MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--March 15,
2006--SumTotal(TM) Systems (NASDAQ:SUMT), the largest provider of
learning and business performance technologies and services, announced
that it has entered into a settlement agreement with IpLearn, LLC
which will end the patent litigation that has been pending in the
United States District Court for the Northern District of California
since 2002.
Under the terms of the settlement agreement, IpLearn will grant to
SumTotal, among other things, a release from all claims related to the
litigation, certain licenses and covenants not to sue. The settlement
agreement was entered into for the primary purpose of resolving
contested claims and disputes, as well as avoiding the substantial
cost, expenses and uncertainties associated with protracted and
complex litigation. The settlement agreement does not contain any
finding of fault or admission of wrongdoing or liability on the part
of SumTotal. As consideration, SumTotal has agreed to a $3.5 million
payment, payable over 3 years, and the issuance of 50,000 shares of
common stock to IpLearn. As a result of the settlement, SumTotal will
record a one-time charge for this settlement in its financial
statements for the period ended December 31, 2005.
"We are pleased to put this matter behind us," said Erika
Rottenberg, SumTotal's senior vice president and general counsel.
"With the resolution of this litigation, SumTotal can focus on growing
our business, ensuring success for our customers, and creating value
for our shareholders."
In addition, SumTotal plans to file a Form 12b-25 stating that it
will need additional time to file its Annual Report on Form 10-K.
However, SumTotal believes that it will file its Form 10-K on or
before March 31, 2006. The additional time is required, in part, for
(a) SumTotal to appropriately account for the settlement of the
IpLearn litigation due to the close proximity of SumTotal's Form 10-K
filing date to the litigation settlement date, and (b) completion of
SumTotal's accounting for the acquisition of Pathlore Software
Corporation and the audit thereof by SumTotal's independent registered
financial accountants.
About SumTotal Systems Inc.
SumTotal Systems, Inc. (NASDAQ:SUMT) is the largest provider of
learning and business performance technologies and services. SumTotal
deploys mission-critical solutions that align learning with
organizational and business goals to generate significant bottom-line
results. With more than 17 million users worldwide, SumTotal has
helped accelerate performance and profits for more than 1,500 of the
world's best-known companies and government agencies including
Accenture, Aetna, Cendant, DaimlerChrysler, Delta Air Lines,
Harley-Davidson, Microsoft, Novartis, PNC Bank, U.S. Army, U.S. Air
Force, U.S. Navy, U.S. Coast Guard, U.S. Bancorp, United Airlines,
Vodafone, Wachovia and Wyeth. SumTotal has offices throughout the
United States, in London, Paris, Singapore, Sydney, Tokyo, Hong Kong
and Hyderabad, India. For more information about SumTotal's products
and services, visit www.sumtotalsystems.com.
Safe Harbor Statement/ Forward-Looking Statements
Information in this press release contains forward-looking
statements. These statements represent SumTotal's expectations or
beliefs concerning future events and include statements, among others,
regarding the anticipated benefits of the litigation settlement with
IpLearn; the anticipated filing date of SumTotal's Form 10-K for the
year ended December 31, 2005 by March 31, 2006; completion of
SumTotal's external auditors' audit of SumTotal's financial
statements, including SumTotal's accounting for its acquisition of
Pathlore Software Corporation; and the growth of SumTotal's business,
customer success and shareholder value. These statements are not
historical facts or guarantees of future performance or events, and
are based on current expectations, estimates, beliefs, assumptions,
goals and objectives, and involve known and unknown risks,
uncertainties and other factors that may cause actual results to be
materially different from the results expressed or implied by these
statements. Readers of this press release are cautioned not to place
undue reliance on any forward-looking statements. Additional factors
that could cause actual results to differ include, but are not limited
to, (i) adjustments made to SumTotal's preliminary reporting of its
financial results for the quarter and year ended December 31, 2005,
including adjustments related to the acquisition accounting of
SumTotal's acquisition of Pathlore Corporation and the impact of the
settlement agreement in the IpLearn patent litigation; (ii) failure to
complete the year end audit by SumTotal's external auditors which may
delay, or prevent, SumTotal from filing its Form 10-K by the
prescribed filing deadlines; (iii) failure to file a Form 10-K by the
prescribed filing deadlines; (iv) loss of investor confidence in the
accuracy and completeness of SumTotal's financial reports; (v) failure
to achieve the anticipated benefits of the IpLearn settlement
agreement; (vi) failure to increase quarterly bookings or revenue;
(vii) the ability to reach revenue scale and profitability and to
drive innovation and customer satisfaction; (viii) SumTotal's ability
to retain and attract key employees, especially in light of recent
changes in executive management; (ix) SumTotal's competitive position,
including its market share and leadership position; (x) SumTotal's
ability to execute; (xi) SumTotal's product leadership; and (xii)
other events and other important factors disclosed previously and from
time to time in SumTotal's filings with the Securities and Exchange
Commission, including SumTotal's annual report filed on Form 10-Q
filed on November 9, 2005, and Form 8-Ks. SumTotal assumes no
obligation to update the information in this press release.
CONTACT: SumTotal Systems
Bill Perry, 614-975-7538
bperry[at]sumtotalsystems.com