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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

 x 

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 ¨ 

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 000-22904

PARKERVISION, INC.

(Exact name of registrant as specified in its charter)

Florida

59-2971472

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No)

4446-1A Hendricks Avenue, Suite 354

Jacksonville, Florida 32207

(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)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

None

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 every Interactive Data File required to be submitted 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 such file). Yes x   No ¨ .

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

Large accelerated filer  ¨

Accelerated filer  ¨

Non-accelerated filer   x

Smaller reporting company  x

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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 May 6, 2022, 77,935,740 shares of the issuer’s common stock, $.01 par value, were outstanding. 


1


PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements (Unaudited)

PARKERVISION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except par value data)

March 31,

December 31,

2022

2021

CURRENT ASSETS:

Cash and cash equivalents

$

198

$

1,030

Prepaid expenses

463

574

Other current assets

26

25

Total current assets

687

1,629

Intangible assets, net

1,696

1,785

Operating lease right-of-use assets

7

7

Other assets, net

17

19

Total assets

$

2,407

$

3,440

CURRENT LIABILITIES:

Accounts payable

$

944

$

706

Accrued expenses:

Salaries and wages

43

27

Professional fees

56

109

Other accrued expenses

488

555

Related party note payable, current portion

94

94

Operating lease liabilities, current portion

116

155

Total current liabilities

1,741

1,646

LONG-TERM LIABILITIES:

Secured contingent payment obligation

36,212

37,372

Unsecured contingent payment obligations

4,549

5,691

Convertible notes

2,870

2,895

Related party note payable, net of current portion

585

609

Operating lease liabilities, net of current portion

3

4

Total long-term liabilities

44,219

46,571

Total liabilities

45,960

48,217

SHAREHOLDERS' DEFICIT:

Common stock, $0.01 par value, 150,000 shares authorized, 77,814 and 76,992 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

778

770

Additional paid-in capital

388,749

387,865

Accumulated deficit

(433,080)

(433,412)

Total shareholders' deficit

(43,553)

(44,777)

Total liabilities and shareholders' deficit

$

2,407

$

3,440

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

2


PARKERVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in thousands, except per share data)

Three Months Ended

March 31,

2022

2021

Licensing revenue

$

-

$

-

Cost of sales

(3)

-

Gross margin

(3)

-

Selling, general and administrative expenses

1,933

2,280

Total operating expenses

1,933

2,280

Other income

28

-

Interest expense

(62)

(37)

Change in fair value of contingent payment obligations

2,302

(150)

Total other income (loss), net

2,268

(187)

Net income (loss)

332

(2,467)

Other comprehensive income, net of tax

-

-

Comprehensive income (loss)

$

332

$

(2,467)

Earnings (loss) per common share:

Basic

$

0.00

$

(0.04)

Diluted

$

0.00

$

(0.04)

Weighted average common shares outstanding:

Basic

77,553

63,695

Diluted

106,859

63,695

 

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

3


PARKERVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT

(UNAUDITED)

(in thousands)

Three Months Ended

March 31,

2022

2021

Total shareholders' deficit, beginning balances

$

(44,777)

$

(43,821)

Common stock

Beginning balances

770

586

Issuance of common stock and warrants in public and private offerings, net of issuance costs and initial fair value of contingent payment rights

-

62

Issuance of common stock upon exercise of options and warrants

5

27

Issuance of common stock and warrants for services

-

6

Issuance of common stock upon conversion and payment of interest-in-kind on convertible debt

3

17

Share-based compensation, net of shares withheld for taxes

-

1

Ending balances

778

699

Additional paid-in capital

Beginning balances

387,865

376,954

Cumulative effect of change in accounting principle

-

(1,126)

Issuance of common stock and warrants in public and private offerings, net of issuance costs and initial fair value of contingent payment rights

(18)

4,734

Issuance of common stock upon exercise of options and warrants

77

397

Issuance of common stock and warrants for services

-

391

Issuance of common stock upon conversion and payment of interest-in-kind on convertible debt

79

459

Share-based compensation, net of shares withheld for taxes

746

952

Ending balances

388,749

382,761

Accumulated deficit

Beginning balances

(433,412)

(421,361)

Cumulative effect of change in accounting principle

-

279

Comprehensive income (loss) for the period

332

(2,467)

Ending balances

(433,080)

(423,549)

Total shareholders' deficit, ending balances

$

(43,553)

$

(40,089)

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

4


PARKERVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

Three Months Ended

March 31,

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$

332

$

(2,467)

Adjustments to reconcile net income (loss) to net cash used in

   operating activities:

Depreciation and amortization

83

97

Share-based compensation

746

953

(Gain) loss on changes in fair value of contingent payment obligations

(2,302)

150

Loss on disposal of assets

8

-

Changes in operating assets and liabilities:

