SOURCE: MacroSolve, Inc.

MacroSolve, Inc.

August 13, 2012 16:05 ET

MacroSolve Announces FY 2012 Second Quarter Results

TULSA, OK--(Marketwire - Aug 13, 2012) -  MacroSolve, Inc. (PINKSHEETS: MCVE) (OTCQB: MCVE) ("MacroSolve" or the "Company"), a company focused on intellectual property licensing and patent enforcement in the mobile app market development space, today announced financial results for its second quarter of fiscal 2012, ended June 30, 2012.

Highlights for Q2 of fiscal 2012 include:

  • Revenues increased 161% to $572,000 from $219,000 in the same period of FY 2011;
  • Marks sixth consecutive quarter of revenue growth;
  • Licensing revenues increased 356% from $52,000 in the same period of FY 2011;
  • $312,000 backlog for custom mobile app solution services;
  • Gross profit increased 172% to $329,000 from $121,000 in Q2 of FY 2011; and
  • The Company's distribution network supported growth in new sales of software products and solution services.

Also, as recently announced, all assets relating to the Illume Mobile business were sold to DecisionPoint Systems, Inc. in a profitable sale for $1,000,000 in cash and stock on July 31, 2012. In addition, MacroSolve may earn up to an additional $500,000 in cash and stock upon certain net revenue milestones being reached by DecisionPoint relating to the Illume Mobile assets;

Revenues for the three months ended June 30, 2012 were $572,000 as compared to $219,000 in the quarter ended June 30, 2011. This 161% rise is due to increased intellectual property licensing and increased sales of the Company's products and services.

Similarly, for the six month period ended June 30, 2012, revenues were $1,426,000 as compared to $335,000 for the six months ended June 30, 2011. This 326% increase in sales is a result of IP licensing, and increased sales of the Company's products and services.

On June 30, 2012, MacroSolve had an additional $312,000 in backlog that is not included in the reported revenues for the quarter ended June 30, 2012. The majority of this unbilled revenue was transferred to DecisionPoint as part of the July 31, 2012 sale of Illume Mobile assets.

Gross profit in the second quarter of fiscal 2012 rose 172% to $329,000 from $121,000 in the second quarter of fiscal 2011. For the six month period ended June 30, 2012, gross profit was up 335% to $827,000 from $190,000 in the first half of 2011.

Operating expenses increased 34% in the three months ended June 30, 2012 to $1,054,000 from $784,000 in the same period of fiscal 2011. The increase was driven by a rise in investments in growth via salaries, marketing, and public relations expenses in support of higher revenues, as well as depreciation and amortization expenses. The resulting loss from operations was $726,000 in the second quarter of fiscal 2012, up 10% over operating loss of $663,000 in the second quarter of fiscal 2011.

Similarly, the loss from operations for the six months ended June 30, 2012 was $(1,331,000), as compared to loss from operations in the same period of the prior year of $(1,141,000). The $170,000, or 15%, increase in loss from operations was primarily due to growth in company personnel in support of additional revenues offset by increased profit for the year to date.

Net loss for the three months ended June 30, 2012 was $(779,000) or $(0.01) per share, as compared to a net loss of $(723,000) or $(0.01) in the three months ended June 30, 2011, an increase of $56,000 or 8%. The rise was primarily due to increasing the Company's workforce by 11 employees. For the six months ended June 30, 2012 net loss was $(1,484,000) or $(0.01) per share, as compared to a net loss of $(1,230,000) or $(0.01) per share for the six months ended June 30, 2011.

"We've just completed our sixth consecutive quarter of revenue increases, clearly demonstrating that our growth strategy is working," stated MacroSolve Executive Chairman, Jim McGill.  "With the sale of Illume Mobile assets, we are focusing on growing our intellectual property portfolio and license sales. We have confidence the next quarter will show strong results due to intellectual property and a unique investment approach that mentors budding developers in the world of mobile technology."

For further information please see MacroSolve's full 10-Q filing at www.sec.gov.

About MacroSolve
MacroSolve, Inc. is an Oklahoma corporation formed on January 17, 1997, under the laws of the State of Oklahoma. We are focused on intellectual property licensing and enforcement of our patent in the mobile app market development space. Our principal executive offices are located at 1717 South Boulder Avenue, Suite 700, Tulsa, Oklahoma 74119.

Safe Harbor Statement
This press release contains projections of future results and other forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Important factors that may cause actual results and outcomes to differ materially from those contained in the projections and forward-looking statements included in this press release are described in our publicly filed reports. Factors that could cause these differences include, but are not limited to, the acceptance of our products, lack of revenue growth, failure to realize profitability, inability to raise capital and market conditions that negatively affect the market price of our common stock. The Company disclaims any responsibility to update any forward-looking statements.

