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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from ________to____________
Commission file number 0-22904
-------
PARKERVISION, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2971472
(State or other jurisdiction of I.R.S. Employer ID No.
incorporation or organization)
8493 Baymeadows Way
Jacksonville, Florida 32256
(904) 737-1367
(Address of principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No .
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
As of October 25, 2002, 13,987,529 shares of the Issuer's Common Stock, $.01 par
value, were outstanding.
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
PARKERVISION, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
September 30,
2002 December 31,
ASSETS (unaudited) 2001
------ ------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 2,128,897 $ 4,563,535
Short-term investments 17,939,217 26,908,362
Accounts receivable, net of allowance for doubtful
accounts of $115,289 and $84,103 at September 30,
2002 and December 31, 2001, respectively 1,925,120 946,635
Interest and other receivables 214,295 406,133
Inventories, net 3,910,804 4,319,539
Prepaid expenses and other 1,364,214 2,642,966
------------ ------------
Total current assets 27,482,547 39,787,170
PROPERTY AND EQUIPMENT, net 6,538,548 7,003,465
OTHER ASSETS, net 8,368,819 7,383,169
------------ ------------
Total assets $ 42,389,914 $ 54,173,804
============ ============
The accompanying notes are an integral part of these balance sheets.
2
PARKERVISION, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
September 30,
2002 December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY (unaudited) 2001
------------------------------------ ------------ ------------
CURRENT LIABILITIES:
Accounts payable $ 1,098,992 $ 938,488
Accrued expenses:
Salaries and wages 846,928 1,184,780
Warranty reserves 253,347 212,107
Other accrued expenses 343,209 274,739
Deferred revenue 794,370 985,612
------------ ------------
Total current liabilities 3,336,846 3,595,726
DEFERRED INCOME TAXES 30,748 30,748
COMMITMENTS AND CONTINGENCIES
(Notes 5, 7 and 8)
------------ ------------
Total liabilities 3,367,594 3,626,474
------------ ------------
SHAREHOLDERS' EQUITY:
Convertible preferred stock, $1 par value,
5,000,000 shares authorized, 13,678 and
27,356 shares issued and outstanding at
September 30, 2002 and December 31, 2001,
respectively 13,678 27,356
Common stock, $.01 par value, 100,000,000 shares
authorized, 13,987,529 and 13,913,806 shares
issued and outstanding at September 30, 2002
and December 31, 2001, respectively 139,875 139,138
Warrants outstanding 16,807,505 16,807,505
Additional paid-in capital 90,411,656 89,804,504
Accumulated other comprehensive income 356,954 151,359
Accumulated deficit (68,707,348) (56,382,532)
------------ ------------
Total shareholders' equity 39,022,320 50,547,330
------------ ------------
Total liabilities and shareholders' equity $ 42,389,914 $ 54,173,804
============ ============
The accompanying notes are an integral part of these statements.
3
PARKERVISION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended Nine months ended
September 30, September 30,
---------------------------- ----------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Product revenue, net $ 1,956,242 $ 2,038,235 $ 7,467,032 $ 6,249,552
Support and other services revenue, net 324,354 280,790 863,679 713,877
------------ ------------ ------------ ------------
Total net revenues 2,280,596 2,319,025 8,330,711 6,963,429
------------ ------------ ------------ ------------
Cost of goods sold - products 1,244,385 1,289,152 4,293,539 3,726,340
Cost of goods sold - support and other services 288,710 295,612 886,308 794,289
------------ ------------ ------------ ------------
Total cost of goods sold 1,533,095 1,584,764 5,179,847 4,520,629
------------ ------------ ------------ ------------
Gross margin 747,501 734,261 3,150,864 2,442,800
------------ ------------ ------------ ------------
Research and development expenses 3,539,049 3,052,520 10,193,682 9,292,526
Marketing and selling expenses 707,131 1,000,746 2,528,586 3,055,029
General and administrative expenses 1,141,351 1,229,159 3,426,597 3,614,443
Loss (gain) on disposal of property and equipment (448) 539 51,643 2,563
------------ ------------ ------------ ------------
Total operating expenses 5,387,083 5,282,964 16,200,508 15,964,561
------------ ------------ ------------ ------------
Loss from operations (4,639,582) (4,548,703) (13,049,644) (13,521,761)
Interest and other income 239,260 420,111 724,828 1,352,856
------------ ------------ ------------ ------------
Net loss $ (4,400,322) $ (4,128,592) $(12,324,816) $(12,168,905)
============ ============ ============ ============
Basic and diluted net loss per common share $ (0.31) $ (0.30) $ (0.88) $ (0.89)
============ ============ ============ ============
The accompanying notes are an integral part of these statements.
