|
|
☒
|
QUARTERLY 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
|
|
|
|
Florida
|
|
59-2971472
|
(State
or other jurisdiction of incorporation or
organization)
|
|
(I.R.S. Employer
Identification No)
|
Title of Each
Class
|
Trading
Symbol
|
Name of Each
Exchange on Which Registered
|
Common Stock, $.01 par value
|
PRKR
|
OTCQB
|
Common Stock Rights
|
|
OTCQB
|
|
|
|
Large
accelerated filer ☐
|
|
Accelerated
filer ☐
|
Non-accelerated
filer ☒
|
|
Smaller reporting
company ☒
|
|
|
Emerging growth
company ☐
|
|
|
PART I
- FINANCIAL INFORMATION
|
|
|
|
|
|
PART
II - OTHER INFORMATION
|
|
|
|
|
June
30,
|
December
31,
|
|
2019
|
2018
|
CURRENT ASSETS:
|
|
|
Cash and cash equivalents
|
$63
|
$1,527
|
Accounts receivable, net
|
1
|
2
|
Finished goods inventories, net
|
58
|
98
|
Prepaid expenses
|
637
|
538
|
Other current assets
|
-
|
55
|
Held for sale assets
|
50
|
65
|
Total current assets
|
809
|
2,285
|
|
|
|
Property and equipment, net
|
96
|
129
|
Operating lease right-of-use assets
|
364
|
-
|
Intangible assets, net
|
3,341
|
3,902
|
Other assets, net
|
16
|
15
|
Total assets
|
$4,626
|
$6,331
|
|
|
|
CURRENT LIABILITIES:
|
|
|
Accounts payable
|
$1,087
|
$655
|
Accrued expenses:
|
|
|
Salaries and wages
|
128
|
122
|
Professional fees
|
597
|
493
|
Statutory court costs
|
424
|
115
|
Other accrued expenses
|
574
|
448
|
Related party note payable, current portion
|
108
|
37
|
Notes payable
|
1,825
|
2,400
|
Operating lease liabilities, current portion
|
264
|
86
|
Total current liabilities
|
5,007
|
4,356
|
|
|
|
LONG-TERM LIABILITIES:
|
|
|
Secured contingent payment obligation
|
24,734
|
25,557
|
Convertible notes, net
|
2,444
|
837
|
Related party note payable, net of current portion
|
754
|
799
|
Operating lease liabilities, net of current portion
|
373
|
91
|
Other long term liabilities
|
-
|
1
|
Total long-term liabilities
|
28,305
|
27,285
|
Total liabilities
|
33,312
|
31,641
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
SHAREHOLDERS' DEFICIT:
|
|
|
Common stock, $.01 par value, 75,000 shares authorized, 31,731
and 28,677 shares issued and outstanding at June 30, 2019
and December 31, 2018, respectively
|
317
|
287
|
Warrants outstanding
|
1,453
|
1,810
|
Additional paid-in capital
|
365,530
|
364,885
|
Accumulated deficit
|
(395,986)
|
(392,292)
|
Total shareholders' deficit
|
(28,686)
|
(25,310)
|
Total liabilities and shareholders' deficit
|
$4,626
|
$6,331
|
|
Three
Months Ended
|
Six
Months Ended
|
||
|
June
30,
|
June
30,
|
||
|
2019
|
2018
|
2019
|
2018
|
Product revenue
|
$25
|
$38
|
$35
|
$115
|
Cost of sales
|
(25)
|
(31)
|
(35)
|
(84)
|
Inventory impairment charge
|
-
|
(42)
|
-
|
(42)
|
Gross margin
|
-
|
(35)
|
-
|
(11)
|
|
|
|
|
|
Research and development expenses
|
-
|
1,001
|
334
|
1,875
|
Selling, general and administrative expenses
|
1,851
|
2,902
|
4,007
|
5,879
|
Total operating expenses
|
1,851
|
3,903
|
4,341
|
7,754
|
|
|
|
|
|
Interest and other income
|
-
|
-
|
-
|
2
|
Interest expense
|
(76)
|
(18)
|
(138)
|
(34)
|
Change in fair value of secured contingent
payment obligation
|
365
|
(538)
|
823
|
(987)
|
Total interest and other
|
289
|
(556)
|
685
|
(1,019)
|
|
|
|
|
|
Net loss
|
(1,562)
|
(4,494)
|
(3,656)
|
(8,784)
|
|
|
|
|
|
Other comprehensive loss, net of tax
|
-
|
-
|
-
|
-
|
|
|
|
|
|
Comprehensive loss
|
$(1,562)
|
$(4,494)
|
$(3,656)
|
$(8,784)
|
|
|
|
|
|
Basic and diluted net loss per common share
|
$(0.05)
|
$(0.18)
|
$(0.12)
|
$(0.39)
|
|
|
|
|
|
Weighted average common shares outstanding
|
30,888
|
24,564
|
30,042
|
22,672
|
|
Common
Stock, Par Value
|
Warrants
Outstanding
|
Additional
Paid-in Capital
|
Accumulated
Deficit
|
Total
Shareholders' Deficit
|
Balance as of December 31, 2018
|
$287
|
$1,810
|
$364,885
|
$(392,292)
|
$(25,310)
|
Cumulative effect of change in accounting principle
|
-
|
-
|
-
|
(38)
|
(38)
|
Issuance of common stock upon exercise of warrants
|
15
|
(357)
|
357
|
-
|
15
|
Issuance of common stock upon conversion and payment of
interest-in-kind on convertible debt
|
4
|
-
|
76
|
-
|
80
|
Share-based compensation, net of shares withheld for
taxes
|
-
|
-
|
67
|
-
|
67
|
Comprehensive loss for the period
|
-
|
-
|
-
|
(2,094)
|
(2,094)
|
Balance as of March 31, 2019
|
$306
|
$1,453
|
$365,385
|
$(394,424)
|
$(27,280)
|
Issuance of common stock for services
|
6
|
-
|
54
|
-
|
60
|
Issuance of common stock upon conversion and payment of
interest-in-kind on convertible debt
|
5
|
-
|
43
|
-
|
48
|
Share-based compensation, net of shares withheld for
taxes
|
-
|
-
|
48
|
-
|
48
|
Comprehensive loss for the period
|
-
|
-
|
-
|
(1,562)
|
(1,562)
|
Balance as of June 30, 2019
|
$317
|
$1,453
|
$365,530
|
$(395,986)
|
$(28,686)
|
|
Common
Stock, Par Value
|
Warrants
Outstanding
|
Additional
Paid-in Capital
|
Accumulated
Deficit
|
Total
Shareholders' Deficit
|
Balance as of December 31, 2017
|
$212
|
$826
|
$359,141
|
$(371,423)
|
$(11,244)
|
Issuance of common stock and warrants in public and private
offerings, net of issuance costs
|
25
|
-
|
2,227
|
-
|
2,252
|
Share-based compensation, net of shares withheld for
taxes
|
1
|
-
|
362
|
-
|
363
|
Comprehensive loss for the period
|
-
|
-
|
-
|
(4,290)
|
(4,290)
|
Balance as of March 31, 2018
|
238
|
826
|
361,730
|
(375,713)
|
(12,919)
|
Expiration of warrants
|
-
|
(491)
|
491
|
-
|
-
|
Issuance of common stock and warrants in public and private
offerings, net of issuance costs
|
20
|
-
|
1,103
|
-
|
1,123
|
Share-based compensation, net of shares withheld for
taxes
|
1
|
-
|
347
|
-
|
348
|
Comprehensive loss for the period
|
-
|
-
|
-
|
(4,494)
|
(4,494)
|
Balance as of June 30, 2018
|
$259
|
$335
|
$363,671
|
$(380,207)
|
$(15,942)
|
|
Three
Months Ended
|
Six
Months Ended
|
||
|
June
30,
|
June
30,
|
||
|
2019
|
2018
|
2019
|
2018
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
Net loss
|
$(1,562)
|
$(4,494)
|
$(3,656)
|
$(8,784)
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
Depreciation and amortization
|
199
|
312
|
411
|
633
|
Share-based compensation
|
48
|
348
|
115
|
711
|
Noncash lease expense
|
101
|
