01 Communique Reports Fourth Quarter 2007 Results



    TORONTO, Jan. 4 /CNW/ - 01 Communique Laboratory Inc. (TSX:ONE) today
announced results for its fourth quarter fiscal 2007, which ended October 31st
2007.
    Revenue for fiscal 2007 was $495,541 with an operating loss of $2,020,812
or $0.04 per share compared to revenue of $529,256 with an operating loss of
$1,556,261 or $0.04 per share for fiscal 2006. Revenue for the fourth quarter
2007 was $91,539 with an operating loss of $372,894 or $0.01 per share
compared to revenue of $114,971 with an operating loss of $437,957 or $0.01
per share for the fourth quarter 2006. We completed the year with $2,886,270
of cash and cash equivalents.
    "We made significant strides over the past year in our plan to maximize
shareholder value from our intellectual property," said Andrew Cheung
President and CEO for 01 Communique. "The three components to our plan, as
explained below, have all progressed and we expect them to continue to
progress to fruition in 2008. First, we will continue to market our suite of
remote access products using our direct sales efforts and web presence. Our
product offering is a showcase for our technology and our best asset to
attract more world-class partners such as the partnership we have with Hitachi
in Japan. Secondly, we will continue to support Hitachi in Japan as we wait
for their sales and marketing efforts to pay off. Third, we will continue with
our patent litigation against Citrix in order to defend our intellectual
property rights and protect our future. The trial is currently scheduled to
commence March 24, 2008."

    Highlights:

    Expenses. Operating expenses for the year were $2,375,390 compared to
$2,002,051 for fiscal 2006 an increase of $373,339 or 19%. This increase is
mainly attributable to the increase in patent litigation expenses pertaining
to our patent litigation against Citrix Systems Inc. (CTXS:NSDQ). During the
year $582,483 was spent on litigation expenses compared to $208,221 in 2006,
which is an increase of $374,262. The majority of litigation expenses
pertained to costs associated with expert witnesses.
    Our litigation expenses are expected to be minimal during the first
quarter 2008 and hence the expenses to run our business are expected to be
approximately $400,000 for the first quarter 2008.

    Liquidity and cash resources. We completed the year with cash and cash
equivalents of $2,886,270 a decrease of $432,761 for the fourth quarter. Cash
was used to fund operations in the amount of $254,658 net of a non-cash charge
to operating results for stock-based compensation of $118,236. Cash was also
used to fund a reduction in non-cash working capital of $222,306, the majority
of which is accounted for by a decrease in accounts payable of $191,474 as
expenses pertaining to the litigation were paid and an increase in accounts
receivable of $78,480 pertaining to the Ontario Innovative Tax Credit. There
was a $45,500 source of cash for the issuance of common shares from options
exercised that were about to expire.

    Hitachi Business Solution "Hitachi". On October 1st, 2007 Hitachi
announced the release of DoMobile Ver.2.5, the latest version of DoMobile with
increased security and additional smartphone functionality. The package is now
available throughout Japan and is distributed by Hitachi Ltd. and its partner
companies.
    "One of the major concerns Japanese businesses have identified with
remote access is the issue of "corporate information leakage," said Andrew
Cheung, President of 01 Communique. "DoMobile Ver.2.5, representing the next
generation in remote access, has increased security features built in that are
designed to resolve this issue. The combination of our technology with
Hitachi's FLORA Se210 notebook and server provides a turn-key remote access
solution offering businesses the ability to stay connected and not be
concerned about the loss of sensitive information. We look forward to
capitalizing on our investment as Hitachi's sales and marketing initiatives
are realized."

    Citrix Litigation. We commenced a patent infringement lawsuit against
Citrix Systems Inc. in February 2006. The case is moving forward and we remain
confident in the merits of our case. Below is a synopsis of the important
milestones of the litigation to date and the current timeframes.

    
    -   On March 16, 2007 the Court issued a patent claim construction ruling
        adopting our claim construction for 19 of the 20 disputed claim terms
        (commonly referred to as the Markman Ruling).

    -   The deadline for Fact Discovery and Citrix's identification of prior
        art closed on July 12, 2007.

