OTTAWA, Canada – August 30, 2006 – Wi-LAN Inc. (TSX:WIN) (“Wi-LAN” or “the Company”) today announced fiscal third quarter 2006 financial results for the three and nine months ended July 31, 2006. All financial amounts are expressed in thousands of Canadian dollars, except per share amounts or unless otherwise noted.
Following an extensive review of strategic alternatives, Wi-LAN decided to focus resources on commercializing its portfolio of essential wireless technology patents. To achieve this, the Company’s Board of Directors approved a plan in January 2006 to exit the products businesses, and in March 2006 to divest its engineering services business. The divestitures were substantially completed in May, during the Company’s fiscal third quarter.
In the third quarter ending July 30, 2006, Wi-LAN generated revenues from its patent licensing program by licensing intellectual property (“IP”) involved with specific fixed WiMAX applications known as the IEEE 802.16d standard to Fujitsu Microelectronics for a $2,096 up front and a possible future royalty stream upon the achievement of certain shipment volume levels.
Fiscal third quarter G&A expenses totaled $1,483. This includes approximately $400 of unusual or one-time costs relating to certain legal expenses, proxy fight and contractors supporting systems requirements in the transition of the business into patent licensing. The third quarter 2006 loss from discontinued operations amounted to $832. These costs reflect a number of expenses relating to the obligations of exiting the businesses, including additional termination, product return and other items. Earnings per share figures were $0.01 from continuing operations, and a loss of $(0.01) per share after including the discontinued businesses.
At June 30, 2006 Wi-LAN’s cash and equivalents amounted to $9,556. A large portion of this cash component is associated with completing the financing which closed June 22, 2006. Net cash proceeds to Wi-LAN were $7,395, after brokers fees and other cash costs. Patents, licenses & trademarks plus cash represent 94% of the Company’s total assets.
“This was a watershed quarter for Wi-LAN”, said Jim Skippen, Wi-LAN’s President & CEO. “The accomplishments this quarter are numerous, and include the completion of the sale of the Company’s product division, the signing of two financing deals for gross proceeds of $16 million, the opening of our new head office in Ottawa, the hiring of essential management to position the Company for future success and the realization of the new Wi-LAN’s first patent licensing revenues from Fujitsu. This quarter we have also initiated a widespread licensing campaign for our essential wireless patents and are already in discussions and negotiations with a number of parties.”
”I am delighted with Wi-LAN’s progress on the financial front,” said Acting CFO Steve Bower. “We restructured the business successfully, and with the $7.4 million net cash raised in June and an additional $7.3 million net cash raised in August, the Company is positioned for great success as a major licensor of patents in the wireless markets we serve.”
To complete its transformation into a successful patent licensing company, Wi-LAN announced in May the hiring of Jim Skippen as President & CEO of the Company. Mr. Skippen joined Wi-LAN from MOSAID Technologies Inc., where he was Senior Vice President Patent Licensing and General Counsel, and was responsible for managing MOSAID’s highly successful patent licensing program. Mr. Skippen also has extensive experience practicing technology law in two major Canadian law firms. Mr. Skippen started at Wi-LAN on June 19, 2006.
For a number of reasons, including the ability to take advantage of Mr. Skippen’s many contacts in the Ottawa region and Ottawa’s technology leadership in Canada, the Company relocated its head office from Calgary to Ottawa. Wi-LAN officially started operations at its new facility in Ottawa on August 1, 2006. The Company continues to have a registered office in Calgary.
Staff count increased to five at the end of the third quarter, and is expected to grow to between 8 and 10 by the end of the fiscal year, ending on October 31, 2006.
On August 22, 2006, Wi-LAN completed the sale of 6,400,000 common shares of the Company on a bought deal basis, at a price of $1.25 per common share, for net cash of approximately $7,300 after brokers fees and other cash costs. The shares were offered by way of a short form prospectus in all of the provinces of Canada (excluding Quebec) and in the United States on a private placement basis. In addition, brokers were granted one-year warrants to purchase 384,000 common shares at a strike price of $1.35 per common share.
On August 28, 2006, Wi-LAN added two new key executives. Jung Yee started as the Company’s Chief Technology Officer, and Bill Middleton joined as the Company’s Vice President, Licensing, General Counsel and Secretary.
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Conference Call Information – August 30 - 10:00 eastern time
Wi-LAN will conduct a conference call to discuss its second quarter results today at 10:00 A.M. eastern time (8:00 A.M. mountain time).
Participants calling from Canada or the Unites States should call toll-free:
+1 (888) 459-5609
Callers from other international locations may access the call at:
+1 (973) 321-1024
For those who prefer to join by webcast, the URL is:
Participants are requested to call in 10 minutes before the start of the call. The call will be webcast from Wi-LAN’s website at www.wi-lan.com and will be archived there.
Wi-LAN representatives will be:
- Jim Skippen – President & CEO
- Steve Bower – Acting CFO
A replay of the call will be available until 11:59 p.m. Eastern time on September 6, 2006 via telephone by calling +1 (877) 519-4471 or +1 (973) 341-3080. The replay pin number is 778 92 27. The Conference Call will also be available by webcast at the same URL noted above until September 6.
About Wi-LAN Inc.
Wi-LAN, which was founded in 1992, is a licensor of key wireless technologies, and was co-founder of both the OFDM Forum and the WiMAX Forum. Some of the fundamental technologies covered by the Wi-LAN patents include CDMA, WiFi and WiMAX. Wi-LAN has already licensed its intellectual property to a number of major companies, including Cisco and Fujitsu.
Detailed information on Wi-LAN can be found at www.wi-lan.com.