-
|
199
|
-
|
(Gain) loss on changes in fair value of secured contingent payment
obligation
|
(365)
|
538
|
(823)
|
987
|
Loss on disposal of equipment and other assets
|
221
|
-
|
215
|
-
|
Inventory impairment charges
|
-
|
42
|
-
|
42
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
1
|
(2)
|
1
|
16
|
Finished goods inventories
|
26
|
(14)
|
40
|
(213)
|
Prepaid expenses and other assets
|
(41)
|
(199)
|
15
|
(4)
|
Accounts payable and accrued expenses
|
524
|
701
|
1,081
|
499
|
Operating lease liabilities and deferred rent
|
(29)
|
(7)
|
(148)
|
(13)
|
Total adjustments
|
685
|
1,719
|
1,106
|
2,658
|
Net cash used in operating activities
|
(877)
|
(2,775)
|
(2,550)
|
(6,126)
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
Proceeds from redemption of available-for-sale
securities
|
-
|
6
|
-
|
26
|
Proceeds from sale of fixed assets
|
9
|
-
|
23
|
-
|
Purchases of property and equipment
|
-
|
-
|
-
|
(5)
|
Payments for patent costs and other intangible assets
|
(9)
|
(4)
|
(17)
|
(4)
|
Net cash provided by investing activities
|
-
|
2
|
6
|
17
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
Net proceeds from issuance of common stock and warrants in
public and private offerings
|
-
|
1,123
|
-
|
3,375
|
Net proceeds from exercise of options and
warrants
|
-
|
-
|
15
|
-
|
Net proceeds from debt financings
|
565
|
-
|
1,865
|
-
|
Principal payments on long-term debt
|
-
|
(21)
|
(800)
|
(21)
|
Proceeds from contingent payment obligation
|
-
|
1,500
|
-
|
1,500
|
Net cash provided by financing activities
|
565
|
2,602
|
1,080
|
4,854
|
|
|
|
|
|
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(312)
|
(171)
|
(1,464)
|
(1,255)
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, beginning of period
|
375
|
270
|
1,527
|
1,354
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end of period
|
$63
|
$99
|
$63
|
$99
|
|
June
30,
|
|
|
2019
|
2018
|
Options outstanding
|
1,082
|
1,001
|
Warrants outstanding
|
11,700
|
350
|
Unvested RSUs
|
-
|
322
|
Shares underlying convertible notes
|
11,096
|
-
|
|
23,878
|
1,673
|
|
June30,
|
December
31,
|
|
2019
|
2018
|
Prepaid services
|
$398
|
$252
|
Prepaid bonds for German statutory costs
|
191
|
199
|
Prepaid licenses, software tools and support
|
17
|
51
|
Prepaid insurance
|
14
|
19
|
Other prepaid expenses
|
17
|
17
|
|
$637
|
$538
|
|
June
30,
|
December
31,
|
|
2019
|
2018
|
Patents and
copyrights
|
$17,510
|
$18,350
|
Accumulated
amortization
|
(14,169)
|
(14,448)
|
|
$3,341
|
$3,902
|
|
Three
Months Ended
|
Six
Months Ended
|
|
June
30,
|
June
30,
|
|
2019
|
2019
|
Cash paid for amounts included in the measurement of lease
liabilities:
|
|
|
Operating cash flows from operating leases
|
$80
|
$195
|
Right-of-use assets obtained in exchange for operating lease
liabilities
|
-
|
563
|
|
Six
Months Ended
|
|
June
30,
|
|
2019
|
Weighted-average remaining lease term (in years):
|
|
Operating leases
|
1.3
|
Finance leases
|
0.7
|
Weighted average discount rate:
|
|
Operating leases
|
10.9%
|
Finance leases
|
8.7%
|
|
Operating
Leases
|
Finance
Leases
|
2019 (remaining)
|
$221
|
$1
|
2020
|
185
|
1
|
2021
|
176
|
-
|
2022
|
166
|
-
|
2023
|
4
|
-
|
Thereafter
|
-
|
-
|
Total undiscounted lease payments
|
$752
|
$2
|
Less: imputed interest
|
115
|
-
|
Present value of lease liabilities
|
$637
|
$2
|
|
June
30,
|
December
31,
|
Description
|
2019
|
2018
|
Note payable to a related party
|
$862
|
$836
|
Unsecured short term notes payable
|
225
|
-
|
Secured note payable
|
1,600
|
2,400
|
Total notes payable
|
2,687
|
3,236
|
Less current maturities
|
1,933
|
2,437
|
Long-term note payable
|
$754
|
$799
|
|
Fixed
|
Effective
|
|
|
|
|
Conversion
|
Interest
|
|
June
30,
|
December
31,
|
Description
|
Rate
|
Rate
|
Maturity Date
|
2019
|
2018
|
Convertible notes dated September 10, 2018
|
$0.40
|
8.3%
|
September 7, 2023
|
$700
|
$800
|
Convertible note dated September 19, 2018
|
$0.57
|
8.3%
|
September 19, 2023
|
425
|
425
|
Convertible notes dated February/March 2019
|
$0.25
|
8.3%
|
February 28, 2024 to March 13, 2024
|
1,300
|
-
|
Convertible notes dated June 2019
|
$0.10
|
8.3%
|
June 7, 2024 to June 19, 2024
|
340
|
-
|
Total principal balance
|
|
|
|
2,765
|
1,225
|
Less Unamortized discount
|
|
|
|
321
|
388
|
|
|
|
|
$2,444
|
$837
|
|
|
|
|
|
|
|
Six
Months Ended
June 30, 2019 |
Year
Ended
December 31, 2018 |
Secured contingent
payment obligation, beginning of period
|
$25,557
|
$15,896
|
Proceeds from
contingent payment obligation
|
-
|
4,000
|
Change
in fair value
|
(823)
|
5,661
|
Secured contingent
payment obligation, end of period
|
$24,734
|
$25,557
|
|
|
Fair
Value Measurements
|
||
|
Total
Fair Value
|
Quoted
Prices in Active Markets (Level 1)
|
Significant
Other Observable Inputs (Level 2)
|
Significant
Unobservable Inputs (Level 3)
|
June 30, 2019:
|
|
|
|
|
Liabilities:
|
|
|
|
|
Secured contingent
payment obligation
|
$24,734
|
$-
|
$-
|
$24,734
|
|
|
Fair
Value Measurements
|
||
|
Total
Fair Value
|
Quoted
Prices in Active Markets (Level 1)
|
Significant
Other Observable Inputs (Level 2)
|
Significant
Unobservable Inputs (Level 3)
|
December 31, 2018:
|
|
|
|
|
Liabilities:
|
|
|
|
|
Secured contingent
payment obligation
|
$25,557
|
$-
|
$-
|
$25,557
|
|
Three
Months Ended
|
Six
Months Ended
|
||
|
June
30,
|
June
30,
|
||
|
2019
|
2018
|
2019
|
2018
|
Research and development expenses
|
$-
|
$50
|
$5
|
$115
|
Selling, general and administrative expenses
|
48
|
298
|
110
|
596
|
Total share-based compensation expense
|
$48
|
$348
|
$115
|
$711
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
3.5
|
|
|
|
|
|
3.6
|
|
|
|
|
|
3.7
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
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*
|
|
|
|
|
|
|
|
|
ParkerVision, Inc.
|
|
|
|
Registrant
|
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August 14,
2019
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By:
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/s/Jeffrey L. Parker
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Jeffrey L. Parker
