Diversinet Corp. Announces Fiscal 2008 Annual Results



    
                     Achieves Profitability in Q3 and Q4
                         Q4 Quarterly Revenues Up 42%
    

    TORONTO, Feb. 24 /CNW/ - Diversinet Corp. (TSX Venture: DIV, OTCBB:
DVNTF), a leading provider of secure application platforms for the mobile
world, today announced its fiscal 2008 results. All dollar amounts are in U.S.
dollars.
    For the year ended December 31, 2008, Diversinet reported revenue of
$4,615,000 compared to revenue of $4,537,000, for the year ended December 31,
2007. The company reported a net loss of $1,949,000 or $(0.04) per share for
the year ended December 31, 2008 compared to a net loss of $3,433,000 or
$(0.09) per share for the year ended December 31, 2007. Included in the
December 31, 2008 net loss are non-cash items of $1,389,000 in stock-based
compensation expense, depreciation and amortization of $155,000, totaling
$1,544,000 or 79% percent of the net loss.
    The company recorded revenues of $1,924,000 in the three months ended
December 31, 2008, compared to $1,352,000, in the same period in the prior
year. Net income for the three months ended December 31, 2008 was $272,000,
compared to a net loss for the same quarter in fiscal 2007 of $1,326,000.
Included in the three months ended December 31, 2008 net income are non-cash
items of $598,000 in stock-based compensation expense, $76,000 for
depreciation and amortization, totaling $674,000.
    The company had $12,075,000 in cash and cash equivalents as of December
31, 2008. Cash provided by operations during 2008 amounted to $1,938,000
compared to cash used in operations of $2,201,000 for 2007.
    "2008 marked an important year for Diversinet as we continued to
successfully transition from a product development focused company towards a
sales and marketing enterprise. In 2008 we continued to develop customer
relationships, notably in the healthcare sector. This was highlighted by our
five year, $40 million worldwide exclusive license and revenue share agreement
with AllOne Mobile Corporation ("AllOne"). The second half of 2008 also saw
another Diversinet first, profitability in each of the third and fourth
quarters." said Albert Wahbe, Diversinet's CEO.

    
    Outlined below are the key milestones the company achieved during 2008:

    -   In April, AllOne launched its mobile application that uses our secure
        MobiSecure Wallet and Vault product line to place personal health
        records (PHR) at consumers' fingertips through their mobile phones.
        AllOne Mobile accesses an individual's PHR in a secure environment
        and links to the users' mobile phones, giving them well-organized,
        easy-to-use, 24/7 mobile access. Users can manage and share their
        PHRs with physicians, hospitals, clinics and emergency personnel
        helping to improve medical outcomes. AllOne data is stored behind a
        password-protected encrypted channel through a partnership with
        Diversinet. The application is downloaded wirelessly to phones and is
        automatically updated with the most current security and features
        available. This level of security and control gives users the
        confidence and comfort to create, manage and enhance their PHRs using
        a mobile phone or the Web.

    -   In April Diversinet introduced the MobiSecure(TM) USBToken. The
        MobiSecure USBToken is a One Time Password (OTP) authentication
        technology contained within a durable, portable USB device which is
        driverless and leaves no residual footprint on the user's computer.

    -   In June, Intersections Inc. launched Mobile Lockbox, a major
        enhancement to the Identity Guard(R) Total Protection service.
        MobiSecure(TM) Wallet and Vault mobile secure encrypted access
        solution is at the heart of the offering. MobiSecure Wallet and Vault
        provides Intersections with a mobile security platform to extend its
        core Identity Guard offering by creating a host of new services that
        build closer, more personal and "sticky" relationships with new and
        existing customers.

    -   In June CEO and Chairman Albert Wahbe exercised 2,300,000 share
        purchase warrants at $0.75 per common share for gross proceeds of
        $1,725,000.

    -   In September, Diversinet signed an exclusive worldwide license and
        revenue share agreement with AllOne Mobile Corporation, a subsidiary
        of AllOne Health Group, Inc., who in turn is a subsidiary of Hospital
        Service Association of Northeastern Pennsylvania to cross license
        certain software and to share revenues from the secure mobile access
        to personal health records and information. During the five year
        agreement, Diversinet is to receive a minimum commitment fee of
        $5.5 million in the first year, $7 million per year in years two and
        three and $10 million per year in years four and five from AllOne.
        The agreement may be cancelled after the third year if, through no
        fault of either party, there are changes in market conditions, law or
        regulation, or technology obsolescence. In addition, Diversinet also
        completed a $500,000 statement of work for AllOne, bringing the
        combined total of the 5 year agreement to $40 million. This agreement
        replaces the agreement with AllOne Health Group, Inc. signed in
        August 2007.

    -   During the third quarter of 2008, Diversinet refocused its sales
        efforts primarily towards mobile personal health records and related
        secured payments and identity protection.
    