4
PARKERVISION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,400,322) $ (4,128,592) $(12,324,816) $(12,168,905)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 758,535 731,805 2,192,822 2,073,380
Amortization of discounts on investments 88,476 13,153 214,611 13,153
Provision for obsolete inventories 75,000 130,000 225,000 190,000
Stock compensation 290,816 333,270 984,575 1,445,298
Gain on sale of investments (88,523) 0 (102,772) 0
(Gain) loss on disposal of equipment (448) 0 51,643 0
Changes in operating assets and liabilities:
Accounts receivable, net (33) 125,301 (978,485) 991,357
Inventories 274,217 (248,043) (116,373) (872,851)
Prepaid and other assets (228,643) (362,335) 83,808 213,447
Accounts payable and accrued expenses 176,228 83,188 (67,638) 117,403
Deferred revenue (68,821) 239,890 (191,242) 156,141
------------ ------------ ------------ ------------
Total adjustments 1,276,804 1,046,229 2,295,949 4,327,328
------------ ------------ ------------ ------------
Net cash used in operating activities (3,123,518) (3,082,363) (10,028,867) (7,841,577)
------------ ------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investments available for sale (7,689,821) (11,898,579) (15,499,492) (11,898,579)
Proceeds from sale and maturity of investments 6,902,572 1,002,141 24,562,394 5,002,141
Proceeds from sale of property and equipment 460 0 7,660
Purchase of property and equipment (120,875) (992,014) (797,611) (1,703,108)
Payment for patent costs (383,859) (142,357) (1,161,947) (1,287,435)
------------ ------------ ------------ ------------
Net cash provided by (used in)
investing activities (1,291,523) (12,030,809) 7,111,004 (9,886,981)
------------ ------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 0 0 2,500,000
Proceeds from exercise of options and warrants 100,000 436,932 483,225 3,747,040
------------ ------------ ------------ ------------
Net cash provided by 100,000 436,932 483,225 6,247,040
financing activities
------------ ------------ ------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS
(4,315,041) (14,676,240) (2,434,638) (11,481,518)
CASH AND CASH EQUIVALENTS, beginning of period
6,443,938 34,566,626 4,563,535 31,371,904
------------ ------------ ------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 2,128,897 $ 19,890,386 $ 2,128,897 $ 19,890,386
============ ============ ============ ============
The accompanying notes are an integral part of these statements.
5
PARKERVISION, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ACCOUNTING POLICIES
-------------------
The accompanying unaudited consolidated financial statements of
ParkerVision, Inc. and subsidiary (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. All normal and recurring adjustments which, in the
opinion of management, are necessary for a fair presentation of the
financial condition and results of operations have been included. Operating
results for the three and nine month periods ended September 30, 2002 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2002.
These interim consolidated financial statements should be read in
conjunction with the Company's latest Annual Report on Form 10-K for the
year ended December 31, 2001. There have been no changes in accounting
policies from those stated in the Annual Report on Form 10-K for the year
ended December 31, 2001.
COMPREHENSIVE INCOME. The Company's other comprehensive income is comprised
of net unrealized gains (losses) on investments available-for-sale which
are included in accumulated other comprehensive income in the consolidated
balance sheets. The Company's other comprehensive income for the
three-month periods ended September 30, 2002 and 2001 was $164,152 and
$222,206 respectively. The Company's total comprehensive loss for the
three-month periods ended September 30, 2002 and 2001 was $(4,236,170) and
$(3,906,386), respectively. The Company's other comprehensive income for
the nine-month periods ended September 30, 2002 and 2001 was $205,595 and
$318,846, respectively. The Company's total comprehensive loss for the
nine-month periods ended September 30, 2002 and 2001 was $(12,119,221) and
$(11,850,059), respectively.
STATEMENTS OF CASH FLOWS. The Company paid no cash for income taxes or
interest for the three or nine-month periods ended September 30, 2002 and
2001. For the three month period ended September 30, 2002 the Company
capitalized inventory used in the business in the amount of $8,634 to
property and equipment. For the nine month period ended September 30, 2002
the Company capitalized inventory used in the business in the amount of
$300,108 to property and equipment.