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Chairman and Chief Executive Officer
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(Principal Executive Officer)
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August 14,
2019
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By:
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/s/Cynthia L.
Poehlman
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Cynthia L.
Poehlman
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Chief Financial Officer
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(Principal Financial Officer and Principal
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Accounting Officer)
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Ugust
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Date:
August 14, 2019
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Name:/s/
Jeffrey L. Parker
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Title:
Chief Executive Officer (Principal Executive Officer)
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Date:
August 14, 2019
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Name:/s/Cynthia L.
Poehlman
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Title:
Chief Financial Officer (Principal Financial Officer and Principal
Accounting Officer)
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Ugust
7
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Dated:
August 14, 2019
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Name:/s/
Jeffrey L. Parker
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Title:
Chief Executive Officer (Principal
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Executive
Officer)
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Dated:
August 14, 2019
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Name:/s/
Cynthia L. Poehlman
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Title:
Chief Financial Officer (Principal
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Financial Officer
and Principal Accounting Officer)
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Document And Entity Information - shares |
6 Months Ended | |
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Jun. 30, 2019 |
Aug. 09, 2019 |
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Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Entity Registrant Name | PARKERVISION INC | |
Entity Central Index Key | 0000914139 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,730,872 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 31,731 | 28,677 |
Common stock, shares outstanding | 31,731 | 28,677 |
Condensed Consolidated Statements Of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Income Statement [Abstract] | ||||
Revenue | $ 25 | $ 38 | $ 35 | $ 115 |
Cost of sales | (25) | (31) | (35) | (84) |
Inventory impairment charge | 0 | (42) | 0 | (42) |
Gross margin | 0 | (35) | 0 | (11) |
Research and development expenses | 0 | 1,001 | 334 | 1,875 |
Selling, general and administrative expenses | 1,851 | 2,902 | 4,007 | 5,879 |
Total operating expenses | 1,851 | 3,903 | 4,341 | 7,754 |
Interest and other income | 0 | 0 | 0 | 2 |
Interest expense | (76) | (18) | (138) | (34) |
Change in fair value of secured contingent payment obligation | 365 | (538) | 823 | (987) |
Total interest and other | 289 | (556) | 685 | (1,019) |
Net loss | (1,562) | (4,494) | (3,656) | (8,784) |
Other comprehensive loss, net of tax | 0 | 0 | 0 | 0 |
Comprehensive loss | $ (1,562) | $ (4,494) | $ (3,656) | $ (8,784) |
Basic and diluted net loss per common share | $ (0.05) | $ (0.18) | $ (0.12) | $ (0.39) |
Weighted average common shares outstanding | 30,888 | 24,564 | 30,042 | 22,672 |
Description of Business |
6 Months Ended |
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Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 a distributed WiFi product line for consumers and small businesses that is being marketed under the brand name Milo®. We have also designed and developed proprietary radio frequency (“RF”) technologies and integrated circuits 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 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 restructured our operations during the third quarter of 2018 in order to reduce operating expenses in light of our limited capital resources. Our primary business is to support and defend the investments we have made in developing and protecting our technologies by focusing on our patent enforcement program. 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 Going Concern |
6 Months Ended |
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Jun. 30, 2019 | |
Liquidity And Going Concern [Abstract] | |
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. 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 in every year since inception and have utilized the proceeds from debt and equity financings to fund our operations, including the cost of litigation. For the six months ended June 30, 2019, we incurred a net loss of approximately $3.7 million and negative cash flows from operations of approximately $2.6 million. At June 30, 2019, we had a working capital deficit of approximately $4.2 million and we had an accumulated deficit of approximately $396.0 million. These circumstances raise substantial doubt about our ability to continue to operate as a going concern within one year following the issue date of these condensed consolidated financial statements.
For the six months ended June 30, 2019, we received aggregate net proceeds of approximately $1.64 million from the sale of convertible promissory notes and $0.23 million for the issuance of short term notes. At June 30, 2019, we had cash and cash equivalents of approximately $0.1 million. Our Milo product line has not generated expected revenues to date and the amount and timing of proceeds from our patent enforcement actions, if any, is difficult to predict. Although we have made significant reductions in our operating costs, we will need additional working capital to fund our operations.
