Walker Innovation Announces Second Quarter 2017 Results

Over $25 Million Cash Balance, Operating Expenses Decrease by More Than 62% from Prior-Year Period

STAMFORD, Conn.--()--Walker Innovation Inc. (OTCQB: WLKR) (“Walker Innovation” or the “Company”), which develops and commercializes its unique portfolio of intellectual property assets through licensing and enforcement operations and has initiated an effort to acquire one or more operating businesses, today announced second quarter 2017 results.

“While we explore these opportunities we will continue our plans to reduce operating expenses and pursue the licensing and enforcement business on a select basis.”

Second Quarter 2017 Highlights

  • As of June 30, 2017, Walker Innovation had $25.3 million in cash and no outstanding debt on its consolidated balance sheet.
  • Net income for the second quarter of 2017 was $1.4 million, or $0.04 per diluted common share, compared to net income of $4.4 million, or $0.12 per diluted common share, in the prior-year period.
  • Operating expenses decreased by more than 62% to $0.9 million for the second quarter of 2017, compared to $2.4 million for the second quarter of 2016.
  • During the quarter the Company raised an additional $16.8 million by redeeming remaining warrant shares in The Upside Commerce Group, LLC, the new business travel service launched by Jay Walker earlier this year.

“The Company’s materially enhanced cash balance should augment our efforts to explore acquisitions and other opportunities to create shareholder value,” said Jonathan Siegel, the Company’s Chief Executive Officer. “While we explore these opportunities we will continue our plans to reduce operating expenses and pursue the licensing and enforcement business on a select basis.”

Second Quarter 2017 Results

For the second quarter ended June 30, 2017, Walker Innovation reported no revenue versus total revenue of $0.4 million in the prior-year period. Management expects that the timing and results of patent filings and the Company’s enforcement proceedings relating to its intellectual property rights will fluctuate from period to period.

Total operating expenses for the second quarter 2017 were approximately $0.9 million versus $2.4 million in the prior-year period, primarily due to reduced overhead by eliminating positions and streamlining processes to conserve cash.

Net income for the second quarter of 2017 was $1.4 million, compared to net income of $4.4 million in the prior-year period. Net income per diluted common share for the second quarter of 2017 was $0.04, compared to net income per diluted common share of $0.12 in the prior-year period.

Liquidity and Capital Resources

As of June 30, 2017, Walker Innovation had $25.3 million in cash and no outstanding debt on its consolidated balance sheet.

Forward-Looking Statements

This press release may contain certain “forward-looking statements” that reflect the Company’s current expectations and projections about its future results, performance, prospects and opportunities. When used, the words “anticipate,” “believe,” “estimate,” “expect” and “intend” and words or phrases of similar import, as they relate to Walker Innovation, are intended to identify forward-looking statements. Such forward-looking statements include, in particular, projections about the Company’s future results, statements about its plans, strategies, business prospects, changes and trends in its business and the markets in which it operates.

Additionally, statements concerning future matters such as revenue levels, expense levels, and other statements regarding matters that are not historical are forward-looking statements. Management cautions that these forward-looking statements relate to future events or the Company’s future financial performance and are subject to business, economic, and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance, or achievements of its business or its industry to be materially different from those expressed or implied by any forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, but are not limited to, those discussed under the section entitled “Risk Factors” in the Company’s most recently filed Annual Report on Form 10-K and in any Risk Factors or cautionary statements contained in its Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. Readers should carefully review this information as well as other risks and uncertainties described in other filings the Company makes with the Securities and Exchange Commission, or the SEC. The Company does not undertake any obligation to publicly update these forward-looking statements. As a result, investors should not place undue reliance on these forward-looking statements.

About Walker Innovation Inc.

