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InsPro Technologies Corporation Announces First Quarter 2014 Financial Results

InsPro Technologies Corporation (OTC Bulletin Board: ITCC), a leading provider of core policy administration software for Group and Individual Life, Health, and Annuity products 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 ended March 31, 2014.

First Quarter 2014 Highlights

  • Revenues decreased 22% to $3,576,599 in the first quarter of 2014, compared to $4,592,823 in the first quarter of 2013 primarily due to a $1,200,000 license fee that was recognized in the first quarter of 2013 upon the completion of the implementation of InsPro Enterprise™ for a client. The variance was partially offset by increased maintenance, professional services and ASP/Hosting revenues.
  • Operating loss from continuing operations was $564,714 in the first quarter of 2014, compared to a loss of $64,791 in the first quarter of 2013. The results from operations in the first quarter of 2013 were favorably impacted by the $1,200,000 license fee.
  • Net loss increased to $501,758 in the first quarter of 2014, compared to a net loss of $238,492 in the first quarter of 2013 due primarily to the $1,200,000 license fee and lower revenues which were partially offset by lower expenses, particularly software consulting and professional services expenses, and loss on the change of the fair value of warrant liability.

Anthony R. Verdi, Chief Executive Officer, stated, “We are pleased with the start to 2014 as we are making significant progress on several ongoing implementations of InsPro Enterprise and just recently announced a new client with a strong presence in the growing Group Voluntary market. Additionally, we are receiving considerable market interest in our Annuity product capabilities. We are confident in our technology, pleased with the market recognition of InsPro Enterprise and optimistic about our future opportunities.”

About InsPro Enterprise

InsPro Enterprise, a Life and Health insurance policy administration system, is a single technology solution used to manage all insurance processing requirements supporting multiple product lines as well as hybrid products for both group and individual policies on a single web-based platform. The InsPro Enterprise design provides carriers 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 components.

About InsPro Technologies Corporation

Through its subsidiary, InsPro Technologies, LLC, InsPro Technologies Corporation offers InsPro Enterprise, an end-to-end, web-based policy administration system used by insurance carriers and third-party administrators. By managing the entire product and policy lifecycle on a single integrated platform, customers are afforded opportunities to 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, growth in the number of clients, 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’s 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 March 31
2014 2013
 
Revenues $ 3,576,599 $ 4,592,823
 
Cost of revenues 2,952,433 3,372,376
   
Gross profit   624,166     1,220,447  
 
Selling, general and administrative expenses:
Salaries, employee benefits and related taxes 657,495 651,964
Advertising and other marketing 51,929 56,172
Depreciation 36,715 38,213
Rent, utilities, telephone and communications 90,662 93,421
Professional fees 170,665 267,178
Other general and administrative   181,415     178,290  
 
Total selling, general and administrative expenses   1,188,880     1,285,238  
 
Operating loss from continuing operations   (564,714 )   (64,791 )
 
Other expense:
Loss on the change of the fair value of warrant liability - (279,799 )
Interest expense   (7,444 )   (7,655 )
 
Total other expense   (7,444 )   (287,454 )
 
Loss from continuing operations   (572,158 )   (352,245 )
 
Income from discontinued operations   70,400     113,753  
 
Net loss $ (501,758 ) $ (238,492 )
 
Net income (loss) per common share - basic and diluted:
Loss from operations $ (0.01 ) $ (0.02 )
Income from discontinued operations   0.00     0.01  
Net loss per common share $ (0.01 ) $ (0.01 )
 
Weighted average common shares outstanding - basic and diluted   41,543,655     41,543,655  
 
 
INSPRO TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
March 31, 2014 December 31, 2013
ASSETS
 
CURRENT ASSETS:
Cash $ 1,837,930 $ 2,569,536
Accounts receivable, net 2,513,689 1,660,564
Prepaid expenses 226,056 200,985
Other current assets 2,066 2,564
Assets of discontinued operations   24,224     31,540  
 
Total current assets 4,603,965 4,465,189
 
Property and equipment, net 883,006 959,902
Other assets   60,000     60,000  
 
Total assets $ 5,546,971   $ 5,485,091  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Notes payable $ 525,000 $ 550,761
Accounts payable 1,247,773 1,169,251
Accrued expenses 521,625 456,753
Current portion of capital lease obligations 78,885 57,932
Due to related parties 10,000 10,000
Deferred revenue   1,435,050     1,006,875  
 
Total current liabilities   3,818,333     3,251,572  
 
LONG TERM LIABILITIES:
Warrant liability 607,199 607,199
Capital lease obligations   6,892     23,184  
 
Total long term liabilities   614,091     630,383  
 
Total liabilities   4,432,424     3,881,955  
 
 
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, 3,809,378 shares issued and outstanding (liquidation value $11,428,134 and $9,892,134, respectively)

7,709,919 7,709,919

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 43,424,341 43,411,172
Accumulated deficit   (52,925,360 )   (52,423,602 )
 
Total shareholders' equity   1,114,547     1,603,136  
 
Total liabilities and shareholders' equity $ 5,546,971   $ 5,485,091  
 
   
INSPRO TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
For the Three Months Ended March 31,
2014 2013
Cash Flows From Operating Activities:
Net loss $ (501,758 ) $ (238,492 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 175,455 177,172
Stock-based compensation 13,168 18,183
Loss on change of fair value of warrant liability - 279,799
Changes in assets and liabilities:
Accounts receivable (853,125 ) (669,640 )
Prepaid expenses (25,071 ) (4,163 )
Other current assets 498 (5,704 )
Accounts payable 78,522 (425,293 )
Accrued expenses 64,872 61,894
Deferred revenue 428,175 630,223
Assets of discontinued operations   7,316     23,044  
 
Net cash used in operating activities   (611,948 )   (152,977 )
 
Cash Flows From Investing Activities:
Purchase of property and equipment   (70,601 )   (68,888 )
 
Net cash used in investing activities   (70,601 )   (68,888 )
 
Cash Flows From Financing Activities:
Gross proceeds from sale of preferred stock and warrants - 36,000
Fees paid in connection with sale of preferred stock and warrants - (28,800 )
Payments on notes payable (25,761 ) (26,985 )
Payments on capital leases   (23,296 )   (20,267 )
 
Net cash used in financing activities   (49,057 )   (40,052 )
 
Net decrease in cash (731,606 ) (261,917 )
 
Cash - beginning of the period   2,569,536     3,347,689  
 
Cash - end of the period $ 1,837,930   $ 3,085,772  
 

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