Terms Enable Diversinet to Freely Market Secure Mobile Healthcare Applications Worldwide
TORONTO, June 18 /PRNewswire-FirstCall/ - Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF), a leading innovator of secure mobile healthcare applications, has reached a settlement with AllOne Mobile Corporation ("AllOne") and its parent company, AllOne Heath Group, Inc. ("AHG"), which were seeking the termination of the parties' September 2008 license and revenue sharing agreement (the "License Agreement"). All dollar amounts are in U.S. dollars.
According to the terms of the settlement agreement, AllOne will pay Diversinet $4,000,000 to terminate the License Agreement, including any future revenue sharing obligations. Diversinet will also retain complete ownership and control over its related intellectual property developed during the term of the License Agreement.
Additionally, the parent company of AHG, Hospital Service Association of Northeastern Pennsylvania, d/b/a Blue Cross of Northeastern Pennsylvania ("HSA"), will return to Diversinet all of the common shares of Diversinet it currently owns, totalling 6,956,152 shares.
HSA had acquired 6,756,757 shares of Diversinet common stock in a private placement completed in August 2007. The offering was priced at $0.74 per share, for gross proceeds of $5,000,000 to Diversinet.
Pro forma of the successfully executed settlement agreement, Diversinet expects to have more than $14 million in cash and cash equivalents and approximately 41.7 million in common shares outstanding and 47.4 million fully diluted.
"We are pleased with the terms of the settlement," said Albert Wahbe, Diversinet's chairman and CEO. "This resolution will now allow us to proceed freely to execute our go-to-market strategy, which focuses on providing feature-rich mobile applications that securely connect and protect people with their healthcare information, providers and payers - anytime, anywhere. While AllOne has decided to change its strategic focus, we are thankful for their support over the years."
Diversinet's increased emphasis on mobile health, announced in March, includes these key elements:
- Introducing new products and product enhancements matched to the needs of the mHealth industry. - Creating customized portals to support mobile health applications for physicians and healthcare providers to deliver better care at lower cost. - Expanding Diversinet's network of healthcare partners and providing new partners a model that offers trials with minimal commitment.
AllOne License Agreement Background
In September 2008, Diversinet entered into the License Agreement with AllOne, a wholly owned subsidiary of AHG, which in turn is a wholly owned subsidiary of HSA, to cross-license certain software and share revenues from the worldwide sales. Under the terms of the License Agreement, Diversinet provided an exclusive worldwide right to AllOne to sub-license certain Diversinet software in combination with AllOne's software in the mobile personal health record market.
As of May 2010, HSA owned 6,956,152 common shares of Diversinet, representing approximately 14.5% of the issued and outstanding common shares of Diversinet. These common shares will be returned to Diversinet for cancellation as part of the settlement agreement.
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 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. All other marks are the property of their respective owners.
SOURCE Diversinet Corp.