01 Communique Reports First Quarter 2010 Results
TORONTO, March 4 /CNW/ - 01 Communique Laboratory Inc. (TSX:ONE) today announced results for its first quarter fiscal 2010, which ended January 31st. Revenue was $75,035 compared to revenue of $66,263 for the same period in 2009. The loss for the period and comprehensive loss was $416,751 compared to $305,011 for the first quarter 2009. We completed the quarter with $1,772,560 of cash and cash equivalents.
"We believe that the value of our technology and our patents are key components of our goal to increase revenue and generate profitable operations," said Andrew Cheung, President and CEO for 01 Communique. "To achieve this goal, we are focusing on several key initiatives. One of these initiatives is to build licensing revenue from our patents. This is dependant on a successful outcome of our patent litigation with Citrix Systems Inc. and our ability to develop new partnerships similar to that of Hitachi Business Solution of Japan. A second initiative is build direct sales subscriptions via on-line initiatives and our direct sales efforts. A new product for the on-line meeting market, I'm InTouch Meeting, is planned for release later in the second quarter to help us build our subscriber base. This new product is built on our I'm InTouch technology platform which encompasses our patents. We are continuing to move forward on all fronts as we strive to build value in our Company by using our technology and our patents."
Financial Highlights -
The loss and comprehensive loss for the first quarter 2010 was $416,751 which includes a non-cash expense for stock-based compensation of $84,821 and $51,000 one-time costs associated with the issuance of the Debenture. After deducting these two items the adjusted loss becomes $272,793 which is $32,218 less than the $305,011 incurred for the same period in 2009.
Cash and cash equivalents at January 31, 2010 were $1,772,560 compared to $922,091 at October 31, 2009 an increase of $850,469. The major use of funds was the funding of the operating loss which excluding non-cash items was $349,531. Funds of $1,200,000 were added by the issuance of the Debenture.
During the quarter we issued a Secured Debenture ("Debenture") comprising of 12 Debenture Units for total proceeds of $1,200,000. Each Debenture Unit bears interest at a rate of 15% per annum, payable quarterly in arrears. The term is 36 months. The Debenture is subject to a pre-payment penalty equivalent to three months interest. In addition, each of the 12 Debenture Units (each comprising $100,000) will also entitle the holder thereof to 0.4% of the cash proceeds received by the Company as a result of (i) a final, non-appealable decision by a court of competent jurisdiction in respect of the Company's litigation with Citrix Systems Inc. or (ii) a settlement in respect of such matter. The Debenture is secured by a general security agreement in favour of the Subscriber. In addition, each Debenture Unit holder is entitled to 100,000 common share purchase warrants ("Warrants"). Each Warrant entitles the holder to acquire one Common Share of the Company for a period of 36 months from the issue date at a price of $0.20 per Common Share. Expenses pertaining to the Debenture were approximately $51,000.
Direct Sales Update - In the second quarter of 2010 we plan to release a Beta version of a 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. The 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 now waiting for a USPTO report in response to these submissions.
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.
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 January 31, 2010 and October 31, 2009 31-Jan-10 31-Oct-09 -------------- -------------- Assets Current assets Cash and cash equivalents $ 1,772,560 $ 922,091 Accounts receivable 82,113 77,148 Prepaid expenses and other assets 27,279 34,552 -------------- -------------- 1,881,952 1,033,791 Capital assets 28,333 31,672 -------------- -------------- $ 1,910,285 $ 1,065,463 -------------- -------------- -------------- -------------- Liabilities & Shareholders' Equity Current liabilities Accounts payable & accruals $ 527,543 $ 535,515 Deferred revenue 69,902 86,896 -------------- -------------- 597,445 622,411 Liability portion of debenture 1,060,736 - Shareholders' equity Share capital 30,326,144 30,326,144 Contributed surplus 1,505,286 1,364,035 Equity portion of debenture 140,982 - Share purchase warrants - 37,556 Agent options - 18,874 Deficit (31,720,308) (31,303,557) -------------- -------------- 252,104 443,052 -------------- -------------- $ 1,910,285 $ 1,065,463 -------------- -------------- -------------- -------------- 01 Communique Laboratory Inc. SELECTED FINANCIAL INFORMATION Consolidated Statements of Operations and Comprehensive Income (Unaudited) For the 3 month periods ended January 31, 2010 and 2009 31-Jan-10 31-Jan-09 -------------- -------------- Revenue $ 75,035 $ 66,263 Cost of revenue 692 1,995 -------------- -------------- 74,343 64,268 Expenses (income) Selling, general and administrative 298,216 172,694 Research and development 181,586 200,249 Interest (184) (6,776) Depreciation and amortization 3,339 3,112 -------------- -------------- 482,957 369,279 -------------- -------------- Loss before interest and accretion on liability component of debenture (408,614) (305,011) Interest on debenture 6,419 - Accretion on liability component of debenture 1,718 - -------------- -------------- Loss for the period and comprehensive loss (416,751) (305,011) -------------- -------------- Loss per common share Basic $ (0.008) $ (0.006) Diluted $ (0.008) $ (0.006) Weighted average number of common shares Basic 51,403,507 51,723,507 Diluted 51,403,507 51,723,507 01 Communique Laboratory Inc. SELECTED FINANCIAL INFORMATION Consolidated Statements of Cash Flows (Unaudited) For the 3 month periods ended January 31, 2010 and 2009 31-Jan-10 31-Jan-09 -------------- -------------- Cash provided by (used in): Operating activities: Loss for the period $ (416,751) $ (305,011) Items not involving cash: Depreciation and amortization 3,339 3,112 Accretion of liability portion of debenture 1,718 - Stock-based compensation 84,821 885 Change in non-cash working capital (22,658) 2,471 -------------- -------------- (349,531) (298,543) Financing activities: Issue of debenture 1,200,000 - Investing activities: Purchase of capital assets - (385) -------------- -------------- Increase (decrease) in cash 850,469 (298,928) Cash and cash equivalents, beginning of period 922,091 1,974,658 -------------- -------------- Cash and cash equivalents, end of period $ 1,772,560 $ 1,675,730 -------------- --------------
For further information: INVESTOR CONTACT: Brian Stringer, Chief Financial Officer, 01 Communique, (905) 795-2888 x204, [email protected]
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