99.1
RISK FACTORS
PARKERVISION HAS A HISTORY OF LOSSES AND OPERATING LOSSES ARE EXPECTED TO
CONTINUE ON A COMPANY WIDE BASIS.
ParkerVision has had losses in each year since its inception in 1989. There
can be no assurance that revenues from the current CameraMan(TM) or PVTV(TM)
products, D2D(TM) technology or products and technologies being developed will
produce revenues that will cover operational expenses or result in net profits.
PARKERVISION MAY REQUIRE ADDITIONAL CAPITAL TO FUND ITS OPERATIONS.
Because ParkerVision has had net losses and positive cash flow has not been
generated from operations, it has funded its operating activities to date from
the sale of equity securities. In addition, the Company's business plan for 2001
and thereafter requires significant expenditures. Although ParkerVision had
working capital of $45.6 million at December 31, 2000, it may require additional
capital in the future for research and development and manufacturing. The
financing, if any, may be in the form of loans or additional sales of equity
securities. A loan may result in the imposition of operational limitations and
will have payment obligations that may be burdensome to ParkerVision. The sale
of equity securities will result in dilution to the current stockholders
ownership of ParkerVision. ParkerVision does not have any plans or arrangements
for additional public financing at this time.
MICROELECTRONIC HARDWARE AND SOFTWARE IS SUBJECT TO RAPID TECHNOLOGICAL CHANGES
THAT REQUIRE PARKERVISION TO DEVELOP AND MARKET ENHANCEMENTS TO CURRENT PRODUCTS
AND DEVELOP NEW PRODUCTS.
Because of the rapid technological development that regularly occurs in the
microelectronics industry, ParkerVision must continually devote substantial
resources to developing and improving its technology and introducing new product
offerings and creating new products. This is necessary to establish and increase
market share and grow revenues. If another company offers better products or
ParkerVision development lags, the competitive position and revenues of
ParkerVision may be adversely affected.
PARKERVISION EXPENDS SIGNIFICANT RESOURCES FOR RESEARCH AND DEVELOPMENT OF NEW
PRODUCTS AND TECHNOLOGY THAT ULTIMATELY MAY NOT BE COMMERCIALLY ACCEPTED.
ParkerVision devotes substantial resources to research and development.
There can be no assurance that the results of the research and the product
development will produce commercially viable technologies and products. If new
technologies and products are not commercially accepted, the funds expended will
not be recoverable, and ParkerVision's competitive and financial position may be
adversely affected.
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PARKERVISION NEEDS TO ACHIEVE MARKET ACCEPTANCE OF ITS D2D TECHNOLOGY.
The ParkerVision wireless technology represents a significant change in the
architecture of wireless radio-frequency communications. To achieve market
acceptance, the Company will need to demonstrate the benefits of its technology
over more traditional solutions through the development of application solutions
and aggressive marketing to wireless products companies. In many respects,
because the D2D technology is such a radically different approach in its
industry, it is very difficult for ParkerVision to predict the final economic
benefits to users of the technology and the financial rewards that ParkerVision
might expect. If the D2D technology is not established in the market place as an
improvement over current, traditional solutions in wireless communications, our
business and financial condition will be adversely affected.
IF PARKERVISION'S PATENTS DO NOT PROVIDE THE ANTICIPATED MARKET PROTECTIONS, ITS
COMPETITIVE POSITION WILL BE ADVERSELY AFFECTED.
ParkerVision has a large number of patents and patent applications relating
to its microelectronic technologies. ParkerVision relies on these to provide
competitive advantage and protect it from theft of its intellectual property.
ParkerVision believes that many of these patents are for entirely new
technologies. If the patents are not issued or issued patents are later shown
not to be as broad as currently believed or otherwise challenged such that some
or all of the protection is lost, ParkerVision will suffer adverse effects from
the loss of competitive advantage and its ability to offer unique products and
technologies. Concomitantly, there would be an adverse impact on its financial
condition and business prospects.
PARKERVISION WIRELESS COMMUNICATIONS USE INFRARED AND RADIO FREQUENCY TECHNOLOGY
SUBJECT TO REGULATION BY THE FEDERAL COMMUNICATIONS COMMISSION.
ParkerVision must obtain licenses and approvals from the United States
Federal Communications Commission for the operation of its products.
ParkerVision may also have to obtain licenses and approvals from foreign
governments where its products are sold overseas. The inability to obtain any
required licenses and approvals, or a change in current regulation that impacts
issued licenses and approvals, will have an adverse impact on the ability of
ParkerVision to market its products. Therefore, there will be an adverse impact
on the revenues and business prospects of ParkerVision.
