DIVERSINET CORP. 
By TORONTO, Feb. 28, 2012 /PRNewswire/ - 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(TM) 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) 85,848,861 85,583,198
common shares
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' $ 7,955,733 $ 12,767,656
equity
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 (5,527,102) (1,941,158) 596,110
undernoted:
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 (5,536,595) 1,867,274 1,910,799
and comprehensive net
income (loss)
Basic and diluted earnings $ (0.13) $ 0.04 $ 0.04
(loss) per share
Weighted average common shares 42,587,632 45,029,121 47,191,669
outstanding
Weighted average fully diluted 42,587,632 45,029,121 47,295,515
common shares
outstanding
DIVERSINET CORP.
Consolidated Statements of
Cash Flows
(In United States dollars)
For the year ended December 2011 2010 2009
31
Cash provided by (used in):
Operating activities:
Net income (loss) for the $ (5,536,595) $ 1,867,274 $ 1,910,799
year
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 669,952 658,991 1,195,570
expense
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 - 128,604 254,075
cash
Cash provided by financing - 128,604 254,075
activities
Investing activities:
Purchase of property and (89,285) (28,645) (38,421)
equipment
Cash used in investing (89,285) (28,645) (38,421)
activities
Foreign exchange gain on cash 31,699 167,297 1,151,363
held in foreign currency
Net increase (decrease) in (5,061,725) (209,092) 592,420
cash and cash equivalents
Cash and cash equivalents, 12,458,750 12,667,842 12,075,422
beginning of year
Cash and cash equivalents, $ 7,397,025 $ 12,458,750 $ 12,667,842
end of year
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 265,663 284,750 414,188
employees and Board
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.
