ParkerVision, Inc.
PARKERVISION INC (Form: 10-Q, Received: 11/09/2015 16:27:55)

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 September 30 , 2015

 

      (   ) 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 November 4 , 2015 ,     98,8 82,362 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

12 

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

16 

Item 4.    Controls and Procedures

16 

 

 

PART II - OTHER INFORMATION

 

Item 1.    Legal Proceedings

17 

Item 1A. Risk Factors

17 

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

17 

Item 3.    Defaults Upon Senior Securities

17 

Item 4.    Mine Safety Disclosures

17 

Item 5.    Other Information

17 

Item 6.    Exhibits

17 

 

 

SIGNATURES

19 

EXHIBIT INDEX

20 

 

 

 

 

 

2


 

PAR T I - FINANCIAL INFORMATION

 

ITEM 1.  Financial Statements

PARKERVISION, INC.

BALANCE SHEETS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

2015

 

 

2014

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

$

305,650 

 

$

218,925 

Available-for-sale securities

 

1,413,450 

 

 

10,985,000 

Accounts receivable, net

 

5,475 

 

 

Inventories

 

142,146 

 

 

66,468 

Prepaid expenses and other

 

482,474 

 

 

812,577 

Total current assets

 

2,349,195 

 

 

12,082,970 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, net

 

640,522 

 

 

633,084 

 

 

 

 

 

 

INTANGIBLE ASSETS, net

 

7,709,929 

 

 

8,002,638 

Total assets

$

10,699,646 

 

$

20,718,692 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Accounts payable

$

2,057,886 

 

$

475,200 

Accrued expenses:

 

 

 

 

 

Salaries and wages

 

290,427 

 

 

394,964 

Professional fees

 

450,669 

 

 

940,581 

Other accrued expenses

 

211,694 

 

 

59,277 

Capital leases, current portion

 

99,427 

 

 

40,337 

Deferred rent, current portion

 

69,481 

 

 

54,426 

Deferred revenue

 

22,492 

 

 

Total current liabilities

 

3,202,076 

 

 

1,964,785 

 

 

 

 

 

 

LONG-TERM LIABILITIES

 

 

 

 

 

Capital leases, net of current portion

 

710 

 

 

10,244 

Deferred rent, net of current portion

 

71,186 

 

 

127,964 

Total long-term liabilities

 

71,896 

 

 

138,208 

Total liabilities

 

3,273,972 

 

 

2,102,993 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

   

 

 

 

 

 

SHAREHOLDERS' EQUITY:

 

 

 

 

 

Common stock, $.01 par value, 150,000,000 shares authorized, 99,880,279  and 97,183,433 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively  

 

988,803 

 

 

971,834 

Accumulated other comprehensive loss

 

(2,911)

 

 

Warrants outstanding

 

1,655,778 

 

 

355,778 

Additional paid-in capital

 

332,117,559 

 

 

330,867,750 

Accumulated deficit

 

(327,333,555)

 

 

(313,579,663)

Total shareholders' equity

 

7,425,674 

 

 

18,615,699 

Total liabilities and shareholders' equity

$

10,699,646 

 

$

20,718,692 

 

 

 

 

 

 

 

 

 

 

 

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

3


 

 

 

 

 

 

PARKERVISION, INC.

STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product and services revenue

$

5,483 

 

$

 

$

5,483 

 

$

Cost of sales

 

5,046 

 

 

 

 

5,046 

 

 

Gross margin

 

437 

 

 

 

 

437 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

1,094,076 

 

 

1,945,365 

 

 

4,545,867 

 

 

6,450,539 

Marketing and selling expenses

 

308,535 

 

 

727,833 

 

 

1,184,848 

 

 

2,173,174 

General and administrative expenses

 

1,725,252 

 

 

3,758,950 

 

 

8,018,569 

 

 

9,478,073 

Total operating expenses

 

3,127,863 

 

 

6,432,148 

 

 

13,749,284 

 

 

18,101,786 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

(1,145)

 

 

24,925 

 

 

12,222 

 

 

85,175 

Interest expense

 

(6,945)

 

 

(1,905)

 

 

(17,267)

 

 

(5,439)

Total interest and other income and interest expense

 

(8,090)

 

 

23,020 

 

 

(5,045)

 

 

79,736 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(3,135,516)

 

 

(6,409,128)

 

 

(13,753,892)

 

 

(18,022,050)

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale securities

 

8,797 

 

 

 

 

(2,911)

 

 

8,215 

Other comprehensive income (loss), net of tax

 

8,797 

 

 

 

 

(2,911)

 

 

8,215 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

$

(3,126,719)

 

$

(6,409,128)

 

$

(13,756,803)

 

$

(18,013,835)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

$

(0.03)