Prepaid expenses and other assets

110

282

Accounts payable and accrued expenses

191

(3,970)

Operating lease liabilities

(40)

(34)

Total adjustments

(1,204)

(2,522)

Net cash used in operating activities

(872)

(4,989)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

-

(1)

Net cash used in investing activities

-

(1)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net (payments) proceeds from issuance of common stock, contingent payment rights and warrants in public and private offerings

(18)

5,208

Net proceeds from exercise of options and warrants

82

424

Principal payments on notes payable

(24)

(22)

Net cash provided by financing activities

40

5,610

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

(832)

620

CASH AND CASH EQUIVALENTS, beginning of period

1,030

1,627

CASH AND CASH EQUIVALENTS, end of period

$

198

$

2,247

 

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

5


PARKERVISION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Description of Business

ParkerVision, Inc. and its wholly-owned German subsidiary, ParkerVision GmbH (collectively “ParkerVision”, “we” or the “Company”), is in the business of innovating fundamental wireless technologies and products.

We have designed and developed proprietary radio frequency (“RF”) technologies and integrated circuits and license those technologies to others for use in 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 of America (“U.S.”) and certain foreign jurisdictions. We believe certain patents protecting our proprietary technologies have been broadly infringed by others, and therefore the primary focus of our business plan is the enforcement of our intellectual property rights through patent infringement litigation and licensing efforts. We currently have patent enforcement actions ongoing in various U.S. district courts against providers of mobile handsets, smart televisions and other WiFi products and, in certain cases, their chip suppliers for the infringement of a number of our RF patents. We have made significant investments in developing and protecting our technologies.

2. Liquidity and Going Concern

Our accompanying condensed consolidated 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 for a period of at least one year from the issuance date of these condensed consolidated financial statements. These condensed consolidated 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.

We have incurred significant losses from operations and negative cash flows from operations in every year since inception and have utilized the proceeds from the sales of debt and equity securities and contingent funding arrangements with third parties to fund our operations, including the cost of litigation. For the three months ended March 31, 2022, we recognized net income of approximately $0.3 million and incurred negative cash flows from operations of approximately $0.9 million. At March 31, 2022, we had cash and cash equivalents of approximately $0.2 million and an accumulated deficit of approximately $433.1 million. Additionally, a significant amount of future proceeds that we may receive from our patent enforcement and licensing programs will first be utilized to repay borrowings and legal fees and expenses under our contingent funding arrangements. These circumstances raise substantial doubt about our ability to continue to operate as a going concern for a period of one year following the issue date of these condensed consolidated financial statements.

In May 2022, we received proceeds of $0.3 million from the sale of convertible notes (see Note 14). Our current capital resources, including the proceeds from the May 2022 transaction, are not sufficient to meet our liquidity needs for the next twelve months and we will be required to seek additional capital.

Our ability to meet our liquidity needs for the next twelve months is dependent upon (i) our ability to successfully negotiate licensing agreements and/or settlements relating to the use of our technologies by others in excess of our contingent payment obligations, (ii) our ability to control operating costs, and/or

6


(iii) our ability to obtain additional debt or equity financing. We expect that proceeds received by us from patent enforcement actions and technology licenses over the next twelve months may not be sufficient to cover our working capital requirements.

We expect to continue to invest in the support of our patent enforcement and licensing programs. 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 and contingent payment obligations. In the event that we do not generate sufficient revenues, we will be required to obtain additional funding through public or private debt or equity financing or contingent fee arrangements and/or reduce operating costs. Failure to generate sufficient revenues, raise additional capital through debt or equity financings or contingent fee arrangements, and/or reduce operating costs will 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 condensed consolidated financial statements for the period ended March 31, 2022 were prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or future years. All normal and recurring adjustments which, in the opinion of management, are necessary for a fair statement of the consolidated financial condition and results of operations have been included.

The year-end condensed consolidated balance sheet data was derived from audited financial statements for the year ended December 31, 2021. Certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with GAAP have been omitted from these interim condensed consolidated financial statements. These interim condensed consolidated financial statements should be read in conjunction with our latest Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Annual Report”).

The condensed consolidated financial statements include the accounts of ParkerVision, Inc. and its wholly-owned German subsidiary, ParkerVision GmbH, after elimination of all intercompany transactions and accounts.  

 

4. Accounting Policies

There have been no changes in accounting policies from those stated in our 2021 Annual Report. We do not expect any newly effective accounting standards to have a material impact on our financial position, results of operations or cash flows when they become effective. 

5. Revenue

We have an active monitoring and enforcement program with respect to our intellectual property rights that includes seeking appropriate compensation from third parties that utilize or have utilized our intellectual property without a license. As a result, we may receive payments as part of a settlement or in the form of court-awarded damages for a patent infringement dispute. We recognize such payments as

7


revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.”

