Certicom Reports Results for Second Quarter of Fiscal 2008



    Pipeline of potential recurring revenue continues to strengthen

    
    Highlights for the Quarter:

     -  Sony answered Certicom's patent infringement complaint; Certicom
        remains confident in its legal position

     -  Certicom launched Security Builder API for .NET

     -  Sicon Semiconductor licensed Certicom's technology for
        digital content protection

     -  Frost & Sullivan awarded 2007 Product Innovation Award to Certicom

     -  Vaultus Mobile Technologies licensed Certicom's ECC technology for
        mobile enterprise applications

     -  Certicom opened design centre in Silicon Valley, to be dedicated to
        development of hardware-based cryptographic technologies

    Subsequent to Quarter End:

     -  Texas Instruments licensed Certicom's ECC technology for improved
        security in next generation government-issued identification
        documents

     -  Bally Technologies licensed Certicom technology for gaming security

     -  Kilopass and Certicom to partner for delivery of security for digital
        content protection

     -  IdentiPHI licensed Certicom's ECC technology for new security
        products for businesses and government agencies

     -  Certicom's Suite B Power Bundle to support Cavium Networks'
        processors
    

    MISSISSAUGA, Dec. 4 /CNW/ - Certicom Corp. (TSX: CIC) ("Certicom" or the
"Company") today reported results for the second quarter of fiscal 2008 ended
October 31, 2007. All figures are in U.S. dollars and in accordance with
Canadian Generally Accepted Accounting Principles (GAAP) except where
otherwise noted.
    Revenue for the quarter was $3.8 million compared to $5.9 million for the
second quarter of fiscal 2007. For the first six months of fiscal 2008,
revenue was $7.0 million, compared to $10.6 million in the first six months of
fiscal 2007.
    "While we are disappointed with the revenue for the first half of the
year, I will reiterate that we have not lost any prospective deals for this
time period," said Bernard Crotty, Certicom's President and Chief Executive
Officer. "Our pipeline of opportunities continues to grow by quantity and
quality. As the Texas Instruments and Bally Technologies agreements
demonstrate, leading technology companies are embracing Certicom's complete
security solutions."
    Mr. Crotty continued, "As we stated in our pre-release last month, our
second quarter revenue fell short of expectations due to a combination of
factors. These included the complex nature of the strategic deals we focus on
and our product development shift towards total security solutions. I will
point out again that we may encounter revenue variability, including upside
variability, over the next few quarters as we adapt to changing market
dynamics, progress through the Sony patent litigation case, and proceed with
executing our growth strategy."

    Second Quarter Financial Review

    Operating expenses(1) for the quarter were $5.0 million, compared to 
$4.6  million in the second quarter of fiscal 2007. The increase in
year-over-year operating expenses was mainly due to legal expenses related to
the Sony litigation. However, the operating expenses were lower than the
guidance given in the previous quarter due to lower than expected litigation
expenses, which totaled $0.4 million for the quarter. The Company posted a net
loss on a GAAP basis of $2.8 million, or $0.06 per basic and diluted share for
the quarter, compared to net earnings of $0.6 million, or $0.01 per basic and
diluted share in the second quarter of fiscal 2007.
    The Company reports that recurring revenue for the second quarter was
$2.0 million, consistent with $2.1 million in the second quarter of fiscal
2007.
    Certicom had $40.4 million in cash(2) at quarter-end compared to
$43.2 million at year-end fiscal 2007 and $44.4 million at October 31, 2006.
The Company has no debt.

    Six Month Financial Review

    Operating expenses(1) for the first six months of fiscal 2008 were
$10.7 million compared to $9.0 million for the same period last year. The
increase in year-over-year operating expenses was mainly due to legal expenses
related to the Sony litigation and a planned increase in product development
resources specifically related to new product initiatives.
    For the first six months of fiscal 2008, the Company posted a net loss on
a GAAP basis of $6.2 million or $0.14 per basic and diluted share, compared to
a net loss of $0.7 million, or $0.02 per basic and diluted share for the same
period last year.
    The Company reports that recurring revenue for the six-month period was
$4.0 million, consistent with $4.1 million for the same period in fiscal 2007.

