Internet banking outfit Corillian Corporation has reported a third quarter net loss of $5.6 million, including a $2.6 million litigation settlement with a bank which accused the vendor of misuse of its trade secrets.
Steve Sipowicz, Corillian chief financial officer, says the company this month settled a lawsuit brought by an un-named bank which was not a customer.
"The bank claimed that one of our employees used its trade secrets inappropriately," he says. "We contested the lawsuit and denied the allegations, but the costs of continued litigation combined with the inherent risks of a jury trial caused us to settle the case."
He says Corillian agreed to pay approximately $1.8 million in cash and issue 500,000 shares of common stock to the bank, resulting in a $2.6 million charge in the third quarter.
"This settlement will have no ongoing impact on our business or customers," he states.
Revenue for the third quarter improved marginally to $10 million, from $9 million in Q2, 2002. Adjusted EBITDA loss for the period was $1 million, or $0.03 per share, compared to $3.5 million, or $0.10 per share for the second quarter of 2002.
Cash and investment balances at the end of the third quarter were $14.1 million, compared to $14.3 million for the second quarter of 2002.
Coriliian president and CEO Alex Hart describes the reduction in cash expenses and growth in revenues as a "positive step". However he warns that revenue growth for the fourth quarter is likely to remain flat.