PARKERVISION INC

Previous wording

We believe that it is important to communicate our future expectations to our shareholders and to the public. This quarterly report contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including, in particular, statements about our future plans, objectives, and expectations contained in this Item. When used in this quarterly report and in future filings by us with the Securities and Exchange Commission (“SEC”), the words or phrases “expects”, “will likely result”, “will continue”, “is anticipated”, “estimated” or similar expressions are intended to identify “forward-looking statements.” Readers are cautioned not to place undue reliance on such forward-looking statements, each of which speaks only as of the date made. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those presently anticipated or projected, including the risks and uncertainties identified in our annual report on Form 10-K for the fiscal year ended December 31, 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. 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.

Current wording

We believe that it is important to communicate our future expectations to our shareholders and to the public. This quarterly report contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including, in particular, statements about our future plans, objectives, and expectations contained in this Item. When used in this quarterly report and in future filings by us with the Securities and Exchange Commission (“SEC”), the words or phrases “expects”, “will likely result”, “will continue”, “is anticipated”, “estimated” or similar expressions are intended to identify “forward-looking statements.” Readers are cautioned not to place undue reliance on such forward-looking statements, each of which speaks only as of the date made. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those presently anticipated or projected, including the risks and uncertainties identified in our annual report on Form 10-K for the fiscal year ended December 31, 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 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.

Previous wording

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. 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.

Current wording

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.

Previous wording

At March 31, 2024, we had cash and cash equivalents of approximately $1.7 million and an accumulated deficit of $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 maturities over the next twelve months. 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.

Current wording

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. 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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

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. 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.

Current wording

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 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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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

Current wording

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. The outstanding warrants have a weighted average exercise price of $0.75 per share and a weighted average remaining life of approximately 1.0 years.