Unwired Planet, Inc. Announces Third Quarter Fiscal Year 2016 Financial Results

Unwired Planet, Inc. (NASDAQ: UPIP) today filed the company's financial results for the third quarter fiscal year 2016 after market with the Securities and Exchange Commission on Form 10-Q. The company also announced a litigation update.

Third Quarter Fiscal 2016 Highlights
  • Revenue for the third quarter ended March 31, 2016, was $1.3 million, while net loss from continuing operations totaled $9.8 million.
  • On a GAAP basis, net loss for the third quarter ended March 31, 2016, was $9.8 million, or $1.04 per share, compared with a net loss of $9.6 million, or $1.03 per share, in the third quarter of the preceding year.

Third Quarter Fiscal 2016 Litigation Updates
  • Defendants in the UK cases were ordered to pay Unwired Planet $1.7 million in partial legal fee reimbursements by May 4, 2016 as a result of Unwired Planet prevailing in the second litigation in the UK as announced on March 22, 2016.
  • The UK Court granted the parties' request for a postponement of the next two technical trials, reducing litigation expenses on a go-forward basis.
  • The UK Court denied defendants' application for change of venue in the upcoming competition/FRAND trial, ruling in favor of Unwired Planet and Ericsson. The judgment states that no transfer action shall be made.

"Unwired Planet is in the midst of a transition as discussed on our most recent call on April 6, 2016, and we continue to work toward closing the transaction with Optis UP Holdings, while continuing to prepare for the UK FRAND trial this fall," said Boris Teksler, president and chief executive officer. "Please refer to our Form 10-Q for commentary and analysis on this quarter's results of operations and financial statements."

About Unwired Planet

Unwired Planet, Inc. (NASDAQ: UPIP) is the inventor of the Mobile Internet and a premier intellectual property company focused exclusively on the mobile industry. The company's patent portfolio of approximately 2,500 issued and pending US and foreign patents, includes technologies that allow mobile devices to connect to the Internet and enable mobile communications. The portfolio spans 2G, 3G, and 4G technologies, as well as cloud-based mobile applications and services. Unwired Planet's portfolio includes patents related to key mobile technologies, including baseband mobile communications, mobile browsers, mobile advertising, push notification technology, maps and location based services, mobile application stores, social networking, mobile gaming, and mobile search. Unwired Planet is headquartered in Los Altos, California. References in this release to Unwired Planet may be to Unwired Planet, Inc. or its subsidiaries.

Cautionary Note Regarding Forward Looking Statements

Any statements in this press release with respect to future events or expectations, including statements regarding the Company's licensing activities and related recognition of revenue, litigation strategy and prospects and expectations regarding the pending transaction with Optis UP Holdings are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1943 and Section 27A of the Securities Act of 1933. These forward-looking statements are subject to many risks and uncertainties that could cause actual results to differ materially from those projected. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Unwired Planet assumes no obligation to update the forward-looking statements included in this press release, except as may be required by law. For a detailed discussion of these and other factors that may cause these forward looking statements not to come true, please refer to the risk factors discussed in Unwired Planet's filings with the U.S. Securities and Exchange Commission ("SEC"), including the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2015. These documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov or from Unwired Planet's website at www.unwiredplanet.com.
 
UNWIRED PLANET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

Unaudited
 
  March 31,   June 30,
2016 2015

ASSETS
Current assets:
Cash and cash equivalents $ 55,856 $ 73,755
Short-term investments 11,713
Restricted cash 4 27
Prepaid and other current assets   2,561     632  
Total current assets 58,421 86,127
Property and equipment, net 93 110
Initial direct license costs, net 1,341 1,595
Debt issuance costs and other assets, net   971     1,052  
Total assets $ 60,826   $ 88,884  

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 5,011 $ 678
Fee share obligation 500
Deferred revenue 5,005 5,005
Accrued liabilities 921 970
Accrued legal expense 2,760 3,152
Accrued compensation   485     433  
Total current liabilities 14,182 10,738
Long-term note payable, related party 33,410 29,874
Deferred revenue, net of current portion 20,808 24,562
Other long-term liabilities   20     206  
Total liabilities   68,420     65,380  
Commitments and Contingencies
Stockholders' equity (deficit)
Preferred stock, $0.001 par value; 5,000 shares authorized and zero outstanding

Common stock, $0.001 par value; 350,000 shares authorized and 9,444 and 9,373 issued; and 9,440 and 9,362 outstanding at March 31, 2016 and June 30, 2015, respectively
9 9