In July 2019, we sold additional convertible notes for aggregate proceeds of $0.75 million (see Note 13). We are exploring additional financing opportunities for both our short and long-term capital needs. These financing opportunities may include debt, convertible debt, common or preferred equity offerings, additional litigation financing, or a combination thereof. There can be no assurance that we will be able to consummate a financing transaction or that the terms of such financing will be on terms and conditions that are acceptable.
Our ability to meet our liquidity needs for the next twelve months is dependent upon one or more of (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; and/or (ii) our ability to obtain additional debt or equity financing. We expect that revenue generated from product sales, patent enforcement actions, and technology licenses over the next twelve months may not be sufficient to cover our working capital requirements. In the event we do not generate sufficient revenues to cover our operational costs and contingent repayment obligations, we will be required to use available working capital and/or raise additional working capital through the sale of equity securities or other financing arrangements.
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 our ability to secure sufficient financing to support our business and our ability to generate revenues and/or patent-related proceeds sufficient to offset expenses and meet our contingent payment obligation and other debt repayment obligations. 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. |
Basis of Presentation |
6 Months Ended |
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Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements for the period ended June 30, 2019 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 and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 or future years. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. 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, 2018, but does not include all disclosures required by GAAP. 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, 2018 (“2018 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. |
Accounting Policies |
6 Months Ended |
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Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | There have been no changes in accounting policies from those stated in our 2018 Annual Report, except as follows:
Adoption of New Accounting Standards
As of January 1, 2019, we adopted Accounting Standards Codification (“ASC”) 842, “Leases.” ASC 842 requires lessees to recognize right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all finance and operating leases with lease terms of more than 12 months and disclose key information about leasing arrangements (see Note 8). ASC 842 allows for the application of the new standard on the adoption date without restatement of prior comparative periods or a modified retrospective transition method which requires application of the new standard at the beginning of the earliest period presented. We have elected to use the adoption date as the initial application date without restatement of prior comparative periods. We also elected the package of practical expedients permitted under the transition guidance which, among other things, does not require us to reassess lease classification. Upon adoption of ASC 842, we recognized an adjustment to beginning retained earnings of approximately $0.04 million for the cumulative effect of the change in accounting principle. We also recorded a ROU asset of approximately $0.56 million and an increase in our operating lease liabilities of approximately $0.60 million, primarily related to operating leases for our office and warehouse facilities. Our accounting for finance leases remains substantially unchanged. Adoption of the standard did not materially impact operating results or cash flows.
As of January 1, 2019, we adopted Accounting Standards Update (“ASU”) 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. We have no stranded tax effects included in our other comprehensive loss and therefore the adoption of ASU 2018-02 did not impact our consolidated financial statements.
As of January 1, 2019, we adopted ASU 2018-07, "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." The amendments in this update simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. We did not previously have awards to nonemployees that would require reassessment and therefore the adoption of ASU 2018-07 did not impact our condensed consolidated financial statements. |
Loss Per Common Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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.
We have shares underlying outstanding options, warrants, unvested RSUs and convertible notes that were excluded from the computation of diluted loss per share as their effect would have been anti-dilutive. These common share equivalents at June 30, 2019 and 2018 were as follows (in thousands):
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Prepaid Expenses |
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Prepaid Expense and Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses | Prepaid expenses consist of the following (in thousands):
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Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible assets consist of the following (in thousands):
During the three and six months ended June 30, 2019, we recorded losses due to abandonment of patents and patent applications of approximately $0.2 million. |
Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | We lease our office and other facilities and certain office equipment under long-term, non-cancelable operating and finance leases. Some leases include options to purchase, terminate, or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. We do not recognize ROU assets and lease liabilities for leases with terms at inception of twelve months or less.
At inception, we determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of our lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. services). For certain equipment leases, we account for lease and non-lease components separately based on a relative fair market value basis. For all other leases, we account for the lease and non-lease components (e.g. common area maintenance) on a combined basis.
Following the adoption of ASC 842 as of January 1, 2019 (see Note 4), operating leases are included in operating lease right-of-use assets and operating lease liabilities on the condensed consolidated balance sheets. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term using the implicit rate, when readily available, or our incremental borrowing rate for collateralized debt based on information available at the lease commencement date. Lease expense for operating leases is generally recognized on a straight-line basis over the lease term and is included in operating expenses on the condensed consolidated statement of comprehensive loss. For the three and six months ended June 30, 2019, we recognized operating lease costs of approximately $0.1 million and $0.2 million, respectively.
Finance leases are included in property, plant, and equipment, other accrued expenses and other long-term liabilities on the condensed consolidated balance sheets. Finance leases are recorded as an asset and an obligation at an amount equal to the present value of the minimum lease payments during the lease term. Amortization expense and interest expense associated with finance leases are included in selling, general, and administrative expense and interest expense, respectively, on the condensed consolidated statements of comprehensive loss. Our finance leases are not material to our condensed consolidated financial statements as of or for the three and six months ended June 30, 2019.
No new finance or operating leases commenced during the three or six months ended June 30, 2019. The following table summarizes the supplemental cash flow information related to leases, including the right-of-use assets recognized upon adoption of the new lease standard (in thousands):
The following table summarizes other supplemental information related to leases:
The future maturities of lease liabilities consist of the following as of June 30, 2019 (in thousands):
As of December 31, 2018, we had a lease liability of approximately $0.1 million which represented the estimated fair value of remaining lease rental payments for our cease-use facility in Lake Mary, Florida, less estimated sublease rentals, as accounted for under ASC 840, “Leases” which was superseded by ASC 842 as of January 1, 2019. |
Long-term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt |
Notes Payable
Notes payable at June 30, 2019 and December 31, 2018, consisted of the following (in thousands):
Note Payable to a Related Party We have an unsecured promissory note payable to Sterne, Kessler, Goldstein, & Fox, PLLC (“SKGF”), a related party, for outstanding unpaid fees for legal services (the “SGKF Note”). The SKGF Note, as amended in 2018, accrued interest at a rate of 8% per annum and provided for payments of principal and interest of approximately $48,500 per month commencing October 31, 2018 through March 31, 2020. At December 31, 2018, we were in default on the payment terms of the SKGF Note. In March 2019, we amended the SKGF Note to provide for a waiver of past payment defaults, a decrease in the interest rate from 8% per annum to 4% per annum, an extension of the maturity date from March 2020 to April 2022, and a modification of payment terms. This amendment constituted a troubled debt restructuring and has been accounted for on a prospective basis from the date of the amendment. As of June 29, 2019, we amended the note to provide for a postponement of past payment defaults and future payments until October 2019. As of June 30, 2019, we were in compliance of all terms of the agreement.
