ParkerVision, Inc.
PARKERVISION INC (Form: 10-Q, Received: 05/10/2010 16:01:58)
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q
(Mark One)
   
(X)
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
 
 
 OF THE SECURITIES EXCHANGE ACT OF 1934
 
     
 
For the quarterly period ended March 31, 2010
 
     
(   )
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
 
 
 OF THE SECURITIES EXCHANGE ACT OF 1934
 

For the transition period from ________to____________

Commission file number 0-22904

PARKERVISION, INC.
(Exact name of registrant as specified in its charter)

Florida
59-2971472
(State or other jurisdiction of
I.R.S. Employer Identification No.
incorporation or organization)
 

7915 Baymeadows Way, Ste 400
 Jacksonville, Florida 32256
(Address of principal executive offices)

(904) 732-6100
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes X No __.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such file).    Yes __   No __.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.   See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act.

Large accelerated filer __
Accelerated filer             
Non-accelerated filer   __ (Do not check if a smaller reporting company)
Smaller reporting company __

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No X .

APPLICABLE ONLY TO CORPORATE ISSUERS

As of May 7, 2010, 41,208,258 shares of the Issuer’s Common Stock, $.01 par value, were outstanding.
 
 
 

 

TABLE OF CONTENTS

PART I -  FINANCIAL INFORMATION
 
     
  Item 1.
Consolidated Financial Statements (Unaudited)
3
  Item 2.
Management’s Discussion and Analysis of Financial Condition And Results of Operations
9
  Item 3.
Quantitative and Qualitative Disclosures About Market Risk
12
  Item 4.
Controls and Procedures
12
   
PART II - OTHER INFORMATION
 
  Item 1.
Legal Proceedings
12
  Item 1A.
Risk Factors
13
  Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
13
  Item 3.
Defaults Upon Senior Securities
13
  Item 4.
Reserved
13
  Item 5.
Other Information
13
  Item 6.
Exhibits
13
   
SIGNATURES
14
   
EXHIBIT INDEX
15

 
2

 

PART I - FINANCIAL INFORMATION

ITEM 1.  Consolidated Financial Statements

PARKERVISION, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

   
March 31,
2010
   
December 31,
2009
 
CURRENT ASSETS:
           
   Cash and cash equivalents
  $ 10,687,913     $ 13,490,612  
   Accounts receivable
    3,689       101,305  
   Prepaid expenses and other
    392,513       493,157  
          Total current assets
    11,084,115       14,085,074  
                 
PROPERTY AND EQUIPMENT, net
    721,678       835,963  
                 
INTANGIBLE ASSETS, net
    9,960,446       10,078,439  
                 
OTHER ASSETS, net
    529,521       545,945  
          Total assets
  $ 22,295,760     $ 25,545,421  
                 
CURRENT LIABILITIES:
               
   Accounts payable
  $ 676,307     $ 264,059  
   Accrued expenses:                
        Salaries and wages
    382,827       269,630  
        Professional fees
    194,156       749,864  
        Other accrued expenses
    115,858       60,014  
   Deferred rent, current portion
    115,515       113,282  
   Deferred revenue
    -       50,733  
          Total current liabilities
    1,484,663       1,507,582  
                 
LONG TERM LIABILITES
               
   Capital lease, net of current portion
    31,349       37,495  
   Deferred rent, net of current portion
    84,503       117,038  
          Total long term liabilities
    115,852       154,533  
          Total liabilities
    1,600,515       1,662,115  
                 
COMMITMENTS AND CONTINGENCIES (Note 10)
               
                 
SHAREHOLDERS' EQUITY:
               
   Common stock, $.01 par value, 100,000,000 shares  authorized, 41,192,550 and 41,160,335 shares issued  and outstanding at March 31, 2010 and December 31,  2009, respectively
        411,925           411,603  
   Warrants outstanding
    15,443,357       17,767,663  
   Additional paid-in capital
    221,006,485       217,919,771  
   Accumulated deficit
    (216,166,522 )     (212,215,731 )
          Total shareholders' equity
    20,695,245       23,883,306  
          Total liabilities and shareholders' equity
  $ 22,295,760     $ 25,545,421  
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 
3