No revenue was recognized during the three-month periods ended March 31, 2022 or 2021.

6. Earnings (Loss) per Common Share

Basic earnings (loss) per common share is determined based on the weighted-average number of common shares outstanding during each period.

The dilutive effect of outstanding options and warrants is calculated using the treasury stock method. The dilutive effect of shares underlying convertible notes was calculated using the if-converted method.

The following table shows the computation of basic and diluted earnings (loss) per share for the three months ended March 31, 2022 and 2021 (net income and shares in thousands):

March 31,

2022

2021

Numerator:

Net income (loss)

$

332

$

(2,467)

Effect of dilutive securities

56

-

Net income (loss) adjusted for dilutive effect

$

388

$

(2,467)

Denominator:

Weighted-average basic shares outstanding

77,553

63,695

Effect of dilutive securities

29,306

-

Weighted-average diluted shares

106,859

63,695

Basic earnings (loss) per share

$

0.00

$

(0.04)

Diluted earnings (loss) per share

$

0.00

$

(0.04)

Diluted earnings (loss) per common share for the three months ended March 31, 2022 excludes options and warrants that are anti-dilutive. For the three months ended March 31, 2021, all shares underlying outstanding options, warrants, unvested restricted stock units (“RSUs”) and convertible notes were excluded from the computation of diluted loss per share as their effect would have been anti-dilutive. The anti-dilutive common share equivalents at March 31, 2022 and 2021 were as follows (in thousands):

March 31,

2022

2021

Options outstanding

373

24,875

Warrants outstanding

7,346

12,169

Unvested RSUs

-

85

Shares underlying convertible notes

-

21,957

7,719

59,086

 

8


7. Prepaid Expenses

Prepaid expenses consist of the following (in thousands):

March 31,

December 31,

2022

2021

Prepaid services

$

400

$

523

Prepaid insurance

30

16

Prepaid licenses, software tools and support

23

23

Other prepaid expenses

10

12

$

463

$

574

  

Prepaid services at March 31, 2022 and December 31, 2021 include approximately $0.4 million and $0.5 million, respectively of consulting services paid in shares of stock or warrants to purchase shares of stock in the future.

8. Intangible Assets

Intangible assets consist of the following (in thousands):

March 31,

December 31,

2022

2021

Patents and copyrights

$

14,683

$

14,755

Accumulated amortization

(12,987)

(12,970)

$

1,696

$

1,785

 

9. Debt

Notes Payable

Related Party Note Payable

We have an unsecured promissory note of approximately $0.7 million payable to Sterne, Kessler, Goldstein, & Fox, PLLC (“SKGF”), a related party, for outstanding unpaid fees for legal services. The note, as amended, accrues interest at a rate of 4% per annum and provides for monthly payments of principal and interest of $10,000 with a final balloon payment of approximately $0.59 million due at the maturity date of April 30, 2023. We are currently in compliance with all the terms of the note. 

Convertible Notes

Our convertible notes represent 5-year promissory notes that are convertible, at the holders’ option, into shares of our common stock at fixed conversion prices. Interest payments are made on a quarterly basis and are payable, at our option, subject to certain equity conditions, in either cash, shares of our common stock, or a combination thereof. The number of shares issued for interest is determined by dividing the interest payment amount by the closing price of our common stock on the trading day immediately prior to the scheduled interest payment date. To date, all interest payments on the convertible notes have been made in shares of our common stock. We have recognized the convertible notes as debt in our condensed consolidated financial statements.

We have the option to prepay the majority of the notes, subject to a premium on the outstanding principal prepayment amount of 25% prior to the two-year anniversary of the note issuance date, 20% prior to the

9


three-year anniversary of the note issuance date, 15% prior to the four-year anniversary of the note issuance date, or 10% thereafter.  The notes provide for events of default that include failure to pay principal or interest when due, breach of any of the representations, warranties, covenants or agreements made by us, events of liquidation or bankruptcy, and a change in control.  In the event of default, the interest rate increases to 12% per annum and the outstanding principal balance of the notes plus all accrued interest due may be declared immediately payable by the holders of a majority of the then outstanding principal balance of the notes.

Convertible notes payable at March 31, 2022 and December 31, 2021 consist of the following (in thousands):

Fixed

Principal Outstanding as of

Conversion

Interest

March 31,

December 31,

Description

Rate

Rate

Maturity Date

2022

2021

Convertible notes dated September 10, 2018

$0.40

8.0%

September 10, 2023

$

200

$

200

Convertible note dated September 19, 2018

$0.57

8.0%

September 19, 2023

425

425

Convertible notes dated February/March 2019

$0.25

8.0%

February 28, 2024 to March 13, 2024

750

750

Convertible notes dated June/July 2019

$0.10

8.0%

June 7, 2024 to July 15, 2024

295

320

Convertible notes dated July 18, 2019