01 Communique Reports Results for Fourth Quarter and Fiscal 2014
TORONTO, Dec. 17, 2014 /CNW/ - 01 Communique Laboratory Inc. (ONE:TSX-V) today announced results for its fourth quarter and fiscal year ended October 31, 2014. The loss and comprehensive for the fourth quarter and fiscal 2014 was $674,589 (2013 - $357,631) and $2,073,332 (2013 - $3,172,080) respectively. The adjusted loss, which excludes non-cash expenses for stock-based compensation and depreciation, for the fourth quarter and fiscal 2014 was $438,087 (2013 - $271,899) and $1,551,181 (2013 - $2,449,335) respectively. The Company completed the year with $1,370,813 of cash and cash equivalents. Â Â
"As we head into 2015 we are continuing with our lawsuit against Citrix and are looking forward to our day in court," said Andrew Cheung, President and CEO for 01 Communique. "Protecting our intellectual property is very important to us. We have cut our operating expenses while this lawsuit carries on and will continue to monitor them very closely."
An update on the Company's patent lawsuit against Citrix Systems Inc. ("Citrix") follows. Â
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, a permanent injunction and attorneys' fees. An overview of recent events and timelines to get to trial follows.
The timetable. Expert discovery is scheduled to be completed by January 16, 2015 following which a scheduling conference is expected to take place to set dates regarding filing and/or renewing dispositive motions, trial preparation and trial.
The inter partes re-examination. On October 16, 2014 the United States Court of Appeal for the Federal Circuit ("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 on November 25, 2014 the Federal Circuit issued their mandate to the USPTO to issue a re-examination certificate.
The Recent Claim Construction Hearing. A claim construction tutorial and hearing took place on November 12 and 13, 2014. We are now waiting for the Court's findings.
The California Action. In May 2014 Citrix filed a lawsuit in the United States District Court Central District of California alleging infringement of three U.S. Patents No. 7,219,233; 8,127,019; and 8,325,896 by the Company's I'm InTouch Meeting product. On October 23, 2014 the parties reached an agreement whereby each party withdrew their claims against each other with respect to Citrix's GoToMeeting product and 01 Communique's I'm InTouch Meeting product. The Company's case against Citrix's GoToMyPC product offering is continuing. Â
An update on financial results follows.
- Operating expenses for the fourth quarter 2014 were $746,101 (2013 - $528,227). Excluding non-cash expenses for stock based compensation of $234,870 (2013 - $83,978) and depreciation of $1,632 (2013 - $1,754), as well as patent litigation and re-examination costs of $153,272 (2013 - $39,039) the cash operating expenses to fund operations for the fourth quarter 2014 were $356,327 (2013 - $403,456), a reduction of $47,129.
- Executive management and directors agreed to a reduction in the cash component of their compensation effective August 1, 2014. This reduction along with other cost saving initiatives is expected to save approximately $75,000 per quarter ($300,000 annually). The first quarter 2015 cash operating expenses, excluding patent litigation and re-examination costs, are expected to be approximately $350,000.
- The loss and comprehensive loss for the three months ended October 31, 2014 was $674,589 (2013 - $357,631) an increase of $316,958. Excluding non-cash expenses for stock-based compensation and depreciation, the adjusted loss for the three months ended October 31, 2014 was $438,087 (2013 - $271,899) an increase of $166,188 due primarily as a result of a reduction in revenue, an increase in patent litigation and re-examination expenses offset by a reduction in expenses for salaries, contractors, commissions, and benefits.
- The reduction in revenue of $104,062 from $161,810 in the fourth quarter 2013 to $57,748 in 2014 was primarily due to a reduction in contract engineering fees.Â
- Patent litigation and re-examination expenses increased by $114,233 from $39,039 in the fourth quarter 2013 to $153,272 in 2014 primarily a result of an increase in expenses pertaining to costs associated with the re-exam appeal and previous lawsuits.    Â
- There was a reduction in expenses for salaries, contractors, commissions, and benefits primarily a result of reducing the cash component of compensation to directors and executive management effective August 1, 2014. The salaries, contractors, commissions, and benefits expenses for the fourth quarter 2014 was $223,286 (2013 - $287,716) a reduction of $64,430.
- Cash and cash equivalents were 1,370,813 as at October 31, 2014 compared to $1,607,879 as at July 31, 2014 a decrease of $237,067 for the fourth quarter. This decrease is primarily a result of funding the adjusted loss of $438,087 offset by an increase in accounts payable and accrued liabilities of $104,536 and an increase in accounts receivable of $79,556.
