LONG-TERM CONTRACTS - Note 3	6 Months Ended
Jun. 30, 2019
Notes To Financial Statements Abstract
Long-term contracts - Note 3	3. LONG-TERM CONTRACTS In May 2018, we signed a five-year license agreement with a customer granting them exclusive license to our LBS technology for display-only applications. As part of the agreement, we received a first payment of $5.0 million in June 2018 and the second payment of $5.0 million in October 2018. The contract includes requirements that must be met in order to maintain exclusivity. If this customer acquires a customer, we expect orders for component sales. We may also receive payments for non-recurring engineering expenses associated with process and product transfer and qualification milestones. During the year ended December 31, 2018 we completed the performance obligations required by the contract. As a result, we recognized $10.0 million in license and royalty revenue during the year ended December 31, 2018. In April 2017, we signed a contract with a major technology company to develop an LBS display system. Under this agreement, we are working to develop a new generation of MEMS, ASICs and related firmware for a high resolution, LBS-based product that the technology company is planning to produce. Under the agreement, we received an upfront payment of $10.0 million in 2017 and, as of June 30, 2019, have received $12.5 million in fees for development work. In June 2019 we invoiced the final $2.5 million in fees for development work. If the major technology company decides to manufacture the product with the MicroVision display components, the $10.0 million upfront payment would be applied as a prepayment to future component purchases from us. Based on current pricing and cost estimates, the amount of per unit prepayment is greater than our estimated per unit gross profit. We have recognized revenue on the $15.1 million in development fees over time based on the proportion of total cost expended (under Topic 606, the "input method") to the total cost expected to complete the contract performance obligation. For the three and six months ended June 30, 2019, we have recognized $1.2 million and $2.8 million, respectively, of contract revenue from development fees on this agreement compared to $2.0 million and $4.0 million, respectively, during the three and six months ended June 30, 2018. We have an amount equal to the $10.0 million upfront payment classified as an other current liability on the balance sheet.

LONG-TERM CONTRACTS - Note 3

6 Months Ended

Jun. 30, 2019

Notes To Financial Statements Abstract

3. LONG-TERM CONTRACTS

In May 2018, we signed a five-year license agreement with a customer granting them exclusive license to our LBS technology for display-only applications. As part of the agreement, we received a first payment of $5.0 million in June 2018 and the second payment of $5.0 million in October 2018. The contract includes requirements that must be met in order to maintain exclusivity. If this customer acquires a customer, we expect orders for component sales. We may also receive payments for non-recurring engineering expenses associated with process and product transfer and qualification milestones. During the year ended December 31, 2018 we completed the performance obligations required by the contract. As a result, we recognized $10.0 million in license and royalty revenue during the year ended December 31, 2018.

In April 2017, we signed a contract with a major technology company to develop an LBS display system. Under this agreement, we are working to develop a new generation of MEMS, ASICs and related firmware for a high resolution, LBS-based product that the technology company is planning to produce. Under the agreement, we received an upfront payment of $10.0 million in 2017 and, as of June 30, 2019, have received $12.5 million in fees for development work. In June 2019 we invoiced the final $2.5 million in fees for development work. If the major technology company decides to manufacture the product with the MicroVision display components, the $10.0 million upfront payment would be applied as a prepayment to future component purchases from us. Based on current pricing and cost estimates, the amount of per unit prepayment is greater than our estimated per unit gross profit. We have recognized revenue on the $15.1 million in development fees over time based on the proportion of total cost expended (under Topic 606, the "input method") to the total cost expected to complete the contract performance obligation. For the three and six months ended June 30, 2019, we have recognized $1.2 million and $2.8 million, respectively, of contract revenue from development fees on this agreement compared to $2.0 million and $4.0 million, respectively, during the three and six months ended June 30, 2018. We have an amount equal to the $10.0 million upfront payment classified as an other current liability on the balance sheet.