Microvision Awarded Additional $3.85 Million from U.S. Army for Development of Virtual Cockpit Helmet-Mounted Display.

Business Editors/High-Tech Writers

BOTHELL, Wash.--(BUSINESS WIRE)--May 27, 2004

Company Continues to Prepare Pilot-Worn Full-Color See-Through

HMD for Rugged Military Flight Use

Microvision (Nasdaq:MVIS), a leader in light scanning technologies, announced today that it has received a contract modification for an additional $3.85 million from the U.S. Army Product Manager, Air Warrior, awarded through the U.S. Army's Aviation Applied Technology Directorate (AATD), located at Ft. Eustis, VA.

The one-year contract is for advanced miniaturization and ruggedization development of Microvision's Scanned Beam display technology, which the Army is supporting for potential use in attack and utility helicopters under a pilot navigation flight system, called the Virtual Cockpit Optimization Program (VCOP). Microvision's display technology is particularly well suited for use in the Army's proposed navigation system due to its potential for providing variable lighting conditions (readable in bright sunlight to dim night operations) and full color, and the expected cost efficiencies associated with a small, light-weight display device that draws very low power.

VCOP takes advantage of Microvision's advanced display technology to provide pilots with battlefield information in their field of view to increase situational awareness. The full-color navigational and terrain overlays that appear on the helmet display depict Force XXI Battle Command, Brigade-and-Below (FBCB2) information critical to mission effectiveness, and have previously been flight tested with positive results. This contract also incorporates development work for the modification of the Electronic Data Manager (EDM, a knee board style touch screen display) software and hardware for integration into the VCOP system. Additionally, Microvision believes that the virtual cockpit concept and its variations can be utilized not only to provide digital information (see-through/color) in older analog helicopters, but will also support a variety of other military aircraft, military ground vehicles, and eventually infantry soldiers.

"The VCOP program provides both technical and cost advantages to the Army," noted Rob Sainsbury, General Manager of Government Programs for Microvision. "Aging helicopter cockpits present a real problem. Legacy analog avionics can be cumbersome to upgrade, particularly as new digital capabilities become available. Maintaining or upgrading cockpit hardware requires re-engineering, replacement and re-wiring. This expensive procedure removes the aircraft from service for an extended period. The VCOP helmet-mounted display, however, is small, lightweight and can readily upgrade legacy cockpits with digitized information without extensive cockpit refurbishment. We believe the flexible, cost-effective VCOP system will help the Army deploy and maintain the most advanced helicopter cockpits available while offering substantial savings compared to the cost of upgrading all the instruments, software and supporting elements in an existing helicopter's avionics suite."

Sainsbury added "We are honored from our continuing role with the Army and appreciate the level of support we have received from Congress, particularly the Washington delegation. Their support of this technology will result in providing the latest technological advantages on the battlefield for our men and women in uniform."

About Microvision: www.microvision.com

Headquartered in Bothell, Wash., Microvision Inc. is the world leader in the development of high-resolution displays and imaging systems based on the company's proprietary silicon micro-mirror technology. The company's technology has applications in a broad range of military, medical, industrial, professional and consumer products.

Microvision has been working with Canon, BMW, the Electronics Research Lab of Volkswagen of America and others to develop a number of display and image capture product applications based on its proprietary scanned beam technology.

Forward-Looking Statement Disclaimer

Certain statements contained in this release, including those relating to contract performance, product capabilities, plans for product development, future product benefits and applications, as well as statements containing words like "believe" and "anticipates," are forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those projected in the company's forward-looking statements include the following: our ability to raise additional capital when needed, market acceptance of our technologies and products; our financial and technical resources relative to those of our competitors; our ability to keep up with rapid technological change; government regulation of our technologies; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain additional contract awards and to develop partnership opportunities; the timing of commercial product launches and delays in product development; the ability to achieve key technical milestones in key products; and other risk factors identified from time to time in the company's SEC reports and filings, including in its most recent Annual Report on Form 10-K.