01 Communique Reports Third Quarter Fiscal 2017 Results and Provides an Update on its Patent Litigation with Citrix

TORONTO, Sept. 13, 2017 /CNW/ - 01 Communique Laboratory Inc. (ONE:TSX-V) today announced results for its third quarter fiscal 2017, which ended July 31, 2017. The Company produced a profit for the quarter of $68,383 (2016 – loss of $162,660). The adjusted profit for the quarter, which excludes non-cash expenses for stock-based compensation and depreciation, was $79,261 (2016 – loss of $79,883). The Company generated positive cash flow in the third quarter completing the period with $243,638 of cash and cash equivalents.

"We remain committed to our plan of continuing operations as well as pursuing the matter with Citrix Systems Inc. ("Citrix") until its conclusion," said Andrew Cheung, President and CEO for 01 Communique. "With respect to the lawsuit with Citrix, we filed a Notice to Appeal of the district court's decision with the United States Court of Appeals for the Federal Circuit on March 30, 2017 and are progressing with the appeal process. We remain confident in the merits of our appeal."  

An Update on the Company's Operations follows:

The Company reduced its operating expenses significantly in January 2016 as it prepared to work through the appeal process in its patent litigation against Citrix. In addition to moving forward with the appeal process the Company plans to continue to work with Hitachi Solutions Create as well as make its products available from its web site. Substantially all development work has been completed on the products that the Company is looking to license and with respect to the appeal process the Company relies on its lawyers and hence minimal internal resources are expected. Accordingly the Company was able to significantly reduce its expenses. The Company makes use of third party contractors for the development and support of its products as required.

For the three months ended July 31, 2017 there was a profit of $68,383 compared to a loss of $162,660 in 2016.

Revenue for the third quarter 2017 was $247,269 (2016 - $9,453) an increase of $237,816. Earlier in fiscal 2017 a co-development agreement had been signed with Hitachi Solutions Create to enhance DoMobile which is a remote access offering built on the Company's I'm InTouch platform and marketed exclusively in Japan by Hitachi Solutions Create under agreement with the Company. The Company completed development and recognized revenue in the third quarter 2017 resulting from these development efforts. In addition to the revenue from this co-development agreement the Company also received royalties for the Company`s share of revenue received from third parties for the sale of DoMobile in Japan by Hitachi Solutions Create.

Cash operating expenses, which exclude stock based compensation and depreciation, for the third quarter 2017 were $153,663 (2016 - $65,984) an increase of $87,679. The majority of this increase is due to an increase in amounts paid to third party development contractors that were required to complete the development efforts as part of the co-development agreement with Hitachi Solutions Create and withholding taxes paid on revenue from Japan. 

There were no patent enforcement and re-examination expenses for the three and nine month periods ended July 31, 2017 and 2016. Patent enforcement and re-examination expenses have fluctuated in the past with the level of activity in respect of the Company's patent litigation and the re-examination requested by Citrix. With respect to the Citrix litigation, expenses have reached a cap and the Company's lawyers are now responsible for such expenses for which they are to be reimbursed out of proceeds of settlement or an award of damages, if any.

As previously announced on June 7, 2017 stock options were granted to members of the Company's executive management and directors. There were 835,000 stock options granted to executive management and directors with a 4 year term expiring on June 7, 2021, with an exercise price of $0.05. These stock options vest on December 7, 2017.

Background on the Company's patent lawsuit against Citrix:

In February 2006, the Company commenced a lawsuit in the United States District Court, Northern District of Ohio, Eastern Division, against Citrix alleging infringement by their GoToMyPC product line of the Company's patent, United States Patent No. 6,928,479, (" the '479 Patent"). On January 11, 2016 a jury trial commenced in the lawsuit with the jury reaching and returning a unanimous verdict on January 19, 2016. The Court entered Judgment as follows:

1. Defendants Citrix have not infringed claims 24 or 45 of the '479 Patent;

2. Claims 24 and 45 of the '479 Patent are not invalid;

3. Plaintiff 01 Communique takes no damages from Citrix;

4. Except as set forth above or adjudicated through Summary Judgment, all other claims and counterclaims in this matter were dismissed;

5. On March 7, 2016 the Company filed post-trial motions with the District Court that presided over the trial. These included motions for renewed judgment as a matter of law and for a new trial.

6. On March 21, 2017 the District Court issued its order denying the Company's motion for judgment as a matter of law and for a new trial.

7. On March 30, 2017 the Company filed a Notice to Appeal the District Court's Order with the United States Court of Appeals for the Federal Circuit. The Company is working through this process and while the Company is confident in the merits of its appeal there can be no assurance that the Company will be successful in its appeal.

