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MOSAID Technologies Inc.: CORRECTION FROM SOURCE: MOSAID Reports Results for Third Quarter Fiscal 2009 and Dividend

OTTAWA, ONTARIO--(Marketwire - Feb. 26, 2009) - A correction is being issued with respect to the release sent out today at 4:01 PM ET. In the 4th paragraph starting with "On February 26, 2008, MOSAID....", an error occurred in the date. The correct sentence should have read: "On February 26, 2009, MOSAID declared a quarterly dividend of $0.25 per share". The complete and corrected version follows.

MOSAID Technologies Incorporated (TSX:MSD) today announced financial results for the third quarter of fiscal 2009, ended January 31, 2009.

- Q3 revenues of $18.1 million, up 29% from $14.0 million in Q3 fiscal 2008

- Q3 pro forma income of $5.3 million or $0.53 per diluted share, compared to $5.4 million or $0.50 per diluted share in Q3 fiscal 2008

- Q3 GAAP net income of $2.3 million or $0.23 per diluted share, compared to a net loss of $1.2 million or $0.11 per diluted share in Q3 fiscal 2008

"Our strong financial results for the third quarter, achieved during a period of global economic turmoil, demonstrate that the Company is well positioned to meet its financial targets for fiscal 2009," said John Lindgren, President and CEO, MOSAID.

"The landmark agreements that we recently announced with Nokia Corporation and Micron Technology are key transition points for the Company," said Lindgren. "Our deal with Nokia, the world leader in the mobile phone industry, fulfills management's commitment to license a major handset vendor this fiscal year, and boosts the momentum of our wireless licensing program. With the Micron deal, MOSAID has now licensed virtually 100% of the global commodity DRAM market to its patents, and has also gained title to an important portfolio of 400 patents that will help generate new revenue streams and assist us in reaching new agreements with existing licensees."

MOSAID had cash and marketable securities of $62.2 million at the end of the third quarter of fiscal 2009, compared to $59.8 million at the end of the second quarter of fiscal 2009. In Q3 fiscal 2009, MOSAID returned $2.5 million to shareholders in quarterly dividend payments.

On February 26, 2009, MOSAID declared a quarterly dividend of $0.25 per share. The dividend, which is an eligible dividend, is payable on April 16, 2009 to shareholders of record as of April 2, 2009.

A reconciliation of pro forma income to Canadian generally accepted accounting principles (GAAP) net income is included in the Notes to the Financial Statements accompanying this press release.

Operational Highlights

Semiconductor licensing: MOSAID announced the settlement of patent infringement litigation with Micron Technology, Inc., and that the companies had entered into two separate agreements: a patent license agreement and a patent transfer agreement. Under the patent license agreement, Micron received a lives-of-the-patents license to certain MOSAID patents, and a 10-year term license to certain other MOSAID patents. Micron will make a series of fixed cash payments to MOSAID. Under the patent transfer agreement, MOSAID acquired title to 400 Micron patents related to DRAM, Flash memory and semiconductor process technology.

First wireless handset license: MOSAID announced that Nokia Corporation became the first major vendor of Wi-Fi enabled handsets to license MOSAID's wireless patents. MOSAID granted Nokia a license under MOSAID's wireless technology patents, as well as certain other patents, covering the company's products sold globally under the Nokia brand name.

MOSAID also announced patent license agreements with three vendors of wireless and wired networking equipment. Buffalo Inc., ATEN Technology, Inc., and Sena Technologies, Inc. were each granted five year, running royalty licenses under certain of MOSAID's wireless patents.

Patent portfolio: At the end of the third quarter, MOSAID's portfolio comprised 1,397 patents and applications, compared with 897 patents and applications one year ago.

Q4 and Fiscal 2009 Guidance

Management offers the following guidance for the fourth quarter of fiscal 2009:

- Q4 revenues of $16.0 million to $18.0 million

- Q4 pro forma income of $6.4 million to $7.4 million, or $0.62 to $0.71 per diluted share, based on 10.3 million diluted shares

The Company is maintaining its annual guidance for fiscal 2009, as follows:

- Fiscal 2009 revenues in the range of $61.0 million to $63.0 million

- Fiscal 2009 pro forma income of $20.0 million to $21.0 million, or $1.92 to $2.02 per diluted share, based on 10.4 million diluted shares

MOSAID's revenues result primarily from intellectual property agreements, which by their nature may actually close on dates other than those projected. MOSAID's priority and focus is on obtaining the best terms possible under its agreements, rather than on the particular timing of agreement closure. MOSAID's revenues depend upon, among other items, the continued ability of its licensees to pay amounts as they become due.