    Sony Patent Infringement Litigation

    Sony answered Certicom's patent infringement complaint on August 31,
2007, denying infringement and asserting invalidity. Certicom remains
confident in its legal position and in its ability to successfully pursue this
litigation.
    In pursuing the Sony litigation, Certicom management expects to receive a
reasonable royalty on the sales of Sony products that Certicom alleges use its
ECC technology in content protection technologies, such as Advanced Access
Control System (AACS) and Digital Transmission Content Protection (DTCP).
    Certicom is currently progressing through the broad discovery phase in
which both parties are required to provide certain documentation.

    CEO Search

    The Company expects to make an announcement regarding the appointment of
Certicom's new CEO by December 31, 2007.

    Outlook

    "There are several factors that reaffirm our optimism about Certicom's
outlook. Our portfolio of design wins continues to expand as global adoption
of our technology proliferates, thereby strengthening our platform for
increasing recurring revenue. Our product development strategy is making
excellent progress, as evidenced by our recent agreements featuring Certicom's
end-to-end security solutions and the establishment of our state-of-the-art
crypto technology design centre," said Mr. Crotty.
    Management intends to continue its focus on leveraging Certicom's global
leadership position in ECC to build recurring revenue and sustainable profits.
The Company is committed to five key strategies for maximizing market share:
partnering for continued ECC adoption, expanding its global sales presence,
investing in new product development, pursuing acquisitions, and defending its
patent portfolio.
    Operating expenses(1) for the third quarter of fiscal 2008, excluding
cost of revenues, depreciation and amortization, and stock-based compensation,
are expected to range from $5.4 to $5.8 million, including estimated legal
expenses ranging from $0.4 to $0.7 million associated with intellectual
property protection. Management continues to aggressively manage expenses to
achieve a cost structure that is in line with revenue, which is key to
Certicom's goal of achieving sustainable, profitable growth.

    
    Conference Call

    -------------------------------------------------------------------------
    Conference Call and Webcast      December 5, 2007, 11 a.m. ET (8 a.m. PT)
    Participant Numbers              416-644-3414 or 1-800-733-7571
    -------------------------------------------------------------------------

    The conference call will be webcast live with supporting slides and
subsequently archived at www.certicom.com. To listen to the webcast,
participants will require Windows Media Player(TM) which can be downloaded
from Certicom's website prior to the event. An archived recording will be
available from 12 p.m. (ET) on December 5 until 12 a.m. (ET) on December 12,
2007. To access the archive, please call 416-640-1917 or 1-877-289-8525 and
enter passcode 21251970 followed by the number sign.

    About Certicom

    Certicom protects the value of content, applications and devices with
government-approved security. Adopted by the National Security Agency (NSA)
for government communications, Elliptic Curve Cryptography (ECC) provides the
most security per bit of any known public-key scheme. As the global leader in
ECC, Certicom security offerings are currently licensed to more than 300
customers including General Dynamics, Motorola, Oracle, Research In Motion and
Unisys. Founded in 1985, Certicom's corporate offices are in Mississauga,
Ontario, Canada with worldwide sales and marketing headquarters in Reston,
Virginia and offices in the U.S., Canada, Europe and China. Visit
www.certicom.com.

    Certicom, Certicom Security Architecture, Certicom Trust Infrastructure,
    Certicom CodeSign, Certicom KeyInject, Security Builder, Security Builder
    API, Security Builder BSP, Security Builder Crypto, Security Builder ETS,
    Security Builder GSE, Security Builder IPSec, Security Builder NSE,
    Security Builder PKI and Security Builder SSL are trademarks or
    registered trademarks of Certicom Corp. All other companies and products
    listed herein are trademarks or registered trademarks of their respective
    holders. Information subject to change.