 

$

(0.07)

 

$

(0.14)

 

$

(0.19)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

98,667,367 

 

 

97,017,009 

 

 

97,922,109 

 

 

95,918,402 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

4


 

PARKERVISION, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2015

 

 

2014

 

 

2015

 

 

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(3,135,516)

 

$

(6,409,128)

 

$

(13,753,892)

 

$

(18,022,050)

Adjustments to reconcile net loss to net cash used in

 

 

 

 

 

 

 

 

 

 

 

operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

327,551 

 

 

318,470 

 

 

976,952 

 

 

943,857 

Share-based compensation

 

115,201 

 

 

690,168 

 

 

985,466 

 

 

3,961,342 

(Gain) loss on disposal of assets

 

(1,000)

 

 

 

 

(4,200)

 

 

887 

Realized loss on available-for-sale securities

 

5,891 

 

 

 

 

12,951 

 

 

6,869 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

14,925 

 

 

 

 

(5,475)

 

 

Inventories

 

 

 

 

 

(19,735)

 

 

Prepaid expenses and other assets

 

110,948 

 

 

(120,384)

 

 

580,103 

 

 

(57,465)

Accounts payable and accrued expenses

 

433,721 

 

 

1,069,742 

 

 

1,173,966 

 

 

103,534 

Deferred rent

 

(13,907)

 

 

(11,902)

 

 

(41,723)

 

 

49,673 

Deferred revenue

 

2,492 

 

 

 

 

22,492 

 

 

Total adjustments

 

995,822 

 

 

1,946,094 

 

 

3,680,797 

 

 

5,008,697 

Net cash used in operating activities

 

(2,139,694)

 

 

(4,463,034)

 

 

(10,073,095)

 

 

(13,013,353)

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

Purchase of available-for-sale investments

 

(3,890)

 

 

(24,925)

 

 

(949,312)

 

 

(11,586,399)

Proceeds from sale of investments

 

2,350,000 

 

 

4,755,000 

 

 

10,505,000 

 

 

11,960,000 

Proceeds from sale of assets

 

1,000 

 

 

 

 

4,200 

 

 

Payments for patent costs and other intangible assets

 

(76,446)

 

 

(91,496)

 

 

(542,803)

 

 

(505,906)

Purchases of property and equipment

 

(3,648)

 

 

(224,000)

 

 

(51,271)

 

 

(264,640)

Net cash provided by (used in) investing activities

 

2,267,016 

 

 

4,414,579 

 

 

8,965,814 

 

 

(396,945)

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

Net proceeds from issuance of common stock and warrants in

 

 

 

 

 

 

 

 

 

 

 

public and private offerings

 

 

 

 

 

1,298,000 

 

 

11,946,365 

Net proceeds from exercise of options and warrants

 

 

 

 

 

 

 

1,655,550 

Principal payments on capital lease obligations

 

(45,515)

 

 

(14,436)

 

 

(103,994)

 

 

(34,872)

Net cash (used in) provided by financing activities

 

(45,515)

 

 

(14,436)

 

 

1,194,006 

 

 

13,567,043 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH

 

 

 

 

 

 

 

 

 

 

 

 EQUIVALENTS

 

81,807 

 

 

(62,891)

 

 

86,725 

 

 

156,745 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, beginning of period

 

223,843 

 

 

442,333 

 

 

218,925 

 

 

222,697 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, end of period

$

305,650 

 

$

379,442 

 

$

305,650 

 

$

379,442 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.  In addition, we offer engineering consulting and design services, for a negotiated fee, to assist customers in developing prototypes and/or products incorporating wireless technologies .  

 

We believe certain patents protecting our proprietary technologies have been broadly infringed by others and therefore our business plan include s   enforcement of our intellectual property rights through patent infringement litigation and licensing efforts.    

 

2.  Liquidity and Going Concern

 

Our financial statements were prepared assuming we would continue as a going concern, which contemplates that we will continue in operation for the foreseeable future and will be able to realize assets and settle liabilities and commitments in the normal course of business.  These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that could result should we be unable to continue as a going concern.

 

In June 2015, we implemented a reduction in staff which resulted in a reduction in our recurring payroll costs of approximately 40% (see Note 12).  Also in June 2015, we entered into a fully contingent funding arrangement for our ongoing patent infringement litigation against Qualcomm, HTC and Samsung in district court.  Despite these cost reduction measures, revenues generated from patent enforcement actions, technology licenses and/or the sale of products and services in 2015 will not be sufficient to cover our operational expenses for 2015. 

 

Our capital resources at September 30, 2015 include cash, cash equivalents, and available-for-sale securities of approximately $1.7 million.  These capital resources are not sufficient to support our liquidity requirements through 2015.  At September 30, 2015, our current liabilities exceed our current assets by approximately $0.85 million.  These circumstances raise substantial doubt about our ability to continue as a going concern. 

