SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 14, 2004
----------------------------
PARKERVISION, INC.
(Exact Name of Registrant as Specified in Charter)
Florida 0-22904 59-2971472
---------------------------- ------------------------ -------------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
8493 Baymeadows Way, Jacksonville Florida 32256
------------------------------------------------------- ---------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (904) 737-1367
--------------------------
N/A
---
(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 25, 2004, ParkerVision, Inc. ("ParkerVision" or "Company")
entered into an asset purchase agreement ("Asset Agreement") and various
ancillary agreements with Thomson Broadcast & Media Solutions, Inc. ("Thomson")
and Thomson Licensing, SA ("Thomson Licensing" and, together with Thomson, the
"Purchasers") for the sale of all the assets of the Company's video division. On
May 14, 2004, after receipt of shareholder approval of the transaction and
satisfaction of the conditions to closing, the Company, Thomson and Thomson
Licensing consummated the sale.
Thomson is a leading provider of technology and service solutions for
integrated entertainment and media companies, providing end-to-end solutions to
content creators, video network operators and manufacturers and retailers
through its Technicolor, Grass Valley, THOMSON and RCA brands. Thomson
Licensing, an affiliate of Thomson, is the world-wide licensing administrator
for the Thomson group of companies.
Assets Being Sold
-----------------
Under the Asset Agreement and the various ancillary agreements, the Company
sold to the Purchasers the business and substantially all the assets of its
video division, excluding certain contracts and incidental properties.
Generally, the assets sold were all those used in connection with and relating
to the PVTV, WebCast and CameraMan products and services, including patents,
patent applications, tradenames, trademarks and other intellectual property,
inventory, specified design, development and manufacturing equipment, and
obligations under outstanding contracts for products and services. The
Purchasers extended offers to and received acceptances from 31 of the persons
employed in connection with the video division who transfer employment effective
May 14, 2004.
Consideration
-------------
The purchase price paid at closing for the assets at the closing was
$11,250,000, which amount is subject to adjustment upon verification of the
actual value of the assets that will be transferred, minus certain liabilities
(warranty reserves, deferred income and amounts required to satisfy certain
assumed liabilities). The upward adjustment to the purchase price, if any,
cannot exceed $2,750,000. The Company currently believes that the adjustment
will be approximately $1,300,000. The actual amount of the adjustment will be
determined not later than June 28, 2004 and will be paid when the final
valuation is agreed upon. A portion of the purchase price equal to $1,250,000
will be held by the Purchasers until May 14, 2005, as security against the
Company's obligations to indemnify the Purchasers. This amount will earn
interest until paid. Thomson, Inc., an affiliate of the Purchasers, has agreed
to guarantee the payment obligations of the Purchasers under the Asset
Agreement.
Other Agreements
----------------
The Company has agreed not to compete with the business of the video
division for five years after the closing date. The Company also agreed not to
seek legal recourse against the
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Purchasers in respect of its intellectual property that was transferred or
should have been transferred if used in connection with the video division.
For a period of up to six months after the closing, the Company will be
obligated to assist the Purchaser in transitioning the business of the video
division into Thomson's operations. This will include providing the Purchaser's
employees with office space, training in respect of the business and the
products and services, contract manufacturing, and certain general
administrative functions. The Company will be reimbursed at cost and at
cost-plus depending on the service and for how long the service is being
provided. The Company has entered into a transition services agreement and a
sublease for part of the office space it currently leases.
The Purchasers have been granted a license to use the "ParkerVision" name
for a limited time in connection with the transition of the video division to
the integrated operations of the Purchasers.
Indemnification
---------------
The Asset Agreement provides that each party will indemnify the other for
damages incurred as a result of the breach of their respective representations
and warranties and failure to observe their covenants. In general, the
representations and warranties will survive for 18 months after the closing and
will not be affected by any investigation by the other party. Each party is
obligated to indemnify the other up to $4,000,000, once a threshold of $150,000
in damages is achieved. Additionally, the Company must indemnify the Purchasers
against intellectual property claims for an unlimited period of time, without
any minimum threshold, and with a separate maximum of $5,000,000. Certain other
claims by the Purchasers will not be limited as to time or amount. The
Purchasers will be permitted to offset their claims against the amount held back
on the purchase price and other amounts due the Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
None
(b) Pro Forma Financial Statements
Attached to this Current Report on Form 8-K, as Appendix A, are the
required pro forma financial statements relating to the consummation of the
transactions contemplated by the Asset Agreement, including the following: (i)
the unaudited pro forma consolidated balance sheet as of March 31, 2004, and
(ii) the unaudited pro forma consolidated statements of operations for the years
ended December 31, 2003, 2002 and 2001, and for the quarters ended March 31,
2004 and March 31, 2003 illustrating the estimated effects of the sale of the
video business and related assets at January 1, 2001.
