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Two Customers Launch Wallet and Vault Solution During Quarter
TORONTO, Aug. 1 /CNW/ - Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF), a leading provider of wireless data application and security infrastructure products and services, today announced financial results for the second quarter of 2008.
Revenues for the second quarter were $565,000, up 65 percent compared to $342,000 in Q1 2008 and down from $1,017,000 for the second quarter of 2007. Revenues for the six months ended June 30, 2008 were $906,000, down from $1,923,000 in the same period in 2007. During the second quarter of 2008 two of the Company's customers successfully launched their applications using Diversinet's Wallet and Vault technology. All dollar amounts are in U.S. dollars.
The net loss for the second quarter of 2008 was $1,205,000 or $0.03 per share compared to $1,045,000, or $0.03 per share in the second quarter of 2007. The net loss for the six months ended June 30, 2008 was $2,363,000, or $0.05 per share, compared to a net loss of $1,376,000 or $0.04 per share in the similar six months of 2007. Included in the second quarter net loss are non-cash stock-based compensation, depreciation and amortization of $304,000 ($218,000 in Q2 2007). Cash and cash equivalents at June 30, 2008 were $7,864,000 and $8,394,000 at December 31, 2007.
As stated in our 2007 annual results press release, Diversinet now has two live customer launches of its Wallet and Vault platform licensed in 2007 and expects to have additional customer wins in the second half of 2008.
Company, customer, and product solution highlights include:
- In June, Intersections launched Mobile Lockbox, a major enhancement
to the Identity Guard(R) Total Protection service. MobiSecure(TM)
Wallet and Vault mobile secure encrypted access solution is at the
heart of the offering. MobiSecure Wallet and Vault provides
Intersections with a mobile security platform to extend its core
Identity Guard offering by creating a host of new services that build
closer, more personal and "sticky" relationships with new and
existing customers.
- In April, AllOne launched its mobile application that uses
Diversinet's secure MobiSecure Wallet and Vault product line to place
personal health records (PHR) at consumers' fingertips through their
mobile phones. AllOne Mobile accesses an individual's PHR in a secure
environment and links to the users' mobile phones, giving them well-
organized, easy-to-use, 24/7 mobile access. Users can manage and
share their PHRs with physicians, hospitals, clinics and emergency
personnel helping to improve medical outcomes. AllOne data is stored
behind a password-protected encrypted channel through a partnership
with Diversinet. The application is downloaded wirelessly to phones
and is automatically updated with the most current security and
features available. This level of security and control gives users
the confidence and comfort to create, manage and enhance their PHRs
using the mobile phone or the Web.
- In April Diversinet launched the MobiSecure(TM) USBToken. The
MobiSecure USBToken is a One Time Password (OTP) authentication
technology contained within a durable, portable USB device which is
driverless and leaves no residual footprint on the user's computer.
- In June CEO and Chairman Albert Wahbe exercised 2,300,000 share
purchase warrants for gross proceeds of US$1,725,000. The share
purchase warrants had an exercise price of US$0.75 per common share.
Diversinet intends to use the new funds to continue its research and
development programs and expand our sales and service activities.
Mr. Wahbe stated "We are delighted that AllOne and Intersections were able to successfully launch their product offering during the second quarter. With the launch of the Wallet and Vault product and the introduction of the MobiSecure USBToken we continue to build our product offering to increase revenue opportunities and enhance our long term shareholder value."
About Diversinet
Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF) is a leading provider of wireless authentication and access solutions that secure the personal identity, transactions and data of consumers over almost any mobile phone or handheld device. Diversinet's reliable; end-to-end MobiSecure Wallet and Vault products provide global, secure and cost effective solutions to mobilize personal health records, financial services transactions and identity protection management. Connect with Diversinet Corp. at www.diversinet.com.
The Private Securities Litigation Reform Act of 1995 and Canadian securities laws provide a "safe harbour" for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by the company) contains statements that are forward-looking, such as statements relating to anticipated future revenues of the company and success of current product offerings. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of the company. For a description of additional risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission available at www.sec.gov and Canadian securities regulatory authorities available at www.sedar.com.
Diversinet Corp.