 

We may secure additional working capital through public or private debt or equity financing arrangements, although no such arrangements are in place at this time.   Failure to obtain additional funding from debt or equity financing arrangements may require us to further reduce our operating costs which could have a material adverse effect on our ability to meet our business objectives.  Failure to obtain additional funding and/or further reduce operating costs could have a material adverse effect on our ability to meet both short-term and longer-term liquidity needs.  In addition, the incurrence of debt may result in the imposition of operational limitations and other covenant and payment obligations which may be burdensome to us.

 

Our future business plans call for continued investment in patent enforcement activities to protect our intellectual property rights.   We believe these efforts will be largely, if not entirely, funded under contingent-based funding arrangements where the funding party is repaid from proceeds resulting from our patent licensing and enforcement activities.  In December 2014, we entered into a funding agreement

6


 

with 1624 PV, LLC (“1624”) whereby 1624 committed to fund up to $7 million for legal fees and expenses for specified future patent infringement litigation.   To the extent that we draw down committed funds under this agreement, we will be obligated to reimburse and compensate 1624 from the proceeds resulting from the specified actions as well as proceeds from other ongoing and/or future patent-related activities.   To date, we have not drawn any funds under this agreement, and therefore have no contingent obligation to 1624.  We expect to continue to evaluate this and other litigation funding arrangements to support our future business plans.

 

Our future business plans also call for continued investment in product development and sales, marketing, and customer support for our technologies and products.  Our ability to generate revenues sufficient to offset costs is subject to successfully enforcing our intellectual property rights and securing new product and licensing customers for our technologies.   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. 

 

3 .  Basis of Presentation

 

The accompanying unaudited financial statements for the period ended September 30, 2015 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 nine   months ended September 30 , 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 201 5 or future years.  All normal and recurring adjustments which, in the opinion of management, are necessary for a fair statement of the financial condition and results of operations have been included.  Certain reclassifications have been made to prior period amounts to conform to the current period presentation.

 

The year-end balance sheet data was derived from audited financial statements for the year ended December 31, 2014 , 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 4  

 

4.   Accounting Policies

 

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11, “Simplifying the Measurement of Inventory (Topic 330).” ASU 2015-11 simplifies the accounting for the valuation of all inventory not accounted for using the last-in, firstout (“LIFO”) method by prescribing inventory be valued at the lower of cost and net realizable value. ASU 2015-11 is effective for public companies' annual periods, including interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis. Early adoption is permitted. We do not expect the adoption of ASU 2015-11 to have a material effect on our financial position, results of operations or cash flows.

 

In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”) ,  to provide guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures.  ASU 2014-15 is effective for interim and annual periods beginning after December 15, 2016 and earlier adoption is permitted.  We are currently assessing the impact of this update on future discussions of our liquidity position in our financial statements and have not early adopted ASU 2014-15 .

 

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 4 .

 

7


 

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.

 

O ptions and warrants to purchase 13, 086,687 and 7,765,232 shares of common stock were outstanding at September 30 , 2015 and 2014 , respectively.  In addition, unvested restricted stock units (“RSUs”), representing 758,334 and 2,309,901 shar es of common stock, were outstanding at September 30 , 2015 and 2014 , respectively.   These options, warrants and RSUs were excluded from the computation of diluted loss per common share as their effect would have been anti-dilut ive.

 

6. Inventor ies

 

Inventorie s consisted of the following :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2015

 

 

December 31, 2014

Work-in-process

$

98,396 

 

$

66,468 

Finished goods

 

43,750 

 

 

Total inventories

$

142,146 

 

$

66,468 

 

 

 

 

 

 

 

 

7 .   Intangible Assets

 

Intangible assets consist of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2015

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Book Value

Patents and copyrights

$

20,159,280 

 

$

12,449,351 

 

$

7,709,929 

Prepaid licensing fees

 

574,000 

 

 

574,000 

 

 

 

$

20,733,280 

 

$

13,023,351 

 

$

7,709,929 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Book Value

Patents and copyrights

$

19,616,477 

 

$

11,613,839 

 

$

8,002,638 

Prepaid licensing fees

 

574,000 

 

 

574,000 

 

 

 

$

20,190,477 

 

$

12,187,839 

 

$

8,002,638 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8 .  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, 201 4

 

8


 

The following table presents share-based compensation expense included in our statements of comprehensive loss for the three and nine   month period s ended September 30, 2015 and 2014 , respectively:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Nine months ended

 

September 30,

 

 

September 30,

 

 

2015

 

 

2014

 

 

2015

 

 

2014

Research and development expense

$

82,670 

 

$

199,165 

 

$

204,928 

 

$

932,649 

Sales and marketing expense

 

18,423 

 

 

42,528 

 

 

47,934 

 

 

186,280 

General and administrative expense

 

94,923 

 

 

448,475 

 

 

830,414 

 

 

2,842,413 

Total share-based expense

$

196,016 

 

$

690,168 

 

$

1,083,276 

 

$

3,961,342 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three and nine   month periods ended September 30, 2015, total share based compensation expense includes $ 80,8 16 and $97,811 , respectively, representing the fair value of shares withheld for payment of payroll taxes on the distribution of employee share-based compensation awards. 