RECLASSIFICATIONS. Certain reclassifications have been made to the 2001
financial statements in order to conform to the 2002 presentation.
2. LOSS PER SHARE
--------------
Basic loss per share is determined based on the weighted average number of
common shares outstanding during each period. Diluted loss per share is the
same as basic loss per share as all common share equivalents are excluded
from the calculation, as their effect is anti-dilutive. The weighted
average number of common shares outstanding for the three-month periods
ended September 30, 2002 and 2001 is 13,976,225 and 13,890,327,
respectively. The weighted average number of common shares outstanding for
the nine-month periods ended September 30, 2002 and 2001 is 13,940,916 and
13,745,004, respectively. The total number of options and warrants to
6
purchase 6,307,700 and 5,742,910 shares of common stock that were
outstanding at September 30, 2002 and 2001, respectively, were excluded
from the computation of diluted earnings per share as the effect of these
options and warrants would have been anti-dilutive.
3. INVENTORIES:
------------
Inventories consist of the following:
September 30, December 31,
2002 2001
------------ ------------
Purchased materials $ 2,458,447 $ 2,726,813
Work in process 94,781 169,248
Finished goods 798,545 887,081
Spare parts and demonstration inventory 1,102,529 1,515,967
------------ ------------
4,454,302 5,299,109
Less allowance for inventory obsolescence (543,498) (979,570)
------------ ------------
$ 3,910,804 $ 4,319,539
============ ============
Obsolete inventory that was specifically identified and included in the
allowance for inventory obsolescence was removed from inventory and the
respective allowance for inventory obsolescence as of September 30, 2002.
4. OTHER ASSETS:
------------
Other assets consist of the following:
September 30, December 31,
2002 2001
------------ ------------
Patents and copyrights $ 9,217,598 $ 8,055,651
Prepaid licensing fees 750,000 0
Other intangible assets 364,830 364,830
Deposits and other 214,809 208,128
Prepaid compensation 0 243,488
Noncompete agreement 0 31,250
------------ ------------
10,547,237 8,903,347
Less accumulated amortization (2,178,418) (1,520,178)
------------ ------------
$ 8,368,819 $ 7,383,169
============ ============
5. CONCENTRATIONS OF CREDIT RISK
-----------------------------
For the quarter ended September 30, 2002, three broadcast customers
accounted for an aggregate of approximately 41% of the Company's total
revenues. For the quarter ended September 30, 2001, one broadcast ownership
group accounted for approximately 17% of the Company's total revenues. For
the nine months ended September 30, 2002, two broadcast customers,
McGraw-Hill Broadcasting Company, Inc. and LIN Television Corporation
accounted for an aggregate of approximately 33% of the Company's total
revenues. For the nine months ended September 30, 2001, no one customer
accounted for over 10% of the Company's total revenues. Three broadcast
customers accounted for approximately 40% of accounts receivable at
September 30, 2002. VTEL and one broadcast customer accounted for
approximately 30% of accounts receivable at September 30, 2001. The Company
closely monitors extensions of credit and has never experienced significant
credit losses.
7
6. BUSINESS SEGMENT INFORMATION
----------------------------
The Company's segments include the Video Products Division ("Video
Division") and the Wireless Technology Division ("Wireless Division").
