PARKERVISION INC

Previous 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.

Current wording

We used cash for operations of approximately $2.1 million for the nine months ended September 30, 2024 and generated cash from operations of $11.5 million for the nine months ended September 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 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.

Current wording

At September 30, 2024, we had cash and cash equivalents of approximately $0.8 million, an accumulated deficit of $445.5 million, and a working capital deficit of $1.5 million. At September 30, 2024, we had $2.4 million in current liabilities, including approximately $1.1 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 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 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. We expect that proceeds received by us from patent enforcement actions and technology licenses over the next twelve months may not alone be sufficient to cover our working capital requirements.

Current wording

Approximately $0.64 million in convertible notes, including accrued interest thereon, were converted by the holders into shares of our common stock subsequent to September 30, 2024, and all of our remaining convertible notes have conversion prices that are substantially below the market price of our common stock as of September 30, 2024. We anticipate that all of our outstanding convertible notes will be converted by the holders prior to their scheduled maturity dates. However, even with the anticipated conversions of our convertible debt, 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, and/or (iii) our ability to obtain additional debt or equity financing. We expect that proceeds received by us from patent enforcement actions and technology licenses over the next twelve months may not alone be sufficient to cover our working capital requirements.

Previous 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.

Current wording

Our working capital decreased approximately $1.8 million from December 31, 2023 to September 30, 2024. This decrease in working capital is primarily the result of cash used in operations during the nine months ended September 30, 2024.

Previous 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.

Current wording

Our long-term liabilities increased $8.5 million from December 31, 2023 to September 30, 2024, primarily due to an overall increase in the estimated fair value our contingent payment obligations of $8.9 million. Refer to "Change in Fair Value of Contingent Payment Obligations" below.

Previous wording

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

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

Previous 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.

Current wording

We reported no licensing revenue for the three and nine months ended September 30, 2024 or the three months ended September 30, 2023. Licensing revenue was $25.0 million for the nine months ended September 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 nine months ended September 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 $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.

Current wording

Our selling, general and administrative expenses increased by less than $0.1 million, or 8.4%, during the three months ended September 30, 2024 when compared to the same period in 2023. This is primarily the result of a $0.1 million increase in litigation fees and expenses.

Previous 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.

Current wording

Our selling, general and administrative expenses decreased by approximately $11.7 million, or 82.7%, during the nine months ended September 30, 2024 when compared to the same period in 2023. This is primarily the result of an $10.9 million decrease in litigation fees and expenses, a $0.4 million decrease in compensation expense, including share-based compensation, and a $0.3 million decrease in consulting expenses.

Previous wording

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.

Current wording

The increase in litigation fees and expenses for the three months ended September 30, 2024 is the result of the settlement of a contingent obligation. The decrease in litigation fees and expenses for the nine months ended September 30, 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.

Previous 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.

Current wording

The decrease in our compensation expense for the nine months ended September 30, 2024 is the result of bonuses paid and share-based awards issued to employees and executives in 2023. As of September 30, 2024, we had$0.1 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 0.7 years. The decrease in consulting fees for the nine months ended September 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 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.

Current wording

For the three months ended September 30, 2024 and 2023, we recorded aggregate increases in the fair value of our secured and unsecured contingent payment obligations of approximately $9.7 million and $2.9 million, respectively. For the nine months ended September 30, 2024, we recorded an aggregate increase in the fair value of our secured and unsecured contingent payment obligations of approximately $9.0 million compared to an aggregate decrease of $0.2 million for the nine months ended September 30, 2023. The change in fair value for the three and nine months ended September 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, particularly as a result of the favorable CAFC decision received in September 2024 that remanded the Qualcomm case back to district court.

Previous 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.

Current wording

As of September 30, 2024, we had outstanding warrants to purchase approximately 7.7 million shares of our common stock. The estimated grant date fair value of these warrants of approximately $3.2 million is included in shareholders’ deficit in our condensed consolidated balance sheets. The outstanding warrants have a weighted average exercise price of $0.95 per share and a weighted average remaining life of approximately 0.8 years.