ParkerVision 2012 Q2 Conference Call

August 15, 2012

Ron Stabiner

Cindy Poehlman

Jeff Parker

Philip Anderson of Pinnacle Fund

John Hinkman of Leadenburg Thalmann

Walter Schenker from MAZ Partners

Wilson Jaeggli with Southwell Partners

 

Syed:  Good morning and welcome to ParkerVision's second quarter 2012 conference call and webcast. Today's conference is being recorded and all listeners are in a listen only mode. Following the presentation, we will open up the conference call for questions and answers. The Company has requested that questions and answers be limited to one question and one follow‑up per caller. As it is now time for opening remarks and introductions, I would like to turn the conference over to Ron Stabiner, with the Wall Street Group. Please go ahead, sir.

Ron Stabiner:  Thank you Syed. Good morning, everyone. Thank you for joining us. Before we get started, I would like to remind listeners that this conference call will contain forward‑looking statements, which involve known and unknown risks and uncertainties about our business and the economy and other factors that may cause actual results to differ materially from our expected achievements and anticipated results. Including in these factors is the ability to maintain technological advantages in the marketplace, the ability to increase manufacturing capacity to meet demands, achieving timely market introduction and acceptance of product, maintaining our patent protection and the availability of capital among others. Given these uncertainties and other factors for our business, listeners are cautioned not to place undue reliance on any forward‑looking statement contained within this conference call.

Additional materials concerning these and other risks can be found in our filings with the Securities and Exchange Commission. On this morning's call, we'll hear first from Cindy Poehlman, the Chief Financial Officer, who will provide a review of the Company's second‑quarter results. She will be followed by Jeffrey Parker, Chief Executive Officer of ParkerVision, who will provide an update on the business of the Company.

With that, I will now turn the call over to Cindy. Please go ahead.

[1:44]

Cindy Poehlman:  Thank you, Ron. Good morning to those of you joining us for ParkerVision's second‑quarter 2012 conference call. Yesterday afternoon, we reported a net loss of $5.1 million, or seven cents per share for the second quarter of 2012 compared to a net loss of $3.5 million, or six cents per share for the same quarter last year. On a year to date basis, our net loss increased from $6.9 million, or 12 cents per share, in the first half of 2011, to $9.1 million, or thirteen cents per share for the same period in 2012. The increase in our aggregate net loss, for both the quarter and the six‑month period, was the result of increased legal expenses, primarily litigation related and an increase in non‑cash share‑based compensation as discussed in our 10‑Q that was filed yesterday afternoon.

Our working capital increased by $5.2 million, during the second quarter of 2012. This increase is largely the result of $8.3 million in net proceeds from a common stock offering under our shelf registration statement in April. In addition, during this past quarter, we received net proceeds of approximately $900,000 from the exercise of 1.6 million warrants.

We used approximately $3.9 million in cash for operations, during the second quarter of 2012. We ended the quarter with $6.9 million in cash and investments. I'm happy to answer any questions regarding the financials at the end of today's call. But at this time, I would like to turn the call over to Jeff Parker for a business update.

[3:20]

Jeff Parker:  OK. Thank you, Cindy. Good morning to all of you joining us on our second quarter conference call. The activities, over this past quarter, have continued to be focused on the development and commercialization of our technologies, securing patent protection for our innovations and the defense of our intellectual property portfolio. Today, I hope to provide you with an update concerning these activities. I'll start with the defense of our intellectual property portfolio, namely our patent infringement lawsuit against Qualcomm. There have been approximately three dozen court documents that have been filed over the past three months, all of which are available through our website. A number of those documents are related to the recent Markman hearing, which was held early last week.

The Markman hearing, also referred to as the Patent Claim Construction Hearing, is where the oral arguments of each party are heard by the Court regarding how certain terms, used within the patent claims, are defined. It is this hearing, along with the companion briefs, that have been filed by each party, that are then considered by the judge.

The judge has the authority to issue rulings regarding the interpretation of certain terms found in the patent claims that are at issue in this case. This ruling will serve as a basis for defining ParkerVision's property rights, with respect to its patented technologies. The ruling will drive and inform many aspects of the litigation and provide guidance to the jury.