Segment results are as follows (in thousands):
Three months ended Nine months ended
------------------------ ------------------------
September 30, September 30, September 30, September 30,
2002 2001 2002 2001
---------- ---------- ---------- ----------
NET SALES:
Video Division $ 2,281 $ 2,319 $ 8,331 $ 6,963
Wireless Division 0 0 0 0
---------- ---------- ---------- ----------
Total net sales $ 2,281 $ 2,319 $ 8,331 $ 6,963
========== ========== ========== ==========
LOSS FROM OPERATIONS:
Video Division $ (691) $ (975) $ (1,682) $ (2,222)
Wireless Division (3,949) (3,574) (11,368) (11,300)
---------- ---------- ---------- ----------
Total loss from operations $ (4,640) $ (4,549) $ (13,050) $ (13,522)
========== ========== ========== ==========
DEPRECIATION:
Video Division $ 140 $ 139 $ 407 $ 411
Wireless Division 377 360 1,096 1,041
---------- ---------- ---------- ----------
Total depreciation $ 517 $ 499 $ 1,503 $ 1,452
========== ========== ========== ==========
AMORTIZATION OF IDENTIFIABLE
INTANGIBLES AND OTHER ASSETS:
Video Division $ 36 $ 26 $ 97 $ 68
Wireless Division 205 206 592 553
---------- ---------- ---------- ----------
Total amortization $ 241 $ 232 $ 689 $ 621
========== ========== ========== ==========
CAPITAL EXPENDITURES:
Video Division $ 33 $ 72 $ 269 $ 250
Wireless Division 68 920 503 1,439
Corporate 20 0 26 14
---------- ---------- ---------- ----------
Total capital expenditures $ 121 $ 992 $ 798 $ 1,703
========== ========== ========== ==========
September 30, December 31,
2002 2001
---------- ----------
ASSETS:
Video Division $ 7,613 $ 6,843
Wireless Division 13,662 14,229
Corporate 21,115 33,102
---------- ----------
Total assets $ 42,390 $ 54,174
========== ==========
8
Corporate assets consist of the following:
September 30, December 31,
2002 2001
---------- ----------
Cash and investments $ 20,068 $ 31,466
Interest and other receivables 187 366
Prepaid expenses 238 599
Property and equipment, net 462 544
Other assets 160 127
---------- ----------
Total assets $ 21,115 $ 33,102
========== ==========
7. STOCK OPTIONS
--------------
For the three month period ended September 30, 2002 the Company granted
stock options under the 1993 Stock Plan (the "1993 Plan") to purchase an
aggregate of 47,500 shares of its common stock at exercise prices ranging
from $13.64 to $18.50 per share in connection with hiring and retention of
employees. These options vest ratably over five years and expire five years
from the date they become vested.
The Company also granted a stock option under the 2000 Performance Equity
Plan (the "2000 Plan") to an officer and director of the Company to
purchase an aggregate of 50,000 shares of its common stock at an exercise
price of $16.61 per share. These options vest ratably over five years and
expire five years from the date they become vested.
As of September 30, 2002 options to purchase 3,029,340 and 394,886 shares
of common stock were available for future grants under the 2000 and 1993
Plans, respectively.
8. STOCK AUTHORIZATION AND ISSUANCE
--------------------------------
In March 2000, the Company issued an aggregate of 114,019 shares of Series
A, B, C and D Preferred Stock, $1 par value, $25 stated value, for the
acquisition of substantially all of the assets of Signal Technologies,
Inc., ("STI") as well as signing bonuses and compensation under employment
contracts for certain former employees of STI.
In March 2001, the Series A and D preferred shares were converted into
approximately 86,000 shares of common stock. In March 2002, the Series B
shares were converted into approximately 16,600 shares of common stock. The
Series C Preferred Stock will automatically convert to common stock on
March 10, 2003.
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Forward-Looking Statements
- --------------------------
When used in this Form 10-Q and in future filings by the Company 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 the timely development and acceptance of new
products, sources of supply and concentration of customers. The Company has no
obligation to publicly release the results of any revisions, which may be made
to any forward-looking statements to reflect, anticipated events or
circumstances occurring after the date of such statements.
Results of Operations for Each of the Three and Nine-Month Periods Ended
- --------------------------------------------------------------------------------
September 30, 2002 and 2001
- ---------------------------
Revenues
- --------
Revenues for the three months ended September 30, 2002 decreased by $38,429 as
compared to the same period in 2001. This decrease was due to a decrease in
camera revenue of approximately $393,000, offset by an increase in PVTV(TM)
system revenue of approximately $311,000 and an increase in service and support
revenue of approximately $44,000. For the nine-month period ended September 30,
2002, revenues increased by $1,367,282. This increase was due to an increase in
PVTV(TM) system revenue and service and support revenue of approximately
$3,406,000 and $149,800, respectively, offset by a decrease in camera revenue of
approximately $2,188,600. The number of camera and PVTV(TM) systems sold and the
average selling price per system for the three and nine month periods were as
follows:
Average Selling Price
Number of Systems Sold per System
------------------------ ------------------------
September 30, September 30, September 30, September 30,
2002 2001 2002 2001
---------- ---------- ---------- ----------
PVTV(TM) SYSTEMS
Three month period 4 3 $ 246,000 $ 222,000
Nine month period 14 7 $ 348,000 $ 209,000
CAMERA SYSTEMS
Three month period 96 204 $ 10,100 $ 6,800
Nine month period 322 653 $ 8,100 $ 7,400
The increases in PVTV(TM) revenues for the three and nine month periods were due
to increased system sales as the PVTV(TM) product continued to gain market
acceptance among broadcasters and increases in the average selling price per
system due to the mix of product sold to broadcast customers in larger markets.
