Achieves Profitability in Q3 and Q4
Q4 Quarterly Revenues Up 42%
TORONTO, Feb. 24 /CNW/ - Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF), a leading provider of secure application platforms for the mobile world, today announced its fiscal 2008 results. All dollar amounts are in U.S. dollars.
For the year ended December 31, 2008, Diversinet reported revenue of $4,615,000 compared to revenue of $4,537,000, for the year ended December 31, 2007. The company reported a net loss of $1,949,000 or $(0.04) per share for the year ended December 31, 2008 compared to a net loss of $3,433,000 or $(0.09) per share for the year ended December 31, 2007. Included in the December 31, 2008 net loss are non-cash items of $1,389,000 in stock-based compensation expense, depreciation and amortization of $155,000, totaling $1,544,000 or 79% percent of the net loss.
The company recorded revenues of $1,924,000 in the three months ended December 31, 2008, compared to $1,352,000, in the same period in the prior year. Net income for the three months ended December 31, 2008 was $272,000, compared to a net loss for the same quarter in fiscal 2007 of $1,326,000. Included in the three months ended December 31, 2008 net income are non-cash items of $598,000 in stock-based compensation expense, $76,000 for depreciation and amortization, totaling $674,000.
The company had $12,075,000 in cash and cash equivalents as of December 31, 2008. Cash provided by operations during 2008 amounted to $1,938,000 compared to cash used in operations of $2,201,000 for 2007.
"2008 marked an important year for Diversinet as we continued to successfully transition from a product development focused company towards a sales and marketing enterprise. In 2008 we continued to develop customer relationships, notably in the healthcare sector. This was highlighted by our five year, $40 million worldwide exclusive license and revenue share agreement with AllOne Mobile Corporation ("AllOne"). The second half of 2008 also saw another Diversinet first, profitability in each of the third and fourth quarters." said Albert Wahbe, Diversinet's CEO.
Outlined below are the key milestones the company achieved during 2008:
- In April, AllOne launched its mobile application that uses our 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
a mobile phone or the Web.
- In April Diversinet introduced 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, Intersections Inc. 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 June CEO and Chairman Albert Wahbe exercised 2,300,000 share
purchase warrants at $0.75 per common share for gross proceeds of
$1,725,000.
- In September, Diversinet signed an exclusive worldwide license and
revenue share agreement with AllOne Mobile Corporation, a subsidiary
of AllOne Health Group, Inc., who in turn is a subsidiary of Hospital
Service Association of Northeastern Pennsylvania to cross license
certain software and to share revenues from the secure mobile access
to personal health records and information. During the five year
agreement, Diversinet is to receive a minimum commitment fee of
$5.5 million in the first year, $7 million per year in years two and
three and $10 million per year in years four and five from AllOne.
The agreement may be cancelled after the third year if, through no
fault of either party, there are changes in market conditions, law or
regulation, or technology obsolescence. In addition, Diversinet also
completed a $500,000 statement of work for AllOne, bringing the
combined total of the 5 year agreement to $40 million. This agreement
replaces the agreement with AllOne Health Group, Inc. signed in
August 2007.
- During the third quarter of 2008, Diversinet refocused its sales
efforts primarily towards mobile personal health records and related
secured payments and identity protection.
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. 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)
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As at December 31 2008 2007
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Assets
Current assets:
Cash and cash equivalents $ 12,075,422 $ 8,394,286
Accounts receivable - 122,687
Prepaid expenses 57,346 63,105
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Total current assets 12,132,768 8,580,078
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Property and equipment, net 255,264 379,993
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Total assets $ 12,388,032 $ 8,960,071
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 168,078 $ 249,502
Accrued liabilities 511,961 731,461
Deferred revenue 2,646,356 130,961
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Total current liabilities 3,326,395 1,111,924
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Shareholders' equity:
Share capital:
Authorized:
Unlimited common shares
Issued and outstanding: 47,031,935
(43,167,783 - 2007) common shares 68,099,993 65,370,707
Contributed surplus 7,596,686 5,621,383
Share purchase warrants 13,687 1,555,453
Deficit (65,128,008) (63,178,675)
Accumulated other comprehensive income:
Cumulative translation adjustment (1,520,721) (1,520,721)
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Total shareholders' equity 9,061,637 7,848,147
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Total liabilities and shareholders' equity $ 12,388,032 $ 8,960,071
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Diversinet Corp.
Consolidated Statements of Loss, Comprehensive Income (Loss) and Deficit
(In United States dollars)
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Year ended December 31 2008 2007 2006
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Revenue $ 4,614,790 $ 4,536,983 $ 1,666,965
Cost of revenues 307,946 239,878 1,041,096
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Gross margin 4,306,844 4,297,105 625,869
Expenses:
Research and development 2,601,833 2,265,755 831,925
Sales and marketing 1,862,337 1,780,991 700,870
General and administrative 2,512,454 3,738,545 2,484,556
Depreciation and amortization 154,881 119,647 159,048
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7,131,505 7,904,938 4,176,399
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Loss before the following: (2,824,661) (3,607,833) (3,550,530)
Foreign exchange gain (loss) 655,020 (71,106) (18,291)
Interest income and other
income 220,308 245,968 118,104
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Loss for the year and
comprehensive loss (1,949,333) (3,432,971) (3,450,717)
Deficit, beginning of year (63,178,675) (59,745,704) (56,294,987)
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Deficit, end of year $(65,128,008) $(63,178,675) $(59,745,704)
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Basic and diluted loss per
share $ (0.04) $ (0.09) $ (0.12)
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Weighted average number of
common shares 44,454,008 36,872,086 28,740,174
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Diversinet Corp.
Consolidated Statements of Cash Flows
(In United States dollars)
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For the year ended December 31 2008 2007 2006
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Cash provided by (used in):
Operating activities:
Loss for the year from
continuing operations $ (1,949,333) $ (3,432,971) $ (3,450,717)
Items not involving cash:
Depreciation and
amortization 154,881 119,647 159,048
Stock-based compensation
expense 1,389,323 1,542,743 906,444
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(405,129) (1,770,581) (2,385,225)
Change in non-cash operating
working capital:
Accounts receivable 122,687 31,422 (86,804)
Prepaid expenses 5,759 77,976 (23,836)
Accounts payable (81,424) 77,211 19,191
Accrued liabilities (219,500) 190,900 406,982
Deferred revenue 2,515,395 (807,589) 859,550
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Cash provided by (used in)
operations 1,937,788 (2,200,661) (1,210,142)
Financing activities:
Issue of common shares, common
share purchase options and
warrants for cash 1,773,500 5,559,548 5,075,656
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Cash provided by financing
activities 1,773,500 5,559,548 5,075,656
Investing activities:
Property and equipment
additions (30,152) (110,917) (74,761)
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Cash used in investing
activities (30,152) (110,917) (74,761)
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Increase in cash and cash
equivalents 3,681,136 3,247,970 3,790,753
Cash and cash equivalents,
beginning of year 8,394,286 5,146,315 1,355,562
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Cash and cash equivalents,
end of year $ 12,075,422 $ 8,394,286 $ 5,146,315
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Supplemental cash flow
information:
Interest received 220,308 245,968 118,104
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Supplemental disclosure relating
to non-cash financing and
investing activities:
Issuance of shares to
employees 425,283 516,409 84,543
Issuance of shares for
public relations services - 61,545 -
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Cash and cash equivalents is
comprised of:
Cash 762,266 857,609 674,421
Cash equivalents 11,313,156 7,536,677 4,471,894
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$ 12,075,422 $ 8,394,286 $ 5,146,315
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