 
 
PARKERVISION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

   
Three Months Ended
March 31,
   
2010
   
2009
 
             
             
Service revenue
  $ 63,735     $ -  
Cost of sales
    46,401       -  
   Gross margin
    17,334       -  
                 
                 
Research and development expenses
    2,304,323       3,000,310  
Marketing and selling expenses
    461,104       615,261  
General and administrative expenses
    1,204,718       1,563,668  
    Total operating expenses
    3,970,145       5,179,239  
                 
Interest and other income
    4,424       37,738  
Interest expense
    (2,404 )     -  
   Total interest and other income
    2,020       37,738  
                 
                 
Net loss
  $ (3,950,791 )   $ (5,141,501 )
                 
                 
Basic and diluted net loss per  common share
  $ (0.10 )   $ (0.18 )
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 
4

 
 
PARKERVISION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

   
Three Months Ended
March 31,
 
   
2010
   
2009
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
  $ (3,950,791 )   $ (5,141,501 )
Adjustments to reconcile net loss to net cash used in  operating activities:
               
        Depreciation and amortization
    437,959       422,966  
        Share-based compensation
    762,730       1,403,783  
        Gain on disposal of property and equipment
    -       (1,342 )
        Changes in operating assets and liabilities:
               
           Accounts receivable
    97,616       -  
           Prepaid expenses and other assets
    117,068       214,984  
           Accounts payable and accrued expenses
    24,822       (229,674 )
  Deferred rent
    (30,302 )     (26,265 )
           Deferred revenue
    (50,733 )     -  
               Total adjustments
    1,359,160       1,784,452  
                   Net cash used in operating activities
    (2,591,631 )     (3,357,049 )
                 
 CASH FLOWS FROM INVESTING ACTIVITIES:
               
   Payments for patent costs and other intangible assets
    (200,012 )     (272,863 )
   Proceeds from sale of property and equipment
    -       185,987  
Purchases of property and equipment
    (5,669 )     (1,060 )
              Net cash used in investing activities
    (205,681 )     (87,936 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
   Net proceeds from issuance of common stock in  public offering
    -        9,422,571  
   Principal payments on capital lease obligation
    (5,387 )     -  
              Net cash provided by/used in financing activities
    (5,387 )     9,422,571  
                 
NET INCREASE/DECREASE IN CASH AND CASH  EQUIVALENTS
    (2,802,699 )     5,977,586  
                 
CASH AND CASH EQUIVALENTS, beginning of  period
    13,490,612       4,814,659  
                 
CASH AND CASH EQUIVALENTS, end of period
  $ 10,687,913     $ 10,792,245  
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 
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PARKERVISION, INC. AND SUBSIDIARY

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.
Description of Business

ParkerVision, Inc. and its subsidiary (the “Company”, “ParkerVision”, or “we”) are in the business of designing, developing and selling our proprietary radio frequency (“RF”) technologies and products for use in semiconductor circuits for wireless communication products.  We are primarily focused on the mobile handset market, but our technologies are applicable to other wireless communication products as well.

2.
Basis of Presentation

The accompanying unaudited consolidated financial statements of ParkerVision have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Operating results for the three months ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.  All normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the financial condition and results of operations have been included.

The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.  These interim consolidated financial statements should be read in conjunction with our latest Annual Report on Form 10-K for the year ended December 31, 2009.

3.
Accounting Policies

There have been no changes in accounting policies from those stated in the Annual Report on Form 10-K for the year ended December 31, 2009.

