Add
PRKR to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| PRKR > SEC Filings for PRKR > Form 10-Q on 10-Aug-2009 | All Recent SEC Filings |
10-Aug-2009
Quarterly Report
Forward-Looking Statements
When used in this Form 10-Q and in future filings by us with the Securities and
Exchange Commission, the words or phrases "will likely result", "management
expects" or "Company expects", "will continue", "is anticipated", "estimated" or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. 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 earnings and those presently anticipated or projected, including
risks and uncertainties relating to timely development and acceptance of new
products, sources of supply and concentration of customers. We have no
obligation to publicly release the results of any revisions that may be made to
any forward-looking statements to reflect events or circumstances occurring
after the date of such statements.
General
We are in the business of designing, developing and selling our proprietary RF
technologies and products for use in semiconductor circuits for wireless
communication products. Since 2007, we have entered into three customer
contracts for the incorporation of our technologies into wireless chipsets,
modules and products. Two of the three customer agreements represent licensing
agreements whereby our customers will incorporate our IP into their own wireless
semiconductor circuits and/or radio products. The third customer agreement is
for the joint development and marketing of wireless radio modules that
incorporate our technologies.
We believe our technology has substantial advantages over competing technologies, especially in the 3G mobile handset market and generations that are likely to evolve beyond 3G, such as 4G mobile handset standards and applications. We have made significant investments in developing our technologies and products, the returns on which are dependent upon the generation of future revenues for realization. We had no revenue for the three and six month periods ended June 30, 2009 and have used the proceeds from the sale of our equity securities to fund our operations.
Critical Accounting Policies
There have been no other changes in critical accounting policies from those
stated in the Annual Report on Form 10-K/A for the year ended December 31, 2008.
Results of Operations for Each of the Three and Six Month Periods Ended June 30, 2009 and 2008
Revenue and Gross Margin
We had no revenue or gross margin for the three and six month periods ended June
30, 2009 and 2008. We expect to recognize revenue in the second half of 2009
from our relationship with ITT Corporation as well as initial royalties from our
chipset customer as they commence delivery of chipsets which incorporate our
technology. Revenues from product royalties, however, are dependent on our
customers' ability to bring products containing our technology to market. Their
ability to market such products is contingent on uncertainties relating to
development of our technology, product design, the market for cellular devices
and general economic conditions. We can provide no assurance that our customers
will be able to market such products within the anticipated time frame.
Research and Development Expenses
Our research and development expenses decreased approximately $190,000 or 5.0%
during the three month period ended June 30, 2009 when compared to the same
period in 2008. This decrease is primarily due to reduced consulting fees of
approximately $370,000 and reduced compensation and other personnel-related
expenses of approximately $230,000. These reductions were offset by increases in
share-based compensation expense of approximately $240,000, prototype
fabrication and materials costs of approximately $130,000, and amortization
expenses of approximately $60,000.
Our research and development costs decreased approximately $140,000, or 2.1% during the six month period ended June 30, 2009 when compared to the same period in 2008. This decrease was due to reduced consulting fees of approximately $1,050,000 and reduced compensation and other personnel-related expenses of approximately $330,000. These reductions were offset by increases in share-based compensation expense of approximately $640,000, prototype fabrication costs of approximately $440,000, and amortization expenses of approximately $140,000.
Outside consulting services are utilized to supplement our internal engineering resources and the related fees are generally project-based and will vary based on the magnitude and timing of those projects. The decrease in consulting fees from 2008 to 2009 was primarily related to the completion of certain development programs late in 2008. We expect to continue to utilize outside consulting services periodically to supplement our internal resources.
The reduction in personnel-related expenses is primarily a result of the elimination of cash-based incentive compensation programs for 2009. These reductions are offset by increases in share-based compensation expense from new equity awards as well as equity awards made in connection with executive and senior management employment agreements entered into in 2008.
Prototype fabrication and materials costs generally vary period to period based on the number and timing of foundry runs, the materials specified and the number of variants requested on each run.
The increase in amortization expense for the three and six month periods ended June 30, 2009 as compared to the same periods in 2008 is primarily a result of the amortization expense on certain licenses purchased in 2008.
Marketing and Selling Expenses
Marketing and selling expenses decreased approximately $150,000 or 21.3% during
the three month period ended June 30, 2009 when compared to the same period in
2008. This decrease is primarily due to reduced consulting and other
professional fees of approximately $90,000 and reduced compensation and other
personnel-related expenses of approximately $70,000. These reductions were
partially offset by increases in share-based compensation expense of
approximately $30,000.
Marketing and selling expenses decreased by approximately $180,000, or 13.6% during the six month period ended June 30, 2009 when compared to the same period in 2008. This decrease was due primarily to reduced consulting and other professional fees of approximately $170,000 and reduced compensation and other personnel-related expenses of approximately $150,000. These reductions were partially offset by an increase in share-based compensation expense of approximately $150,000.
The reduction in personnel-related expenses is primarily a result of the elimination of cash-based incentive compensation programs for 2009. These reductions are offset by increases in share-based compensation expense from new equity awards as well as equity awards made in connection with executive and senior management employment agreements entered into in 2008.
