Diversinet Corp. Announces First Quarter 2005 Financial Results.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- - Company's Focus on Core Competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
(2) (Digital Satellite S Key Drivers in Delivering Operational Efficiencies Diversinet Corp. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :DVNTF), a leading provider of mobile device security and authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC. (2) Verifying the identity of a user logging into a network. solutions for the mobile data ecosystem, today announced its first quarter 2005 results. Revenues for the quarter were $354,000, compared to $853,000 in the first quarter of 2004. For the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future, revenues will continue to be dominated by professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. provided in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. market. The net loss for the quarter was $1,299,000, or $0.07 per share, down from the 2004 first quarter loss of $1,343,000 or $0.11 per share. Cash used in operations for the first quarter was $580,000, a decrease from the $861,000 used in the fourth quarter of 2004 and from the $1,294,000 used in the first quarter of 2004. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (i) before stock-based compensation expense for the quarter was $(763,000), compared to $(464,000) in the fourth quarter of 2004 and $(859,000) in the first quarter of 2004. Cash and short term investments at quarter end was $2,152,000 compared to $2,734,000 at December December: see month. 2004. In the first quarter of 2005, Diversinet entered into an asset sale agreement for its DSS subsidiary whereby it sold the majority of its current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. , capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) , current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. , consultant and customer accounts to CIT n. 1. A citizen; an inhabitant of a city; a pert townsman; - used contemptuously. Which past endurance sting the tender cit. - Emerson. Global for $250,000 plus certain earn out provisions over the next 5 years. Of the $250,000, $100,000 was paid at closing with cash payments of $50,000 due May 1, July July: see month. 1 and September September: see month. 1, 2005. The sale enables Diversinet to focus its efforts on mobile device security and authentication solution core competencies. "2005 is all about focus and execution. With our new senior management team fully engaged and the asset sale of DSS complete, Diversinet is now completely focused on delivering our MobiSecure suite of two-factor authentication The use of two independent mechanisms for authentication; for example, requiring a smart card and a password. The combination is less likely to allow abuse than either component alone. See authentication. solutions to the marketplace," said Nagy Nagy is the most popular Hungarian surname, pronounced /nɒɟ/ or roughly like 'nawdge'. It may refer, among others, to the following people:
Diversinet's first quarter 2005 highlights include: - The Company names Kashif Hassan as President, Michael O'Farrell as Chief Marketing Officer and David Annan as Chief Technology Officer. The new executive management team brings strong operational focus and mobile industry expertise to the company. - The Company announces its plan to focus on mass-market, mobile authentication services, leveraging over 8 years of mobile device security expertise and intellectual capital core competencies. - The Company continues to play an active role in the initiative for Open AuTHentication Initiative for Open Authentication (OATH) is an industry-wide collaboration to develop an open reference architecture using open standards to promote the adoption of strong authentication. (OATH) industry alliance for mobile-optimized strong authentication solution delivery. Stu Vaeth, Chief Security Officer at Diversinet, is appointed the Co-Chair of the OATH Technology Focus Group (TFG TFG Transitional Federal Government TFG Tactical Fighter Group (USAF) TFG Taken for Granted TFG Timber Framers Guild TFG Technologie–Fonds GmbH (German, now TFG Venture Capital) TFG The Fall Guy ). - The Company successfully develops OATH-Compliant One-Time-Password (OTP (1) (One Time Programmable) Refers to programming content or logic into chips such as EPROMs and EEPROMs, which cannot be reversed. See antifuse. (2) (One Time P ) mobile tokens for Microsoft, RIM, Symbian, Palm and Java-based mobile device operating environments In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. , fully integrated with VeriSign Unified Authentication service for end-user validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. . - The Company successfully divests of non-core DSS Software Technologies subsidiary through asset sale to CIT Global. The sale enables Diversinet to strengthen its focus on mass-market, mobile authentication services. "I am very impressed im·press 1 tr.v. im·pressed, im·press·ing, im·press·es 1. To affect strongly, often favorably: with the Company's progress during the last quarter - it is focused, operationally strong and energized to deliver," adds Kashif Hassan, President of Diversinet. "MobiSecure is set to change the way consumers and companies combat the ever-present threats of identity theft, transaction fraud and smorphing. Going forward, Diversinet will concentrate its efforts on sales and channel partner development to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the high level of customer and industry interest to our approach to mass-market mobile authentication services." As a leading mobile authentication service provider, Diversinet provides its customers with cost effective, mobile-optimized strong authentication products and services that reduce identity theft and improve brand trust. Diversinet's solutions leverage more than 1.5 billion consumer and enterprise mobile devices as strong authentication tokens A security device given to authorized users who keep them in their possession. To log into the network, the security "card" or "token" may be read directly like a credit card, or it may display a changing number that is typed in as a password. . Diversinet MobiSecure suite of mobile tokens and MobiSecure Authentication Service Center offerings are available on all intelligent mobile device platforms, including Microsoft, RIM, Symbian, Palm and Java-based phones. About Diversinet (OTCBB: DVNTF) Diversinet is a leading provider of mobile device security and authentication solutions for the mobile data ecosystem. Diversinet products and services allow users to protect their identity, data and device for personal communications and commercial transactions. The Diversinet MobiSecure suite of mobile tokens and MobiSecure Authentication Service Center enable application providers, mobile network operators and security service providers to rapidly develop, deploy and manage secure mobile data services for the over 1.5 billion mobile device users worldwide. MobiSecure is the industry's first open mobile security platform to support OATH-Compliant strong authentication on mobile devices and networks. For more information about the initiative for Open AuTHentication (OATH) visit www.openauthentication.org. Connect with Diversinet Corp. at www.diversinet.com. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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. (i)EBITDA is defined as operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. less cash operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and therefore reflects earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) and therefore may not be comparable to similarly titled measures presented by other companies. EBITDA should not be construed as the equivalent of net cash flows from operating activities. The following table reconciles net loss to operating revenues less cash operating expenses and therefore reflects earnings before interest, taxes, depreciation and amortization and stock-based compensation expense:
Three months ended March 31
2005 2004
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Loss from continuing operations $ (1,157,651) $ (1,227,903)
Add back:
Stock based compensation 236,152 185,284
Depreciation and amortization 174,287 199,852
Foreign exchange gain (7,086) (9,798)
Interest income (8,949) (6,329)
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EBITDA before stock-based compensation
expense $ (763,247) $ (858,894)
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Diversinet Corp.