    -   Initial Expert Reports and the Rebuttals were filed on August 3, 2007
        and August 24, 2007 respectively.

    -   Close of Expert Discovery was September 14, 2007.

    -   Dispositive Motions (Summary Judgment Motions) were submitted by both
        parties on December 7, 2007 leading up to trial.

    -   Trial by Jury is scheduled to commence March 24, 2008 in the United
        States District Court Northern District of Ohio Eastern Division.
    

    Forward-looking Statements.

    Certain statements in this news release may constitute "forward-looking"
statements which involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. When used in this news release, such statements
use such words as "may", "will", "expect", "believe", "plan", "intend", "are
confident" and other similar terminology. These statements reflect current
expectations regarding future events and operating performance and speak only
as of the date of this news release. Forward-looking statements involve
significant risks and uncertainties, should not be read as guarantees of
future performance or results, and will not necessarily be accurate
indications of whether or not such results will be achieved. A number of
factors could cause actual results to differ materially from the results
discussed in the forward-looking statements, including, but not limited to,
the factors discussed under "Risk Factors" in the company's Annual Information
Form filed on SEDAR. Although the forward-looking statements contained in this
news release are based upon what management of the Company believes are
reasonable assumptions, the company cannot assure investors that actual
results will be consistent with these forward looking statements. These
forward-looking statements are made as of the date of this news release, and
the company assumes no obligation to update or revise them to reflect new
events or circumstances.


    
                       SELECTED FINANCIAL INFORMATION
                         Consolidated Balance Sheets
                    October 31, 2007 and October 31, 2006


                                                    Oct. 31/07    Oct. 31/06
                                                  ---------------------------
    Assets
    Current assets
      Cash and cash equivalents                   $  2,886,270  $    559,558
      Accounts receivable                              189,681       154,145
      Prepaid expenses and other assets                 24,385        30,902
                                                  ---------------------------
                                                     3,100,336       744,605


    Capital assets                                      23,704        37,110
                                                  ---------------------------
                                                  $  3,124,040  $    781,715
                                                  ---------------------------
                                                  ---------------------------

    Liabilities & Shareholders' Equity

    Current liabilities
      Accounts payable & accruals                 $    281,946  $    290,697
      Deferred revenue                                 102,032       106,302
                                                  ---------------------------
                                                       383,978       396,999

    Liability portion of debenture                           -       450,110

    Shareholders' equity
      Share capital                                 30,338,753    26,068,445
      Contributed surplus                              645,453       343,734
      Equity portion of debenture                            -        69,089
      Share purchase warrants                           30,995        20,195
      Agent options                                    339,674        27,144
      Deficit                                      (28,614,813)  (26,594,001)
                                                  ---------------------------
                                                     2,740,062       (65,394)
                                                  ---------------------------
                                                  $  3,124,040  $    781,715
                                                  ---------------------------
                                                  ---------------------------



                       SELECTED FINANCIAL INFORMATION
             Consolidated Statements of - Operations and Deficit
       For the 3 and 12 month periods ended October 31, 2007 and 2006


                            12 months ended              3 months ended
                        Dec. 31/07    Dec. 31/06    Dec. 31/07    Dec. 31/06
                      --------------------------- ---------------------------

    Revenue           $    495,541  $    529,256  $     91,539  $    114,971
    Cost of revenue         32,453         8,224         3,363         2,487
                      --------------------------- ---------------------------
                           463,088       521,032        88,176       112,484

    Expenses (income)
    Selling,
     general and
     administrative      1,189,593     1,166,975       388,438       300,315
    Patent litigation      582,483       208,221         5,175       154,959
    Research and
     development           670,874       611,073       142,552        71,744
    Interest               (91,489)      (12,075)      (77,346)       (6,898)
    Depreciation and
     amortization           23,929        27,857         2,251         6,968
                      --------------------------- ---------------------------
                         2,375,390     2,002,051       461,070       527,088
                      --------------------------- ---------------------------


    Loss before
     non-controlling
     interest, debt
     settlement
     expense,
     accretion and
     interest on
     liability
     component of
     debenture          (1,912,302)   (1,481,019)     (372,894)     (414,604)