4.
Consolidated Statements of Cash Flows

We maintain keyman life insurance policies on two of our named executive officers.  Annual premiums for the two policies total approximately $46,000.  The 2010 policy premiums were paid through the use of the annual policy dividends and a loan against the cash surrender value of one policy for approximately $15,000.   The 2009 policy premiums were also paid through the use of the annual policy dividends and a loan against the cash surrender value of one policy for approximately $9,000.

In connection with one of the offerings of shares of our common stock on March 3, 2009, we issued warrants to purchase 431,320 shares of common stock.  These warrants were recorded at their relative fair value of approximately $453,000.

5.
Loss per Share

Basic loss per share is determined based on the weighted-average number of common shares outstanding during each period.  Diluted loss per share is the same as basic loss per share as all
 
 
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common share equivalents are excluded from the calculation, as their effect is anti-dilutive. The weighted average number of common shares outstanding for the three-month periods ended March 31, 2010 and 2009 are 41,172,657 and 28,596,360, respectively.  Options and warrants to purchase 5,367,719 and 6,010,660 shares of common stock were outstanding at March 31, 2010 and 2009, respectively.  In addition, unvested restricted share units (“RSUs”) representing 427,045 and 583,027 shares of common stock were outstanding at March 31, 2010 and 2009, respectively.   These options, warrants and RSUs were excluded from the computation of diluted loss per share as their effect would have been anti-dilutive.

6.
Intangible Assets

Intangible assets consist of the following:
 

   
March 31, 2010
 
   
Gross Carrying Amount
   
Accumulated Amortization
   
Net Book
 Value
 
Patents and copyrights
  $ 16,309,152     $ 6,587,695     $ 9,721,457  
Prepaid licensing fees
    794,000       555,011       238,989  
    $ 17,103,152     $ 7,142,706     $ 9,960,446  



   
December 31, 2009
 
   
Gross Carrying Amount
   
Accumulated Amortization
   
Net Book
 Value
 
Patents and copyrights
  $ 16,109,140     $ 6,351,237     $ 9,757,903  
Prepaid licensing fees
    794,000       473,464       320,536  
    $ 16,903,140     $ 6,824,701     $ 10,078,439  


7.
Accounting for Share-Based Compensation

There has been no material change in the assumptions used to compute the fair value of our equity awards, nor in the method used to account for share-based compensation from those stated in our Annual Report on Form 10-K for the year ended December 31, 2009.

The following table presents share-based compensation expense included in our consolidated statements of operations for the three-month periods ended March 31, 2010 and 2009, respectively:

   
Three months ended
March 31,
 
   
2010
   
2009
 
Research and development expense
  $ 327,423     $ 564,451  
Sales and marketing expense
    86,027       180,610  
General and administrative expense
    349,280       658,722  
    Total share-based expense
  $ 762,730     $ 1,403,783  

As of March 31, 2010, there was $3,197,267 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation awards.  This cost is expected to be recognized over a weighted average period of 1.22 years.
 
 
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8.
Stock Authorization and Issuance

We have filed two shelf registration statements with the SEC for purposes of providing flexibility to raise funds from the offering of various securities over a period of three years, subject to market conditions.   Securities offered under the shelf registration statements may be used to fund working capital, capital expenditures, vendor purchases, and other capital needs.  The first shelf registration statement was filed on January 5, 2009 (File No. 333-156571) and declared effective on January 20, 2009 for the offering of up to $25 million in securities.  The second shelf registration statement was filed on September 14, 2009 (File No. 333-161903) and was declared effective on September 30, 2009 for the offering of up to $50 million in securities.  To date, we have issued an aggregate of $26 million in securities under these two shelf registration statements.
 
9.
Fair Value Measurements

We have determined the estimated fair value amounts of our financial instruments using available market information.  Our assets that are measured at fair value on a recurring basis include the following as of March 31, 2010 and December 31, 2009:
 

     
Fair Value Measurements Using
 
   
Money market securities value at
   
Quoted prices in Active Markets (Level 1)
   
Significant Other Observable Inputs
(Level 2)
   
Significant Unobservable Inputs
(Level 3)
 
    March 31, 2010
  $ 8,584,000     $ 8,584,000       -       -  
    December 31, 2009
  $ 11,402,000     $ 11,402,000                  


10.
Commitments and Contingencies

We are subject to legal proceedings and claims which arise in the ordinary course of our business. Although occasional adverse decisions or settlements may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position, results of operations or liquidity.

