Diversinet Corp. Announces Fiscal 2003 Annual Results; Mobile Security Company Achieves Record Growth with Acquisitions, Partnerships and New Products.Business Editors/High-Tech Writers TORONTO--(BUSINESS WIRE)--Feb. 24, 2004 Diversinet Corp. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : DVNTF), a leading provider of secured mobile solutions, today announced its fiscal 2003 results. 2003 was a year of growth and change for the Company. In January January: see month. 2003, Diversinet acquired DSS (1) (Digital Signature Standard) A National Security Administration standard for authenticating an electronic message. See RSA and digital signature. (2) (Digital Satellite S Software Technologies, a systems integration provider headquartered in Fremont, California For the unincorporated community in Yolo County, California, see . Fremont (IPA: /ˈfriːmɒnt/) is a city in California that was incorporated on January 23, 1956, from the merger of five smaller communities: , and in September September: see month. 2003 acquired Caradas, Inc., a digital identity 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. management technology provider headquartered near Boston, Massachusetts “Boston” redirects here. For other uses, see Boston (disambiguation). Boston is the capital and most populous city of Massachusetts.[3] The largest city in New England, Boston is considered the unofficial economic and cultural center of the entire New . In October October: see month. , based on the substantial 'intellectual capital' gained through these acquisitions, the Company was reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. into four customer-facing strategic business units, focusing on financial and international, government and enterprise, professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. and OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and channels. For the fourteen months ended December December: see month. 31, 2003, Diversinet reported revenue of $8,563,000 compared to revenue of $710,000, for the twelve months ended October 31, 2002, representing an 1,100 percent increase. The Company reported a net loss of $5,618,000 or $(0.87) per share, for the fourteen months ended December 31, 2003, compared to a net loss $4,065,000 or $(1.37) per share, for the twelve months ended October 31, 2002. Included in the December 31, 2003 net loss are non-cash items of $825,000 in stock-based compensation expense, depreciation and amortization of $740,000 and $416,000 in unrealized foreign exchange losses, totaling $1,981,000 or 35 percent of the net loss. During the year Diversinet changed reporting currency Reporting Currency The currency used in published reports and financial documents. Notes: All annual and quarterly reports state the currency in which their results are listed. from Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents to United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. dollars and changed its year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. from October 31 to December 31. The Company recorded revenues of $4,140,000 in the five months ended December 31, 2003, compared to $302,000, in the same period in the prior year. The net loss for the five months ended December 31, 2003 was $2,665,000, compared to a net loss for the same quarter in fiscal 2002 of $827,000. The increase is largely due to the acquisitions and the five months versus three months reporting periods. Included in the five months ended December 31, 2003 net loss are non-cash items of $825,000 in stock-based compensation expense, depreciation and amortization of $666,000 and $416,000 in unrealized foreign exchange losses, totaling $1,907,000 or 72 percent of the net loss. During fiscal 2003, the Company successfully raised a total of $3,100,000 through a private placement. The Company had $1,967,000 in cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments as of December 31, 2003. Cash resources used in continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the during the fourteen-month period amounted to $1,677,000, down significantly from $4,532,000 for the twelve months ended October 31, 2002. In January 2004, the Company completed a private placement for gross proceeds of $2,000,000. In 2003, Diversinet further strengthened its market leadership through new projects, partnerships and products. The Company continued its focus on the high-growth Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). region and signed a cooperative agreement in June June: see month. 2003 with Hongkong Post
