Diversinet Reports Third Quarter 2010 Financial Results

Oct 29, 2010, 09:15 ET from Diversinet Corp.

TORONTO, Oct. 29 /PRNewswire-FirstCall/ - Diversinet Corp. (OTCBB: DVNTF, TSX Venture: DIV), a leading innovator of secure mobile healthcare applications, reported its third quarter 2010 results for the period ended September 30, 2010.  All dollar amounts are in U.S. dollars.

Financial Highlights
Revenues for the third quarter were $394,000, compared to $1.9 million in the same quarter a year ago and were primarily derived from the company's license and VAR agreement with Intersections, Inc. Third quarter 2009 revenues included $1.6 million from the license agreement with AllOne Mobile Corp. which was terminated in June 2010.

Revenues for the nine months ended September 30, 2010 were $4.8 million, compared to $5.9 million in the same period in 2009. Revenues in the first nine months of 2010 included $3.6 million derived from the settlement with AllOne and return of common shares from Hospital Service Association of Northeastern Pennsylvania, which was included in other income.

Net loss for the quarter was $933,000 or $(0.02) per share and includes a government research and development tax refund of $208,000 (2009-$nil), compared to net income in the same year-ago quarter of $1.1 million or $0.02 per share. The net income for the nine months ended September 30, 2010 was $3.4 million, or $0.07 per share, compared to $2.3 million or $0.05 per share in the similar nine months of 2009.

Included in the third quarter net loss was non-cash stock-based compensation, depreciation and amortization of $182,000 versus $277,000 in Q3 2009 and a foreign exchange gain of $117,000 versus a gain of $667,000 in Q3 2009.

Cash and cash equivalents at September 30, 2010 were $13.8 million as compared to $12.7 million at December 31, 2009.

Operational Highlights

  • In July 2010, Minneapolis based HealthPartners, the largest consumer-governed, non-profit healthcare organization in the United States, licensed Diversinet's MobiSecure® Health platform to enhance mobile communications and build upon its mobile strategy. HealthPartners is currently piloting new applications (for high risk pregnancies and discharged patients with chronic illnesses) secured with MobiSecure.

  • In September 2010, Dr. Richard Eidinger, a physician executive with diverse healthcare industry experience, joined the company's board of directors. Licensed to practice medicine in both Canada and the U.S., Dr. Eidinger brings to Diversinet a background spanning the healthcare provider and payer market segments, both of which Diversinet serves with its secure mobile platform and applications. Dr. Eidinger has held executive positions with Aetna Health Plans and FHP (now United Healthcare), and is a partner in the Life Sciences practice of Heidrick & Struggles, one of the world's premier executive-search and leadership-consulting firms.

  • In Q3 2010, to complement Mark Trigsted, Diversinet added three U.S.-based sales executives with deep and diverse healthcare-IT experience: Ivan Boyd was appointed senior vice president, and Gene Ridge and Jon Smith were appointed as vice presidents.

"Q3 2010 represented important progress in building our U.S.-based sales force with the addition of three seasoned executives, as well as strengthening our corporate governance and leadership with Dr. Eidinger," said Albert Wahbe, Diversinet's chairman and CEO. "The highlight for the quarter was clearly our new licence agreement with HealthPartners. With our market-proven MobiSecure solution for mobile health, over the coming quarters we believe additional pilots will showcase our 'connected and protected' mobile healthcare applications. Diversinet stands to benefit tremendously from our foothold in a market that by any measure is about to experience accelerated growth."

Financial Summary     Q3 2010      Q3 2009
Revenues $393,500 $1,948,705
Cost of revenues 1,032 41,372
Gross margin 392,468 1,907,333
     
Expenses    
  Research and development 496,954 742,629
  Sales and marketing 520,302 324,314
  General and administrative 428,299 481,525
  Depreciation and amortization 17,173 18,860
  1,462,728 1,567,328
Income (loss) before the undernoted (1,070,260) 340,005
Foreign exchange gain 122,382 731,505
Interest income 14,915 6,962
Net income (loss) for the period $(932,963) $1,078,472
Basic and diluted earnings per share $(0.02) $0.02
     
Cash and cash equivalents $13,798,031 $12,060,548
Total assets $14,038,908 $12,413,607
Total current liabilities $659,585 $288,234
Total shareholders' equity $13,379,323 $12,125,373
     
Weighted average basic common shares outstanding 41,927,307 47,181,935
Weighted average fully diluted common shares outstanding 41,927,307 47,380,962

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 proven, reliable technology for mobile applications that securely connect people with their healthcare information, payers and providers - anyway, anytime and anywhere. Diversinet's MobiSecure® platform helps payers and providers meet rapidly growing needs for safe, convenient, on-the-go storage and sharing of personal health data. 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 href="../../../Documents and Settings/dhackett/Local Settings/Temporary Internet Files/OLK27B/www.sedar.com">www.sedar.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

SOURCE Diversinet Corp.