Conference Call and Webcast

Management will hold a conference call and webcast on Thursday, February 26, 2009 at 5:00 p.m. EST. The webcast will be live at [ www.mosaid.com ] and may also be accessed by dialing 1-800-264-7882. The webcast will be available on mosaid.com for 90 days following the event.

About MOSAID

MOSAID Technologies Inc. is one of the world's leading intellectual property companies. MOSAID develops semiconductor memory technology and licenses patented intellectual property in the areas of semiconductors, and wired and wireless communications systems. MOSAID counts many of the world's largest semiconductor companies among its licensees. Founded in 1975, MOSAID is based in Ottawa, Ontario.

Pro forma income, a non-GAAP measure, is GAAP net income adjusted for stock-based compensation, patent amortization and imputed interest, foreign exchange gains and losses on "Other long-term liabilities," and any other non-recurring items. The Company uses pro forma measures internally to evaluate and manage operating performance, and to forecast and plan. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers.

Forward Looking Information

This document and certain other public documents incorporated by reference in this document, contain forward-looking statements to the extent they relate to MOSAID or its management, including those identified by the expressions "anticipate," "believe," "foresee," "estimate," "expect," "intend," "could," "may," "plan," "will," "would" and similar expressions. Similarly, statements in this document that describe MOSAID's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. These forward-looking statements are not historical facts, but rather reflect MOSAID's current expectations regarding future events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially from those in such forward-looking statements. Assumptions made in preparing forward-looking statements and financial guidance include, but are not limited to, the following: MOSAID's continued expansion of its patent portfolio and of its opportunities for future patent licensing revenue as a result of MOSAID's acquisition of patents from third parties and from development of new inventions; DRAM manufacturers continuing to infringe MOSAID's patents; the timing and amount of MOSAID's litigation expenses; MOSAID's ability to sign new patent licensees; current assumptions as to the identification of products that are unlicensed to MOSAID's wireless patents; and the timing and amount of MOSAID's Research & Development expenses.

Factors that could cause actual results to differ materially from expected results include, but are not limited to, the following: the extent of embedded DRAM proliferation in the System-on-a-Chip markets; legal rulings and/or regulatory investigations or complaints having an adverse impact on the validity, enforceability, potential royalty rates, and strength or breadth of coverage of MOSAID's essential and/or nonessential patents (including, but not limited to, adverse results from litigation or proceedings in patent offices and government regulatory agencies in various countries around the world); judicial, legislative or regulatory changes that impair the ability of patent holders to earn licensing revenues; economic, social, and political conditions in the countries in which MOSAID or patent licensees operate, including security risks, health conditions, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates; non-payment or delays in payment by, or insolvency of, licensees or other debtors; variability in patent licensees' sales of licensed products, failure to maintain and enforce MOSAID's existing patent portfolio, or failure to obtain valuable patents as a result of research and development activities, or failure to acquire valuable patents from third parties; MOSAID's ability to recruit and retain skilled personnel; change in MOSAID's financial position; consolidation of MOSAID's licensees; natural events, such as severe weather and earthquakes in the locations in which MOSAID or patent licensees operate; and changes in the tax rate applicable to MOSAID as the result of changes in the tax law in the jurisdictions in which profits are determined to be earned and taxed, the outcome of tax audits and the ability to realize deferred tax assets.

MOSAID assumes no obligation to update or revise any forward-looking statements. Additional information identifying risks and uncertainties affecting MOSAID's business and other factors that could cause MOSAID's financial results to fluctuate are contained in MOSAID's Annual Information Form, under the section entitled "Risk Factors," and in MOSAID's other public filings available online at [ www.sedar.com ].



MOSAID Technologies Incorporated

Unaudited Consolidated Financial Statements

For the Quarter Ended January 31, 2009


The attached consolidated financial statements have been prepared by Management of MOSAID Technologies Incorporated and have not been reviewed by an auditor.

