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InsPro Technologies Corporation Announces Third Quarter 2012 Financial Results

InsPro Technologies Corporation (OTC Bulletin Board: ITCC), a leading software innovator and provider of an insurance administration and marketing system, InsPro Enterprise, used by insurance carriers and third party administrators, that supports individual and group business lines and efficiently processes agent, direct market, worksite and web site generated business, today announced its financial results for the quarter ended September 30, 2012.

Third Quarter 2012 Highlights

  • Revenues from continuing operations increased 98% to $3,372,990 in the third quarter of 2012, compared to $1,699,802 in the third quarter of 2011 primarily due to increased professional services fees and to a lesser extent higher ASP/Hosting and maintenance revenue.
  • Loss from continuing operations increased to $1,240,515 in the third quarter of 2012, compared to a loss of $1,181,227 in the third quarter of 2011. A modest improvement in gross profit, which was the result of higher revenue largely offset by higher spending on InsPro Enterprise functional improvements, was offset by higher selling general and administrative expenses especially costs associated with recently acquired software licenses.
  • Net loss was $1,154,579 in the third quarter of 2012, compared to net loss of $982,809 in the third quarter of 2011.

Year to Date 2012 Highlights

  • Revenues from continuing operations increased 57% to $8,835,150 in the nine months ended September 30, 2012, compared to $5,636,023 in the same period of 2011. Increased professional services fees, ASP/Hosting revenue and maintenance revenue more than offset the lower license fee revenue so far in 2012.
  • Loss from continuing operations decreased to $2,699,495 in the nine months ended September 30, 2012, compared to a loss of $3,064,934 in the same period of 2011. The improved operating performance was the result of higher revenue offset by increased expense related to accelerated enhancements to InsPro Enterprise’s functionality.
  • Net loss was $6,864,779 for nine months ended September 30, 2012, compared to net loss of $1,496,548 for 2011 year to date. The increased net loss was primarily the result of a non cash loss on the change of the fair value of warrant liability of $4,508,078 in 2012, compared to gain of $929,671 in 2011.

Anthony R. Verdi, Chief Executive Officer, stated, “The continued significant growth of revenue and improving financial results only begins to tell our story in 2012. We are successfully achieving important milestones this year on four new implementations of InsPro Enterprise and at our recent Executive Forum we unveiled the initial version of our upgraded platform which adds Annuity product support to our capabilities. We remain committed to the partnership with our clients and to providing the premier results driven end to end technology solution for insurance companies and administrators.”

About InsPro Enterprise

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. InsPro Enterprise was designed as a single technology solution to manage all insurance processing requirements and built from the ground up to support both group and individual policies. 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.

About InsPro Technologies Corporation

Through its subsidiary, InsPro Technologies, LLC, InsPro Technologies Corporation offers InsPro Enterprise software, 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 IT support costs, increase customer retention, 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 the effects of existing and new clients, our prospect pipeline, and the investments in and potential of our technology platform. 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 Corporation’s most recent Quarterly Reports on Form 10-Q or Annual Reports on Form 10-K filed with the Securities and Exchange Commission. These documents are 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 September 30, For the Nine Months Ended September 30,
  2012     2011     2012     2011  
 
Revenues $ 3,372,990 $ 1,699,802 $ 8,835,150 $ 5,636,023
 
Cost of revenues 3,237,929 1,587,656 7,844,648 5,035,330
       
Gross profit   135,061     112,146     990,502     600,693  
 
Selling, general and administrative expenses:
Salaries, employee benefits and related taxes 580,579 765,496 1,735,783 2,053,281
Advertising and other marketing 84,802 27,199 145,119 81,243
Depreciation and amortization 255,316 166,521 717,072 521,309
Rent, utilities, telephone and communications 99,652 93,526 281,353 282,363
Professional fees 176,905 99,199 385,407 307,856
Other general and administrative   178,323     141,432     425,264     419,575  
 
  1,375,577     1,293,373     3,689,998     3,665,627  
 
Loss from operations   (1,240,516 )   (1,181,227 )   (2,699,496 )   (3,064,934 )
 
