InPlay Technologies Reports First Quarter 2008 Financial Results

  
    
  
  
    
      InPlay Technologies (Nasdaq: NPLA) today announced financial results for 
      the three months ended March 31, 2008.
    
    
      Revenue for the first quarter 2008 was $388,000, down from $9.0 million 
      in the comparable period during 2007. 2007 revenue included $7.6 million 
      from the sale of the Company’s allowed claim 
      against Delphi Automotive Systems, LLC for licensing fees. InPlay does 
      not expect any future revenue related to Delphi. For the three month 
      period in 2008, revenue included $9,000 from the FinePoint segment and 
      $379,000 from the Duraswitch segment.
    
    
      InPlay reported a net loss for the quarter of $1.6 million, or $0.14 per 
      share, compared to net income of $6.2 million or $0.54 per share for 
      2007.
    
    
      “As anticipated, revenue from our FinePoint 
      segment was significantly lower during the first quarter. At the same 
      time, we made substantial investments in customer support and technology 
      development, in particular our integrated capacitive touch and digital 
      pen platform. We believe that this investment is an important step to be 
      able to deliver the products for our key markets. In the short term, 
      however, our net loss and cash use increased,” 
      said InPlay chairman and CEO, Steve Hanson.
    
    
      “Our Duraswitch business showed progress 
      during the quarter, with revenue from non-exclusive licensees up 42 
      percent from the comparable quarter in 2007. We continue to explore 
      alternatives to accelerate market penetration for our switch business,” 
      Hanson added.
    
    
      “Our overriding goals for 2008 are to win new 
      project designs, manage our cash resources and demonstrate a path to 
      profitability,” Hanson said. “We 
      have put resources in place that we believe will enable us to grow our 
      business more effectively. While we continue to make progress with 
      prospective customers and generate new interest, project lead times can 
      be fairly lengthy. Given the current state of the economy, we do not 
      expect any of our customers to accelerate these timelines. We do remain 
      confident in our ability to earn design wins with prospective customers 
      in 2008.”
    
    
      Conference Call
    
    
      InPlay Technologies will host a conference call today at 5:00 p.m. 
      Eastern Time. To participate on the live call, analysts and investors 
      should dial 800-240-2134 at least ten minutes prior to the call. To 
      participate on the live call from outside the U.S., dial 303-262-2137. 
      InPlay Technologies will also offer a live and archived webcast of the 
      conference call, accessible from the "Investor" section of the company’s 
      Web site (http://www.inplaytechnologies.com). 
      A telephonic replay of the conference call will also be available 
      through May 16 by dialing 800-405-2236 and entering passcode 11114027#.
    
    
      About InPlay Technologies
    
    
      InPlay Technologies is a developer of innovative human interface devices 
      for electronic products. The company's FinePoint division offers the 
      only digital-based pen-input solution for the rapidly growing mobile 
      computing market. With InPlay’s digital 
      technology, OEMs have an almost limitless roadmap for development of 
      new features and functions for their product designs. The Company’s 
      Duraswitch® brand of electronic switch 
      technologies couples the friendly tactile feedback of mechanical 
      pushbuttons and rotary dials with the highly reliable, thin profile of 
      membrane switches, enabling OEMs to create ergonomic, space saving input 
      panels for a wide range of applications. Visit www.inplaytechnologies.com 
      for more information.
    
    
      This news release contains certain “forward-looking 
      statements” within the meaning of Section 27A 
      of the Securities Act of 1933 and Section 21E of the Securities Exchange 
      Act of 1934, as amended. These forward-looking statements include 
      statements regarding our progress with potential customers and ability 
      to win new projects using our Duraswitch and FinePoint technologies, our 
      estimation of the benefits derived from our investment in technology 
      development and customer support, our ability to successfully manage our 
      cash and attain profitability. Risks and uncertainties that could cause 
      results to differ materially from those projected include our ability to 
      raise and maintain sufficient cash resources to fund our business plan, 
      changes in orders or timing from our licensees and customers, lack of 
      market acceptance of our products, general changes in demand in the 
      personal computing industry, pricing pressures, component shortages, 
      unanticipated expenses or other unforeseen difficulties related to 
      manufacturing our technologies and other uncertainties described from 
      time to time in our documents filed with the Securities and Exchange 
      Commission, including our Annual Report on Form 10-KSB for the year 
      ended December 31, 2007 as filed with the Securities and Exchange 
      Commission on March 24, 2008. These forward-looking statements represent 
      our beliefs as of the date of this press release and we disclaim any 
      intent or obligation to update these forward-looking statements.
    