Both ParkerVision and Qualcomm filed opening claim construction briefs as well as respective rebuttal briefs in preparation for the Markman. In addition, the Judge asked those parties to provide a technology tutorial to the Court about two weeks prior to the Markman hearing itself. The transcript from the tutorial is available from the Court. Some of our investors attended the tutorial in person.

However, I would like to spend just a moment explaining on what our tutorial presentation focused. Our CTO, Mr. David Sorrells, along with our lead litigation counsel, Doug Cawley, of McKool Smith, walked the Court through an oral and visual explanation of the operation of some of the historical down-converters that are used in different types of RF receivers versus our RF down-converter technology, which we refer to as RF energy sampling.

We explained that ParkerVision's RF energy sampling technology advanced to the capability of the RF down converter by the novel use of transferring energy from the RF carrier signal in samples, integrating that energy and using controlled charge and discharge cycles to ultimately produce superlative base band information that was sent on the modulated RF carrier signal. Although our patents describe a number of different embodiments in which this kind of down converter can be practiced, we believe that the fundamental concepts came across as straightforward and easy to grasp.

When we developed the science behind RS energy sampling, we were very enthusiastic about the breadth of potential applications in modern wireless devices. Today, our enthusiasm remains greater than ever as we see the significant contributions that we believe our technology is making in today's wireless devices and the benefits that our technology makes possible in future devices.

Based on the Court's current case management schedule, we anticipate that, in the coming several weeks, we will see the Court rule on the claim construction. Following that ruling, ParkerVision will have an opportunity to amend our infringement contentions and Qualcomm will have an opportunity to amend its invalidity contentions.

The Court currently has set a date of October 5, 2012, for our amended infringement contentions and October 26, for Qualcomm's amended invalidity contentions to be filed. With the jury trial scheduled to begin on August 5, 2013, we have now crossed the halfway point in this case. We continue to look forward to showing the Court and the jury how Qualcomm is using ParkerVision's technology, despite the legal patent protections that we have expended a great deal of time and capital to secure.

Now, I would like to turn the topic to commercialization of our intellectual property. In the area of our D2P transmit technology, our team continues to work closely with an Asian OEM, who is a customer of our baseband partner, Via Telecom. This OEM has requested that we provide additional detailed information on our D2P components, which we have done and for additional reference design work, which is in the process of being completed.

After completion of the reference design work, we anticipate moving forward with this OEM to incorporate our D2P technology into certain handset programs and their associated products. We also recently announced that we have engaged the firm of Wilson, Sonsini, Goodrich and Rosati. Wilson, Sonsini joins our existing team of highly regarded outside law firms that include Graubard, Miller; McKool, Smith; Sterne, Kessler, Goldstein and Fox and Workman, Nydegger.

Having counseled a number of the world's most prestigious and successful technology companies, both large and small, we look forward to working with Wilson, Sonsini's highly experienced team on matters concerning our technologies in the areas of joint ventures and alliances, licensing, intellectual property transactions and other areas, where we believe Wilson, Sonsini's significant expertise aligns with opportunities that we are working to develop.

Lastly, we continue to invest in the advancement of our technologies and to secure protection on those investments as we continue investing in the development of our intellectual property portfolio. The firm of Sterne, Kessler, Goldstein and Fox has assisted us in building our portfolio from the ground up and continues to represent us in the expansion of that portfolio.

We have also supplemented our patent prosecution resources with the addition of the intellectual property law firm Workman, Nydegger, late last year. So far this year, the work of our internal and external intellectual property teams has resulted in the granting of 12 additional United States patents and one foreign patent, as we reported in our Q.

Actually, we learned last night of a second foreign patent that just issued. So it is now 12 US and two foreign additional patents that have issued to cover our wireless technologies. This increases the size of our IT portfolio to over 200 domestic and international patents issued and over 50 additional pending applications. We continue to believe in the importance of developing and advancing new technologies and protecting those inventions.

We continue to have a very optimistic outlook for the adoption of those technologies and our ability to generate revenue and shareholder value. With that, I will. Thank you for listening to our update today. I would like to open this call for your questions.

Syed:  Thank you. Ladies and gentlemen, on the phone line, if you have a question at this time, please press star then one on your touchtone telephone. If your questions have been answered and you wish to move yourself from the queue, please press the pound key. Again, if you have a question at this time, please press star, then one on your touch‑tone telephone. [silence]

Syed:  Our first question comes from Philip Anderson, from Pinnacle.