Treasury stock, 4 and 11 shares at March 31, 2016 and June 30, 2015, respectively
(43 )

(93

)
Additional paid-in-capital 3,246,634 3,245,049
Accumulated other comprehensive income 182 234
Accumulated deficit   (3,254,376 )  

(3,221,695

)
Total stockholders' equity (deficit)   (7,594 )   23,504  
Total liabilities and stockholders' equity (deficit) $ 60,826   $ 88,884  
 
UNWIRED PLANET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Unaudited
 
  Three Months Ended   Nine Months Ended
March 31, March 31,
2016   2015 2016   2015
Net revenue $ 1,251   $ 1,251   $ 3,754   $ 3,754  
Operating costs and expenses:
Patent licensing expenses 6,509 7,895 24,154 24,620
General and administrative 3,369 2,115 8,796 9,321
Restructuring and other related costs               2  
Total operating costs and expenses   9,878     10,010     32,950     33,943  
Operating loss from continuing operations (8,627 ) (8,759 ) (29,196 ) (30,189 )
Interest income - 16 6 61
Interest expense (1,220 ) (1,104 ) (3,677 ) (3,181 )
Other income   73     283     64     598  
Loss from continuing operations   (9,774 )   (9,564 )   (32,803 )   (32,711 )
Income tax benefit (expense)   (12 )       122      
 
Loss from continuing operations after income taxes (9,786 ) (9,564 ) (32,681 ) (32,711 )
Discontinued operations:
Loss from discontinued operations, net of tax       (83 )       (15 )
Net loss $ (9,786 ) $ (9,647 ) $ (32,681 ) $ (32,726 )
 
Basic and diluted net loss per share from:
Continuing operations $ (1.04 ) $ (1.03 ) $ (3.48 ) $ (3.51 )
Discontinued operations                
Net loss per share $ (1.04 ) $ (1.03 ) $ (3.48 ) $ (3.51 )
 
Weighted average shares outstanding basic and diluted 9,432 9,342 9,402 9,326
 
UNWIRED PLANET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

Unaudited
 
  Three Months Ended   Nine Months Ended
March 31, March 31,
2016   2015 2016   2015
Net loss $ (9,786 ) $ (9,647 ) $ (32,681 ) $ (32,726 )
Other comprehensive income
 
Change in unrealized loss on marketable securities (3 ) (19 )
Foreign currency translation adjustment   34         (52 )    
Other comprehensive income (loss)   34     (3 )   (52 )   (19 )
Comprehensive loss $ (9,752 ) $ (9,650 ) $ (32,733 ) $ (32,745 )
 
UNWIRED PLANET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Unaudited
 
  Nine Months Ended March 31,
2016   2015
Cash flows from operating activities:
Net loss $ (32,681 ) $ (32,726 )

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 52 80
Stock-based compensation 1,743 1,543
Non-cash restructuring charges 2
Amortization of premiums on investments, net 3 70
Realized gain on foreign currency (87 )
Gain on change in fair value of consultant incentive award obligation (316 )
In-kind interest on notes payable 3,214 2,832
Amortization debt discount and issuance costs 464 349
Changes in operating assets and liabilities:
Initial licensing costs 254 395
Prepaid assets, deposits, and other assets (1,965 ) (23 )
Accounts payable 4,333 1,486
Fee share obligation (500 ) (20,032 )
Accrued liabilities and other (226 ) (63 )
Accrued legal expense (392 ) -
Accrued compensation 52 -
Deferred revenues (3,754 ) (3,753 )
Accrued restructuring costs (256 )
Restricted cash   23     586  
Net cash used in operating activities   (29,467 )   (49,826 )
Cash flows from investing activities:
Purchases of property and equipment (35 ) (30 )
Proceeds from sales and maturities of investments   11,710     30,000  
Net cash provided by investing activities   11,675     29,970  
Cash flows from financing activities:
Proceeds from exercise of stock options 92
Purchase of treasury stock   (107 )   (178 )
Net cash used in financing activities   (107 )   (86 )
Net decrease in cash and cash equivalents (17,899 ) (19,942 )
Cash and cash equivalents at beginning of period   73,755     93,877  
Cash and cash equivalents at end of period $ 55,856   $ 73,935  
Non-cash investing and financing activity
Retirement of treasury stock $ 156 $ 1,002
Unpaid debt and equity issuance costs       31  
Total non-cash investing and financing activities $ 156   $ 1,033  

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