ParkerVision, Inc.
PARKERVISION INC (Form: 10-Q, Received: 08/11/2014 16:03:52)

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 June 30, 2014

 

      (   ) 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 00 -22904

 

PARKERVISION, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

Florida

 

59-2971472

(State or other jurisdi ction of

 

I.R.S. Employer I dentification No

incorporation or organization)

 

 

 

7915 Baymeadows Way, S ui te 400

Jacksonville, Florida 32256 

(Address of principal executive offices)

 

(904) 732-6100

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such file).    Yes X     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 Exchange Act.   (Check one):

 

 

 

 

Large accelerated filer __

 

Accelerated filer           X

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 .

 

As of August 4, 2014 ,   97,017,683 shares of the i ssuer’s c ommon s tock, $.01 par value, were outstanding.


 

 

TABLE OF CONTENTS

 

 

 

PART I -  FINANCIAL INFORMATION

 

 

 

Item 1.    Financial Statements (Unaudited)

Item 2.    Management’s Discussion and Analysis of Financial Condition

 

and Results of Operations  

11 

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

15 

Item 4.    Controls and Procedures

15 

 

 

PART II - OTHER INFORMATION

 

Item 1.    Legal Proceedings

15 

Item 1A. Risk Factors

15 

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

16 

Item 3.    Defaults Upon Senior Securities

16 

Item 4.    Mine Safety Disclosures

16 

Item 5.    Other Information

16 

Item 6.    Exhibits

16 

 

 

SIGNATURES  

18 

 

 

EXHIBIT INDEX  

19 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2


 

PAR T I - FINANCIAL INFORMATION

 

ITEM 1.  Financial Statements

PARKERVISION, INC.

BALANCE SHEETS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

2014

 

 

2013

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

$

442,333 

 

$

222,697 

Available for sale securities

 

21,315,309 

 

 

16,957,489 

Prepaid expenses and other

 

490,970 

 

 

551,961 

Total current assets

 

22,248,612 

 

 

17,732,147 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, net

 

331,596 

 

 

307,385 

 

 

 

 

 

 

INTANGIBLE ASSETS, net

 

8,423,395 

 

 

8,552,432 

 

 

 

 

 

 

OTHER ASSETS, net

 

648 

 

 

2,576 

Total assets

$

31,004,251 

 

$

26,594,540 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Accounts payable

$

355,723 

 

$

1,246,470 

Accrued expenses:

 

 

 

 

 

Salaries and wages

 

384,265 

 

 

325,313 

Professional fees

 

684,068 

 

 

631,871 

Other accrued expenses

 

128,543 

 

 

289,031 

Deferred rent, current portion

 

38,472 

 

 

33,894 

Total current liabilities

 

1,591,071 

 

 

2,526,579 

 

 

 

 

 

 

LONG-TERM LIABILITIES

 

 

 

 

 

Capital lease, net of current portion

 

27,130 

 

 

7,290 

Deferred rent, net of current portion

 

71,376 

 

 

14,379 

Total long-term liabilities

 

98,506 

 

 

21,669 

Total liabilities

 

1,689,577 

 

 

2,548,248 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

   

 

 

 

 

 

SHAREHOLDERS' EQUITY:

 

 

 

 

 

Common stock, $.01 par value, 150,000,000 shares authorized, 96,946,309  and 93,208,471 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively  

 

969,463 

 

 

932,085 

Accumulated other comprehensive loss

 

 

 

(8,215)

Warrants outstanding

 

355,778 

 

 

663,100 

Additional paid-in capital

 

329,613,063 

 

 

312,470,030 

Accumulated deficit

 

(301,623,630)

 

 

(290,010,708)

Total shareholders' equity

 

29,314,674 

 

 

24,046,292 

Total liabilities and shareholders' equity

$

31,004,251 

 

$

26,594,540 

 

 

 

 

The accompanying notes are an integral part of these unaudited financial statements.

 

 

 

 

3


 

 

PARKERVISION, INC.

 

STATEMENTS OF COMPREHENSIVE LOSS

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2014

 

 

2013

 

2014

 

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineering services revenue

$

 

$

 

$

 

$

Cost of sales

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

2,240,694 

 

 

2,576,103 

 

 

4,505,174 

 

 

4,941,577 

Marketing and selling expenses

 

788,350 

 

 

426,208 

 

 

1,445,341 

 

 

823,135 

General and administrative expenses

 

2,846,255 

 

 

4,148,372 

 

 

5,719,123 

 

 

7,860,189 

Total operating expenses

 

5,875,299 

 

 

7,150,683 

 

 

11,669,638 

 

 

13,624,901 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

36,366 

 

 

25,433 

 

 

60,250 

 

 

39,633 

Interest expense

 

(2,337)

 

 

(1,864)

 

 

(3,534)

 

 

(4,018)

Total interest and other income and interest expense

 

34,029 

 

 

23,569 

 

 

56,716 

 

 

35,615 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(5,841,270)

 

 

(7,127,114)

 

 

(11,612,922)

 

 

(13,589,286)

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available for sale securities

 

332 

 

 

(36,290)

 

 

8,215 

 

 

(29,210)

Other comprehensive income (loss), net of tax

 

332 

 

 

(36,290)

 

 

8,215 

 

 

(29,210)

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

$

(5,840,938)

 

$

(7,163,404)

 

$

(11,604,707)

 

$

(13,618,496)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

$

(0.06)

 

$

(0.08)

 

$

(0.12)

 

$

(0.16)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited financial statements.

 

 

4


 

PARKERVISION, INC.