The Company broadened its reach through agreements with several application developers, including Consist International, Arcot Systems and Spiral Solutions, as part of a strategy to find leading channel partners to quickly establish a leadership presence in growing markets for wireless security. The Company furthered its product leadership by launching the Passport passport Document issued by a national government identifying a traveler as a citizen with a right to protection while abroad and a right to return to the country of citizenship. It is normally a small booklet containing a description and photograph of the bearer. SMS (1) (Storage Management System) Software used to routinely back up and archive files. See HSM. (2) (Systems Management Server) Systems management software from Microsoft that runs on Windows NT Server. Messenger product, a zero-client solution that enables application providers and enterprises to rapidly extend mobile connectivity to key business and consumer applications. Passport SMS Messenger is an ideal solution for enterprises that want to extend corporate applications to mobile devices using commonly available SMS technology, and a key tool organizations can use to unlock the promise of mobility for mobile lotteries United Kingdom
Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . In August 2003, the Company received a trademark from the U.S. Patent and Trademark Office for its Diversinet logo, thus securing its brand. In July, the Company was granted a patent for the "System and Method for Reliable Key Transfer," or Root Key Rollover See n-key rollover. technology. Then in November, the Company received a patent from the State of Israel Patent Office for its "System and Method for Handling Permits." This technology provides for a unique permit separation model that enhances the security and privacy of wired and wireless e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. systems by improving the management of personal privileges in advanced PKI (Public Key Infrastructure) A framework for creating a secure method for exchanging information based on public key cryptography. The foundation of a PKI is the certificate authority (CA), which issues digital certificates that authenticate the identity of security environments. About Diversinet Corp. Diversinet is a leading provider of secured mobile solutions to the enterprise, financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , and gaming and wagering wa·ger n. 1. a. An agreement under which each bettor pledges a certain amount to the other depending on the outcome of an unsettled matter. b. A matter bet on; a gamble. 2. marketplaces. With demonstrated expertise in wireless and security, Diversinet delivers secure, reliable and scalable mobile solutions through security products and professional services such as application development and integration, consulting, training and technical support. Diversinet enables customers and their employees to securely access applications and critical corporate information from anywhere, at anytime and via any mobile device. Diversinet is headquartered in Toronto, Canada, with offices in Boston, MA; Fremont, California; and Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , SAR (Segmentation And Reassembly) The protocol that converts data to cells for transmission over an ATM network. It is the lower part of the ATM Adaption Layer (AAL), which is responsible for the entire operation. See AAL. SAR - segmentation and reassembly . For more information visit www.diversinet.com.
DIVERSINET CORP.
Consolidated Balance Sheets
(In United States dollars)
As at
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December October October
31 31 31
2003 2003 2002
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Assets
Current assets:
Cash and cash equivalents $ 722,569 $ 863,977 $ 608,692
Short-term investments 1,243,960 1,853,369 1,843,657
Accounts receivable (including
$62,293, $62,293,
$110,148 from joint venture,
note 8) 1,081,760 1,422,943 265,672
Other receivables 85,748 77,720 15,933
Prepaid expenses 375,009 232,812
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Total current assets 3,509,046 4,450,821 2,810,966
Capital assets, net (note 4) 986,316 1,053,544 1,198,527
Purchased technology, net of $62,833,
$31,416,
$nil amortization (note 3) 314,167 345,584 -
Customer assets net of $110,256,
$55,129,
$nil amortization (note 3) 882,048 937,175 -
Goodwill (note 3) 5,311,932 5,311,932 -
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Total assets $11,003,509 $12,099,056 $4,009,493
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 899,644 $ 845,757 $ 352,025
Accrued liabilities (note 5) 1,351,400 1,504,319 698,137
Notes payable 28,192 33,178 -
Current portion of promissory note 300,000 300,000 -
Deferred revenue 477,449 653,350 9,228
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Total current liabilities 3,056,685 3,336,604 1,059,390
Promissory note 300,000 300,000 -
Shareholders' equity:
Share capital (note 6):
Authorized:
Unlimited common shares
Issued and outstanding:
11,043,027, 11,043,027, 3,222,308
common shares 49,191,482 49,201,868 40,677,645
Contributed surplus 126,173 72,680 72,680
Cumulative translation
Adjustment (1,520,721) (1,445,932) (1,936,534)
Share purchase warrants (note 6) 1,331,652 1,331,652 -
Deficit (41,481,762)(40,697,816)(35,863,688)
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Total shareholders' equity 7,646,824 8,462,452 2,950,103
Future operations (note 1)
Commitments and contingencies (note 11)
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Total liabilities and shareholders'
equity $11,003,509 $12,099,056 $4,009,493
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DIVERSINET CORP.