[11:30]

Philip Anderson:  Good morning, Jeff.

Jeff Parker:  Good morning, Phil.

Philip Anderson:  I know the name Wilson Sonsini by reputation. They have been involved with some of our companies over the years. We know Doug Cawley is our lawyer from McKool. Who is heading up our efforts, whatever they are, within Wilson Sonsini?

Jeff Parker:  We are working with Larry Sonsini, Phil, to explore some of these opportunities I mentioned. Larry has had an opportunity to familiarize himself better with our technologies and our intellectual property and some of the business development activities, on which we are interested in working with him. We are just very pleased that Larry Sonsini and some of his team members are working with us now to help develop those.

Philip Anderson:  Yeah, I am pleasantly shocked to hear it is Larry Sonsini himself. He is the Who's Who on the West Coast of IP lawyers. Well, not actually IP, but corporate law. How did you convince him to work with little ParkerVision? What is our angle with him?

Jeff Parker:  Well, I don't think it was anything we did in particular that convinced him, so to speak. I think he took a look at the technologies we have developed and set those, along with the way we have thoughtfully gone about the process of incorporating intellectual property protection around those technologies and where those technologies fit into the marketplace today. He agrees with us that there is a great deal of value that can be built from these technologies and the intellectual property. I think Larry is the type of counselor that, if he believes he can bring significant assistance and positive results, is enthusiastic to put his time towards that. He was very enthusiastic to do so.

We also had the good fortune of having an introduction to Larry through one of our Board members, who has known Larry for many years. Larry has counseled, personally, some of the companies that this Board member has either been an executive of or has gone on the board of. I think Larry is looking at the opportunities for ParkerVision correctly. We are very excited to have someone of his experience available to help us. I think it's terrific.

Philip Anderson:  Yeah. It's terrific. Again, it's shocking that someone of his stature would...I guess maybe I shouldn't be shocked. I guess we should be proud that someone of his stature is confirming the opportunities to license the patent portfolio. Switching gears for a second Jeff, I want to push the cell phone OEM opportunity a little bit harder. For example, is the testing, whatever the testing is, complete? Is it largely complete? Where are we in the testing process? Has the product or products been issued part numbers? Are they in the purchasing department? Are we creating materials with them? Can you give us a bit more granularity? As the process has been going on for some time, it would seem that it should be getting near the conclusion one of these days, weeks or months.

Jeff Parker:  Right. The testing, Phil, is, we believe, largely complete. I don't know that, with testing, you can ever say it is totally complete. Even when a product is in production, they continue to do life‑cycle and other types of testing. But it is largely complete. The documentation that we have provided is in preparation for what we believe is the adoption of these parts into the products. It is one of the steps in the process you have to go through to get parts available for being ordered. So we think that's a good sign.

We are nearing completion of this reference design, which brings some additional flexibility to the customer in terms of the numbers of different products that it can go into.

I'm pretty optimistic that the team, who has been working on this, is, in fact, on a track to bringing this to the kind of conclusion we have all been hoping for. But I don't really want to make any comments beyond that right now, because I think let's see what kind of conclusion it comes to, based on events that we expect to happen in the not too distant future here.

Philip Anderson:  OK. Thanks very much for the update Jeff. I appreciate it.

Philip Anderson:  You bet, Phil. Thank you.

Syed:  Thank you. Our next question comes from John Hickman, from Ladenburg Thalmann.

[16:26]

John Hickman:  Hello, and good morning.

Jeff Parker:  Good morning, John.

John Hickman:  I want to push you just a little bit harder on this commercialization opportunity. Could you elaborate on what the reference design is and exactly what they want that for? You said something about you needed to get product parts into manufacturing.

Jeff Parker:  Sure. Sure. Yeah. The reference design is a template that the customer will use that can be incorporated into various phone and possibly other product models. It incorporates our latest and greatest silicon. I think we mentioned in the last conference call or two that we have advanced the silicon to have even lower temperature benefits than the original versions, which are already very low in temperature. This is even beyond that. The only other flavor I can probably appropriately provide is that we do see the initial phone or other model products that would incorporate this being initially for the Asia market. That would be where we would start. It is certainly the quickest to market. The specific kinds of models with which we have been working with this customer are the Asian models right now.

