01 Communique Reports Fourth Quarter 2009 Results

TORONTO , Jan. 21 /CNW/ - 01 Communique Laboratory Inc. (TSX:ONE) today announced results for its fourth quarter fiscal 2009, which ended October 31st . Revenue for the year was $414,350 with an operating loss of $1,358,893 or $0.03 per share compared to revenue of $414,294 with an operating loss of $1,178,851 or $0.03 per share for fiscal 2008. Revenue for the fourth quarter 2009 was $70,632 with a loss of $471,397 or $0.01 per share compared to revenue of $70,449 with a loss of $322,590 or $0.01 per share for the same period in 2008. We completed the year with $922,091 of cash and cash equivalents. In addition, subsequent to the year end we issued a Series A - Secured Debenture for gross proceeds of $1,100,000 .

"During fiscal 2009 we continued with our three part plan to build our company," said Andrew Cheung , President and CEO for 01 Communique. "We continued to add subscribers through our direct sales efforts. To support this effort, we have new products under development with an exciting new on-line meeting product expected to be released in our second quarter of 2010. We have completed new versions of DoMobile as part of our agreement with Hitachi Business Solution ("Hitachi") in Japan . We made progress with our patent re-examination process as part of our patent litigation against Citrix Systems Inc. We remain committed to all three components of our plan."

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. 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.

Direct Sales Update -

Our products continue to win awards. For the third year in a row we were awarded the TMC Communications Solutions - Product of the Year Award.

We are building new products based on our patented technology and are on time to announce a new on-line meeting product in our second quarter of fiscal 2010. This new offering will allow users the ability to conduct on-line meetings anywhere in the world. This represents new markets for us and provides us the opportunity to increase our subscriber base and revenue.

Hitachi Update -

A new version has been launched and we are now waiting for the results of Hitachi's sales and marketing initiatives.

During the year we completed a new version of DoMobile (DoMobile CSE Ver.207) which was released in Japan on September 25, 2009 . The new version incorporates Intel Corporation's vPro technology thereby enhancing DoMobile's remote wake-up functionality, which utilizes our patent-pending remote wake up technology. This improves the remote power management of their office PC's, most importantly allowing remote resetting of any PC or Server even if it is "frozen" i.e. blue screen. DoMobile is marketed in Japan , under a license agreement with the Company, as a secure remote access solution for businesses to support their mobile computing needs, as well as a continuity solution for the possibility of a flu pandemic, and as part of the infrastructure required for cloud-computing.

Financial Highlights -

Operating expenses for the year were $1,768,093 compared to $1,587,254 for 2008. The majority of the increase is due to the additional expenses accrued in 2009 for the patent re-examination process. The cash operating expenses to run our business for the first quarter 2010 are expected to be approximately $400,000 .

Operating expenses for the fourth quarter were $541,246 compared to $390,826 for 2008. The increase is predominately due to additional expenses accrued for the patent re-examination process.

We completed the year with cash and cash equivalents of $922,091 a decrease of $1,052,567 over the year. Cash was used predominately to fund the cash operating loss, which after adding back non-cash charges amounted to $1,049,543 .

In the fourth quarter fiscal 2009 cash decreased by $167,295 . The cash was used to fund the operating loss of $471,397 which was offset by a change in non-cash working capital of $290,550 (predominately a result of an increase in accounts payable and accrued liabilities of $234,313 and an increase in accounts receivable of $42,783 ).

Subsequent Event -

On January 15, 2010 the Company issued a Series A - Secured Debenture ("Debenture") comprising of 11 Debenture Units for total proceeds of $1,100,000 . 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 Debenture Unit 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. Agents received a cash payment, as compensation, amounting to 3% of the gross proceeds.

