NPLA Inplay Technologies (MM)

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 