11.
Liquidity and Capital Resources

Our future business plans call for continued investment in sales, marketing, customer support and product development for our technologies and products.  Our ability to generate revenues sufficient to offset costs is subject to our ability to successfully support our customers in completing their initial product designs incorporating our technologies and our ability to secure a reasonable share of the market through product offerings with our current customers and/or the addition of new customers.  We expect that revenue for 2010 will not be sufficient to cover our operational expenses for 2010, and that our expected continued losses and use of cash will be funded from available working capital.  We assessed our short-term liquidity needs based on the assumption that our working capital must be sufficient to cover our operational expenses for 2010 with an assumption of minimal revenue.  
 
We expect our overall operating costs in 2010 will be less than those incurred in 2009 as a result of the elimination and/or deferral of certain expenditures related to product development activities and other cost-reduction measures implemented by us.  We believe our current capital resources, including $10.7 million in cash and cash equivalents, along with our 2010 cost reduction efforts will be sufficient to support our liquidity requirements through 2010.  In the event that sufficient working capital is not available to meet our 2010 liquidity needs, we believe additional liquidity could be
 
 
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obtained through the surrender of key-man life insurance policies for their cash value and/or additional cost reduction measures.  In addition, we may be able to meet future liquidity needs through the issuance of equity securities under our outstanding shelf registration statements or through short or long-term debt financing, although there can be no assurance that such financing will be available to us.  We currently have no significant long-term debt obligations.
 
The long-term continuation of our business plan through 2010 and beyond is dependent upon the generation of sufficient revenues from our technologies and products to offset expenses.  In the event that we do not generate sufficient revenues, we will be required to obtain additional funding through public or private financing and/or further reduce operating costs.  Failure to generate sufficient revenues, raise additional capital through debt or equity financings, and/or further reduce operating costs could have a material adverse effect on our ability to meet our long-term liquidity needs and achieve our intended long-term business objectives.
 
ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

We believe that it is important to communicate our future expectations to our shareholders and to the public.  This report contains forward-looking statements, including, in particular, statements about our future plans, objectives, and expectations under the heading “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report.  When used in this Annual Report and in future filings by the Company with the Securities and Exchange Commission (“SEC”), the words or phrases “will likely result”, “management expects”, “we expect”, “will continue”, “is anticipated”, “estimated” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Readers are cautioned not to place undue reliance on such forward-looking statements, each of which speaks only as of the date made.  Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those presently anticipated or projected.  Examples of such risks and uncertainties include the timely development and commercial acceptance of new products and technologies, reliance on key business and sales relationships, and reliance on our intellectual property. We have no obligation to publicly release the results of any revisions which may be made to any forward-looking statements to reflect anticipated events or circumstances occurring after the date of such statements.

Overview

We are in the business of designing, developing and selling our proprietary RF technologies and devices for use in semiconductor circuits for wireless communication products.  We currently have three customer contracts for the incorporation of our technologies into wireless chipsets, modules and products.  Under these contracts, we anticipate future revenues will be generated through product sales of integrated circuits (“ICs”) that incorporate our technology and/or royalties from the licensing of our IP for integration into our customer’s own wireless semiconductor circuits.  We also have service agreements in place whereby we may provide engineering services on a time and materials basis as requested by our customers.

We believe our technology has substantial advantages over competing technologies, especially in the 3G mobile handset market and generations that are likely to evolve beyond 3G, such as 4G mobile handset standards and applications.  We have made significant investments in developing our technologies and products, the returns on which are dependent upon the generation of future revenues for realization.  Since we have not yet generated revenues sufficient to offset our operating expenses, we have mostly
 
 
9

 
 
relied on proceeds from the sale of equity securities to fund our operations.  We intend to continue to use our working capital to support future marketing, sales, research and development and general operations.