 

General and administrative share-based compensation expense includes expense recognized upon vesting of RSUs awarded to consultants of approximatel y   $ 29 ,000 and $ 50 ,000 for the three months ended S e ptember 30, 2015 and 2014, respectively, and approximately $ 221 ,000 and $ 68 3 ,000 , for the nine months ended September 30, 2015 and 2014, respectively.  As of September 30, 2015, we have an aggregate of 750,000 performance-based RSUs awarded to consultants that rem ain unvested.  The performance-based RSUs, awarded in November 2013, 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 agreements.  Achievement of the specified market conditions is not considered probable as of September 30, 2015 and , therefore no share-based compensation expense has been recorded for these awards .  Upon thirty days’ notice, the consulting agreements may be terminated and any unvested portion of the performance-based RSUs will be cancelled.   

 

As of September 30, 2015 , we had approximately $ 0.2   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   one year. 

 

9 .   Stock Authorization and Issuance

 

On January 15, 2015, we consummated the sale of three warrants, each for the purchase of up to 1,884,058 shares of our common stock at exercise prices of $1.50 ,   $2.50 and $3.50 , respectively, to 1624 PV, LLC (“1624”) for an aggregate purchase price of approximately $1.3 million.  The warrants are exercisable through January 15, 2018.  On January 26, 2015, we issued 250,000 shares of unregistered common stock to our securities counsel, Graubard Miller , in exchange for a $250,000 prepaid retainer for legal services.  The common stock issuable upon exercise of the warrants issued to 1624 and the shares of common stock issued to Graubard Miller were registered on Form S-3 (File No. 333-202802) which was declared effective on May 4, 2015.     

 

 

 

 

 

 

 

 

 

9


 

 

10 . 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 September 30 , 2015 and December 31, 201 4 :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

Total

 

 

Quoted Prices in Active Markets  (Level 1)

 

 

Significant Other Observable Inputs     (Level 2)

 

 

Significant Unobservable Inputs      (Level 3)

September 30, 2015:

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

Municipal bond mutual funds

$

1,413,450 

 

$

1,413,450 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

Total

 

 

Quoted Prices in Active Markets  (Level 1)

 

 

Significant Other Observable Inputs     (Level 2)

 

 

Significant Unobservable Inputs        (Level 3)

December 31, 2014:

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

Municipal bond mutual funds

$

10,985,000 

 

$

10,985,000 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 1 .  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.   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.   In addition, we are subject to the following legal proceedings:

 

ParkerVision vs. Qualcomm, Inc.

In October 2013, a jury in the United States District Court of the Middle District of Florida awarded us $172.7 million in damages in a patent infringement action filed against Qualcomm Incorporated (“Qualcomm”) in July 2011 (the “Qualcomm I Action.”) .  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.  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 patent validity but granted Qualcomm’s motion to overturn the jury’s verdict of infringement.   We appealed this decision to the U.S. Court of Appeals for the Federal Circuit.  Qualcomm filed a counter-appeal on the issues of validity and damages.   On July 31, 2015, the appellate court issued its opinion, upholding the district court’s determination of non-infringement.  In addition, the appellate court overturned the district court’s decision on validity, ruling that ten of the eleven patent claims in the case were invalid.  On September 14, 2015, we filed a petition for a rehearing on the

10


 

infringement decision with respect to the one claim that was not invalidated by the court (“Claim 27 of the ‘518 Patent”) .  O n October 2, 2015, our petition for rehearing was denied.     We are currently evaluating our options for filing an appeal with the Supreme Court .

 

ParkerVision vs. Qualcomm, HTC, and Samsung

In August 2014, we served a complaint in the United States District Court of the Middle District of Florida against Qualcomm, Qualcomm Atheros, Inc., HTC Corporation, HTC America, Inc., Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively “Defendants”) seeking unspecified damages and injunctive relief for infringement of eleven of our patents related to RF up-conversion, down-conversion, systems for control of multi-mode, multi-band communications, baseband innovations including control and system calibration, and wireless protocol conversion (the “Qualcomm II Action”) .  In November 2014, certain of the Defendants filed counterclaims of non-infringement and invalidity for all patents in the case.  A claim construction hearing was held on August 12, 2015 .  The court has not yet issued its ruling with regard to claim construction.  Discovery in the case is ongoing and a trial start date is scheduled for August 1, 2016.  

