What changed in this filing

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Item 1. Financial Statements

2024-08-13 compared with 2024-05-14 · 173 added, 109 removed, 403 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands, except par value data)

March 31, 2024

June 30, 2024

December 31, 2023

29 unchanged sentences

SHAREHOLDERS' DEFICIT:

Common stock, $ 0.01 par value, 175,000 shares authorized, 88,361 and 87,681 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Common stock, $ 0.01 par value, 175,000 shares authorized, 88,890 and 87,681 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

10 unchanged sentences

(in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

$ - $ - $ 25,000

Cost of sales

( 58 ) ( 63 ) ( 117 ) ( 106 )

( 58 ) ( 63 ) ( 117 ) 24,894

Selling, general and administrative expenses

683 1,125 1,457 13,210

Total operating expenses

683 1,125 1,457 13,210

Interest expense

( 104 ) ( 107 ) ( 208 ) ( 213 )

Change in fair value of contingent payment obligations

502 2,728 722 3,077

Total interest and other

414 2,621 554 2,864

Provision for income taxes

Net (loss) income

( 327 ) 1,433 ( 1,020 ) 14,548

Other comprehensive income, net of tax

Comprehensive (loss) income

$ ( 327 ) $ 1,433 $ ( 1,020 ) $ 14,548

(Loss) earnings per common share

$ ( 0.00 ) $ 0.02 $ ( 0.01 ) $ 0.17

$ ( 0.00 ) $ 0.01 $ ( 0.01 ) $ 0.12

Weighted average common shares outstanding

88,683 85,263 88,424 84,570

88,683 120,061 88,424 119,700

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

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Total shareholders' deficit, beginning balances

$ ( 40,023 ) $ ( 36,877 ) $ ( 39,519 ) $ ( 50,689 )

Beginning balances

884 845 877 812

Issuance of common stock and warrants in private offerings, net of issuance costs

4 unchanged sentences

Ending balances

889 855 889 855

Additional paid-in capital

Beginning balances

393,496 392,388 393,314 391,724

Issuance of common stock and warrants in private offerings, net of issuance costs

- ( 14 ) - 113

Issuance of common stock upon exercise of options and warrants

1 unchanged sentence

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

83 79 175 349

Share-based compensation, net of shares withheld for taxes

77 129 149 314

Ending balances

393,656 392,618 393,656 392,618

Accumulated deficit

Beginning balances

( 434,403 ) ( 430,110 ) ( 433,710 ) ( 443,225 )

Comprehensive (loss) income for the period

( 327 ) 1,433 ( 1,020 ) 14,548

Ending balances

( 434,730 ) ( 428,677 ) ( 434,730 ) ( 428,677 )

Total shareholders' deficit, ending balances

$ ( 40,185 ) $ ( 35,204 ) $ ( 40,185 ) $ ( 35,204 )

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

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Gain on changes in fair value of contingent payment obligations

Loss on disposal/impairment of equipment and intangible assets

(Gain) loss on disposal/impairment of equipment and intangible assets

Paid in kind interest expense

11 unchanged sentences

Net proceeds from debt financings

Proceeds from contingent payment obligation

Repayment of contingent payment obligation

Principal payments on long-term debt

Net cash (used in) provided by financing activities

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period

Net cash used in financing activities

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, beginning of period

CASH AND CASH EQUIVALENTS, end of period

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

5 unchanged sentences

We have designed and developed proprietary radio frequency (“RF”) technologies and integrated circuits based on those technologies, and we license those technologies to others for use in wireless communication products.

We currently have five licensees of our technologies.

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.

4 unchanged sentences

Liquidity and Going Concern

For the three months ended March 31, 2024 , we incurred a net loss of approximately $ 0.7 million and incurred negative cash flows from operations of approximately $ 0.8 million.

At March 31, 2024 , we had cash and cash equivalents of approximately $ 1.7 million and an accumulated deficit of approximately $ 434.4 million.

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.

In addition, we have approximately $ 1.4 million in convertible debt that matures over the next twelve months.

For the six months ended June 30, 2024 , we incurred a net loss of approximately $ 1.0 million and incurred negative cash flows from operations of approximately $ 1.4 million.

At June 30, 2024 , we had cash and cash equivalents of approximately $ 1.0 million and an accumulated deficit of approximately $ 434.7 million.

At June 30, 2024, we had $ 2.4 million in current liabilities, including approximately $ 1.3 million in convertible debt that matures over the next twelve months.

In addition, 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.

Our current capital resources are not sufficient to meet our liquidity needs for the next twelve months and we may be required to seek additional capital.

