NPLA Inplay Technologies (MM)

PHOENIX, May 4 /PRNewswire-FirstCall/ -- InPlay Technologies (NASDAQ:NPLA) today announced financial results for the three months ended March 31, 2006. InPlay reported a net loss of $532,000, or $0.05 per share for the three months ended March 31, 2006 compared to a net loss of $412,000, or $0.04 per share, for the three months ended March 31, 2005. Revenue for the first quarter of 2006 was $1.72 million, compared to $207,000 in the same period during 2005. Revenue during the quarter included approximately $1.57 million from FinePoint operations and approximately $0.15 million from Duraswitch operations. FinePoint revenue was generated primarily from sales of its MagicPoint(R) digital stream signaling pen technology to one major computer customer for its tablet PC products. At March 31, 2006 FinePoint had open purchase orders from this customer totaling $216,000. Subsequent to March 31 and through April 30, 2006, FinePoint received an additional $1.5 million in purchase orders from this customer for immediate production. Bob Brilon, InPlay CEO, said, "As expected, revenue from our FinePoint subsidiary was lower in the first quarter after a significant ramp up in production during the fourth quarter 2005. The continued success of our OEM customer's tablet PC program is expected to drive a significant demand for our patented technology. This initial launch has also opened doors to additional OEMs with high-volume opportunities." Consolidated gross profit for the three month period ended March 31, 2006 was 27%, including 24% for FinePoint and 60% for Duraswitch. InPlay expects that gross profit will continue to fluctuate quarter to quarter. Total operating expenses for the three months ended March 31, 2006 were $1.0 million compared to $587,000 for the same period in 2005. Operating expenses included $156,000 for the Duraswitch segment, $446,000 for the FinePoint segment and $427,000 in corporate expenses. "Operating expenses, which include SG&A and R&D, for the quarter are in the relative range that we would expect going forward," Brilon continued. InPlay Technologies reported cash of $2.3 million and restricted short term investments of $0.4 million at March 31, 2006. "Our focus this year continues to be on securing additional OEM customers for our FinePoint technologies, and supporting our Duraswitch licensees in their efforts toward new design wins using our switch technologies," concluded Brilon. 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 8663198. 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 May 5, 2006, at 800-642-1687, or +1-706-645-9291. A webcast replay will be available on the InPlay Technologies website through June 30, 2006. About InPlay Technologies InPlay Technologies markets and licenses proprietary emerging technologies. 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. 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 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 statements regarding our estimation for the potential production for FinePoint technologies, our expectations for operating expenses going forward, and our ability to secure additional OEM customers using our FinePoint technologies and support Duraswitch licensees in their efforts toward new design wins. Risks and uncertainties that could cause results to differ materially from those projected include lack of market acceptance of our technologies, 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, 2005 as filed with the Securities and Exchange Commission on March 17, 2006. 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, 2006 2005 NET REVENUE: FinePoint $1,565,369 $-- Duraswitch: Related party - Delphi -- 102,345 Non-related parties 152,626 104,304 Total net revenue 1,717,995 206,649 COST OF GOODS SOLD: FinePoint 1,190,016 -- Duraswitch 61,768 45,697 Total cost of goods sold 1,251,784 45,697 Gross profit 466,211 160,952 OPERATING EXPENSES: Selling, general and administrative 716,778 462,331 Research, development and commercial application engineering 311,899 124,499 Total operating expenses 1,028,677 586,830 LOSS FROM OPERATIONS (562,466) (425,878) OTHER INCOME - Net 30,075 14,103 NET LOSS $(532,391) $(411,775) NET LOSS PER COMMON SHARE, BASIC AND DILUTED $(0.05) $(0.04) WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED 11,481,512 9,614,673 INPLAY TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, 2006 December 31, 2005 ASSETS CURRENT ASSETS: Cash and cash equivalents $2,285,086 $4,022,734 Restricted short-term investment 400,000 400,000 Accounts receivable 975,112 1,460,169 Inventory 1,851,186 1,311,077 Prepaid expenses and other current assets 113,019 87,071 Total current assets 5,624,403 7,281,051 PROPERTY AND EQUIPMENT - Net 605,423 557,145 GOODWILL 1,321,240 1,321,240 PATENTS - Net 1,369,783 1,389,153 OTHER ASSETS 19,299 19,299 TOTAL ASSETS $8,940,148 $10,567,888 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $1,001,723 $1,496,780 Accrued salaries and benefits 318,212 510,794 Other accrued expenses and other current liabilities 365,665 539,786 Deferred licensing revenue - other 70,154 82,879 Current portion notes payable and capital leases 7,430 165,914 Total current liabilities 1,763,184 2,796,153 LONG-TERM LIABILITIES: Other non-current liabilities 9,137 11,465 Total liabilities 1,772,321 2,807,618 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock, no par value, 10,000,000 shares authorized, no shares issued and outstanding in 2006 and 2005 -- -- Common stock, $.001 par value, 40,000,000 shares authorized in 2006 and 2005, 11,481,512 shares issued and outstanding in 2006 and 2005 11,482 11,482 Additional paid-in capital 31,313,240 31,373,292 Accumulated deficit (24,156,895) (23,624,504) Total stockholders' equity 7,167,827 7,760,270 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $8,940,148 $10,567,888 DATASOURCE: InPlay Technologies, Inc. CONTACT: Heather Beshears, Vice President, Corporate Communications, InPlay Technologies, Inc., +1-480-586-3357, Web site: http://www.inplaytechnologies.com/

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