 

RPX and Farmwald vs. ParkerVision

In mid-2014 , RPX Corporation and Michael Farmwald (collectively, the “Petitioners”) filed petitions for Inter Partes review (“IPR”) with the Patent Trial and Appeal Board of the United States Patent and Trademark Office (“PTAB”) seeking to invalidate eleven claims included in the four patents in our Qualcom m I Action , as well as a number of additional claims related to those same four patents .  In December 2014 , the PTAB issued   a   decision to institute trial on three of the four petitions which included nine of the eleven claims in the Qualcomm I Action and excluded Claim 27 of the ‘518 Patent In January 2015, the PTAB denied institution of trial for the fourth petition which included one of the eleven claims in the Qualcomm I Action. 

 

As a result of the appellate court’s decision in July 2015 invalidating ten of the eleven claims in the Qualcomm I Action , we determined not to pur s ue defense of the remaining claims under the three outstanding IPRs.     O n October 22, 2015, the PTAB dismissed   these three   cases.

 

Qualcomm Inc. and Qualcomm Atheros, Inc. vs. ParkerVision

On August 27, 2015, Qualcomm, Inc. and Qualcomm Atheros, Inc. filed an aggregate of ten petitions for IPR with the PTAB seeking to invalidate certain claims related to three of the eleven patents asserted in our Qualcomm II Action .  Our preliminary responses to these petitions, if any, must be filed by November 27, 2015. 

   

12.  Termination Benefits

 

On June 8, 2015, we implemented a reduction in staff in order to reduce our ongoing operating expenses, resulting in charge s to operating expenses for the three and nine   month periods ended September 30, 2015.   Accrued severance benefits consist of the following for the three and nine month periods ended September 30, 2015 :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Nine months ended

 

 

September 30, 2015

 

 

September 30, 2015

Accrued severance benefits, beginning of period

$

85,000 

 

$

Severance costs incurred

 

(1,700)

 

 

311,300 

Costs paid or settled

 

(83,300)

 

 

(311,300)

Accrued severance benefits, end of period

$

 

$

 

 

 

 

 

 

 

 

11


 

Approximately $ 25 ,000 and $71,000 of the accrued severance benefits were settled by the issuance of share-based compensation during the three and nine month periods ended September 30, 2015.  Accrued severance benefits are included in accrued expenses in the accompanying balance sheets .

 

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 quarterly 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 quarterly 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 4 (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 expended significant financial and other resources to research and develop our RF technologies and to obtain patent protection for those technologies in the United States and certain foreign jurisdictions.  We believe certain patents protecting our proprietary technologies have been broadly infringed by others and therefore our business plan includes enforcement of our intellectual property rights through patent infringement litigation and licensing efforts.

 

We have a three-part growth strategy that includes intellectual property licensing and/or product ventures, intellectual property enforcement, and product and component sales and design services.  We have made

12


 

significant investments in developing and protecting our technologies and products, the returns on which are dependent upon the generation of future revenues from licensing and/or product sales for realization. 

 

Liquidity and Capital Resources

At September 30, 2015, our current liabilities exceed our current assets by approximately $0.85 million.  This represented a decrease of approximately $ 11.0 million from working capital at December 31, 2014 as a result of the use of approximately $ 10.1 million to fund operations and approximately $0. 6 million used for patents and fixed assets during the first nine months of 2015, partially offset by proceeds of $1.3 million from the sale of warrants .  

 

Cash used for operations in the first nine months of 2015 decreased approximately $ 2.9 million from cash used for operations in the same period in 2014.  This decrease is primarily the result of a reduction in operating expenses due to a staff reduction along with the timing on payments of litigation related expenses.

 

In June 2015, we implemented a reduction in staff which resulted in a 37% reduction in our personnel and related costs for the three month period ended September 30, 201 5 as compared to the same period in 201 4 .  Also in June 2015 , we entered into a fully contingent funding arrangement for our ongoing patent infringement litigation against Qualcomm Incorporated (“Qualcomm”) and other w hich is expected to reduce our future litigation fees and expenses. 

 

Despite our cost reduction measures, revenue generated from patent enforcement actions, technology licenses and/or the sale of products in 2015 will not be sufficient to cover our operational expenses for 2015.  In addition, o ur current capital resources will not be sufficient to support our liquidity requirements through 2015.  At September 30, 2015, our accounts payable included approximately $2.0 million due to law firms primarily in connection with patent infringement and Inter Partes Review (“IPR”) defense activities (see Note 11 in Item 1) .  We are working with these firms on longer term payment plans for these liabilities.

