ParkerVision

We believe that ParkerVision, Inc. (PRKR) is highly overvalued. We are short the stock and stand to benefit in the event of a price decline.

I would like to caution readers that shorting PRKR contains certain risks. PRKR has a high short interest and is a small-capitalization stock, and is therefore considerably susceptible to a short squeeze. As we saw with China Medical Technologies, another company that we wrote on this year, short squeezes on hard-to-borrow smallcaps can be quite dangerous. So tread carefully.

ParkerVision generates no revenue, dilutes shareholders at a breathtaking pace, and boasts one of the longest and most consistent track records of equity value destruction that we have ever come across. In his two-decade tenure as ParkerVision’s CEO, Jeffrey Parker has raised and squandered more shareholder capital than any Chinese reverse-merger CEO we can think of. As such, he deserves a place alongside Xiqun Yu, Zhiguo Fu, and Ron Chan, other ignominious targets of our firm’s detailed ‘short sale’ reports.

Since going public nearly twenty years ago, PRKR has not generated a single year of net profit. Its share count has increased by nearly 10-fold since 1993. Since inception, ParkerVision has burned over $200 million in cash from operations. To fund its cash burns, ParkerVision has raised more than $200 million through secondary equity raises, having tapped the capital markets nine times since 2005. ParkerVision’s “D2P” technology for smartphones has been the subject of a litany of press releases over the past seven years, yet PRKR ended 2011 with zero paying customers for its D2P product.

The Company’s technological claims have been debunked in detailed manner by multiple leading experts in RF technology, including a former Schlumberger Chair in Microelectronics at Georgia Tech, a lecturer of electromagnetics courses at Santa Clara University, and a writer of three published books on RF power amplification. All of these experts are PhDs with expertise in PRKR’s technological niche. In contrast, ParkerVision’s Chief Technology Officer and the author of its main patents is David Sorrells, whose pedigree consists of an undergraduate degree from Southern Polytechnic State University and “a few quarters” at Georgia Tech.

Long holders cling to the notion that PRKR may derive value from its current patent infringement case against Qualcomm. We’re confident that shareholders will be sorely disappointed. We will provide ample evidence why ParkerVision’s purported innovations are neither novel nor feasible, and are unlikely to survive a re-examination by the U.S. patent office or close scrutiny by the court system. In the slim chance that ParkerVision wins a meaningful settlement, we believe that the fair present value of shares is lower than today’s trading level. Investors are misjudging the potential time to a settlement, lawyer contingency fees and future shareholder dilution.

In our report, we discuss ParkerVision’s checkered financial past, its questionable technological claims and the Qualcomm lawsuit. Last but not least, we review how ParkerVision has been accused of fraud by MaxTak Capital Advisors under a lawsuit currently working its way through the New Jersey courts.

Kerrrisdale Capital and our clients are short and own options on the shares of ParkerVision. We stand to benefit in the event of a price decline in PRKR shares, and will transact in the securities subsequent to this email. Please read our full disclaimer at the end of the report.

ParkerVision Final Report October 2012