    
      
        
          INPLAY TECHNOLOGIES, INC.
        
      
      
        
          CONSOLIDATED STATEMENTS OF OPERATIONS
        
      
      
        
          (Unaudited)
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          Three Months Ended March 31,
        
      
      
        
        
        
        
        
          2008
        
        
        
        
          2007
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NET REVENUE:
        
        
        
        
        
        
        
        
        
      
      
        
          FinePoint
        
        
        
        
          $
        
        
          8,951
        
        
        
        
        
        
          $
        
        
          1,168,034
        
      
      
        
          Duraswitch:
        
        
        
        
        
        
        
        
        
      
      
        
          Related party - Delphi
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          7,631,250
        
      
      
        
          Non-related parties
        
        
        
        
           
        
        
          379,126
        
        
           
        
        
        
        
           
        
        
          266,971
        
      
      
        
          Total net revenue
        
        
        
        
        
        
          388,077
        
        
        
        
        
        
        
        
          9,066,255
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          COST OF GOODS SOLD:
        
        
        
        
        
        
        
        
        
      
      
        
          FinePoint
        
        
        
        
        
        
          9,618
        
        
        
        
        
        
        
        
          857,373
        
      
      
        
          Duraswitch
        
        
        
        
           
        
        
          120,930
        
        
           
        
        
        
        
           
        
        
          66,325
        
      
      
        
          Total cost of goods sold
        
        
        
        
           
        
        
          130,548
        
        
           
        
        
        
        
           
        
        
          923,698
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Gross profit
        
        
        
        
           
        
        
          257,529
        
        
           
        
        
        
        
           
        
        
          8,142,557
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          OPERATING EXPENSES:
        
        
        
        
        
        
        
        
        
      
      
        
          Selling, general and administrative
        
        
        
        
        
        
          861,005
        
        
        
        
        
        
        
        
          1,483,987
        
      
      
        
          
            Research, development and commercial application engineering
          
        
        
        
        
           
        
        
          1,026,886
        
        
           
        
        
        
        
           
        
        
          338,158
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total operating expenses
        
        
        
        
           
        
        
          1,887,891
        
        
           
        
        
        
        
           
        
        
          1,822,145
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          INCOME (LOSS) FROM OPERATIONS
        
        
        
        
        
        
          (1,630,362
        
        
          )
        
        
        
        
        
        
          6,320,412
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          OTHER INCOME - Net
        
        
        
        
           
        
        
          33,881
        
        
           
        
        
        
        
           
        
        
          38,582
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          INCOME (LOSS) BEFORE INCOME TAXES
        
        
        
        
          $
        
        
          (1,596,481
        
        
          )
        
        
        
        
          $
        
        
          6,358,994
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          PROVISION FOR INCOME TAXES
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          127,180
        
      
      
        
        
        
        
        
           
        
        
        
        
           
        
      
      
        
          NET INCOME (LOSS)
        
        
        
        
          $
        
        
          (1,596,481
        
        
          )
        
        
        
        
          $
        
        
          6,231,814
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          EARNINGS (LOSS) PER SHARE - BASIC
        
        
        
        
          $
        
        
          (0.14
        
        
          )
        
        
        
        
          $
        
        
          0.54
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          EARNINGS (LOSS) PER SHARE - DILUTED
        
        
        
        
          $
        
        
          (0.14
        
        
          )
        
        
        
        
          $
        
        
          0.54
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          WEIGHTED AVERAGE SHARES OUTSTANDING:
        
        
        
        
        
        
        
        
        
      
      
        
          BASIC
        
        
        
        
           
        
        
          11,596,950
        
        
           
        
        
        
        
           
        
        
          11,502,373
        
      
      
        
          DILUTED
        
        
        
        
           
        
        
          11,596,950
        
        
           
        
        
        
        
           
        
        
          11,559,472
        
      
    
    
    
    
      
        
          INPLAY TECHNOLOGIES, INC.
        