Unsecured Short Term Notes Payable During the three months ended June 30, 2019, we entered into short-term promissory notes with accredited investors for aggregate proceeds of approximately $0.23 million. The notes are unsecured and bear interest at a rate of 18% per annum. The notes mature at the earlier of ninety (90) days following the issuance date or upon our receipt of additional litigation financing. In the event of default, the outstanding balance of the notes and any other obligation from the Company to the lenders shall become due immediately without demand or notice. If the payment obligations under the notes are not paid when due, the interest rate increases to 20% per annum and we are obligated to pay all costs of collection, including reasonable attorney fees.
Secured Note Payable We have a note payable to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (“Mintz”) for outstanding, unpaid attorney’s fees and costs associated with our patent enforcement program (the “Mintz Note”). The Mintz Note is non-interest bearing, except in the event of a default, and is secured by certain of our U.S. and foreign patents. The Mintz Note accelerates and becomes immediately due and payable in the case of standard events of default and/or in the event of a sale or other transfer of substantially all of our assets or a transfer of more than 50% of our capital stock in one or a series of transactions or through a merger or other similar transaction. In an event of default, the Mintz Note will accrue interest at a rate of 12% per annum on any outstanding balance until such time that the note is paid in full. As of December 31, 2018, we were in default on the payment terms of the Mintz Note. The payment default was cured in January 2019. On April 1, 2019 and again on June 29, 2019, Mintz waived past and future payment defaults under the note through at least August 2019, provided that no other event of default occurs. Mintz also waived acceleration of unpaid principal and interest as well as an increase in the interest rate to the default rate of 12%. As of June 30, 2019, we are in compliance with all the terms of the Mintz Note.
Convertible Notes
Our convertible notes represent five-year promissory notes that are convertible, at the holders’ option, into shares of our common stock at fixed conversion prices. The convertible notes bear interest at a stated rate of 8% per annum and interest payments are made on a quarterly basis. Interest is payable, at our option and subject to certain equity conditions, in either cash, shares of our common stock, or a combination thereof. To date, all interest payments on the convertible notes have been made in shares of our common stock.
We have the option to prepay the notes any time following the one-year anniversary of the issuance 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 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 convertible notes.
Convertible notes payable at June 30, 2019 and December 31, 2018 consist of the following (in thousands):
We have an obligation to file a registration statement for the shares underlying the June 2019 notes by the 75th calendar day following the issuance date of the notes and to cause the registration statement to become effective by the 150th calendar day following the issuance dates. The registration rights agreements provide for liquidated damages upon the occurrence of certain events including failure by us to file the registration statement or cause it to become effective by the deadlines set forth above. The amount of the liquidated damages is 1.0% of the aggregate subscription amount paid by holders for the notes upon the occurrence of the event, and monthly thereafter, up to a maximum of 6%. Registration statements have previously been filed and declared effective for the September 2018 and February/March 2019 notes.
Secured Contingent Payment Obligation
The following table provides a reconciliation of our secured contingent payment obligation, measured at estimated fair market value, for the six months ended June 30, 2019 and the year ended December 31, 2018 (in thousands):
Our secured contingent payment obligation represents the estimated fair value of our repayment obligation to Brickell Key Investments, LP ("Brickell") under a February 2016 funding agreement, as amended in May 2016, December 2017, April 2018, September 2018 and December 2018. Under the agreement, as of June 30, 2019, we have received aggregate proceeds of $18.0 million in exchange for Brickell’s right to reimbursement and compensation from gross proceeds resulting from patent enforcement and other patent monetization actions. To date, we have repaid an aggregate of $3.3 million to Brickell from patent enforcement proceeds.
Brickell is entitled to priority payment of 100% of proceeds received from patent-related actions until such time that Brickell has been repaid in full. After repayment of the funded amount, Brickell is entitled to a portion of remaining proceeds up to a specified minimum return which is determined as a percentage of the funded amount and varies based on the timing of repayment. In addition, Brickell is entitled to a pro rata portion of proceeds from specified legal actions to the extent aggregate proceeds from those actions exceed the specified minimum return.
Brickell holds a senior security interest in the majority of our assets until such time as the specified minimum return is paid, in which case, the security interest will be released except with respect to the patents and proceeds related to specific legal actions. The security interest is enforceable by Brickell in the event that we are in default under the agreement which would occur if (i) we fail, after notice, to pay proceeds to Brickell, (ii) we become insolvent or insolvency proceedings are commenced (and not subsequently discharged) with respect to us, (iii) our creditors commence actions against us (which are not subsequently discharged) that affect our material assets, (iv) we, without Brickell’s consent, incur indebtedness other than immaterial ordinary course indebtedness, or (v) there is an uncured non-compliance of our obligations or misrepresentations under the agreement. As of June 30, 2019, we are in compliance with our obligations under this agreement.
We have elected to measure our secured contingent payment obligation at fair value based on probability-weighted estimated cash outflows, discounted back to present value using a discount rate determined in accordance with accepted valuation methods. The secured contingent payment obligation is remeasured to fair value at each reporting period with changes recorded in the condensed consolidated statements of comprehensive loss until the contingency is resolved. As of June 30, 2019, the fair value of the obligation is estimated to be approximately $24.7 million (see Note 10). |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
The following tables summarize the fair value of our assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 (in thousands):
The fair value of our secured contingent payment obligation was estimated using a probability-weighted income approach based on various cash flow scenarios as to the outcome of patent-related actions both in terms of timing and amount, discounted to present value using a risk-adjusted rate. We used a risk-adjusted discount rate of 15.75% at June 30, 2019, based on a risk-free rate of 1.75% as adjusted by 8% for credit risk and 6% for litigation inherent risk. At December 31, 2018, we used a risk-adjusted discount rate of approximately 16.5%, based on a two year risk-free rate of approximately 2.5% as adjusted by 8% for credit risk and 6% for litigation inherent risk. The contingent payment obligation does not have a fixed duration; however, our cash flow projections assume a remaining duration ranging from approximately one to three years with an average duration of 2.5 years. The cash outflows could potentially range from $0 to $50.2 million through 2021 with a weighted average outflow of approximately $36.3 million. We evaluate the estimates and assumptions used in determining the fair value of our secured contingent payment obligation each reporting period and make any adjustments prospectively based on those evaluations. Changes in any of these Level 3 inputs could result in a higher or lower fair value measurement. |
Legal Proceedings |
6 Months Ended |
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Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings |
From time to time, we are subject to legal proceedings and claims which arise in the ordinary course of our business. These proceedings include patent enforcement actions initiated by us against others for the infringement of our technologies, as well as proceedings brought by others against us at the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office (“PTAB”) and in the Federal Patent Court in Germany in an attempt to invalidate certain of our patent claims. We have several patent enforcement actions in Germany which has a “loser pay” system whereby the non-prevailing party is responsible for statutory attorney fees and costs. To the extent a loss is probable and reasonably estimable as of the balance sheet date, the estimated loss is recorded in the accompanying condensed statements of comprehensive loss and included in current liabilities under the heading “statutory court costs” in the condensed consolidated balance sheets. The accompanying condensed statements of comprehensive loss for the three and six months ended June 30, 2019 exclude any charges related to probable losses that arose after the date of these financial statements. There is at least a reasonable possibility of an unfavorable outcome in any one or more of our legal proceedings that could result in expenses in the aggregate that could have a material unfavorable impact on our results of operations as more fully discussed below.
