10-Q 1 x10q-1102.txt PARKERVISION, INC 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