THE CAMERAMAN AND PVTV PRODUCTS COMPETE WITH OTHER PRODUCTS.
The videoconferencing and studio production industries are highly
competitive. There are many other companies that offer products that compete
with those of ParkerVision. ParkerVision, however, believes that no one
competing product offers the range of options and capabilities of the CameraMan
and PVTV products in the tasks for which these products have been designed. The
principal competitors include Sony Corporation, Panasonic Corporation and Grass
Valley Group. Each of these companies are well established, have substantially
greater financial and other resources and have established reputations or
success in the development, sale and service of products. They also have
significant advertising budgets that permit them to implement extensive
advertising and promotional campaigns in response to competitors. If these or
other companies improve or change their products or launch significant marketing
efforts in the market segments in which ParkerVision operates, ParkerVision may
lose market share.
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PARKERVISION EXPECTS COMPETITION IN CONNECTION WITH ITS DIRECT2DATA TECHNOLOGY.
Although the D2D technology of ParkerVision is believed to be a significant
technological advancement, it will face competition from older technological
solutions until the ParkerVision products are more widely acknowledged and
utilized. This technology may also face competition from other technological
advances which are under development and have not yet emerged.
PARKERVISION OBTAINS CRITICAL COMPONENTS AND MANUFACTURING SERVICES FOR ITS
PRODUCTS FROM VARIOUS SUPPLIERS WHICH PUTS PARKERVISION AT RISK IF THEY DO NOT
FULFILL THE PARKERVISION NEEDS OR INCREASE PRICES THAT CANNOT BE PASSED ON.
Both the video products and wireless divisions of ParkerVision obtain
critical components from various suppliers and manufacturers. Some of these are
single sources. Because ParkerVision depends on outside sources for supplies and
manufacturing of various parts of its products, ParkerVision is at risk that it
may no obtain these components on a timely basis, or at all due to lack of
capacity, parts shortages in the overall marketplace and other fulfillment
obligations of these sources, among other things. If ParkerVision is unable to
obtain its components from the current sources, its business would be disrupted,
and it would have to expend some of its resources to modify its products. In
addition, ParkerVision is at risk for increases in prices imposed by these
sources over which ParkerVision has no control. Any inability of ParkerVision to
obtain components or price increases may have adverse effects on its own ability
to fulfill orders and on its financial condition.
IF PARKERVISION LOSES ITS SIGNIFICANT CUSTOMER FOR CAMERAMAN CAMERAS, ITS
REVENUES WILL BE SIGNIFICANTLY AFFECTED.
Vtel Corporation purchased approximately 38% of the CameraMan camera
systems sold in 2000, which represented 16% of ParkerVision's revenues for 2000.
Vtel Corporation was also a significant customer in each of 1998 and 1999. These
CameraMan systems are used primarily in the distance education segment of the
video conferencing market. The loss of this customer will severely impact
revenues of ParkerVision and will diminish the ParkerVision presence in this
particular market segment.
PARKERVISION BELIEVES THAT IT WILL RELY IN THE NEAR FUTURE ON KEY BUSINESS
RELATIONSHIPS FOR THE SUCCESSFUL COMMERCIALIZATION OF ITS D2D TECHNOLOGY, WHICH
IF LOST, WILL HAVE AN ADVERSE IMPACT ON ACHIEVING MARKET AWARENESS AND
ACCEPTANCE AND LOSS OF BUSINESS OPPORTUNITY.
To achieve market awareness and acceptance of its D2D technology, as part
of its business strategy, ParkerVision will enter into a variety of business
relationships with other companies which will incorporate the D2D technology
into their products. Therefore, ParkerVision's successful commercialization of
the D2D technology will depend on its ability to meet its obligations under the
contracts in respect of its D2D technology and related development requirements
and the other parties using the D2D technology as agreed. The failure of the
these business relationships will limit the commercialization of the
ParkerVision D2D technology which will have an adverse impact on the business
development of the company and its ability to generate revenues and recover
development expenses.
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PARKERVISION HAS LIMITED EXPERIENCE IN THE COMMERCIAL DESIGN AND MANUFACTURE OF
ELECTRONIC CHIPS WHICH MAY RESULT IN PRODUCTION INADEQUACIES, DELAYS AND
REJECTION.
As ParkerVision begins to commercialize its D2D technology, it plans to
manufacture some of the electronic chips that employ its proprietary designs for
supply to end users. ParkerVision has limited experience in the commercial
design and the manufacture of these kinds of electronic chips. If there are
design flaws or manufacturing errors resulting from the inexperience, there may
be resulting delays or loss of customer acceptance of the electronic chips.