 

STATEMENTS OF CASH FLOWS

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2014

 

 

2013

 

 

2014

 

 

2013

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(5,841,270)

 

$

(7,127,114)

 

$

(11,612,922)

 

$

(13,589,286)

Adjustments to reconcile net loss to net cash used in

 

 

 

 

 

 

 

 

 

 

 

operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

314,508 

 

 

310,145 

 

 

625,387 

 

 

618,163 

Share-based compensation

 

1,447,153 

 

 

2,282,273 

 

 

3,271,174 

 

 

4,041,517 

Loss on disposal of assets

 

887 

 

 

126 

 

 

887 

 

 

126 

Realized (gain) loss on available for sale securities

 

(1,014)

 

 

(3,085)

 

 

6,869 

 

 

(8,789)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

94,397 

 

 

289,707 

 

 

62,919 

 

 

59,577 

Accounts payable and accrued expenses

 

(47,197)

 

 

49,652 

 

 

(966,208)

 

 

(134,293)

Deferred rent

 

9,442 

 

 

(17,320)

 

 

61,575 

 

 

(37,291)

Total adjustments

 

1,818,176 

 

 

2,911,498 

 

 

3,062,603 

 

 

4,539,010 

Net cash used in operating activities

 

(4,023,094)

 

 

(4,215,616)

 

 

(8,550,319)

 

 

(9,050,276)

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

Purchase of investments available for sale

 

(35,347)

 

 

(22,347)

 

 

(11,561,474)

 

 

(14,130,741)

Proceeds from sale of investments

 

3,405,000 

 

 

4,185,000 

 

 

7,205,000 

 

 

8,820,000 

Payments for patent costs and other intangible assets

 

(256,323)

 

 

(141,528)

 

 

(414,410)

 

 

(310,141)

Purchases of property and equipment

 

(14,495)

 

 

(26,025)

 

 

(40,640)

 

 

(47,978)

Net cash provided by (used in) investing activities

 

3,098,835 

 

 

3,995,100 

 

 

(4,811,524)

 

 

(5,668,860)

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

Net proceeds from issuance of common stock in public and private

 

 

 

 

 

 

 

 

 

 

 

offerings

 

 

 

 

 

11,946,365 

 

 

14,308,428 

Net proceeds from exercise of options and warrants

 

728,054 

 

 

243,235 

 

 

1,655,550 

 

 

447,969 

Principal payments on capital lease obligation

 

(14,148)

 

 

(5,621)

 

 

(20,436)

 

 

(11,036)

Net cash provided by financing activities

 

713,906 

 

 

237,614 

 

 

13,581,479 

 

 

14,745,361 

 

 

 

 

 

 

 

 

 

 

 

 

NET (DECREASE) INCREASE IN CASH AND CASH

 

 

 

 

 

 

 

 

 

 

 

EQUIVALENTS

 

(210,353)

 

 

17,098 

 

 

219,636 

 

 

26,225 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, beginning of period

 

652,686 

 

 

307,354 

 

 

222,697 

 

 

298,227 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, end of period

$

442,333 

 

$

324,452 

 

$

442,333 

 

$

324,452 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited financial statements.

 

5


 

 

 

PARKERVISION, INC.

 

CONDENSED NOTES TO FINANCIAL STATEMENTS

 

(UNAUDITED)

1.  Description of Business

 

ParkerVision, Inc. (“w e”, the “Company”, or “ParkerVision”) is in the business of innovating fundamental wireless technologies.   We design, develop and market our proprietary radio frequency (“RF”) technologies and products for use in semiconductor circuits for wireless communication products.   Our business is expected to include licensing of our intellectual property and/or the sale of integrated circuits based on our technology for incorporation into wireless devices designed by our customers.   In addition, from time to time, we offer engineering consulting and design services to our customers, for a negotiated fee, to assist them in developing prototypes and/or products incorporating our technologies

 

2 .  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, as well as investment in continued protection of our intellectual property including prosecution of new patents and defense of existing patents.  Our ability to generate revenues sufficient to offset costs is subject to securing new product and licensing customers for our technologies, successfully supporting our customers in completing their product designs, and/or successfully protecting or defending our intellectual property. 

 

We expect that revenue , if any, for 2014 will not be sufficient to cover our operational expenses for 2014, and that our expected continued losses and use of cash will be funded from available working capital.  In addition, we expect that available working capital will be used for initial production start-up costs, including test programs and production tooling, and for litigation expenses to defend our intellectual property.  Our current capital resources include cash and available for sale securities of approximately $ 21.8 million at June 30 , 2014.  These current capital resources are sufficient to meet our working capital needs for 2014, but may not be sufficient to sustain our operations on a longer-term basis and we may require additional capital to fund our operations .

 

The long-term continuation of our business plan beyond 2014 is dependent upon the generation of sufficient revenues from our technologies and/or 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 reduce operating costs.  Failure to generate sufficient revenues, raise additional capital through debt or equity financings, and/or 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 .

 

3 Basis of Presentation

 

The accompanying unaudited financial statements for the period ended June 30 , 2014 were 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   and six month s ended June  3 0 , 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 20 1 4 or future years 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. 

 

6


 

The year-end 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 financial statements should be read in conjunction with our latest Annual Report on Form 10-K for the year ended December 31, 201 3

 

4 .   Accounting Policies

 

In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update 2013-11 Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”) to provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists thereby reducing diversity in practice. The amendments in ASU 2013-11 became effective for the Company on January 1, 2014 and did not have a material impact on the Company’s financial statements.

 

There have been no other changes in accounting policies from those stated in the Annual Report on Form 10-K for the year ended December 31, 201 3 .

