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Fourth Consecutive Quarter of Profitability
Quarterly Revenues up 244%
TORONTO, July 31 /CNW/ - Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF), a leading provider of secure application platforms for the mobile world, today announced financial results for the second quarter of 2009. All dollar amounts are in U.S. dollars.
Revenues for the second quarter were $1,945,000, up 244% percent compared to $565,000 in the second quarter of 2008. Revenues for the six months ended June 30, 2009 were $3,955,000, up 336% from $906,000 in the same period in 2008. The Q2 2009 revenues include $1,625,000 from the $40 million five-year worldwide license and revenue share agreement with AllOne Mobile Corporation ("AllOne") signed in Q3 2008.
The net income for the second quarter of 2009 was $1,056,000 or $0.02 per share, compared to a net loss of $1,205,000, or $0.03 per share in the second quarter of 2008. The net income for the six months ended June 30, 2009 was $1,238,000, or $0.03 per share, compared to a net loss of $2,363,000 or $0.05 per share in the similar six months of 2008. Included in the second quarter net income are non-cash stock-based compensation, depreciation and amortization of $259,000 ($304,000 in Q2 2008). Also included in the second quarter net income is a foreign exchange gain of $707,000 ($15,000 gain in Q2 2008). Cash and cash equivalents at June 30, 2009 were $10,671,000 and $10,719,000 at March 31, 2009.
Albert Wahbe, CEO and Chairman stated "First and foremost is the continued strength of our balance sheet and the achievement of our fourth consecutive profitable quarter - both represent significant achievements for Diversinet. We believe that 2009 will be our first profitable year since our founding twelve years ago. From a business perspective, 2009 will continue to be measured by our and AllOne's ability to negotiate pilots and strategic partnerships as we wait for the wireless health care market to emerge. While we would like to see the market evolve faster, we have noticed an increase in telehealth activity over the last three months. From a competitive standpoint, we believe Diversinet is a leading secure application platform for the mobile world. Through our partnership with AllOne Mobile we have established exciting new relationships with Microsoft HealthVault and the U.S. Army, establishing a credible footprint. Additionally, we have several U.S. and international activities that I am confident will emerge during the second half of 2009. Please note that Diversinet is providing technology leadership in the telehealth segment that is still in its infancy and evolving rapidly. While our technology is available for deployment, our growth is ultimately reliant upon market adoption. We continue to believe that we can make additional progress in the health care industry even in these challenging economic times and believe the U.S. commitment to spend up to $31 billion dollars on U.S. health care information technology over the next 10 years will be a positive catalyst for AllOne and Diversinet. With this momentum, we expect to launch an investor relations program later this year."
Company, customer and product solution highlights include:
- During May 2009, the AllOne Mobile secured by Diversinet and MyHealth
Mobile application (for BlueCross of Northeast Pennsylvania members)
was approved and is now available on the Verizon BREW application
deck for download.
- During May 2009, the AllOne Mobile secured by Diversinet product went
live with a secure mobile consumer direct PHR (personal health
record) solution that is offered by Microsoft's HealthVault. The
product is now available for purchase for $25 per year. Visit
HealthVault's website to purchase our innovative solution today at
http://healthvault.com/websites/AllOneHealth-AllOneMobile.html?type(equal sign)
application.
- During June 2009, the AllOne Mobile secured by Diversinet product
went live on the iTunes App Store offering three iPhone apps
available for download. The applications are for AllOne Mobile,
MyHealth Mobile and mCare. The mCare application is for use in a U.S.
Army pilot that creates a challenge response secure session with the
wounded warrior for interactive feedback. The AllOne Mobile direct to
consumer application for Microsoft's HealthVault is anticipated to be
available in August.
- During June 2009, after successful implementation of our U.S. Army
pilot our combined solution was moved behind the Army's firewall and
the pilot metrics expanded. An early positive sign. AllOne Mobile's
platform is anticipated to support the rehabilitation needs of up to
10,000 returning soldiers in a phased implementation over the next
year.
- Diversinet was awarded an additional U.S. Patent No. 7,555,460
entitled "Payment system and method using tokens" on June 30, 2009.
The patent provides a method for collecting payment over the internet
by a third party for services using secure digital tokens issued by a
third party. The new patent addresses several security and fraud
issues related to the use of credit card payments over the internet.
Diversinet's patent portfolio now includes 12 patents and 24 patents
pending.
- During April 2009, the AllOne Mobile Secured by Diversinet product
(that utilizes MobiSecure Wallet and Vault) won the Info Security
Products Guide 2009 Global Product Excellence Award for Security
solution for health.
About Diversinet
Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF) is a leading provider of secure application platforms for the mobile world utilizing 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 applications 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 and the term of the agreement with AllOne Mobile Corporation. 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.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Diversinet Corp.
CONSOLIDATED BALANCE SHEETS
(in United States dollars)
June 30 December 31
2009 2008
$ $
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(Unaudited)
ASSETS
Current assets
Cash and cash equivalents 10,671,462 12,075,422
Accounts receivable (note 2(c)) 217,307 -
Prepaid expenses 42,029 57,346
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Total current assets 10,930,798 12,132,768
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Property and equipment, net (note 4) 241,745 255,264
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Total assets 11,172,543 12,388,032
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 177,615 168,078
Accrued liabilities (note 5) 170,465 511,961
Deferred revenues 35,833 2,646,356
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Total current liabilities 383,913 3,326,395
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Shareholders' equity
Share capital (note 6) 68,168,993 68,099,993
Contributed surplus 8,030,183 7,596,686
Share purchase warrants (note 6) - 13,687
Deficit (63,889,825) (65,128,008)
Accumulated other comprehensive income:
Cumulative translation adjustment (1,520,721) (1,520,721)
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Total shareholders' equity 10,788,630 9,061,637
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Total liabilities and shareholders' equity 11,172,543 12,388,032
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Diversinet Corp.
CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)
AND DEFICIT AND COMPREHENSIVE NET INCOME (LOSS)
(in United States dollars)
(Unaudited)
Three months ended June 30 Six months ended June 30
2009 2008 2009 2008
$ $ $ $
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Revenues 1,944,683 564,709 3,954,958 906,304
Cost of revenues 42,491 68,760 84,428 150,823
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Gross margin 1,902,192 495,949 3,870,530 755,481
Expenses
Research and
development 689,483 715,048 1,346,959 1,343,071
Sales and
marketing 379,198 486,344 758,717 896,301
General and
administrative 472,904 525,411 912,384 971,866
Depreciation and
amortization 18,799 26,494 36,631 52,040
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1,560,384 1,753,297 3,054,691 3,263,278
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Income (loss)
before the
following 341,808 (1,257,348) 815,839 (2,507,797)
Foreign exchange
gain 706,820 15,101 383,778 36,502
Interest income 7,133 37,735 38,566 108,142
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Net income (loss)
for the period
and comprehensive
net income (loss) 1,055,761 (1,204,512) 1,238,183 (2,363,153)
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Deficit, beginning
of period (64,945,586) (64,337,316) (65,128,008) (63,178,675)
Net income (loss)
for the period 1,055,761 (1,204,512) 1,238,183 (2,363,153)
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Deficit, end
of period (63,889,825) (65,541,828) (63,889,825) (65,541,828)
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Basic and diluted
earnings (loss)
per share 0.02 (0.03) 0.03 (0.05)
Weighted average
basic common
shares
outstanding 47,106,935 43,242,783 47,069,642 43,242,783
Weighted average
fully diluted
common shares
outstanding
(note 7) 47,221,687 43,242,783 47,106,527 43,242,783
Diversinet Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in United States dollars)
(Unaudited)
Three months ended June 30 Six months ended June 30
2009 2008 2009 2008
$ $ $ $
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OPERATING
ACTIVITIES
Net income (loss)
for the period 1,055,761 (1,204,512) 1,238,183 (2,363,153)
Add (deduct) items
not requiring an
outlay of cash:
Depreciation and
amortization 18,799 26,494 36,631 52,040
Foreign exchange
(gain) loss (646,724) (15,334) (343,577) (6,591)
Stock-based
compensation
expense
(note 6(c)) 240,665 277,815 488,810 479,469
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668,501 (915,537) 1,420,047 (1,838,235)
Changes in non-cash
working capital:
Accounts
receivable (168,987) - (217,307) 122,687
Prepaid expenses (1,183) 11,306 15,317 20,319
Accounts payable 37,497 83,099 9,537 29,943
Accrued
liabilities (28,680) 68,080 (341,496) (523,735)
Deferred revenue (1,185,834) 34,942 (2,610,523) (59,027)
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Cash used in
operations (678,686) (718,109) (1,724,425) (2,248,048)
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FINANCING
ACTIVITIES
Issue of common
shares on exercise
of warrants
for cash - 1,725,000 - 1,725,000
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Cash provided by
financing
activities - 1,725,000 - 1,725,000
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INVESTING
ACTIVITIES
Purchase of
property and
equipment (15,463) (12,631) (23,112) (13,915)
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Cash used in
investing
activities (15,463) (12,631) (23,112) (13,915)
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Foreign exchange
gain on cash
held in foreign
currency 646,724 15,334 343,577 36,502
Net change in cash
and cash
equivalents during
the period (47,425) 1,009,593 (1,403,960) (530,372)
Cash and cash
equivalents,
beginning of
the period 10,718,887 6,854,321 12,075,422 8,394,286
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Cash and cash
equivalents,
end of
the period 10,671,462 7,863,914 10,671,462 7,863,914
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Supplemental cash
flow information:
Interest
received 7,133 37,735 38,566 108,142
Supplemental
disclosure
relating to
non-cash
financing and
investing
activities:
Issuance of
shares to
employees
(note 6(a)) 41,250 42,000 69,000 71,499
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Cash and cash
equivalents is
comprised of:
Cash 646,657 2,356,432
Cash equivalents 10,024,805 5,507,482
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10,671,462 7,863,914
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