Our current capital resources 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, (iii) our ability to successfully negotiate extensions to the maturity date for certain convertible notes, and/or (iv) our ability to obtain additional debt or equity financing.

5 unchanged sentences

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements for the period ended March 31, 2024 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, 2024 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 , or future years.

The accompanying unaudited condensed consolidated financial statements for the three and six month periods ended June 30, 2024 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 six months ended June 30, 2024 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 , 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.

5 unchanged sentences

and its wholly-owned German subsidiary, ParkerVision GmbH, after elimination of all intercompany transactions and accounts.

Cash, cash equivalents, and restricted cash at March 31, 2023 included $ 13.9 million of restricted cash held in escrow by our attorneys designated for repayment of principal on our secured contingent debt obligation.

These restricted funds were released from escrow in May 2023.

Accounting Policies

4 unchanged sentences

We recognize such payments as revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.”

No revenue was recognized during the three months ended March 31, 2024 .

We recognized $ 25.0 million of revenue during the three -month period ended March 31, 2023 from patent license and settlement agreements with third parties for their use of our technologies.

No revenue was recognized during the six months ended June 30, 2024 .

We recognized $ 25.0 million of revenue during the six -month period ended June 30, 2023 from a patent license and settlement agreement with a third party for their use of our technologies.

Our performance obligations were satisfied, and therefore revenue recognized, upon transfer of the licensed rights and dismissal of all patent enforcement actions between the parties.

1 unchanged sentence

Basic (loss) earnings 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 for the three months ended March 31, 2024 as all common share equivalents are excluded from the calculation because their effect is anti-dilutive.

Diluted loss per common share is the same as basic loss per common share for the three and six months ended June 30, 2024 as all common share equivalents are excluded from the calculation because their effect is anti-dilutive.

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 (loss) earnings per share for the three months ended March 31, 2024 and 2023 (net (loss) income and shares in thousands):

Three Months Ended March 31,

The dilutive effect of shares underlying convertible notes is calculated using the if-converted method.

The following table shows the computation of basic and diluted (loss) earnings per share for the six months ended June 30, 2024 and 2023 (net (loss) income and shares in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Net (loss) income

6 unchanged sentences

Effect of dilutive securities

- 34,798 - 35,130

Weighted-average diluted shares

4 unchanged sentences

$ ( 0.00 ) $ 0.01 $ ( 0.01 ) $ 0.12

Diluted earnings per common share for the three months ended March 31, 2024 and 2023 excludes shares underlying options, warrants, and convertible notes that are anti-dilutive.

The anti-dilutive common share equivalents at March 31, 2024 and 2023 were as follows (in thousands):

Three Months Ended March 31,

Diluted (loss) earnings per common share for the six months ended June 30, 2024 and 2023 excludes shares underlying options, warrants, and convertible notes that are anti-dilutive.

The anti-dilutive common share equivalents at June 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Options outstanding

1 unchanged sentence

Warrants outstanding

10,346 10,346 10,346 7,346

Shares underlying convertible notes

35,925 - 35,925 -

73,405 35,880 73,405 24,865

Intangible Assets

Intangible assets consist of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

8 unchanged sentences

We are currently in compliance with all the terms of the note.

At March 31, 2024 , we estimate the note has an aggregate fair value of approximately $ 0.36 million and would be categorized within Level 2 of the fair value hierarchy.

At June 30, 2024 , we estimate the note has an aggregate fair value of approximately $ 0.33 million and would be categorized within Level 2 of the fair value hierarchy.

Convertible Notes

For the three months ended March 31, 2024 , no convertible notes were converted.

For the three months ended March 31, 2024 , we recognized interest expense of approximately $ 0.1 million related to the contractual interest on our convertible notes which we elected to pay in shares of our common stock and issued approximately 0.6 million shares of our common stock as interest-in-kind payments.

On May 10, 2024, a $ 25,000 convertible note dated June 19, 2019, and a $ 50,000 convertible note dated September 13, 2019, payable to a related party, were amended to extend the maturity dates to March 15, 2026, to reduce the interest rate from 8 % to 5 % for the remaining term of the notes, and to eliminate quarterly interest payments in favor of a single lump-sum payment of accrued and unpaid interest upon the earlier of the conversion or the maturity date of the notes.

Accordingly, the principal balance of these notes was excluded from current maturities as of March 31, 2024.

We also amended additional related party convertible notes with aggregate outstanding principal of $ 475,000 and maturity dates ranging from January 2025 to August 2027 to eliminate quarterly interest payments in favor of a single lump-sum payment of accrued and unpaid interest upon the earlier of the conversion or the maturity date of the notes.