Camera revenues have declined due to declining unit sales of the Company's
single chip product line. Earlier, in 2002, the Company announced the
discontinuation of its single chip camera product line because of supply issues,
declining demand and the Company's increasing focus on product development and
marketing of its PVTV(TM) broadcast systems. The decline in camera unit sales
has been somewhat offset by an increase in the average selling price per system
due to a shift in the product mix towards the higher priced three-chip cameras.
10
The increase in support revenue was due to revenues from training and support
for new PVTV(TM) systems sold and recurring support contracts related to the
Company's growing installed base of PVTV(TM) systems.
Gross Margin
- ------------
For the three-month periods ended September 30, 2002 and 2001, gross margins
based on aggregate revenues as a percentage of sales were 32.8% and 31.7%,
respectively. For the nine-month periods ended September 30, 2002 and 2001,
gross margins, on the same basis, were 37.8% and 35.1%, respectively. The
fluctuations in margins from period to period were primarily due to the mix of
products sold. Margins for the nine months ended September 30, 2002 were higher
than margins for the quarter ended September 30, 2002 due to a higher sales
volume in relation to relatively fixed overhead costs and a higher average
selling price per PVTV system during the first half of the year.
Research and Development Expenses
- ---------------------------------
The Company's research and development expenses for the three and nine month
periods ended September 30, 2002 increased $486,529 and $901,156 as compared to
the same periods in 2001. These increases were primarily due to increased
wireless chip development expenses, increased personnel costs in the wireless
division, and increased overhead due to the expansion of the Orlando wireless
facility. These increases were offset by decreases in consulting and recruitment
fees.
Marketing and Selling Expenses
- ------------------------------
Marketing and selling expenses decreased $293,615 and $526,443 for the three and
nine-month periods ended September 30, 2002 as compared to the same period in
2001. These decreases were primarily due to personnel reductions in the both the
video and wireless divisions in late 2001, and decreases in video trade show
expenses. These decreases were offset by increased travel expenses related to
the video division and recruitment fees for both divisions.
General and Administrative Expenses
- -----------------------------------
For the three and nine-month periods ended September 30, 2002, general and
administrative expenses decreased $87,808 and $187,846, respectively over the
same period in 2001. These decreases were largely due to decreased outside
professional fees offset by personnel additions, increased insurance premiums,
and travel expenses.
Interest and Other Income
- -------------------------
Interest and other income consist of interest earned on the Company's
investments, and net gains recognized on the sale of investments. Interest and
other income for the three and nine month periods ended September 30, 2002
decreased $180,851 and $628,028 from the same periods in 2001. This decrease was
the result of declining interest rates and continued use of cash and investments
to fund operations.
Loss and Loss per Share
- -----------------------
The Company's net loss increased by $271,730 or one cent per common share from
the three-month period ended September 30, 2002 to the same period in 2001. This
increase was largely due to the increases in research and development expenses
offset by decreases in interest income and marketing and selling expenses. On a
year to date basis, the Company's net loss increased by $155,911. This increase
is primarily due to increases in research and development expenses and increases
in margin from PVTV(TM) sales, offset by decreases in interest income and
marketing and selling expenses. The Company's net loss per common share
decreased one cent per common share for the nine-month period ended September
30, 2002. This decrease is due to a larger number of weighted average shares
outstanding as of September 30, 2002 as compared to the same period in 2001.
11
Backlog
- -------
The Company had camera backlog of approximately $212,000 at September 30, 2002.
Camera backlog consists of orders received, which generally have a specified
delivery schedule within nine weeks of receipt. In addition, the Company
currently has a backlog of PVTV(TM) system sales and services of approximately
$3,400,000 of which approximately $2,300,000 is attributable to purchase
contracts received from News 12 Network cable television stations in October
2002. Delivery dates for PVTV(TM) purchase contracts extend through early 2003.
Liquidity and Capital Resources
- -------------------------------
At September 30, 2002, the Company had working capital of $24.1 million, a
decrease of $12.1 million from $36.2 million at December 31, 2001. This decrease
is primarily due to the use of cash to fund operations. The Company's future
business plans call for continued increases in research, development and
marketing costs related to its wireless technology. The Company intends to
utilize its working capital to fund these increases. Based on its current
estimates, the Company believes it has sufficient capital to fund its business
plans for the next twelve months. The Company's principal source of liquidity at
September 30, 2002 consisted of $20.1 million in cash and short-term
investments. Until the Company generates sufficient revenues from system and
other sales, it will be required to continue to utilize its cash and investments
to cover the continuing expense of product development, marketing, and general
administration.