CONSOLIDATED BALANCE SHEETS
(in United States dollars)
(Unaudited)
March 31 December 31
2005 2004
(restated note 3)
$ $
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ASSETS
Current
Cash and cash equivalents 652,004 723,498
Short-term investments 1,500,205 2,000,000
Accounts receivable 185,384 290,239
Other receivables 155,701 35,700
Prepaid expenses 169,834 187,653
Current assets of discontinued
operations (note 3) - 512,992
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Total current assets 2,663,128 3,750,082
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Capital assets, net 549,043 593,673
Purchased technology, net of
accumulated amortization 78,541 125,667
Customer assets, net of accumulated
amortization 468,588 551,280
Goodwill 1,894,690 2,286,932
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Total assets 5,653,990 7,307,634
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LIABILITIES AND SHAREHOLDERS'
EQUITY
Current
Accounts payable 240,053 147,084
Accrued liabilities 345,049 478,781
Notes payable - 4,611
Deferred revenue 161,500 165,343
Current liabilities of discontinued
operations (note 3) 119,560 676,414
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Total current liabilities 866,162 1,472,233
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Total liabilities 866,162 1,472,233
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Shareholders' equity
Share capital 52,460,635 52,445,135
Cumulative translation adjustment (1,520,721) (1,520,721)
Share purchase warrants 2,843,765 2,830,929
Contributed surplus 1,488,865 1,265,549
Deficit (50,484,716) (49,185,491)
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Total shareholders' equity 4,787,828 5,835,401
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Total liabilities and shareholders'
equity 5,653,990 7,307,634
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See accompanying notes to interim consolidated financial statements.
Diversinet Corp.
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(in United States dollars)
(Unaudited)
Three months ended March 31
2005 2004
(restated note 3)
$ $
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REVENUE 354,411 853,200
Cost of sales 245,468 436,321
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Gross margin 108,943 416,879
EXPENSES
Research and development 277,547 331,089
Sales and marketing 316,735 388,004
General and administrative 514,060 741,964
Depreciation and amortization 174,287 199,852
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1,282,629 1,660,909
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Loss before the following (1,173,686) (1,244,030)
Foreign exchange gain (7,086) (9,798)
Interest income (8,949) (6,329)
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Loss from continuing operations (1,157,651) (1,227,903)
Loss from discontinued operations
(note 3) (141,574) (115,006)
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Loss for the period (1,299,225) (1,342,909)
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Deficit, beginning of period (49,185,491) (41,461,762)
Adjustment for change in accounting
for stock based compensation - (186,887)
Loss for the period (1,299,225) (1,342,909)
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Deficit, end of period (50,484,716) (43,011,558)
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Loss per share
Basic and diluted loss per share
from continuing operations (0.06) (0.10)
Basic and diluted loss per share (0.07) (0.11)
Weighted average common shares
outstanding 19,179,052 11,881,901
See accompanying notes to interim consolidated financial statements.
Diversinet Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in United States dollars)
(Unaudited)
Three months ended March 31
2005 2004
(restated note 3)
$ $
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OPERATING ACTIVITIES
Loss from continuing operations for
the period (1,157,651) (1,227,903)
Add (deduct) items not requiring an
outlay of cash:
Depreciation and amortization 174,287 199,852
Stock based compensation expense 236,152 185,284
Changes in non-cash working capital
items related to operations:
Accounts receivable and other receivables (15,145) (23,810)
Prepaid expenses 17,819 217,338
Accounts payable and accrued liabilities (40,763) (508,931)
Deferred revenue (3,843) (142,340)
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Cash used in continuing operations (789,144) (1,300,510)
Cash provided by discontinued operations 209,215 6,047
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Cash used in operations (579,929) (1,294,463)
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FINANCING ACTIVITIES
Issue of common shares, common
purchase options, warrants for cash 15,500 1,884,714
Repayment of notes payable (4,611) (1,897)
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Cash provided by financing activities 10,889 1,882,817
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INVESTING ACTIVITIES
Decrease (increase) in short-term
investments 499,795 (4,524)
Net addition of capital assets (2,249) (4,462)
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Cash provided by (used in) investing
activities 497,546 (8,986)
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Net change in cash and cash equivalents
during the period (71,494) 579,368
Cash and cash equivalents, beginning of
the period 723,498 547,534
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Cash and cash equivalents, end of
the period 652,004 1,126,902
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See accompanying notes to interim consolidated financial statements.
Diversinet Corp. (OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. :DVNTF) |
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