The decreases in consulting and other professional fees results from a reduction in services rendered coupled with a re-negotiation of fees with various sales and marketing consultants as part of our cost-reduction measures implemented in late 2008.
General and Administrative Expenses
General and administrative expenses increased approximately $130,000 or 8.8%
during the three month period ended June 30, 2009 when compared to the same
period in 2008. The increase is due primarily to an increase in share-based
compensation expense of approximately $230,000, offset by reductions in
compensation and other personnel-related expenses of approximately $70,000 and a
decrease in board cash compensation expense of approximately $60,000.
General and administrative expenses increased approximately $260,000 or 8.7% during the six month period ended June 30, 2009 when compared to the same period in 2008. This increase is due primarily to increases in share-based compensation expense of approximately $500,000, offset by reductions in compensation and other personnel-related expenses of approximately $140,000 and a decrease in board cash compensation expense of approximately $120,000.
The increase in share-based compensation is a result of compensation related to new equity awards as well as equity awards made in connection with executive and senior management employment agreements entered into in 2008. For the three and six month periods ended June 30, 2009, we recognized approximately $160,000 in share-based compensation expense related to nonqualified stock options granted to our non-employee directors in lieu of cash compensation for board and director fees for the same periods. In addition, in 2009, we granted equity-based awards to non-executive employees to offset the elimination of the 2009 cash incentive award program. The reduction in compensation and other personnel-related costs is primarily a result of the elimination of this cash incentive program for 2009.
Interest and Other Income
Interest and other income consist of interest earned on our investments and
other miscellaneous income. Interest and other income decreased by approximately
$130,000 or 99.6% during the three months ended June 30, 2009 when compared to
the same period in 2008. For the six month period ended June 30, 2009, interest
and other income decreased by approximately $230,000, or 85.8% when compared to
the same period in 2008. These decreases are primarily due to lower interest
rates and lower average cash balances during the three and six month periods
ended June 30, 2009.
Loss and Loss per Share
Our net loss decreased approximately $70,000 or 1.3% during the three month
period ended June 30, 2009 when compared to the same period in 2008, primarily
due to a decrease in operating expenses of approximately $200,000 offset by a
decrease in interest income of approximately $130,000.
Our net loss increased approximately $170,000 or 1.5% during the six month period ended June 30, 2009 when compared to the same period in 2008, primarily due to the decrease in interest income of approximately $230,000, offset by a decrease in operating expenses of approximately $70,000.
Liquidity and Capital Resources
As of June 30, 2009, we had working capital of approximately $6.1 million,
including approximately $7.5 million in cash and cash equivalents. This
represents an increase of approximately $2.1 million from working capital at
December 31, 2008. The increase was due primarily to the $9.7 million in
proceeds from the sale of equity securities in 2009, offset by cash used to fund
operations in the first half of 2009.
We expect that revenue for 2009 will not be sufficient to cover our operational expenses for 2009, and that our expected continued losses and use of cash will be funded from available working capital. We assessed our short-term liquidity needs based on the assumption that our working capital must be sufficient to cover our operational expenses for 2009 with an assumption of minimal revenue.
We expect our overall liquidity needs in 2009 will be lower than those incurred in 2008 as a result of the elimination of certain non-recurring product development activities as well as certain cost reduction measures implemented by us during the first quarter of 2009. Our use of cash for operating and investing activities in the first half of 2009 was approximately $1.0 million, or 12.9% less than our use of cash for the same period in 2008.
We believe our current capital resources are sufficient to support our liquidity requirements at least into the first quarter of 2010. In the event that sufficient working capital is not available to meet our 2009 liquidity needs, we believe additional liquidity could be obtained through the issuance of securities under our Shelf, including securities in lieu of cash payments for certain vendor purchases, the surrender of key-man life insurance policies for their cash value, and/or additional cost reduction measures. In addition, we may be able to meet certain liquidity needs through short or long-term debt financing, although there can be no assurance that such financing will be available to us. We currently have no outstanding long-term debt obligations.
The long-term continuation of our business plan through 2009 and beyond is dependent upon the generation of sufficient revenues from our technologies and products to offset expenses. In the event that we do not generate sufficient revenues, we will be required to obtain additional funding through public or private financing and/or further reduce operating costs. Failure to generate sufficient revenues, raise additional capital through debt or equity financings, and/or further reduce operating costs could have a material adverse effect on our ability to meet our long-term liquidity needs and achieve our intended long-term business objectives.
Off-Balance Sheet Transactions, Arrangements and Other Relationships As of June 30, 2009, we had outstanding warrants to purchase 2,200,139 shares of common stock that were issued in connection with the sale of equity securities in various private placement transactions in 2000, 2001, 2005, 2006 and 2009. These warrants have exercise prices ranging from $1.88 to $56.66 per share, with a weighted average exercise price of $26.01 and a weighted average remaining contractual life of approximately 2.5 years. The estimated fair value of these warrants of $17,778,163 is included in shareholders' equity in our consolidated balance sheets.
|
|