01 Communique Reports Third Quarter Fiscal 2015 Results

TORONTO, Aug. 26, 2015 /CNW/ - 01 Communique Laboratory Inc. (ONE:TSX-V) today announced results for its third quarter fiscal 2015, which ended July 31, 2015. The loss and comprehensive loss for the third quarter 2015 was $345,956 (2014 - $629,744). The adjusted loss, which excludes non-cash expenses for stock-based compensation and depreciation, for the quarter was $297,216 (2014 - $353,469). The Company completed the quarter with $841,437 of cash and cash equivalents.   

"Our main goal for the remainder of this year is to prepare for our patent lawsuit trial against Citrix, scheduled to commence January 8, 2016," said Andrew Cheung, President and CEO for 01 Communique. "Our results reflect our emphasis on this aspect of our business. With respect to the case, on May 18, 2015 we received the inter partes re-examination certificate from the USPTO bringing that part to a successful conclusion and on June 12, 2015 we received the Court's claim construction ruling adopting our construction for the four disputed claim terms. We look forward to our day in court."

An update on the Company's patent lawsuit against Citrix Systems Inc. ("Citrix") follows.  

The Company is protecting its intellectual property against Citrix's GoToMyPC product offering. The Company is seeking damages based upon a reasonable royalty, back to August 2005 the date the patent was issued, for infringement, as well as pre and post judgment interest on awarded damages; treble damages for willful infringement, and attorneys' fees. An overview of recent events and timelines to get to trial follows.

The inter partes re-examination. On October 16, 2014 the United States Court of Appeal for the Federal Circuit rendered their decision affirming the United States Patent and Trademark Office's ("USPTO") Patent Trial and Appeals Board decision that the Company's patent 6,928,479 (" '479 Patent") is valid and then issued their mandate to the USPTO to issue a re-examination certificate. On May 18, 2015 the USPTO issued that inter partes re-examination certificate.

The Markman Order. On June 12, 2015 the Court issued its claim construction order and memorandum ruling on the meaning of four disputed claim terms, adopting the Company's proposed construction for all four claim terms. The Court also agreed with the Company that the preamble to claim 24 of the '479 Patent was not limiting and hence concluded that it was not necessary to construe two additional claim terms contained in the preamble. 

The timetable. Expert discovery was completed on February 27, 2015. A trial is scheduled to commence January 8, 2016. A summary judgment motion schedule is as follows:

• Opening briefs were filed July 27, 2015.
• Response briefs along with an opening brief (if elected) due on any issue for which the party does not bear the burden of proof are to be filed by August 27, 2015.
• Reply and response briefs for the July 27, 2015 and August 27, 2015 briefing respectively to be filed by September 14, 2015.
• Reply briefs in respect of the issues raised in the August 27, 2015 opening brief by September 28, 2015.

An update on financial results follows.

1. Operating expenses for third quarter 2015 were $356,229 (2014 - $681,748). Excluding non-cash expenses for stock based compensation of $47,348 (2014 - $189,643) and depreciation of $1,392 (2014 - $1,632), the cash operating expenses to fund the business for the third quarter 2015 were $307,489 (2014 - $490,473), a decrease of $97,984. Much of this decrease is a result of a reduction in compensation related expenses and patent litigation and re-examination costs.
   
   
2. The loss and comprehensive loss for third quarter 2015 was $345,956 (2014 - $629,744). Excluding non-cash expenses for stock-based compensation and depreciation, the adjusted loss for the third quarter 2015 was $297,216 (2014 - $353,469).
   
   
3. There were no patent litigation and re-examination expenses incurred in the third quarter 2015 (2014 -$85,000). These expenses fluctuate with the level of activity in respect of patent litigation as well as the re-examination that had been requested by Citrix and, with the receipt of the re-examination certificate, it is now complete and no further costs are expected. With respect to the Citrix litigation, expenses have reached a cap and the Company's lawyers are now responsible for such expenses for which they are to be reimbursed out of proceeds of settlement or an award of damages, if any.

On August 26, 2015 stock options were granted to members of the Company's executive management and directors. There were 840,000 stock options granted in total expiring on August 26, 2019, with an exercise price of $0.42 and vesting 500,000 on February 26, 2016 and 340,000 on August 26, 2016.