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(c) Exhibits
Exhibit Number Description
-------------- -----------
2.1 Asset Purchase Agreement, dated as of February 25,
2004, among the Company, Thomson and Thomson Licensing
10.1 Form of Retained Trademark License among Company,
Thomson and Thomson Licensing
10.2 Form of Transition Services Agreement between Company
and Thomson
10.3 Form of Patent Assignment Agreement between Company and
Thomson Licensing
10.4 Form of Non-Patent Assignment and Bill of Sale between
Company and Thomson
10.5 Form of Sublease relating to 8493 Baymeadows Way,
Jacksonville, Florida
10.6 Guarantee of Thomson, Inc., dated February 25, 2004
99.1 Press release of the Company dated May 14, 2004
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 18, 2004 PARKERVISION, INC.
------------------
(Registrant)
/s/ Jeffrey L. Parker
---------------------
Jeffrey L. Parker
Chief Executive Officer
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APPENDIX A
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following pro forma financial data should be read in conjunction with
the financial statements of ParkerVision available on the SEC website or from
the Company. The following pro forma information below has not been audited.
The unaudited pro forma consolidated balance sheet as of March 31, 2004 has
been prepared to illustrate the estimated effects of the sale of the video
business and related assets as of March 31, 2004. The unaudited pro forma
consolidated statements of operations for the years ended December 31, 2003,
2002 and 2001 and the quarters ended March 31, 2004 and March 31, 2003 have been
prepared to illustrate the estimated effects of the sale of the video business
and related assets at January 1, 2001. The pro forma consolidated statements of
operations for each of the years ending December 31, 2003, 2002 and 2001 and the
quarters ended March 31, 2004 and March 31, 2003 were derived by adjusting the
historical financial statements of ParkerVision for certain transactions
pursuant to the sale transaction described in the notes to the unaudited pro
forma consolidated financial statements.
The pro forma financial data does not purport to be indicative of the
results which actually could have been obtained had the sale transaction been
completed as of the assumed dates or which may be obtained in the future. The
future financial results of the Company primarily will be those of the wireless
division.
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PARKERVISION, INC. AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 2004
Historical Video Division Pro Forma
------------------- ------------------ ------------------
Product revenue $1,003,479 $ 935,285 a $ 68,194
Royalty revenue 250,000 0 250,000
Support and other services revenue 222,685 222,685 a 0
------------------- ------------------ ------------------
Net revenues 1,476,164 1,157,970 318,194
------------------- ------------------ ------------------
Cost of goods sold - products 650,152 602,068 a 48,084
Cost of goods sold - support and other services 260,093 260,093 a 0
------------------- ------------------ ------------------
Total cost of goods sold 910,245 862,161 48,084
------------------- ------------------ ------------------
Gross margin 565,919 295,809 270,110
------------------- ------------------ ------------------
Research and development expenses 3,375,406 398,739 b 2,976,667
Marketing and selling expenses 760,988 476,227 c 284,761
General and administrative expenses 1,844,429 0 1,844,429
Loss on disposal of assets 635 635 0
------------------- ------------------ ------------------
Total operating expenses 5,981,458 875,601 5,105,857
------------------- ------------------ ------------------
Loss from operations (5,415,539) (579,792) (4,835,747)
Interest and other income 53,278 0 53,278
------------------- ------------------ ------------------
Loss from continuing operations $(5,362,261) $(579,792) $(4,782,469)
=================== ================== ==================
6
PARKERVISION, INC. AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 2003
Historical Video Division Pro Forma
------------------- ------------------ ------------------
Product revenue $1,455,516 $1,455,516 a 0
Royalty revenue 0 0 0
Support and other services revenue 304,654 304,654 a 0
------------------- ------------------ ------------------
Net revenues 1,760,170 1,760,170 0
------------------- ------------------ ------------------
Cost of goods sold - products 921,538 921,538 a 0
Cost of goods sold - support and other services 272,716 272,716 a 0
------------------- ------------------ ------------------
Total cost of goods sold 1,194,254 1,194,254 0
------------------- ------------------ ------------------
Gross margin 565,916 565,916 0
------------------- ------------------ ------------------
Research and development expenses 4,259,750 433,865 b $ 3,825,885
Marketing and selling expenses 871,990 705,073 c 166,917
General and administrative expenses 1,173,671 0 1,173,671
------------------- ------------------ ------------------
Total operating expenses, net 6,305,411 1,138,938 5,166,473
------------------- ------------------ ------------------
Loss from operations (5,739,495) (573,022) (5,166,473)
