Internet Patents Corporation Reports Fourth Quarter 2012 Results
March 04 2013 - 3:15PM
Marketwired
Internet Patents Corporation ("IPC") (NASDAQ: PTNT) today reported
financial results for the fourth quarter ended December 31, 2012.
"During the fourth quarter we initiated two lawsuits against
Quinstreet, Inc. and Tree.com, Inc. alleging infringement of U.S.
Patent No. 7,707,505 entitled Dynamic Tabs for a Graphical User
Interface," said Hussein Enan, Chairman and CEO of Internet Patents
Corporation. "We also continue to pursue the three patent
infringement lawsuits filed earlier in the year and to review and
identify other potential infringers of our strong portfolio of
e-commerce patents."
Operating Highlights As of the quarter
ended December 31, 2012:
- In its fourth quarter of operating a patent licensing business,
the Company reported a net loss for the quarter of $667,000 or
$0.09 per share.
- Total operating expenses of $670,000 exceeded the Company's
target range of $0.5 to $0.6 million. This was due to the Company
recording a charge of $95,000 for the quarter, representing the
difference between the Company's lease obligations and sub-lease
income it expects to receive for the duration of the lease. We
expect operating expenses for the foreseeable future to increase to
between $0.6 million and $0.8 million per quarter, reflecting
additional patent litigation costs.
- Cash and cash equivalents and short-term investments were $33.6
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 231,666 shares of common stock remain outstanding and
exercisable as of that same date.
- Net operating loss (NOL) carry forwards were approximately
$140.8 million and $62.7 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 $10.3
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 2019 and 2013 respectively.
Information Regarding Tax Basis of Special
Distribution On March 9, 2012, Internet Patents Corporation
made a special distribution to holders of its Common stock. This
distribution would generally constitute a dividend for U.S. federal
income tax purposes to the extent it was paid from IPC's current or
accumulated earnings and profits, as determined under U.S. federal
income tax principles.
IPC determined that the distribution exceeded its 2012
accumulated earnings and profits. Accordingly, the distribution
will constitute a return of capital and will first reduce a
stockholder's adjusted tax basis in the Common stock, but not below
zero, and then will be treated as gain from the sale of the Common
stock. Such gain generally will be long term capital gain if the
Common stock has been held for more than one year. The maximum tax
rate for non-corporate taxpayers on adjusted net capital gains is
15% for long-term capital gains recognized in taxable years
beginning on or before December 31, 2012.
IRS Form 8937 applicable to the special distribution is
accessible on the investor relations page of IPC's website:
http://internetpatentscorporation.net/Investor_Relations.html.
About Internet Patents Corporation
Headquartered in Sacramento, CA, Internet Patents Corporation
(NASDAQ: 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)
December 31, December 31,
2012 2011
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 31,068 $ 70,326
Short-term investments 1,497 1,225
Restricted short-term investments 1,000 -
Prepaid expenses and other current assets 169 1,374
------------ ------------
Total current assets 33,734 72,925
Property and equipment, net 32 42
Other assets 27 1,027
------------ ------------
Total assets $ 33,793 $ 73,994
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 234 $ 3,385
Accrued expenses and other current liabilities 346 541
Income tax payable - 644
------------ ------------
Total current liabilities 580 4,570
Income tax liability 101 101
------------ ------------
Total liabilities 681 4,671
Stockholders' equity:
Common stock 11 10
Paid-in capital 221,726 216,401
Treasury stock (6,788) (6,589)
Accumulated deficit (181,837) (140,499)
------------ ------------
Total stockholders' equity 33,112 69,323
------------ ------------
Total liabilities and stockholders' equity $ 33,793 $ 73,994
============ ============
INTERNET PATENTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Years Ended December 31,
--------------------------
2012 2011
------------ ------------
Total revenues $ - $ -
Operating expenses:
Sales and marketing - -
Technology - 97
General and administrative 2,959 3,184
------------ ------------
Total operating expenses 2,959 3,281
------------ ------------
Loss from operations (2,959) (3,281)
Other income (expense), net 172 15
------------ ------------
Loss from continuing operations (2,787) (3,266)
------------ ------------
Discontinued operations, net of tax
Income from discontinued operations - 719
Gain on sale of discontinued operations 53,716
------------ ------------
Total discontinued operations - 54,435
------------ ------------
Net income (loss) before income taxes $ (2,787) $ 51,169
Income tax expense (benefit) (61) -
------------ ------------
Net income (loss) $ (2,726) $ 51,169
============ ============
Net income (loss) per share:
Basic and diluted
Loss from continuing operations, net of tax $ (0.36) $ (0.56)
Discontinued operations, net of tax $ - $ 9.34
------------ ------------
Net income (loss) per basic common share $ (0.36) $ 8.78
============ ============
Shares used in computing income (loss) per
share:
Basic and diluted 7,659 5,831
============ ============
Investor Relations Contact: Jennifer Jarman The Blueshirt
Group 415-217-5866 Email Contact
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