LINMOR Announces First Quarter Results: Revenues Up 64% Over Same Quarter Last Year.Business Editors OTTAWA--(BUSINESS WIRE)--Aug. 8, 2000 LINMOR Inc. (LINMOR) (CDNX CDNX See Canadian Venture Exchange (CDNX). :LIR.) announced today financial results for the Company's fiscal first quarter, ended June June: see month. 30, 2000. Revenue for the first quarter of fiscal 2001 was $568,951, compared with first quarter fiscal 2000 revenue of $347,745. Net loss for the quarter was $2,585,157, compared to a net loss of $750,216 for the first quarter of fiscal 2000. The increase in net loss is primarily attributable to the planned increases in sales & marketing and research & development resources. Significant achievements this quarter included: --LINMOR closed an equity financing of $15,000,000 --LINMOR converted all remaining convertible debentures into common shares, meaning that LINMOR is now free of debt --LINMOR increased its R&D staff by 54%, and sales and marketing by 100% from the previous quarter --LINMOR announced a partnership with IPmobile a leading wireless router company. Cisco Systems recently announced plans to purchase IPmobile. --LINMOR, in co-operation with IPmobile, announced the release of the first real-time performance management system for wireless Internet access networks --LINMOR announced a partnership with NHC Communications, a leading supplier of cross connection switching systems to the Competitive Local Exchange Carrier market --LINMOR announced support for Hyperchip's Petabit carrier-class routers "We are pleased to report that LINMOR made significant progress on several fronts during the quarter, including a major financing, new partnerships and customer wins. We are also pleased to report that the market is unfolding as anticipated," said John Farrell For other uses, see John Farrell (disambiguation). John Farrell VC (b. March 1826 in Dublin, d. 31 August 1865) was a soldier and Irish recipient of the Victoria Cross, the highest and most prestigious award for gallantry in the face of the enemy that can be awarded to , President, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of LINMOR. "Revenue for the quarter was lower than anticipated due to senior management's focus on completing the financing and unforeseen delays in closing some key sales opportunities, which are now expected to close in future quarters. This recent financing has allowed us to significantly ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale our sales and marketing efforts to meet our growth targets." A new equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. of $15,000,000 and the conversion of all remaining debentures into common shares, mean that LINMOR's financial position has improved substantially. "This quarter, a significant amount of interest expense was incurred as a result of the conversion of debentures," said David Oikle, Chief Financial Officer of LINMOR. "These expenses are one time charges that will not be seen in subsequent quarters." LINMOR's Markets Still Projected to Experience Rapid Growth Over the last 10 months, the need for performance management systems has really started to unfold unfold - inline and is expected to continue on its path of high growth. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the Yankee Group (the Yankee Group, Boston, MA, www.yankeegroup.com) A major market research, analysis and consulting firm founded in 1970 by Howard Anderson. It provides general consulting and strategic planning in the computer and communications field. , the performance management software market is currently valued at US$700 million and is expected to increase to US$1.1 billion by 2003. "Mission critical traffic today runs over a packet based network, not a circuit based one," commented Jennifer Jennifer became a common first name for females in English-speaking countries during the 20th century. The name Jennifer is a Cornish variant of Guinevere, deriving ultimately from Proto-Celtic *windo-seibaro- "white ghost", via Brythonic *wino-hibirā (cf. Pigg n. 1. A piggin. See 1st Pig. , Executive Vice President of the Yankee Group. "Service providers must have the tools that enable them to proactively monitor and manage not just tens of thousands but hundreds of thousands of network objects. LINMOR represents the next generation of performance management solutions focused on meeting this service provider demand." The strategy LINMOR adopted at the start of the fiscal year is on target with industry projections. All of the markets LINMOR has established as target markets, such as DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary , IP, ATM and Frame Relay A high-speed packet switching protocol used in wide area networks (WANs). Providing a granular service of up to DS3 speed (45 Mbps), it has become popular for LAN to LAN connections across remote distances, and services are offered by most major carriers. services, have been validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. by industry analysts as high growth markets. The Yankee Group predicts the combined growth of U.S. data services, such as ATM, Frame Relay, IP and DSL, to increase from $30 billion in 2000 to $52 billion by 2002. $15 Million Financing One of the most significant events of the quarter was a new financing that will allow LINMOR to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the opportunities currently available in its market. The gross proceeds of $15,000,000 will allow LINMOR to execute its very aggressive marketing, sales, product and business development plans in order to firmly establish itself as the leader in its market and capture significant share. Corporate Strategy During the quarter LINMOR finalized See finalization. its business, sales and marketing plans for the next 12 months, with an extremely aggressive plan targeted for the next 6 months. LINMOR also increased its overall US and Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. staff by 44%, particularly in the areas of Sales, Marketing and R&D. More Customer Wins and Distribution Agreements In co-operation with a next generation wireless Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the equipment company, LINMOR announced the release of NEBULA nebula (nĕb`y  lə) [Lat.,=mist], in astronomy, observed manifestation of a collection of highly rarefied gas and dust in interstellar space. in May of this year. NEBULA is the first-real time