Neither TSX Venture Exchange ("TSX-V") nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About 01 Communique

Established in 1992, 01 Communique Laboratory Inc. (TSX-V: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 ) products are protected in the U.S.A. by its patents #6,928,479 / #6,938,076 / #8,234,701 and in  Canada by its patents #2,309,398 / #2,524,039 and Japan by its patent #4,875,094. For more information, visit www.01com.com or call (905) 795-888 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 and Uncertainties" in the company's Management`s Discussion and Analysis document 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 Statements of Financial Position

(Unaudited)










31-July-17


31-Oct-16





Assets




Current assets





Cash and cash equivalents

$

243,638


$

173,424


Accounts receivable

33,883


27,696


Prepaid expenses and other assets

12,803


6,975


290,324



208,095






Plant and equipment

1,921



3,965


$

292,245


$

212,060






Liabilities & Shareholders' Equity










Current liabilities






Accounts payable and accrued liabilities

$

518,372


$

522,119


Deferred revenue

11,690


12,075


Current liability portion of Debenture

387,065


---


917,127



534,194






Liability portion of Debenture

---



374,476






Shareholders' equity






Share capital

40,832,777


40,832,777


Contributed surplus

5,394,655


5,311,155


Equity portion of Debenture

47,111


47,111


Deficit


(46,899,425)



(46,887,653)


(624,882)



(696,610)







$

292,245


$

212,060

 

01 Communique Laboratory Inc.

SELECTED FINANCIAL INFORMATION

Consolidated Statements of Operations and Comprehensive Income

For the 3 and 9 month periods ended July 31, 2017 and 2016

(Unaudited)






 for the 3 months ending


 for the 9 months ending


31-Jul-17

31-Jul-16


31-Jul-17

31-Jul-16







 Revenue

$

247,269

$

9,453


$

384,362

$

56,456

 Cost of revenue

-

-


-

-


247,269

9,453


384,362

56,456







Expenses (income):






Selling, general and administrative

71,054

130,594


233,581

583,682

Patent litigation & re-examination expenses

-

-


-

-

Research and development

93,487

27,844


119,998

266,923

Interest

(7)

(81)


(34)

(844)


164,534

158,357


353,545

849,761

Profit (Loss) before interest and accretion on






liability component of debenture

$

82,735

$

(148,904)


$

30,817

$

(793,305)







Interest on debenture

10,000

10,000


30,000

30,000

Accretion on liability portion of debenture

4,352

3,756


12,589

10,866







Profit (Loss) for the period and comprehensive profit (loss)

$

68,383

$

(162,660)


$

(11,772)

$

(834,171)



















Loss per common share 






Basic

$

0.001

$

(0.002)


$

(0.000)

$

(0.013)

Diluted

$

0.001

$

(0.002)


$

(0.000)

$

(0.013)







Weighted average number of common shares 

Basic

66,543,807

66,543,807


66,543,807

66,468,807

Diluted

66,543,807

66,543,807


66,543,807

66,468,807

 

01 Communique Laboratory Inc.

SELECTED FINANCIAL INFORMATION

Consolidated Statements of Cash Flows

For the 3 and 9 month periods ended July 31, 2017 and 2016

(Unaudited)








three months ending


nine months ending



31-Jul-17

31-Jul-16


31-Jul-17

31-Jul-16

Cash provided by (used in):













Operating activities:







Income (Loss) for the period

$

68,383

$

(162,660)


$

(11,772)

$

(834,171)


Adjustments to reconcile the loss for the period






to net cash flows from operating activities








Depreciation

378

1,204


2,043

4,080



Stock-based compensation

10,500

91,250


83,500

368,940



Accretion on liability portion of debenture

4,352

3,756


12,589

10,866



Interest paid on debenture

10,000

10,000


30,000

30,000



Interest income

(7)

(81)


(34)

(844)


Change in non-cash working capital 

71,474

10,619


(16,146)

(12,094)



165,080

(45,912)


100,180

(433,223)


Interest income received

7

81


34

844



165,087

(45,831)


100,214

(432,379)









Financing activities:








Issue of common shares

-

-


-

123,000



Interest paid on debenture

(10,000)

(10,000)


(30,000)

(30,000)


Investing activities:








Purchase of capital assets

-

-


-

(655)


Increase (decrease) in cash

155,087

(55,831)


70,214

(340,034)









Cash and cash equivalents, beginning of period

88,551

267,003


173,424

551,205


Cash and cash equivalents, end of period

$

243,638

$

211,172


$

243,638

$

211,171

 

SOURCE 01 Communique Laboratory Inc.

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

RELATED LINKS
http://www.01com.com

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