Interest and other income 181,402 0 181,402
------------------- ------------------ ------------------
Loss from continuing operations $(5,558,093) $ (573,022) $(4,985,071)
=================== ================== ==================
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PARKERVISION, INC. AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
Historical Video Division Proforma
------------------- ------------------ ------------------
Product revenue $ 5,576,472 $ 5,555,582 a $ 20,890
Support and other services revenue 1,161,597 1,161,597 a 0
------------------- ------------------ ------------------
Net revenues 6,738,069 6,717,179 20,890
------------------- ------------------ ------------------
Cost of goods sold - products 3,500,064 3,470,411 a 29,653
Cost of goods sold - support and other services 1,165,609 1,165,609 a 0
------------------- ------------------ ------------------
Total cost of goods sold 4,665,673 4,636,020 29,653
------------------- ------------------ ------------------
Gross margin 2,072,396 2,081,159 (8,763)
------------------- ------------------ ------------------
Research and development expenses 15,025,747 1,708,268 b 13,317,479
Marketing and selling expenses 3,679,203 2,681,329 c 997,874
General and administrative expenses 5,774,239 0 5,774,239
Loss on disposal of assets 84,007 0 84,007
------------------- ------------------ ------------------
Total operating expenses, net 24,563,196 4,389,597 20,173,599
------------------- ------------------ ------------------
Loss from operations (22,490,800) (2,308,438) (20,182,362)
Interest and other income 476,002 0 476,002
------------------- ------------------ ------------------
Loss from continuing operations $(22,014,798) $(2,308,438) $(19,706,360)
=================== ================== ==================
PARKERVISION, INC. AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2002
Historical Video Division Pro Forma
------------------ ------------------ ------------------
Product revenue $ 10,733,769 $10,733,769 a $ 0
Support and other services revenue 1,178,144 1,178,144 a 0
------------------ ------------------ ------------------
Net revenues 11,911,913 11,911,913 0
------------------ ------------------ ------------------
Cost of goods sold - products 6,031,027 6,031,027 a 0
Cost of goods sold - support and other services 1,178,258 1,178,258 a 0
------------------ ------------------ ------------------
Total cost of goods sold 7,209,285 7,209,285 0
------------------ ------------------ ------------------
Gross margin 4,702,628 4,702,628 0
------------------ ------------------ ------------------
Research and development expenses 13,939,480 1,814,726 b 12,124,754
Marketing and selling expenses 3,568,208 2,878,046 c 690,162
General and administrative expenses 5,320,557 0 5,320,557
Loss on disposal of assets 51,643 51,643 0
------------------ ------------------ ------------------
Total operating expenses, net 22,879,888 4,744,415 18,135,473
------------------ ------------------ ------------------
Loss from operations (18,177,260) (41,787) (18,135,473)
Interest and other income 905,438 0 905,438
------------------ ------------------ ------------------
Loss from continuing operations $(17,271,822) $ (41,787) $(17,230,035)
================== ================== ==================
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PARKERVISION, INC. AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2001
Historical Video Division Pro Forma
------------------- ------------------ ------------------
Product revenue $ 8,340,528 $ 8,340,528 a $ 0
Support and other services revenue 974,917 974,917 a 0
------------------- ------------------ ------------------
Net revenues 9,315,445 9,315,445 0
------------------- ------------------ ------------------
Cost of goods sold - products 5,005,121 5,005,121 a 0
Cost of goods sold - support and other services 1,048,683 1,048,683 a 0
------------------- ------------------ ------------------
Total cost of goods sold 6,053,804 6,053,804 0
------------------- ------------------ ------------------
Gross margin 3,261,641 3,261,641 0
------------------- ------------------ ------------------
Research and development expenses 12,796,442 1,590,179 b 11,206,263
Marketing and selling expenses 3,835,724 2,817,131 c 1,018,593
General and administrative expenses 4,972,889 0 4,972,889
Loss on disposal of assets 8,241 7,871 370
------------------- ------------------ ------------------
Total operating expenses, net 21,613,296 4,415,181 17,198,115
------------------- ------------------ ------------------
Loss from operations (18,351,655) (1,153,540) (17,198,115)
Interest and other income 1,741,188 0 1,741,188
------------------- ------------------ ------------------
Loss from continuing operations $(16,610,467) $(1,153,540) $(15,456,927)
=================== ================== ==================
________________________________
a. Reflects the discontinued revenues and corresponding cost of sales
attributable to the video business being sold.
b. Reflects the elimination of research and development costs attributable to
the video business being sold.
c. Reflects the elimination of marketing and selling costs attributable to the
video business being sold.