ParkerVision v. Qualcomm and HTC (Middle District of Florida) We have a patent infringement complaint pending in the Middle District of Florida against Qualcomm and Qualcomm Atheros, Inc. (collectively “Qualcomm”), and HTC (HTC Corporation and HTC America, Inc.) (the “Qualcomm Action”) seeking unspecified damages and injunctive relief for infringement of certain of our patents. Certain of the defendants have filed counterclaims against us for non-infringement and invalidity for all patents in the case. A claim construction hearing was held in August 2015 but no ruling on claim construction has been issued by the court. In February 2016, the court granted the parties’ joint motion to stay these proceedings until resolution of proceedings at the International Trade Commission (“ITC”). In May 2017, the stay of these proceedings was continued pending an appeal of certain PTAB decisions with regard to our U.S. Patent 6,091,940 (“the ‘940 Patent”). In September 2018, the Federal Circuit issued its decision in the appeal of the ‘940 Patent. Accordingly, in January 2019, the court lifted the stay. In July 2019, the court issued an order that granted our proposed selection of patent claims from four asserted patents, including the ‘940 Patent, and denied Qualcomm’s request to limit the claims and patents. The court also agreed that we may elect to pursue accused products that were at issue at the time the case was stayed, as well as new products that were released by Qualcomm during the pendency of the stay. A case management schedule has been submitted by the parties with a proposed trial date of December 2020.
ParkerVision v. Apple and Qualcomm (Middle District of Florida) In December 2015, we filed a patent infringement complaint in the Middle District of Florida against Apple, LG, Samsung and Qualcomm alleging infringement of four of our patents. In February 2016, the district court proceedings were stayed pending resolution of the corresponding case filed at the ITC. In July 2016, we entered into a patent license and settlement agreement with Samsung and, as a result, Samsung was dismissed from the district court action. In March 2017, we filed a motion to terminate the ITC proceedings and a corresponding motion to lift the stay in the district court case. This motion was granted in May 2017. In July 2017, we filed a motion to dismiss LG from the district court case (see ParkerVision v. LG below). Also in July 2017, Qualcomm filed a motion to change venue to the southern district of California and Apple filed a motion to dismiss for improper venue. In March 2018, the district court ruled against the Qualcomm and Apple motions. The parties also filed a joint motion in March 2018 to eliminate three of the four patents in the case in order to expedite proceedings leaving our U.S. patent 9,118,528 as the only remaining patent in this case. A claim construction hearing was held on August 31, 2018. In July 2019, the court issued its claim construction order in which the court adopted our proposed claim construction for two of the six terms and the “plain and ordinary meaning” on the remaining terms. In addition, the court denied a motion filed by Apple for summary judgment. A case management schedule has been submitted by the parties with a proposed trial date of August 2020.
ParkerVision v. LG (District of New Jersey) In July 2017, we filed a patent infringement complaint in the district of New Jersey against LG for the alleged infringement of the same patents previously asserted against LG in the middle district of Florida (see ParkerVision v. Apple and Qualcomm above). We elected to dismiss the case in the middle district of Florida and re-file in New Jersey as a result of a recent Supreme Court ruling regarding proper venue. In March 2018, the court stayed this case pending a final decision in ParkerVision v. Apple and Qualcomm in the Middle District of Florida. As part of this stay, LG has agreed to be bound by the final claim construction decision in that case.
ParkerVision v. LG Electronics (Munich, Germany) In June 2016, we filed a complaint in Munich District Court against LG Electronics Deutschland GmbH, a German subsidiary of LG Electronics, Inc. (“LGE”) seeking damages and injunctive relief for the alleged infringement of the German part of our European patent 1 206 831 (“the ‘831 Patent”). A hearing in this case was held in November 2016 at which time the court concluded that certain LGE products using Qualcomm RF circuitry infringe our patent. The final decision in this case was stayed pending resolution of the corresponding nullity, or validity, action filed by Qualcomm in the German Federal Patent Court in Munich (see Qualcomm v. ParkerVision below). In October 2018, we received an unfavorable decision in the nullity case for which we filed an appeal. In July 2019, we withdrew our appeal. As a result, we are subject to a claim for reimbursement of statutory attorney’s fees and costs in this case. We estimate a claim of approximately $0.06 million which we have accrued in the accompanying condensed consolidated financial statements as the loss is considered probable as of June 30, 2019. We have posted a bond to cover this cost which is included in “Prepaid expenses” in the accompanying consolidated balance sheets.
ParkerVision v. Apple (Munich, Germany) - the Apple I case In October 2016, we filed a complaint in Munich District Court against Apple, Inc., Apple Distribution International, and Apple Retail Germany B.V. & Co. KG (collectively “Apple”) seeking damages and injunctive relief for the alleged infringement of the ‘831 Patent (the “Apple I Case”). In February 2017, we amended our complaint adding the infringement of a second German patent and alleging infringement by Apple devices that incorporate an Intel transceiver chip. The Munich Regional Court bifurcated the new claims into a second case (see ParkerVision v. Apple - the Apple II case below). A hearing was held in May 2017 in the Apple I Case. In June 2017, the court deferred its ruling pending the decision from the German Federal Patent Court in the validity action filed by Qualcomm (see Qualcomm v. ParkerVision below). In October 2018, we received an unfavorable decision in the nullity case for which we filed an appeal which we subsequently withdrew. We opted not to post a bond to cover the potential statutory costs in this case. As a result, in March 2019, the district court declared the complaint withdrawn, a decision we opted not to appeal. Accordingly, we are subject to a claim for reimbursement of statutory attorney’s fees and costs of approximately $0.12 million, which is accrued in the accompanying condensed consolidated financial statements as the loss is considered probable as of June 30, 2019.
