Diversinet Corp. Reports Fourth Quarter and Fiscal 2009 Results
Annual Revenues Increase to $8 Million, Achieves Annual Net Income of $1.9 Million or $0.04 Per Share
TORONTO, Feb. 26 /PRNewswire-FirstCall/ - Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF), a leading provider of secure application platforms for the mobile world, reported its fourth quarter and fiscal 2009 results for the period ended December 31, 2009. All dollar amounts are in U.S. dollars.
"Fiscal 2009 marked another important year for Diversinet as we continued our transition from primarily research and development to actual sales and marketing of one of the most feature-rich and capable secure application platforms for the mobile world," said Albert Wahbe, Diversinet's CEO.
2009 Financial Highlights
Revenues for the fourth quarter increased 8% to $2.1 million from $1.9 million in the same period a year ago. Revenue for the year increased 73% to $8.0 million from $4.6 million in 2008. Revenues in 2009 included $6.5 million from the license and revenue share agreement with AllOne Mobile Corporation ("AllOne") signed in the third quarter of 2008.
Net loss for the quarter was $406,000 or $(0.01) per share, compared to net income in the same year-ago quarter of $272,000 or $0.01 per share. Fourth quarter 2009 net loss included non-cash items of $448,000 in stock-based compensation expense and $20,000 in depreciation and amortization, and a foreign exchange gain of $138,000. This compares to non-cash items in the same year-ago quarter of $598,000 in stock-based compensation and $76,000 in depreciation and amortization, and a foreign exchange gain of $616,000.
Net income for the year was $1.9 million or $0.04 per share, compared to a net loss of $1.9 million or $(0.04) per share in 2008. Included in the full year net income were non-cash items of $1.2 million in stock-based compensation and $76,000 in depreciation and amortization, and a foreign exchange gain of $1.3 million. This compares to non-cash items in 2008 of $1.4 million in stock-based compensation and $155,000 in depreciation and amortization, and a foreign exchange gain of $655,000.
Cash and cash equivalents totaled $12.7 million at December 31, 2009, an increase of $592,000 from the prior year.
2009 Operational Highlights
- In April, the AllOne Mobile Secured by Diversinet product that
utilizes Diversinet's MobiSecure Wallet and Vault won the Info
Security Products Guide's 2009 Global Product Excellence Award for
Security Solution for Health.
- In May, the MyHealth Mobile and AllOne Mobile secured by Diversinet
applications were approved and are now available on the Verizon BREW
application deck for download. Also in May, the AllOne Mobile
secured by Diversinet product went live, with a mobile consumer
direct PHR (personal health record) solution available through
Microsoft's HealthVault.com.
- In June, Diversinet was awarded an additional United States patent
(# 7,555,460) entitled, "Payment System and Method Using Tokens."
This patent provides a method for collecting payment over the
Internet by a third party for services using secure digital tokens
issued by a third party. The new patent addresses several security
and fraud issues related to the use of credit card payments over the
internet. Diversinet's patent portfolio includes six patents in the
U.S., two in Canada, and four in Israel, with 24 patents pending.
- Also in June, AllOne Mobile secured by Diversinet products went live
on the iTunes App Store: AllOne Mobile and mCare. The mCare
application was designed for a U.S. Army pilot program that creates
a challenge response secure session with the wounded warrior for
real-time interactive feedback. The AllOne Mobile direct-to-consumer
application for Microsoft's HealthVault became available in August.
- Following the successful implementation of our U.S. Army pilot the
pilot metrics were expanded. AllOne Mobile's platform is expected to
support the rehabilitation needs of up to 10,000 soldiers in a phased
implementation over the next year.
- In December, Diversinet furthered its industry leading innovation in
software-based authentication by expanding its offering to include
time-based OTP for its MobiSecure SoftToken. The technology is based
on the TOTP Oath specification. Diversinet's MobiSecure SoftToken is
available for mobile, PC, SMS and as a web browser plugin. It also
supports a wide variety of mobile platforms like J2ME, Blackberry,
Windows Mobile, iPhone and Android. MobiSecure SoftTokens are now
available for both time-based or event-based algorithms.
- In December 2009, AllOne Mobile commenced discussions with Diversinet
to renegotiate its license and revenue sharing agreement. In January
2010, the company received notice from AllOne Mobile that it has
commenced a legal proceeding in Pennsylvania seeking the termination
of the agreement upon payment of $3,000,000. The company believes
the amounts due under the agreement, if terminated at this time, are
substantially greater than the amount claimed.
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 and the agreement with AllOne Mobile Corporation. 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.
Diversinet Corp.