At March 31, 2024, we estimate our convertible notes have an aggregate fair value of approximately $ 3.8 million and would be categorized within Level 2 of the fair value hierarchy.

Convertible notes payable at March 31, 2024 and December 31, 2023 consist of the following (in thousands):

For the six months ended June 30, 2024 , we had no conversions of our convertible notes and we repaid an aggregate of $ 0.05 million of notes at maturity.

For the six months ended June 30, 2024 , we recognized interest expense of approximately $ 0.2 million related to the contractual interest on our convertible notes.

During the six months ended June 30, 2024 , we elected to pay $ 0.19 million of interest payments in shares of our common stock and issued approximately 1.1 million shares of our common stock as interest-in-kind payments.

At June 30, 2024 , we estimate our convertible notes have an aggregate fair value of approximately $ 3.8 million and would be categorized within Level 2 of the fair value hierarchy.

Convertible notes payable at June 30, 2024 and December 31, 2023 consist of the following (in thousands):

Principal Outstanding as of

6 unchanged sentences

$ 0.25 8.0 % February 28, 2026 to March 13, 2026

Convertible notes dated June 2019

$ 0.10 8.0 % December 1, 2024 1

Convertible notes dated June 2019

$ 0.10 5.0 % March 15, 2026 2

Convertible notes dated June/July 2019

$ 0.10 8.0 % June 7, 2024 to July 1 5, 2024 1

$ 0.10 8.0 % January 15, 2026 to March 19, 2026 3

Convertible notes dated July 18, 2019

$ 0.08 7.5 % July 18, 2024

$ 0.08 7.5 % December 1, 2024 4

Convertible note dated September 13, 2019

$ 0.10 8.0 % September 13, 2 024 2

$ 0.10 5.0 % March 15, 2026 5

Convertible notes dated January 8, 2020

11 unchanged sentences

$ 3,588 $ 3,893

On May 10, 2024, one note with a principal balance of $ 25,000 was amended to extend its maturity date to March 15, 2026 and reduce its interest rate on a going forward basis from 8 % to 5 %.

On June 3, 2024, this note was amended to extend the maturity date to December 1, 2024.

2 On May 10, 2024, this note was amended to extend its maturity date to March 15, 2026 and reduce its interest rate on a going forward basis from 8 % to 5 %.

3 The maturity date may be extended by one -year increments for up to an additional ten years at the holders’ option at a reduced interest rate of 2 %.

3 Between June 18 and July 9, 2024, these notes were amended to extend the maturity dates to January 15, 2026 through March 19, 2026.

4 Between June 3, 2024 and July 8, 2024, these notes were amended to extend their maturity date from July 18, 2024 to December 1, 2024.

5 On May 10, 2024, this note, held by a director of ours, was amended to extend its maturity date to March 15, 2026 and reduce its interest rate on a going forward basis from 8 % to 5 %.

6 On July 8, 2024, a note with a face value of $ 400,000 was amended to provide for up to ten ( 10 ) one -year automatic extensions of the original maturity date, at the original stated interest rate, provided the holder does not revoke the extension option in writing at least ten ( 10 ) trading days prior to the then applicable maturity date.

7 On July 8, 2024, this note was amended to provide for up to ten ( 10 ) one -year automatic extensions of the original maturity date, at the original stated interest rate, provided the holder does not revoke the extension option in writing at least ten ( 10 ) trading days prior to the then applicable maturity date.

In addition, the note was amended to reduce the conversion price from $ 0.16 to $ 0.11 .

Contingent Payment Obligations

Secured Contingent Payment Obligation

The following table provides a reconciliation of our secured contingent payment obligation, measured at estimated fair market value, for the three months ended March 31, 2024 and the year ended December 31, 2023 (in thousands):

Three Months Ended March 31, 2024

The following table provides a reconciliation of our secured contingent payment obligation, measured at estimated fair value, for the six months ended June 30, 2024 and the year ended December 31, 2023 (in thousands):

Six Months Ended June 30, 2024

Year Ended December 31, 2023

19 unchanged sentences

The secured contingent payment obligation is remeasured to fair value at each reporting period with changes recorded in the condensed consolidated statements of comprehensive income (loss) until the contingency is resolved.

The underlying carrying value of the Note, which includes the Face Value plus accrued interest, was approximately $ 53.0 million and $ 51.0 million as of March 31, 2024 and December 31, 2023 , respectively.

The underlying carrying value of the Note, which includes the Face Value plus accrued interest, was approximately $ 55.1 million and $ 51.0 million as of June 30, 2024 and December 31, 2023 , respectively.