MOSAID TECHNOLOGIES INCORPORATED
(Subject to the Canada Business Corporations Act)
CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
(In thousands of Canadian Dollars, except per share amounts)
(Unaudited)


 Quarter Ended Nine Months Ended
 January 31, January 31,
 2009 2008 2009 2008
----------------------------------------------------------------------

Revenues $18,055 $13,992 $44,502 $38,113

Operating expenses
 Patent portfolio
 management 1,246 1,270 3,572 3,588
 Patent licensing
 and litigation 7,484 3,233 18,429 8,382
 Research and development 539 657 1,614 1,748
 General and administration 1,261 1,118 3,295 3,276
 Foreign exchange
 (gain) loss (142) (160) (1,077) 515
 Other - 35 - 147
----------------------------------------------------------------------
 10,388 6,153 25,833 17,656
----------------------------------------------------------------------

Pro forma income
 from operations 7,667 7,839 18,669 20,457
Net interest income 313 605 1,448 1,568
----------------------------------------------------------------------
Pro forma income before
 income tax 7,980 8,444 20,117 22,025
Income tax expense 2,633 3,004 6,639 7,879
----------------------------------------------------------------------
Pro forma income (Note 6) $5,347 $5,440 $13,478 $14,146
----------------------------------------------------------------------
----------------------------------------------------------------------

Pro forma earnings
 per share
 Basic $0.53 $0.50 $1.30 $1.28
 Diluted $0.53 $0.50 $1.30 $1.27

Weighted average
 number of shares
 Basic 10,180,831 10,892,593 10,370,617 11,042,957
 Diluted 10,180,831 10,963,060 10,386,739 11,154,782

See accompanying Notes to the Consolidated Financial Statements



MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(In thousands of Canadian Dollars, except per share amounts)
(Unaudited)

 Quarter Ended Nine Months Ended
 January 31, January 31,
 2009 2008 2009 2008
----------------------------------------------------------------------

Revenues $18,055 $13,992 $44,502 $38,113

Operating expenses
 Patent portfolio
 management 1,246 1,270 3,572 3,588
 Patent licensing
 and litigation 7,484 3,233 18,429 8,382
 Research and development 539 657 1,614 1,748
 General and
 administration 1,261 1,118 3,295 3,276
 Foreign exchange
 loss (gain) 648 1,983 7,168 (3,760)
 Other 235 197 550 563
 Patent amortization
 and imputed interest 3,439 3,133 10,000 9,969
----------------------------------------------------------------------
 14,852 11,591 44,628 23,766
----------------------------------------------------------------------

Income (loss)
 from operations 3,203 2,401 (126) 14,347
Net interest income 313 605 1,448 1,568
----------------------------------------------------------------------
Income before income tax
 expense and discontinued
 operations 3,516 3,006 1,322 15,915
Income tax expense 1,371 4,297 1,981 8,973
----------------------------------------------------------------------
Income (loss) before
 discontinued operations 2,145 (1,291) (659) 6,942
Discontinued operations
 income (net of tax)
 (Note 5) 146 71 883 6,107
----------------------------------------------------------------------
Net income (loss) 2,291 (1,220) 224 13,049
Dividends 2,546 2,720 7,774 8,278
Normal course issuer bid - 2,529 3,215 4,947
Retained earnings,
 beginning of period 8,787 23,194 19,297 16,901
----------------------------------------------------------------------
Retained earnings,
 end of period $8,532 $16,725 $8,532 $16,725
----------------------------------------------------------------------

Earnings (loss) per
 share (Note 4)
 Basic - before
 discontinued operations $0.21 ($0.12) ($0.06) $0.63
 Diluted - before
 discontinued operations $0.21 ($0.12) ($0.06) $0.62

 Basic - net
 earnings (loss) $0.23 ($0.11) $0.02 $1.18
 Diluted - net
 earnings (loss) $0.23 ($0.11) $0.02 $1.17

Weighted average
 number of shares
 Basic 10,180,831 10,892,593 10,370,617 11,042,957
 Diluted 10,180,831 10,963,060 10,386,739 11,154,782

See accompanying Notes to the Consolidated Financial Statements



MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands of Canadian Dollars)

 As at As at
 January 31, 2009 April 30, 2008
 (unaudited) (audited)
---------------------------------------------------------------------

Current Assets
 Cash and cash equivalents $43,444 $22,133
 Marketable securities 18,788 36,246
 Accounts receivable 5,892 12,304
 Prepaid expenses 638 486
 Future income taxes recoverable 11,015 11,015
---------------------------------------------------------------------
 79,777 82,184

Capital assets 675 957
Acquired intangibles 73,476 70,130
Future income taxes recoverable 19,613 16,988
---------------------------------------------------------------------
 $173,541 $170,259
---------------------------------------------------------------------
---------------------------------------------------------------------