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UNAUDITED PRO FORMA CONSOLIDATED
BALANCE SHEET AS OF MARCH 31, 2004
ParkerVision, ParkerVision,
Inc. Inc.
Historical Pro Forma Adjustments Pro Forma
3/31/04 Debit Credit 3/31/04
------------------------------------------------------------------------------
Cash and cash equivalents $13,788,062 $11,250,000 a $25,038,062
Investments in US government
securities 2,694,007 2,694,007
Accounts receivable, net 1,132,587 1,132,587
Note receivable - Purchase price
adjustment 1,399,021 b 1,399,021
Note receivable - purchase price
holdback 1,250,000 c 1,250,000
Inventories, net 2,982,596 1,756,744 d 1,225,852
Prepaid expenses and other 2,214,643 154,620 e 2,060,023
------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 22,811,895 13,899,021 1,911,364 34,799,552
PROPERTY & EQUIPMENT, net 4,581,135 683,149 f 3,897,986
Deposits and other 545,247 545,247
Prepaid license fees 2,255,000 2,255,000
Patents and copyrights, net 8,391,644 666,052 g 7,725,592
------------------------------------------------------------------------------
OTHER ASSETS, net 11,191,891 - 666,052 10,525,839
------------------------------------------------------------------------------
TOTAL ASSETS 38,584,921 13,899,021 3,260,565 49,223,377
==============================================================================
CURRENT LIABILITIES
Accounts payable 2,170,531 2,170,531
Salaries and wages payable 669,360 669,360
Warranty reserves 207,114 206,197 h 917
Other accrued expenses 476,380 476,380
Deferred revenue 1,026,173 989,295 i 36,878
------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 4,549,558 1,195,492 3,354,066
STOCKHOLDERS' EQUITY
Common stock 179,595 179,595
Additional paid in capital 118,048,964 118,048,964
Accumulated other comprehensive
income 30,712 30,712
Warrants 16,807,505 16,807,505
Accumulated deficit (101,031,413) 11,833,948 j (89,197,465)
------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 34,035,363 - 11,833,948 45,869,311
------------------------------------------------------------------------------
TOTAL LIABILITIES AND
EQUITY $38,584,921 $1,195,492 $11,833,948 $49,223,377
==============================================================================
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_________________________________
a. Represents 90% of the purchase price of $12,500,000 payable at the closing
for the video business and related assets being sold to the Purchasers. The
remaining 10%, or $1,250,000, is payable by the Purchasers one year after
the closing, subject to deduction for indemnification amounts claimed by
such date, and is accounted for by the company as a purchase price holdback
receivable.
b. Represents the estimated purchase price adjustment receivable, due within
45 days after closing, for the book value of the inventories, prepaid
expenses, and equipment transferred to the Purchasers, less liabilities
assumed for warranty reserves and deferred revenue.
c. Represents 10%, or $1,250,000, payable by the Purchasers one year after the
closing, subject to deduction for indemnification amounts claimed by such
date.
d. Represents the estimated inventories to be sold to the Purchasers and is a
portion of the purchase price adjustment receivable.
e. Represents the estimated current prepaid assets to be assigned to the
Purchasers and is a portion of the purchase price adjustment receivable.
f. Represents the estimated equipment to be sold to the Purchasers and is a
portion of the purchase price adjustment receivable.
g. Represents the estimated book value of the patents and other intangible
assets to be sold to the Purchasers, which amount is included in the
purchase price payable at the closing.
h. Represents the estimated warranty reserves liability assumed by the
Purchasers and is a portion of the purchase price adjustment receivable.
i. Represents the estimated deferred revenue assumed by the Purchasers and is
a portion of the purchase price adjustment receivable.
j. Represents the estimated gain on sale to the Purchasers of the video
business and related assets.
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EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
2.1 Asset Purchase Agreement, dated as of February 25, 2004,
among the Company, Thomson and Thomson Licensing (PREVIOUSLY
FILED
10.1 Form of Retained Trademark License among Company, Thomson
and Thomson Licensing (PREVIOUSLY FILED)
10.2 Form of Transition Services Agreement between Company and
Thomson (PREVIOUSLY FILED)
10.3 Form of Patent Assignment Agreement between Company and
Thomson Licensing (PREVIOUSLY FILED)
10.4 Form of Non-Patent Assignment and Bill of Sale between
Company and Thomson (PREVIOUSLY FILED)
10.5 Form of Sublease relating to 8493 Baymeadows Way,
Jacksonville, Florida (PREVIOUSLY FILED)
10.6 Guarantee of Thomson, Inc., dated February 25, 2004
(PREVIOUSLY FILED)
99.1 Press release of the Company dated May 14, 2004 (FILED
HEREWITH)
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