Consolidated Balance Sheets
(In United States dollars)
Unaudited
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As at December 31 2009 2008
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Assets
Current assets:
Cash and cash equivalents $ 12,667,842 $ 12,075,422
Accounts receivable, net 79,717 -
Prepaid expenses 35,182 57,346
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Total current assets 12,782,741 12,132,768
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Property and equipment, net 218,126 255,264
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Total assets $ 13,000,867 $ 12,388,032
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 148,531 $ 168,078
Accrued liabilities 296,255 511,961
Deferred revenue 134,000 2,646,356
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Total current liabilities 578,786 3,326,395
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Shareholders' equity:
Share capital:
Authorized:
Unlimited common shares
Issued and outstanding:
48,135,872 (47,031,935 - 2008)
common shares 69,187,052 68,099,993
Contributed surplus 7,965,227 7,596,686
Share purchase warrants 7,732 13,687
Deficit (63,217,209) (65,128,008)
Accumulated other comprehensive income:
Cumulative translation adjustment (1,520,721) (1,520,721)
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Total shareholders' equity 12,422,081 9,061,637
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Total liabilities and shareholders' equity $ 13,000,867 $ 12,388,032
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Diversinet Corp.
Consolidated Statements of Net Income (Loss),
Comprehensive Income (Loss) and Deficit
(In United States dollars)
Unaudited
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For the year ended December 31 2009 2008 2007
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Revenues $ 7,972,929 $ 4,614,790 $ 4,536,983
Cost of revenues 175,138 307,946 239,878
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Gross margin 7,797,791 4,306,844 4,297,105
Expenses:
Research and development 3,351,742 2,601,833 2,265,755
Sales and marketing 1,448,000 1,862,337 1,780,991
General and administrative 2,326,380 2,512,454 3,738,545
Depreciation and amortization 75,559 154,881 119,647
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7,201,681 7,131,505 7,904,938
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Income (loss) before
the undernoted: 596,110 (2,824,661) (3,607,833)
Foreign exchange gain (loss) 1,253,375 655,020 (71,106)
Interest income 61,314 220,308 245,968
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Net income (loss) for the year
and comprehensive net income
(loss) 1,910,799 (1,949,333) (3,432,971)
Deficit, beginning of year (65,128,008) (63,178,675) (59,745,704)
Net income (loss) for the year 1,910,799 (1,949,333) (3,432,971)
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Deficit, end of year $(63,217,209) $(65,128,008) $(63,178,675)
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Basic and diluted earnings
(loss) per share $ 0.04 $ (0.04) $ (0.09)
Weighted average common
shares outstanding 47,191,669 44,454,008 36,872,086
Weighted average fully diluted
common shares outstanding 47,295,515 44,454,008 36,872,086
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Diversinet Corp.
Consolidated Statements of Cash Flows
(In United States dollars)
Unaudited
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For the year ended December 31 2009 2008 2007
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Cash provided by (used in):
Operating activities:
Net income (loss) for
the year $ 1,910,799 $ (1,949,333) $ (3,432,971)
Items not involving cash:
Depreciation and
amortization 75,559 154,881 119,647
Foreign exchange gain (1,151,363) (590,836) -
Stock-based compensation
expense 1,195,570 1,389,323 1,542,743
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2,030,565 (995,965) (1,770,581)
Changes in non-cash working
capital:
Accounts receivable (79,717) 122,687 31,422
Prepaid expenses 22,164 5,759 77,976
Accounts payable (19,547) (81,424) 77,211
Accrued liabilities (215,706) (219,500) 190,901
Deferred revenue (2,512,356) 2,515,395 (807,589)
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Cash provided by (used in)
operations (774,597) 1,346,952 (2,200,660)
Financing activities:
Issue of common shares
and warrants for cash 254,075 1,773,500 5,559,548
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Cash provided by financing
activities 254,075 1,773,500 5,559,548
Investing activities:
Purchase of property and
equipment (38,421) (30,152) (110,917)
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Cash used in investing
activities (38,421) (30,152) (110,917)
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Foreign exchange gain (loss)
on cash held in foreign
currency 1,151,363 590,836 -
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Net increase in cash and cash
equivalents 592,420 3,681,136 3,247,971
Cash and cash equivalents,
beginning of year 12,075,422 8,394,286 5,146,315
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Cash and cash equivalents,
end of year $ 12,667,842 $ 12,075,422 $ 8,394,286
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Supplemental cash flow
information:
Interest received 61,314 220,308 245,968
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Supplemental disclosure
relating to non-cash
financing and investing
activities:
Issuance of shares to
employees and Board 414,188 588,489 797,159
Issuance of shares for public
relations services - - 61,545
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Cash and cash equivalents
is comprised of:
Cash 563,471 762,266 857,609
Cash equivalents 12,104,371 11,313,156 7,536,677
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$ 12,667,842 $ 12,075,422 $ 8,394,286
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SOURCE Diversinet Corp.
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