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Internet Patents Corporation Reports First Quarter 2012 Results and Provides Business Update

(May 07, 2012)

SACRAMENTO, CA -- (Marketwire) -- 05/07/12 -- Internet Patents Corporation (NASDAQ: PTNT) today reported financial results for the first quarter ended March 31, 2012 and provided a business update.

"We have made significant progress in identifying the initial entities to pursue in our efforts to license our strong portfolio of e-commerce patents and expect to begin to take action against companies that we believe are infringing our IP by the end of the second quarter," said Hussein Enan, Chairman and CEO of Internet Patents Corporation. "Given that we are embarking on a business strategy that will frequently require litigation, and keeping our strong balance sheet in mind, the Board of Directors will revisit the possibility of making a second special cash distribution to shareholders during the first quarter 2013 board meeting. We expect our near-term quarterly run-rate for OPEX, excluding legal fees, to be in the range of $0.6 to $0.7 million. This does not factor in any additional potential cost savings from our ongoing efforts to reduce our expense structure."

Operating Highlights
As of the quarter ended March 31, 2012:

  • In its first quarter of operating a patent licensing business, the Company reported a net loss for the quarter of $737,000, or $0.10 per share.

  • Cash and cash equivalents and short-term investments were $34.5 million, which includes $1.0 million in restricted short-term investments. The Company's cash position benefited from a lower than expected state tax liability related to the Company's gain on the sale of assets to Bankrate, Inc. in December 2011.

  • The number of shares of Internet Patents Corporation common stock issued and outstanding was 7,751,952. Options representing a total of 232,854 shares of common stock remain outstanding and exercisable as of that same date.

  • Net operating loss (NOL) carry forwards were approximately $138.9 million and $83.5 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 (NASDAQ: PTNT) operates a patent licensing business focused on its e-commerce technologies.

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) March 31, December 31, 2012 2011 --------------- --------------- Assets Current assets: Cash and cash equivalents $ 32,321 $ 70,326 Short-term investments 1,225 1,225 Restricted short-term investments 1,000 - Prepaid expenses and other current assets 1,413 1,374 --------------- --------------- Total current assets 35,959 72,925 Property and equipment, net 44 42 Other assets 27 1,027 --------------- --------------- Total assets $ 36,030 $ 73,994 =============== =============== Liabilities and stockholders' equity Current liabilities: Accounts payable $ 482 $ 3,385 Accrued expenses and other current liabilities 347 541 Income tax payable - 644 --------------- --------------- Total current liabilities 829 4,570 Income tax liability 101 101 --------------- --------------- Total liabilities 930 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 (179,848) (140,499) Accumulated other comprehensive loss (1) - --------------- --------------- Total stockholders' equity 35,100 69,323 --------------- --------------- Total liabilities and stockholders' equity $ 36,030 $ 73,994 =============== =============== CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited) Three Months Ended March 31, -------------------------------- 2012 2011 --------------- --------------- Revenues: Total revenues - - Operating expenses: Sales and marketing - - Technology - 24 General and administrative 837 888 --------------- --------------- Total operating expenses 837 912 --------------- --------------- Loss from operations (837) (912) Other income 100 5 --------------- --------------- Loss from continuing operations (737) (907) --------------- --------------- Discontinued operations, net of tax Income from discontinued operations - 1,205 --------------- --------------- Total discontinued operations - 1,205 --------------- --------------- Net income (loss) $ (737) $ 298 =============== =============== Net income (loss) per share: Basic and diluted Loss from continuing operations $ (0.10) $ (0.16) Discontinued operations, net of tax $ - $ 0.22 --------------- --------------- Net income (loss) per basic common share $ (0.10) $ 0.06 =============== =============== Shares used in computing income (loss) per share: Basic and diluted 7,379 5,523 =============== ===============

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