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| 8-K - FORM 8-K - InsPro Technologies Corp | t80035_8k.htm |
InsPro Technologies Corporation Announces
Second Quarter 2014 Financial Results
Radnor, PA – August 14, 2014 – InsPro Technologies Corporation (OTC Bulletin Board: ITCC), a leading provider of core policy administration software for Group and Individual Life, Health, and Annuity products that enables insurance carriers and third-party administrators to quickly respond to evolving market needs, improve customer service, and reduce operating costs today announced its financial results for the quarter ended June 30, 2014.
Second Quarter 2014 Highlights
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Revenues were $4,267,656 in the second quarter of 2014 as compared to $4,296,755 in the second quarter of 2013. In the second quarter of 2013 we recognized $1,275,000 of license fees upon the completion of the implementation of InsPro Enterprise™ for two clients. The decline in license fees was virtually offset by increased professional services, ASP/Hosting and maintenance revenues in the second quarter of 2014 as compared to the same period in 2013.
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Operating loss from continuing operations was $2,547,644 in the second quarter of 2014 as compared to a loss of $26,839 in the second quarter of 2013. The results from operations in the second quarter of 2014 were unfavorably impacted by a one-time, non-cash equity compensation expense of $1,664,400 while the second quarter of 2013 was favorably impacted by $1,275,000 of license fees.
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Net loss was $2,487,141 in the second quarter of 2014 as compared to a net loss of $37,439 in the second quarter of 2013 due primarily to the stock-based compensation charge and the reduced license fees.
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First Half 2014 Highlights
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Revenues were $7,844,255 in the first half of 2014 as compared to $8,889,578 in the first half of 2013. In the first half of 2013, we recognized $2,475,000 of license fees upon the completion of the implementation of InsPro Enterprise™ for three clients. The decline in license fees was partially offset by increased professional services, ASP/Hosting and maintenance revenues in the first half of 2014 as compared to the same period in 2013.
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Operating loss from continuing operations was $3,112,359 in the first half of 2014 as compared to a loss of $91,630 in the first half of 2013. The results from operations in the first half of 2014 were unfavorably impacted by a one-time, non-cash equity compensation expense of $1,664,400, and the first half of 2013 was favorably impacted by $2,475,000 of license fees.
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Net loss was $2,988,900 in the first half of 2014 as compared to a net loss of $275,931 in the first half of 2013. The net loss in the first half of 2014 included a non-cash gain on the change of the fair value of warrant liability of $10,120 and one-time stock-based compensation while the same period in 2013 included a non-cash loss of $382,199 on the change in the fair value of the warrant liability and license fees of $2,475,000.
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Anthony R. Verdi, Chief Executive Officer, stated, “We generated significant growth in our professional services and other recurring revenue streams in the first half of the year, the result of our expanding portfolio of clients. Even more promising, though, is the increased strength of our sales pipeline. The considerable investments we made in the InsPro Enterprise™ technology has both broadened our addressable market and raised market interest in our system and services. We remain optimistic about our future opportunities.”
About InsPro Enterprise
InsPro Enterprise, a Life and Health insurance policy administration system, is a single technology solution used to manage all insurance processing requirements supporting multiple product lines as well as hybrid products for both group and individual policies on a single web-based platform. The InsPro Enterprise design provides carriers the option to deploy the solution as an end-to-end straight through processing suite or on a modular, componentized basis to address immediate areas of concern. The InsPro Enterprise suite includes Product Configuration Workbench, New Business and Underwriting, Billing and Collections, Policy Administration, Agent Management and Commissions, Claims, Document Management, Web Portals, and Data Analytics components.
About InsPro Technologies Corporation
Through its subsidiary, InsPro Technologies, LLC, InsPro Technologies Corporation offers InsPro Enterprise, an end-to-end, web-based policy administration system used by insurance carriers and third-party administrators. By managing the entire product and policy lifecycle on a single integrated platform, customers are afforded opportunities to accelerate new product introductions, lower costs, increase customer satisfaction and improve operational performance. InsPro’s solutions are offered through standard software licensing, as a hosted solution, or via Software as a Service (SaaS) delivery.
For additional information on InsPro Technologies, LLC and InsPro Enterprise please visit www.inspro.com.