performance management system for wireless Internet access See how to access the Internet. . One month
later, LINMOR officially announced the partner to be IPmobile, a leading
wireless router A network device that combines a wireless access point (base station), a wired LAN switch and a router with connections to a cable or DSL service. Wireless routers provide a convenient way to connect a small number of wired and any number of wireless computers to the Internet. company, and that NEBULA will now be part of
IPmobile's Airscape product line. This expansion of LINMOR's
NEBULA Performance Monitor will give wireless Internet Service Providers Internet service provider (ISP)Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. network management capability, thus ensuring the quality of service of their networks and providing tremendous value to wireless operators who wish to implement service level agreements. This is a lucrative opportunity for LINMOR due to the record growth of the Wireless Internet Access market. Also in May, LINMOR announced that it was partnering with NHC NHC National Hurricane Center NHC Naval Historical Center NHC National Housing Conference NHC National Hurricane Conference NHC National Healthcare Corporation NHC No Homers Club (Simpsons cartoon) Communications to provide Competitive Local Exchange Carriers with an integrated performance cross-connect solution for the burgeoning DSL services market. NHC will sell NEBULA with its smart switching solution. The solution will facilitate rapid DSL deployment, which has been one of the major problems associated with DSL service, as well as reduce costs and eliminate human error, without having to establish a physical connection. In June, LINMOR announced that its NEBULA product would provide vendor-specific reporting modules for Hyperchip's Petabit carrier-class routers. This is another opportunity for LINMOR to widen wid·en tr. & intr.v. wid·ened, wid·en·ing, wid·ens To make or become wide or wider. wid  en·er n. the number of network device manufacturers it supports, making its
solution that much more attractive to the carrier market, which tends
not to standardize stan·dard·izev. 1. To cause to conform to a standard. 2. To evaluate by comparing with a standard. on one network vendor. About LINMOR LINMOR (www.linmor.com) is the leading developer of real-time performance management solutions for Managing the Internet Network Infrastructure. LINMOR's NEBULA products provide vital network performance data for managing the Internet core and access networks as well as Internet services such as Virtual Private Networks (VPNs) and Voice-over-IP (VoIP). NEBULA is currently installed at some of the leading telecommunications companies See telecom company. in the world including AT&T, MCI (1) (Media Control Interface) A high-level programming interface from Microsoft and IBM for controlling multimedia devices. It provides commands and functions to open, play and close the device. (2) (Microwave Communications Inc. WorldCom The former name of MCI. Based in Jackson, MS, WorldCom, Inc. was a major, international telecommunications carrier. It was founded in 1983 by Bernard Ebbers as Long Distance Discount Service (LDDS), a reseller of AT&T WATS lines to small businesses. , NEXTLINK Communications and Cable & Wireless. LINMOR Inc. is publicly traded on the Canadian Venture Exchange The Canadian Venture Exchange (CDNX) is now a defunct stock exchange having been acquired by the TSX Group in 2001 and renamed the TSX Venture Exchange. History of the Canadian Venture Exchange (CDNX) (CDNX) under the symbol LIR. LINMOR has scheduled a conference call on Tuesday, August 8, 2000 at 4:30 PM (EST EST electroshock therapy. EST abbr. electroshock therapy ) to announce its Q1 FY 2001 financial results. You are invited to participate. --Date: Tuesday, August 8, 2000 --Time: 4:30 PM EST --To Listen via Telephone: 1-877-793-3791 (US and Canada) Confirmation # C522570 --RSVP: No RSVP is necessary --Replay: The playback of the Q1 FY 2000 conference call begins at 7:30 PM (EST) on August 8, 2000 and ends at 7:30 PM (EST) on August 15, 2000. The replay will be available by calling 1-877-793-3791, confirmation # C522580. The call runs 24 hours/day, including weekends. LINMOR's Annual General Meeting for Shareholders will be held Thursday September 14, 2000 at 10:00 a.m. (EST) in the Kensington Room of the Meridian Meridian (mərĭd`ēən), city (1990 pop. 41,036), seat of Lauderdale co., E Miss., near the Ala. line; settled 1831, inc. 1860. King Edward King Edward has been the name of several monarchs in English history:
The Canadian Venture Exchange has neither approved nor disapproved the information contained herein. All product names are trademarks of their respective companies.