   
   
MACROSOLVE, INC.  
BALANCE SHEETS  
             
    6/30/2012     12/31/2011  
ASSETS                
CURRENT ASSETS:                
  Cash   $ 99,196     $ 273,132  
  Accounts receivable - trade     367,266       288,201  
  Prepaid expenses and other     135,355       240,388  
                 
    Total current assets     601,817       801,721  
                 
PROPERTY AND EQUIPMENT, at cost:     263,836       285,976  
  Less - accumulated depreciation     (171,906 )     (188,016 )
  Total cost of revenues                
    Net property and equipment     91,930       97,960  
                 
OTHER ASSETS:                
  Note receivable     135,577       135,577  
  Software development costs, net of accumulated amortization of $169,564 and $36,316 as of June 30, 2012 and December 31, 2011, respectively     1,315,044       1,280,903  
  Other assets     61,066       83,329  
                 
    Total other assets     1,511,687       1,499,809  
                 
TOTAL ASSETS   $ 2,205,434     $ 2,399,490  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
CURRENT LIABILITIES:                
  Current maturities of long-term debt   $ -     $ -  
  Revolving Line of Credit     100,000       100,000  
  Note Payable - Shareholder     459,842       169,306  
  Accounts payable - trade and accrued liabilities     370,554       631,419  
  Unearned income     53,614       31,400  
                 
    Total current liabilities     984,010       932,125  
                 
LONG-TERM DEBT, less current maturities                
  Oklahoma Technology Commercialization Center     237,500       237,500  
  Convertible debentures     150,000       2,621,161  
    Total long-term debt, less current maturities     387,500       2,858,661  
                 
COMMITMENTS AND CONTINGENCIES                
                 
STOCKHOLDERS' EQUITY:                
  Common stock, $.01 par value; authorized 500,000,000 shares; issued and outstanding 174,952,780 and 122,386,894 shares, at June 30, 2012 and December 31, 2011, respectively     1,749,527       1,223,869  
  Additional paid-in capital     13,242,622       10,059,029  
  Accumulated deficit     (14,158,225 )     (12,674,194 )
                 
    Total stockholders' (deficit) equity     833,924       (1,391,296 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 2,205,434     $ 2,399,490  
                 

The accompanying notes are an integral part of these statements.

                         
                         
                         
MACROSOLVE, INC.  
STATEMENTS OF OPERATIONS  
    For the Quarters Ended     Year to Date  
For the Periods Ended June 30,    6/30/2012     6/30/2011     2012     2011  
                                 
                                 
REVENUES:                                
  Software products and licensing   $ 237,309     $ 52,244     $ 1,009,435     $ 72,560  
  Solution services     335,127       167,187       416,082       262,871  
                                   
  Net revenues     572,436       219,431       1,425,517       335,431  
                                 
COST OF REVENUES:                                
  Software products and licensing     74,512       -       367,948       -  
  Solution services     169,096       98,629       230,295       145,413  
                                   
  Total cost of revenues     243,608       98,629       598,243       145,413  
                                 
  Gross profit     328,828       120,802       827,274       190,018  
                                 
OPERATING EXPENSES:                                
  Solution services     156,069       49,339       322,804       174,797  
  Depreciation and amortization     94,550       62,047       196,619       123,727  
  Marketing and sales     357,981       132,668       750,698       162,586  
  General and administrative     445,868       540,134       868,301       869,421  
                                   
  Total operating expenses     1,054,468       784,188       2,138,422       1,330,531  
                                   
  Loss from operations     (725,640 )     (663,386 )     (1,311,148 )     (1,140,513 )
                                 
OTHER INCOME (EXPENSE):                                
  Interest income     20       61       28       86  
  Interest expense     (32,012 )     (30,607 )     (116,156 )     (36,919 )
  Loss on sale of asset     -       (235 )     (761 )     (235 )
  Stock based compensation     (21,802 )     (28,550 )     (56,427 )     (52,538 )
                                   
  Total other expense     (53,794 )     (59,331 )     (173,316 )     (89,606 )
                                 
LOSS BEFORE INCOME TAXES     (779,434 )     (722,717 )     (1,484,464 )     (1,230,119 )
                                 
INCOME TAXES     -       -       -       -  
                                 
NET LOSS   $ (779,434 )   $ (722,717 )   $ (1,484,464 )   $ (1,230,119 )
                                 
LOSS ALLOCABLE TO COMMON STOCKHOLDERS:                                
  Net loss   $ (779,434 )   $ (722,717 )   $ (1,484,464 )   $ (1,230,119 )
                                 
  Loss allocable to common stockholders   $ (779,434 )   $ (722,717 )   $ (1,484,464 )   $ (1,230,119 )
                                 
Basic and diluted loss per share   $ (0.01 )   $ (0.01 )   $ (0.01 )   $ (0.01 )
                                 
The accompanying notes are an integral part of these statements.