WorldGate Releases Second Quarter 2007 Results

Business Wire, August 9, 2007

Period Marked by Distribution Transactions and Receipt of Patent Allowance

TREVOSE, Pa. -- WorldGate Communications, Inc. (NASDAQ: WGAT), a leading provider of personal video phones, today announced its financial results for the second quarter ended June 30, 2007.

Recent Highlights:

The second quarter of 2007 was marked by continued technology and marketing advancements for our Ojo video phone that enhance our leadership position in the video telephony market and facilitate deployment of our products by service operators and consumers.

Key recent operating highlights during and subsequent to the second quarter include:

* Expanded our relationship with Snap Telecommunications, Inc., a wholly owned subsidiary of Aequus Technologies Corp. and a provider of Video Relay Services (VRS) that enables deaf and hard-of-hearing customers to improve the connection with people in their personal and business lives, toward our goal of becoming the premier providers of technology and services to the over eight million people in the deaf and hard-of-hearing community.

* Entered into an agreement with BroadVoice Inc, a leading provider of high-quality, feature-rich broadband phone services to consumers and businesses, for Broadvoice to utilize WorldGate's new service provider software package to easily provision the Ojo personal video phones on their technology platforms, enhancing their capabilities and increasing their speed to market.

* Entered into an agreement with BAB Communications for the distribution of the Ojo Shadow personal video phone in Turkey and surrounding countries.

* Entered into a distribution agreement with Aianna Corporation, a full-service global telecommunications company, to distribute the Ojo personal video phone as part of Aianna's wide array of telecommunications offerings in Africa, Latin America, Asia and Europe.

* Completed distribution agreements in Italy with B.F. Automation and in the Caribbean with People's Telecom Jamaica LTD.

* Contracted with Grey Goose Marketing LLC to further develop our retail distribution plan to position and showcase WorldGate's Ojo video phones and services through the marquee Big Box Retail (BBR) and specialty stores in North America.

* Ojo received a 2006 Product of the Year Award by Technology Marketing Corporation's (TMC) Communications Solutions.

* Announced that the Company had received a notice of allowance of its patent application for a video phone system and method. This application, containing 39 claims, all of which have been allowed, describes a video phone system as well as a method for making video phone calls.

* Announced extended Ojo capability to interoperate with various video phones and soft clients using previous generation communications protocols and video and audio codecs, specifically, enabling Ojo to communicate with video phones using H.263 and G729 video and audio codecs and enabling utilization of the H.323 communications protocol. This added functionality also provided the ability for video phone calls to be made between an Ojo and PCs with web cam capabilities.

* Adopted Texas Instruments Incorporated's (TI) DaVinci[TM] technology for the next generation of the Ojo personal video phone to reduce overall system cost while getting to market more quickly with advanced functionality.

* Developed a new Service Provider Package that allows Ojo video phones to be more quickly and easily adapted to their networks around the world using a wide variety of technology platforms.

* Debuted Ojo video phone on Home Shopping Network, introducing the video phone experience to millions of HSN customers.

Management Comments

During the past quarter the Company has taken a major step toward reaching profitability through its expanded relationship with Snap Telecommunications. This relationship offers the opportunity for Ojo to be installed in the homes of thousands of deaf and hard-of-hearing persons, as well for expanding Ojo's visibility and usage to the business environment, not only for the deaf and hard-of-hearing but to the general business sector. In addition, the Company believes there is a natural expansion and revenue opportunity through the offering of Ojo to the friends and families of the deaf and hard-of-hearing. The Company and Snap are working together to build further awareness of Ojo to this community. The Company commenced shipping Ojo's to Snap customers in July and expects to continue to ship products well into next year to meet the current backlog of orders. The sale of Ojo's to Snap not only results in product revenues but WorldGate also receives a usage network service fee. This special market venue also offers the opportunity to showcase the value-added benefits of Ojo to a host of market segments related to the deaf community, such as government and state agencies.

During the quarter the Company also received a notice of allowance of its patent application for a video phone system and method. This application, containing 39 claims, all of which have been allowed, describes a video phone system as well as a method for making video phone calls. The patent furthers our competitive advantage and provides additional basis for service providers selecting Ojo video phones when determining their video phone platform.