TORONTO, Canada, April 30, 2010 – Diversinet
Corp. (TSX Venture: DIV, OTCBB: DVNTF), a leading innovator of
secure mobile applications, reported its first quarter 2010 results
for the period ended March 31, 2010. All dollar amounts
are in U.S. dollars.
Financial Highlights
Revenues for the first
quarter were $576,000, compared to $2.0 million in the same period
a year ago. Revenues in the first quarter of 2010 included $346,000
from the company’s
license and VAR agreement with Intersections, Inc., (Nasdaq:
INTX) a global provider of consumer and corporate identity
risk management services. The decrease in year over year revenue
is largely due to AllOne Mobile Corporation’s (“AllOne”)
failure to pay the quarterly minimum commitment from the license
and revenue share agreement signed in Q3 2008.
Net loss for the quarter was $1,005,000 or $(0.02) per share,
compared to net income in the same year-ago quarter of $182,000
or $0.00 per share. First quarter 2010 net loss included non-cash
items of $223,000 in stock-based compensation, $16,000 in depreciation
and amortization, and a foreign exchange gain of $188,000. This
compares to non-cash items in the same year-ago quarter of $248,000
in stock-based compensation, $18,000 in depreciation and amortization,
and a foreign exchange loss of $323,000.
Cash and cash equivalents at March 31, 2010 were $11,914,000
and $12,668,000 at December 31, 2009.
Operational Highlights
Leveraging years of development in secure applications for
the mobile world, Diversinet announced an increased focus on
delivering secure mobile healthcare during the March CTIA Wireless
Conference. Elements of the company’s new mobile health
strategy include introducing new products and product enhancements,
creating customized portals to support mobile health applications,
and expanding Diversinet’s network of healthcare partners. Introduced Release 4.0 of MobiSecure® Wallet and Vault,
which features new advanced personalization tools ideally suited
to healthcare organizations. This new release allows healthcare
organizations to reduce costs and improve patient care by extending
their information management to the mobile world. With MobiSecure’s
turn-key capability, this can now be accomplished without undergoing
extensive product development and testing, while also maintaining
feature flexibility, security and branding. Introduced MobiSecure® SMS, a product that allows healthcare
organizations and providers to exchange sensitive information
with customers over a wider range of mobile devices and service
plans, while maintaining a secure and trusted environment. On January 20, 2010, AllOne and AllOne Health Group, Inc.
(“AHG”) commenced a legal proceeding in Pennsylvania
seeking the termination of the license and revenue share agreement
upon payment of $3,000,000 to Diversinet. Diversinet believes
that the amounts due under the agreement, if terminated at
this time, are substantially greater than AllOne and AHG’s
claim. In addition, and despite AllOne’s contractual
obligation to pay minimum quarterly amounts of $1.75 million,
on March 1, 2010 AllOne failed to pay the quarterly minimum
commitment due to Diversinet at that time. Diversinet has removed
the legal proceedings to the Federal U.S. District Court located
in Pennsylvania, where it has asserted, or is intending to
assert, various counterclaims for breach of confidentiality,
misappropriation of trade secrets and intellectual property,
declaratory judgment, monetary damages and equitable relief.
Diversinet is intending to enter into mediation with AllOne
and AHG during the second quarter of 2010. Albert Wahbe, Diversinet’s CEO and chairman stated: “During
the quarter, the company continued the transition from research
and development to the commercialization of one of the most feature-rich
and capable secure application platforms for the mobile world.
We introduced a major new release that makes implementing mobile
health faster and easier to deploy, along with secure SMS capability
that offers broader accessibility.
“With our new emphasis on mobile health, we expect to
benefit from the strengthening and widespread market demand for
the secure mobilisation of health information, driven by both
clear economics for healthcare organizations and new U.S. federal
legislation providing healthcare IT funding and incentives.”
Financial Summary
| |
Q1
2010 |
Q1
2009 |
| Revenues |
$575,724 |
$2,010,275 |
| Cost of revenues |
19,704 |
41,937 |
| Gross margin |
556,020 |
1,968,338 |
| |
|
|
| Expenses |
|
|
| Research
and development |
827,854 |
657,476 |
| Sales and
marketing |
372,361 |
379,519 |
| General
and administrative |
548,649 |
439,480 |
| Depreciation
and amortization |
15,705 |
17,832 |
|
| 1,764,569 |
1,494,307 |
| Income (loss) before
the undernoted |
(1,208,549) |
474,031 |
| Foreign exchange
gain (loss) |
187,856 |
(323,042) |
| Interest income |
16,112 |
31,433 |
| Net income
(loss) for the period |
$(1,004,581) |
$182,422 |
| Basic and diluted
earnings (loss) per share |
$(0.02) |
$0.00 |
| |
|
|
| Cash and cash equivalents |
$11,913,804 |
$10,718,887 |
| Total assets |
$12,184,670 |
$11,053,134 |
| Total current liabilities |
$441,022 |
$578,786 |
| Total shareholders’ equity |
$11,743,648 |
$12,422,081 |
| |
|
|
| Weighted average
basic common shares outstanding |
48,500,871 |
47,031,935 |
| Weighted average
fully diluted common shares outstanding |
48,500,871 |
47,033,810 |
For complete financial statements, including the notes and management’s
discussion and analysis, please visit the investors section on
our website at www.diversinet.com/AboutUs/Investors.html.
About Diversinet
Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF) provides the
healthcare industry with applications that securely connect people
with their healthcare information, providers and payers – anyway,
anytime and anywhere. Diversinet’s reliable, end-to-end
MobiSecure platform offers global, secure and cost-effective
applications to meet rapidly growing needs for mobile personal
health records. Connect with Diversinet Corp. at www.diversinet.com.
Healthcare. Connected and Protected.
###
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, including
the uncertainty of the outcome of the proceedings initiated
by AllOne, 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.
|
Company Contact
Diversinet Corp.
David Hackett
Chief Financial Officer
416-756-2324 ext. 275
dhackett@diversinet.com |
Investor Relations
Liolios Group, Inc.
Ron Both
Managing Director
949-574-3860 ext 1710
rboth@liolios.com |
|