John Hickman:  So, are these just some pages of electronic circuit schematics that define or describe it?

Jeff Parker:  Well, no. In our case, the reference design goes all the way from the pages that support it to schematics, specifications for the components, test results for the components, spec sheets for the components and all of that, along with physical hardware that represents that schematic on circuit boards that test out to match the schematics and to match the specifications and the performance that the spec sheets call out. So it's everything from the written documents all the way through the physical hardware that matches up with those documents.

John Hickman:  What part of this have you already delivered and what part is still being...?

Jeff Parker:  We've delivered everything through hardware except that we're doing an additional version now with additional hardware for refined reference design, which gives them more flexibility in terms of which model they could put our technology and our components into. So it's a refinement of a previous version that makes it even smaller and more flexible. There are a lot of different considerations in these types of products in terms of where the RF section resides and what kind of interface it requires to the base band processor and other parts of the product. So we've taken that to another step that just makes that more flexible.

John Hickman:  In your estimation, they still want to get this phone out some time, early part of next year?

Jeff Parker:  Their indication is there are programs that they have right now that this would be a very good fit for. So they're hoping we can get this thing wrapped up sooner than later. So our team is pushing as quick as they can to do that. Some of the things that we've been gated by or we needed additional silicon chips to finish up some of these designs in the physical form. It took some time for us to get those from the fab. Our fabs are IBM, we get some of our silicon from, and TSMC, some of the other. So that was some of the gating factor, but that's now behind us.

It's just moving as quickly as we can to wrap up. The documentation's been wrapped up. There are some hardware deliverables that are coming in any time now, too, that we'll be delivering to them, that will be what we think is the last step to finally, then, move this thing on to, knock wood, an order, which is what we're all driving toward here.

John Hickman:  Are there any, what's the right word, press release type events between now and an actual order that would allow you to keep us up on the progress here?

Jeff Parker:  John, not that I can think of. I think really the next milestone would, in fact, be an order. I reserve the right to change my mind on that if there's something that happens between now and then that I haven't thought of. But right now, really, all of our efforts are focused on status find the OEM to, in fact, be able to get an order.

John Hickman:  OK. Thank you very much. I'll turn it back over to...

Jeff Parker:  OK. Thanks for your questions. You bet.

Syed:  Thank you. Our next question comes from Walter Schenker from MAZ Partners.

[21:39]

Walter Schenker:  Two questions, but on the litigation as we continue to add law firms, they are generally coming in on what sort of ‑‑ I know you won't specifically detail it ‑‑ an economic basis? Meaning, are you paying them on an hourly...? I would think that the top guy in a West Coast patent litigation firm probably bills more than $10 or $20 an hour. Not with what, but what type of terms are people coming in on?

Jeff Parker:  Walt, let me clarify. The Wilson Sonsini relationship has nothing to do with our IP litigation. They are exclusively working with us. Let me maybe provide this visibility, if you look at our patent portfolio we have over 200 patents now. We've assorted, against Qualcomm, six patents. That's less than three percent of our entire portfolio. We see a lot of opportunity to commercialize our technologies off of the strength of the technologies themselves and the portfolio that protects those. Whether it's licensing, joint ventures, there are all kinds of possibilities that we're exploring. It's in that business development sense that we engage with Wilson Sonsini and that Larry Sonsini will be helping us.

In terms of how they get compensated, right now their compensation will be on an hourly basis. I don't consider that the amount of time Larry will be contributing to this at the beginning will be material. But what hopefully will occur is that there will be some successes in working together that will then lead to bigger projects and programs that could become very material to the company.

As it became material in fees, then we'll address that at that time with Wilson, see if they're interested in working with us on a success fee or stay with an hourly. But recognize, before we would see material advance in Wilson Sonsini's billings, it'll be because we're onto a very specific transaction that would be well worth whatever the investment is to support that activity.

What's exciting to us about working, not just with the Wilson Sonsini team, the very seasoned, accomplished team in the technology sector, but with Larry as well, is these guys have a great deal of experience in sorting through how to be a deal...Larry and his team are deal makers. How do you get things done?