 

5 .   Loss per Common Share

 

Basic loss per common share is determined based on the weighted-average number of common shares outstanding during each period.  Diluted loss per common share is the same as basic loss per common share as all 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 months ended June 30 , 201 4 and 201 3 were 96,999,397 and 88,43 6 ,532 , respectively The weighted average number of common shares outstanding for the six months ended June 30, 2014 and 2013 were 95,359,994 and 85,905,873 , respectively .

 

Options and warrants to purchase 7,649,496   and 9,848,142 shares of common stock were outstanding at June 30 , 2014 and 201 3 ,   respectively.  In addition, unvested restricted stock units (“RSUs”), representing 1,714,825 and 950,136   shares of common stock, were outstanding at June 30 , 2014 and 201 3 , respectively.   These options , warrants and RSUs were excluded from the computation of diluted loss per common share as the ir effect would have been anti-dilutive.    

 

6 .   Intangible Assets

 

Intangible assets consist of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2014

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Book Value

Patents and copyrights

$

19,357,430 

 

$

10,935,591 

 

$

8,421,839 

Prepaid licensing fees

 

574,000 

 

 

572,444 

 

 

1,556 

 

$

19,931,430 

 

$

11,508,035 

 

$

8,423,395 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Book Value

Patents and copyrights

$

18,943,020 

 

$

10,397,136 

 

$

8,545,884 

Prepaid licensing fees

 

574,000 

 

 

567,452 

 

 

6,548 

 

$

19,517,020 

 

$

10,964,588 

 

$

8,552,432 

 

 

 

 

 

 

 

 

 

 

7


 

 

 

 

7 .  Share-Based Compensation

 

On June 17, 2014, our shareholders approved amendments to our 2011 Long-Term Equity Incentive Plan (the “2011 Plan ) including an increase to the shares authorized for issuance under the plan from 5,000,000 to 12,000,000 shares.  Upon approval of the amendments to our 2011 plan, we also amended our 2000 Performance Incentive Plan (the “2000 Plan”) such that no further awards will be granted under the 2000 Plan .

 

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, 201 3

 

The following table presents share-based compensation expense included in our statements of comprehensive loss for the three and six months ended June 30 , 2014 and 2013 , respectively:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Six months ended

 

June 30,

 

 

June 30,

 

 

2014

 

 

2013

 

 

2014

 

 

2013

Research and development expense

$

349,409 

 

$

343,246 

 

$

733,484 

 

$

704,841 

Sales and marketing expense

 

69,574 

 

 

70,191 

 

 

143,752 

 

 

143,857 

General and administrative expense

 

1,028,170 

 

 

1,868,836 

 

 

2,393,938 

 

 

3,192,819 

Total share-based expense

$

1,447,153 

 

$

2,282,273 

 

$

3,271,174 

 

$

4,041,517 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30 , 2014 , we had approximately $ 1.5   million in 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 approximatel y   1. 2 year s    

 

For the three-month periods ended June 30 , 2014 and 2013, share-based compensation expense above includes approximately $ 158 ,000 and $ 1,215 ,000 , respectively, recognized upon vesting of RSUs granted to consultants.  For the six-month periods ended June 30, 2014 and 2013, share-based compensation expense above includes approximately $633,000 and $1,836,000 , respectively, recognized upon vesting of RSUs granted to consultants As of June 30 , 2014, we have an aggregate of 750,000 performance-based RSUs awarded to consultants that remain unvested.  The se RSUs vest only upon achievement of certain market conditions, as measured based on the closing price of our common stock during a period ending on the earlier of (i) December 31, 2015 or (ii) thirty days following termination of the related consulting agreement.  Upon thirty days’ notice, the consulting agreements may be terminated and any unvested portion of the RSUs will be cancelled.    

 

8 .   Stock Authorization and Issuance

 

On March 13, 2014 , we completed the sale of an aggregate of 2,666,666 shares of our common stock, at a price of $ 4.50 per share, to two accredited investors in a private placement transaction pursuant to Rule 506 of Regulation D under the Securities Act of 1933, as amended .   The offering represented 2.8 % of our outstanding common stock on an after-issued basis.   The aggregate net proceeds from this offering, after deduction of offering costs which are recorded to additional - paid -in- capital in the accompanying balance sheets, were approximately $ 1 1.9 million We filed a registration statement on April 7, 2014   to register the resale of the common stock issued in the private placement transaction.  The registration statement became effective on   May 1, 2014 (File No. 333- 195105 ).  In the event the registration statement ceases to be effective for any continuous period that exceeds 10 consecutive calendar days or more than an aggregate of fifteen calendar days during any 12-month period or any time during the six-month anniversary of the registration date (a “Registration Default”), we shall pay the investors an amount in

8


 

cash equal to 1% of the aggregate purchase price paid for each 30-day period of a Registration Default.   The maximum penalty that we may incur under this arrangement is 6 % of the aggregate purchase price, or approximately $ 7 20,000 subject to reduction for shares sold or transferred and not held at the penalty determination date.  We do not believe that payment under the registration payment arrangement is probable and therefore no related liability has been recorded in the accompanying financial 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 June 30 , 2014 and December 31, 201 3 :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

Total

 

 

Quoted Prices in Active Markets  (Level 1)

 

 

Significant Other Observable Inputs     (Level 2)

 

 

Significant Unobservable Inputs      (Level 3)

June 30, 2014:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

Money market funds

$

83,154 

 

$

83,154 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale securities:

 

 

 

 

 

 

 

 

 

 

 

Municipal bond mutual funds

$

21,315,309 

 

$

21,315,309 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

Total

 

 

Quoted Prices in Active Markets  (Level 1)

 

 

Significant Other Observable Inputs     (Level 2)

 

 

Significant Unobservable Inputs        (Level 3)

December 31, 2013:

 

 

 

 

 

 

 

 

 

 

 

Available for sale securities:

 

 

 

 

 

 

 

 

 

 

 

Municipal bond mutual funds

$

16,957,489 

 

$

16,957,489 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10 .  Commitments and Contingencies

 

Legal Proceedings

 

From time to time, we are subject to legal proceedings and claims which arise in the ordinary course of our business, including those matters discussed below.   We believe, based on advice from our outside legal counsel, that the final disposition of such matters will not have a material adverse impact on our financial position, results of operation or liquidity.  