CONSOLIDATED BALANCE SHEETS
(in United States dollars)
(Unaudited)
June 30 December 31
2008 2007
$ $
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ASSETS
Current assets
Cash and cash equivalents 7,863,914 8,394,286
Accounts receivable - 122,687
Prepaid expenses 42,786 63,105
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Total current assets 7,906,700 8,580,078
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Property and equipment, net (note 4) 341,867 379,993
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Total assets 8,248,567 8,960,071
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 279,445 249,502
Accrued liabilities (note 5) 207,726 731,461
Deferred revenue 71,934 130,961
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Total current liabilities 559,105 1,111,924
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Commitments and contingencies (note 10)
Shareholders' equity
Share capital (note 6) 67,458,247 65,370,707
Contributed surplus 6,895,998 5,621,383
Share purchase warrants (note 6) 397,766 1,555,453
Deficit (65,541,828) (63,178,675)
Accumulated other comprehensive income:
Cumulative translation adjustment (1,520,721) (1,520,721)
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Total shareholders' equity 7,689,462 7,848,147
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Total liabilities and shareholders' equity 8,248,567 8,960,071
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See accompanying notes to interim consolidated financial statements.
Diversinet Corp.
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT AND COMPREHENSIVE LOSS
(in United States dollars)
(Unaudited)
Three months ended June 30 Six months ended June 30
2008 2007 2008 2007
$ $ $ $
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Revenues 564,709 1,017,466 906,304 1,922,844
Cost of revenues 68,760 16,435 150,823 52,896
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Gross margin 495,949 1,001,031 755,481 1,869,948
Expenses
Research and
development 715,048 615,848 1,343,071 1,155,065
Sales and
marketing 486,344 370,845 896,301 559,499
General and
administrative 525,411 1,044,686 971,866 1,501,683
Depreciation and
amortization 26,494 29,294 52,040 56,674
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1,753,297 2,060,673 3,263,278 3,272,921
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Loss before the
following (1,257,348) (1,059,642) (2,507,797) (1,402,973)
Foreign exchange
(gain) loss (15,101) 32,234 (36,502) 47,500
Interest income (37,735) (46,917) (108,142) (74,251)
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Loss for the period
and comprehensive
loss (1,204,512) (1,044,959) (2,363,153) (1,376,222)
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Deficit, beginning
of period (64,337,316) (60,076,967) (63,178,675) (59,745,704)
Loss for the
period (1,204,512) (1,044,959) (2,363,153) (1,376,222)
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Deficit, end of
period (65,541,828) (61,121,926) (65,541,828) (61,121,926)
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Basic and diluted
loss per share
(note 8) (0.03) (0.03) (0.05) (0.04)
Weighted average
common shares
outstanding 43,242,783 34,434,969 43,205,283 34,116,744
See accompanying notes to interim consolidated financial statements.
Diversinet Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in United States dollars)
(Unaudited)
Three months ended June 30 Six months ended June 30
2008 2007 2008 2007
$ $ $ $
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OPERATING ACTIVITIES
Loss from
continuing
operations for
the period (1,204,512) (1,044,959) (2,363,153) (1,376,222)
Add (deduct) items
not requiring an
outlay of cash:
Depreciation and
amortization 26,494 29,294 52,040 56,674
Stock-based
compensation
expense (note 7) 277,815 188,516 479,469 311,587
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(900,203) (827,149) (1,831,644) (1,007,961)
Changes in non-cash
operating working
capital items
related to
operations:
Accounts
receivable
and other
receivables - 8,908 122,687 78,034
Prepaid expenses 11,306 18,270 20,319 104,674
Accounts payable 83,099 46,038 29,943 93,036
Accrued
liabilities 68,080 91,450 (523,735) (18,874)
Deferred revenue 34,942 9,856 (59,027) (821,419)
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Cash used in
operations (702,776) (652,627) (2,241,457) (1,572,510)
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FINANCING ACTIVITIES
Issue of
common shares,
compensation
options, warrants
for cash 1,725,000 199,270 1,725,000 466,170
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Cash provided by
financing
activities 1,725,000 199,270 1,725,000 466,170
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INVESTING ACTIVITIES
Purchase of
property and
equipment (12,631) (72,384) (13,915) (78,342)
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Cash used in
investing
activities (12,631) (72,384) (13,915) (78,342)
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Net change in cash
and cash
equivalents during
the period 1,009,593 (525,741) (530,372) (1,184,682)
Cash and cash
equivalents,
beginning of the
period 6,854,321 4,487,374 8,394,286 5,146,315
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Cash and cash
equivalents, end
of the period 7,863,914 3,961,633 7,863,914 3,961,633
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Supplementary
non-cash
transaction
Issuance of
shares to
employees
(note 6(a)) 42,000 37,921 71,499 131,020
Issuance of shares
for public
relations
services - 16,650 - 34,650
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Cash and cash
equivalents is
comprised of:
Cash 2,356,432 563,928
Cash equivalents 5,507,482 3,397,705
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7,863,914 3,961,633
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See accompanying notes to interim consolidated financial statements.