Current Liabilities
 Accounts payable and accrued liabilities $9,586 $7,723
 Income tax payable 1,432 356
 Deferred revenue 2,153 1,146
 Other liability 459 318
 Current portion of other
 long-term liabilities 15,974 5,345
---------------------------------------------------------------------
 29,604 14,888
Deferred gain on sale-leaseback 1,191 1,797
Other long-term liabilities 36,354 31,195
---------------------------------------------------------------------

 67,149 47,880
---------------------------------------------------------------------

Shareholders' Equity
 Share capital (Note 3) 94,822 100,403
 Contributed surplus 3,497 2,997
 Retained earnings 8,532 19,297
 Accumulated other comprehensive income (459) (318)
---------------------------------------------------------------------
 106,392 122,379
---------------------------------------------------------------------
 $173,541 $170,259
---------------------------------------------------------------------
---------------------------------------------------------------------

See accompanying Notes to the Consolidated Financial Statements



MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Canadian Dollars)
(Unaudited)

 Quarter Ended Nine Months Ended
 January 31, January 31,
 2009 2008 2009 2008
----------------------------------------------------------------------

Operating
Income (loss) before
 discontinued operations $2,145 ($1,291) ($659) $6,942
 Items not affecting cash
 Amortization 2,474 2,431 7,404 7,181
 Stock option expense 235 162 550 398
 Loss on disposal of
 capital assets 76 - 76 -
 Unrealized foreign
 exchange loss (gain) on
 other long-term
 liabilities 790 2,143 8,245 (4,275)
 Future income
 tax recoverable (282) 1,785 (2,625) 5,052
----------------------------------------------------------------------
 5,438 5,230 12,991 15,298
Change in non-cash working
 capital items from
 continuing operations 1,110 (240) 5,619 (6,259)
----------------------------------------------------------------------
 6,548 4,990 18,610 9,039
----------------------------------------------------------------------

Investing
 Acquisition of capital
 assets and acquired
 intangibles (9,184) (77) (10,578) (2,744)
 Acquisition of short-term
 marketable securities (13,021) (35,147) (60,135) (116,554)
 Proceeds on disposal/
 maturity of short-term
 marketable securities 28,595 39,458 77,593 110,013
----------------------------------------------------------------------
 6,390 4,234 6,880 (9,285)
----------------------------------------------------------------------

Financing
 Repayment of mortgage - (4,216) - (4,346)
 Long-term liabilities 7,707 212 7,543 1,826
 Repurchase of shares - (5,459) (8,415) (9,960)
 Dividends (2,546) (2,720) (7,774) (8,278)
 Funding of RSU plan - - (718) -
 Issue of common shares 75 713 242 2,639
----------------------------------------------------------------------
 5,236 (11,470) (9,122) (18,119)
----------------------------------------------------------------------

Net cash inflow (outflow)
 from continuing
 operations 18,174 (2,246) 16,368 (18,365)
Net cash (outflow) inflow
 from discontinued
 operations (120) 608 4,943 12,381
----------------------------------------------------------------------
Net cash inflow (outflow) 18,054 (1,638) 21,311 (5,984)
Cash and cash equivalents,
 beginning of period 25,390 19,050 22,133 23,396
----------------------------------------------------------------------
Cash and cash equivalents,
 end of period $43,444 $17,412 $43,444 $17,412
----------------------------------------------------------------------
----------------------------------------------------------------------

See accompanying Notes to the Consolidated Financial Statements



MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of Canadian Dollars)
(Unaudited)

 Quarter Ended Nine Months Ended
 January 31, January 31,
 2009 2008 2009 2008
----------------------------------------------------------------------

Net income (loss) $2,291 ($1,220) $224 $13,049

Other Comprehensive
 income, net of tax:
 Gains and losses on
 derivatives designated
 as cash flow hedges (437) (757) (1,824) 900
 Gains and losses on
 derivatives designated
 as cash flow hedges in
 prior periods transferred
 to net income in the
 current period 1,094 (420) 1,683 (862)
----------------------------------------------------------------------
Other comprehensive
 income (loss) 657 (1,177) (141) 38
----------------------------------------------------------------------

Comprehensive income (loss) $2,948 ($2,397) $83 $13,087
----------------------------------------------------------------------
----------------------------------------------------------------------

See accompanying Notes to the Consolidated Financial Statements



MOSAID TECHNOLOGIES INCORPORATED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Quarter ended January 31, 2009
(tabular dollar amounts in thousands of Canadian Dollars, except per
share amounts)

1. Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements.

