For immediate release (Calgary, AB Canada)
March 15,  2000
 

Calgary, AB (March 15, 2000) - Zi Corporation (NASDAQ: ZICA) (TSE: ZIC) increased annual revenue for the year ended Dec. 31, 1999 by 51 per cent to $2.5 million compared to $1.6 million recorded in 1998. Royalty revenue, which was introduced in the last four months of the year, accounted for 76 per cent of total 1999 revenues.

Revenues for the fourth quarter of 1999 were $1.1 million a 197 per cent increase over the fourth quarter of 1998 and a 40 per cent increase over the third quarter of 1999. The increase in quarterly revenue results from Zi collecting royalty revenue from its licensees as they begin introducing product to the consumer market.

"Nineteen-ninety nine was an incredible year," says Michael Lobsinger, chairman and chief executive officer, Zi Corporation. "The strategy for embedding our technology in information and Internet appliances is showing results."

1999 highlights

• Well capitalized with a strong cash position and no debt
• Signed contracts with international licensees
• Signed contract with the Ministry of Information Industries in the People’s Republic of China
• Formed partnership with the Ministry of Education in the People’s Republic of China
• Established European sales office and expanded North American and mainland Chinese offices

Operating costs in 1999 amounted to $8 million, approximately double 1998 levels. Eighty per cent of the company’s operating costs are made up of expenses relating to salaries, travel, professional fees, depreciation and amortization. Expenditures in each of these areas increased significantly in the last half of 1999 as the company expanded its sales and marketing team and added more than 30 people to the areas of engineering, product development and linguistics. The company is shaping its employee compliment to focus on the key markets of Asia, Europe and North America as well as supporting growth initiatives.

Zi signed contracts with 16 new licensees during the third and fourth quarters of 1999. The companies licensing Zi’s technology will introduce their products to the mass-market throughout 2000. A total of six new products should enter the market by the end of the first quarter and another 12 products before the end of the second quarter. Additionally, Zi’s on-line education subsidiary is expected to begin contributing to the company’s revenue in fall of 2000 when it becomes fully operational.

"Zi’s technology will not only enable the interactive delivery of courseware and educational products over the Internet in Asia, but we are now acting as the exclusive Web site administrator for the largest distance education institution in China," says Lobsinger.

In October 1999, Zi announced the acquisition of the Beijing subsidiary of a Canadian company, known as Ozlearning.com. This acquisition provides a new income stream from the sale of web-based educational and re-training courseware. The new subsidiary positions Zi to take advantage of the Internet growth in Asia, which is currently doubling every six months.

Zi Corporation is a leading provider of embedded software technology and educational products. The company’s core product, eZiText^TM connects people to short messaging, email, e-commerce, web browsing and similar applications in almost any written language. Zi’s strategic partners use the technology to enable information and Internet appliances that meet the needs of consumers, business, government and education systems. Zi Corporation supports its strategic partners from offices in Calgary, Beijing, Hong Kong, San Francisco, Shenzhen and Stockholm. A publicly traded company, Zi Corporation is listed on the NASDAQ Stock Market (ZICA) and the Toronto Stock Exchange (ZIC).

Certain statements in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The information in this press release is based on Zi Corporation’s current expectation and assumptions, and is subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks include, among others, general business and economic conditions and competitive actions as well as the risks and uncertainties referred to in Zi Corporation’s 20-F for the most recent calendar year.

For further information, please contact: 

Karen Attwell 
Manager, Investor/Media Relations 
Phone: (403) 233-8875 
Email: investor@zicorp.com
Web site: http://www.zicorp.com/

Consolidated balance sheet
as at December 31
unaudited
(CDN in millions)

	1999	1998
Assets
Cash and short term investments	$ 27.6	$ 1.0
Other current assets	2.8	0.7
Other assets	3.6	2.0
Total assets	$ 34.0	$ 3.7
Liabilities & shareholders’ equity
Current liabilities	$ 1.0	$ 0.6
Long term debt	0.0	0.5
Shareholders’ equity	33.0	2.6
	$ 34.0	$ 3.7

Consolidated statement of operations
for the year ended December 31
unaudited
(CDN in millions)

	1999	1998
Revenues	$ 2.5	$ 1.6
Operating Costs	7.9	3.9
Net Loss	$ 5.4	$ 2.3
Net Loss per share	$ 0.18	$ 0.08

Consolidated statement of change in cash position
for the year ending December 31
unaudited
(CDN in millions)

	1999	1998
Operating Activities
Cash flow applied to operations	$ 5.7	$ 4.2
Financing activities
Proceeds from issue of shares	34.1	3.7
Proceeds from issue of long term debt	0.0	0.5
	$ 34.1	$ 4.2
Investing activities
Purchases of capital assets	0.4	0.1
Deferred development costs	1.4	1.0
	1.8	1.1
Net cash inflow (outflow)	26.6	(1.1)
Cash, beginning of year	1.0	2.1
Cash, end of year	$ 27.6	$ 1.0