What they've seen in our technologies and our supporting IP is that we're in a space that has a lot of need for this technology and they have reach to many companies that we believe and they believe will be very interested in working with us in a variety of business development activities.

So let's just leave it right now as we think that the support of whatever financial requirements will occur will first be gated by the actual opportunity itself, which we obviously won't pursue unless we think it's financially rewarding to us. And, of course, building shareholder value.

Walter Schenker:  So this is, again, I'm being redundant, a little bit, I don't want to waste time. But this effectively addresses the question I remember asking, if your patents are very broadly referenced by many major technology companies, why are none of these people paying you any royalties?

Jeff Parker:  Let's just say it could address a lot of things, Walter. I don't want to narrow down the possibilities right now. But let's just leave it as we and Wilson and Larry see a lot of opportunity in the technologies we've developed and building business revenue streams from those opportunities.

Walter Schenker:  The second question is in regard to the commercial hope for a contract. Much of what's going on now is largely between you and the end customer and whatever issues or capabilities may exist at VIA is unlikely to play a flowing role in what's going on, hopefully?

Jeff Parker:  I would agree with that. VIA Telecom's role right now is really being supportive in some of the software nuances that the customer may want. It's one of VIA's largest customers. So I think they get good support. Plus that customer has a fair amount of their own commitment to being able to incorporate VIA's basebands into various products that they use them in and the support staff to do so. Yeah, I think we're in pretty good shape in that regard.

Walter Schenker:  OK. Thank you.

Jeff Parker:  Thank you.

Syed:  Thank you. Ladies and gentlemen, if you have a question at this time, please press star then one on your touchtone telephone. Our next question comes from Wilson Jaeggli with Southwell Partners.

 

[27:12]

Wilson Jaeggli:  Good morning, Jeff.

Jeff Parker:  Good morning, Wilson.

Willson Jaeggli:  Two subjects here. Last week or maybe the week before there was a rumor going about that there had been some major sales in the company's stock by you or by other board members. Has that occurred?

Jeff Parker:  Absolutely not. I don't have any idea where such rumors were fabricated from. But I did get calls from a few shareholders who told me that they had received calls from, they didn't say who, some sources saying that my 13D filing, which was just an update of my holdings, was an indication that I was selling all my stock and moving on. That was just a complete untrue, fabricated, rumor, I can only guess to attempt to create fear with the shareholders. What that 13D shows is that I've increased my holdings. And Wilson, I can't remember the last time I sold stock from this company. It's been years and years, so long honestly I can't remember how long ago it's been. In terms of other board members, we have a board member with a 10b5‑1 that was put in place when the stock was at 50 or 60 cents a share. And literally, I think, he sold a few thousand shares and that's it, which I certainly don't consider to be material.

Beyond that there are no transactions that have occurred here, as I say, other than I've been increasing my holdings. I wish I had more liquid cash, I'd like to increase them further. But no, that's a complete, fabricated, untrue, rumor.

Wilson:  OK. Thank you for that. Talk about here Qualcomm's incorporation of your design. As I understand it one of your engineers was at a presentation by one of Qualcomm's engineers on one of their white papers and looked at the technology discussed and said, "Well that mimics ours." Can you tell us your best estimate when Qualcomm starting infringing upon our patents and how you actually learned about that?

Jeff Parker:  Sure, I'm going to be a little limited to what's out there in the filings. But we have evidence that they started incorporating this technology and shipping it as early as 2007. Is it possible they incorporated it earlier? Well, we're still in the discovery process and we may learn that maybe it was a little bit earlier. But we certainly have verified the 2007 date. We believe and when we announced litigation we stated that we believe that they had expanded this technology throughout their product line such that by around the end of 2009 or early 2010 that it was incorporated into everything that they shipped. To this day we believe it's been incorporated in everything they ship.

Our discovery is still not complete, but as of this point we continue to believe what I just described to you based on what we've seen from what we've gotten in discovery thus far.

In terms of how we learned of the infringement, really not at liberty at this time to go into the detail. Other than I will comment that we learned of this infringement on our own. We had no help from any of our legal counselors or any outside third party in finding their infringement.

Let's just leave for the detail how we found that infringement for a later date when it will probably show up either in court filings or at the trial itself.