In the opinion of management, all adjustments consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company's financial position, results of operations and cash flows have been included. Operating results for the interim period presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the full fiscal year ending April 30, 2009.

2. Adoption of New Accounting Standards

Effective January 1, 2008 the Company adopted the following new accounting standards issued by the Canadian Institute of Chartered Accountants.

Capital Management

Section 1535, Capital disclosures, requires the Company to disclose information about the Company's objectives, policies and procedures for the management of its capital.

Financial Instruments - Disclosures and Presentation

Section 3862, Financial Instruments - Disclosures, and Section 3863, Financial Instruments - Presentation replace section 3861, Financial Instruments - Disclosure and Presentation. These sections require the disclosure of information with regards to the significance of financial instruments for the Company's financial position and performance and the nature and extent of risks arising from financial instruments to which the Company is exposed during the period and at the balance sheet date, and how the Company manages those risks.

Financial instrument classification is as follows:

Cash and marketable securities Held-for-trading
Accounts receivable Loans and receivables
Derivative assets and liabilities Held-for-trading
Accounts payable and accrued liabilities Held-for-trading
Income taxes payable Held-for-trading
Long-term liabilities Other liabilities

As a result of adoption of the above policies, there was no material impact on the Statement of Operations.

3. Shareholders' equity and other comprehensive income

The following are the changes in shareholders' equity for the nine months ended January 31, 2009:

 Accumulated
 other
 Common Common Contributed Retained compre-
 shares shares surplus earnings hensive Total
 (number) ($) ($) ($) income ($) ($)
------------------------------------------------------------------------
Balance at
 April 30,
 2008 10,719,807 $100,403 $2,997 $19,297 ($318) $122,379
------------------------------------------------------------------------
Net income 224 224
------------------------------------------------------------------------
Dividends (7,774) (7,774)
------------------------------------------------------------------------
Employee
 Stock
 Option
 Program 14,713 222 (95) 127
------------------------------------------------------------------------
Employee
 Share
 Purchase
 Program 8,951 115 21 136
------------------------------------------------------------------------
Stock-based
 compensation (718) 574 (144)
------------------------------------------------------------------------
Normal course
 issuer bid (559,148) (5,200) (3,215) (8,415)
------------------------------------------------------------------------
Unrealized
 derivative
 gains on
 cash flow
 hedges - net (141) (141)
------------------------------------------------------------------------
Balance at
 January 31,
 2009 10,184,323 $94,822 $3,497 $8,532 ($459) $106,392
------------------------------------------------------------------------


4. Earnings per Share

The following is a reconciliation of the numerator and denominator of the
basic and diluted per share computations:

 Quarter Ended Nine Months Ended
 January 31, January 31,
 2009 2008 2009 2008
----------------------------------------------------------------------

Income (loss) before
 discontinued operations $2,145 ($1,291) ($659) $6,942
Discontinued operations
 (net of tax) 146 71 883 6,107
----------------------------------------------------------------------
Net income (loss) $2,291 ($1,220) $224 $13,049
----------------------------------------------------------------------
----------------------------------------------------------------------

Weighted average
 number of common
 shares outstanding 10,180,831 10,892,593 10,370,617 11,042,957
Net effect of
 stock options - 70,467 16,122 111,825
----------------------------------------------------------------------
Weighted average
 diluted number of
 common shares
 outstanding 10,180,831 10,963,060 10,386,739 11,154,782
----------------------------------------------------------------------
----------------------------------------------------------------------

Earnings (loss)
 per share
 Basic - before
 discontinued
 operations $0.21 ($0.12) ($0.06) $0.63
 Diluted - before
 discontinued
 operations $0.21 ($0.12) ($0.06) $0.62

 Basic - net
 income (loss) $0.23 ($0.11) $0.02 $1.18
 Diluted - net
 income (loss) $0.23 ($0.11) $0.02 $1.17

For the quarters ended January 31, 2009 and January 31, 2008, 563,095 and 267,031 options, respectively, were excluded from the calculation of diluted earnings per share, as the exercise price of these options exceeded the average market price of the Company's common stock during this period and were therefore anti-dilutive.

For the nine months ended January 31, 2009 and January 31, 2008, 259,606 and 86,128 options, respectively, were excluded from the calculation of diluted earnings per share as the exercise price of these options exceeded the average market price of the Company's common stock during this period and were therefore anti-dilutive.

