TORONTO,
March 4 /PRNewswire-FirstCall/ -
Diversinet Corp. (TSXV: DIV) (OTCBB: DVNTF), a leader in "connected
and protected" mobile healthcare communications, reported its
fourth quarter and fiscal 2010 results for the period ended
December 31, 2010. All dollar amounts
are in U.S. dollars. 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.
"In 2010, Diversinet advanced the commercial
introduction of its secure mobile health care solutions,
highlighted by new commercial and government contracts," said
Albert Wahbe, Diversinet's chairman
and CEO. "We also released new mobile health products and
enhancements, obtained important new patents, and furthered our
more focused mobile health strategy."
Q4 and Fiscal 2010 Financial
Highlights
Revenues for the fourth quarter were $106,000 compared to $2.1
million in the same year-ago period. Revenues for the full
year were $4.9 million compared to
$8.0 million in 2009. Revenues in
2010 included $3.7 million from
AllOne Mobile Corporation ("AllOne") versus $6.5 million in 2009. In June 2010 Diversinet reached a settlement with
AllOne and its parent company, AllOne Heath Group, whereby
Diversinet's 2008 license and revenue share agreement with AllOne
was ended and AllOne paid Diversinet $4
million to settle any future obligations. In addition, the
parent company of AllOne returned for cancellation all of the
common shares of Diversinet it owned, totaling nearly 7 million
shares. This represented a reduction of approximately 14% of
Diversinet's issued and outstanding common shares. The
stock-purchase agreement between the parent company and Diversinet,
including certain common share put rights and board representation
rights was also terminated. Diversinet retained complete ownership
and control over the intellectual property it developed during its
relationship with AllOne.
Net loss for the fourth quarter was $1.5 million or $(0.04) per share, compared to the year-ago
quarter of $406,000 or $(0.01) per share. Fourth quarter 2010 net loss
included non-cash items of $129,000
in stock-based compensation expense and $17,000 in depreciation, and a foreign exchange
gain of $91,000. This compares with
non-cash items in the year-ago quarter of $448,000 in stock-based compensation and
$20,000 in depreciation, and a
foreign exchange gain of $138,000.
Net income for the year was $1.9 million or $0.04 per share, unchanged from $1.9 million or $0.04 per share in 2009. Included in the
full-year net income were non-cash items of $3.1 million related to the canceled shares
discussed above, $659,000 in
stock-based compensation and $66,000
in depreciation, and a foreign exchange gain of $190,000. This compares with non-cash items in
2009 of $1.2 million in stock-based
compensation and $76,000 in
depreciation, and a foreign exchange gain of $1.3 million.
Cash and cash equivalents totaled $12.5 million at December
31, 2010, as compared to the previous year's balance of
$12.7 million.
2010 Operational Highlights
- In 2010, Diversinet significantly advanced the capabilities of
its secure mobile health product offering. The company introduced
MobiSecure® SMS, which 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. Diversinet also introduced Release
4.0 of MobiSecure Publisher, which features new advanced
personalization tools ideally suited to healthcare organizations.
With MobiSecure's turn-key capability, this customization now can
be accomplished without undergoing extensive product development
and testing, while also maintaining feature flexibility, security
and branding.
- Diversinet was awarded three patents designed to provide
wireless carriers, device vendors and other members of the mobile
ecosystem advanced methods for resolving two of the industry's
biggest problems: security and fragmentation. With the addition of
these three patents, Diversinet's intellectual property portfolio
has 15 patents in the U.S., Canada
and Israel, with 33 patents
pending.
- Mark Trigsted was appointed to
the new position of Executive Vice President, Healthcare, with
responsibilities for global business development and sales.
Trigsted is leading the expansion of Diversinet's partner network
and customer base in the growing market for mobile healthcare
applications. To support him, the company added three U.S.-based
sales executives with deep and diverse healthcare-IT
experience.
- In June, Col. Ronald Poropatich,
M.D., the deputy director of the U.S. Army's Telemedicine and
Advanced Technology Research Center (part of the U.S. Army Medical
Research and Materiel Command), presented the results of the Army's
mCare program to the U.S. House of Representatives' Veterans
Affairs Health Subcommittee. mCare is the Army's mobile health
application for wounded warriors, powered by Diversinet's
MobiSecure platform. In November, following the successful
conclusion of the one-year pilot program, the Army awarded
Diversinet a five-year contract to support expansion of mCare.
Under this contract, the Army licensed MobiSecure SMS for the first
time.
