News release

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Zi reports results for Q1, 2002

Calgary, AB (May 14, 2002) - Zi Corporation (NASDAQ: ZICA) (TSE: ZIC), a leading provider of intelligent interface solutions today announced its financial results for the quarter ended March 31, 2002.

Q1 2002 highlights

• Increased revenues to $2.3 million, which represents a 75% increase over the comparable quarter in the previous year.
• Zi Technology business unit becomes profitable
• Added five new eZiText® licensees, bringing the total number of global customers to 56, and increased the number of eZiText®-enabled handsets delivered by Zi's customers by 25 unique handsets to nearly 90
• Acquired the Magic Lantern group of companies, a 25-year old e-learning company with more than $5 million in annual revenues

Zi closed the first quarter of 2002 with $2.3 million in revenues compared to $1.3 million the same quarter in the previous year, an increase of over 75 per cent. Contributing to this revenue growth were 17 eZiText® licensees that launched a combined total of 25 new eZiText®-enabled products to the market during the quarter.

Gross margin was $2.1 million, approximately double the gross margin for the first quarter of 2001 of $1.1 million. Gross margin was 92 per cent of revenue compared to 80 per cent in the first quarter of the prior year.

On a business unit basis, Zi Technology, which includes eZiText®, generated a modest profit for the quarter compared to a $0.7 million loss a year earlier. Zi Services, the company's VoIP and Bluetooth division, posted a $1.4 million loss, down from $2.1 million a year earlier, and Zi's e-Learning investment generated $0.3 million in revenue but incurred $1 million in loss. The balance of the company's $5.7 million loss for the quarter includes corporate and public company operating costs, depreciation and amortization, and legal fees.

"Given the current economic climate, we are pleased with the results achieved during the first quarter in our Zi Technology business unit, and we are optimistic that we will continue to see revenue growth in our technology unit throughout 2002," said Michael E. Lobsinger, Chairman and Chief Executive Officer of Zi Corporation. "Additionally, our e-Learning investments are now contributing revenue and the addition of Magic Lantern, based on its historical revenue, is also expected to add substantially to our revenue." Finally, the adoption of VoIP and Bluetooth technology continues to be slower than expected. As such, our contract with Cidco Communications Corporation to provide VoIP telephony equipment and design has been adversely affected and is currently being reconsidered. With these delays, Zi Corporation is taking immediate steps to reduce or eliminate the cash burn associated with the Zi Services business unit, which should materialize in the coming quarter."

Zi Corporation will host a teleconference and Webcast to discuss its Q1 2002 results on Wednesday, May 15, 2002, 9am Eastern Time. To participate, please make your connection 10 minutes prior to the start of the call.

Conference call

Toll free in North America: 1-877-888-4210

International: 1-416-695-5261


Webcast

The call can be accessed on the Internet at: www.zicorp.com


Recording

A recording will be available shortly following the conference call until 11:55 pm eastern time on Wednesday, May 22, 2002.

Toll free in North America: 1-888-509-0082

International: 1-416-695-9731


About Zi Corporation

Zi Corporation is a market-driven technology company delivering intelligent interface solutions to enhance the user experience of wireless and consumer technologies. The company's core technology product, eZiText® connects people to short messaging, e-mail, e-commerce, Web browsing and similar applications in more than 35 languages and regional dialects. Zi supports its strategic partners from offices in Calgary, Beijing, Hong Kong, London, San Francisco, Shenzhen and Stockholm. A publicly traded company, Zi Corporation is listed on the NASDAQ National Market (ZICA) and the Toronto Stock Exchange (ZIC).

Certain statements in this press release that involve expectations or intentions (such as those relating to future deployments or planned cooperation) may 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 expectations 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, competitive actions, continued acceptance of Zi Corporation's products and services and dependence on third party performance as well as the risks and uncertainties referred to in Zi Corporation's 20-F for the most recent calendar year that is filed with the Securities and Exchange Commission. The reader should not place undue reliance on such forward looking statements. Zi Corporation does not assume any obligation to update such forward looking statements.