 

We may secure additional working capital through public or private debt or equity financing arrangements, although no such arrangements are in place at this time.   Failure to obtain additional funding from debt or equity financing arrangements may require us to further reduce our operating costs which could have a material adverse effect on our ability to meet our business objectives.  Failure to obtain additional funding and/or further reduce operating costs could have a material adverse effect on our ability to meet both short-term and longer-term liquidity needs.  In addition, the incurrence of debt may result in the imposition of operational limitations and other covenant and payment obligations which may be burdensome to us.

 

Our future business plans calls for continued investment in patent enforcement activities to protect our intellectual property rights.   We believe these efforts will be largely, if not entirely, funded under contingent-based funding arrangements where the funding party is repaid from proceeds resulting from our patent licensing and enforcement activities.  In December 2014, we entered into a funding agreement with 1624 PV, LLC (“1624”) whereby 1624 committed to fund up to $7 million for legal fees and expenses for specified future patent infringement litigation.   To date, we have not drawn any funds under this agreement, and we have no payment obligation to 1624 under the agreement until we do so .  We expect to continue to evaluate this and other litigation funding arrangements to support our future business plans.  

 

Our future business plans also call for continued investment in product development and sales, marketing, and customer support for our technologies and products.  Our ability to generate revenues sufficient to offset costs is subject to successfully enforcing our intellectual property rights and securing new product and licensing customers for our technologies.   The long-term continuation of our business plan is

13


 

dependent upon the generation of sufficient revenues from our technologies and/or products to offset expenses .

 

Results of Operations for Each of the Three and Nine  M onths Ended September 30, 2015 and 2014

 

Revenue and Gross Margin

We reported   approximately $5,500 in product and service  r evenue for the three and nine month period s ended September 30, 2015 Our gross margin for the three and nine month periods ended September 30, 2015 was approximately $400 , or 7% Our cost of sales includes cost of materials and the cost of labor incurred under engineering design contracts.  At September 30, 2015, we have defer red revenue of approximately $2 2 ,000 representing component product inventory held by a distributor and prepaid fees under design contracts .

 

Revenues from product sales will be recognized at the time of shipment, or when title and risk of loss pass to the customer and other criteria for revenue recognition are met, if later. Revenues from services will be recognized when performance obligations are satisfied. Revenues 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.  Revenues from litigation awards and settlements, as well as certain other patent licensing activities may be reduced by contingent fees owed to law firms and litigation funding parties .    

 

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 decreased approximately $ 851,000, or 4 4%, during the three months ended September 30, 2015 when compared to the same period in 2014.  This decrease is primarily due to a reduction in personnel and related expenses of approximately $596,000 ,   decreases in share-based compensation expense of approximately $ 116 ,000 and a decrease in prototype production related expenses of approximately $ 86 ,000. 

 

Our research and development expenses decreased approximately $1, 905 ,000, or 30 %, during the nine months ended September 30, 2015 when compared to the same period in 2014.  This decrease is primarily due to a reduction in personnel and related expenses of approximately $ 652 ,000 , decreases in share-based compensation expense   of approximately $ 728 ,000 and a decrease in prototype production related expenses of approximately $ 378 ,000. 

 

The decrease in personnel and related expenses is primarily the result of the June 2015 reduction in workforce .  The decrease in share-based compensation expense is primarily a result of a decrease in expense attribution for long-term equity incentive awards granted to engineering executives in prior years and an increase in forfeitures of unvested awards as a result of our June 2015 workforce reduction.  

   

Prototype production expenses vary from period to period based on the timing of various development projects.  We expect a significant percentage of our current working capital will continue to be invested in our research and product development activities.  

14


 

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.  Our marketing and selling expenses decreased approximately $ 419 ,000, or 5 8 % during the three months ended September 30, 2015 when compared to the same period in 2014.  This decrease is primarily due to a reduction in outside professional fees of approximately $3 51 ,000.

 

Our marketing and selling expenses decreased approximately $ 988 ,000, or 45 % during the nine   months ended September 30, 2015 when compared to the same period in 2014.  This decrease is primarily due to a decrease in fees to outside professionals of approximately $ 834 ,000 and a decrease in share-based compensation expense of approximately $ 138 ,000.

 

The decrease in fees to outside professionals for the three and nine month periods ended September 30, 2015 is a result of a change in fee structure for certain consultants from a fixed monthly retainer to commission-based fees.  The decrease in share-based compensation expense for the nine month period ended September 30, 2015 is primarily the result of a decrease in expense attribution for long-term equity incentive awards granted to sales and marketing employees in prior years.  

 

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. 