There were 563,095 and 407,319 options issued and outstanding as at January 31, 2009 and January 31, 2008, respectively.

5. Discontinued operations

 Quarter Ended Nine Months Ended
 January 31, January 31,
 2009 2008 2009 2008
----------------------------------------------------------------------

Revenues $- $423 $156 $763

Expenses
 Research and development 28 87 36 1,487
 Selling and marketing - 24 5 1,030
 Restructuring - - - 166
----------------------------------------------------------------------
 28 111 41 2,683
----------------------------------------------------------------------

 (Loss) gain from operations (28) 312 115 (1,920)
 Gain on sale of assets 243 - 866 9,295
----------------------------------------------------------------------

 Earnings before tax 215 312 981 7,375
 Income tax expense 69 241 98 1,268
----------------------------------------------------------------------
Discontinued operations
 (net of tax) $146 $71 $883 $6,107
----------------------------------------------------------------------
----------------------------------------------------------------------


6. Reconciliation of pro forma income with GAAP net income

 Quarter Ended Nine Months Ended
 January 31, January 31,
 2009 2008 2009 2008
----------------------------------------------------------------------

GAAP net income (loss) $2,291 ($1,220) $224 $13,049
Add (deduct):
 Stock-based compensation 235 162 550 398
 Patent amortization and
 imputed interest 3,439 3,133 10,000 9,969
 Restructuring - - - 19
 Foreign exchange loss (gain) 790 2,143 8,245 (4,275)
 Income tax expense -
 for the above items (1,262) (1,876) (4,658) (2,076)
 Future income
 tax revaluation - 3,169 - 3,169
 Discontinued operations
 (net of tax) (146) (71) (883) (6,107)
----------------------------------------------------------------------
Pro forma income $5,347 $5,440 $13,478 $14,146
----------------------------------------------------------------------
----------------------------------------------------------------------

7. Stock-based Compensation

The Company has an employee stock purchase plan program whereby employees may elect to designate up to 5% of their annual salary to purchase shares of the Company at a 10% discount from the fair market value. The purchase price is deducted over a six month period via payroll. Directors are also eligible to participate in the Stock Purchase Plan.

Also, the Company has an Employee and Director Stock Option Plan. The exercise price is no lower than the closing market price on the trading day immediately preceding the date of grant. Options granted under the Plan expire within a period of six years of granting, with vesting periods determined by the Human Resources Committee.

The Company employs a fair value method of accounting for all options issued to employees and directors on or after April 27, 2002. The fair value of options issued in the quarter was calculated using the Black-Scholes option pricing model and the following assumptions:

 Quarter Ended January 31,
 2009 2008
---------------------------------------------------
Risk free interest rate 1.92% 3.70%
Expected life in years 5.5 5.5
Expected dividend yield 11.92% 6.13%
Volatility 43.14% 57.25%

For the quarter ended January 31, 2009, the Company issued nil Deferred Share Units in lieu of options to directors and officers of the Company under its Deferred Share Unit Plan. Those deferred share units vest evenly over a four year period. Deferred share units do not have an exercise price and can only be settled using cash consideration.

The Company implemented a restricted share unit plan ("RSU Plan") for certain employees in October 2008, and has granted 62,700 RSUs under the RSU Plan. The RSUs vest over three years. Under the RSU Plan, units are settled using common shares of the Company. During fiscal year 2009, the Company funded an independent trustee to purchase the required shares and to provide custodial services. The Company recognizes compensation expense, as measured by the purchase price of the shares, over the vesting period.

8. Financial Instruments

The Company has exposure to the following risks from its use of financial instruments: credit risk, market risk and liquidity risk.

Credit Risk

Credit risk is the risk of financial loss to the Company if a licensee or counter-party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's accounts receivable and its foreign exchange contracts.

The Company provides credit to some licensees in the normal course of its operations. The Company's credit risk review includes performing periodic credit evaluations of its most significant licensees. In certain circumstances, the Company may utilize letters of guarantee or credit insurance to mitigate certain credit risks. The Company's licensees are, for the most part, large national and international public companies. Due to the nature of the Company's operations, provisions for doubtful accounts are made on a licensee-by- licensee basis, based upon on-going review of licensee financial status.