Qualcomm v. ParkerVision - Federal Patent Court in Germany (as appealed to the German Supreme Court) In August 2016, Qualcomm filed a validity action in Federal Patent Court in Germany against the ’831 Patent. The outcome of this validity action impacts our German patent infringement cases against LGE and Apple as discussed above. On October 17, 2018, following an oral hearing, the court ruled that the ‘831 Patent was invalid. Based on the October 2018 decision from the federal court, we recorded a contingent loss of $0.11 million for the estimated statutory fees and costs in this case as of December 31, 2018. In January 2019, we appealed this decision to the German Supreme Court, but withdrew our appeal in July 2019.
ParkerVision v. Apple (Munich, Germany) - the Apple II case The Apple II case seeks damages and injunctive relief for the alleged infringement of the German part of our European patent 1 135 853 (“the ‘853 Patent”). A preliminary hearing was held in November 2017. Subsequent to the hearing, the court requested that we supplement certain elements of the infringement claims against Apple devices. In May 2018, we filed our supplemental briefs as requested by the court. In October 2018, we also filed a supplemental expert report. The court appointed an expert in this case and a hearing was held in March 2019 for purposes of providing expert testimony. The court ruled in April 2019 that Apple does not infringe our ‘853 Patent. We did not appeal this decision. As a result, we are subject to a claim for reimbursement of statutory attorney’s fees and costs in this case. We estimate a claim of approximately $0.13 million which we have accrued in the accompanying condensed consolidated financial statements as the loss is considered probable as of June 30, 2019. We have posted a bond to cover this cost which is included in “Prepaid expenses” in the accompanying condensed consolidated balance sheets.
Intel v. ParkerVision (Federal Patent Court in Germany) In August 2017, Intel filed a nullity action in German Federal Patent Court claiming invalidity of the ‘853 Patent that is the subject of the Apple II case. If the ‘853 Patent is declared invalid, we may be subject to a claim for reimbursement of statutory attorney fees and costs in this case which we currently estimate will not exceed $0.1 million. No dates have yet been set in this nullity action, and the accompanying consolidated financial statements do not include any accrual for a loss contingency in this case as a loss is not considered probable. |
Share-Based Compensation |
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Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2018 Annual Report.
The following table presents share-based compensation expense included in our condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2019 and 2018, respectively (in thousands):
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events |
In July 2019, we sold convertible notes for aggregate proceeds of $0.75 million to accredited investors. The notes mature five years from the date of issuance. The first tranche of notes with a face value of $0.05 million are convertible, at the holders’ option, into shares of our common stock at a fixed conversion price of $0.10 per share and bear interest at a stated rate of 8% per annum. The second tranche of notes with an aggregate face value of $0.7 million are convertible, at the holders’ option, into shares of our common stock at $0.08 per share and bear interest at a stated rate of 7.5% per annum. Interest is payable quarterly, and we may elect, subject to certain equity conditions, to pay interest in cash, shares of our common stock, or a combination thereof. In addition, we issued a warrant for the purchase of 1.8 million shares of our common stock at an exercise price of $0.10 per share to Park Consultants LLC ("Park") as a nonrefundable retainer for services for a period of 18 months valued at approximately $0.2 million. The warrant is immediately exercisable and expires in July 2024. Park is providing advisory services with regard to our future business strategies.
In August 2019, our board of directors ("Board") adopted the 2019 Long-Term Incentive Plan (the "2019 Plan") to enable us to offer equity-based compensation to our employees, officers, directors and consultants who have been, are, or will be important to our success. Subject to authorization of sufficient shares for issuance by our stockholders, 12 million shares will be reserved for issuance under the 2019 Plan. In addition, the Board approved the grant of two-year nonqualified stock options, with an exercise price of $0.17 per share, vesting in 8 equal quarterly installments commencing September 1, 2019, provided that such options will not be exercisable unless and until we have sufficient authorized unissued shares or treasury shares available for such exercise. Each of our three non-employee directors were granted an option to purchase 800,000 shares, Jeffrey Parker, our chief executive officer, was granted an option to purchase 6,000,000 shares, Cynthia Poehlman, our chief financial officer, was granted an option to purchase 1,000,000 shares, Gregory Rawlins, our chief technical officer, was granted an option to purchase 750,000 shares and one additional key employee was granted an option to purchase 400,000 shares. The aggregate grant-date fair value of the awards, totaling approximately $1.5 million, will be recognized as share-based compensation expense over the two-year life of the awards. |
Accounting Policies (Policies) |
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Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Adoption of New Accounting Standards | There have been no changes in accounting policies from those stated in our 2018 Annual Report, except as follows:
Adoption of New Accounting Standards
As of January 1, 2019, we adopted Accounting Standards Codification (“ASC”) 842, “Leases.” ASC 842 requires lessees to recognize right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all finance and operating leases with lease terms of more than 12 months and disclose key information about leasing arrangements (see Note 8). ASC 842 allows for the application of the new standard on the adoption date without restatement of prior comparative periods or a modified retrospective transition method which requires application of the new standard at the beginning of the earliest period presented. We have elected to use the adoption date as the initial application date without restatement of prior comparative periods. We also elected the package of practical expedients permitted under the transition guidance which, among other things, does not require us to reassess lease classification. Upon adoption of ASC 842, we recognized an adjustment to beginning retained earnings of approximately $0.04 million for the cumulative effect of the change in accounting principle. We also recorded a ROU asset of approximately $0.56 million and an increase in our operating lease liabilities of approximately $0.60 million, primarily related to operating leases for our office and warehouse facilities. Our accounting for finance leases remains substantially unchanged. Adoption of the standard did not materially impact operating results or cash flows.
As of January 1, 2019, we adopted Accounting Standards Update (“ASU”) 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. We have no stranded tax effects included in our other comprehensive loss and therefore the adoption of ASU 2018-02 did not impact our consolidated financial statements.