Walker Innovation (OTCQB: WLKR) owns and seeks to commercialize, license and enforce the unique portfolio of intellectual property developed by inventor and entrepreneur Jay Walker, who serves as the Company’s Executive Chairman. The Company has a history of performing innovation services that help companies improve their internal product and business development efforts. The Company’s current plan of operations includes the initiation of an effort to acquire, through merger, share exchange or other transactions, one or more operating businesses, or control of such operating businesses through contractual arrangements. Mr. Walker is best known as the founder of Priceline.com and has twice been named by TIME magazine as “one of the top 50 business leaders of the digital age.” Mr. Walker currently ranks as the world’s 10th most patented living individual, based on U.S. patent issuances according to Wikipedia. Additional information regarding the company can be found at www.walkerinnovation.com

   
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share amounts)

(Unaudited)

 
Three Months Ended Six Months Ended
June 30, June 30,
2017   2016 2017   2016
Revenues:
Licensing fees $ -- $ 1 $ -- $ 502
Custom innovation – related party -- 436 -- 1,103
Subscription revenue   --   --   --   75
 
Total revenues   --   437   --   1,680
 
 
Cost of Revenue:
Legal and consulting contingency fees -- -- -- --
Cost of subscription revenue -- -- -- 199
Cost of custom innovation   --   395   --   984
Total cost of revenue   --   395   --   1,183
Net revenue -- 42 -- 497
 
Operating expenses:
Other legal and consulting fees 151 1,002 252 1,167
Patent prosecution and maintenance fees 36 32 68 84

Compensation and benefits (includes non-cash stock based
compensation of $46 and $450 for the three months ended June
30, 2017 and 2016 and $294 and $963 for the six months ended
June 30, 2017 and 2016, respectively)

377 876 1,056 2,112
Professional fees 168 270 446 528
General and administrative 132 184 326 413
Restructuring charge   --   --   --   575
 
Total operating expenses   864   2,364   2,148   4,879
 
Operating net loss (864) (2,322) (2,148) (4,382)
 
Other income:
Change in fair value of investment 2,189 6,536 2,189 6,536
Other income 109 204 229 441
Interest income   7   2   11   4
 
Net income $ 1,441 $ 4,420 $ 281 $ 2,599
 
Net income per common share:
Basic $ 0.07 $ 0.21 $ 0.01 $ 0.13
Diluted $ 0.04 $ 0.12 $ -- $ 0.07
       
 
Weighted average common shares outstanding:
Basic 20,603 20,742 20,672 20,742
Diluted 35,743 35,769 35,812 35,769
 
   
CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share and per share amounts)

 
June 30, December 31,
2017 2016
(Unaudited)
ASSETS
Current Assets:
Cash $ 25,335 $ 10,285
Short-term investment 25 25
Prepaid and other current assets   251   398

Total current assets

25,611

10,708

 
Property and equipment, net 4 9
 
Other Assets:
Investment, at fair value -- 14,621
Investment, at cost   --   250
TOTAL ASSETS $ 25,615 $ 25,588
 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable $ 205 $ 214
Accrued expenses 215 461
Deferred revenue   148   316

Total current liabilities

568 991
       
TOTAL LIABILITIES   568   991
 
COMMITMENTS AND CONTINGENCIES
 
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 15,000,000 shares authorized

Series B Convertible Preferred stock, $0.001 par value, 14,999,000
shares designated, issued and outstanding as of June 30, 2017
and December 31, 2016, respectively

15 15

Common stock, $0.001 par value, 100,000,000 shares authorized;
21,134,744 shares issued and 20,400,368 and 20,741,572 shares
outstanding as of June 30, 2017 and December 31, 2016 respectively

21 21

Treasury stock, 734,376 and 393,172 shares, at cost as of June 30,
2017 and December 31, 2016, respectively

(965 ) (840 )
Additional paid-in capital 47,279 46,985
Accumulated deficit   (21,303 )   (21,584 )
TOTAL STOCKHOLDERS’ EQUITY $ 25,047   24,597
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 25,615 $ 25,588

 

 

Contacts

For Walker Innovation Inc.
Investors:
ICR
Don Duffy/Garrett Edson, 203-682-8200
or
Media:
ICR
Michael Fox, 203-682-8218

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