Diversinet Corp. Reports Fourth Quarter and Fiscal 2011 Results

TORONTO, Feb. 28, 2012 /CNW/ - Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF), a leader in secure mobile health that "Powers Care Coordination through Mobility", reported its fourth quarter and fiscal 2011 results for the period ended December 31, 2011. All dollar amounts are in U.S. dollars.

"In 2011, Diversinet made substantial strides in advancing the market adoption of our secure mobile solutions in the growing wireless health and mHealth marketplace," said Dr. Hon Pak, Diversinet's CEO. "This was demonstrated in events and milestones that were both significant and wide ranging."

Q4 and Fiscal 2011 Financial Highlights

Revenues for the fourth quarter were $382,000 compared to $106,000 in the same year-ago period. Revenues for the full year were $1.3 million, compared to $4.9 million in 2010. Revenues in 2010 included $3.7 million from AllOne Mobile Corporation ("AllOne") relating to a termination of a prior agreement.

Net loss for the fourth quarter was $1.7 million or $(0.04) per share, compared to $1.5 million or $(0.04) per share the year-ago quarter. The net loss in the fourth quarter 2011 included non-cash items of $154,000 in stock-based compensation expense, $16,000 in depreciation, and a foreign exchange loss of $52,000. This compares with non-cash items in the year-ago quarter of $129,000 in stock-based compensation and $17,000 in depreciation, and a foreign exchange gain of $91,000.

Net loss for the year was $5.5 million or $(0.13) per share, compared to net income of $1.9 million or $0.04 per share in 2010. Included in the full-year net income were non-cash items $670,000 in stock-based compensation, $63,000 in depreciation, and a foreign exchange loss of $32,000. This compares with non-cash items in 2010 of $3.1 million related to the canceled shares from AllOne, $659,000 in stock-based compensation, $66,000 in depreciation, and a foreign exchange gain of $190,000.

Cash and cash equivalents totaled $7.4 million at December 31, 2011, as compared to the previous year's balance of $12.5 million.

2011 Operational Highlights

  • Based on the strong results from the Mihealth™ pilot program with its subscription based patient health record (PHR) system, Diversinet began 2011 by signing a five-year, $5 million Canadian reseller agreement with Mihealth Global Systems, Inc. for its MobiSecure® platform. This relationship enabled Diversinet to focus on the large opportunities in the U.S.

  • In March, Diversinet released a Clinical Communicator application, which incorporates the power and unique functionality of its field-proven MobiSecure Publisher and MobiSecure SMS. Clinical Communicator enables physicians, nurses and other clinicians to communicate securely with their patients via mobile devices and tablets.

  • Another successful pilot program led Johnson & Johnson Pharmaceutical Research and Development to license MobiSecure.  This deployment involved new features developed for consumer interaction, which demonstrated how MobiSecure's turnkey capability can provide full customization without undergoing extensive product development and testing, and while also maintaining feature flexibility, security and customer branding.

  • In September, the U.S. Army's Telemedicine and Advanced Technology Research Center renewed its annual contract with Diversinet to support the Army's mCare telehealth outreach program.  The program was established for members of the military recovering from mild traumatic brain injuries and other wounds.  The mCare mobile health application, powered by MobiSecure, also received the '2010 Army Greatest Inventions Award,' representing the most innovative advances in Army technology.

  • Diversinet enhanced its intellectual property portfolio with the award of a U.S. patent for an encryption method that addresses growing concerns about protecting sensitive personal data stored on a mobile device. This technology prevents unauthorized access to data via encryption and protects information if it is transferred to another mobile device.

  • In December, Diversinet reached an important milestone in an extensive security validation process for the cryptographic modules used by its MobiSecure® mHealth application, with a formal listing in the "Federal Information Processing Standards Publication (FIPS) 140-2" publication. This listing is critical for government agencies, medical device manufacturers and pharmaceutical companies that require absolute security in safeguarding personal health information.

In February 2012, the company's board of directors appointed Hon Pak CEO, succeeding Albert Wahbe.  The board believes his leadership will continue to be important to Diversinet's success in the healthcare marketplace.

"As the mHealth market continues to evolve in 2012, we remain focused on the key elements of our mobile health strategy, which include introducing new products and product enhancements, creating customized portals to support mobile health applications, and expanding our network of healthcare partners and infield deployments," said Pak. "I believe that healthcare is becoming unsustainable, and changes are now in place that will impact the landscape of how healthcare will be delivered.  We believe that by focusing on care coordination through mobility, our products can help coordinate and manage all of a patient's care."