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For more information:

Media Inquiries: Shawn Kelly Zi Corporation Corporate Communications Manager Phone: 403 537 9770 skelly@zicorp.com

Investor Inquiries: Dale Kearns Zi Corporation Chief Financial Officer Phone: 403 233 8875 investor@zicorp.com

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ZI CORPORATION
CONSOLIDATED BALANCE SHEETS
					March 31 2002 ("unaudited")		December 31 2001 ("audited")		March 31 2001 ("unaudited")
Assets
Current assets
	Cash and cash equivalents				$ 9,045,649		$ 19,090,964		$ 43,715,481
	Short-term investments				10,815,017		8,577,503		-
	Accounts receivable				4,412,347		2,752,262		2,198,965
	Work-in-progress and inventory				318,949		509,298		-
	Prepayments and deposits				1,827,543		909,388		1,553,798
					26,419,505		31,839,415		47,468,244
Capital assets - net					4,546,519		3,160,008		3,224,118
Intangible assets - net					14,296,340		13,082,923		9,137,154
					$ 45,262,364		$ 48,082,346		$ 59,829,516
Liabilities and shareholders' equity
Current liabilities
	Accounts payable and accrued liabilities				$ 4,044,326		$ 3,097,692		$ 2,820,448
	Deferred revenue				820,137		773,115		-
	Current portion of capital lease obligations				192,898		175,996		149,814
	Promissory notes payable				867,356		-		-
					5,924,717		4,046,803		2,970,262
Capital lease obligations					120,674		159,013		220,551
					6,045,391		4,205,816		3,190,813
Shareholders' equity
Share capital					95,881,873		94,871,503		91,993,823
Deficit					(56,664,900)		(50,994,973)		(35,355,120)
					39,216,973		43,876,530		56,638,703
					$ 45,262,364		$ 48,082,346		$ 59,829,516

ZI CORPORATION
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
Periods ended March 31					2002 ("unaudited")		2001 ("unaudited")
Revenue
	License and implementation fees				$ 1,850,290		$ 1,151,163
	Engineering services				114,147		94,268
	Other product revenue				347,500		77,114
					2,311,937		1,322,545
Cost of sales
	License and implementation fees				53,657		223,208
	Engineering services				47,042		38,535
	Other products				78,722		-
					179,421		261,743
Gross margin					2,132,516		1,060,802
Operating expenses
Selling general and administrative					(4,716,799)		(4,751,860)
Product research and development					(1,469,777)		(1,251,926)
Depreciation and amortization					(1,627,163)		(777,455)
Foreign exchange gain (loss)					(2,622)		1,997,339
Operating loss before undernoted					(5,683,845)		(3,723,100)
	Interest on leases				(34,228)		(7,951)
	Other interest expense				(1,318)		-
	Interest income and other income				62,214		732,186
Loss before income taxes					(5,657,177)		(2,998,865)
	Income taxes				(12,750)		(43,572)
Net loss					(5,669,927)		(3,042,437)
Deficit, beginning of period					(50,994,973)		(32,312,683)
Deficit, end of period					$ (56,664,900)		$ (35,355,120)
Basic loss per share					$ (0.15)		$ (0.08)
Diluted loss per share					$ (0.15)		$ (0.08)
Weighted average common shares					37,584,679		37,032,978
Common shares outstanding, end of period					37,723,350		37,035,967

ZI CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Periods ended March 31					2002 ("unaudited")		2001 ("unaudited")
Operating activities:
	Net loss				$ (5,669,927)		$ (3,042,437)
	Items not affecting cash:
	Loss (gain) on dispositions of capital assets				78,305		(20,983)
	Depreciation and amortization				1,627,163		777,455
	Funds applied to operations				(3,964,459)		(2,285,965)
	(Increase) decrease in non-cash working capital				(1,503,118)		777,899
	Cash flow applied to operations				(5,467,577)		(1,508,066)
Financing activities:
	Proceeds from issuance of common shares				220,370		18,000
	Payment of capital lease obligations				(21,438)		(37,000)
	Payment of notes payable				(7,947)		-
					190,985		(19,000)
Investing activities:
	Short-term investments				(2,237,514)		-
	Purchase of capital assets				(66,650)		(294,979)
	Proceeds from capital dispositions				-		-
	Software development costs				(580,126)		(1,353,547)
	Other deferred costs				-		(793)
	Acquisition of subsidiaries net of cash acquired				(1,884,433)		-
					(4,768,723)		(1,649,319)
Net cash outflow					(10,045,315)		(3,176,385)
Cash and cash equivalents, beginning of period					19,090,964		46,891,866
Cash and cash equivalents, end of period					$ 9,045,649		$ 43,715,481
Non cash financing activity
	Equipment acquired under capital lease				$ -		$ 16,351
	Acquisition of subsidiaries				$ 790,000		-
Components of cash and cash equivalents
	Cash				$ 3,346,813		$ 3,084,752
	Cash equivalents				$ 5,698,836		$ 40,630,729
Supplemental cash flow information
Cash paid for interest					$ 35,546		$ 7,951

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