Internet Patents Corporation Reports Second Quarter 2012 Results

Marketwired

SACRAMENTO, CA--(Marketwire -07/30/12)- Internet Patents Corporation (PTNT) today reported financial results for the second quarter ended June 30, 2012.

"As part of our efforts to license our strong portfolio of e-commerce patents, during the second quarter we initiated our first lawsuits against eBags, Inc. and TellApart, Inc. alleging infringement of U.S. Patent No. 6,898,587 entitled 'Event Log Information in Client-Server Computer System.' We are preparing to file additional lawsuits against other parties for infringing the Event Log and other patents in the near future," said Hussein Enan, Chairman and CEO of Internet Patents Corporation. "We are also pleased that our Board of Directors recently named Steve Yasuda as chief financial officer. Steve has been a key member of the management team for over 12 years, and we look forward to his continued contributions to the company in this role."

Operating Highlights
As of the quarter ended June 30, 2012:

  • In its second quarter of operating a patent licensing business, the Company reported a net loss for the quarter of $911,000, or $0.12 per share.
  • Total operating expenses of $979,000 were higher than the previous quarter due to severance and retention payments. Operating expenses are expected to return to the Company's target range of $0.6 to $0.7 million in the third quarter.
  • Cash and cash equivalents and short-term investments were $34.6 million, which includes $1.0 million in restricted short-term investments.
  • The number of shares of Internet Patents Corporation common stock issued and outstanding was 7,751,952. Options representing a total of 232,666 shares of common stock remain outstanding and exercisable as of that same date.
  • Net operating loss (NOL) carry forwards were approximately $139.2 million and $83.8 million for federal income tax and state income tax purposes, respectively. Included in these amounts are unrealized federal and state net operating loss deductions resulting from stock option exercises of approximately $6.7 million each. The benefit of these unrealized stock option-related deductions has not been included in deferred tax assets and will be recognized as a credit to additional paid-in capital when realized. Federal and state net operating loss carry forwards begin expiring in 2012.

About Internet Patents Corporation
Headquartered in Sacramento, CA, Internet Patents Corporation (PTNT) operates a patent licensing business focused on its e-commerce technologies. www.internetpatentscorporation.net

Forward-Looking Statements

This news release contains forward-looking statements, which include statements expressing the intent, belief or current expectations of Internet Patents Corporation that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. The words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "target," "goal," and similar expressions are intended to identify forward-looking statements. Actual results might differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with Internet Patent Corporation's business, which include, but are not limited to: the unpredictable nature of patent licensing and patent litigation; potential changes in the laws and regulations relating to patents and patent litigation; the risk that we are not currently engaged in the patent licensing business, and our patent portfolio has never generated revenues; future changes we may make in our patent licensing strategy; and changes in the taxation of income due to the disallowance or expiration of the Company's net operating losses. Unless legally required, Internet Patents Corporation undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements should be considered in the context of these and other risk factors disclosed in the Company's filings with the Securities and Exchange Commission.

 

INTERNET PATENTS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)
(unaudited)

June 30, December 31,
2012 2011
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 33,102 $ 70,326
Short-term investments 491 1,225
Restricted short-term investments 1,000 -
Prepaid expenses and other current assets 300 1,374
------------- -------------
Total current assets 34,893 72,925
Property and equipment, net 44 42
Other assets 27 1,027
------------- -------------
Total assets $ 34,964 $ 73,994
============= =============

Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 426 $ 3,385
Accrued expenses and other current
liabilities 247 541
Income tax payable - 644
------------- -------------
Total current liabilities 673 4,570

Income tax liability and other non-current
liabilities 101 101
------------- -------------
Total liabilities 774 4,671

Commitments and contingencies

Stockholders' equity:
Common stock 11 10
Paid-in capital 221,726 216,401
Treasury stock (6,788) (6,589)
Accumulated deficit (180,759) (140,499)

------------- -------------
Total stockholders' equity 34,190 69,323
------------- -------------
Total liabilities and stockholders' equity $ 34,964 $ 73,994
============= =============



INTERNET PATENTS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)
(unaudited)

Three Months Six Months
Ended June 30, Ended June 30,
2012 2011 2012 2011
--------- --------- --------- ---------

Total revenues $ - $ - $ - $ -

Operating expenses:
Sales and marketing - - - -
Technology - 24 - 48
General and administrative 979 826 1,816 1,714
--------- --------- --------- ---------
Total operating expenses 979 850 1,816 1,762
--------- --------- --------- ---------
Loss from operations (979) (850) (1,816) (1,762)
Other income 68 5 168 10
--------- --------- --------- ---------
Loss from continuing operations (911) (845) (1,648) (1,752)
--------- --------- --------- ---------
Discontinued operations, net of
tax
Income from discontinued
operations - 1,824 - 3,029
--------- --------- --------- ---------
Total discontinued operations - 1,824 - 3,029
--------- --------- --------- ---------

Net income (loss) $ (911) $ 979 $ (1,648) $ 1,277
========= ========= ========= =========

Net income (loss) per share:
Basic and diluted
Loss from continuing
operations $ (0.12) $ (0.15) $ (0.22) $ (0.31)
Discontinued operations,
net of tax $ - $ 0.32 $ - $ 0.54
--------- --------- --------- ---------
Net income (loss) per basic
common share $ (0.12) $ 0.17 $ (0.22) $ 0.23
========= ========= ========= =========

Shares used in computing per
share amounts
Basic and diluted 7,752 5,687 7,566 5,605
========= ========= ========= =========

Contact:
Investor Relations
Jennifer Jarman
The Blueshirt Group
415-217-5866
Email Contact

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