Diversinet Reports Third Quarter 2009 Financial Results

    
                 Revenue Up 9% Year-Over-Year to $1.9 Million
                         Net Income of $1.1 Million
    

TORONTO, Oct. 30 /CNW/ - Diversinet Corp. (TSX Venture: DIV, OTCBB: DVNTF), a leading provider of secure application platforms for the mobile world, today announced financial results for the third quarter of 2009. All dollar amounts are in U.S. dollars.

"We are pleased with our progress during the quarter, as we continued to develop our suite of products and protect our intellectual property by adding to our portfolio of patents," said Albert Wahbe, Diversinet's Chairman and CEO. "Our financial position remains strong, with over $12 million in cash and no debt on our balance sheet."

"We are now focused on establishing our distribution network to capitalize on international opportunities in the rapidly emerging mobile sector," added Mr. Wahbe. "We believe we are the leading provider of secure application platforms for the mobile world and look forward to rolling out new products in the coming quarters."

Q3 2009 Financial Highlights

Revenues for the third quarter increased 9% to $1,949,000, from $1,784,000 in the same period a year ago. Revenues for the nine months ended September 30, 2009 were $5,904,000, up 119% from $2,690,000 in the same period in 2008. The Q3 2009 revenues include $1,625,000 from the license and revenue share agreement with AllOne Mobile Corporation ("AllOne") signed in Q3 2008.

Net income for the third quarter of 2009 increased 661% to $1,078,000 or $0.02 per basic and diluted share from $142,000 or $0.00 per basic and diluted share in the same year-ago quarter. Included in the 2009 third quarter net income were non-cash stock-based compensation, depreciation and amortization charges totalling $277,000, as compared to $339,461 in the same year-ago quarter. Also included was a foreign exchange gain of $732,000, as compared to $3,000 in the same year-ago quarter.

Net income for the nine months ended September 30, 2009 was $2,317,000, or $0.05 per share, compared to a net loss of $2,221,000 or $(0.05) per share in the similar nine months of 2008. Included in the nine month net income is non-cash stock-based compensation, depreciation and amortization of $803,000 ($871,000 in 2008). Also included in the nine month net income is a foreign exchange gain of $1,115,000 ($39,000 in 2008).

Cash and cash equivalents at September 30, 2009 were $12,061,000 as compared to $10,671,000 at the end of June 30, 2009.

    
    2009 Operational Highlights

    -   Diversinet continued 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.

    -   Diversinet was awarded an additional US Patent No. 7,555,460 entitled
        "Payment system and method using tokens". The 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 USA, two patents in Canada and four
        patents in Israel and 24 patents applications.

    -   As part of an equity investment in August 2007, Blue Cross of
        Northeastern Pennsylvania ("BCNEPA") has the right to designate one
        Board member. William Farrell, who joined BCNEPA as Senior Vice
        President, Finance & Enterprise CFO in August 2009 has been appointed
        to the Diversinet Board of Directors effective October 29, 2009. Mr.
        Farrell has extensive knowledge in the health care industry with
        prior experience at Sanofi Pasteur SA. William Reed is retiring from
        BCNEPA and therefore Diversinet also announced the departure of
        William Reed from the company's Board and thanks him for his
        contribution.
    

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 term of the agreement with AllOne Mobile Corporation. 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)

                                                  September 30   December 31
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------
                                                    (Unaudited)

    ASSETS
    Current assets
    Cash and cash equivalents                       12,060,548    12,075,422
    Accounts receivable, net (note 2(c))                93,044             -
    Prepaid expenses                                    32,295        57,346
    -------------------------------------------------------------------------
    Total current assets                            12,185,887    12,132,768
    -------------------------------------------------------------------------
    Property and equipment, net (note 4)               227,720       255,264
    -------------------------------------------------------------------------
    Total assets                                    12,413,607    12,388,032
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Accounts payable                                   138,327       168,078
    Accrued liabilities (note 5)                       137,573       511,961
    Deferred revenue                                    12,334     2,646,356
    -------------------------------------------------------------------------
    Total current liabilities                          288,234     3,326,395
    -------------------------------------------------------------------------

    Shareholders' equity
    Share capital (note 6)                          68,251,680    68,099,993
    Contributed surplus                              8,202,925     7,596,686
    Share purchase warrants (note 6)                     2,842        13,687
    Deficit                                        (62,811,353)  (65,128,008)
    Accumulated other comprehensive income:
      Cumulative translation adjustment             (1,520,721)   (1,520,721)
    -------------------------------------------------------------------------
    Total shareholders' equity                      12,125,373     9,061,637
    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity      12,413,607    12,388,032
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Diversinet Corp.
    CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) AND DEFICIT AND
    COMPREHENSIVE NET INCOME (LOSS)
    (in United States dollars)
    (Unaudited)

                              Three months ended           Nine months ended
                                    September 30                September 30
                              2009          2008          2009          2008
                                 $             $             $             $
    -------------------------------------------------------------------------

    Revenues             1,948,705     1,784,136     5,903,663     2,690,440
    Cost of revenues        41,372       154,968       125,800       305,791
    -------------------------------------------------------------------------
    Gross margin         1,907,333     1,629,168     5,777,863     2,384,649

    Expenses
      Research and
       development         742,629       435,773     2,089,588     1,778,844
      Sales and
       marketing           324,314       491,866     1,083,031     1,388,167
      General and
       administrative      481,525       569,431     1,393,909     1,541,297
      Depreciation and
       amortization         18,860        27,216        55,491        79,256
    -------------------------------------------------------------------------
                         1,567,328     1,524,286     4,622,019     4,787,564
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Income (loss)
     before the
     undernoted            340,005       104,882     1,155,844    (2,402,915)
    Foreign exchange
     gain                  731,505         2,558     1,115,283        39,060
    Interest income          6,962        34,260        45,528       142,402
    -------------------------------------------------------------------------
    Net income (loss)
     for the period
     and comprehensive
     net income (loss)   1,078,472       141,700     2,316,655    (2,221,453)
    -------------------------------------------------------------------------

    Deficit, beginning
     of period         (63,889,825)  (65,541,828)  (65,128,008)  (63,178,675)
    Net income (loss)
     for the period      1,078,472       141,700     2,316,655    (2,221,453)
    -------------------------------------------------------------------------
    Deficit, end of
     period            (62,811,353)  (65,400,128)  (62,811,353)  (65,400,128)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     earnings (loss)
     per share                0.02          0.00          0.05         (0.05)
    Weighted average
     basic common
     shares
     outstanding        47,181,935    45,650,731    47,107,484    44,026,382
    Weighted average
     fully diluted
     common shares
     outstanding
     (note 7)           47,380,962    45,650,731    47,200,776    44,026,382
    

SOURCE Diversinet Corp.

For further information: For further information: Company Contact: Diversinet Corp., David Hackett, Chief Financial Officer, (416) 756-2324 ext. 275, dhackett@diversinet.com; Investor Relations U.S: Liolios Group, Inc., Ron Both, Managing Director, (949) 574-3860 ext 1710, rboth@liolios.com; Investor Relations Canada: The Equicom Group, Glen Williams or Jeff Codispodi, (416) 815-0700 ext. 272 or ext. 261, gwilliams@equicomgroup.com, jcodispodi@equicomgroup.com

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