MICROVISION, INC. Leases Disclosure
11. LEASES
The Company leases office space and certain equipment under operating and finance leases. All leases have remaining lease terms of less than eight years. Office lease agreements include both lease and non-lease components, which are accounted for separately. Finance leases contain options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless the Company is reasonably certain to exercise the purchase option.
In September 2021, the Company entered into a lease agreement for product testing and lab space in Redmond, Washington which commenced in November 2021. In addition to base rent, the Company pays additional rent comprised of a proportionate share of any operating expenses, real estate taxes, and management fees. The lease, which expires in July 2032, includes an option to extend the term for one ten-year renewal period.
In September 2021, the Company entered into a lease agreement for office space in Redmond, Washington which commenced in December 2022. In addition to base rent, the Company will pay additional rent comprised of a proportionate share of any operating expenses, real estate taxes, and management fees. During the quarter ended June 30, 2023, a payment of $3.0 million was received as an incentive to terminate the Company’s previous lease. The gain is recorded as other income in the consolidated statements of operations. The lease, which expires in December 2032, contains an option to extend the term for one ten-year renewal period. On April 21, 2025, the Company signed an agreement with a third party to sublease a portion of this office space. The sublease commenced on July 15, 2025 and provides monthly rent of $0.1 million. The sublease expires on April 1, 2030 and contains one 32-month extension option.
In April 2022, the Company entered into a lease agreement for product testing for engineering and development activities in Nuremberg, Germany which commenced in May 2022. In June 2024, the Company abandoned the space prior to its expiration of November 2027. During the year ended December 31, 2024, impairment expense of $0.2 million was incurred and is recorded within sales, marketing, general and administrative expense on the consolidated statements of operations.
In September 2022, the Company entered into a lease agreement for office space in Nuremberg, Germany which commenced in November 2022. In June 2024, the Company entered into an early termination agreement to decrease the expiration from April 2027 to April 2025, resulting in an insignificant early termination fee. During the year ended December 31, 2024, impairment expense of $0.1 million was incurred and is recorded within sales, marketing, general and administrative expense on the consolidated statements of operations.
Additionally, in connection with the January 2023 acquisition of assets from Ibeo, the Company assumed three leases in Hamburg, Germany. Each lease was abandoned or expired in 2024, resulting in impairment expense of $0.1 million during the year ended December 31, 2024.
In December 2023, the Company entered into a lease agreement for office space in Hamburg, Germany which commenced in November 2024. The lease, which expires in October 2029, includes an option to extend the term for two three-year renewal periods. During the year ended December 31, 2025, the Company determined that the associated operating lease right-of-use asset was impaired. Impairment expense of $1.2 million is recorded within operating expenses on the consolidated statement of operations.
In September 2025, the Company entered into a lease agreement for an airplane runway strip in Warrenton, Virgia which commenced in October 2025. In addition to base rent, the Company pays additional rent comprised of a proportionate share of any operating expenses and real estate taxes. The lease, which expires in September 2026, includes an option to extend the term for two one-year renewal periods.
The components of lease expense are as follows:
| Year Ended December 31, | ||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | |||||||||
| Operating lease expense | $ | 3,710 | $ | 2,701 | $ | 2,625 | ||||||
| Finance lease expense: | ||||||||||||
| Amortization of leased assets | 13 | 21 | ||||||||||
| Interest on lease liabilities | ||||||||||||
| Total finance lease expense | 13 | 21 | ||||||||||
| Sublease income | (250 | ) | ||||||||||
| Total lease expense | $ | 3,473 | $ | 2,701 | $ | 2,646 | ||||||
Supplemental cash flow information related to leases is as follows:
| Year Ended December 31, | ||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | |||||||||
| Cash paid for amounts included in measurement of lease liabilities: | ||||||||||||
| Operating cash flows from operating leases | $ | 3,036 | $ | 2,491 | $ | 2,500 | ||||||
| Operating cash flows from finance leases | ||||||||||||
| Financing cash flows from finance leases | 13 | 21 | ||||||||||
Supplemental balance sheet information related to leases is as follows:
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Operating leases | ||||||||
| Operating lease right-of-use assets | $ | 14,075 | $ | 16,746 | ||||
| Current portion of operating lease liabilities | 3,481 | 2,682 | ||||||
| Operating lease liabilities, net of current portion | 14,034 | 15,954 | ||||||
| Total operating lease liabilities | $ | 17,515 | $ | 18,636 | ||||
| Finance leases | ||||||||
| Property and equipment, at cost | $ | 157 | $ | 112 | ||||
| Accumulated depreciation | (120 | ) | (112 | ) | ||||
| Property and equipment, net | $ | 37 | $ | |||||
| Weighted Average Remaining Lease Term | ||||||||
| Operating leases | 5.7 years | 6.8 years | ||||||
| Finance leases | 2.3 years | na | ||||||
| Weighted Average Discount Rate | ||||||||
| Operating leases | 4.9 | % | 4.9 | % | ||||
| Finance leases | 5.5 | % | na | |||||
As of December 31, 2025, maturities of lease liabilities are as follows:
| (in thousands) | Operating | Finance | ||||||
| Years Ended December 31, | Leases | Leases | ||||||
| 2026 | $ | 3,737 | $ | 16 | ||||
| 2027 | 3,625 | 16 | ||||||
| 2028 | 3,522 | 7 | ||||||
| 2029 | 3,308 | 5 | ||||||
| 2030 | 2,062 | |||||||
| Thereafter | 3,654 | |||||||
| Total minimum lease payments | 19,908 | 44 | ||||||
| Less: amount representing interest | (2,393 | ) | (3 | ) | ||||
| Present value of capital lease liabilities | $ | 17,515 | $ | 41 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 4, 2026 | Showing above |
| 2024 | Mar 26, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 2, 2023 | |
| 2020 | Mar 15, 2021 | |
| 2019 | Mar 12, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.