 

ParkerVision vs. Qualcomm, Inc.

On July 20, 2011, we filed a patent infringement action in the United States District Court of the Middle District of Florida against Qualcomm Incorporated (“Qualcomm”) seeking unspecified damages and injunctive relief for infringement of several of our patents related to radio-frequency receivers and the down-conversion of electromagnetic signals.  Qualcomm filed a counterclaim against us alleging

9


 

invalidity and unenforceability of each of our patents.  In October 2013, a jury awarded us $172.7 million in damages for Qualcomm’s direct and indirect infringement of eleven claims of four of our patents.  The jury also found that Qualcomm did not prove its claims of invalidity for any of the eleven claims of the four patents in the case, and furthermore found that we did not prove our claims of willfulness, which would have allowed enhancement of the jury-awarded damages.  On June 20, 2014, a final district court ruling was issued in which the court denied Qualcomm’s motion to overturn the jury’s verdict regarding validity of the patents but granted Qualcomm’s motion to overturn the jury’s verdict of infringement.   On June 25, 2014, we filed a notice of appeal with the court to appeal the decision of non-infringement to the U.S. Court of Appeals for the Federal Circuit.  The collection of damages from Qualcomm, if any, will be dependent upon the final disposition of this case. 

 

ParkerVision vs. Qualcomm and HTC

On May 1, 2014, we filed a complaint against Qualcomm, Qualcomm Atheros, Inc., HTC Corporation and HTC America, Inc. seeking unspecified damages and injunctive relief for infringement of seven of our patents related to RF up-conversion, systems for control of multi-mode, multi-band communications, baseband innovations including control and system calibration, and wireless protocol conversion. The complaint was filed in the United States District Court of the Middle District of Florida and service of the complaint on the defendants is pending.

 

RPX and Farmwald vs. ParkerVision

In June 2014, RPX Corporation and Michael Farmwald (collectively, the “Petitioners”) filed petitions for Inter Partes review (“IPR”) with the United States Patent and Trademark Office (“USPTO”) related to three of the four patents in our July 2011 district court case against Qualcomm.  In July 2014, the Petitioners filed an additional IPR petition for the fourth patent in the July 2011 district court case against Qualcomm. The USPTO will review the petitions within six months of the filing date and determine whether or not to institute an IPR. 

 

Maxtak Capital Advisors LLC vs. ParkerVision

On December 28, 2011, Maxtak Capital Advisors LLC, Maxtak Partners LP and David Greenbaum (the “Plaintiffs”) filed a complaint in the United States District Court of New Jersey against us, our chief executive officer, Jeffrey Parker and one of our directors, Robert Sterne, alleging common law fraud and negligent misrepresentation of material facts concerning the effectiveness of our technology and our success in securing customers.  The Plaintiffs we re seeking unspecified damages, including attorneys’ fees and costs.  In October 2012, the court granted our motion to transfer the case to the Middle District of Florida where discovery commenced

 

In July 2014, we conducted a demonstration of our d2p technology for the Plaintiffs.  As a result of the demonstration and the discovery conducted to date, the parties entered into a confidential resolution of this action.  In connection with the resolution, the Plaintiffs stated that they agree and acknowledge that the d2p technology works in a manner consistent with our representations during the period covered by the litigation.  The Plaintiffs further agreed and acknowledged that their allegations with regard to the efficacy of the d2p technology and all statements in their complaint attributed to or based upon the pvnotes website, Michael Farmwald, Barbara Paldus, Alfred Riddle, Steven Cripps and Joy Laskar with regard to the efficacy of our d2p technology are without merit.  The financial terms of the confidential resolution will have no impact on our financial position, results of operations or liquidity.

 

 

 

 

 

 

 

 

10


 

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, within the meaning of the Private Securities Litigation Reform Act of 1995, including, in particular, statements about our future plans, objectives, and expectations contained in this Item.  When used in this report and in future filings by us with the Securities and Exchange Commission (“SEC”), the words or phrases “expects”, “will likely result”, “will continue”, “is anticipated”, “estimated” or similar expressions are intended to identify “forward-looking statements.”  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, including the risks and uncertainties identified in our annual report on Form 10-K for the fiscal year ended December 31, 201 3 (the “Annual Report”) and in this Item 2 of Part I of this quarterly report.  Examples of such risks and uncertainties include general economic and business conditions, competition, unexpected changes in technologies and technological advances, the timely development and commercial acceptance of new products and technologies, reliance on key business and sales relationships, reliance on our intellectual property, the outcome of our intellectual property litigation and the ability to obtain adequate financing in the future.  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.

 

Corporate Website

 

We webcast our earnings calls and certain events we participate in or host with members of the investment community in the investor relations section of our website. Additionally, we announce investor information, including news and commentary about our business, financial performance and related matters, SEC filings, notices of investor events, and our press and earnings releases, in the investor relations section of our website ( http://ir.parkervision.com ). Investors and others can receive notifications of new information posted in the investor relations section in real time by signing up for email alerts and/or RSS feeds. Further corporate governance information, including our governance guidelines, board committee charters, and code of conduct, is also available in the investor relations section of our website under the heading “Corporate Governance.” The content of our website is not incorporated by reference into this quarterly report   or in any  other report or document we file with the SEC , and any references to our website are intended to be inactive textual references only.