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 [phone] or [phone] ( 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
                    October 31, 2009 and October 31, 2008

                                                31-Oct-09          31-Oct-08
                                            --------------     --------------

    Assets
    Current assets
      Cash and cash equivalents             $     922,091      $   1,974,658
      Accounts receivable                          77,148             65,363
      Prepaid expenses and other assets            34,552             42,695
                                            --------------     --------------
                                                1,033,791          2,082,716

    Capital assets                                 31,672             41,099
                                            --------------     --------------
                                            $   1,065,463      $   2,123,815
                                            --------------     --------------
                                            --------------     --------------

    Liabilities & Shareholders' Equity

    Current liabilities
      Accounts payable & accruals           $     535,515      $     334,392
      Deferred revenue                             86,896             86,251
                                            --------------     --------------
                                                  622,411            420,643

    Shareholders' equity
      Share capital                            30,326,144         30,514,944
      Contributed surplus                       1,364,035            669,453
      Share purchase warrants                      37,556            113,751
      Agent options                                18,874            371,288
      Shareholder loans                                 -            (57,600)
      Deficit                                 (31,303,558)       (29,908,664)
                                            --------------     --------------
                                                  443,052          1,703,172
                                            --------------     --------------
                                            $   1,065,463      $   2,123,815
                                            --------------     --------------
                                            --------------     --------------



                        01 Communique Laboratory Inc.
                       SELECTED FINANCIAL INFORMATION
       Consolidated Statements of Operations and Comprehensive Income
       For the 3 and 12 month periods ended October 31, 2009 and 2008

                      For the three months ended         For the years ended
                         31-Oct-09     31-Oct-08     31-Oct-09     31-Oct-08
                       --------------------------  --------------------------
    Revenue            $    70,632   $    70,449   $   414,350   $   414,294
    Cost of revenue            783         2,213         5,150         5,891
                       --------------------------  --------------------------
                            69,849        68,236       409,200       408,403

    Expenses (income)
    Selling,
     general and
     administrative        266,212       195,061       888,204       779,591
    Patent
     litigation &
     re-examination
     expenses              174,782        72,704       191,324       161,620
    Research and
     development           100,397       128,325       683,963       721,518
    Interest                (3,258)       (6,654)       (7,849)      (81,073)
    Depreciation and
     amortization            3,113         1,389        12,451         5,598
                       --------------------------  --------------------------
                           541,246       390,826     1,768,093     1,587,254
                       --------------------------  --------------------------
    Loss for the
     period and
     comprehensive loss   (471,397)     (322,590)   (1,358,893)   (1,178,851)
                       --------------------------  --------------------------

    Loss per
     common share
    Basic              $     (0.01)  $     (0.01)  $     (0.03)  $     (0.03)
    Diluted            $     (0.01)  $     (0.01)  $     (0.03)  $     (0.03)

    Weighted average
     number of
     common shares
    Basic               51,403,507    51,720,207    51,556,840    51,476,130
    Diluted             51,403,507    51,720,207    51,556,840    51,476,130



                        01 Communique Laboratory Inc.
                    Consolidated Statements of Cash Flows
       For the 3 and 12 month periods ended October 31, 2009 and 2008

                      For the three months ended         For the years ended
                         31-Oct-09     31-Oct-08     31-Oct-09     31-Oct-08
                       --------------------------  --------------------------
    Cash provided by
     (used in):

    Operating
     activities:
      Loss for
       the period      $  (471,397)     (322,590)  $(1,358,893)  $(1,178,851)

      Items not
       involving cash:
        Depreciation
         and
         amortization        3,113         1,389        12,451         5,598
        Stock-based
         compensation       10,439        14,875        98,773        24,000
      Change in non-cash
       working capital     290,550        60,074       198,126       142,673
                       --------------------------  --------------------------
                          (167,295)     (246,252)   (1,049,543)    1,006,580

    Financing activities:
      Issue of
       common shares             -             -             -       117,961

    Investing activities:
      Purchase of capital
       assets                    -        (6,060)       (3,024)      (22,993)
                       --------------------------  --------------------------

    Increase (decrease)
     in cash              (167,295)     (252,312)   (1,052,567)     (911,612)
                       --------------------------  --------------------------

    Cash and
     cash equivalents,
     beginning
     of period           1,089,387     2,226,970     1,974,658     2,886,270
                       --------------------------  --------------------------
    Cash and cash
     equivalents,
     end of period     $   922,092   $ 1,974,658   $   922,091   $ 1,974,658
                       --------------------------  --------------------------
                       --------------------------  --------------------------
    

For further information: INVESTOR CONTACT: Brian Stringer, Chief Financial Officer, 01 Communique, [phone] x204, [email protected]