Many of the Company's current licensees' operations are focused in the semiconductor industry. The semiconductor industry, particularly the DRAM memory segment, has been suffering, for some time, from economic difficulties due to pricing pressure as a result of an oversupply of memory devices.

During Q3 fiscal 2009, Qimonda AG (Qimonda), a company representing more than 10% of the Company's consolidated revenues, filed for insolvency protection in Germany and defaulted on a payment due to the Company. The Company has in place a credit insurance policy which covers 90% of such payment and 90% of each of the subsequent 3 payments. As a result, the Company has recorded, as revenue, 90% of the current amount due from Qimonda, which is expected to be recovered via insurance. There is a risk that amounts due in future from Qimonda to the Company, that are not covered by credit insurance, may become uncollectible, resulting in a materially adverse impact to the Company.

Further, during Q3 fiscal 2009, another licensee defaulted on a fixed payment of U.S. $1.0 million due during the quarter. The Company has recorded the amount as accounts receivable but has deferred recognition of the amount as revenue due to the uncertainty regarding ultimate collection.

Due to the long-term nature of many of the Company's licensing arrangements and the prolonged downturn in the semiconductor industry, in certain circumstances, the Company may not be able to obtain at reasonable cost credit insurance or other forms of credit risk mitigation instruments. A default of the remaining payments by one of the Company's licensees could have a materially adverse impact on the Company's future revenues, earnings, cash flow and financial position.

The Company limits its exposure to credit risk from counter-parties to derivative instruments by dealing only with major financial institutions. Management does not expect any counter-parties to fail to meet their obligations.

The Company invests its excess cash in investment grade securities with a maturity date not exceeding 12 months. The Company relies upon the credit rating of the counter-party to limit its credit risk. The Company does not invest in asset-backed commercial paper.

The carrying amount of financial assets represents the maximum credit exposure. The maximum credit exposure to credit risk at the reporting date was:

 January 31, 2009 April 30, 2008
---------------------------------------------------------

Cash $43,444 $22,133
Marketable securities 18,788 36,246
Accounts receivable 5,892 12,304
Other liability (459) (318)
---------------------------------------------------------
---------------------------------------------------------
 $67,665 $70,365
---------------------------------------------------------
---------------------------------------------------------

The aging of accounts receivable at the reporting date was:

 January 31, 2009 April 30, 2008
---------------------------------------------------------

Current $1,789 $12,101
Past due 4,103 203
---------------------------------------------------------
---------------------------------------------------------
 $5,892 $12,304
---------------------------------------------------------
---------------------------------------------------------

Of the amount past due, a portion has been recognized as revenue as the Company expects to collect the amount under a credit insurance policy, and a portion has been recorded as deferred revenue as there is uncertainty regarding ultimate collection.

Marketable securities comprise the following:

 January 31, 2009 April 30, 2008
---------------------------------------------------------

Bonds & debentures $5,738 $18,980
Discount notes 13,050 17,266
---------------------------------------------------------
---------------------------------------------------------
 $18,788 $36,246
---------------------------------------------------------
---------------------------------------------------------

Carrying values of bonds and debentures and discount notes include accrued interest and approximate market value. Investments in bonds and debentures and discount notes represent holdings in corporate and government short-term marketable securities as at January 31, 2009 and have a maturity date of one year or less.

Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Company's income or the value of its holding of financial instruments.

Foreign Exchange Risk

The Company's revenues are denominated primarily in U.S. dollars, giving rise to exposure to market risks from changes in foreign exchange rates. The Company is exposed to foreign currency fluctuations on its accounts receivable and future cash flows related to licensing arrangements denominated in U.S. dollars, as well as certain operating expenses and its other long-term liabilities obligations.

The Company's foreign exchange risk management includes the use of foreign exchange forward contracts to fix the exchange rates on certain foreign currency exposures. The Company's objective is to manage and control exposures and secure the Company's profitability on existing contracts and anticipated future cash flows. The Company does not utilize derivative instruments for trading or speculative purposes. The Company formally documents all relationships between derivative instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives to specific firm contractually related commitments or anticipated transactions.

The Company also formally assesses, both at the inception and on an on-going basis, whether the derivatives that are used in hedging transactions are highly effective in off-setting changes in fair values or cash flows of hedged items. Hedge ineffectiveness is insignificant.

The forward foreign exchange contracts primarily require the Company to sell U.S. dollars for Canadian dollars at contractual rates. The Company had the following forward exchange contracts.