 

Our general and administrative expenses decreased approximately $ 2,03 4 ,000, or 54 %, during the three months ended September 30, 2015 when compared to the same period in 2014, primarily as a result of a decrease in litigation related fees and expenses of approximately $1,599,000 and a decrease in share-based compensation expense of approximately $ 354 ,000 .    

 

Our general and administrative expenses decreased approximately $ 1,460 ,000, or 15 %, during the nine months ended September 30, 2015 when compared to the same period in 2014, primarily as a result of a decrease in share-based compensation expense of approximately $2,012,000 partially offset by an in crease in litigation related fees and expenses of approximately $ 416 ,000. 

 

The increase in litigation related fees and expenses for nine mont h period ended September 30, 2015 is a result of increased patent related legal activities including those related to our appellate case against Qualcomm, our patent infringement action against Qualcomm, HTC and Samsung in the middle district of Florida, and our defense of the IPR actions filed against us (see Note 11 in Item 1) .  In June 2015, we entered into a fully contingent fee arrangement with our counsel, McKool Smith , for our ongoing litigation against Qualcomm, HTC, and Samsung. This arrangement will reduce our future litigation fees and expenses in this case which is expected to go to trial in August 2016.  The decrease in our litigation fees and expenses for the three month period ended September 30, 2015 is largely related to our contingent fee arrangement with McKool Smith as well as decreased legal activities associated with the various actions (see Note 11 in Item 1).

 

The decrease in share-based compensation expense for the three and nine month periods ended September 30, 2015 is the result of a decrease in the price of our common stock which is used to determine fair value for non-employee RSUs vesting during the periods, as well as reduced expense attribution related to executive long-term equity incentive awards from prior years.

 

15


 

Off-Balance Sheet Transactions, Arrangements and Other Relationships

As of September 30, 2015, we had outstanding warrants to purchase 7,051,378 shares of common stock that were issued in connection with the sale of equity securities.  The estimated grant date fair value of these warrants of $ 1,655,778 is included in shareholders’ equity in our balance sheets. 

 

The warrants outstanding include warrants to purchase 1,399,204 shares of our common stock at an exercise price of $0.54 that were sold in connection with our November 2010 sale of equity securities.  These warrants expire d   unexercised on November 3, 2015.  The remaining warrants are comprised of three warrants, each for the purchase of up to 1,884,058 shares of our common stock at exercise prices of $1.50, $2.50 and $3.50, respectively that were issued to 1624 on January 15, 2015 .  The se warrants are exercisable through January 15, 2018. 

 

Contractual Obligations

There have been no material changes in our contractual obligations as set forth in our Annual Report.

 

Critical Accounting Policies

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11, “Simplifying the Measurement of Inventory (Topic 330).” ASU 2015-11 simplifies the accounting for the valuation of all inventory not accounted for using the last-in, first - out method by prescribing inventory be valued at the lower of cost and net realizable value. ASU 2015-11 is effective for public companies' annual periods, including interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis. Early adoption is permitted. We do not expect the adoption of ASU 2015-11 to have a material effect on our financial position, results of operations or cash flows.  

 

In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-1 5, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , (“ASU 2014-15”)  to provide guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures.  ASU 2014-15 is effective for interim and annual periods beginning after December 15, 2016 and earlier adoption is permitted.  We are currently assessing the impact of this update on future discussions of our liquidity position in our financial statements and have not early adopted ASU 2014-15 .

 

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 nine months ended September 30, 2015, 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 September 30, 2015, 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 September 30, 2015 .  

 

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(d ) 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.

16


 

PART II - OTHER INFORMATION

 

ITEM 1.  Legal Proceedings.

 

Refer ence is made to the section entitled “Legal Proceedings” in Note 1 1 to our unaudited financial statements included in this quarterly report 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.   

 

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 November 9 , 2015, we issued a press release announcing our results of operations and financial condition for the three and nine months ended September 30, 2015.  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)

 

 

17


 

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)

 

 

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 .

18


 

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

 

 

 

 

November 9 , 2015

By : /s/Jeffrey L. Parker

 

Jeffrey L. Parker

 

Chairman and Chief Executive Officer

 

(Principal Executive Officer)

 

 

 

 

 

 

November 9 , 2015

By: /s/Cynthia L. Poehlman

 

Cynthia L. Poehlman

 

Chief Financial Officer

 

(Principal Financial Officer and Principal

 

 Accounting Officer)

 

19


 

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

 

20


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: November 9 , 2015

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:   November 9 , 2015

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   September 30 , 201 5 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.

