01 Communique Reports Second Quarter 2010 Results
TORONTO, June 7 /CNW/ - 01 Communique Laboratory Inc. (TSX:ONE) today announced results for its second quarter fiscal 2010, which ended April 30th. Revenue was $108,127 compared to revenue of $156,838 for the same period in 2009. The loss for the period and comprehensive loss was $320,753 compared to $331,502 for the second quarter 2009. We completed the quarter with $1,418,887 of cash and cash equivalents.
"We continue with our plan to make use of our technology and our patents to develop revenue and generate profitable operations," said Andrew Cheung, President and CEO for 01 Communique. "Our first step to build licensing revenue from our patents is dependant on a successful outcome of our patent litigation with Citrix Systems Inc. and our ability to develop new licensees similar to that of Hitachi Business Solution of Japan. In addition, our direct sales team continues to concentrate on selling our suite of remote access services to small and mid-sized businesses. An update follows."
Direct Sales Update - We are in the final stages in preparation for release of a Beta version of our 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. 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 waiting for a USPTO report in response to these submissions. There has been no change in status since our last quarterly report.
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.
Financial Highlights -
The loss and comprehensive loss for the second quarter 2010 was $320,753 which compares to a loss of $331,502 for the same period in 2009. On a year to date basis the loss for 2010 was $737,504 compared to $636,513 for 2009 an increase of $100,991. The main contributors to this increase was a $39,664 reduction in revenue and in 2010 we incurred interest and accretion on the debenture issued at the beginning of 2010 of $54,755. Operating expenses have remained relatively consistent from year to year. Revenue has remained relatively consistent from our direct business with the decrease primarily a result of a reduction in contract engineering fees which are expected to be made up in the third quarter 2010 as the work is completed.
Cash and cash equivalents at April 30, 2010 were $1,418,887 compared to $1,772,560 at January 31, 2010 a decrease of $353,673. The major use of funds was the funding of the operating loss which excluding non-cash items was $354,204. Non-cash items include stock-based compensation of $37,821 and a reduction in non-cash working capital (predominantly due to a decrease in accounts payable and accruals) of $82,436.
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 April 30, 2010 and October 31, 2009 30-April-10 31-Oct-09 -------------- -------------- Assets Current assets Cash and cash equivalents $ 1,418,887 $ 922,091 Accounts receivable 60,246 77,148 Prepaid expenses and other assets 60,176 34,552 -------------- -------------- 1,564,884 1,033,791 Capital assets 25,575 31,672 -------------- -------------- $ 1,564,884 $ 1,065,463 -------------- -------------- -------------- -------------- Liabilities & Shareholders' Equity Current liabilities Accounts payable & accruals $ 422,288 $ 535,515 Deferred revenue 103,751 86,896 -------------- -------------- 526,039 622,411 Liability portion of debenture 1,068,773 - Contractual obligations and contingencies Shareholders' equity Share capital 30,327,044 30,326,144 Contributed surplus 1,543,107 1,364,035 Equity portion of debenture 140,982 - Share purchase warrants - 37,556 Agent options - 18,874 Deficit (32,041,061) (31,303,557) -------------- -------------- (29,928) 443,052 -------------- -------------- $ 1,564,884 $ 1,065,463 -------------- -------------- -------------- -------------- 01 Communique Laboratory Inc. SELECTED FINANCIAL INFORMATION Consolidated Statements of Operations and Comprehensive Income (Unaudited) For the 3 and 6 month periods ended April 30, 2010 and 2009 3 months ending 6 months ending 30-Apr-10 30-Apr-09 30-Apr-10 30-Apr-09 -------------------------- -------------------------- Revenue $ 108,127 $ 156,838 $ 183,162 $ 223,101 Cost of revenue 576 1,363 1,268 3,358 -------------------------- -------------------------- 107,551 155,475 181,894 219,743 Expenses (income) Selling, general and administrative 206,092 264,849 504,308 437,543 Patent litigation & re-examination expenses - 16,542 - 16,542 Research and development 170,010 200,072 351,596 400,321 Interest 2,457 2,401 2,273 (4,375) Depreciation and amortization 3,127 3,113 6,466 6,225 -------------------------- -------------------------- 381,686 486,977 864,643 856,256 -------------------------- -------------------------- Loss before interest and accretion on liability component of debenture (274,135) (331,502) (682,749) (636,513) Interest on debenture 38,581 - 45,000 - Accretion on liability component of debenture 8,037 - 9,755 - -------------------------- -------------------------- Loss for the period and comprehensive loss (320,753) (331,502) (737,504) (636,513) -------------------------- -------------------------- Loss per common share Basic $ (0.006) $ (0.006) $ (0.014) $ (0.012) Diluted $ (0.006) $ (0.006) $ (0.014) $ (0.012) Weighted average number of common shares Basic 51,406,007 51,586,878 51,404,757 51,656,325 Diluted 53,531,840 51,586,878 53,014,590 51,656,325 01 Communique Laboratory Inc. SELECTED FINANCIAL INFORMATION Consolidated Statements of Cash Flows (Unaudited) For the 3 and 6 month periods ended April 30, 2010 and 2009 3 months ending 6 months ending 30-Apr-10 30-Apr-09 30-Apr-10 30-Apr-09 -------------------------- -------------------------- Cash provided by (used in): Operating activities: Loss for the period $ (320,753) $ (331,502) $ (737,504) $ (636,513) Items not involving cash: Depreciation and amortization 3,127 3,113 6,466 6,225 Accretion of liability portion of debenture 8,037 - 9,755 - Stock-based compensation 37,821 84,851 122,642 85,736 Change in non-cash working capital (82,436) (100,340) (105,094) (97,869) -------------------------- -------------------------- (354,204) (343,878) (703,735) (642,421) Financing activities: Issue of debenture - - 1,200,000 - Issue of common shares 900 - 900 - Investing activities: Purchase of capital assets (369) (1,740) (369) (2,125) Increase (decrease) in cash (353,673) (345,618) 496,796 (644,546) Cash and cash equivalents, beginning of period 1,772,560 1,675,730 922,091 1,974,658 -------------------------- -------------------------- Cash and cash equivalents, end of period $ 1,418,887 $ 1,330,112 $ 1,418,887 $ 1,330,112 -------------------------- --------------------------
For further information: For further information: INVESTOR CONTACT: Brian Stringer, Chief Financial Officer, 01 Communique, (905) 795-2888 x204, [email protected]
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