Consolidated Statements of Earnings and Deficit
(In United States dollars)
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Fourteen month Years ended
period ended
December 31 October 31 October 31 October 31
2003 2003 2002 2001
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Revenue (including
$nil, $nil, $85,138,
$127,034,from joint
venture, note 8) $ 8,562,676 $ 7,108,003 $ 710,250 $ 792,814
Cost of sales 6,622,495 5,491,029 - -
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Gross margin 1,940,181 1,616,974 710,250 792,814
Expenses:
Research and
development 1,513,323 1,243,545 1,478,980 4,484,608
Sales and
marketing 2,656,099 2,270,982 1,103,722 4,711,785
General and
administrative 2,654,214 2,368,903 1,899,302 2,616,285
Depreciation and
amortization 740,049 573,672 404,015 1,226,022
Severance costs - - - 474,008
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7,563,685 6,457,102 4,886,019 13,512,708
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Loss before the
following (5,623,504) (4,840,128) (4,175,769) (12,719,894)
Interest income and
other income (26,302) (25,653) (111,096) (447,736)
Interest expense 20,872 19,653 - -
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Loss for the
period (5,618,074) (4,834,128) (4,064,673) (12,272,158)
Deficit, beginning
of period (35,863,688) (35,863,688) (31,799,015) (19,526,857)
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Deficit, end of
period $(41,481,762)$(40,697,816)$(35,863,688)$(31,799,015)
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Basic and diluted
loss per share
(note 7) $ (0.87) $ (0.85) $ (1.37) $ (4.65)
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Weighted average
number Of common
shares 6,478,296 5,715,423 2,971,692 2,637,648
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DIVERSINET CORP.
Consolidated Statements of Cash Flows
(In United States dollars)
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Fourteen month Years ended
period ended
December 31 October 31 October 31 October 31
2003 2003 2002 2001
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Cash provided by
(used in):
Operating
activities:
Loss from
continuing
operations $(5,618,074) $(4,834,128) $(4,064,673)$(12,272,158)
Items not involving
cash:
Depreciation and
amortization 740,049 573,672 404,015 1,226,022
Stock-based
compensation
expense 825,010 771,519 - -
Unrealized foreign
exchange loss
(gain) 415,813 490,602 71,603 (185,117)
Change in non-cash
operating working
capital:
Accounts
receivable 2,425,570 2,084,387 (91,726) 908,489
Other receivables (69,815) (61,787) 47,094 37,949
Prepaid expenses (98,846) 43,350 300,700 (7,180)
Accounts payable (571,786) (625,673) (402,707) 480,399
Accrued liabilities 431,892 584,811 (777,766) (758,104)
Deferred revenue (156,371) 19,530 (18,552) (26,634)
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Cash used in
continuing
operations (1,676,558) (953,717) (4,532,012) (10,596,334)
Financing
activities:
Issue of common
shares, common
share
purchase options
and warrants for
cash 2,920,646 2,931,032 3,108,317 68,651
Notes payable (873,323) (868,337) - -
Bank indebtedness (240,979) (240,979) - -
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Cash provided by
Financing
activities 1,806,344 1,821,716 3,108,317 68,651
Investing
activities:
Short-term
investments 599,698 (9,712) 112,799 (1,956,457)
Acquisitions, net
of cash received (541,084) (541,084) - -
Additions to
capital assets (74,523) (61,918) (20,525) (719,453)
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Cash provided by
(used in) investing
activities (15,909) (612,714) 92,274 (2,675,910)
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Increase (decrease)
in cash and cash
equivalents 113,877 255,285 (1,331,421) (13,203,593)
Cash and cash
equivalents,
beginning of
period 608,692 608,692 1,940,113 15,143,706
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Cash and cash
equivalents, end
of period $ 722,569 $ 863,977 $ 608,692 $ 1,940,113
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Supplementary non-cash
financing and
investing activities:
Issue of warrants
on acquisitions $1,044,640 $ 1,044,640 $ - $ -
Issue of common
shares on
acquisitions 4,959,875 4,959,875 - -
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# of shares issued and outstanding: 12,043,277
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