 

Overview

 

We are in the business of innovating fundamental wireless technologies.   We design, develop and market our proprietary radio frequency (“RF”) technologies and products for use in semiconductor circuits for wireless communication products.  

 

We have a three-part growth strategy that includes intellectual property licensing and/or product ventures, intellectual property enforcement, and product and component development, manufacturing and sales.  We have launched a licensing/product venture campaign to explore licensing and joint product development opportunities with wireless communications companies that make, use or sell chipsets and/or products that incorporate RF technology.  In February 2014, we engaged the intellectual property firm of 3LP Advisors, LLC (“3LP”) to assist in managing our licensing operations.  We believe there are a number of wireless communications companies that can benefit from the use of the RF technologies we have developed, whether through a license or, in certain cases, a joint product venture that would include licensing rights.   We will pay 3LP success fees as a percentage of net proceeds received by us for licensing and licensing-related transactions.  During the first 12 months of the term of their engagement,

11


 

we will also pay 3LP a monthly retainer, one-half of which will be offset against success fees earned by 3LP.

 

From time to time we expect to be involved in litigation in order to protect or defend our intellectual property rights.   Since 2011, we have been involved in patent infringement litigation against Qualcomm Incorporated (“Qualcomm”) for their unauthorized use of our receiver technology.   In October 2013, a jury awarded us $172.7 million in past damages for Qualcomm’s infringement of four of our patents.  In June 2014, the district court issued its final ruling overturning the jury’s infringement decision.  We have appealed this decision to the U.S. Court of Appeals.   In May 2014, we filed a second patent infringement litigation action against Qualcomm, as well as their customer, HTC, for their infringement of seven patents related to different technologies of ours.  In June 2014, RPX Corporation and Michael Farmwald filed petitions for Inter Partes review with the U.S. Patent and Trademark Office challenging the four patents in our initial Qualcomm infringement case.  Refer to “Legal Proceedings” in Note 10 to our financial statements included in Item 1 for a complete discussion of the proceedings in these matters.  Litigation is inherently uncertain, and as such, we cannot predict the ultimate outcome of these matters.  The unfavorable resolution of one or more of these matters could adversely affect our future business plans.

 

The law firm of McKool Smith is representing us in both Qualcomm infringement actions on a partial contingency basis.  We believe there are funding opportunities available to us for financing our portion of the litigation fees for the May 2014 patent infringement action in return for an additional contingent share of any damages awarded in the case, should we determine that such financing is prudent.  We expect to continue to incur a portion of the legal costs related to the initial Qualcomm case, including the fees and costs for appellate counsel, and legal costs to defend against the IPR actions. 

 

Our product development and marketing efforts are focused on our RF technologies in mobile and other communications industries that use RF.  We have developed and are actively marketing a number of RF component products to industries that presently use less highly integrated semiconductors than would typically be found in mobile wireless applications.  These are applications such as industrial, infrastructure, and military devices.  In addition, we are working on the continued development and marketing of RF integrated circuits that function with VIA Telecom’s baseband products for mobile handset customers.

 

Since 2005, we have generated no product or royalty revenue from our wireless technologies.  We have made significant investments in developing and protecting our technologies and products, the returns on which are dependent upon the generation of future revenues for realization. 

 

Liquidity and Capital Resources

On March 13, 2014, we completed the sale of an aggregate of 2,666,666 shares of our common stock, at a price of $4.50 per share, to two accredited investors in a private placement transaction pursuant to Rule 506 of Regulation D under the Securities Act of 1933, as amended.   The offering represented 2.8 % of our outstanding common stock on an after-issued basis.   The aggregate net proceeds from this offering, after deduction of offering costs, were approximately $ 11.9 million and will be used for general working capital purposes.  We filed a registration statement on April 7, 2014 to register the resale of the common stock issued in the private placement transaction.  The registration statement became effective on May 1, 2014 (File No. 333-195105).     

 

As of June 30, 2014 , we had working capital of approximately $ 20.7 million which represented an increase of approximately $ 5.5 million from working capital at December 31, 201 3 .  This increase in working capital is a result of approximately $11.9 million in net proceeds from the March 2014 offering and approximately $ 1.7 million in proceeds from the exercise of stock options and warrants, less approximately $ 8.6 million to fund operations and approximately $0. 5 million used for patents and fixed assets during the first six months of 2014.  

12


 

Our future business plans call for continued investment in sales, marketing, customer support and product development for our technologies and products, as well as investment in continued protection of our intellectual property ,   including the prosecution of new patents and defense of existing patents.  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, our ability to secure a reasonable share of the market through additi onal product offerings with our customers , our ability to secure new customers for our products or technologies , and /or our ability to defend our intellectual property. 

 

Revenue generated from technology licenses and/or the sale of RF chipsets or component products, if any, in 2014 may not be sufficient to cover our operational expenses, and we expect that our continued losses and use of cash will be funded from available working capital.  In addition, we expect that available working capital will be used for initial production start-up costs, including test programs and production tooling, and for litigation expenses to defend our intellectual property. 

 

We believe o ur current capital resources are sufficient to support our currently projected liquidity requirements through 2014 and beyond The long-term continuation of our business plan is dependent upon the generation of sufficient revenues from our technologies and/or 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 reduce operating costs.  Failure to generate sufficient revenues, raise additional capital through debt or equity financings, and/or 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.  

 

Results of Operations for Each of the Three and Six M onths Ended June 30, 2014 and 2013

 

Revenue and Gross Margin

We had no product or royalty revenue for the three and six months ended June 30, 2014 and 2013

 

Revenue from litigation awards, including settlements, if any, will be recognized upon final disposition of the litigation, including the outcome of any settlement discussions and/or appeals.  Refer to “Legal Proceedings”   in note 10 for further discussion of our patent infringement litigation against Qualcomm and others.