LINMOR INC.
CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30
(unaudited)
2000 1999
Current assets
Cash and marketable securities $ 11,564,195 $ 46,255
Accounts receivable 1,060,076 331,617
Prepaid expenses 168,504 46,179
Deferred costs - 189,523
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12,792,775 613,574
Capital assets, net 522,939 450,670
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$ 13,315,714 $ 1,064,244
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Current liabilities
Bank indebtedness $ - $ 51,520
Accounts payable and
accrued liabilities 1,022,023 863,896
Promissory notes payable - -
Deferred revenue 118,596 68,782
Current portion of long-term debt 124,305 75,000
Current portion of capital lease
obligations 28,545 60,055
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1,293,469 1,119,253
Long-term debt - 32,639
Capital lease obligations - 31,463
Convertible debentures - 5,956,295
Shareholders' deficiency
Share capital 27,457,860 4,239,786
Special warrants - -
Other paid in capital 607,299 571,808
Deficit (16,042,914) (10,887,000)
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12,022,245 (6,075,406)
$ 13,315,714 $ 1,064,244
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LINMOR INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
FOR THE THREE MONTHS ENDED JUNE 30
(unaudited)
2000 1999
Revenue $ 568,951 $ 347,745
Expenses
Salaries, wages and benefits 1,311,869 294,003
Research and development 710,734 349,242
General and administration 707,039 164,633
Amortization 82,909 73,742
Advertising and promotion 45,280 2,512
Licence and royalty fees - 4,307
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2,857,831 888,439
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Net loss before under-noted items (2,288,880) (540,694)
Interest and bank charges, net
of interest income 198,869 183,797
Amortization of deferred costs 97,408 25,725
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Net loss (2,585,157) (750,216)
Deficit, beginning of period (13,457,757) (10,136,784)
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Deficit, end of period $ (16,042,914) $ (10,887,000)
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Net loss per share $ (0.04) $ (0.04)
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LINMOR INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30
(unaudited)
2000 1999
Cash provided by (used in)
Operations
Net loss $ (2,585,157) $ (750,216)
Amortization 82,909 73,742
Amortization of deferred costs 97,408 25,725
Interest expense on conversion
of debentures 256,576 -
Change in non-cash operating
working capital (216,638) (323,392)
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(2,364,902) (974,141)
Financing activities
Issue of convertible debentures,
net of costs - 800,468
Principal accretion of convertible
debentures 25,078 164,513
Proceeds from issue of treasury shares 15,219,584 -
Proceeds from exercise of warrants 201,840 -
Issue costs (1,336,445) -
Proceeds from exercise of
special warrants 2,600 -
Proceeds from other paid in capital - 107,281
Repayment of promissory notes payable (150,000) -
Repayment of long-term debt (27,083) (18,750)
Repayment of obligations under
capital leases (8,801) (16,022)
Reduction in bank indebtedness - (14,636)
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13,926,773 1,022,854
Investing activity
Purchase of capital assets (193,499) (2,458)
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Increase (decrease) in cash and
cash equivalents 11,370,372 46,255
Cash and cash equivalents,
beginning of period 193,823 -
Cash and cash equivalents,
end of period $ 11,564,195 $ 46,255
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Cash paid during the period
for interest $ 49,126 $ 19,284
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