01 Communique Reports Results for Second Quarter Fiscal 2014 and Provides an Update on its Patent Litigation

TORONTO, June 9, 2014 /CNW/ - 01 Communique Laboratory Inc. (ONE:TSX) today announced results for its second quarter 2014 which ended April 30, 2014. The loss for the second quarter 2014 was $369,632 compared to a loss of $1,169,030 for the same period in 2013, a decrease of $799,398. Excluding non-cash expenses for stock-based compensation and depreciation the adjusted loss for the second quarter 2014 was $324,559 (2013 - $1,066,559) a decrease of $674,625. The Company completed the quarter with $2,101,469 of cash and cash equivalents.   

"As we move forward our plan is to continue to monitor our expenses closely and adjust them as we see necessary with the primary goal of continuing in the defense of our intellectual property and then to accelerate our product development," said Andrew Cheung, President and CEO for 01 Communique. "In respect of our patent litigation against Citrix and LogMeIn there have been several recent developments which are highlighted below."     

"In the LogMein case the Federal Circuit affirmed the district court's finding of non-infringement as well as affirming the validity of our patent. We are disappointed with the finding of non-infringement but believe that decision is limited to that case," said Andrew Cheung, President and CEO of 01 Communique. "As we move forward with our lawsuit against Citrix we do so with a patent that has had its validity confirmed by the Federal Circuit."   

"On May 30, 2014 Citrix filed a patent infringement case in the central district of California alleging infringement of one of their patents by our I'm InTouch Meeting product and as well requested a declaratory judgment against us alleging that their GoToMeeting product offering does not infringe the "479 Patent". Shortly thereafter on June 3, 2014 the Judge presiding over the litigation in the Northern District of Ohio issued an Opinion and Order granting our motion to amend our original complaint to include alleged infringement of the "479 Patent" by their GoToMeeting product offering, which we did on June 6, 2014, as well as their GoToMyPC product offering," said Andrew Cheung. "We believe their patent infringement allegation is without merit and we will defend ourselves against it. In respect of the declaratory judgment issue, we feel confident that the case will proceed with respect to their GoToMeeting product offering in Ohio."    

Background on the Company's patent lawsuits against Citrix Systems Inc. ("Citrix") and LogMeIn Inc. ("LogMeIn") follows.  

Citrix Litigation –
On February 2, 2006, a lawsuit was filed by the Company in the United States District Court, Northern District of Ohio, Eastern Division, against Citrix alleging infringement of our patent number 6928479 (the "'479 Patent"). As part of the litigation Citrix requested an inter partes reexamination of the '479 Patent by United States Patent and Trademark Office ("USPTO"), and also requested a stay in the Court proceedings. The stay was granted by the Judge in the case on March 12, 2008.

On March 16, 2007, prior to the stay being implemented, the court issued a patent claim construction ruling adopting the Company's claim construction for 19 of the 20 disputed claim terms (commonly referred to as a "Markman Ruling"). 

On July 6, 2010 a Right of Appeal Notice was issued by the USPTO confirming the patentability of the '479 Patent. Citrix appealed that decision to the USPTO's Patent Trial and Appeals Board ("PTAB").

On October 29, 2013 the PTAB rendered their decision affirming the validity of the '479 Patent. The appeal process is now complete at the USPTO. Citrix has appealed that decision to the United States Court of Appeal for the Federal Circuit and that appeal is now in process. We are confident that we will prevail in this appeal as well.

On February 28, 2014 a Court Order was issued granting 01 Communique's motion to lift the stay and proceed to trial. A pretrial conference was requested for October 17, 2014 at which time a trial date is expected to be set. Between now and the pretrial conference the Company and its legal team will be working in earnest to complete everything that is required in preparation for trial.

On May 30, 2014 Citrix filed a complaint in the United States District Court Central District of California alleging infringement of their U.S. Patent No. 7,219,233  by the Company's I'm InTouch Meeting product and requesting a declaratory judgment against the Company alleging that that Citrix's GoToMeeting product offering does not infringe the "479 Patent". On June 3, 2014 the Judge presiding over the litigation in the Northern District of Ohio issued an Opinion and Order granting the Company's motion to amend the original complaint, which was done on June 6, 2014, to include alleged infringement of the "479 Patent" by Citrix's GoToMeeting product offering as well as their GoToMyPC product offering.     

LogMeIn Appeal –
On September 8, 2010, the Company filed a lawsuit in the Eastern District of Virginia, against LogMeIn alleging infringement of the '479 Patent. The case against LogMeIn proceeded to trial and on March 26, 2013 the Jury in the trial rendered its verdict concluding that 01 Communique's '479 Patent is valid but that LogMeIn does not infringe the patent.