 

Research and Development Expenses

Research and development expenses consist primarily of engineering and related management and support personnel costs; fees for outside engineering design services which we use from time to time to supplement our internal resources; amortization and depreciation expense related to our patents and other assets used in product development; prototype production and materials costs, which represent the fabrication and packaging costs for prototype integrated circuits, as well as the cost of supporting components for prototype board development; software licensing and support costs, which represent the annual licensing and support maintenance for engineering design and other software tools; and rent and other overhead costs for our engineering design facility.  Personnel costs include share-based compensation amounts which have been determined based on the grant date fair value of equity-based awards to our employees and then recorded to expense over the vesting period of the award. 

 

Our research and development expenses dec reased approximately $ 335, 000, or 13 %, during the three months ended June 30, 2014 when compared to the same period in 201 3 .   This de crease is primarily due to a decrease in fees for outside design and development services of approximately $284,000 and a decrease in travel expenses of approximately $61,000.     

 

Our research and development expenses dec reased approximately $ 436, 000, or 9 %, during the six months ended June 30, 2014 when compared to the same period in 201 3 .   This de crease is primarily due to a

13


 

decrease in fees for outside design and development services of approximately $321,000, a decrease in travel expenses of approximately $69,000, and a decrease in prototype costs of approximately $61,000.     

 

The decrease in outside design and development services and prototype costs for the three and six month periods is a result of the timing of development projects.  The decrease in travel costs for the three and six month periods is primarily the result of a decline in international travel related to development projects.  We expect a significant percentage of our current working capital will continue to be invested in our research and product development activities. However, cash expenditures for research and product development activities will fluctuate on a quarter to quarter basis depending on the timing of various projects. 

 

Marketing and Selling Expenses

Marketing and selling expenses consist primarily of marketing and sales personnel costs, including share-based compensation and travel costs, and outside professional fees.  Marketing and selling expenses increased approximately $362,000, or 85% during the three months ended June 30, 2014 when compared to the same period in 201 3.  Marketing and selling expenses increased approximately $622,000, or 76% during the six months ended June 30, 2014 when compared to the same period in 201 3.  These increases are primarily due to increases in outside professional fees as a result of certain business development activities, including those related to licensing operations and component products,   of approximately $316,000 and $523,000 during the three and six months ended June 30, 2014, respectively.

 

General and Administrative Expenses

General and administrative expenses consist primarily of executive, director, finance and administrative personnel costs, including share-based compensation, and costs incurred for insurance, shareholder relations and outside professional services, including litigation and other legal services. 

 

General and administrative expenses decreased approximately $1,302,000, or 31%, during the three months ended June 30, 2014 when compared to the same period in 2013, primarily as a result of a decrease in share-based compensation of approximately $841,000 and a decrease in litigation fees and expenses of approximately $454,000.  General and administrative expenses decreased approximately $2,141,000, or 27%, during the six months ended June 30, 2014 when compared to the same period in 2014, primarily as a result of a decrease in share-based compensation of approximately $799,000 and a decrease in litigation fees and expense of approximately $1,315,000.   The decrease in share-based compensation is primarily related to a decrease in performance-based RSUs vesting during the three and six months ended June 30, 2014 when compared to the same period in 2013.  Litigation fees and expenses declined substantially following the conclusion of the patent infringement jury trial against Qualcomm in October 2013.

 

Net Loss and Net Loss per Common Share

Our net loss de creased approximately $ 1,286,000 , or 18 %, during the three months ended June 30, 2014 when compared to the same period in 201 3 .  This de crease is primarily the result of a n   $835,000 decrease in share-based compensation expense and a $454,000 decrease in litigation expenses .  On a per share basis, our net loss decreased $0.02 per common share, or 25%, for the three months ended June 30, 2014 when compared to the same period in 201 3 as a result of a   $1,275,000 decrease in operating expenses and a 9.7 % increase in the weighted average shares outstanding for the period.

 

Our net loss de creased approximately $ 1,976,000 , or 15 %, during the six months ended June 30, 2014 when compared to the same period in 201 3 .  This de crease is primarily the result of a $770,000 decrease in share-based compensation expense and a $1,315,000 decrease in litigation expenses .  On a per share basis, our net loss decreased $0.04 per common share, or 25%, for the six months ended June 30, 2014 when compared to the same period in 201 3 as a result of a   $1,955,000 decrease in operating expenses and an 11.0 % increase in the weighted average shares outstanding for the period.

 

14


 

Off-Balance Sheet Transactions, Arrangements and Other Relationships

As of June 30, 2014 , we had outstanding warrants to purchase 1,399,204 shares of common stock that were issued in connection with the sale of equity securities in a private place ment transaction in November 2010. These warrants have an exercise price of $0.54 per share and a remaining contractual life of approximately 1 . 4 years.  The estimated grant date fair value of these warrants of $ 355,778 is included in shareholders’ equity in our balance sheets. 

 

Critical Accounting Policies

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2013-11 Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”) to provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists thereby reducing diversity in practice. The amendments in ASU 2013-11 became effective for the Company on January 1, 2014 and did not have a material impact on the Company’s financial statements .

 

There have been no other changes in critical accounting policies from those stated in our Annual Report. 

 

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk.    

 

For the three and six months ended June 30, 2014, there were no material changes from the market risk information disclosed under Item 7A of Part II of our Annual Report .

 

 

ITEM 4.  Controls and Procedures .  

 

Evaluation of Disclosure Controls and Procedures

As of June 30, 2014, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our “disclosure controls and procedures , ” as defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934 , as amended (the “Exchange Act” ).   Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of June 30, 2014 .  