Either of these may be a breach of supply agreements or may cause a loss of
customer willingness to use ParkerVision products. These may result in loss of
commercialization opportunities as well as revenues and cause additional,
unanticipated expenses with adverse financial effect.
PARKERVISION IS HIGHLY DEPENDENT ON MR. JEFFERY PARKER AS ITS CHIEF EXECUTIVE
OFFICER.
Because of Mr. Parker's position in the company and the respect he has
garnered in the industries in which ParkerVision operates and from the
investment community, the loss of the services of Mr. Parker would be seen as an
impediment to the execution of the ParkerVision business plan. If Mr. Parker
were no longer available to the company, investors may experience an adverse
impact on their investment.
PARKERVISION IS DEPENDENT ON HIRING HIGHLY SKILLED EMPLOYEES.
The business of ParkerVision is very specialized in the areas of automated
video camera control systems and automated production systems and wireless
direct conversion technology. Because these areas of business are extremely
specialized, ParkerVision is dependent on having skilled and specialized
employees to conduct its research and development activities, manufacturing,
marketing and support. The inability to obtain these kinds of persons would have
an adverse impact on its business development and may prevent ParkerVision
successfully implementing its current plans.
PARKERVISION FACES INTENSE COMPETITION IN ITS HIRING PROGRAM FOR THE KINDS OF
EMPLOYEES IT REQUIRES.
Because ParkerVision needs highly skilled employees and persons with very
specialized experience, there tends to be relatively few persons available that
meet its requirements. Generally, ParkerVision has experienced a small pool of
persons in the labor markets in which it must seek its employees. Therefore,
when hiring, ParkerVision encounters intense competition from other
telecommunications, electronics and technically orientated companies. To meet
this competition ParkerVision often is required to fashion superior compensation
packages and to develop a working environment conducive to attracting the kinds
of person the company needs. ParkerVision may experience an inability to obtain
the services of required personnel and a high cost of labor in some areas. The
former may prevent ParkerVision from implementing its business plan as intended
and the latter may result in additional expense in its operations which may not
be recoverable. One or the other or both may place ParkerVision at a overall
disadvantage comparative to other companies.
4
THE OUTSTANDING OPTIONS AND WARRANTS MAY EFFECT THE MARKET PRICE AND LIQUIDITY
OF THE COMMON STOCK.
ParkerVision has outstanding options, warrants and purchase options to
purchase 6,135,510 shares of its common stock at December 31, 2000. This
represents about 31% of the common stock outstanding on a fully diluted basis.
Approximately 60% of these securities have exercise prices at less than the
current market price of the common stock. All of the underlying common stock of
these securities is or will be registered for sale by ParkerVision to the option
holder or for public sale by the security holder. The amount of common stock
available for the sales may have an adverse impact on ParkerVision's ability to
raise capital in the public market and may affect the price and liquidity of the
common stock in the public market. In addition, the issuance of these shares of
common stock will have a dilutive effect on the current stockholders' ownership
of ParkerVision.
THE MARKET OF THE PARKERVISION COMMON STOCK HAS FLUCTUATED SIGNIFICANTLY,
SOMETIMES IN A MANNER UNRELATED TO ITS PERFORMANCE.
The market price of the common stock has varied in response to various
factors and events. These include:
o the number of shares of common stock being sold and purchased in the
marketplace,
o variations in operating results,
o rumors of significant events which can circulate quickly in the
marketplace, particularly over the internet, and
o the difference between actual results and the results expected by investors
and analysts.
Since the common stock has been publicly traded, its market price has fluctuated
over a wide range and ParkerVision expects it to continue to do so in the
future. In addition, the stock market had experienced broad price and volume
fluctuations in recent years that have often been unrelated to the operating
performance of companies. These broad market fluctuations also may adversely
affect the market price of the common stock.
PROVISIONS IN THE CERTIFICATE OF THE INCORPORATION AND BY-LAWS COULD HAVE
AFFECTS THAT CONFLICT WITH THE INTEREST OF STOCKHOLDERS.
Some provisions in the certificate of incorporation and by-laws of
ParkerVision could make it more difficult for a third party to acquire control.
For example, the board of directors has the ability to issue preferred stock
without stockholder approval and there are pre-notification provisions for
director nominations and submissions of proposals from stockholders to a vote by
all the stockholders under the by-laws. Florida law also has anti-takeover
provisions.
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