The following discussion should be read along with the unaudited condensed consolidated financial statements included in this Form 10-Q, as well as our 2009 Annual Report on Form 10-K, filed with the Securities and Exchange Commission, which provides a more thorough discussion of our products and services, industry outlook, and business trends.

Critical Accounting Policies

There have been no changes in critical accounting policies from those stated in the Annual Report on Form 10-K for the year ended December 31, 2009.

Results of Operations for Each of the Three Month Periods Ended March 31, 2010 and 2009

Revenue and Gross Margin
In October 2009, we were engaged by ITT under a fixed-price service contract valued at approximately $130,000 to incorporate our d2p commercial integrated circuits into a highly integrated transceiver for purposes of demonstrating the performance of the device to one of ITT’s military customers.  For the three-month period ended March 31, 2010, we recognized $64,000 in service revenue and approximately $17,000, or 27% in gross margin related to the completion of this contract.  We had no revenue or gross margin for the three-month period ended March 31, 2009.

We are jointly marketing our ICs along with our baseband chipset customer to handset OEMs and ODMs and we anticipate initial orders and product sales to commence in 2010.

Research and Development Expenses
Our research and development expenses decreased approximately $700,000 or 23% during the three- month period ended March 31, 2010 when compared to the same period in 2009.  This decrease is the result of decreases in outside engineering design services of approximately $210,000, software maintenance costs of approximately $110,000, prototype fabrication costs of approximately $110,000, and share-based compensation expense of approximately $240,000.

Outside engineering design services are utilized to supplement our internal engineering resources.  The related fees are generally project-based and will vary based on the timing and status of development projects.  The decrease in these fees was primarily related to the completion of certain programs in late 2009.  We expect to continue to utilize outside engineering design services periodically to supplement our internal resources.

Software licensing and support costs represent the annual licensing and support maintenance costs for engineering design and other software tools.  The decrease in these costs is a result of changes in the software tools necessary to support our product designs. Prototype fabrication costs are expected to vary period to period based on the timing, materials specified and number of variants requested on each prototype foundry run.

The decrease in share-based compensation expense is primarily the result of a reduction in expense attributed to employee equity awards from previous years which became fully vested in 2009.

We expect our 2010 research and development expenses to be less than those incurred in 2009.  However, these expenses will fluctuate on a quarter to quarter basis depending on the timing of various projects.
 
 
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Marketing and Selling Expenses
Marketing and selling expenses decreased approximately $150,000, or 25% during the three-month period ended March 31, 2010 when compared to the same period in 2009.  This decrease was primarily due to a decrease in share-based compensation expense of approximately $95,000.  The decrease in share-based compensation expense is primarily the result of a reduction in expense attributed to employee equity awards from previous years which became fully vested in 2009.

General and Administrative Expenses
General and administrative expenses decreased by approximately $360,000, or 23% during the three-month period ended March 31, 2010 when compared to the same period in 2009.  This decrease was primarily due to a decrease in share-based compensation expense of approximately $310,000.  The decrease in share-based compensation expense is primarily the result of a reduction in expense attributed to employee equity awards from previous years which became fully vested in 2009.

Loss and Loss per Share
Our net loss decreased approximately $1,200,000 or 23% during the three-month period ended March 31, 2010 when compared to the same period in 2009.  This decrease is a result of the $1,200,000, or 23% decrease in operating expenses.

On a per share basis, our loss decreased $0.08 per share, or 44% for the three month period ended March 31, 2010 when compared to the same period in 2009.  This decrease is a result of the 23% decrease in operating expenses as well as a 44% increase in the weighted average shares outstanding for the period.