 

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(e) under the Exchange Act that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control   over financial reporting.

PART II - OTHER INFORMATION

 

ITEM 1.  Legal Proceedings.

 

Refer ence is made to the section entitled “Legal Proceedings” in Note 1 0 to our unaudited financial statements for a discussion of current legal proceedings , which discussion is incorporated herein by reference

 

ITEM 1A.  Risk Factors.

 

There have been no material changes from the risk factors disclosed in Item 1A of Part I of our Annual Report .  In addition to the information in this quarterly report, the risk factors disclosed in our Annual Report 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.   

 

15


 

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

ITEM 3. Defaults Upon Senior Securities.

 

None.

 

ITEM 4.  Mine Safety Disclosures.

 

Not applicable.

 

ITEM 5.  Other Information. 

 

On August 11, 2014, we issued a press release announcing our results of operations and financial condition for the three and six months ended June 30, 2014.  The press release is attached hereto as Exhibit 99.1.

 

The foregoing information, including the exhibit related thereto, is furnished in response to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any disclosure document of the Registrant, except as shall be expressly set forth by specific reference in such document.

 

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 3.2 of Annual Report on Form 10-K for the year ended December 31, 1998)

 

 

3.4

Amendment to Certificate of Incorporation, dated July 17, 2000 (incorporated by reference from Exhibit 3.1 of Quarterly Report on Form 10-Q for the quarter ended June 30, 2000)

 

 

3. 5

Certificate of Designations of the Preferences, Limitations, and Relative Rights of Series E Preferred Stock, dated November 21, 2005 (incorporated by reference from Exhibit 4.02 of Form 8-K filed November 21, 2005)

 

 

3.6

Amended and Restated Bylaws (incorporated by reference from Exhibit 3.1 of Current Report on Form 8-K filed August 1 4 , 200 7 )

 

 

3.7

Articles of Amendment to Articles of Incorporation, dated October 3, 2012 (incorporated by reference from Exhibit 3.1   of Current Report on Form 8-K filed October 4, 2012)

 

 

3.8

Articles of Amendment to Articles of Incorporation, dated July 11, 2013 (incorporated by reference from Exhibit 3.1 of Current Report on Form 8-K filed July 12, 2013)

16


 

 

 

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*

 

 

101.INS

XBRL Instance Document*

 

 

101.SCH

XBRL Taxonomy Extension Schema*

 

 

101.CAL

XBRL Taxonomy Extension Calculation Linkbase*

 

 

101.DEF

XBRL Taxonomy Extension Definition Linkbase*

 

 

101.LAB

XBRL Taxonomy Extension Label Linkbase*

 

 

101.PRE

XBRL Taxonomy Extension Presentation Linkbase*

* Filed herewith .

17


 

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

 

 

 

 

August 11, 2014

By : /s/Jeffrey L. Parker

 

Jeffrey L. Parker

 

Chairman and Chief Executive Officer

 

(Principal Executive Officer)

 

 

 

 

 

 

August 11, 2014

By: /s/Cynthia L. Poehlman

 

Cynthia L. Poehlman

 

Chief Financial Officer

 

(Principal Financial Officer and Principal

 

 Accounting Officer)

 

18


 

EXHIBIT INDEX

 

 

10.

 

31.1

Section 302 Certification of Jeffrey L. Parker, CEO

31.2

Section 302 Certification of Cynthia Poehlman, CFO

32.1

 

99.1

Section 906 Certification

 

Earnings Press Release

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

 

19


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.

 

Ugust

 

 

 

Date: August 11 , 2014

Name: /s/ Jeffrey L. Parker

 

Title: Chief Executive Officer (Principal 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: August 11 , 2014

Name :/s/Cynthia L. Poehlman

 

Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting 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 June 30 , 2014 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.

 

 

 

Ugust 7

 

 

 

Dated: August 11 , 2014

Name: /s/ Jeffrey L. Parker

 

Title: Chief Executive Officer (Principal

 

Executive Officer)

 

 

 

 

 

 

 

 

Dated: August 11 , 2014

Name: /s/ Cynthia L. Poehlman

 

Title: Chief Financial Officer  (Principal

 

Financial Officer and Principal Accounting Officer)

 

 


DESCRIPTION: 1 PARKERVISION_LOGO_BLACK    

NEWS RELEASE

 

PARKERVISION REPORTS SECOND QUARTER 2014 RESULTS

 

Management to Host Conference Call and Webcast Today at 4:30 p.m. ET

JACKSONVILLE, Fla., August 11, 2014 –   ParkerVision, Inc. (NASDAQ:PRKR) , a developer and marketer of semiconductor technology solutions for wireless applications, today announced results for the three and six months ended June 30, 2014.

 

Second Quarter 2014 Business Highlights and Recent Developments

 

·

Awarded fourteen new patents in five jurisdictions in the first half of 2014.

o

These patents are the result of the Company’s continuing investment in research and development in wireless communications and covers innovations in:

§

radio frequency power transmission modulation and amplification

§

radio frequency down-conversion, and

§

antenna control technology

 

·

Filed a second patent infringement complaint against Qualcomm Incorporated (“Qualcomm”) on May 1, 2014 that also names HTC Corporation as a defendant.

 

o

The complaint cites seven patents relating to RF up-conversion and baseband technologies which are different technologies than the radio-frequency (“RF”) energy transfer sampling down-conversion technology that is the subject of ParkerVision’s first infringement suit against Qualcomm.

 

·

Received final district court ruling on June 20, 2014 related to outstanding motions in the first ParkerVision v. Qualcomm patent infringement case:

 

o

Qualcomm's motion to overturn the jury’s decision regarding validity of patents was denied .