On December 10, 2014 stock options were granted to members of the Company's executive management and directors. There were 958,750 stock options granted in total expiring on December 10, 2018 with an exercise price of $0.20 and vesting 208,750 on June 10, 2015; 375,000 on December 10, 2015 and 375,000 on December 10, 2016. Â Â Â
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 (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.
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01 Communique Laboratory Inc.SELECTED FINANCIAL INFORMATIONConsolidated Statements of Financial Position
31-Oct-14 31-Oct-13
Assets
Current assets
Cash and cash equivalents $1,370,813 $3,072,281
Accounts receivable 105,551 225,007
Prepaid expenses and other assets 35,938 36,073
1,512,302 3,333,361
Plant and equipment 12,549 17,816
$1,524,851 $3,351,177
Liabilities & Shareholders' Equity
Current liabilities
Accounts payable and accruals $711,679 $1,048,164
Deferred revenue 17,810 24,582
729,489 1,072,746
Shareholders' equity
Share capital 40,288,777 39,997,277
Contributed surplus 4,878,587 4,468,044
Agent options --- 111,780
Deficit (44,372,002) (42,298,670)
795,362 2,278,431
$1,524,851 $3,351,177
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01 Communique Laboratory Inc.SELECTED FINANCIAL INFORMATIONConsolidated Statements of Operations and Comprehensive IncomeFor the 3 and 12 month periods ended October 31, 2014 and 2013
 for the 3 months ending  for the 12 months ending
31-Oct-14 31-Oct-13 31-Oct-14 31-Oct-13
 Revenue $   57,748 $  161,810 $  266,691 $  1,258,109
 Cost of revenue - 7,502 - 7,502
57,748 154,308 266,691 1,250,607
Expenses (income)
Selling, general and administrative 370,266 353,425 1,327,639 1,659,834
Patent enforcement & re-examination expenses 153,272 39,039 267,968 2,004,581
Research and development 222,563 135,763 763,738 793,627
Interest (13,764) (16,288) (19,322) (35,355)
732,337 511,939 2,340,023 4,422,687
Loss for the period and comprehensive loss (674,589) (357,631) (2,073,332) (3,172,080)
Loss per common share
Basic $ Â Â (0.01) $ Â Â (0.01) $ Â Â (0.03) $ Â Â (0.05)
Diluted $ Â Â (0.01) $ Â Â (0.01) $ Â Â (0.03) $ Â Â (0.05)
Weighted average number of common shares
Basic 65,743,807 65,203,807 65,496,739 65,112,751
Diluted 65,743,807 65,203,807 65,496,739 65,112,751
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01 Communique Laboratory Inc.SELECTED FINANCIAL INFORMATIONConsolidated Statements of Cash FlowsFor the 3 and 12 month periods ended October 31, 2014 and 2013
three months ending twelve months ending
31-Oct-14 31-Oct-13 31-Oct-14 31-Oct-13
Cash provided by (used in):
Operating activities:
Loss for the period $ Â Â Â (674,589)$ Â Â Â (357,631)$ Â Â (2,073,332)$ Â (3,172,080)
Adjustments to reconcile the loss for the period to net cash flows from operating activities:
Depreciation 1,632 1,754 7,488 7,411
Stock-based compensation 234,870 83,978 514,663 715,334
Interest income (13,764) (16,288) (19,322) (35,355)
Change in non-cash working capital 203,241 (220,361) (223,666) 687,957
(248,610) (508,548) (1,794,169) (1,796,733)
Interest income received 13,764 16,288 19,322 35,355
(234,846) (492,260) (1,774,847) (1,761,378)
Financing activities:
Issue of common shares - - 75,600 294,250
Investing activities:
Purchase of capital assets (2,221) (1,609) (2,221) (7,966)
Increase (decrease) in cash (237,067) (493,869) (1,701,468) (1,475,094)
Cash and cash equivalents, beginning of period 1,607,880 3,566,150 3,072,281 4,547,375
Cash and cash equivalents, end of period $ Â Â 1,370,813 $ Â 3,072,281 $ Â Â 1,370,813 $ Â 3,072,281
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SOURCE 01 Communique Laboratory Inc.
For further information: INVESTOR CONTACT: Brian Stringer, Chief Financial Officer, 01 Communique, (905) 795-2888 x204, brian.stringer@01com.com