Getting Up To Speed With Zi Corporation, Inc.
Symbol: ZICA (NASDAQ)
Price: $.37 (as of 1/15/2009)
Market Cap: $18.70

Though the stock markets and economic conditions remain in turmoil, we continue to witness profoundly positive developments and milestone executions by the management of Zi Corporation. Zi’s third quarter, which ended September 30th, 2008, ran concurrent to the Global recession’s acceleration into “meltdown” status, and yet, Zi continued to “fire on all cylinders”.

The company’s quarter had the following highlights:

Zi set a new quarterly revenue record of $4.2 Million, which represents the first time the company has exceeded $4 Million in a quarter.
Nokia renewed multi year licensing deal, increasing first year revenue by 100%, compared to the final year of the previous contract.
The company’s relationship with Sony Ericsson expanded dramatically. Revenues generated increased by 33%.
ZTE, a major Chinese telecommunications equipment manufacturer, signed a multi-year deal to license Zi’s hand-writing recognition software, Decuma™.
Kyocera chose eZiText ™ and eZiType™ predictive text technology for select devices within the Kyocera advanced mobile phone portfolio, including Sanyo branded handsets worldwide.

These by no means represent all of the recent, important developments for Zi Corporation. The company, since the quarter’s end, has had additional revenue generating announcements, and have again rejected another offer from Nuance Communications, Inc. (OTCBB: NUAN). Although Nuance’s more recent, tender offer is lower than their initial offer, their continued attempts to buy Zi can be seen as nothing less than vigorous confirmation that ZICA’s cutting edge technology is at the forefront of the handheld device market. Furthermore, having been contacting the shareholder base in an attempt to determine the general “temperature”, we are very confident that the tender will not occur.

The recent pullback in the stock’s price represents nothing short of a strong buying opportunity. Worst case scenario, we feel confident that Nuance will make an offer that management cannot disregard, but that would by definition require a substantially higher price point. Best case scenario, the company continues to execute and gain market share with the Decuma™ and Qix™ technologies, which offer the potential to ramp up to $50 to $100MM in annual revenues relatively quickly. Either scenario though, provides likely substantial share price appreciation.

DISCLAIMER

This publication is strictly the opinion of Water’s Edge Advisors and may not be construed as investment advice. This publication does not provide an analysis of the Company’s financial position and is not a solicitation to purchase or sell securities of Zi Corp. (hereinafter referred to as “The Company”). Readers should consult their own independent tax, business and financial advisors with respect to any investment, including any contemplated investment in the aforementioned Company. All information contained in this publication should be independently verified with the Company and by an independent financial analyst. Water’s Edge Advisors, its affiliates, subsidiaries and agents (collectively, “The Publisher”) is being compensated fifteen thousand dollars per month for general consulting services. Additionally, the Publisher reserves the right to buy and sell shares of the Company’s securities in the open market. In preparing this publication, the Publisher relied on information supplied by the Company, which although believed to be reliable, cannot be guaranteed. This publication is not an endorsement of the Company by the Publisher, and the Publisher is not a registered investment advisor or broker-dealer and accepts no liability for any loss arising from an investor’s reliance on or use of this publication.

SAFE HARBOR STATEMENT

The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides a “safe harbor” for forward-looking statements. Any forward-looking statements are made pursuant to the PSLRA and, as such, speak only as of the date made. Certain statements contained herein that are not purely historical facts are forward-looking statements, including any statements as to beliefs, plans, events, expectations or intentions regarding the future, the occurrence of which involves risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. We undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Information concerning potential factors that could affect the Company is detailed from time to time in the Company’s reports filed with the Securities and Exchange Commissions.

The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides a “safe harbor” for forward-looking statements. Any forward-looking statements are made pursuant to the PSLRA and, as such, speak only as of the date made. Certain statements contained herein that are not purely historical facts are forward-looking statements, including any statements as to beliefs, plans, events, expectations or intentions regarding the future, the occurrence of which involves risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. We undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Information concerning potential factors that could affect the Company is detailed from time to time in the Company’s reports filed with the Securities and Exchange Commissions.

The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides a “safe harbor” for forward-looking statements. Any forward-looking statements are made pursuant to the PSLRA and, as such, speak only as of the date made. Certain statements contained herein that are not purely historical facts are forward-looking statements, including any statements as to beliefs, plans, events, expectations or intentions regarding the future, the occurrence of which involves risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. We undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Information concerning potential factors that could affect the Company is detailed from time to time in the Company’s reports filed with the Securities and Exchange Commissions.

SAFE HARBOR STATEMENT

The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides a “safe harbor” for forward-looking statements. Any forward-looking statements are made pursuant to the PSLRA and, as such, speak only as of the date made. Certain statements contained herein that are not purely historical facts are forward-looking statements, including any statements as to beliefs, plans, events, expectations or intentions regarding the future, the occurrence of which involves risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. We undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Information concerning potential factors that could affect the Company is detailed from time to time in the Company’s reports filed with the Securities and Exchange Commissions.

The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides a “safe harbor” for forward-looking statements. Any forward-looking statements are made pursuant to the PSLRA and, as such, speak only as of the date made. Certain statements contained herein that are not purely historical facts are forward-looking statements, including any statements as to beliefs, plans, events, expectations or intentions regarding the future, the occurrence of which involves risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. We undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Information concerning potential factors that could affect the Company is detailed from time to time in the Company’s reports filed with the Securities and Exchange Commissions.

SAFE HARBOR STATEMENT

The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides a “safe harbor” for forward-looking statements. Any forward-looking statements are made pursuant to the PSLRA and, as such, speak only as of the date made. Certain statements contained herein that are not purely historical facts are forward-looking statements, including any statements as to beliefs, plans, events, expectations or intentions regarding the future, the occurrence of which involves risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. We undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Information concerning potential factors that could affect the Company is detailed from time to time in the Company’s reports filed with the Securities and Exchange Commissions.

The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides a “safe harbor” for forward-looking statements. Any forward-looking statements are made pursuant to the PSLRA and, as such, speak only as of the date made. Certain statements contained herein that are not purely historical facts are forward-looking statements, including any statements as to beliefs, plans, events, expectations or intentions regarding the future, the occurrence of which involves risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. We undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Information concerning potential factors that could affect the Company is detailed from time to time in the Company’s reports filed with the Securities and Exchange Commissions.

The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides a “safe harbor” for forward-looking statements. Any forward-looking statements are made pursuant to the PSLRA and, as such, speak only as of the date made. Certain statements contained herein that are not purely historical facts are forward-looking statements, including any statements as to beliefs, plans, events, expectations or intentions regarding the future, the occurrence of which involves risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. We undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Information concerning potential factors that could affect the Company is detailed from time to time in the Company’s reports filed with the Securities and Exchange Commissions.