Neither TSX Venture Exchange ("TSX-V") nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About 01 Communique
Established in 1992, 01 Communique Laboratory Inc. (TSX-V: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 #6,928,479 / #6,938,076 / #8,234,701 and in Canada by its patents #2,309,398 / #2,524,039 and Japan by its patent #4,875,094. For more information, visit www.01com.com or call (905) 795-888 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 achieveme*nts 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 Statements of Financial Position
Unaudited
						31-July-15				31-Oct-14
Assets
Current assets
	Cash and cash equivalents				$	841,437			$	1,370,813
	Accounts receivable					79,990				105,551
	Prepaid expenses and other assets					52,372				35,938
						973,799				1,512,302
Property and equipment						9,588				12,549
					$	983,387			$	1,524,851
Liabilities and Shareholders' Equity
Current liabilities
	Accounts payable and accrued liabilities				$	507,309			$	711,679
	Deferred revenue					15,464				17,810
						522,773				729,489
Liability portion of Debenture						356,351				---
Shareholders' equity
	Share capital					40,628,777				40,288,777
	Equity portion of Debenture					47,111				---
	Contributed surplus					4,909,005				4,878,587
	Deficit					(45,480,630)				(44,372,002)
						104,263				795,362
					$	983,387			$	1,524,851

01 Communique Laboratory Inc.
SELECTED FINANCIAL INFORMATION
Consolidated Statements of Operations and Comprehensive Income
For the 3 and 9 month periods ended July 31, 2015 and 2014
Unaudited
		for the 3 months ending						for the 9 months ending
			31-Jul-15			31-Jul-14			31-Jul-15			31-Jul-14
Revenue		$	23,018		$	49,355		$	76,311		$	208,943
Cost of revenue			-			-			-			-
			23,018			49,355			76,311			208,943
Expenses (income):
Selling, general and administrative			162,032			418,052			575,728			957,373
Patent litigation & re-examination expenses			-			85,000			6,658			114,696
Research and development			194,197			178,696			590,352			541,175
Interest			(497)			(2,649)			(1,911)			(5,558)
			355,732			679,099			1,170,827			1,607,686
Loss before interest and accretion on liability
component of debenture		$	(332,714)		$	(629,744)		$	(1,094,516)		$	(1,398,743)
Interest on debenture			10,000			-			10,650			-
Accretion on liability portion of debenture			3,242			-			3,462			-
Loss for the period and comprehensive loss		$	(345,956)		$	(629,744)		$	(1,108,628)		$	(1,398,743)
Loss per common share
Basic		$	(0.01)		$	(0.01)		$	(0.02)		$	(0.02)
Diluted		$	(0.01)		$	(0.01)		$	(0.02)		$	(0.02)
Weighted average number of common shares
Basic			65,795,437			65,743,807			65,761,159			65,607,697
Diluted			65,795,437			65,743,807			65,761,159			65,607,697

01 Communique Laboratory Inc.
SELECTED FINANCIAL INFORMATION
Consolidated Statements of Cash Flows
For the 3 and 9 month periods ended July 31, 2015 and 2014
Unaudited
					three months ending						nine months ending
					31-Jul-15			31-Jul-14			31-Jul-15			31-Jul-14
Cash provided by (used in):
Operating activities:
	Loss for the period			$	(345,956)		$	(629,744)		$	(1,108,628)		$	(1,398,743)
	Adjustments to reconcile the loss for the period
	to net cash flows from operating activities
		Depreciation			1,392			1,632			4,719			5,856
		Stock-based compensation			47,348			189,643			165,418			279,793
		Accretion on liability portion of debenture			3,242			-			3,462			-
		Interest income			(497)			(2,649)			(1,911)			(5,558)
	Change in non-cash working capital				7,708			(55,120)			(197,589)			(426,907)
					(286,763)			(496,238)			(1,134,529)			(1,545,559)
Interest income received					497			2,649			1,911			5,558
					(286,266)			(493,589)			(1,132,618)			(1,540,001)
Financing activities:
	Issue of common shares				205,000			-			205,000			75,600
	Issue of debenture				-			-			400,000			-
Investing activities:
	Purchase of capital assets				(1,017)			-			(1,758)			-
Increase (decrease) in cash					(82,283)			(493,589)			(529,376)			(1,464,401)
Cash and cash equivalents, beginning of period					923,720			2,101,469			1,370,813			3,072,281
Cash and cash equivalents, end of period				$	841,437		$	1,607,880		$	841,437		$	1,607,880

SOURCE 01 Communique Laboratory Inc.

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