Gain from discontinued operations 138,818 198,529 409,094 638,034
 
Other income (expense):
Gain (loss) on the change of the fair value of warrant liability - 103 (4,508,078 ) 929,671
Interest income 419 5,087 4,008 19,483
Interest expense   (53,300 )   (5,301 )   (70,307 )   (18,802 )
 
Total other income (expense)   (52,881 )   (111 )   (4,574,377 )   930,352  
 
Net loss $ (1,154,579 ) $ (982,809 ) $ (6,864,779 ) $ (1,496,548 )
 
Net income (loss) per common share - basic and diluted:
Income (loss) from operations $ (0.03 ) $ (0.03 ) $ (0.18 ) $ (0.06 )
Gain from discontinued operations   0.00     0.01     0.01     0.02  
Net income (loss) per common share $ (0.03 ) $ (0.02 ) $ (0.17 ) $ (0.04 )
 
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
 
September 30, 2012 December 31, 2011
ASSETS
 
CURRENT ASSETS:
Cash $ 2,091,032 $ 3,702,053
Accounts receivable, net 2,444,375 1,506,234
Tax receivable 766 766
Prepaid expenses 285,143 116,649
Other current assets 396 2,139
Assets of discontinued operations   87,817     104,002  
 
Total current assets 4,909,529 5,431,843
 
Property and equipment, net 1,501,835 496,692
Intangibles, net - 260,050
Other assets   80,608     80,608  
 
Total assets $ 6,491,972   $ 6,269,193  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Note payable $ 66,686 $ 8,586
Accounts payable 1,906,096 644,563
Accrued expenses 712,777 521,383
Current portion of capital lease obligations 74,319 109,872
Deferred revenue   1,672,039     622,500  
 
Total current liabilities   4,431,917     1,906,904  
 
LONG TERM LIABILITIES:
Warrant liability - 1,674,226
Capital lease obligations   95,776     113,943  
 
Total long term liabilities   95,776     1,788,169  
 
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, 2,797,379 shares issued and outstanding (liquidation value $8,392,137)

5,427,604 5,427,604

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

41,544 41,543
Additional paid-in capital 43,293,255 37,038,318
Accumulated deficit   (49,662,228 )   (42,797,449 )
 
Total shareholders' equity   1,964,279     2,574,120  
 
Total liabilities and shareholders' equity $ 6,491,972   $ 6,269,193  
 
INSPRO TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
   
For the Nine Months Ended September 30
  2012     2011  
Cash Flows From Operating Activities:
Net loss $ (6,864,779 ) $ (1,496,548 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 717,072 521,309
Stock-based compensation 72,632 250,354
(Gain) loss on change of fair value of warrant liability 4,508,078 (929,671 )
Changes in assets and liabilities:
Accounts receivable (938,141 ) (261,290 )
Tax receivable - 2,840
Prepaid expenses (168,494 ) (10,518 )
Other current assets 1,743 (151 )
Other assets - 1,950
Accounts payable 738,392 (348,106 )
Accrued expenses 191,394 118,309
Deferred revenue 1,049,539 531,537
Assets of discontinued operations   16,185     (84,197 )
 
Net cash used in operating activities   (676,379 )   (1,704,182 )
 
Cash Flows From Investing Activities:
Purchase of property and equipment   (939,022 )   (98,235 )
 
Net cash used in investing activities   (939,022 )   (98,235 )
 
Cash Flows From Financing Activities:
Gross proceeds from note payable 118,206 37,540
Payments on note payable (60,106 ) (33,650 )
Fees paid in connection with secured note from related party - (8,370 )
Gross proceeds from capital leases 27,442 -
Payments on capital leases (81,162 ) (117,535 )
Restricted cash in connection with letters of credit   -     1,152,573  
 
Net cash provided by financing activities   4,380     1,030,558  
 
Net (decrease) in cash (1,611,021 ) (771,859 )
 
Cash - beginning of the period   3,702,053     4,429,026  
 
Cash - end of the period $ 2,091,032   $ 3,657,167  

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