ITEM 4. CONTROLS AND PROCEDURES.
Based on the evaluation conducted by the Chief Executive Officer ("CEO") and
Chief Accounting Officer ("CAO"), as of a date within 90 days of the filing date
of this quarterly report ("Evaluation Date"), of the effectiveness of the
Company's disclosure controls and procedures, the CEO and CAO concluded that, as
of the Evaluation Date, (1) there were no significant deficiencies or material
weaknesses in the Company's disclosure controls and procedures, (2) there were
no significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the Evaluation Date and (3)
no corrective actions were required to be taken.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is subject to legal proceedings and claims which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters will not have a material adverse effect on its financial position,
results of operations or liquidity.
12
ITEM 2. CHANGES IN SECURITIES.
Sales of Unregistered Securities
- --------------------------------
Consideration received and Exemption If option, warrant or
description of underwriting or from convertible security,
Date of sale Title of Number other discounts to market price registration terms of exercise or
security sold afforded to purchasers claimed conversion
- --------------------------------------------------------------------------------------------------------------------
7/02 - Options to 47,500 Option granted - no 4(2) Expire five years from
9/02 purchase consideration received by date vested, options
common stock Company until exercise vest ratably over five
granted to years at exercise prices
employees ranging from $13.64 to
$18.50 per share
7/31/02 Options to 50,000 Option granted - no 4(2) Expire five years from
purchase consideration received by date vested, options
common stock Company until exercise vest ratably over five
granted to years at an exercise
an officer price of $16.61 per
and director share
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable
ITEM 5. OTHER INFORMATION. Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS.
10.1 Form of Indemnification Agreement
99.1 Risk Factors
(B) REPORTS ON FORM 8-K. Not applicable
13
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, thereunto duly authorized.
ParkerVision, Inc.
Registrant
November 13, 2002 By: /s/ Jeffrey L. Parker
----------------------
Jeffrey L. Parker
Chairman and Chief Executive Officer
November 13, 2002 By: /s/ Cynthia L. Poehlman
------------------------
Cynthia L. Poehlman
Chief Accounting Officer
14
FORM OF CERTIFICATION
PURSUANT TO RULE 13A-14 AND 15D-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
CERTIFICATIONS
I, Jeffrey L. Parker, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of ParkerVision, Inc.;
2. based on my knowledge, this Quarterly Report does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Quarterly
Report;
3. based on my knowledge, the financial statements, and other financial
information included in this Quarterly Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Quarterly Report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this Quarterly Report is being
prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days of the filing date of this
Quarterly Report (the "Evaluation Date"); and
(c) presented in this Quarterly Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize, and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
Quarterly Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 14, 2002 /s/ Jeffrey L. Parker
----------------- ---------------------
Name: Jeffrey L. Parker
Title: Chairman and Chief Executive Officer
15
FORM OF CERTIFICATION
PURSUANT TO RULE 13A-14 AND 15D-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
CERTIFICATIONS
I, Cynthia L. Poehlman, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of ParkerVision, Inc.;
2. based on my knowledge, this Quarterly Report does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Quarterly
Report;
3. based on my knowledge, the financial statements, and other financial
information included in this Quarterly Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Quarterly Report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this Quarterly Report is being
prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days of the filing date of this
Quarterly Report (the "Evaluation Date"); and
(c) presented in this Quarterly Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize, and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
Quarterly Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 14, 2002 /s/ Cynthia L. Poehlman
----------------- -----------------------
Name: Cynthia L. Poehlman
Title: Chief Accounting Officer
16
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of ParkerVision, Inc. (the "Company") on
Form 10-Q for the period ended September 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), each of the
undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operation of the Company.
November 14, 2002 By: /s/ Jeffrey L. Parker
----------------------
Jeffrey L. Parker
Chairman and Chief Executive Officer
November 14, 2002 By: /s/ Cynthia L. Poehlman
------------------------
Cynthia L. Poehlman
Chief Accounting Officer
17