Liquidity and Capital Resources

As of March 31, 2010, we had working capital of approximately $9.6 million which represented a decrease of approximately $3.0 million from working capital at December 31, 2009.  The decrease was due primarily to the use of approximately $2.6 million to fund operations and the investment of approximately $0.2 million in intellectual property filings.  Our use of cash for operations decreased approximately $770,000, or 23%, from the three-month period ended March 31, 2009 to the same period for 2010.  This decrease in use of cash is a result of the reduction in operating expenses, primarily in research and development.  We expect our overall operating costs in 2010 will be less than those incurred in 2009 as a result of the elimination and/or deferral of certain expenditures related to product development activities and other cost-reduction measures implemented by us.

Our future business plans call for continued investment in sales, marketing, customer support and product development for our technologies and products.  Our ability to generate revenues sufficient to offset costs is subject to our ability to successfully support our customers in completing their initial product designs incorporating our technologies and our ability to secure a reasonable share of the market through additional product offerings with our current customers and/or the addition of new customers.  We expect that revenue for 2010 will not be sufficient to cover our operational expenses for 2010, and that our expected continued losses and use of cash will be funded from available working capital.  We assessed our short-term liquidity needs based on the assumption that our working capital must be sufficient to cover our operational expenses for 2010 with an assumption of minimal revenue.  

We believe our current capital resources, including $10.7 million in cash and cash equivalents, and our 2010 cost reduction efforts will be sufficient to support our liquidity requirements through 2010.  In the event that sufficient working capital is not available to meet our 2010 liquidity needs, we believe additional liquidity could be obtained through the surrender of key-man life insurance policies for their cash value and/or additional cost reduction measures.  In addition, we may be able to meet future liquidity needs through the issuance of equity securities under our outstanding shelf registration
 
 
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statements or through short or long-term debt financing, although there can be no assurance that such financing will be available to us.  We currently have no significant long-term debt obligations.

The long-term continuation of our business plan through 2010 and beyond is dependent upon the generation of sufficient revenues from our technologies and products to offset expenses.  In the event that we do not generate sufficient revenues, we will be required to obtain additional funding through public or private financing and/or further reduce operating costs.  Failure to generate sufficient revenues, raise additional capital through debt or equity financings, and/or further reduce operating costs could have a material adverse effect on our ability to meet our long-term liquidity needs and achieve our intended long-term business objectives.

Off-Balance Sheet Transactions, Arrangements and Other Relationships

As of March 31, 2010, we had outstanding warrants to purchase 1,653,722 shares of common stock that were issued in connection with the sale of equity securities in various private placement transactions in 2000, 2001, 2006 and 2009. These warrants have exercise prices ranging from $1.88 to $56.66 per share, with a weighted average exercise price of $31.68 and a weighted average remaining contractual life of approximately 2.29 years.  The estimated fair value of these warrants of $15,443,357 is included in shareholders’ equity in our consolidated balance sheets.

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk.

Market risk is the risk of loss arising from adverse changes in market and economic conditions and is directly influenced by the volatility and liquidity in the markets in which the related underlying assets are traded.  Our cash equivalents, which are primarily comprised of highly liquid money market instruments, are subject to interest rate risk.  We are averse to principal loss and seek to ensure the safety and preservation of our invested funds by limiting market risk.

ITEM 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures
As of March 31, 2010, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934).   Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of March 31, 2010.  There have been no changes in our internal control over financial reporting identified in connection with such evaluation that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings.

We are subject to legal proceedings and claims which arise in the ordinary course of our business. Although occasional adverse decisions or settlements may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position, results of operations or liquidity.
 
 
12

 
 
ITEM 1A.  Risk Factors.

In addition to other information in this Quarterly Report on Form 10-Q, the risk factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009 should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition.
 
ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

None.

ITEM 3.  Defaults Upon Senior Securities.

None.

ITEM 4.  Reserved.

ITEM 5.  Other Information.

