Warrants - Note 11

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Warrants - Note 11

11. Warrants

In November 2011, we raised approximately $10.5 million, before issuance costs of approximately $925,000, through an underwritten public offering of 2.2 million shares of common stock and warrants to purchase 1.3 million shares of our common stock. The warrants have an exercise price of $6.24 per share, a five year term, and are exercisable on the date of issuance.

In June 2009, we raised approximately $15.0 million, before issuance costs of approximately $218,000, from the sale of 1.0 million shares of common stock and warrants to purchase approximately 252,000 shares of our common stock to Max Display Enterprises Limited, a subsidiary of Walsin Lihwa. The warrants have an exercise price of $17.48 per share, a three year term, and are exercisable on the date of issuance. We can call the warrants if the average closing bid price of our stock is over $69.92 for any 20 consecutive trading days.

The following summarizes activity with respect to MicroVision common stock warrants during the three years ended December 31, 2011:

	Warrants to		Weighted
	purchase		average
	common		excercise
	shares		price
Outstanding at December 31, 2008	1,189,000	$	34.56
Granted:
Exercise price greater than intrinsic value	252,000		17.52
Exercised	(142,000)		27.68
Canceled/expired	-
Outstanding at December 31, 2009	1,299,000		31.68
Granted:
Exercise price greater than intrinsic value	-		-
Exercised	-		-
Canceled/expired	(257,000)		55.20
Outstanding at December 31, 2010	1,042,000		25.84
Granted:
Exercise price greater than intrinsic value	1,278,000		6.24
Exercised	-		-
Canceled/expired	(33,000)		22.08
Outstanding at December 31, 2011	2,287,000	$	14.96
Exercisable at December 31, 2011	2,287,000	$	14.96

The following table summarizes information about the weighted-average fair value of MicroVision common stock warrants granted for the periods shown:

		Year Ended December 31,
		2011		2010		2009
Exercise price greater than fair value	$	2.06	$	-	$	-
Exercise price equal to fair value		-		-		-
Exercise price less than fair value		-		-		10.16

There were no warrants issued during 2010. We estimated the fair value of our common stock warrants on the respective grant dates using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants in 2011 and 2009, respectively: dividend yield of zero percent for both years; expected volatility of 83% and 75%; risk-free interest rates of 1.0% and 1.5% and expected lives of 5 and 3 years, respectively.

The following table summarizes information about our common stock warrants outstanding and exercisable at December 31, 2011:

	Warrants outstanding				Warrants exercisable
		Weighted
	Number	average		Weighted	Number		Weighted
	outstanding at	remaining		average	excercisable at		average
	December 31,	contractual		excercise	December 31,		excercise
Range of exercise prices	2011	life (years)		price	2011		price
$6.24	1,278,000	4.88	$	6.24	1,278,000	$	6.24
$17.48	253,000	0.47		17.48	253,000		17.48
$27.36	3,000	0.12		27.36	3,000		27.36
$28.80	753,000	1.56		28.80	753,000		28.80
$6.24-$28.80	2,287,000				2,287,000