      
      
        
          CONSOLIDATED BALANCE SHEETS
        
      
      
        
          (Unaudited)
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          March 31, 2008
        
        
        
        
          December 31, 2007
        
      
      
        
          ASSETS
        
        
        
        
        
        
        
        
        
      
      
        
          CURRENT ASSETS:
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
        
        
          $
        
        
          3,179,615
        
        
        
        
        
        
          $
        
        
          5,592,412
        
        
        
      
      
        
          Restricted short term investment
        
        
        
        
        
        
          20,000
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Accounts receivable
        
        
        
        
        
        
          247,838
        
        
        
        
        
        
        
        
          228,610
        
        
        
      
      
        
          Inventory
        
        
        
        
        
        
          152,257
        
        
        
        
        
        
        
        
          108,562
        
        
        
      
      
        
          Prepaid expenses and other current assets
        
        
        
        
           
        
        
          85,152
        
        
           
        
        
        
        
           
        
        
          128,932
        
        
           
        
      
      
        
          Total current assets
        
        
        
        
        
        
          3,684,862
        
        
        
        
        
        
        
        
          6,058,516
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          PROPERTY AND EQUIPMENT - Net
        
        
        
        
        
        
          519,774
        
        
        
        
        
        
        
        
          437,248
        
        
        
      
      
        
          GOODWILL
        
        
        
        
        
        
          1,321,240
        
        
        
        
        
        
        
        
          1,321,240
        
        
        
      
      
        
          PATENTS - Net
        
        
        
        
        
        
          1,186,493
        
        
        
        
        
        
        
        
          1,205,977
        
        
        
      
      
        
          OTHER ASSETS
        
        
        
        
           
        
        
          17,731
        
        
           
        
        
        
        
           
        
        
          17,731
        
        
           
        
      
      
        
          TOTAL ASSETS
        
        
        
        
          $
        
        
          6,730,100
        
        
           
        
        
        
        
          $
        
        
          9,040,712
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES AND STOCKHOLDERS' EQUITY
        
        
        
        
        
        
        
        
        
      
      
        
          CURRENT LIABILITIES:
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts payable
        
        
        
        
          $
        
        
          472,045
        
        
        
        
        
        
          $
        
        
          642,781
        
        
        
      
      
        
          Accrued salaries and benefits
        
        
        
        
        
        
          564,318
        
        
        
        
        
        
        
        
          777,987
        
        
        
      
      
        
          Accrued purchase commitments
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          558,000
        
        
        
      
      
        
          Other accrued expenses and other current liabilities
        
        
        
        
        
        
          677,951
        
        
        
        
        
        
        
        
          453,108
        
        
        
      
      
        
          Deferred revenue
        
        
        
        
           
        
        
          15,000
        
        
           
        
        
        
        
           
        
        
          15,695
        
        
           
        
      
      
        
          Total current liabilities
        
        
        
        
           
        
        
          1,729,314
        
        
           
        
        
        
        
           
        
        
          2,447,571
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LONG-TERM LIABILITIES:
        
        
        
        
        
        
        
        
        
      
      
        
          Other non-current liabilities
        
        
        
        
           
        
        
          102,253
        
        
           
        
        
        
        
           
        
        
          173,228
        
        
           
        
      
      
        
          Total liabilities
        
        
        
        
           
        
        
          1,831,567
        
        
           
        
        
        
        
           
        
        
          2,620,799
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          COMMITMENTS AND CONTINGENCIES
        
        
        
        
        
        
        
        
        
      
      
        
          STOCKHOLDERS' EQUITY:
        
        
        
        
        
        
        
        
        
      
      
        
          
            Preferred stock, no par value, 10,000,000 shares authorized, no 
            shares issued and outstanding in 2008 and 2007
          
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
          
            Common stock, $.001 par value, 40,000,000 shares authorized in 
            2008 and 2007, 11,603,818 and 11,595,138 shares issued and 
            outstanding in 2008 and 2007, respectively
          
        
        
        
        
        
        
          11,604
        
        
        
        
        
        
        
        
          11,595
        
        
        
      
      
        
          Additional paid-in capital
        
        
        
        
        
        
          31,781,550
        
        
        
        
        
        
        
        
          31,706,458
        
        
        
      
      
        
          Accumulated deficit
        
        
        
        
           
        
        
          (26,894,621
        
        
          )
        
        
        
        
           
        
        
          (25,298,140
        
        
          )
        
      
      
        
          Total stockholders' equity
        
        
        
        
           
        
        
          4,898,533
        
        
           
        
        
        
        
           
        
        
          6,419,913
        
        
           
        
      
      
        
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
        
        
        
        
          $
        
        
          6,730,100
        
        
           
        
        
        
        
          $
        
        
          9,040,712