    ENDNOTES:
    ---------
    (1) This news release contains references to operating expenses. Certicom
    defines operating expenses as total operating expenses excluding cost of
    revenues, depreciation and amortization and stock-based compensation. It
    also excludes interest income, other income (expense) and withholding tax
    expense.

                                      ---------------------------------------
                                      Three months ended    Six months ended
                                            October 31,         October 31,
                                          2007      2006      2007      2006
                                      ---------------------------------------
    Sales and marketing               $  1,796  $  2,299  $  3,995  $  4,371
    Product development and
     engineering                         1,560     1,277     3,409     2,773
    General and administrative           1,687     1,012     3,302     1,901
                                      --------- --------- --------- ---------
    Total operating expenses          $  5,043  $  4,588  $ 10,706  $  9,045
                                      --------- --------- --------- ---------
                                      --------- --------- --------- ---------

    (2) This news release contains references to cash, which is defined as
cash and cash equivalents, short term marketable securities and long term
marketable securities.


                                   October 31,  April 30,
                                         2007       2007

        Cash and cash equivalents    $  2,807   $  3,397
        Marketable securities          26,935     26,752
        Long-term marketable
         securities                    10,644     13,013
                                     ------------------------
        Total Cash                   $ 40,386   $ 43,162
                                     ------------------------
    

    Except for historical information contained herein, this news release
contains forward-looking statements that involve risks and uncertainties.
Forward-looking information includes information concerning the Company's
future financial performance, business strategy, plans, goals and objectives.
When used in such documents, the words "plans", "expects", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", "will",
"believes" or variations of such words and phrases often, but not always,
identify forward looking statements. Factors which could cause actual results
or events to differ materially from current expectations include, among other
things: the ability of the Company to successfully implement its strategic
initiatives and whether such strategic initiatives will yield the expected
benefits; the ability of the Company to develop, promote and protect its
proprietary technology security breaches or defects in the Company's products;
competitive conditions in the businesses in which the Company participates;
changes in consumer spending; the outcome of legal proceedings as they arise;
general economic conditions and normal business uncertainty; consolidation in
the Company's industry and by its customers; customer preferences towards
product offerings; the risk that customers may cancel their contracts with the
Company; reliance on a limited number of customers; demand for ECC-based
technology; performance of the Company's management team and the Company's
ability to attract and retain skilled employees; operating the Company's
business profitably; fluctuations in revenue and foreign currency exchange
rates; interest rate fluctuations and other changes in borrowing costs; the
ability to develop and maintain strategic relationships; and other factors
identified under the heading "Risk Factors" in the Company's annual
information form dated July 26, 2007 and filed on SEDAR at www.sedar.com.
    While the Company believes that its forecasts and assumptions are
reasonable, results or events predicted in this forward-looking information
may differ materially from actual results or events. In particular but without
limitation, there is no assurance that the Company will achieve all or a
portion of the goals outlined in its fiscal 2008 business plan within the time
limits specified therein or at all.


    

                               CERTICOM CORP.
                         CONSOLIDATED BALANCE SHEETS
                       (In thousands of U.S. dollars)

    CANADIAN GAAP

                                                     October 31,    April 30,
                                                           2007         2007
                                                    ------------  -----------
                                                      Unaudited      Audited
    ASSETS

    Current assets:
      Cash and cash equivalents ................... $     2,807   $    3,397
      Marketable securities .......................      26,935       26,752
      Accounts receivable, net ....................       3,463        6,008
      Unbilled receivables ........................         292          559
      Prepaid expenses and other current assets ...       2,107          758
                                                    ------------  -----------
        Total current assets ......................      35,604       37,474

    Long-term marketable securities ...............      10,644       13,013
    Property and equipment, net ...................       1,267        1,250
    Patents, net ..................................       2,654        2,222
    Other assets ..................................          24           24
                                                    ------------  -----------
        Total assets .............................. $    50,193   $   53,983
                                                    ------------  -----------
                                                    ------------  -----------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
      Accounts payable ............................       1,873   $    2,170
      Accrued liabilities .........................       1,925        2,878
      Deferred revenue ............................       2,699        3,378
      Current portion of lease inducements ........          52           52
                                                    ------------  -----------
        Total current liabilities .................       6,549        8,478