    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. 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                                     2008          2007
    -------------------------------------------------------------------------
    Assets
    Current assets:
      Cash and cash equivalents                   $ 12,075,422  $  8,394,286
      Accounts receivable                                    -       122,687
      Prepaid expenses                                  57,346        63,105
    -------------------------------------------------------------------------
      Total current assets                          12,132,768     8,580,078
    -------------------------------------------------------------------------

      Property and equipment, net                      255,264       379,993
    -------------------------------------------------------------------------
    Total assets                                  $ 12,388,032  $  8,960,071
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Liabilities and Shareholders' Equity
    Current liabilities:
      Accounts payable                            $    168,078  $    249,502
      Accrued liabilities                              511,961       731,461
      Deferred revenue                               2,646,356       130,961
    -------------------------------------------------------------------------
      Total current liabilities                      3,326,395     1,111,924
    -------------------------------------------------------------------------

    Shareholders' equity:
      Share capital:
      Authorized:
        Unlimited common shares
      Issued and outstanding: 47,031,935
       (43,167,783 - 2007) common shares            68,099,993    65,370,707
      Contributed surplus                            7,596,686     5,621,383
      Share purchase warrants                           13,687     1,555,453
      Deficit                                      (65,128,008)  (63,178,675)
      Accumulated other comprehensive income:
        Cumulative translation adjustment           (1,520,721)   (1,520,721)
    -------------------------------------------------------------------------
      Total shareholders' equity                     9,061,637     7,848,147

    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity    $ 12,388,032  $  8,960,071
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Diversinet Corp.
    Consolidated Statements of Loss, Comprehensive Income (Loss) and Deficit
    (In United States dollars)


    -------------------------------------------------------------------------
    Year ended December 31                  2008          2007          2006
    -------------------------------------------------------------------------

    Revenue                         $  4,614,790  $  4,536,983  $  1,666,965
    Cost of revenues                     307,946       239,878     1,041,096
    -------------------------------------------------------------------------
    Gross margin                       4,306,844     4,297,105       625,869

    Expenses:
    Research and development           2,601,833     2,265,755       831,925
    Sales and marketing                1,862,337     1,780,991       700,870
    General and administrative         2,512,454     3,738,545     2,484,556
    Depreciation and amortization        154,881       119,647       159,048
    -------------------------------------------------------------------------
                                       7,131,505     7,904,938     4,176,399
    -------------------------------------------------------------------------

    Loss before the following:        (2,824,661)   (3,607,833)   (3,550,530)

    Foreign exchange gain (loss)         655,020       (71,106)      (18,291)
    Interest income and other
     income                              220,308       245,968       118,104
    -------------------------------------------------------------------------
    Loss for the year and
     comprehensive loss               (1,949,333)   (3,432,971)   (3,450,717)

    Deficit, beginning of year       (63,178,675)  (59,745,704)  (56,294,987)
    -------------------------------------------------------------------------
    Deficit, end of year            $(65,128,008) $(63,178,675) $(59,745,704)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted loss per
     share                          $      (0.04) $      (0.09) $      (0.12)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number of
     common shares                    44,454,008    36,872,086    28,740,174

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Diversinet Corp.
    Consolidated Statements of Cash Flows
    (In United States dollars)


    -------------------------------------------------------------------------
    For the year ended December 31          2008          2007          2006
    -------------------------------------------------------------------------

    Cash provided by (used in):

    Operating activities:
      Loss for the year from
       continuing operations        $ (1,949,333) $ (3,432,971) $ (3,450,717)
      Items not involving cash:
        Depreciation and
         amortization                    154,881       119,647       159,048
        Stock-based compensation
         expense                       1,389,323     1,542,743       906,444
                                    -----------------------------------------
                                        (405,129)   (1,770,581)   (2,385,225)
      Change in non-cash operating
       working capital:
        Accounts receivable              122,687        31,422       (86,804)
        Prepaid expenses                   5,759        77,976       (23,836)
        Accounts payable                 (81,424)       77,211        19,191
        Accrued liabilities             (219,500)      190,900       406,982
        Deferred revenue               2,515,395      (807,589)      859,550
    -------------------------------------------------------------------------
      Cash provided by (used in)
       operations                      1,937,788    (2,200,661)   (1,210,142)

    Financing activities:
      Issue of common shares, common
       share purchase options and
       warrants for cash               1,773,500     5,559,548     5,075,656
    -------------------------------------------------------------------------
      Cash provided by financing
       activities                      1,773,500     5,559,548     5,075,656

    Investing activities:
      Property and equipment
       additions                         (30,152)     (110,917)      (74,761)
    -------------------------------------------------------------------------
      Cash used in investing
       activities                        (30,152)     (110,917)      (74,761)

    -------------------------------------------------------------------------
    Increase in cash and cash
     equivalents                       3,681,136     3,247,970     3,790,753

    Cash and cash equivalents,
     beginning of year                 8,394,286     5,146,315     1,355,562

    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of year                    $ 12,075,422  $  8,394,286  $  5,146,315
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental cash flow
     information:
      Interest received                  220,308       245,968       118,104
    -------------------------------------------------------------------------

    Supplemental disclosure relating
     to non-cash financing and
     investing activities:
      Issuance of shares to
       employees                         425,283       516,409        84,543
      Issuance of shares for
       public relations services               -        61,545             -
    -------------------------------------------------------------------------

    Cash and cash equivalents is
     comprised of:
      Cash                               762,266       857,609       674,421
      Cash equivalents                11,313,156     7,536,677     4,471,894
    -------------------------------------------------------------------------
                                    $ 12,075,422  $  8,394,286  $  5,146,315
    -------------------------------------------------------------------------
    





For further information:

For further information: Diversinet Contact: David Hackett, Chief
Financial Officer, (416) 756-2324 ext. 275

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