As of January 1, 2019, we adopted ASU 2018-07, "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." The amendments in this update simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. We did not previously have awards to nonemployees that would require reassessment and therefore the adoption of ASU 2018-07 did not impact our condensed consolidated financial statements. |
Loss per Common Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of anti-dilutive shares |
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Prepaid Expenses (Tables) |
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Prepaid Expense and Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepaid expenses |
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Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of intangible assets |
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental cash flow information |
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Supplemental information |
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Future maturities of lease liabilities |
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Long-term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of notes payable |
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Schedule of convertible notes payable |
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Reconciliation of secured contingent obligation at fair value |
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis |
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Share-Based Compensation (Tables) |
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Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share-based compensation expense included in statements of operations |
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Liquidity and Going Concern (Details Narrative) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
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Liquidity And Going Concern [Abstract] | |||||
Net loss | $ (1,562) | $ (4,494) | $ (3,656) | $ (8,784) | |
Net cash used in operating activities | (877) | $ (2,775) | (2,550) | $ (6,126) | |
Net working capital | (4,200) | (4,200) | |||
Accumulated deficit | (395,986) | (395,986) | $ (392,292) | ||
Proceeds from the sale of convertible promissory note | 1,640 | ||||
Proceeds from issuance of short term notes | 230 | ||||
Cash and cash equivalents | $ 63 | $ 63 | $ 1,527 |
Accounting Policies (Details Narrative) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
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Operating lease asset | $ 364 | $ 0 |
Operating lease liability | $ 637 | |
Accounting Standards Update201602 [Member] | ||
Operating lease asset | 560 | |
Operating lease liability | 600 | |
Cumulative effect of change in accounting principle | $ 38 |
Loss per Common Share (Details) - shares |
6 Months Ended | |
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Jun. 30, 2019 |
Jun. 30, 2018 |
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Shares excluded from the computation of diluted loss per share | 23,878 | 1,673 |
Options Outstanding | ||
Shares excluded from the computation of diluted loss per share | 1,082 | 1,001 |
Warrants Outstanding | ||
Shares excluded from the computation of diluted loss per share | 11,700 | 350 |
Unvested RSUs | ||
Shares excluded from the computation of diluted loss per share | 0 | 322 |
Shares Underlying Convertible Notes | ||
Shares excluded from the computation of diluted loss per share | 11,096 | 0 |
Prepaid Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
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Prepaid Expense and Other Assets [Abstract] | ||
Prepaid services | $ 398 | $ 252 |
Prepaid bonds for German statutory costs | 191 | 199 |
Prepaid licenses, software tools and support | 17 | 51 |
Prepaid Insurance | 14 | 19 |
Other prepaid expenses | 17 | 17 |
Prepaid expenses | $ 637 | $ 538 |
Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents and copyrights | $ 17,510 | $ 18,350 |
Accumulated amortization | (14,169) | (14,448) |
Intangible assets | $ 3,341 | $ 3,902 |
Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
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Jun. 30, 2019 |
Jun. 30, 2019 |
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Leases [Abstract] | ||
Operating cash flows from operating leases | $ 80 | $ 195 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 0 | $ 563 |
Leases (Details 1) |
Jun. 30, 2019 |
---|---|
Leases [Abstract] | |
Operating lease, weighted average remaining lease term | 1 year 3 months 18 days |
Operating lease, weighted average discount rate, percent | 10.90% |
Finance lease, weighted average remaining lease term | 8 months 12 days |
Finance lease, weighted average discount rate, percent | 8.70% |
Leases (Details 2) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Operating Lease Liabilities, Payments Due | |
2019 (remaining) | $ 221 |
2020 | 185 |
2021 | 176 |
2022 | 166 |
2023 | 4 |
Total undiscounted lease payments | 752 |
Less: imputed interest | 115 |
Present value of lease liabilities | 637 |
Finance Lease Liabilities, Payments, Due | |
2019 (remaining) | 1 |
2020 | 1 |
Total undiscounted lease payments | 2 |
Present value of lease liabilities | $ 2 |
Leases (Details Narrative) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 100 | $ 200 |
Long-term Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Total notes payable | $ 2,687 | $ 3,236 |
Less current maturities | 1,933 | 2,437 |
Long-term note payable | 754 | 799 |
Note Payable To Related Party | ||
Total notes payable | 862 | 836 |
Unsecured short term notes payable | ||
Total notes payable | 225 | 0 |
Secured Note Payable | ||
Total notes payable | $ 1,600 | $ 2,400 |
Long-term Debt (Details 1) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Total principal balance | $ 2,765 | $ 1,225 |
Less unamortized discount | 321 | 388 |
Convertible notes, net | $ 2,444 | 837 |
Convertible Note 1 | ||
Fixed conversion rate | $ 0.4 | |
Effective interest rate | 8.30% | |
Maturity date | Sep. 07, 2023 | |
Total principal balance | $ 700 | 800 |
Convertible Note 2 | ||
Fixed conversion rate | $ 0.57 | |
Effective interest rate | 8.30% | |
Maturity date | Sep. 19, 2023 | |
Total principal balance | $ 425 | 425 |
Convertible Note 3 | ||
Fixed conversion rate | $ 0.25 | |
Effective interest rate | 8.30% | |
Total principal balance | $ 1,300 | 0 |
Convertible Note 3 | Minimum | ||
Maturity date | Feb. 28, 2024 | |
Convertible Note 3 | Maximum | ||
Maturity date | Mar. 13, 2024 | |
Convertible Note 4 | ||
Fixed conversion rate | $ 0.1 | |
Effective interest rate | 8.30% | |
Total principal balance | $ 340 | $ 0 |
Convertible Note 4 | Minimum | ||
Maturity date | Jun. 07, 2024 | |
Convertible Note 4 | Maximum | ||
Maturity date | Jun. 19, 2024 |
Long-term Debt (Details 2) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Debt Disclosure [Abstract] | ||
Secured contingent payment obligation, beginning of period | $ 25,557 | $ 15,896 |
Proceeds from contingent payment obligation | 0 | 4,000 |
Change in fair value | (823) | 5,661 |
Secured contingent payment obligation, end of period | $ 24,734 | $ 25,557 |
Long-term Debt (Details Narrative) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Debt Disclosure [Abstract] | |||
Secured contingent payment obligation | $ 24,734 | $ 25,557 | $ 15,896 |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Secured contingent payment obligation | $ 24,734 | $ 25,557 | $ 15,896 |
Quoted Prices in Active Markets (Level 1) | |||
Secured contingent payment obligation | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | |||
Secured contingent payment obligation | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | |||
Secured contingent payment obligation | $ 24,734 | $ 25,557 |
Share-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Total share-based compensation expense | $ 48 | $ 348 | $ 115 | $ 711 |
Research and Development Expenses | ||||
Total share-based compensation expense | 0 | 50 | 5 | 115 |
Selling, General and Administrative Expenses | ||||
Total share-based compensation expense | $ 48 | $ 298 | $ 110 | $ 596 |
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