The range of potential proceeds payable to Brickell is discussed more fully in Note 11.

As of March 31, 2024 , we are in compliance with our obligations under this agreement.

As of June 30, 2024 , we are in compliance with our obligations under the Note and the PPFPA.

Unsecured Contingent Payment Obligations

The following table provides a reconciliation of our unsecured contingent payment obligations, measured at estimated fair market value, for the three months ended March 31, 2024 and the year ended December 31, 2023 (in thousands):

Three Months Ended March 31, 2024 Year Ended December 31, 2023

The following table provides a reconciliation of our unsecured contingent payment obligations, measured at estimated fair value, for the six months ended June 30, 2024 and the year ended December 31, 2023 (in thousands):

Six Months Ended June 30, 2024 Year Ended December 31, 2023

Unsecured contingent payment obligations, beginning of period

4 unchanged sentences

$ 7,063 $ 7,618

Our unsecured contingent payment obligations represent amounts payable to others from future patent-related proceeds including (i) a termination fee due to a litigation funder and (ii) contingent payment rights issued to accredited investors in connection with equity financings (“CPRs”).

We have elected to measure these unsecured contingent payment obligations at their estimated 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.

1 unchanged sentence

Fair Value Measurements

The following tables summarize the fair value of our contingent payment obligations measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 (in thousands):

The following tables summarize the fair value of our contingent payment obligations measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 (in thousands):

Fair Value Measurements

3 unchanged sentences

Significant Unobservable Inputs (Level 3)

March 31, 2024:

June 30, 2024:

Secured contingent payment obligation

13 unchanged sentences

The fair values of our secured and unsecured contingent payment obligations were 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 for the secured and unsecured contingent payment obligations of 18.50 % and 18.81 %, respectively, at March 31, 2024 , based on a risk-free rate of 4.50 % and 4.81 %, respectively, as adjusted by 8 % for credit risk and 6 % for litigation inherent risk.

The following table provides quantitative information about the significant unobservable inputs used in the measurement of fair value for both the secured and unsecured contingent payment obligations at March 31, 2024 , including the lowest and highest undiscounted payout scenarios as well as a weighted average payout scenario based on relative undiscounted fair value of each cash flow scenario.

We used a risk-adjusted discount rate for the secured and unsecured contingent payment obligations of 18.62 % and 18.9 %, respectively, at June 30, 2024 , based on a risk-free rate of 4.62 % and 4.9 %, respectively, as adjusted by 8 % for credit risk and 6 % for litigation inherent risk.

The following table provides quantitative information about the significant unobservable inputs used in the measurement of fair value for both the secured and unsecured contingent payment obligations at June 30, 2024 , including the lowest and highest undiscounted payout scenarios as well as a weighted average payout scenario based on relative undiscounted fair value of each cash flow scenario.

Secured Contingent Payment Obligation

11 unchanged sentences

Changes in any of these Level 3 inputs could result in a significantly higher or lower fair value measurement.

Commitments and Contingencies

Legal Proceedings

From time to time, we are subject to legal proceedings and claims which arise in the ordinary course of our business.

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”) in an attempt to invalidate certain of our patent claims.

The majority of our litigation, including our PTAB proceedings, is being paid for through contingency fee arrangements with our litigation counsel as well as third -party litigation financing.

The majority of our litigation is being paid for through contingency fee arrangements with our litigation counsel as well as third -party litigation financing.

In general, litigation counsel is entitled to recoup on a priority basis, from litigation proceeds, any out-of-pocket expenses incurred.

4 unchanged sentences

In March 2022, the district court in the Middle District of Florida ruled on a number of pre-trial motions in our patent infringement case against Qualcomm that was originally filed in May 2014.

The court granted Qualcomm motions to strike and exclude opinions regarding the alleged infringement and validity issues, essentially precluding infringement and validity opinions by both of our experts at trial.

The court granted Qualcomm motions to strike and exclude our technical expert report, essentially precluding the support of infringement testimony at trial.

The court also issued an order granting Qualcomm's motion for summary judgment ruling that Qualcomm did not infringe the remaining three patents in the case.

In April 2022, we filed a notice of appeal to the United States Court of Appeals for the Federal Circuit ("CAFC").

A hearing was held on our appellate action on November 6, 2023, and we are currently awaiting a ruling from the CAFC.

We appealed these rulings to the United States Court of Appeals for the Federal Circuit ("CAFC") and oral arguments were heard in November 2023.

