01 Communique Reports Results for First Quarter Fiscal 2013

TORONTO, March 4, 2013 /CNW/ - 01 Communique Laboratory Inc. (ONE:TSX) today announced results for its first quarter 2013 which ended January 31, 2013 and provided an update on the Company's patent litigation with LogMeIn Inc. ("LogMeIn"). A jury trial is scheduled to start on Monday March 18, 2013 and is expected to last approximately two weeks.

Financial Highlights of the First Quarter -

  • Revenue for the first quarter was $174,475 compared to $68,088 in 2012.
  • Loss of $1,060,478 for the first quarter compared to $705,835 in 2012.
  • Excluding our non-cash expenses for stock based compensation and depreciation the adjusted loss for the quarter was $875,548 compared to $419,838 in 2012 representing a $455,710 increase which is primarily a result of expenses pertaining to the LogMeIn patent lawsuit.
  • Our cash operating expenses excluding expenses pertaining to patent litigation and re-examination were $471,316 for the quarter compared to $487,785 for 2012.
  • We finished the quarter with cash and cash equivalents of $4,116,249.

"We completed the quarter with $4,116,249 of cash and cash equivalents and believe we have sufficient cash resources for the foreseeable future," said Andrew Cheung, President and CEO for 01 Communique. "Our first quarter cash operating expenses to run our business excluding patent litigation and re-examination expenses were $471,316 and are in line with our expectations. For the second quarter 2013 we expect these cash operating expenses to remain relatively consistent at approximately $475,000. In addition we incurred approximately $451,000 of expenses pertaining to the LogMeIn lawsuit in the first quarter 2013 and expect to incur an additional $200,000 through to the end of trial."

Update on Our Intellectual Property -

"We have a suite of products in the remote access, support and online collaboration markets," said Andrew Cheung. "Our plan is to continue developing products for these markets and protect our intellectual property rights. We believe there are significant damages accruing against companies that we believe infringe on our intellectual property. We are currently enforcing our rights against two of these companies, Citrix and LogMeIn. Aside from Citrix and LogMeIn, in conjunction with WiLAN we have identified a number of other such companies."

LogMeIn Litigation -

We commenced our patent infringement lawsuit against LogMeIn in September 2010 in the Eastern District of Virginia. A jury trial is scheduled to begin two weeks from now on Monday March 18, 2013 and is expected to last approximately 2 weeks. Our lawsuit alleges infringement by LogMeIn of our U.S. Patent No. 6,928,479 which was issued in August 2005 and does not expire until 2022. As well as alleging infringement we are alleging willful infringement which can result in a multiple of damages and going forward we are requesting the court grant an injunction against LogMeIn from continuing to use our patent. With respect to the period from the date the patent was issued in August 2005 to the present time we believe we are entitled to a reasonable royalty on revenue generated by LogMeIn from the use of our patented technology and a reasonable royalty based on the value derived by LogMeIn for each of their free users that also make use of our patented technology.

"We remain confident in the merits of our lawsuit and look forward to our day in court, just two weeks away," said Andrew Cheung. "We believe they have been using our patented technology to compete against us for over 7 years now and believe that we should be entitled to receive payment for this use. Going forward we are hopeful that the court will grant an injunction against them continuing to use our patented technology."

Citrix Litigation -

As part of the litigation Citrix requested an inter partes re-examination of our patent by the United States Patent and Trademark Office ("USPTO"). On March 12, 2008, the judge in the litigation issued a memorandum and order staying the case pending the re-examination. On July 6, 2010 a Right of Appeal Notice ("RAN") was issued confirming the patentability of the claims in the re-examination that were challenged by Citrix. Citrix filed a Notice of Appeal appealing that decision to the USPTO's Board of Patent Appeals and Interferences ("BPAI"). That appeal is in process and, as a part of that process, on August 16, 2012, the USPTO Examiner filed the Examiner's Answer to Citrix's Appeal brief affirming his positions in the RAN which confirmed the validity of the claims contested by Citrix in the re-examination. The next step in the process is expected to be a hearing in front of the BPAI after which we expect them to render their decision. We are confident that the validity of our patent will be affirmed by the BPAI. In the interim, we have written to the Court advising them of the Examiner's Answer as well as the recent decision by the United States Court of Appeals for the Federal Circuit in the LogMeIn lawsuit and requested the case be reopened so that the stay can be lifted and the case proceed to trial. We are waiting for the Court to render a decision on this request.

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 Laboratory Inc. (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 ) products are protected in the U.S.A. by its patents #6928479 / #6938076 / #8234701 and in  Canada by its patent #2309398 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 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.
Consolidated Statements of Financial Position
    31-Jan-13   31-Oct-12
Current assets:        
    Cash and cash equivalents $   4,116,249 $   4,547,375
    Accounts receivable       257,776        282,981
    Prepaid expenses and other assets         81,013          35,676
       4,455,038     4,866,032
Property and equipment   20,520         17,261
  $ 4,475,558 $   4,883,293
Liabilities and Shareholders' Equity        
Current liabilities:        
    Accounts payable and accrued liabilities $ 778,616 $      407,770
    Deferred revenue   29,137           34,596
    807,753        442,366
Shareholders' equity:        
    Share capital      39,670,907   39,566,407
    Contributed surplus       3,935,566      3,752,710
    Agent options         248,400         248,400
    Deficit   (40,187,068)   (39,126,590)
       3,667,805       4,440,927
  $   4,475,558 $   4,883,293

01 Communique Laboratory Inc.
Consolidated Statements of Operations and Comprehensive Income
For the 3 month periods ended January 31, 2013 and 2012
  for the 3 months ended    
    31-Jan-13   31-Jan-12
Revenue $ 174,475 $ 68,088
Cost of revenue   -   141
    174,475   67,947
Expenses (income):        
Selling, general and administrative   432,779   532,783
Patent litigation and re-examination   578,707   -
Research and development   233,556   245,674
Interest   (10,089)   (4,675)
    1,234,953   773,782
Loss for the period and comprehensive loss $ (1,060,478) $   (705,835)
Loss per common share:        
Basic $ (0.016) $ (0.012)
Diluted $ (0.016) $ (0.012)
Weighted average number of common
Basic   64,937,427   60,122,045
Diluted   64,937,427   60,122,045

01 Communique Laboratory Inc.
Consolidated Statements of Cash Flows
For the 3 month periods ended January 31, 2013 and 2012
  Three months ended    
    31-Jan-13   31-Jan-12
Cash provided by (used in):        
Operating activities:        
  Loss for the period $       (1,060,478) $          (705,835)
  Adjustments to reconcile the loss for the period        
  to net cash flows from operating activities:        
    Depreciation of property and equipment               2,074                3,355
    Stock-based compensation expense         182,856            282,642
    Interest income          (10,089)             (4,675)
  Change in non-cash operating working capital         345,255         (78,047)
       (540,382)       (502,560)
Interest income received           10,089            4,675
      (530,293)       (497,885)
Financing activities:        
  Issuance of common shares   104,500             -  
Investing activities:        
  Purchase of property and equipment           (5,333)       (141)
Decrease in cash and cash equivalents        (431,126)        (498,026)
Cash and cash equivalents, beginning of period       4,547,375         3,121,417
Cash and cash equivalents, end of period $        4,116,249 $         2,623,391


SOURCE: 01 Communique Laboratory Inc.

For further information:

Brian Stringer
Chief Financial Officer
01 Communique
(905) 795-2888 x204

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