01 Communique Reports Third Quarter 2010 Results and Provides a Corporate
Update
TORONTO, Sept. 9 /CNW/ - 01 Communique Laboratory Inc. (TSX:ONE) today announced results for its third quarter fiscal 2010, which ended July 31. Revenue was $84,307 compared to revenue of $120,617 for the same period in 2009. The loss for the period and comprehensive loss was $348,047 which net of interest and accretion on the debenture of $54,000 is $294,047 and compares to the loss of $250,983 for the third quarter 2009.
"Recent developments have helped us turn the page to a new chapter at 01," said Andrew Cheung President and CEO for 01 Communique. "On July 6th the USPTO issued their findings in a Right to Appeal Notice concluding that all of the claims in our patent subject to the re-examination were patentable thus re-affirming our assertion that our patent is valid. Since then we have moved forward on a number of fronts. We started by strengthening our financial position with a $5.5m financing. We have approached the court to lift the stay in the Citrix litigation. We opened an office in Arlington, Virginia with the responsibility for business development and intellectual property licensing. We commenced litigation against LogMeIn and Dell alleging infringement of our patent. As we move forward we plan to continue and build value in 01 with our products and our patents, whether it be through direct sales efforts or by licensing our products and/or patents under intellectual property agreements. Our plan is to participate in the growth of the remote access and communications industry by leveraging our patents. We have identified a number of companies we believe have products that are making use of our patent and we will proceed accordingly as we endeavor to protect our intellectual property and build revenue."
Recent Developments
On September 8, 2010 we filed a lawsuit in the Eastern District of Virginia, against LogMeIn Inc. (Nasdaq:LOGM) and Dell Inc. (Nasdaq:DELL) alleging infringement of our patent no. 6,928,479. We are seeking past damages which goes back to August 9, 2005 being the date the Patent was issued as well as injunctive relief against both Dell and LogMeIn prohibiting infringement.
Right of Appeal Notice. On July 6, 2010 the United States Patent and Trademark Office ("USPTO") issued a Right of Appeal Notice concluding that all of the claims in the inter partes re-examination, that were challenged by Citrix Systems, Inc. (Nasdaq:CTXS) as part of our infringement litigation against them, are patentable. Citrix has filed its notice to appeal that decision. We have since approached the Court in the Northern District of Ohio requesting that the case be reopened so that the stay can be lifted and the case proceed to trial. The Court has not yet rendered its decision on lifting the stay.
Intellectual Property licensing and business development. We opened an office in Arlington, Virginia staffed with business development personnel whose responsibility is to develop intellectual property licensing revenue from companies looking to market our I'm InTouch product offering along the lines of our agreement with Hitachi Business Solution of Japan and/or from those companies who we believe infringe on our patents.
Private Placement. In August we completed a private placement resulting in the issuance of 6,115,000 common shares at a price of $0.90 per common share for gross proceeds of $5,503,500.
Redemption of the $1,200,000 Debenture. On August 26, 2010 we redeemed the Debenture repaying the principal of $1,200,000 plus accrued interest to the date of redemption plus the penalty of 3 months interest for redeeming prior to maturity.
Financial Highlights -
The loss before interest and accretion on the debenture was $294,047 for the third quarter 2010, which compares to a loss of $250,983 for the same period in 2009, representing an increase of $43,054.
Operating expenses for the third quarter 2010 of $377,708 were relatively consistent when compared to the $370,591 incurred for the same period in 2009. Revenue for the quarter of $84,307 was $36,310 less than the $120,617 recorded for the same period in 2009. The reduction is primarily a result of a reduction in contract engineering fees.
Cash and cash equivalents were $1,129,989 at July 31, 2010 compared to $1,418,887 at April 30, 2010 representing a decrease of $288,898. Cash was used predominantly to fund the operating loss, which after adjusting for non-cash expenses and an increase in non-cash working capital was $297,903.