In July 2024, the CAFC issued an order indicating that it did not have jurisdiction over this case as the district court had not entered a final judgement on Qualcomm's counterclaims of invalidity.

The CAFC indicated that the appeal could be refiled, without fees, by August 15, 2024.

The parties filed a motion with the district court requesting an order dismissing Qualcomm's counterclaims of invalidity without prejudice.

On August 1, 2024, the district court issued such an order, and on August 7, 2024, the matter was transferred back to the CAFC.

We are currently awaiting a final ruling from the CAFC.

As a result of the court's summary judgment motion in favor of Qualcomm, Qualcomm has the right to petition the court for its fees and costs.

26 unchanged sentences

ParkerVision v.

Realtek (Western District of Texas)

We filed two patent infringement actions in the Western District of Texas against Realtek Semiconductor Corp.

("Realtek"), the first in 2022 and a second in 2023 , alleging infringement of an aggregate of seven of our patents.

A claim construction hearing was held in January 2024 in the first Realtek action and the court adopted the majority of our claim constructions.

A jury trial for the first Realtek action is scheduled for March 2025 .

A claim construction hearing was held in June 2024 in the second Realtek action and we are currently awaiting a claim construction ruling and trial date.

ParkerVision v.

TCL (Western District of Texas)

5 unchanged sentences

ParkerVision v.

LGE (Western District of Texas)

We filed a patent infringement action in the Western District of Texas against LG Electronics, a South Korean company ("LGE") in 2021, alleging infringement of ten of our patents.

The court issued its claim construction recommendations in June 2022 , adopting our claim constructions for nearly all of the disputed terms.

In January 2023, the LGE action was stayed pending final resolution of patent infringement actions filed against Realtek and MediaTek as well as final resolution of IPR actions against patents in this case.

ParkerVision v.

Realtek (Western District of Texas)

We filed two patent infringement actions in the Western District of Texas against Realtek Semiconductor Corp.

("Realtek"), the first in 2022 and a second in 2023 , alleging infringement of an aggregate of seven of our patents.

A claim construction hearing was held in January 2024 in the first Realtek action and the court adopted the majority of our claim constructions.

A jury trial for the first Realtek action is currently scheduled for January 2025 .

The parties have filed claim construction briefs and responses in the second action and are currently awaiting a court schedule.

ParkerVision v.

MediaTek (Western District of Texas)

3 unchanged sentences

A claim construction hearing was held in January 2024 in the first MediaTek action and the court adopted the majority of our claim constructions.

A jury trial for the first MediaTek action is currently scheduled for December 2024.

The parties have filed claim construction briefs and responses in the second MediaTek action and a claim construction hearing is scheduled for June 2024 with a jury trial scheduled for October 2025.

A jury trial for the first MediaTek action is currently scheduled for April 2025.

A claim construction hearing was held in June 2024 in the second MediaTek action.

We are currently awaiting the claim construction ruling and a jury trial is tentatively scheduled for February 2026.

ParkerVision v.

LGE (Western District of Texas)

We filed a patent infringement action in the Western District of Texas against LG Electronics, a South Korean company ("LGE") in 2021 , alleging infringement of ten of our patents.

The court issued its claim construction recommendations in June 2022 , adopting our claim constructions for nearly all of the disputed terms.

In January 2023 , the LGE action was stayed pending final resolution of patent infringement actions filed against Realtek and MediaTek as well as final resolution of IPR actions against patents in this case.

ParkerVision v.

Texas Instruments (Western District of Texas)

1 unchanged sentence

In December 2023, TI filed a motion to change venue to the Northern District of Texas.

A ruling has not yet been issued on this motion.

The parties have filed claim construction briefs and responses and a claim construction hearing is currently scheduled for June 2024 with a jury trial scheduled in May 2025.

Although a formal order has not been issued on the change of venue matter, the court informed the parties prior to the claim construction hearing that it intends to deny this motion.

The claim construction hearing was held in June 2024.

The court adopted the majority of our claim constructions, and we are currently awaiting its formal claim construction ruling.

A jury trial is tentatively scheduled for May 2025.

ParkerVision v.

1 unchanged sentence

We filed a patent infringement action in the Western District of Texas against NXP Semiconductors ("NXP") in 2023, alleging infringement of three of our patents.

The parties have filed claim construction briefs and responses and a claim construction hearing is currently scheduled for June 2024, with a jury trial scheduled in August 2025 .

A claim construction hearing was held in June 2024.

The court adopted the majority of our claim constructions, and we are currently awaiting its formal claim construction ruling.

A jury trial is tentatively scheduled for August 2025 .

Intel (USPTO) v.