    Other long-term payables ......................         463          491
    Lease inducements, net of current portion .....          61           87
                                                    ------------  -----------
        Total liabilities                                 7,073        9,056

    Shareholders' equity:
      Share capital ...............................      38,618       36,514
      Contributed surplus .........................       7,936        7,044
      Retained earnings (deficit) .................      (4,831)       1,369
      Accumulated other comprehensive income ......       1,397            -
                                                    ------------  -----------
        Total shareholders' equity ................      43,120       44,927
                                                    ------------  -----------
        Total liabilities and shareholders'
         equity ................................... $    50,193    $  53,983
                                                    ------------  -----------
                                                    ------------  -----------


                               CERTICOM CORP.
    CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
         (In thousands of U.S. dollars, except number of shares and
                               per share data)
                                 (Unaudited)

    CANADIAN GAAP

                                   Three months ended       Six months ended
                                       October 31,             October 31,
                                    2007        2006        2007        2006
                               ----------  ----------  ----------  ----------
    Revenues:
      Product and intellectual
       property .............  $   1,638   $   4,699   $   3,051   $   7,381
      Services ..............      2,160       1,152       3,955       3,203
                               ----------  ----------  ----------  ----------
        Total revenues ......      3,798       5,851       7,006      10,584

    Cost of revenues:
      Product and intellectual
       property .............          -           8          12          68
      Services ..............        998         511       1,604       1,109
                               ----------  ----------  ----------  ----------
        Total cost of
         revenues ...........        998         519       1,616       1,177

                               ----------  ----------  ----------  ----------
    Gross margin                   2,800       5,332       5,390       9,407

    Operating expenses:
      Sales and marketing ...      1,796       2,299       3,995       4,371
      Product development and
       engineering ..........      1,560       1,277       3,409       2,773
      General and
       administrative .......      1,687       1,012       3,302       1,901
      Depreciation and
       amortization .........        330         289         638         562
      Stock-based
       compensation .........        677         419       1,211         832
                               ----------  ----------  ----------  ----------
        Total operating
         expenses                  6,050       5,296      12,555      10,439


    Income (loss) from         ----------  ----------  ----------  ----------
     operations .............     (3,250)         36      (7,165)     (1,032)

    Other income:
      Interest income .......        462         516         986         786
      Interest expense and
       other, net                    (35)         45          (2)        (34)
                               ----------  ----------  ----------  ----------
        Total other income           427         561         984         752

    Income (loss) before
     provision for income      ----------  ----------  ----------  ----------
     taxes ..................     (2,823)        597      (6,181)       (280)
      Provision for income
       taxes ................          3          14          19         377
                               ----------  ----------  ----------  ----------
    Net income (loss) for
     the period .............  $  (2,826)  $     583   $  (6,200)  $    (657)
    Retained earnings
     (deficit), beginning of
     period .................     (2,005)      3,262       1,369       4,502
                               ----------  ----------  ----------  ----------
    Retained earnings
     (deficit), end of
     period .................  $  (4,831)  $   3,845   $  (4,831)  $   3,845
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------

    Basic net income (loss)
     per share ..............  $   (0.06)  $    0.01   $   (0.14)  $   (0.02)
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------

    Diluted net income (loss)
     per share ..............      (0.06)  $    0.01   $   (0.14)  $   (0.02)
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------
    Shares used in basic net
     income (loss) per share
     calculations ...........     43,637      42,155      43,419      40,315
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------
    Shares used in diluted
     net income (loss) per
     share calculations .....     43,637      45,509      43,419      40,315
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------


                               CERTICOM CORP.
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE GAIN (LOSS)
                       (In thousands of U.S. dollars)
                                 (Unaudited)