(In thousands of dollars) January 31, 2009

 Equivalent to
Type Notional Currency Maturity CDN dollars Fair Value

Sell $5,750 USD less than 3 months $6,315 ($486)
Sell $4,700 USD 3-12 months $5,797 $27
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 ($459)
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(In thousands of dollars) April 30, 2008

 Equivalent to
Type Notional Currency Maturity CDN dollars Fair Value

Sell $6,400 USD less than 3 months $6,222 ($141)
Sell $18,700 USD 3-12 months $18,656 ($123)
Buy $4,000 USD 3-12 months $4,117 ($54)
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 ($318)
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A one cent strengthening (weakening) of the U.S. dollar against the Canadian dollar would have decreased (increased) other comprehensive income by approximately $265,000; pro forma income would have increased (decreased) by approximately $18,000.

Interest Rate Risk

The Company is exposed to interest rate risk due to its holdings of interest-bearing marketable securities. It is the Company's policy to invest in securities with a maturity date of 12 months or less and Company practice to hold such securities, when possible, until maturity. A 1% increase (decrease) to the interest rate would result in an approximate $113,000 decrease (increase) in the fair value of the investments held as at the reporting date.

The Company is also exposed to interest rate risk due to its imputed interest on other long-term liabilities.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet liabilities when due. At January 31, 2009, the Company had $62.2 million of cash and marketable securities and has a secured bank credit facility of $10.0 million, less off balance sheet arrangements as described in Note 24 to the fiscal 2008 Consolidated Financial Statements to meet liabilities when due. The credit facility is collateralized by a general security agreement and contains no covenants.

All of the Company's financial liabilities, except for its "other long-term liabilities" and operating lease for its premises, have contractual maturities of less than 30 days.

The following chart indicates the contractual obligations to which the Company is bound over the following five years.

 Payments Due by Period
 (in thousands of dollars)

 Less than 1-3 4-5 After 5
Contractual Obligations Total 1 year years years years

Operation leases $2,267 $948 $554 $496 $269

Other long-term
 obligations $65,684 $16,228 $17,310 $13,600 $18,546

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Total contractual
 obligations $67,951 $17,176 $17,864 $14,096 $18,815
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Fair Value

The fair values of cash, marketable securities, accounts receivable, accounts payable and accrued liabilities approximates their carrying values due to their short-term maturity. The recorded amounts of long-term monetary liabilities approximate fair value, estimated by discounting expected cash flows at rates currently offered to the Company for debts of the same remaining maturities and conditions.

Fair value of the forward exchange contracts reflects the cash flow due to or from the Company if settlement had taken place on the reporting date.

The fair value of employee and director deferred stock units is determined using the market price of the Company's common stock on the reporting date.

9. Capital Management

The Company's objective is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management defines capital as the Company's shareholder's equity excluding accumulated other comprehensive income.

The Company has certain credit facilities with a Canadian chartered bank, which consist of an operating line, a foreign exchange forward contract facility and standby letters of credit. The Board of Directors does not establish quantitative return on capital criteria for management, but rather promotes year over year sustainable profitable growth. The Board of Directors also reviews on a quarterly basis the level of dividends paid to the Company's shareholders and monitors the share repurchase program activities. There were no changes in the Company's approach to capital management during the period. Neither the Company nor any of its subsidiaries is subject to externally imposed capital requirements.

10. Business Segment Information

The Company operates in one business segment as a developer and licensor of semiconductor and telecommunications technologies.

11. International Financial Reporting Standards

The Accounting Standards Board of Canada ("AcSB") plans to converge Canadian GAAP for publicly accountable enterprises with International Financial Reporting Standards ("IFRS") over a transition period that will end effective January 1, 2011 with the adoption of IFRS. The AcSB announced on February 13, 2008 that IFRS will be required in 2011 for publicly accountable profit-oriented enterprises. The changeover date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. The Company will convert to these new standards according to the timetable set with these new rules. The Company is currently in the process of developing a conversion implementation plan and assessing the impacts of the conversion on the consolidated financial statements and disclosures of the Company.

12. Subsequent Event

Subsequent to the quarter-end, the Company entered into a transaction whereby the Company purchased 300 patents related to wired and wireless communications from SercoNet Ltd. for an undisclosed amount. The amount will be paid over the next four months. The Company will also pay SercoNet Ltd. a percentage of net royalties earned from licensing these patents to third parties.

13. Comparative Figures

Certain comparative figures have been reclassified to conform to the financial statement presentation adopted in the current year.