InsPro Technologies Corporation Announces Fourth Quarter and 2012 Full Year Financial Results

InsPro Technologies Corporation Announces Fourth Quarter and 2012 Full Year Financial Results

RADNOR, Pa.--(BUSINESS WIRE)-- InsPro Technologies Corporation (OTC Bulletin Board: ITCC), a leading provider of Life and Health core policy administration software 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 and year ended December 31, 2012.

Fourth Quarter 2012 Highlights

  • Revenues from continuing operations decreased 3% to $3,311,087 in the fourth quarter of 2012, compared to $3,421,793 in the fourth quarter of 2011 primarily due to $1,600,000 license fee revenue recognized in 2011 pertaining to the completion of a large implementation of InsPro Enterprise™, which was offset in 2012 by increased professional services fees and higher ASP/Hosting and maintenance revenue.

  • Loss from continuing operations was $1,196,557 in the fourth quarter of 2012, compared to a gain of $394,396 in the fourth quarter of 2011. The results from continuing operations in 2011 were favorably impacted by the $1,600,000 of license fee revenue.

  • Net loss was $1,018,366 in the fourth quarter of 2012, compared to net income of $1,958,597 in the fourth quarter of 2011. The 2012 net loss included a non cash gain on the change of the fair value of warrant liability of $74,999 while the 2011 net income included a non cash gain of $1,426,443 on the change in the fair value of the warrant liability and the $1,600,000 of license fee revenue.


2012 Full Year Highlights

  • Revenues from continuing operations increased 34% to $12,146,237 in 2012, compared to $9,057,816 in 2011. Increased professional services fees, ASP/Hosting revenue and maintenance revenue in 2012 as compared to 2011 more than offset lower license fee revenue in 2012.

  • Loss from continuing operations increased to $3,896,053 in 2012 compared to a loss of $2,670,538 in 2011. The results from continuing operations in 2011 were favorably impacted by $1,935,000 of license fee revenue.

  • Net loss was $7,883,145 in 2012 compared to net income of $489,049 in 2011. 2012's net loss included a non cash loss on the change of the fair value of warrant liability of $4,422,079 compared to non cash gain of $2,356,114 on the change of the fair value of warrant liability and $1,935,000 of license fee revenue in 2011.

Anthony R. Verdi, Chief Executive Officer, stated, "2012 was another year of milestones including the initiation of four new implementations of InsPro Enterprise™, achieving significant revenue growth, continuing to innovate the scope and scale of our technology and culminated in a rank in the top third of technology companies on Deloitte's "Fast 500" list. 2013 promises to be equally active beginning with the upcoming release of annuity product support as part of InsPro Enterprise."

About InsPro Enterprise

InsPro Enterprise, a Life and Health insurance policy administration system, is a web-based technology solution used to manage all insurance processing requirements, supporting Individual and Group Life, Health, Annuity and Hybrid products on a single platform. The InsPro Enterprise system is highly configurable by the business user, and provides carriers and third-party administrators with 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.

About InsPro Technologies Corporation

Through its subsidiary, InsPro Technologies, LLC, InsPro Technologies Corporation offers InsPro Enterprise, an innovative, end-to-end policy administration system used by insurance carriers and third-party administrators. InsPro Enterprise contains preconfigured, product-specific templates supported by simple, intuitive Wizards that easily and efficiently meet client needs. By managing the entire product and policy lifecycle on a single integrated platform, clients can 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, 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 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

INSPRO TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended December 31,

For the Year Ended December 31,

2012

2011

2012

2011

Revenues

$

3,311,087

$

3,421,793

$

12,146,237

$

9,057,816

Cost of revenues

3,145,598

1,913,542

10,990,246

6,948,872

Gross profit

165,489

1,508,251

1,155,991

2,108,944

Selling, general and administrative expenses:

Salaries, employee benefits and related taxes

586,642

562,321

2,322,425

2,615,602

Advertising and other marketing

72,546

43,887

217,665

125,130

Depreciation and amortization

175,243

165,733

892,315

687,042

Rent, utilities, telephone and communications

91,939

85,973

373,292

368,336

Professional fees

271,870

131,150

657,277

439,006

Other general and administrative

163,806

124,791

589,070

544,366

1,362,046

1,113,855

5,052,044

4,779,482

Gain (loss) from operations

(1,196,557

)