Willson Jaeggli:  OK. Well let me ask you this question. I know our product offers lower voltage and certainly lower temperature. Was there a point in time when Qualcomm offered those functionality in their product?

Jeff Parker:  Well, let me comment. I'm not sure this exactly answers your question, but I think it's what you're looking for. One of the reasons that this is an attractive technology is that the semiconductors that are being used to create radio receivers continue to shrink in terms of the geometries that are the minimum features that the semiconductors can incorporate.

So if you turn the clock back to 1999 when we started on this journey. You would see that the voltages on those semiconductors were maybe five to seven volts. With five to seven volts available on a semiconductor chip, there are certain down-converter approaches you can use.

And so the analog down-converters that we described in our tutorial support back in that era with five to seven volts worked OK. As the silicon geometries continued to get smaller through the next decade and they dropped from, I think back in the 1999 era it was probably 0.35 micron. And then it dropped in the mid 2000s down to the 90 nanometer or 65 nanometer geometries. All of a sudden now those voltages that were available on semiconductors also dropped down into the three to four volt range and through the decade and today continue to drop as we're now seeing people incorporating radio receivers in 28 nanometer geometries and in that area.

The challenges with such low voltage, those analog down-converters that use analog mixers are no longer really an option. You can't get the performance out of those down-converters to build the kind of receivers, especially in direct conversion receivers, that will meet the specifications of 3G, 4G, and other kinds of wireless like some of the WiFi specs that are out there.

The industry had to find other ways of processing and down-converting those radio signals using those lower voltages. RF energy sampling solves that problem.

Now, in addition to solving the problem what's really so special about the technology is it didn't replace the analog down-converter using lower voltages and deliver the same performance. It actually enhanced the performance because of some of the unique properties of RF energy sampling. We explained this in our tutorial. I described it earlier in my conference call comments when I suggested that the RF energy sampling down-converter delivers a superior base band signal over the analog down-converters that it replaces.

There were a number of advances that this RF energy sampling technology brought, but I think the tipping point was when the voltages on the semiconductors came below a certain voltage. It no longer became an option to start looking at RF energy sampling. It really became a necessity because you can't make these analog down-converters function property and meet the specifications of the three and four G standards at these levels, which is what we, with our energy sampling, can achieve and still increase the performance.

I hope that answered your question.

Willson Jaeggli:  Thank you for that technical explanation. Basically what you're saying is at these low sizes, nanometers and low voltage, only our digital RF energy converter will work. Analog will not.

Jeff Parker:  And meet the specifications of these 3 and 4G products and other kinds of challenging wireless applications. That's correct. That we're aware of. I'm not aware of any other down-converter that will do that.

Willson Jaeggli:  Is there any other digital technology out there that Qualcomm could have incorporated besides ours to hit these functionality points?

Jeff Parker:  The only other technologies that we're aware of, again discussed in our tutorial, is what's known as impulse samplers or track and hold samplers where you're trying to preserve a voltage that's measured on the received radio signal. You're trying to preserve that voltage that you sample on the input of the sampler to be represented on the output. So voltage in and voltage out look a lot alike. As the carrier signal is modulating, where its amplitude or frequency or phase or some combination, those voltages are changing. You're trying to use those voltages of every single sample at discrete pieces of information that ultimately recreate the base band signal that you're looking for form which is a representation of the data that was transmitted in the first place.

The challenge with those is their performance is woeful. They've been around for a number of decades, but they don't meet the performance requirements, anywhere near what's required for a cell phone using today's 3 and 4G.

We've never seen anybody incorporate those into these types of products. And, in fact, I would say to you that the use of an impulse or a track and hold sampler, which is the only other form of sampler we're aware of, has never made it into any volume produced quality radio receiver ever. That's the only alternative that we're aware of.

Willson Jaeggli:  That doesn't sound like a very opportune alternative. If Qualcomm started shipping possibly in 2007 and by 2009 looks like they possibly could have incorporated in everything they had, there's obviously some potential penalties here. Could you talk about the analysis or how the penalty's amount will be determined? And maybe in what timeframe?