In accordance with the requirements of Form 8-K, we include the following disclosure:

On May 10, 2010, we issued a press release announcing our results of operations and financial condition for the three-month period ended March 31, 2010.  The press release is attached hereto as Exhibit 99.1.
 
ITEM 6.  Exhibits

3.1
Articles of Incorporation, as amended (incorporated by reference from Exhibit 3.1 of Registration Statement No. 33-70588-A)
   
3.2
Amendment to Amended Articles of Incorporation dated March 6, 2000 (incorporated by reference from Exhibit 3.2 of Annual Report on Form 10-K for the year ended December 31, 1999)
   
3.3
Bylaws, as amended (incorporated by reference from Exhibit 3.1 of Current Report on Form 8-K filed August 10, 2008)
   
31.1
Section 302 Certification of Jeffrey L. Parker, CEO*
   
31.2
Section 302 Certification of Cynthia Poehlman, CFO*
   
32.1
Section 906 Certification*
   
99.1
Earnings Press Release*

*Included herewith

 
13

 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
ParkerVision, Inc.
 
Registrant
   
   
   
May 10, 2010
By:   /s/ Jeffrey L. Parker              
 
Jeffrey L. Parker
 
Chairman and Chief Executive Officer
   
   
May 10, 2010
By:   /s/ Cynthia L. Poehlman         
 
Cynthia L. Poehlman
 
Chief Financial Officer

 
14

 

EXHIBIT INDEX


31.1
Section 302 Certification of Jeffrey L. Parker, CEO
   
31.2
Section 302 Certification of Cynthia Poehlman, CFO
   
32.1
Section 906 Certification
   
99.1
Earnings Press Release
 
 
 
15
 
EXHIBIT 31.1
SECTION 302 CERTIFICATION
 
I, Jeffrey L. Parker, certify that:
 
1.  I have reviewed this Quarterly Report on Form 10-Q of ParkerVision, Inc.;
 
2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
 
(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)  Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons fulfilling the equivalent functions):
 
(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 
Date: May 10, 2010
Name: /s/ Jeffrey L. Parker    
 
Title: Chief Executive Officer
 
 
 
EXHIBIT 31.2

SECTION 302 CERTIFICATION
I, Cynthia Poehlman certify that:
 
1.  I have reviewed this Quarterly Report on Form 10-Q of ParkerVision, Inc.;
 
2.  based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.  based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
 
(a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)      Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)      Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s  most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report)  that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons fulfilling the equivalent functions):
 
(a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 

Date: May 10, 2010
Name : /s/ Cynthia Poehlman    
 
Title: Chief Financial Officer
 
EXHIBIT 32.1

SECTION 906 CERTIFICATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ParkerVision, Inc. (the “Company”) on Form 10-Q, for the period ended March 31, 2010 as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 
1. 
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 
2. 
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.


Dated: May 10, 2010
Name /s/ Jeffrey L. Parker               
 
Title: Chief Executive Officer
   
   
Dated: May 10, 2010
Name /s/ Cynthia L. Poehlman    
 
Title: Chief Financial Officer

 
 
                                                                       NEWS RELEASE


FOR IMMEDIATE RELEASE :


PARKERVISION REPORTS FIRST QUARTER 2010 RESULTS

JACKSONVILLE, Fla., May 10, 2010 – ParkerVision, Inc. (Nasdaq GM: PRKR) , a developer and marketer of semiconductor technology solutions for wireless applications, reported reduced losses for the first quarter ended March 31, 2010, as compared to the same period in 2009.  For the first quarter of 2010, the Company reported a net loss of $3.95 million, or $0.10 per share, on approximately 41.2 million shares outstanding, compared to a net loss of $5.14 million, or $0.18 per share, on approximately 28.6 million shares outstanding, for the same period in 2009. Operating expenses in the quarter were reduced by approximately $1.2 million, or 23%, from the same period in 2009, as a result of cost reduction measures and reduced equity-based compensation.