    CANADIAN GAAP

                                   Three months ended       Six months ended
                                       October 31,             October 31,
                                    2007        2006        2007        2006
                               ----------  ----------  ----------  ----------
    Net income (loss) for
     the period .............. $  (2,826)  $     583   $  (6,200)  $    (657)
    Other comprehensive
     income:
      Net unrealized gain on
       derivatives designated
       as cash flow hedges ...       960           -       1,057           -
                               ----------  ----------  ----------  ----------
    Comprehensive gain
     (loss) .................. $  (1,866)  $     583   $  (5,143)  $    (657)
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------


                               CERTICOM CORP.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (In thousands of U.S. dollars)
                                 (Unaudited)


    CANADIAN GAAP

                                   Three months ended       Six months ended
                                       October 31,             October 31,
                                    2007        2006        2007        2006
                               ----------  ----------  ----------  ----------
    Cash flows from operating
     activities:
      Net income (loss) ...... $  (2,826)  $     583   $  (6,200)  $    (657)
      Adjustments to reconcile
       net income (loss) to
       net cash provided by
       (used in) operating
       activities:
        Depreciation and
         amortization ........       330         289         638         562
        Stock-based
         compensation ........       677         419       1,211         832
        Amortization of lease
         inducements .........       (13)        (13)        (26)        (26)
        Changes in operating
         assets and liabilities:
          Accounts receivable
           and unbilled
           receivables, net ..       114         (58)      2,812      (2,122)
          Prepaid expenses
           and other assets ..       (48)        311          48         (83)
          Account payable ....       281        (120)       (297)        116
          Accrued
           liabilities .......      (309)        303        (953)       (222)
          Deferred revenue ...      (873)       (801)       (679)         (2)
          Other payables .....        (1)        (35)        (28)         32
                               ----------  ----------  ----------  ----------
            Net cash
             provided by
            (used in) operating
            activities .......    (2,668)        878      (3,474)     (1,570)

    Cash flows from investing
     activities:
      Purchase of property and
       equipment .............      (250)        (84)       (433)       (523)
      Purchase of patents ....      (342)       (228)       (654)       (357)
      Net maturity of marketable
       securities ............     1,415     (31,134)      2,186     (19,405)
                               ----------  ----------  ----------  ----------
        Net cash provided by
         (used in) investing
         activities ..........       823     (31,446)      1,099     (20,285)

    Cash flows from financing
     activities:
      Proceeds from issuance
       of common stock,
       net ...................        57      22,062       2,091      22,132
      Common shares
       repurchased ...........         -           -        (306)          -
                               ----------  ----------  ----------  ----------
        Net cash provided by
         financing
         activities ..........        57      22,062       1,785      22,132

    Effect of exchange rate on
     cash and cash
     equivalents .............         -         (43)          -         (44)
                               ----------  ----------  ----------  ----------
    Net increase (decrease) in
     cash and cash
     equivalents .............    (1,788)     (8,549)       (590)        233

    Cash and cash equivalents,
     beginning of period .....     4,595      10,826       3,397       2,044
                               ----------  ----------  ----------  ----------
    Cash and cash equivalents,
     end of period ........... $   2,807   $   2,277   $   2,807   $   2,277
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------
    


    

                               CERTICOM CORP.
                         CONSOLIDATED BALANCE SHEETS
                       (In thousands of U.S. dollars)

    CANADIAN GAAP

                                                     October 31,    April 30,
                                                           2007         2007
                                                    ------------  -----------
                                                      Unaudited      Audited
    ASSETS

    Current assets:
      Cash and cash equivalents ................... $     2,807   $    3,397
      Marketable securities .......................      26,935       26,752
      Accounts receivable, net ....................       3,463        6,008
      Unbilled receivables ........................         292          559
      Prepaid expenses and other current assets ...       2,107          758
                                                    ------------  -----------
        Total current assets ......................      35,604       37,474