ParkerVision (PTAB)

We have an appeal pending in an IPR action, originally filed by Intel, against our U.S.

We appealed an IPR action, originally filed by Intel, against our U.S.

patent 8,190,108, ("the '108 Patent") which was asserted in ParkerVision v.

5 unchanged sentences

We appealed this decision to the CAFC and oral arguments were presented on May 9, 2024.

We are awaiting a decision from the CAFC.

On May 16, 2024, the CAFC issued its decision upholding the PTAB ruling that the challenged claims are unpatentable.

TCL and LGE v.

ParkerVision (PTAB)

We have two appeals pending in IPR actions filed by TCL and LGE against our U.S.

We appealed two IPR actions filed by TCL and LGE against our U.S.

patent 7,292,835 (“the ‘835 Patent”) and U.S.

2 unchanged sentences

In November 2022, the PTAB issued its written decision ruling that the challenged claims for both patents were unpatentable.

We have appealed these decisions to the CAFC and oral arguments for both appeals are scheduled to be presented to the CAFC on June 3, 2024.

We appealed these decisions to the CAFC and oral arguments for both appeals were presented to the CAFC on June 3, 2024.

On June 5, 2024, the CAFC issued its final decision in both of these cases, upholding the PTAB rulings that the challenged claims are unpatentable.

ParkerVision (PTAB)

MediaTek filed an IPR petition in November 2023 against the '835 Patent, which is one of the patents asserted in the first MediaTek infringement action.

This matter is still being briefed by the parties.

On May 23, 2024, the PTAB instituted the IPR petition.

On May 21, 2024, MediaTek filed a second IPR petition against the '686 Patent which is one of the patents asserted in the second MediaTek infringement action.

ParkerVision (PTAB)

In May 2024, TI filed IPR petitions against all three of the patents asserted in our infringement action against them.

ParkerVision (PTAB)

In June 2024, NXP filed IPR petitions against two of the three patents asserted in our infringement action against them.

Both of the IPR challenges are against patents also challenged by TI IPR petitions in May 2024.

Other Contingencies

In July 2024, a public relations firm engaged by us in late 2019 threatened to file a claim against us for the collection of payment for billed and unbilled services totaling approximately $ 0.3 million purportedly performed by them under our engagement agreement during the period from December 2019 through May 2021.

We currently do not believe a loss related to this claim is probable based on the merits, and therefore our financial statements for the period ended June 30, 2024 do not reflect any accrued liability related to this matter.

Due to the inherent uncertainty of the outcome of litigation, we believe a loss related to this threatened action is reasonably possible in the future, although the estimated amount and relative materiality of such possible future loss is currently indeterminable.

Stock Authorization and Issuance

1 unchanged sentence

Payment for Services

During the three months ended March 31, 2024 , we issued 120,000 shares of our common stock to third parties, valued at approximately $ 19,000 , as payment for consulting services over a one -year period.

During the six months ended June 30, 2024 , we issued 120,000 shares of our common stock to third parties, valued at approximately $ 19,000 , as payment for consulting services over a one -year period.

Common Stock Warrants

As of March 31, 2024 , we had outstanding warrants for the purchase of up to 10.3 million shares of our common stock.

As of June 30, 2024 , we had outstanding warrants for the purchase of up to 10.3 million shares of our common stock.

The estimated grant date fair value of these warrants of $ 3.5 million is included in additional paid-in capital in our condensed consolidated balance sheets.

As of March 31, 2024 , our outstanding warrants have an average exercise price of $ 0.75 per share and a weighted average remaining life of approximately 1.3 years.

As of June 30, 2024 , our outstanding warrants have an average exercise price of $ 0.75 per share and a weighted average remaining life of approximately 1.0 years.

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 2023 Annual Report.

For the three months ended March 31, 2024 and 2023 , we recognized share-based compensation expense of approximately $ 0.1 million and $ 0.2 million, respectively.

For the six months ended June 30, 2024 and 2023 , we recognized share-based compensation expense of approximately $ 0.15 million and $ 0.32 million, respectively.

Share-based compensation is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income (loss).

As of March 31, 2024 , there was $ 0.3 million of total unrecognized compensation cost related to all non-vested share-based compensation awards.

As of June 30, 2024 , there was $ 0.2 million of total unrecognized compensation cost related to all non-vested share-based compensation awards.

The cost is expected to be recognized over a weighted-average remaining life of approximately 0.8 years.

The Company's effective income tax rate was 0.0 % for each of the three months ended March 31, 2024 and 2023 as we expect to be able to utilize net operating loss carryforwards not previously recognized as a tax benefit to offset any income tax expense related income for the 2023 and 2024 tax years.