ParkerVision ended the first quarter of 2010 with approximately $10.7 million in cash and cash equivalents after using approximately $2.8 million in cash for the quarter.  Use of cash for operations decreased approximately $0.8 million, or 23%, from the first quarter in 2009.  Revenue in the quarter was approximately $64,000 representing the balance of engineering services provided to ITT Corporation in connection with a government grant.

Chairman and Chief Executive Officer, Jeffrey Parker, commented, “We and our baseband chipset partner are making a coordinated effort to finalize production setup in parallel with securing design wins for the first d2p™-based RF module.  It is increasingly clear that battery life for 3G handsets is an issue that handset OEMs are actively seeking to solve.  The timing of our d2p-based product introduction is well aligned with the needs of the 3G market, and we are confident that our product benefits, particularly with regard to power consumption, will provide the leverage to achieve market acceptance with high-volume handset companies.”

ParkerVision will host a live conference call today at 4:30 p.m. Eastern time to review its first quarter 2010 financial results.  To participate, dial 1-888-801-6492, approximately five minutes before the conference is scheduled to begin.  International callers should dial 913-312-1441. The conference may also be accessed by means of a live audio webcast on the Company’s website at www.parkervision.com   The conference webcast will be archived and available for replay for 90 days from the date of broadcast.
 
About ParkerVision

ParkerVision, Inc. designs, develops and sells its proprietary RF technologies which enable advanced wireless communications for current and next generation mobile communications networks. Its solutions for wireless transfer of radio frequency (RF) waveforms enable significant advancements in wireless products, addressing the needs of the cellular industry for efficient use of power, reduced cost and size, greater design simplicity and enhanced performance in mobile handsets as the industry migrates to next generation networks.   ParkerVision is headquartered in Jacksonville, Florida. For more information, please visit www.parkervision.com . (PRKR-I)
 
Safe Harbor Statement
 
This press release contains forward-looking information.  Readers are cautioned not to place undue reliance on any such forward-looking statements, each of which speaks only as of the date made.  Such statements are subject to certain risks and uncertainties which are disclosed in the Company’s SEC reports, including the Form 10K for the year ended December 31, 2009 and the Form 10Q for the quarter ended March 31, 2010. These risks and uncertainties could cause actual results to differ materially from those currently anticipated or projected.

(TABLES FOLLOW)
 

 
 

 
 
ParkerVision, Inc.
Summary of Results of Operations (unaudited)


 
(in thousands, except per share amounts)
 
Three Months Ended
March 31,
 
   
2010
   
2009
 
Service revenue
  $ 64     $ -  
Cost of sales
    47       -  
   Gross margin
    17       -  
                 
Research and development expenses
    2,304       3,000  
Marketing and selling expenses
    461       615  
General and administrative expenses
    1,205       1,564  
   Total operating expenses
    3,970       5,179  
                 
Interest and other income
    2       38  
                 
Net loss
  $ (3,951 )   $ (5,141 )
                 
Basic and diluted net loss per common share
  $ (0.10 )   $ (0.18 )
 

Balance Sheet Highlights (unaudited)
 
(in thousands)
 
March 31, 2010
   
December 31, 2009
 
Cash and cash equivalents
  $ 10,688     $ 13,491  
Other current assets
    396       594  
Property and equipment, net
    722       836  
Intangible assets, net
    9,960       10,078  
Other assets, net
    530       546  
Total assets
  $ 22,296     $ 25,545  
                 
Current liabilities
  $ 1,485     $ 1,508  
Long term liabilities
    116       154  
Shareholders’ equity
    20,695       23,883  
Total liabilities and shareholders’ equity
  $ 22,296     $ 25,545  
 

Contact:
   
Cindy Poehlman
 
Ron Stabiner
Chief Financial Officer
or
Vice President
ParkerVision, Inc.
 
The Wall Street Group, Inc.
904-732-6100 , cpoehlman@parkervision.com
 
212-888-4848 , rstabiner@thewallstreetgroup.com
 

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