Subsequent to year-end, Diversinet's board of
directors renewed CEO Wahbe's employment agreement for an
additional year (until March 31,
2012). The board believes his leadership will continue to be
important to Diversinet's success in the healthcare
marketplace.
"As we begin 2011, we remain focused on the key
elements of the our mobile health strategy, which includes
introducing new products and product enhancements to support mobile
health applications, and expanding our network of healthcare
partners," said Wahbe, "and we are already seeing results. Based on
the strong progress of our Mihealth pilot program, which is
providing a secure mobile personal health record application to
patients of Blue Sky Family Health, we recently entered into a
five-year, $5 million exclusive
Canadian reseller agreement with Mihealth Global Systems for our
MobiSecure health solutions. This new relationship enables us to
focus on the large opportunities emerging in the U.S., while
Mihealth Global Systems serves Canada and other international markets."
About Diversinet
Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF) provides a
patented and proven secure application platform that enables
healthcare organizations to rapidly deploy HIPAA-compliant mobile
healthcare (mHealth) applications to anyone, anytime, anywhere, on
mobile devices. Diversinet's MobiSecure® platform helps
payers and providers meet growing needs for safe, convenient,
on-the-go storage and sharing of personal health data. Connect with
Diversinet Corp. at www.diversinet.com. Its tagline is "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 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)
| |
|
|
|
|
| As at December 31 |
|
2010 |
|
2009 |
| Assets |
|
|
|
|
| Current assets: |
|
|
|
|
| |
Cash and cash equivalents |
$ |
12,458,750 |
$ |
12,667,842 |
| |
Accounts receivable, net |
|
75,150 |
|
79,717 |
| |
Prepaid expenses |
|
52,773 |
|
35,182 |
| |
Total current assets |
|
12,586,673 |
|
12,782,741 |
| |
|
|
|
|
| |
Property and equipment, net |
|
180,983 |
|
218,126 |
| Total assets |
|
12,767,656 |
$ |
13,000,867 |
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| Liabilities and Shareholders'
Equity |
|
|
|
|
| Current liabilities: |
|
|
|
|
| |
Accounts payable |
$ |
143,253 |
$ |
148,531 |
| |
Accrued liabilities |
|
562,994 |
|
296,255 |
| |
Deferred revenue |
|
45,167 |
|
134,000 |
| |
Total current liabilities |
|
751,414 |
|
578,786 |
| |
|
|
|
|
| Contingently puttable common
stock |
|
- |
|
5,000,000 |
| |
|
|
|
|
| Shareholders' equity: |
|
|
|
|
| |
Share capital: |
|
|
|
|
| |
Authorized: |
|
|
|
|
| |
|
Unlimited common shares |
|
|
|
|
| |
Issued and outstanding: |
|
|
|
|
| |
42,285,171 (48,335,872 - 2009) |
|
|
|
|
| |
|
common shares |
|
85,583,198 |
|
94,276,106 |
| |
Additional paid-in capital |
|
19,346,409 |
|
7,940,124 |
| |
Share purchase warrants |
|
21,242 |
|
7,732 |
| |
Deficit |
|
(91,413,886) |
|
(93,281,160) |
| |
Accumulated other comprehensive
income: |
|
|
|
|
| |
|
Cumulative translation adjustment |
|
(1,520,721) |
|
(1,520,721) |
| |
Total shareholders' equity |
|
12,016,242 |
|
7,422,081 |
| |
|
|
|
|
| Total liabilities and shareholders'
equity |
$ |
12,767,656 |
$ |
13,000,867 |
| |
|
|
|
|
DIVERSINET CORP.
Consolidated Statements of Net Income (Loss) and Comprehensive
Income (Loss)
(In United States dollars)
| |
|
|
|
| For the year ended December 31 |
2010 |
2009 |
2008 |
| |
|
|
|
| Revenues |
$ 4,931,834 |
$ 7,972,929 |
$ 4,614,790 |
| Cost of revenues |
22,860 |
175,138 |
307,946 |
| Gross margin |
4,908,974 |
7,797,791 |
4,306,844 |
| |
|
|
|
| Expenses: |
|
|
|
| Research and development |
3,112,225 |
3,351,742 |
2,601,833 |
| Sales and marketing |
1,783,211 |
1,448,000 |
1,862,337 |
| General and administrative |
1,888,908 |
2,326,380 |
2,512,454 |
| Depreciation |
65,788 |
75,559 |
154,881 |
| |
6,850,132 |
7,201,681 |
7,131,505 |
| |
|
|
|
| Income (loss) before the undernoted: |
(1,941,158) |
596,110 |
(2,824,661) |
| |
|
|
|
| Foreign exchange gain |
190,448 |
1,253,375 |
655,020 |
| Interest income |
57,277 |
61,314 |
220,308 |
| Other income |
3,560,707 |
- |
- |
| Net income (loss) for the year and comprehensive
net income (loss) |
1,867,274 |
1,910,799 |
(1,949,333) |
| |
|
|
|
| |
|
|
|
| Basic and diluted earnings (loss) per share |
$ 0.04 |
$ 0.04 |
$ (0.04) |
| Weighted average common shares outstanding |
45,029,121 |
47,191,669 |
44,454,008 |
| Weighted average fully diluted common shares
outstanding |
45,029,121 |
47,295,515 |
44,454,008
|
| |
|
|
|
| |
|
|
|
DIVERSINET CORP.