 

o

Qualcomm's motion to overturn the jury’s decision regarding infringement was granted .

 

o

Appealed the district court’s decision regarding infringement in ParkerVision v. Qualcomm to the U.S. Court of Appeals for the Federal Circuit and announced engagement of Don Dunner with Finnegan, Henderson, Farabow, Garrett & Dunner to join McKool Smith in leading the appeal.

 


 

·

Had petitions for Inter Partes review filed in June and July 2014 against the four patents asserted in the first Qualcomm case. The Sterne Kessler and Finnegan Henderson law firms are representing ParkerVision in this matter. 

   

·

Held an Investor and Analyst Meeting on July 15, 2014, featuring an update by ParkerVision’s management on the Company's business strategies and market opportunities for the Company's wireless innovations and products worldwide. ParkerVision's legal counsel also provided an update on the Company's patent infringement litigation and related actions. The presentation can be found in the “Events and Presentations” section of the Company’s Investor Relations website, http://ir.parkervision.com/events.cfm .  

 

·

Reached a resolution of the litigation filed in late 2011 against the Company by three former shareholders that will have no impact on the financial position, results of operations or liquidity of the Company.

 

Jeffrey Parker, Chairman and Chief Executive Officer, commented, “Although the progress we continue to make has been overshadowed by the district court’s recent ruling overturning the jury’s verdict of infringement in our Qualcomm patent infringement case, we believe this will be a temporary setback. Our technical team has innovated wireless technologies that are well positioned to meet the needs of the exploding IoT (Internet of Things) market, and we are working to ensure that we are in the best possible position to take advantage of the exciting opportunities in this rapid growth market. Additionally, we are experiencing good customer reception to our recently introduced RF demodulator chips targeted at markets such as infrastructure and other applications, and which provide best-in-class performance at a fraction of the power consumption of any competing product.”

 

Parker continued, “Regarding our ongoing patent litigation, we are fortunate to have the counsel of some of the best minds in this area of the law, and are well prepared to handle the requirements of the upcoming appeal. Given the facts of our case, we are optimistic that the appellate court will support the jury’s finding of infringement. “

 

 

Second Quarter and First Half 2014 Financial Highlights

 

·

Net loss in the second quarter of 2014 decreased to $5. 8 million, or $.06 per common share, compared with a net loss of $7.1 million, or $.08 per common share, for the second quarter of 2013.

 

·

Net loss for the first half of 2014 decreased to $11.6 million, or $0.12 per common share, compared with a net loss of $13.6 million, or $0.16 per common share, for the first half of 2013.

 


 

·

General and administrative expenses in the first half decreased by $2.1 million, or 27%, year-over-year driven primarily by a decrease in litigation fees and related expenses.

 

·

Cash used in operating activities during the three and six months ended June 30, 2014 was $4.0 million and $8.6 million, respectively.

 

·

Cash and securities available for sale as of June 30, 2014 were $21.8 million.

 

Conference Call

The Company will host a conference call and webcast today at 4:30 p.m. Eastern to review its first quarter financial results. The conference call will be accessible by telephone at 1-877-561-2750 , at least five minutes before the scheduled start time.  International callers should dial 1-763-416-8565 . The conference call may also be accessed by means of a live webcast on our website at http://ir.parkervision.com/events.cfm . The conference webcast will also be archived and available for replay on our website at www.parkervision.com for a period of 90 days.

 

About ParkerVision

ParkerVision, Inc. designs, develops and markets its proprietary radio-frequency (RF) technologies that enable advanced wireless solutions for current and next generation communications networks. Protected by a highly-regarded, worldwide patent portfolio, the Company’s solutions for wireless transfer of RF waveforms address the needs of a broad range of wirelessly connected devices for high levels of RF performance coupled with best-in-class power consumption. 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, 2013 and the Forms 10Q for the quarters ended March 31, 2014 and June 30, 2014. These risks and uncertainties could cause actual results to differ materially from those currently anticipated or projected.

 

(TABLES FOLLOW)


 

 

Results of Operations (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

(in thousands, except per share amounts)

June 30,

 

March 31,

 

2014

 

2013

 

2014

 

2013

Revenue

$

 

$

 

$

 

$

Cost of sales

 

 

 

 

 

 

 

  Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

2,241 

 

 

2,576 

 

 

4,505 

 

 

4,942 

Marketing and selling expenses

 

788 

 

 

426 

 

 

1,445 

 

 

823 

General and administrative expenses

 

2,846 

 

 

4,148 

 

 

5,719 

 

 

7,860 

  Total operating expenses

 

5,875 

 

 

7,150 

 

 

11,669 

 

 

13,625 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income and interest expense

 

34 

 

 

23 

 

 

56 

 

 

36 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(5,841)

 

$

(7,127)

 

$

(11,613)

 

$

(13,589)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

$

(0.06)

 

$

(0.08)

 

$

(0.12)

 

$

(0.16)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

96,999 

 

 

88,437 

 

 

95,360 

 

 

85,906 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Highlights (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2014

 

December 31,

 

 

(unaudited)

 

 

2013

Cash and available for sale securities

$

21,758 

 

$

17,180 

Prepaid and other assets

 

491 

 

 

555 

Property and equipment, net

 

332 

 

 

307 

Intangible assets, net

 

8,423 

 

 

8,552 

Total assets

 

31,004 

 

 

26,594 

 

 

 

 

 

 

Current liabilities

 

1,591 

 

 

2,526 

Long-term liabilities

 

98 

 

 

22 

Shareholders’ equity

 

29,315 

 

 

24,046 

Total liabilities and shareholders’ equity

$

31,004 

 

$

26,594 

 

###