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) offers a suite of remote access services designed for small-medium sized business, mobile professionals and IT service providers. 01's software as a service offerings are deployed on-demand and include functionality enabling on-line meetings, remote computing and IT support. 01's suite of products includes its remote access offering I'm InTouch (www.imintouch.com) , its online meeting offering (www.imintouchmeeting.com) and its remote support offering I'm OnCall (www.imoncall.com). 01's products are protected in the U.S.A. by its patents No.6928479 / No.6938076. For more information, 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 July 31, 2010 and October 31, 2009 31-Jul-10 31-Oct-09 ------------- ------------- Assets Current assets Cash and cash equivalents $ 1,129,989 $ 922,091 Accounts receivable 6,341 77,148 Prepaid expenses and other assets 46,470 34,552 ------------- ------------- 1,182,800 1,033,791 Capital assets 24,952 31,672 ------------- ------------- $ 1,207,752 $ 1,065,463 ------------- ------------- ------------- ------------- Liabilities & Shareholders' Equity Current liabilities Accounts payable and accruals $ 413,620 $ 535,515 Deferred revenue 67,977 86,896 ------------- ------------- 481,597 622,411 Liability portion of debenture 1,077,773 - Shareholders' equity Share capital 30,338,444 30,326,144 Contributed surplus 1,558,064 1,364,035 Share purchase warrants 140,982 37,556 Agent options - 18,874 Deficit (32,389,108) (31,303,557) ------------- ------------- (351,618) 443,052 ------------- ------------- $ 1,207,752 $ 1,065,463 ------------- ------------- ------------- ------------- 01 Communique Laboratory Inc. SELECTED FINANCIAL INFORMATION Consolidated Statements of Operations and Comprehensive Income (Unaudited) For the 3 and 9 month periods ended July 31, 2010 and 2009 3 months ending 9 months ending 31-Jul-10 31-Jul-09 31-Jul-10 31-Jul-09 --------------------------- --------------------------- Revenue $ 84,307 $ 120,617 $ 267,469 $ 343,718 Cost of revenue 646 1,009 1,914 4,367 --------------------------- --------------------------- 83,661 119,608 265,555 339,351 Expenses (income) Selling, general and administrative 198,820 184,450 703,128 621,992 Patent litigation & re-examination expenses - - - 16,542 Research and development 176,070 183,245 527,666 583,566 Interest (200) (216) 2,073 (4,591) Depreciation and amortization 3,018 3,113 9,484 9,338 --------------------------- --------------------------- 377,708 370,591 1,242,351 1,226,847 --------------------------- --------------------------- Loss before interest and accretion on liability component of debenture (294,047) (250,983) (976,796) (887,496) Interest on debenture 45,000 - 90,000 - Accretion on liability component of debenture 9,000 - 18,755 - --------------------------- --------------------------- Loss for the period and comprehensive loss $ (348,047) $ (250,983) $ (1,085,551) $ (887,496) --------------------------- --------------------------- Loss per common share Basic $ (0.007) $ (0.005) $ (0.021) $ (0.017) Diluted $ (0.007) $ (0.005) $ (0.021) $ (0.017) Weighted average number of common shares Basic 51,411,985 51,403,507 51,407,219 51,554,618 Diluted 51,411,985 51,403,507 51,407,219 51,554,618 01 Communique Laboratory Inc. SELECTED FINANCIAL INFORMATION Consolidated Statements of Cash Flows (Unaudited) For the 3 and 9 month periods ended July 31, 2010 and 2009 3 months ending 9 months ending 31-Jul-10 31-Jul-09 31-Jul-10 31-Jul-09 --------------------------- --------------------------- Cash provided by (used in): Operating activities: Loss for the period $ (348,047) $ (250,983) $ (1,085,551) $ (887,496) Items not involving cash: Depreciation and amortization 3,018 3,113 9,484 9,338 Accretion of liability portion of debenture 9,000 - 18,755 - Stock-based compensation 14,957 2,598 137,599 88,334 Change in non- cash working capital 23,169 5,445 (81,925) (92,424) --------------------------- --------------------------- (297,903) (239,827) (1,001,638) (882,248) Financing activities: Issue of debenture - - 1,200,000 - Issue of common shares 11,400 - 12,300 - Investing activities: Purchase of capital assets (2,395) (898) (2,764) (3,023) Increase (decrease) in cash (288,898) (240,725) 207,898 (885,271) Cash and cash equivalents, beginning of period 1,418,887 1,330,112 922,091 1,974,658 --------------------------- --------------------------- Cash and cash equivalents, end of period $ 1,129,989 $ 1,089,387 $ 1,129,989 $ 1,089,387 --------------------------- --------------------------- --------------------------- ---------------------------
For further information: For further information: INVESTOR CONTACT: Brian Stringer, Chief Financial Officer, 01 Communique, (905) 795-2888 x204, [email protected]
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