The Company's effective income tax rate was 0.0 % for each of the six months ended June 30, 2024 and 2023 as we expect to be able to utilize net operating loss carryforwards not previously recognized as a tax benefit to offset any income tax expense related to income for the 2023 and 2024 tax years.

Related Party Transactions

On May 10, 2024, we amended convertible notes held by three of our directors.

A June 19, 2019 note with a principal balance of $ 25,000 and a September 13, 2019 note with a principal balance of $ 50,000 , both held by Lewis Titterton, were amended to extend the maturity dates to March 15, 2026, reduce the interest rate from 8 % to 5 % and to replace the quarterly interest payments with a single payment of unpaid, accrued interest at the earlier of conversion or maturity of the notes.

Additional convertible notes with an aggregate principal balance of $ 475,000 were also amended to replace the quarterly interest payment dates with a single payment of unpaid, accrued interest at the earlier of conversion or maturity of the notes.

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Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those presently anticipated or projected, including the risks and uncertainties identified in our annual report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Annual Report”) and in this Item 2 of Part I of this quarterly report.

Examples of such risks and uncertainties include general economic and business conditions, competition, unexpected changes in technologies and technological advances, the timely development and commercial acceptance of new products and technologies, reliance on key suppliers, reliance on our intellectual property, the outcome of our intellectual property litigation and the ability to obtain adequate financing in the future.

Examples of such risks and uncertainties include general economic and business conditions, competition, unexpected changes in technologies and technological advances, the timely development and commercial acceptance of new products and technologies, reliance on our intellectual property, the outcome of our intellectual property litigation and the ability to obtain adequate financing in the future.

We have no obligation to publicly release the results of any revisions which may be made to any forward-looking statements to reflect anticipated events or circumstances occurring after the date of such statements.

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Liquidity and Capital Resources

We used cash for operations of approximately $0.8 million for the three months ended March 31, 2024 and generated cash from operations of $13.2 million for the three months ended March 31, 2023.

We used cash for operations of approximately $1.4 million for the six months ended June 30, 2024 and generated cash from operations of $12.3 million for the six months ended June 30, 2023.

The decrease in cash generated from operations from 2023 to 2024 is primarily due to proceeds received from the patent license and settlement agreement entered into in February 2023, net of contingent legal fees and expenses paid.

At March 31, 2024, we had cash and cash equivalents of approximately $1.7 million and an accumulated deficit of $434.4 million.

In addition, we have approximately $1.4 million in convertible debt maturities over the next twelve months.

At June 30, 2024, we had cash and cash equivalents of approximately $1.0 million, an accumulated deficit of $434.7 million, and a working capital deficit of $1.3 million.

At June 30, 2024, we had $2.4 million in current liabilities, including approximately $1.3 million in convertible debt that matures over the next twelve months.

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Financial Condition

Our working capital decreased approximately $1.1 million from December 31, 2023 to March 31, 2024.

This decrease in working capital is primarily the result of cash used in operations during the three months ended March 31, 2024 and an increase in current liabilities from the reclassification of an additional $0.4 million of convertible notes that mature within the next twelve months, from long-term to current liabilities.

Our long-term liabilities decreased $0.6 million from December 31, 2023 to March 31, 2024, primarily due to the reclassification of an additional $0.4 million of convertible notes that mature within the next twelve months from long-term to current liabilities and an overall decrease in the estimated fair value our contingent payment obligations of $0.2 million.

Results of Operations for the Three Months Ended March 31, 2024 and 2023

Our working capital decreased approximately $1.7 million from December 31, 2023 to June 30, 2024.

This decrease in working capital is primarily the result of cash used in operations during the six months ended June 30, 2024 and an increase in current liabilities from the reclassification of an additional $0.3 million of convertible notes that mature within the next twelve months, from long-term to current liabilities.

Our long-term liabilities decreased $1.1 million from December 31, 2023 to June 30, 2024, primarily due to the reclassification of an additional $0.3 million of convertible notes that mature within the next twelve months from long-term to current liabilities and an overall decrease in the estimated fair value our contingent payment obligations of $0.7 million.

Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023

Revenue and Cost of Sales

We reported no licensing revenue for the three months ended March 31, 2024.

Licensing revenue was $25.0 million for the three months ended March 31, 2023, resulting from a patent license and settlement agreement entered into in February 2023.

We reported no licensing revenue for the three and six months ended June 30, 2024 or the three months ended June 30, 2023.

Licensing revenue was $25.0 million for the six months ended June 30, 2023, resulting from a patent license and settlement agreement entered into in February 2023.

