01 Communique Reports Second Quarter 2010 Results

TORONTO, June 7 /CNW/ - 01 Communique Laboratory Inc. (TSX:ONE) today announced results for its second quarter fiscal 2010, which ended April 30th. Revenue was $108,127 compared to revenue of $156,838 for the same period in 2009. The loss for the period and comprehensive loss was $320,753 compared to $331,502 for the second quarter 2009. We completed the quarter with $1,418,887 of cash and cash equivalents.

"We continue with our plan to make use of our technology and our patents to develop revenue and generate profitable operations," said Andrew Cheung, President and CEO for 01 Communique. "Our first step to build licensing revenue from our patents is dependant on a successful outcome of our patent litigation with Citrix Systems Inc. and our ability to develop new licensees similar to that of Hitachi Business Solution of Japan. In addition, our direct sales team continues to concentrate on selling our suite of remote access services to small and mid-sized businesses. An update follows."

Direct Sales Update - We are in the final stages in preparation for release of a Beta version of our new product aimed at the on-line meeting market, I'm InTouch Meeting. The Beta version will be available free of charge throughout the Beta period. Target markets are small to mid sized businesses and workgroups within larger enterprises. This offering will be sold through our direct sales team and on-line marketing initiatives.

Patent Litigation Update - All submissions have been made in response to the August 2009 Office Action and we are waiting for a USPTO report in response to these submissions. There has been no change in status since our last quarterly report.

The background of our case against Citrix is as follows. In February, 2006 we commenced legal action against Citrix for infringement of our patent. A copy of the court pleading is on our web site. A claim construction hearing, commonly referred to as a Markman Hearing, was held in November 2006. The claim construction order establishes the meaning of the patent claims terms in dispute between the parties. In the Order, the judge adopted the construction asserted by the Company for 19 of the 20 disputed terms. In March 2008, approximately one month before the trial was scheduled to commence, the judge issued a memorandum and order staying the case pending re-examination of the patent by the USPTO.

On August 19, 2009 the USPTO issued an Office Action Closing Prosecution (non-final) in which 4 claims were found to be patentable. We have submitted our report in response, as has Citrix. We now await a report from the USPTO in respect of these submissions. While there can be no assurances, the company is confident that the outcome of the re-examination process will be the affirmation of the validity of asserted claims of the '479 patent as originally issued. A copy of the Office Action is available from the USPTO's web site at http://portal.uspto.gov/external/portal/pair. The application number is 95/001018.

Financial Highlights -

The loss and comprehensive loss for the second quarter 2010 was $320,753 which compares to a loss of $331,502 for the same period in 2009. On a year to date basis the loss for 2010 was $737,504 compared to $636,513 for 2009 an increase of $100,991. The main contributors to this increase was a $39,664 reduction in revenue and in 2010 we incurred interest and accretion on the debenture issued at the beginning of 2010 of $54,755. Operating expenses have remained relatively consistent from year to year. Revenue has remained relatively consistent from our direct business with the decrease primarily a result of a reduction in contract engineering fees which are expected to be made up in the third quarter 2010 as the work is completed.

Cash and cash equivalents at April 30, 2010 were $1,418,887 compared to $1,772,560 at January 31, 2010 a decrease of $353,673. The major use of funds was the funding of the operating loss which excluding non-cash items was $354,204. Non-cash items include stock-based compensation of $37,821 and a reduction in non-cash working capital (predominantly due to a decrease in accounts payable and accruals) of $82,436.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.

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).

Cautionary Note Regarding 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.

    
                        01 Communique Laboratory Inc.
                       SELECTED FINANCIAL INFORMATION
                         Consolidated Balance Sheets
                     April 30, 2010 and October 31, 2009

                                              30-April-10          31-Oct-09
                                            --------------     --------------
    Assets
    Current assets
      Cash and cash equivalents             $   1,418,887      $     922,091
      Accounts receivable                          60,246             77,148
      Prepaid expenses and other assets            60,176             34,552
                                            --------------     --------------
                                                1,564,884          1,033,791

    Capital assets                                 25,575             31,672
                                            --------------     --------------
                                            $   1,564,884      $   1,065,463
                                            --------------     --------------
                                            --------------     --------------

    Liabilities & Shareholders' Equity

    Current liabilities
      Accounts payable & accruals           $     422,288      $     535,515
      Deferred revenue                            103,751             86,896
                                            --------------     --------------
                                                  526,039            622,411