Consolidated Statements of Cash Flows
(In United States dollars)
| |
|
|
|
|
|
|
| For the year ended December 31 |
|
2010 |
|
2009 |
|
2008 |
| |
|
|
|
|
|
|
| Cash provided by (used in): |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Operating activities: |
|
|
|
|
|
|
| |
Net income (loss) for the year |
$ |
1,867,274 |
$ |
1,910,799 |
$ |
(1,949,333) |
| |
Items not involving cash: |
|
|
|
|
|
|
| |
|
Depreciation |
|
65,788 |
|
75,559 |
|
154,881 |
| |
|
Foreign exchange gain |
|
(167,297) |
|
(1,151,363) |
|
(590,836) |
| |
|
Other income |
|
(3,060,707) |
|
- |
|
- |
| |
|
Stock-based compensation expense |
|
658,991 |
|
1,195,570 |
|
1,389,323 |
| |
Changes in non-cash working
capital: |
|
|
|
|
|
|
| |
|
Accounts receivable |
|
4,567 |
|
(79,717) |
|
122,687 |
| |
|
Prepaid expenses |
|
(17,591) |
|
22,164 |
|
5,759 |
| |
|
Accounts payable |
|
(5,278) |
|
(19,547) |
|
(81,424) |
| |
|
Accrued liabilities |
|
266,738 |
|
(215,706) |
|
(219,500) |
| |
|
Deferred revenue |
|
(88,833) |
|
(2,512,356) |
|
2,515,395 |
| |
Cash provided by (used in)
operations |
|
(476,348) |
|
(774,597) |
|
1,346,952 |
| |
|
|
|
|
|
|
| Financing activities: |
|
|
|
|
|
|
| |
Issue of common shares and warrants
for cash |
|
128,604 |
|
254,075 |
|
1,773,500 |
| |
Cash provided by financing
activities |
|
128,604 |
|
254,075 |
|
1,773,500 |
| |
|
|
|
|
|
|
| Investing activities: |
|
|
|
|
|
|
| |
Purchase of property and
equipment |
|
(28,645) |
|
(38,421) |
|
(30,152) |
| |
Cash used in investing activities |
|
(28,645) |
|
(38,421) |
|
(30,152) |
| |
|
|
|
|
|
|
| Foreign exchange gain on cash held in
foreign currency |
|
167,297 |
|
1,151,363 |
|
590,836 |
| |
|
|
|
|
|
|
| Net increase (decrease) in cash and
cash equivalents |
|
(209,092) |
|
592,420 |
|
3,681,136 |
| |
|
|
|
|
|
|
| Cash and cash equivalents, beginning
of year |
|
12,667,842 |
|
12,075,422 |
|
8,394,286 |
| |
|
|
|
|
|
|
| Cash and cash equivalents, end of
year |
$ |
12,458,750 |
$ |
12,667,842 |
$ |
12,075,422 |
| |
|
|
|
|
|
|
| Supplemental cash flow
information: |
|
|
|
|
|
|
| |
Interest received |
|
57,277 |
|
61,314 |
|
220,308 |
| |
|
|
|
|
|
|
| Supplemental disclosure relating to
non-cash financing and investing activities: |
|
|
|
|
|
|
| |
Issuance of shares to employees and
Board |
|
284,750 |
|
414,188 |
|
588,489 |
| |
|
|
|
|
|
|
| Cash and cash equivalents is comprised
of: |
|
|
|
|
|
|
| |
Cash |
|
443,684 |
|
563,471 |
|
762,266 |
| |
Cash equivalents |
|
12,015,066 |
|
12,104,371 |
|
11,313,156 |
| |
$ |
12,458,750 |
$ |
12,667,842 |
$ |
12,075,422 |
SOURCE Diversinet Corp.