 

 

 

U gust 7

 

 

 

Dated: November 9 , 2015

Name: /s/ Jeffrey L. Parker

 

Title: Chief Executive Officer (Principal

 

Executive Officer)

 

 

 

 

 

 

 

 

Dated: November 9 , 2015

Name: /s/ Cynthia L. Poehlman

 

Title: Chief Financial Officer  (Principal

 

Financial Officer and Principal Accounting Officer)

 

 


THE PARKER LOGO

 

 

PARKERVISION REPORTS THIRD QUARTER 2015 RESULTS

 

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

JACKSONVILLE, Fla., November 9, 2015   ParkerVision, Inc. (NASDAQ:PRKR) , a developer and marketer of semiconductor technology solutions for wireless applications, today announced results for the three and nine months ended September 30, 2015.

The net loss for the third quarter of 2015 decreased 52% to $3.1 million, or $0.03 per common share, compared with a net loss of $6.4 million, or $0.07 per common share for the third quarter of 2014.  The net loss for the first nine months of 2015 decreased 23% to $13.8 million, or $0.14 per common share, compared with a net loss of $18.0 million, or $0.19 per common share, for the first nine months of 2014. 

Litigation related fees and expenses decreased by approximately $1.6 million in the third quarter of 2015 compared with the third quarter of 2014, largely as a result of contingent fee arrangements now in place.  In addition, personnel and related costs in the third quarter of 2015 decreased approximately 37% compared with the third quarter of 2014 as a result of the Company s June 2015 staff reduction. 

Share-based compensation expense decreased approximately $2.9 million on a year-to-date basis, and approximately $0.5 million in the third quarter of 20 1 5 compared with the prior year quarter, due in part to a significant reduction in new equity awards issued.

Cash and available-for-sale securities totaled approximately $1.7 million as of September 30, 2015.  Cash used for operations for the third quarter of 2015 decreased 52 % to $2.1 million, compared with $4.5 million in the third quarter of 2014.  For the nine months ended September 30, 2015, cash used for operations was $10.1 million, compared with $13.0 million for the nine months ended September 30, 20 1 4.

Jeffrey Parker, Chairman and Chief Executive Officer, commented, We are actively working to secure non-dilutive working capital financing for the company that will support our significantly reduced operating costs and enable us to move forward on a business plan that we believe will result in recognizing the most meaningful value from our innovations.  

 

. Conference Call

The Company will host a conference call and webcast on November 9, 2015 at 4:30 p.m. Eastern to review its third quarter 2015 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 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, 2014 and the Form 10Q for the quarter ended March 31, 2015, June 30, 2015, and September 30, 2015. These risks and uncertainties could cause actual results to differ materially from those currently anticipated or projected.

 

 

 

 

Contact:

 

 

 

Cindy Poehlman

 

 

Don Markley or

Chief Financial Officer

or

Matt Steinberg

ParkerVision, Inc

 

 

The Piacente Group

904-732-6100, cpoehlman@parkervision.com

 

 

212-481-2050, parkervision@tpg-ir.com

 

 

(TABLES FOLLOW)


 

ParkerVision, Inc.

Summary of Results of Operations (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

(in thousands, except per share amounts)

September 30,

 

September 30,

 

2015

 

2014

 

2015

 

2014

Revenue

$

 

$

 

$

 

$

Cost of sales

 

(5)

 

 

 

 

(5)

 

 

  Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

1,094 

 

 

1,945 

 

 

4,546 

 

 

6,450 

Marketing and selling expenses

 

309 

 

 

728 

 

 

1,185 

 

 

2,173 

General and administrative expenses

 

1,725 

 

 

3,759 

 

 

8,018 

 

 

9,478 

  Total operating expenses

 

3,128 

 

 

6,432 

 

 

13,749 

 

 

18,101 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income and interest expense

 

(8)

 

 

23 

 

 

(5)

 

 

79 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(3,136)

 

$

(6,409)

 

$

(13,754)

 

$

(18,022)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

$

(0.03)

 

$

(0.07)

 

$

(0.14)

 

$

(0.19)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

98,667 

 

 

97,017 

 

 

97,922 

 

 

95,918 

 

 

 

 

 

 

 

 

 

 

 

 

       Balance Sheet Highlights (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2015

 

December 31,

 

 

(unaudited)

 

 

2014

Cash and available-for-sale securities

$

1,719 

 

$

11,204 

Accounts receivable, net

 

 

 

Inventories, net

 

142 

 

 

66 

Prepaid and other assets

 

482 

 

 

813 

Property and equipment, net

 

641 

 

 

633 

Intangible assets, net

 

7,710 

 

 

8,003 

Total assets

 

10,699 

 

 

20,719 

 

 

 

 

 

 

Current liabilities

 

3,202 

 

 

1,965 

Long-term liabilities

 

72 

 

 

138 

Shareholders’ equity

 

7,425 

 

 

18,616 

Total liabilities and shareholders’ equity

$

10,699 

 

$

20,719