    Liability portion of debenture              1,068,773                  -

    Contractual obligations and contingencies

    Shareholders' equity
      Share capital                            30,327,044         30,326,144
      Contributed surplus                       1,543,107          1,364,035
      Equity portion of debenture                 140,982                  -
      Share purchase warrants                           -             37,556
      Agent options                                     -             18,874
      Deficit                                 (32,041,061)       (31,303,557)
                                            --------------     --------------
                                                  (29,928)           443,052
                                            --------------     --------------
                                            $   1,564,884      $   1,065,463
                                            --------------     --------------
                                            --------------     --------------




                        01 Communique Laboratory Inc.
                       SELECTED FINANCIAL INFORMATION
       Consolidated Statements of Operations and Comprehensive Income
                                 (Unaudited)
         For the 3 and 6 month periods ended April 30, 2010 and 2009


                              3 months ending             6 months ending
                         30-Apr-10     30-Apr-09     30-Apr-10     30-Apr-09
                       --------------------------  --------------------------
    Revenue            $   108,127   $   156,838   $   183,162   $   223,101
    Cost of revenue            576         1,363         1,268         3,358
                       --------------------------  --------------------------
                           107,551       155,475       181,894       219,743

    Expenses (income)
    Selling,
     general and
     administrative        206,092       264,849       504,308       437,543
    Patent
     litigation &
     re-examination
     expenses                    -        16,542             -        16,542
    Research and
     development           170,010       200,072       351,596       400,321
    Interest                 2,457         2,401         2,273        (4,375)
    Depreciation and
     amortization            3,127         3,113         6,466         6,225
                       --------------------------  --------------------------
                           381,686       486,977       864,643       856,256
                       --------------------------  --------------------------

    Loss before
     interest and
     accretion on
     liability
     component of
     debenture            (274,135)     (331,502)     (682,749)     (636,513)

    Interest on
     debenture              38,581             -        45,000             -
    Accretion on
     liability
     component of
     debenture               8,037             -         9,755             -
                       --------------------------  --------------------------

    Loss for the
     period and
     comprehensive loss   (320,753)     (331,502)     (737,504)     (636,513)
                       --------------------------  --------------------------

    Loss per
     common share
    Basic              $    (0.006)  $    (0.006)  $    (0.014)  $    (0.012)
    Diluted            $    (0.006)  $    (0.006)  $    (0.014)  $    (0.012)

    Weighted average
     number of
     common shares
    Basic               51,406,007    51,586,878    51,404,757    51,656,325
    Diluted             53,531,840    51,586,878    53,014,590    51,656,325



                        01 Communique Laboratory Inc.
                       SELECTED FINANCIAL INFORMATION
                    Consolidated Statements of Cash Flows
                                 (Unaudited)
         For the 3 and 6 month periods ended April 30, 2010 and 2009


                              3 months ending             6 months ending
                         30-Apr-10     30-Apr-09     30-Apr-10     30-Apr-09
                       --------------------------  --------------------------
    Cash provided by
     (used in):

    Operating
     activities:
      Loss for
       the period      $  (320,753)  $  (331,502)  $  (737,504)  $  (636,513)
      Items not
       involving cash:
        Depreciation
         and
         amortization        3,127         3,113         6,466         6,225
        Accretion of
         liability
         portion of
         debenture           8,037             -         9,755             -
        Stock-based
         compensation       37,821        84,851       122,642        85,736
      Change in non-cash
       working capital     (82,436)     (100,340)     (105,094)      (97,869)
                       --------------------------  --------------------------
                          (354,204)     (343,878)     (703,735)     (642,421)

    Financing activities:
      Issue of debenture         -             -     1,200,000             -
      Issue of
       common shares           900             -           900             -

    Investing activities:
      Purchase of capital
       assets                 (369)       (1,740)         (369)       (2,125)

    Increase (decrease)
     in cash              (353,673)     (345,618)      496,796      (644,546)

    Cash and
     cash equivalents,
     beginning
     of period           1,772,560     1,675,730       922,091     1,974,658
                       --------------------------  --------------------------
    Cash and cash
     equivalents,
     end of period     $ 1,418,887   $ 1,330,112   $ 1,418,887   $ 1,330,112
                       --------------------------  --------------------------
    

SOURCE 01 Communique Laboratory Inc.

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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