    Long-term marketable securities ...............      10,644       13,013
    Property and equipment, net ...................       1,267        1,250
    Patents, net ..................................       2,654        2,222
    Other assets ..................................          24           24
                                                    ------------  -----------
        Total assets .............................. $    50,193   $   53,983
                                                    ------------  -----------
                                                    ------------  -----------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
      Accounts payable ............................ $     1,873   $    2,170
      Accrued liabilities .........................       1,925        2,878
      Deferred revenue ............................       2,699        3,378
      Current portion of lease inducements ........          52           52
                                                    ------------  -----------
        Total current liabilities .................       6,549        8,478

    Other long-term payables ......................         463          491
    Lease inducements, net of current portion .....          61           87
                                                    ------------  -----------
        Total liabilities .........................       7,073        9,056

    Shareholders' equity:
      Share capital ...............................      38,618       36,514
      Contributed surplus .........................       7,936        7,044
      Retained earnings (deficit) .................      (4,831)       1,369
      Accumulated other comprehensive income ......       1,397            -
                                                    ------------  -----------
        Total shareholders' equity ................      43,120       44,927
                                                    ------------  -----------
        Total liabilities and shareholders'
         equity ................................... $    50,193    $  53,983
                                                    ------------  -----------
                                                    ------------  -----------



                               CERTICOM CORP.
    CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
           (In thousands of U.S. dollars, except number of shares
                             and per share data)
                                 (Unaudited)

    CANADIAN GAAP

                                 Three months ended       Six months ended
                                     October 31,             October 31,
                                  2007        2006        2007        2006
                               ----------  ----------  ----------  ----------
    Revenues:
      Product and intellectual
       property .............. $   1,638   $   4,699   $   3,051   $   7,381
      Services ...............     2,160       1,152       3,955       3,203
                               ----------  ----------  ----------  ----------
        Total revenues .......     3,798       5,851       7,006      10,584

    Cost of revenues:
      Product and intellectual
       property ..............         -           8          12          68
      Services ...............       998         511       1,604       1,109
                               ----------  ----------  ----------  ----------
        Total cost of
         revenues ............       998         519       1,616       1,177

                               ----------  ----------  ----------  ----------
    Gross margin .............     2,800       5,332       5,390       9,407

    Operating expenses:
      Sales and marketing ....     1,796       2,299       3,995       4,371
      Product development and
       engineering ...........     1,560       1,277       3,409       2,773
      General and
       administrative ........     1,687       1,012       3,302       1,901
      Depreciation and
       amortization ..........       330         289         638         562
      Stock-based
       compensation ..........       677         419       1,211         832
                               ----------  ----------  ----------  ----------
        Total operating
         expenses ............     6,050       5,296      12,555      10,439


    Income (loss) from         ----------  ----------  ----------  ----------
     operations ..............    (3,250)         36      (7,165)     (1,032)

    Other income:
      Interest income ........       462         516         986         786
      Interest expense and
       other, net ............       (35)         45          (2)        (34)
                               ----------  ----------  ----------  ----------
        Total other income ...       427         561         984         752

                               ----------  ----------  ----------  ----------
    Income (loss) before
     provision for income
     taxes ...................    (2,823)        597      (6,181)       (280)
      Provision for income
       taxes .................         3          14          19         377
                               ----------  ----------  ----------  ----------
    Net income (loss) for
     the period .............. $  (2,826)  $     583   $  (6,200)  $    (657)
    Retained earnings
     (deficit), beginning of
     period ..................    (2,005)      3,262       1,369       4,502
                               ----------  ----------  ----------  ----------
    Retained earnings
     (deficit), end of
     period .................. $  (4,831)  $   3,845   $  (4,831)  $   3,845
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------

    Basic net income (loss)
     per share ............... $   (0.06)  $    0.01   $   (0.14)  $   (0.02)
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------