About Diversinet

Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF) provides patented and proven secure products that enable healthcare organizations to rapidly deploy HIPAA-compliant mobile healthcare (mHealth) applications to power care coordination. Learn more about Diversinet 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 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   2011   2010
Assets        
Current assets:        
  Cash and cash equivalents $   7,397,025 $ 12,458,750
  Accounts receivable, net   287,155   75,150
  Prepaid expenses   64,252   52,773
  Total current assets   7,748,432   12,586,673
         
  Property and equipment, net   207,301   180,983
Total assets $ 7,955,733 $ 12,767,656
         
         
         
Liabilities and Shareholders' Equity        
Current liabilities:        
  Accounts payable $      217,539 $       143,253
  Accrued liabilities   281,011   562,994
  Deferred revenue   284,583   45,167
  Total current liabilities   783,133   751,414
         
         
Shareholders' equity:        
  Share capital:        
  Authorized:        
    Unlimited common shares        
     Issued and outstanding:        
    43,009,347 (42,285,171 - 2010) common shares   85,848,861   85,583,198
  Additional paid-in capital   19,755,623   19,346,409
  Share purchase warrants   39,318   21,242
  Deficit   (96,950,481)   (91,413,886)
  Accumulated other comprehensive income:        
    Cumulative translation adjustment   (1,520,721)   (1,520,721)
  Total shareholders' equity   7,172,600   12,016,242
         
Total liabilities and shareholders' equity $ 7,955,733 $ 12,767,656
           

DIVERSINET CORP.
Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)
(In United States dollars)            
             
For the year ended December 31   2011   2010   2009
             
Revenues $ 1,291,714 $   4,931,834 $ 7,972,929
Cost of revenues   104,600   22,860   175,138
Gross margin   1,187,114   4,908,974   7,797,791
             
Expenses:            
Research and development   2,927,551   3,112,225   3,351,742
Sales and marketing   1,664,996   1,783,211   1,448,000
General and administrative   2,058,702   1,888,908   2,326,380
Depreciation   62,967   65,788   75,559
    6,714,216   6,850,132   7,201,681
             
Income (loss) before the undernoted:   (5,527,102)   (1,941,158)   596,110
             
Foreign exchange gain (loss)   (31,662)   190,448   1,253,375
Interest income, net   22,169   57,277   61,314
Other income   -   3,560,707   -
Net income (loss) for the year and comprehensive net
income (loss)
  (5,536,595)   1,867,274   1,910,799
             
             
Basic and diluted earnings (loss) per share $ (0.13) $ 0.04 $   0.04
Weighted average common shares outstanding   42,587,632   45,029,121   47,191,669
Weighted average fully diluted common shares
outstanding
  42,587,632   45,029,121   47,295,515

DIVERSINET CORP.            
Consolidated Statements of Cash Flows            
(In United States dollars)            
             
For the year ended December 31   2011   2010   2009
             
Cash provided by (used in):            
             
Operating activities:            
  Net income (loss) for the year $ (5,536,595) $ 1,867,274 $ 1,910,799
  Items not involving cash:            
    Depreciation   62,967   65,788   75,559
    Foreign exchange gain   (31,699)   (167,297)   (1,151,363)
    Other income   -   (3,060,707)   -
    Stock-based compensation expense   669,952   658,991   1,195,570
  Changes in non-cash working capital:            
    Accounts receivable   (212,005)   4,567   (79,717)
    Prepaid expenses   (11,479)   (17,591)   22,164
    Accounts payable   74,286   (5,278)   (19,547)
    Accrued liabilities   (258,982)   266,738   (215,706)
    Deferred revenue   239,416   (88,833)   (2,512,356)
  Cash used in operations   (5,004,139)   (476,348)   (774,597)
             
Financing activities:            
  Issue of common shares for cash   -   128,604   254,075
  Cash provided by financing activities   -   128,604   254,075
             
Investing activities:            
  Purchase of property and equipment   (89,285)   (28,645)   (38,421)
  Cash used in investing activities   (89,285)   (28,645)   (38,421)
             
Foreign exchange gain on cash held in foreign currency   31,699   167,297   1,151,363
             
Net increase (decrease) in cash and cash equivalents   (5,061,725)   (209,092)   592,420
             
Cash and cash equivalents, beginning of year   12,458,750   12,667,842   12,075,422
             
Cash and cash equivalents, end of year $ 7,397,025 $ 12,458,750 $ 12,667,842
             
Supplemental cash flow information:            
  Interest received   22,169   57,277   61,314
             
Supplemental disclosure relating to non-cash financing and investing activities:            
  Issuance of shares to employees and Board   265,663   284,750   414,188
              
Cash and cash equivalents is comprised of:            
  Cash   253,715   443,684   563,471
  Cash equivalents   7,143,310   12,015,066   12,104,371
   $ 7,397,025 $ 12,458,750 $ 12,667,842

 

 

 

 

SOURCE Diversinet Corp.

For further information:

Company Contact 

Diversinet Corp.
David Hackett
Chief Financial Officer
416-756-2324 ext. 275
dhackett@diversinet.com

Investor Relations

Liolios Group, Inc.
Ron Both
Managing Director
949-574-3860 ext 1710
DVNTF@liolios.com

Organization Profile

Diversinet Corp.

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