Forward-Looking Statements
In addition to historical facts or statements of current condition, this press release contains forward-looking statements within the meaning of the “Safe Harbor” provisions of The Private Securities Litigation Reform Act of 1995, including statements regarding current and future capabilities and products supported, growth in the number of clients, quality and growth potential of our technology platform, including related services, and providing the financial support and other resources needed to demonstrate the strength of this growing technology business and to continue to reinvest in the product. Forward-looking statements provide InsPro Technologies Corporation’s current expectations or forecasts of future events. Moreover, InsPro Technologies Corporation cautions readers that forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from the statements made, including risks described in InsPro Technologies’ most recent Quarterly Reports on Form 10-Q or Annual Reports on Form 10-K filed with the Securities and Exchange Commission and available on the Securities and Exchange Commission’s website at www.sec.gov. InsPro Technologies Corporation does not undertake any obligation to update any forward-looking statement to conform the statement to actual results or changes in expectations
Contact:
Anthony R. Verdi, CEO
484-654-2200
finance@inspro.com
– financial tables to follow –
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INSPRO TECHNOLOGIES CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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For the Three Months Ended June 30,
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For the Six Months Ended June 30
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2014
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2013
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2014
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2013
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Revenues
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$ | 4,267,656 | $ | 4,296,755 | $ | 7,844,255 | $ | 8,889,578 | ||||||||
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Cost of revenues
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3,614,767 | 3,054,759 | 6,567,200 | 6,427,135 | ||||||||||||
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Gross profit
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652,889 | 1,241,996 | 1,277,055 | 2,462,443 | ||||||||||||
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Selling, general and administrative expenses:
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Compensation, employee benefits and related taxes
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2,385,650 | 671,391 | 3,043,145 | 1,323,355 | ||||||||||||
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Advertising and other marketing
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91,319 | 93,898 | 143,248 | 150,070 | ||||||||||||
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Depreciation
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42,139 | 39,262 | 78,854 | 77,475 | ||||||||||||
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Rent, utilities, telephone and communications
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103,427 | 98,969 | 194,089 | 192,390 | ||||||||||||
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Professional fees
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366,434 | 174,646 | 537,099 | 441,824 | ||||||||||||
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Other general and administrative
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211,564 | 190,669 | 392,979 | 368,959 | ||||||||||||
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Total selling, general and administrative expenses
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3,200,533 | 1,268,835 | 4,389,414 | 2,554,073 | ||||||||||||
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Operating loss from continuing operations
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(2,547,644 | ) | (26,839 | ) | (3,112,359 | ) | (91,630 | ) | ||||||||
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Other income (expense):
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Gain (loss) on the change of the fair value of warrant liability
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10,120 | (102,400 | ) | 10,120 | (382,199 | ) | ||||||||||
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Interest expense
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(11,234 | ) | (9,206 | ) | (18,678 | ) | (16,861 | ) | ||||||||
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Total other income (expense)
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(1,114 | ) | (111,606 | ) | (8,558 | ) | (399,060 | ) | ||||||||
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Loss from continuing operations
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(2,548,758 | ) | (138,445 | ) | (3,120,917 | ) | (490,690 | ) | ||||||||
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Income from discontinued operations
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61,617 | 101,006 | 132,017 | 214,759 | ||||||||||||
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Net loss
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$ | (2,487,141 | ) | $ | (37,439 | ) | $ | (2,988,900 | ) | $ | (275,931 | ) | ||||
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Net income (loss) per common share - basic and diluted:
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Loss from operations
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$ | (0.06 | ) | $ | (0.03 | ) | $ | (0.07 | ) | $ | (0.02 | ) | ||||
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Gain from discontinued operations
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- | - | - | 0.01 | ||||||||||||
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Net loss per common share
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$ | (0.06 | ) | $ | (0.03 | ) | $ | (0.07 | ) | $ | (0.01 | ) | ||||
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Weighted average common shares outstanding - basic and diluted
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41,543,655 | 41,543,655 | 41,543,655 | 41,543,655 | ||||||||||||
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INSPRO TECHNOLOGIES CORPORATION AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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June 30, 2014
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December 31, 2013
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ASSETS
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CURRENT ASSETS:
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Cash
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$ | 2,610,907 | $ | 2,569,536 | ||||
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Accounts receivable, net
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2,166,227 | 1,660,564 | ||||||
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Prepaid expenses
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384,698 | 200,985 | ||||||
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Other current assets
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4,399 | 2,564 | ||||||
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Assets of discontinued operations
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22,034 | 31,540 | ||||||
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Total current assets
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5,188,265 | 4,465,189 | ||||||
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Property and equipment, net
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1,114,361 | 959,902 | ||||||
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Other assets
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60,000 | 60,000 | ||||||