The parties' performance obligations were met in February 2023 and we recognized revenue at that time.

Cost of sales for the three months ended March 31, 2024 and 2023 consists of amortization expense related to the patents covered under license agreements.

Although we anticipate revenue to result in 2024 and beyond from our patent enforcement actions, the amount and timing is highly unpredictable and there can be no assurance that we will achieve our anticipated results.

Cost of sales for the three and six months ended June 30, 2024 and 2023 consists of amortization expense related to the patents covered under license agreements.

Revenue resulting from our patent enforcement actions is highly unpredictable with respect to the amount and timing of receipt, and there can be no assurance that we will achieve our anticipated results.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses consist primarily of litigation fees and expenses, personnel and related costs, including share-based compensation, for executive, Board, finance and accounting and technical support personnel for our patent enforcement program, and costs incurred for insurance and outside professional fees for accounting, legal and business consulting services.

Our selling, general and administrative expenses decreased by approximately $11.3 million, or 93.6%, during the three months ended March 31, 2024 when compared to the same period in 2023.

This is primarily the result of an $11.1 million decrease in litigation fees and expenses and a $0.1 million decrease in share-based compensation.

Our selling, general and administrative expenses decreased by approximately $0.4 million, or 39.3%, during the three months ended June 30, 2024 when compared to the same period in 2023.

This is primarily the result of a $0.2 million decrease in compensation expense, including share-based compensation and a $0.2 million decrease in consulting expenses.

Our selling, general and administrative expenses decreased by approximately $11.8 million, or 89.0%, during the six months ended June 30, 2024 when compared to the same period in 2023.

This is primarily the result of an $11.1 million decrease in litigation fees and expenses, a $0.3 million decrease in compensation expense, including share-based compensation, and a $0.3 million decrease in consulting expenses.

The decrease in our compensation expense for the three and six months ended June 30, 2024 is the result of the elimination of bonuses and share-based awards to employees and executives in 2024.

As of June 30, 2024, we had $0.2 million of total unrecognized compensation cost related to non-vested share-based compensation awards that is expected to be recognized over a period of approximately 0.8 years.

The decrease in consulting fees for the three and six months ended June 30, 2024 is primarily due to decisions not to continue or extend prior consulting arrangements as a result of changes in business strategy.

The decrease in litigation fees and expenses from 2023 to 2024 is the result of contingent legal fees and expenses recognized in 2023 in conjunction with the confidential patent license and settlement agreement reached in February 2023.

The decrease in our share-based compensation for the three months ended March 31, 2024 is primarily the result of fewer share-based grants being awarded to employees and executives.

As of March 31, 2024, we had $0.3 million of total unrecognized compensation cost related to all non-vested share-based compensation awards that is expected to be recognized over a period of approximately 1.0 years.

Change in Fair Value of Contingent Payment Obligations

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Generally, changes in fair value are a result of changes in estimated amounts and timing of projected future cash flows due to increases in funded amounts, passage of time, and changes in the probabilities based on the status of the funded actions.

For the three months ended March 31, 2024 and 2023, we recorded aggregate decreases in the fair value of our secured and unsecured contingent payment obligations of approximately $0.2 million and $0.3 million, respectively.

The change in fair value for the three months ended March 31, 2024 was primarily the result of changes in the estimated amounts and timing of projected future cash flows due to changes in probabilities and time frames based on the status of various patent infringement actions.

With respect to the secured contingent payment obligation, the decrease in fair value resulting from the aforementioned factors was offset by an increase in fair value resulting from the accrual of interest on the outstanding obligation.

For the three months ended June 30, 2024 and 2023, we recorded aggregate decreases in the fair value of our secured and unsecured contingent payment obligations of approximately $0.5 million and $2.7 million, respectively.

For the six months ended June 30, 2024 and 2023, we recorded aggregate decreases in the fair value of our secured and unsecured contingent payment obligations of approximately $0.7 million and $3.1 million, respectively.

The change in fair value for the three and six months ended June 30, 2024 was primarily the result of changes in the estimated amounts and timing of projected future cash flows due to changes in probabilities and time frames based on the status of various patent infringement actions.

Off-Balance Sheet Transactions, Arrangements and Other Relationships

As of March 31, 2024, we had outstanding warrants to purchase approximately 10.3 million shares of our common stock.

As of June 30, 2024, we had outstanding warrants to purchase approximately 10.3 million shares of our common stock.

The estimated grant date fair value of these warrants of approximately $3.5 million is included in shareholders’ deficit in our condensed consolidated balance sheets.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements