NPLA Inplay Technologies (MM)

Purchase Orders for FinePoint Computing Pen Increase to $3.7 Million PHOENIX, Nov. 14 /PRNewswire-FirstCall/ -- InPlay Technologies (NASDAQ:NPLA) today announced financial results for the three and nine months ended September 30, 2005. InPlay Technologies reported a net loss of $411,000, or $0.04 per share, for the third quarter of 2005, compared to a net loss of $375,000, or $0.04 per share, for the third quarter of 2004. Revenue for the third quarter of 2005 was $819,000, up from $199,000 during the comparable quarter of 2004. Third quarter 2005 revenue included $245,000 from Duraswitch operations and $574,000 from the newly acquired FinePoint operations. The increase in revenue in the third quarter 2005 was primarily due to the FinePoint acquisition in September 2005. "We are executing on our strategy of supporting Duraswitch licensees and leveraging our business model with additional innovative technologies," said Bob Brilon, InPlay Technologies CEO. "FinePoint began delivering on an initial $1.1 million purchase order from a major computer OEM during the quarter and as previously announced, has received over $2 million in additional purchase orders. Just last week, we received another order for over $500,000, bringing the total to $3.7 million. We expect to ship the majority of those orders before the end of the year. For the quarter, Duraswitch non-exclusive revenue is up 47 percent year over year. Most of the increase is due to initial production of a consumer medical device using our rotary switch technology." For the nine months ended September 30, 2005, InPlay Technologies recorded net income of $550,000, or $0.06 per share, compared to a net loss of $348,000, or $0.04 per share, for the nine months ended September 30, 2004. Revenue for the nine months ended September 30, 2005 was $3.26 million compared to $1.56 million in the same nine month period in 2004. Revenue for the nine month periods includes minimum royalty payments from Delphi Corp. of $2 million in 2005 and $1 million in 2004. As previously announced, the Delphi license agreement has been cancelled as a result of Delphi's bankruptcy filing. InPlay retains the ability to pursue damage claims, but there is no assurance that InPlay will receive any future payments from Delphi. Under the license agreement with Delphi, InPlay was to receive a total of $9 million in minimum royalty payments during 2006 and 2007. Operating expenses for the quarter ended September 30, 2005 were $710,000, compared to $536,000 for the comparable quarter in 2004. For the nine-month period, total operating expenses were $2.11 million, compared to $1.80 million for the nine month period in 2004. The increase in operating expenses during the third quarter was primarily due to the acquisition of FinePoint in September 2005. InPlay Technologies reported cash of $1.92 million and restricted short term investments of $0.4 million at September 30, 2005 compared to $2.83 million cash at December 31, 2004. Conference Call InPlay Technologies will host a conference call today at 5:00 p.m. Eastern Time. The conference call will be webcast and may be accessed by dialing 800- 803-5267, or +1-706-643-0135 for international callers, a few minutes prior to the scheduled start time. The conference ID is 2226304. The webcast is available on the InPlay Technologies website, http://www.inplaytechnologies.com/, in the investor relations section. Those unable to participate in the live call can listen to the audio replay through November 16, 2005, at 800-642-1687, or +1-706-645-9291. A webcast replay will be available on the InPlay Technologies website through December 31. About InPlay Technologies InPlay Technologies markets and licenses proprietary emerging technologies. The company was founded to commercialize its internally developed Duraswitch electronic switch technologies and has executed license agreements with switch manufacturers and OEMs worldwide. Today, Duraswitch patented technologies are in the controls of a wide range of commercial and industrial applications. InPlay recently expanded its portfolio of technologies with the acquisition of FinePoint Innovations, a developer of pen computing products for tablet PCs and computer peripherals. FinePoint's digital solution is the computing pen and digitizer for a major computer OEM's newly launched line of convertible notebooks. InPlay Technologies is focused on further commercialization of these technologies and leveraging its licensing model with additional, innovative technologies. Visit http://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, but are not limited to, statements regarding our licensees' ability to market and manufacture products using our technologies, our ability to successfully execute our corporate strategy of leveraging our licensing model with new technologies, potential revenue from and timing of production of Duraswitch and FinePoint technologies. Risks and uncertainties that could cause results to differ materially from those projected include lack of market acceptance of our technologies, inability to acquire and commercialize additional technologies, underestimating the length of time required to develop sufficient revenue to create a net profit, unanticipated expenses related to protecting our intellectual property, increased sales and marketing expenses, loss of purchase orders 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, 2004. These forward-looking statements represent our beliefs as of the date of the 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 Nine Months Ended September 30, September 30, 2005 2004 2005 2004 NET REVENUE: Duraswitch: Related party - Delphi $102,345 $102,345 $2,306,933 $1,305,633 Non-related parties 142,443 97,068 381,048 253,040 FinePoint 574,384 -- 574,384 -- Total net revenue 819,172 199,413 3,262,365 1,558,673 COST OF GOODS SOLD: Duraswitch 73,224 49,996 182,078 137,780 FinePoint 463,559 -- 463,559 -- Total cost of goods sold 536,783 49,996 645,637 137,780 Gross profit 282,389 149,417 2,616,728 1,420,893 OPERATING EXPENSES: Selling, general and administrative 541,284 425,862 1,707,199 1,439,736 Research, development and commercial application engineering 168,838 110,113 404,608 357,601 Total operating expenses 710,122 535,975 2,111,807 1,797,337 INCOME (LOSS) FROM OPERATIONS (427,733) (386,558) 504,921 (376,444) OTHER INCOME - Net 16,943 11,511 44,707 28,056 NET INCOME (LOSS) $(410,790) $(375,047) $549,628 $(348,388) NET INCOME (LOSS) PER COMMON SHARE, BASIC $(0.04) $(0.04) $0.06 $(0.04) NET INCOME (LOSS) PER COMMON SHARE, DILUTED $(0.04) $(0.04) $0.06 $(0.04) WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC 9,799,764 9,610,608 9,677,048 9,600,379 DILUTED 9,799,764 9,610,608 9,739,334 9,600,379 INPLAY TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, 2005 December 31, 2004 ASSETS CURRENT ASSETS: Cash and cash equivalents $1,922,625 $2,832,455 Restricted short-term investment 400,000 -- Accounts receivable 796,712 48,601 Inventory 753,772 217,083 Prepaid expenses and other current assets 124,916 83,470 Total current assets 3,998,025 3,181,609 PROPERTY AND EQUIPMENT - Net 384,125 198,589 GOODWILL 1,113,892 443,874 PATENTS - Net 1,590,701 777,013 OTHER ASSETS 56,394 66,297 TOTAL ASSETS $7,143,137 $4,667,382 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $875,497 $59,674 Accrued salaries and benefits 313,698 187,289 Other accrued expenses and other current liabilities 298,321 242,045 Deferred licensing revenue - Delphi 409,380 409,380 Deferred licensing revenue - other 87,984 75,874 Current portion notes payable and capital leases 422,930 -- Total current liabilities 2,407,810 974,262 LONG-TERM LIABILITIES: Capital leases 4,964 -- Other non-current liabilities 13,222 18,486 Deferred licensing revenue - Delphi 238,805 546,257 Total long-term liabilities 256,991 564,743 Total liabilities 2,664,801 1,539,005 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock, no par value, 10,000,000 shares authorized, no shares issued and outstanding in 2005 and 2004 -- -- Common stock, $.001 par value, 40,000,000 shares authorized in 2005 and 2004, 10,182,284 and 9,614,673 shares issued and outstanding in 2005 and 2004, respectively 10,182 9,615 Additional paid-in capital 28,210,680 27,410,916 Accumulated deficit (23,742,526) (24,292,154) Total stockholders' equity 4,478,336 3,128,377 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $7,143,137 $4,667,382 DATASOURCE: InPlay Technologies CONTACT: Heather Beshears, Vice President, Corporate Communications of InPlay Technologies, Inc., +1-480-586-3357, Web site: http://www.inplaytechnologies.com/

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