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Total assets
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$ | 6,362,626 | $ | 5,485,091 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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CURRENT LIABILITIES:
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Notes payable
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$ | 612,982 | $ | 550,761 | ||||
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Accounts payable
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1,374,231 | 1,169,251 | ||||||
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Accrued expenses
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706,693 | 456,753 | ||||||
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Current portion of capital lease obligations
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186,542 | 57,932 | ||||||
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Due to related parties
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10,000 | 10,000 | ||||||
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Deferred revenue
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2,323,805 | 1,006,875 | ||||||
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Total current liabilities
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5,214,253 | 3,251,572 | ||||||
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LONG TERM LIABILITIES:
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Warrant liability
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597,079 | 607,199 | ||||||
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Capital lease obligations
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229,137 | 23,184 | ||||||
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Total long term liabilities
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826,216 | 630,383 | ||||||
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Total liabilities
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6,040,469 | 3,881,955 | ||||||
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SHAREHOLDERS’ EQUITY:
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Preferred stock ($.001 par value; 20,000,000 shares authorized)
Series A convertible preferred stock; 3,437,500 shares authorized, 1,276,750 shares issued and outstanding (liquidation value $12,767,500)
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2,864,104 | 2,864,104 | ||||||
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Series B convertible preferred stock; 5,000,000 shares authorized, 3,809,378 shares issued and outstanding (liquidation value $11,428,134)
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7,709,919 | 7,709,919 | ||||||
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Common stock ($.001 par value; 300,000,000 shares authorized, 41,543,655 shares issued and outstanding)
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41,543 | 41,543 | ||||||
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Additional paid-in capital
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45,119,094 | 43,411,172 | ||||||
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Accumulated deficit
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(55,412,503 | ) | (52,423,602 | ) | ||||
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Total shareholders’ equity
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322,157 | 1,603,136 | ||||||
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Total liabilities and shareholders’ equity
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$ | 6,362,626 | $ | 5,485,091 | ||||
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INSPRO TECHNOLOGIES CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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For the Six Months Ended June 30,
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2014
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2013
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Cash Flows From Operating Activities:
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Net loss
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$ | (2,988,900 | ) | $ | (275,931 | ) | ||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation
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383,686 | 346,814 | ||||||
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Stock-based compensation
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1,707,922 | 37,497 | ||||||
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(Gain) loss on change of fair value of warrant liability
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(10,120 | ) | 382,199 | |||||
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Changes in assets and liabilities:
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Accounts receivable
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(505,663 | ) | 83,663 | |||||
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Prepaid expenses
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(76,633 | ) | (103,276 | ) | ||||
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Other current assets
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(1,835 | ) | 314 | |||||
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Accounts payable
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204,980 | (542,325 | ) | |||||
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Accrued expenses
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249,940 | (25,155 | ) | |||||
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Deferred revenue
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1,316,930 | (388,174 | ) | |||||
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Assets of discontinued operations
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9,506 | 25,374 | ||||||
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Net cash provided (used) in operating activities
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289,813 | (459,000 | ) | |||||
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Cash Flows From Investing Activities:
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Purchase of property and equipment
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(129,140 | ) | (86,720 | ) | ||||
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Net cash used in investing activities
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(129,140 | ) | (86,720 | ) | ||||
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Cash Flows From Financing Activities:
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Gross proceeds from sale of preferred stock and warrants
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- | 36,000 | ||||||
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Fees paid in connection with sale of preferred stock and warrants
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- | (28,800 | ) | |||||
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Payments on notes payable
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(44,859 | ) | (43,981 | ) | ||||
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Payments on capital leases
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(74,443 | ) | (34,579 | ) | ||||
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Net cash used in financing activities
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(119,302 | ) | (71,360 | ) | ||||
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Net increase (decrease) in cash
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41,371 | (617,080 | ) | |||||
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Cash - beginning of the period
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2,569,536 | 3,347,689 | ||||||
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Cash - end of the period
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$ | 2,610,907 | $ | 2,730,609 | ||||