    Diluted net income (loss)
     per share ............... $   (0.06)  $    0.01   $   (0.14)  $   (0.02)
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------
    Shares used in basic net
     income (loss) per share
     calculations ............    43,637      42,155      43,419      40,315
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------
    Shares used in diluted
     net income (loss) per
     share calculations ......    43,637      45,509      43,419      40,315
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------



                               CERTICOM CORP.
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE GAIN (LOSS)
                       (In thousands of U.S. dollars)
                                 (Unaudited)

    CANADIAN GAAP

                                 Three months ended       Six months ended
                                     October 31,             October 31,
                                  2007        2006        2007        2006
                               ----------  ----------  ----------  ----------
    Net income (loss) for
     the period .............. $  (2,826)  $     583   $  (6,200)  $    (657)
    Other comprehensive
     income:
      Net unrealized gain on
       derivatives designated
       as cash flow hedges ...       960           -       1,057           -
                               ----------  ----------  ----------  ----------
    Comprehensive gain
     (loss) .................. $  (1,866)  $     583   $  (5,143)  $    (657)
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------



                               CERTICOM CORP.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (In thousands of U.S. dollars)
                                 (Unaudited)

    CANADIAN GAAP

                                 Three months ended       Six months ended
                                     October 31,             October 31,
                                  2007        2006        2007        2006
                               ----------  ----------  ----------  ----------
    Cash flows from operating
     activities:
      Net income (loss) ...... $  (2,826)  $     583   $  (6,200)  $    (657)
      Adjustments to reconcile
       net income (loss) to
       net cash provided by
       (used in) operating
       activities:
        Depreciation and
         amortization ........       330         289         638         562
        Stock-based
         compensation ........       677         419       1,211         832
        Amortization of lease
         inducements .........       (13)        (13)        (26)        (26)
        Changes in operating
         assets and liabilities:
          Accounts receivable
           and unbilled
           receivables, net ..       114         (58)      2,812      (2,122)
          Prepaid expenses
           and other assets ..       (48)        311          48         (83)
          Account payable ....       281        (120)       (297)        116
          Accrued
           liabilities .......      (309)        303        (953)       (222)
          Deferred revenue ...      (873)       (801)       (679)         (2)
          Other payables .....        (1)        (35)        (28)         32
                               ----------  ----------  ----------  ----------
            Net cash
             provided by
            (used in) operating
            activities .......    (2,668)        878      (3,474)     (1,570)

    Cash flows from investing
     activities:
      Purchase of property and
       equipment .............      (250)        (84)       (433)       (523)
      Purchase of patents ....      (342)       (228)       (654)       (357)
      Net maturity of marketable
       securities ............     1,415     (31,134)      2,186     (19,405)
                               ----------  ----------  ----------  ----------
        Net cash provided by
         (used in) investing
         activities ..........       823     (31,446)      1,099     (20,285)

    Cash flows from financing
     activities:
      Proceeds from issuance
       of common stock,
       net ...................        57      22,062       2,091      22,132
      Common shares
       repurchased ...........         -           -        (306)          -
                               ----------  ----------  ----------  ----------
        Net cash provided by
         financing
         activities ..........        57      22,062       1,785      22,132

    Effect of exchange rate on
     cash and cash
     equivalents .............         -         (43)          -         (44)
                               ----------  ----------  ----------  ----------
    Net increase (decrease) in
     cash and cash
     equivalents .............    (1,788)     (8,549)       (590)        233

    Cash and cash equivalents,
     beginning of period .....     4,595      10,826       3,397       2,044
                               ----------  ----------  ----------  ----------
    Cash and cash equivalents,
     end of period ........... $   2,807   $   2,277   $   2,807   $   2,277
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------
    




For further information:

For further information: Investors and Financial Analysts: Hervé Séguin,
Chief Financial Officer, Certicom Corp., (905) 501-3827, hseguin@certicom.com;
Media: John Callahan, Director, Public Relations & Marketing Communications,
Certicom Corp., (703) 234-2357, jcallahan@certicom.com, www.certicom.com

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CERTICOM CORP.

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