Jeff Parker:  Yeah, sure. The most at this time I think we can appropriately say is that McKool Smith has engaged an experiment damages expert. That expert will be using what we learn in discovery and be calculating what we believe the damages appropriately are. In terms of penalties, the only penalty that I'm aware of that could be imposed, and this is strictly up to the court, is if you can prove that the infringement was willful. That they knew they were incorporating somebody else's protected intellectual property into their products, then the court can take whatever the damages are that the court and the jury find and can add up to what's, I believe, treble damages.

How much actually will be added if they find for willful infringement is truly up to them, and it would be inappropriate for me to make any kind of a guess or estimate. But that's, I believe, what the law states, that they can give up to treble damages.

Willson Jaeggli:  OK. You gave a partial calendar here of when new arguments have to be delivered to the court based on the marksman hearing. Do you have an estimated date when this damage expert might have his analysis complete?

Jeff Parker:  I don't. I prefer to maybe answer that question, again, in our next conference call update. I'll get some flavor on that from our litigators and hopefully be able to answer then. I don't expect it to be done, though, until the discovery is complete, and then incorporated into the damages expertís process, because they have a very specific process they go through to create these damage estimates.

Willson Jaeggli:  OK. One last question here, and I know we've had a lot on our Asian OEM. Have you received the final silicon from your fabs that incorporate your latest and greatest design?

Jeff Parker:  Yes.

Willson Jaeggli:  And has that been shipped to this OEM?

Jeff Parker:  I believe if it hasn't, it's going to be any time now.

Willson Jaeggli:  And I would assume they would do a last testing incorporating this in their baseband?

Jeff Parker:  Yes, and we don't expect that will be a very time consuming event, however, because there's been so much testing that's already occurred. I think it will just be spot checking against our spreadsheets.

Willson Jaeggli:  OK. They've tested previous silicon delivery?

Jeff Parker:  Correct. That's right.

Willson Jaeggli:  Well, you had a busy quarter. Thank you for this update.

Jeff Parker:  You bet. Thank you for your support.

Syed:  Thank you. We have a follow‑up question from Philip Anderson from Pinnacle.

[41:19]

Philip Anderson:  Jeff, listening to Wilsonís comment, I was reminded of the filing in the middle of April, the court filing where it was disclosed that Qualcomm had made us an offer that was $638 to $676 million, if memory serves, over five years. And their estimate, which is a lot of money, particularly when it's license revenue, why did we say no? Why didn't the deal get done?

Jeff Parker:  Well, Phil, look. I hope you can appreciate it, it's kind of inappropriate for me to give any additional information outside of what's in the public filings right now. I think all I can really comment right now is that the legal councilors wouldn't cite this information if there wasn't solid evidence behind the statement. In terms of what exactly transpired between the parties after such an offer was made, let's just say there are a lot of factors that a licensee must consider when licensing a technology, especially one as foundational as this one is proving to be, and we believed at the time that it would be.

So, Phil, consider this. We've had, in our opinion, one of the best prosecuting attorney firms in the country helping us put this portfolio together, and were willing to stake his reputation by sitting on our Board of Directors. We've had, I think, an extraordinary, accomplished, reputable board of independent directors who've been on this company for a long time on this board.

We've got, I think, one of the country's best patent litigators supporting our case. Now you've got Wilson Sonsini coming onboard to help us with further business development opportunities, which is my long‑winded way of suggesting to you that we believed then and further believe that we were correct looking at our beliefs back then now, that we actually see the way the world exists, that this would be a very important patent portfolio and set of inventions.

As such, we have to be careful how we create agreements with companies who are interested in using that technology. So, let's just leave as, there were good reasons sometimes why licensees and licensers don't come together, and you'll learn more about this as the case goes on.

Philip Anderson:  Well, I appreciate the answer, particularly within the constraints that you're under. Thanks, Jeff.

Jeff Parker:  Sure.

Syed:  Thank you. We have no further questions at this time. I would like to hand the conference back to Mr. Parker for any closing remarks.

Jeff Parker:  Well folks, as I think you've seen, it's been a busy quarter. I expect the coming rest of the year to be just as busy, and hopefully even busier. We appreciate your support, and we look forward to a very exciting coming months and the balances this year, and look forward to our next conference call with you. Have a great day, and thanks for listening in.

Syed:  This will conclude today's conference. If you wish to access archived audio cache replay of the call, you may do so by visiting the company's website at www.parkervision.com. Thank you.

Transcription by CastingWords