    Debenture
     settlement
     expense                72,069             -             -             -
    Accretion on
     liability
     component of
     debenture               8,306        19,199             -         1,072
    Interest expense        28,135        56,043             -        22,281

    Loss before the
     undernoted         (2,020,812)   (1,556,261)     (372,894)     (437,957)

    Non-controlling
     interest                    -       171,591             -             -

    Transfer of CSE
     from limited
     partnership                 -    (1,155,000)            -             -

                      --------------------------- ---------------------------
    Loss for the
     period and
     comprehensive
     loss               (2,020,812)   (2,539,670)     (372,894)     (437,957)
                      --------------------------- ---------------------------

    Deficit, beginning
     of period         (26,594,001)  (24,054,331)  (28,241,919)  (26,156,044)

                      --------------------------- ---------------------------
    Deficit,
     end of period    $(28,614,813) $(26,594,001) $(28,614,813) $(26,594,001)
                      --------------------------- ---------------------------
                      --------------------------- ---------------------------

    Loss per
     common share
      Basic           $      (0.04) $      (0.07) $      (0.01) $      (0.01)
      Diluted         $      (0.04) $      (0.07) $      (0.01) $      (0.01)

    Weighted ave.
     number of
     common shares
     outstanding
      Basic             46,717,063    37,842,092    50,777,131    40,107,707
      Diluted           46,717,063    37,842,092    50,777,131    40,107,707



                       SELECTED FINANCIAL INFORMATION
                    Consolidated Statements of Cash Flows
       For the 3 and 12 month periods ended October 31, 2007 and 2006


                            12 months ended              3 months ended
                        Dec. 31/07    Dec. 31/06    Dec. 31/07    Dec. 31/06
                      --------------------------- ---------------------------
    Cash provided by
     (used in):

    Operating
     activities:
      Loss for the
       period           (2,020,812)   (2,539,670)     (372,894)     (437,957)
      Items not
       involving cash:
        Non-controlling
         interest                -      (171,591)            -             -
        Depreciation and
         amortization       23,929        27,857         2,251         6,968
        Accretion on
         liability
         component of
         debenture           8,306        19,199             -         1,072
        Non-cash portion
         of debenture
         settlement
         expense            72,069             -             -             -
        Stock-based
         compensation      264,644       100,273       118,236        57,873
        Transfer of CSE
         from limited
         partnership             -     1,155,000             -             -
        Change in
         non-cash
         operating
         working
         capital           (42,040)      104,452      (222,306)       22,807
                      --------------------------- ---------------------------
                        (1,693,904)   (1,304,480)     (474,713)     (349,237)

    Financing
     activities:
      Issue of common
       shares            4,593,638       716,320        45,500         3,940
      Issue (redemption)
       of debenture       (562,500)      500,000             -             -
                      --------------------------- ---------------------------
                         4,031,138     1,216,320        45,500         3,940

    Investing activities:
      Purchase of
       capital assets      (10,522)       (4,275)       (3,548)       (2,510)
                                               -             -             -
                      --------------------------- ---------------------------
                           (10,522)       (4,275)       (3,548)       (2,510)

    Increase (decrease)
     in cash and cash
     equivalents         2,326,712       (92,435)     (432,761)     (347,807)

    Cash and cash
     equivalents,
     beginning of
     period                559,558       651,993     3,319,031       907,365
                      --------------------------- ---------------------------

    Cash and cash
     equivalents,
     end of period    $  2,886,270  $    559,558  $  2,886,270  $    559,558
                      --------------------------- ---------------------------
                      --------------------------- ---------------------------
    

    About 01 Communique

    Established in 1992, 01 Communique (TSX: ONE) is an innovative force in
the development and delivery of remote access and support products and
integrated communications software. 01's suite of products includes its remote
access product line I'm InTouch (www.imintouch.net) and its remote support
product I'm OnCall (www.imoncall.com). For more information on its products,
visit www.01com.com or call (905) 795-2888 or (800) 668-2185 (North America
only).

    %SEDAR: 00010658E




For further information:

For further information: INVESTOR CONTACT: Brian Stringer, Chief
Financial Officer, 01 Communique, (905) 795-2888 x204,
brian.stringer@01com.com


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