394,396

(3,896,053

)

(2,670,538

)

Gain from discontinued operations

111,469

165,955

520,563

803,989

Other income (expense):

Gain on the change of the fair value of warrant liability

74,999

1,426,443

(4,433,079

)

2,356,114

Interest income

-

3,561

4,008

23,044

Interest expense

(8,277

)

(4,758

)

(78,584

)

(23,560

)

Total other income (expense)

66,722

1,425,246

(4,507,655

)

2,355,598

Net income (loss)

$

(1,018,366

)

$

1,985,597

$

(7,883,145

)

$

489,049

Net income (loss) per common share - basic and diluted:

Gain (loss) from operations

$

(0.02

)

$

0.05

$

(0.20

)

$

(0.01

)

Gain from discontinued operations

0.00

0.00

0.01

0.02

Net income (loss) per common share

$

(0.02

)

$

0.05

$

(0.19

)

$

0.01

Weighted average common shares outstanding - basic and diluted

41,543,655

41,543,655

41,543,655

41,543,655

INSPRO TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2012

December 31, 2011

ASSETS

CURRENT ASSETS:

Cash

$

3,347,689

$

3,702,053

Accounts receivable, net

1,706,414

1,506,234

Prepaid expenses

236,719

116,649

Other current assets

1,723

2,905

Assets of discontinued operations

63,519

104,002

Total current assets

5,356,064

5,431,843

Property and equipment, net

1,422,043

496,692

Intangibles, net

-

260,050

Other assets

70,000

80,608

Total assets

$

6,848,107

$

6,269,193

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Note payable

$

551,985

$

8,586

Accounts payable

1,561,403

644,563

Accrued expenses

523,324

521,383

Current portion of capital lease obligations

61,849

109,872

Deferred revenue

1,680,833

622,500

Total current liabilities

4,379,394

1,906,904

LONG TERM LIABILITIES:

Warrant liability

225,000

1,674,226

Capital lease obligations

83,510

113,943

Total long term liabilities

308,510

1,788,169

Total liabilities

4,687,904

3,695,073

SHAREHOLDERS' EQUITY:

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)

2,864,104

2,864,104

Series B convertible preferred stock; 5,000,000 shares authorized, 3,297,378

and 2,797,379 shares issued and outstanding (liquidation value $9,892,134

and $8,392,137)

6,617,812

5,427,604

Common stock ($.001 par value; 300,000,000 shares authorized, 41,543,655

shares issued and outstanding)

41,543

41,543

Additional paid-in capital

43,317,338

37,038,318

Accumulated deficit

(50,680,594

)

(42,797,449

)

Total shareholders' equity

2,160,203

2,574,120

Total liabilities and shareholders' equity

$

6,848,107

$

6,269,193

INSPRO TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year Ended December 31,

2012

2011

Cash Flows From Operating Activities:

Net income (loss)

$

(7,883,145

)

$

489,049

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

892,315

687,042

Stock-based compensation

96,717

274,303

Loss (Gain) on change of fair value of warrant liability

4,433,079

(2,356,114

)

Changes in assets and liabilities:

Accounts receivable

(200,180

)

(796,731

)

Prepaid expenses

(120,070

)

41,596

Other current assets

1,182

5,306

Other assets

10,608

11,950

Accounts payable

916,840

(274,409

)

Accrued expenses

1,941

174,575

Deferred revenue

1,058,333

245,000

Assets of discontinued operations

40,483

(40,701

)

Net cash used in operating activities

(751,897

)

(1,539,134

)

Cash Flows From Investing Activities:

Purchase of property and equipment

(1,530,175

)

(223,382

)

Net cash used in investing activities

(1,530,175

)

(223,382

)

Cash Flows From Financing Activities:

Gross proceeds from sale of preferred stock and warrants

1,499,997

-

Fees paid in connection with sale of preferred stock and warrants

(9,790

)

-

Gross proceeds from notes and loans payable

643,206

37,540

Payments on notes payable

(99,807

)

(46,265

)

Fees paid in connection with secured note from related party

-

(8,370

)

Gross proceeds from capital leases

-

58,791

Payments on capit