Earlier today, on June 9, 2014, the United States Court of Appeals for the Federal Circuit issued its Order in respect of the Company's appeal affirming the district court's finding that LogMeIn did not infringe 01 Communique's patent while also affirming the district court's finding that the patent is valid.

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 #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.


01 Communique Laboratory Inc.
SELECTED FINANCIAL INFORMATION
Consolidated Statements of Financial Position
Unaudited



30-Apr-14

31-Oct-13




Assets



Current assets



    Cash and cash equivalents

$2,101,469

$3,072,281

    Accounts receivable

                  190,458

                  225,007

    Prepaid expenses and other assets

                    80,924

                    36,073


               2,372,849

               3,333,361




Plant and equipment

                    13,591

                    17,816


$2,386,440

$3,351,177




Liabilities & Shareholders' Equity






Current liabilities



    Accounts payable & accruals

$689,224

$1,048,164

    Deferred revenue

                    22,034

                    24,582


                  711,258

               1,072,746




Shareholders' equity



   Share capital

             40,072,877

             39,997,277

   Contributed surplus

               4,558,194

               4,468,044

   Agent options

                  111,780

                  111,780

   Deficit

           (43,067,669)

           (42,298,670)


               $1,675,182

               $2,278,431


$2,386,440

$3,351,177

 

01 Communique Laboratory Inc.
SELECTED FINANCIAL INFORMATION
Consolidated Statements of Operations and Comprehensive Income
For the 3 and 6 month periods ended April 30, 2014 and 2013
Unaudited


for the 3 months ending


for the 6 months ending


30-Apr-14

30-Apr-13


30-Apr-14

30-Apr-13







 Revenue

 $84,665

$191,964


 $159,588

$366,439

 Cost of revenue

                         -  

                         -  


                          -  

                 -  


                 84,665

               191,964


               159,588

     366,439







Expenses (income)






Selling, general and administrative

           249,428

           343,236


              539,321

      776,015

Patent enforcement and

re-examination expenses

              18,516

          818,393


                 29,696

  1,397,100

Research and development

            188,579

           208,136


               362,479

      441,692

Interest

               (2,226)

              (8,771)


                 (2,909)

     (18,860)


            454,297

         1,360,994


               928,587

    2,595,947







Loss for the period and comprehensive loss

        (369,632)

      (1,169,030)


             (768,999)

(2,229,508)







Loss per common share






Basic

           $(0.006)

            $(0.018)


             $(0.012)

      $(0.034)

Diluted

          $(0.006)

             $(0.018)


             $(0.012)

     $(0.034)







Weighted average number of common shares






 Basic

   65,294,818

       65,012,745


          65,248,312

  65,019,357

 Diluted

     65,294,818

        65,012,745


         65,248,312

  65,019,357

 

 

01 Communique Laboratory Inc.
SELECTED FINANCIAL INFORMATION
Consolidated Statements of Cash Flows
For the 3 and 6 month periods ended April 30, 2014 and 2013
Unaudited


for the 3 months ending


for the 6 months ending



30-Apr-14

30-Apr-13


30-Apr-14

30-Apr-13


Cash provided by (used in):












Operating activities:






   Loss for the period

 $(369,632)

 $(1,169,030)


 $(768,999)

 $(2,229,508)

   Adjustments to reconcile the loss for






the period to net cash flows from

operating activities






     Depreciation

           1,873

              1,829


              4,224

           3,903

     Stock-based compensation

            43,200

           100,500


            90,150

              283,356

     Interest income

            (2,226)

             (8,771)


            (2,909)

               (18,860)

   Change in non-cash working capital 

           (223,167)

    564,366


           (371,787)

              909,621


            (549,952)

       (511,106)


     (1,049,321)

          (1,051,488)

Interest income received

               2,226

              8,771


             2,909

                  18,860


          (547,726)

       (502,335)


    (1,046,412)

           (1,032,628)







Financing activities:






    Issue of common shares

           75,600

       189,750


           75,600

              294,250

Investing activities:






    Purchase of capital assets


            (452)



                 (5,785)

Increase (decrease) in cash

          (472,126)

      (313,037)


      (970,812)

             (744,163)







Cash and cash equivalents, beginning of period

      2,573,595

  4,116,249


    3,072,281

        4,547,375

Cash and cash equivalents, end of period

 $2,101,469

 $3,803,212


 $2,101,469

 $3,803,212













SOURCE 01 Communique Laboratory Inc.



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