News release

 Zi Corporation


Zi Corporation continues revenue growth in third quarter


Calgary, AB (Nov. 15, 2000) - Zi Corporation (NASDAQ: ZICA) (TSE: ZIC) has reported a 145 per cent increase in year-to-date revenues. Total revenues to date amount to $3,364,118. Third quarter revenues were $1,515,338, a 96 per cent increase over the $772,881 earned in the same period of 1999. Zi Corporation revenues increased 29 per cent relative to the second quarter of 2000.

In the third quarter Zi started collecting royalties from a new source, Alcatel. Alcatel products enabled with eZiText™ were introduced to the market in August. Zi is now collecting royalties from three of its licensees and earning royalties regularly each quarter. Royalty revenue in the third quarter was $931,928. The recently acquired Telecom Technology Centre also contributed $350,496 to third quarter revenues.

"Technology leadership is central to our strength," says Michael Lobsinger, chairman and chief executive officer of Zi Corporation. "Our overall technology offering has expanded with the acquisition and integration of Telecom Technology Centre."

Third quarter highlights

(Cdn 000s except earnings per share) Q3 2000 Q3 1999 % change
Revenues $ 1,515 $ 773 up 96
Operating income (loss) $(3,887) $(1,170) up 232
Interest and other income $ 853 $ 39 up 2087
Earnings (loss) per share $(0.083) $(0.038) up 118
Common shares outstanding 37,004,967 33,056,117 up 12
Employees 234 45 up 420

Net loss in the third quarter was $3,033,902, a loss of $0.083 per share compared to a loss of $0.038 per share in the same period in 1999. The increase in loss is related to expenses associated with Zi's global expansion. Zi has been increasing staffing levels in Europe, Japan and North America to provide local support to customers and to continue its investment in product development activities globally.

Zi's Oztime investment launched its commercial service at the end of August, two months ahead of schedule. Oztime addresses critical education and training requirements in China, by offering market driven and career-oriented certificate programs online. Oztime currently has 12 courses available and 12 more are in production. The initial focus of these courses has been on the information technology and project management areas.

In October, Zi Corporation was presented with the i-Business Award for innovation in information technology from the Canadian Chamber of Commerce in Hong Kong. The i-Business Award is presented to an Internet-based Canadian company or member of the Canadian Chamber that has developed innovative information technology or services. Special consideration is given to companies showing a distinct emphasis on the Greater China market.

"Seven years ago, Zi entered the market in China. Today, we have secured contracts with 14 domestic manufacturers in China including Konka, TCL, Legend and Amiosonic," says Michael Lobsinger, chairman and CEO of Zi Corporation. "Zi has its employees to thank for this international award and for our achievements worldwide."

Zi Corporation is a market-driven technology and services company focused on developing and delivering intelligent interface solutions to the wireless and consumer Internet spaces. The company's core product, eZiText™ connects people to short messaging, e-mail, e-commerce, Web browsing and similar applications in almost any written language. Zi supports its strategic partners from offices in Calgary, Beijing, Hong Kong, San Francisco, Shenzhen, Stockholm and Tokyo. 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 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.

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For further information, please contact:

Randy Henderson
Vice President, Finance
Zi Corporation
Phone: (403) 231-4580
Email: investor@zicorp.com
Web site: www.zicorp.com
  

ZI CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED) September 30,
2000		 December 31,
1999		 September 30,
1999
Assets
Current assets
  Cash and cash equivalents $51,459,806 $21,519,737 $8,708,503
  Short-term investments - 6,111,987 -
  Accounts receivable 3,099,599 2,226,004 1,211,657
  Prepayments and deposits 1,391,545 530,985 204,524
  55,950,950 30,388,713 10,124,684
Capital assets - net 2,561,231 650,245 421,311
Intangible assets - net 7,868,714 2,964,516 1,578,825
  $66,380,895 $34,003,474 $12,124,820
 

 
Liabilities and Shareholders' equity
Current liabilities
  Accounts payable and accrued liabilities $2,716,673 $1,031,410 $566,763
 
  2,716,673 1,031,410 566,763
Convertible notes payable - - 500,000
  2,716,673 1,031,410 1,066,763
 

 
Shareholders' equity
Share capital 90,745,960 53,326,681 29,690,293
Deficit (27,081,738) (20,354,617) (18,632,236)
  63,664,222 32,972,064 11,058,057
  $66,380,895 $34,003,474 $12,124,820
 

ZI CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

  Nine Months Ended September 30 Three Months Ended September 30
(UNAUDITED) 2000 1999 2000 1999
Revenue $3,364,118 $1,375,530 $1,515,338 $772,881

Operating costs and expenses
  Operating costs 7,437,397 3,041,230 3,538,272 1,179,905
  General and administrative 2,770,314 1,351,803 812,476 486,401
  Amortization 2,355,834 790,059 1,051,437 276,963
 
  12,563,545 5,183,092 5,402,185 1,943,269
 

Operating income (loss) before the undernoted (9,199,427) (3,807,562) (3,886,847) (1,170,388)
  Interest and other income 2,472,306 56,644 852,945 38,716
  Interest expense - (29,918) - (10,082)

 
Net earnings (loss) $(6,727,121) $(3,780,836) $(3,033,902) $(1,141,754)
 

 
Earning (loss) per share $(0.184) $(0.126) $(0.083) $(0.038)
 

 
Common shares outstanding - weighted average 36,574,926 29,922,512 36,574,926 29,922,512
 

ZI CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW

Nine Months Ended September 30 (UNAUDITED) 2000 1999

Operating activities:
  Net earnings (loss) $(6,727,121) (3,780,836)
  Add: items not affecting cash:
      Loss on dispositions of capital assets 6,362 13,427
      Amortization 2,355,834 790,059
  Funds applied to operations (4,364,925) (2,977,350)
  Decrease (increase) in non-cash working capital 376,882 (854,721)
  Cash flow applied to operations (3,988,043) (3,832,071)

Financing activities:
  Proceeds from issuance of common shares 36,259,280 12,215,019
  36,259,280 12,215,019

Investing activities:
  Short-term investments converted to cash 6,111,987 -
  Purchase of capital assets (1,628,220) (83,451)
  Purchase of subsidiaries (5,076,991) -
  Cash acquired through purchase of subsidiaries 1,932,441 -
  Proceeds from capital dispositions 9,388 6,986
  Payment of capital lease obligation related to capital assets - (1,331)
  Deferred development costs (3,631,257) (646,496)
  Other deferred costs (48,516) -
  (2,331,168) (724,292)

Net cash inflow 29,940,069 7,658,656
Cash and cash equivalents, at the beginning of year 21,519,737 1,049,847
Cash and cash equivalents, at the end of the period $51,459,806 $8,708,503

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