are best enabled by technology such as ours. So that’s – that is what’s going to give this market going.

Because consumer looks like market guys is the copycat market, somebody has to show success for us before everybody jumps on the bandwagon and says copy in it, and having Sony, having Sharp, having Lenovo, having others experimenting with the new applications that are particularly benefited when our technologies is used is good for everyone..

Okay. Fine, thank you very much, Alex..

That was our final question, I would now like to turn the call back over to Alex Tokman for closing remarks..

Let’s see, third quarter was highlighted by big market wins. Specifically, Sony and Sharp announcing product launches. We had significant growth in the year-over-year revenue for both Q3 and nine months. And some unexpected challenges on the supply side, that we addressed.

Due to quick and effective actions on the pile of our team we were able to elevate the temporary unexpected supply issue and address the root cause at the supplier. And we expect to get back on our ramp plans starting this month. We were delighted with Sony announcing the launching their first product in Americas and most of Asia.

And Sharp’s introduction of its new mini robot smartphone, which both came displayed up sensor. Both products received extensive positive media coverage, Sony’s projector has had the medium customer reviews garnering close to five stars.

We’re excited to see the product to our customers are introducing getting such positive reception and we see that as a positive validation of what we’ve had been doing.

We firmly believe that solutions with Microvision’s PicoP technology are poised to enable true differentiated end user experiences that are not attainable from other PicoProjection devices. Press and consumer reviews of the products with our technology often rave about benefiting features enable specifically by our technology.

These include internet focus, screen size, quite operation, clear bright images beyond expectation. For the size of what you get it. the recent Amazon update as I mentioned on best selling Pico projectors, for example, shows that both Sony and [ph] Cellion are in the top two shelf life seller list, which is the strong validation point for us.

And considering that there are lot more choices available to consumers from our technologies haven’t two products based on our technology to be in top five, you should feel good about this because we do.

We continued to see spread adoption of mobile video and believe that this behavior will be key driver for consumer interest in the adoption of Pico projection. The most recent global video index probably [indiscernible] by Aiwa following that globally, nearly half of all online video plays.

In the second quarter of this year, while on mobile devices with smartphones dominating all other categories. This represented approximately 74% increase from previous quarter and more than 800% increase from three years ago. And of course, it comes as no surprise that the reports find the younger consumers are driving the adoption of mobile video.

As we solidify our production capabilities and look forward to new products come into market in the Pico projection space, we’re also continuing to innovate where they mention an enhance PicoP technology platform to address both the growing opportunity in the Pico projection market which is driven by mobile video as well as other non projection market fetch Aiwa, 3G Samsung and HUD.

We’re excited about the prospects in front of us and we expect to end this year with a measurable year-over-year growth, we’re convinced that the achievements over the past nine months are a strong indication of that potential, we’re focused on making our customer successful by providing them with high quality components and assisting them with their go to market effort.

We’re going to continue to this and now on behalf of Steve and Dawn, I’d like to thank you for joining us this morning and we’ll now conclude this call..

Thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect..