Diversinet Reports Third Quarter 2011 Financial Results

TORONTO, Oct. 28, 2011 /CNW/ - Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF), a leader in "connected and protected" mobile healthcare communications, reported its third quarter 2011 financial results for the period ended September 30, 2011. All dollar amounts are in U.S. dollars.

Financial Highlights

Revenues for the third quarter of 2011 were $333,000, compared to $394,000 in the same period a year ago. Revenues for the nine months ended September 30, 2011 were $909,000, compared to $4.8 million in the same period in 2010. Revenues in the first nine months of 2010 included $3.6 million derived from the settlement with AllOne Mobile Corporation ("AllOne").

Net loss in the third quarter was $1,074,000 or $(0.03) per share, compared to net loss of $933,000 or $(0.02) per share in the same period a year ago. Net loss for the nine months ended September 30, 2011 was $3.9 million, or $(0.09) per share, compared to net income of $3.3 million or $0.07 per share in the similar nine months of 2010.

Included in the 2011 third quarter net loss were non-cash stock-based compensation and depreciation of $181,000 versus $182,000 in Q3 2010 and a foreign exchange loss of $15,000 versus a $117,000 gain in Q3 2010.  In 2010, the Company recognized other income of $3.6 million from the return of common shares from Hospital Service Association of Northeastern Pennsylvania, which was included in other income.

Cash and cash equivalents at September 30, 2011 were $8.7 million and $12.5 million at December 31, 2010.

Operational Highlights

• In September 2011, Diversinet received a one year renewal from the U.S. Army's Telemedicine and Advanced Technology Research Center (part of the U.S. Army Medical Research and Materiel Command) mCare telehealth-outreach program for members of the military recovering from mild traumatic brain injuries and other wounds.
  
  
• During the third quarter of 2011, the company strengthened its military healthcare expertise with the addition of Dr. Hon Pak and Mr. Fred Hannett to its executive advisory board.  Dr. Pak is a previous president of the American Telemedicine Association and recently retired as Chief Information Officer of the U.S. Army Medical Department, Office of the Surgeon General.  Mr. Hannett is a Washington-based consultant and healthcare IT thought leader with longstanding ties to the U.S. Department of Defense, as well as founder and Managing Principal of The Capitol Alliance.
  
  
• During the second quarter of 2011, Johnson & Johnson Pharmaceutical Research & Development, L.L.C. ("J&J") licensed Diversinet's MobiSecure product.  The product utilizes existing MobiSecure Publisher features and new features being developed for consumer interaction.  During the third quarter of 2011, the company delivered a MobiSecure^® Publisher license to J&J.
  
  
• In September 2011, mCare, the U.S. Army's Telemedicine and Advanced Technology Research Center mobile health application for wounded warriors that is powered by Diversinet's MobiSecure, received the '2010 Army Greatest Inventions Award' representing the most innovative advances in Army technology. Award nominees were judged by a panel of non-commissioned officers with combat and practical experience, as well as a panel of U.S. Army Training and Doctrine Command field-grade officers.

"In the third quarter of 2011, we advanced the market adoption of our proven secure mobile solutions in the growing wireless health and mHealth marketplace," said Albert Wahbe, Diversinet's chairman and CEO. "The substantial inroads we made earlier in the year continued to bear fruit, as we work to complete one of our most exciting implementation in partnership with a major U.S. pharmaceutical company."

"We were also honored with the mCare program receiving the U.S. Army's highest recognition for new technology that serves its important mission," Wahbe added. "These deployments demonstrate how MobiSecure's turn-key capability is able to provide full customization without undergoing extensive product development and testing, while also maintaining feature flexibility, security and customer branding."

Financial Summary

Effective for the 2010 fiscal year, the company has adopted U.S. generally accepted accounting principles ("U.S. GAAP") for the presentation of its consolidated financial statements for Canadian and U.S. reporting requirements, and in this release has restated comparative historical periods accordingly.

For complete financial statements, including the notes and management's discussion and analysis, please visit the investors section on the company's website at www.diversinet.com/Investors.html.

About Diversinet

Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF) provides patented and proven secure products that enable healthcare organizations to rapidly deploy HIPAA-compliant mobile healthcare (mHealth) applications to anyone, anytime, anywhere, on mobile devices. Diversinet's MobiSecure^® application addresses the increasing need for secure messaging, as well as safe, convenient, on-the-go storage and sharing of personal health data. Learn more about how Diversinet is delivering "Healthcare. Connected and Protected" 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 the 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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. MobiSecure is a registered trademark of Diversinet Corp.