Diversinet Corp. Announces Record Quarterly Revenues And Second Quarter Fiscal 2003 Results; Operating Cash Loss Narrows by 64%; Revenue up 696% for First Six Months.Business Editors/High-Tech Writers TORONTO--(BUSINESS WIRE)--June 24, 2003 Diversinet Corp. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : DVNT DVNT Deviant (record label) ), a leading provider of secured mobile solutions, today announced its second quarter fiscal 2003 results. Revenues for the second quarter of fiscal 2003 were $2,649,000, up from $311,000 in the second quarter of fiscal 2002. For the six months ended April 30, 2003, the Company reported revenue of $3,867,000, compared to revenue of $486,000 for the six months ended April 30, 2002. The higher revenue was due to the inclusion of the results for 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, which was acquired on January January: see month. 2, 2003. The net loss for the quarter ended April 30, 2003, was $2,084,000, or $(0.65) per share, compared to a net loss for the same quarter in fiscal 2002 of $2,063,000, or $(0.74) per share. The net loss reported was $3,198,000, or $(0.99) per share for the six months ended April 30, 2003, compared to a net loss of $3,788,000, or $(1.39) in the same period in fiscal 2002. Cash used in operating activities was $795,000 in the three months ended April 30, 2003, a decline of 64% from the amount used in the same period of the prior year. The Company continues to show reduced quarter over quarter usage of cash in operations from last year and we continue to be vigilant in our cost control efforts. By right-sizing our staff and our office space as our product development efforts reached completion, we have reduced our on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" burn rate by approximately $100,000 per month, which effect should begin to be seen in the third quarter and will fully be realized by the fourth quarter. During the quarter, Diversinet licensed its wireless security software to the 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. Institute of Vocational Education vocational education, training designed to advance individuals' general proficiency, especially in relation to their present or future occupations. The term does not normally include training for the professions. (HKIVE HKIVE Hong Kong Institute of Vocational Education ). The software will be used to train and give students hands-on hands-on adj. Involving active participation; applied, as opposed to theoretical: "We're involved in hands-on operations, pulling levers, pushing buttons" Arthur R. Taylor. experience installing and configuring wireless security in a final year project in the Higher Diploma A higher diploma is an academic award in Hong Kong and Ireland. In Hong Kong the award is below the standard of the bachelor's degree, in Ireland it is above the standard of the bachelor's degree. in Computer and Information Engineering course. Diversinet's wireless security software was chosen since it is the same wireless security technology employed by Hongkong Post
In second quarter of fiscal 2003, Diversinet's systems integration subsidiary DSS entered into new product and project development agreements with Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. , a provider of industrial-strength in·dus·tri·al-strength adj. Extremely strong, durable, or concentrated: industrial-strength cardboard; industrial-strength detergent. Adj. 1. Internet Internet 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 hardware, software and services; Williams-Sonoma Williams-Sonoma, Inc. (NYSE: WSM) is an American company that sells specialty cooking utensils and other housewares, along with a variety of foods including gourmet coffees. Its principal office is in San Francisco, California. , a nationwide retailer of products for the home; MENTURA, a provider of educational and family DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. rentals by mail; Semaphore semaphore (sĕm`əfôr'), device for the visible transmission of messages. The marine semaphore, used by day between ships or between a ship and the shore, consists essentially of a post at the top of which are two pivoted arms. Partners, who assists sales, marketing and customer management professionals in Fortune 1000 companies acquire, convert and retain customers through technology-enabled solutions; and Eveo, the developer of a web-based rich media publishing platform that enables marketers to quickly and affordably, create, publish, and track rich media presentations, e-mails, interactive audio/video, newsletters, and promotional micro-sites. Also during the quarter, Anthony Marcon was appointed VP, 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. . Prior to joining Diversinet, Anthony worked at CertaPay Inc., E Trade Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) in various sales and business development roles. Anthony has extensive experience in developing and structuring deals with leading financial institutions in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and the
Asia Pacific regions.Subsequent to the quarter end, the Company completed the issue and sale of 5,000,000 common shares in the capital of the Company at US$0.62 per share for gross proceeds of US$3,100,000. With this financing, the Company expects to have sufficient cash resources 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. About Diversinet Corp. Diversinet is a leading provider of secured mobile solutions to the enterprise, financial services, 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 (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. 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 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 , Canada, with offices 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: ; Hong Kong, 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 ; and London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. , England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. . For more information visit 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.
Diversinet Corp.
CONSOLIDATED BALANCE SHEETS
(in Canadian dollars)
(Unaudited)
April 30 October 31
2003 2002
$ $
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ASSETS
Current
Cash and cash equivalents 842,772 953,272
Short-term investments - 2,887,352
Accounts receivable 1,479,947 416,070
Other receivables 97,724 24,952
Prepaid expenses 399,170 120,608
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Total current assets 2,819,613 4,402,254
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Capital assets, net 1,464,069 1,877,012
Goodwill 1,417,374 -
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Total assets 5,701,056 6,279,266
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable 1,365,606 551,306
Accrued liabilities 1,422,350 1,093,352
Current portion of
promissory note 432,000 -
Current portion of notes
payable 13,860 -
Deferred revenue 25,778 14,452
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Total current liabilities 3,259,594 1,659,110
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Promissory note 432,000 -
Notes payable 5,040 -
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Total liabilities 3,696,634 1,659,110
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Shareholders' equity
Share capital 58,949,961 58,957,962
Share purchase warrants 589,824 -
Contributed surplus 97,500 97,500
Deficit (57,632,863) (54,435,306)
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Total shareholders'
equity 2,004,422 4,620,156
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Total liabilities and
shareholders' equity 5,701,056 6,279,266
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Diversinet Corp.
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(in Canadian dollars)
Three and six months
ended April 30, 2003
(Unaudited)
Three months April 30 Six months April 30
2003 2002 2003 2002
$ $ $ $
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REVENUE
Software products 29,604 311,189 313,556 485,641
Consulting services 2,619,550 - 3,553,363 -
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2,649,154 311,189 3,866,919 485,641
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Cost of sales 2,252,551 - 3,039,116 -
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Gross margin 396,603 311,189 827,803 485,641
EXPENSES
Research and
development 531,978 761,015 969,535 1,408,633
Sales and marketing 381,561 476,420 780,984 908,011
General and
administrative 1,227,054 1,055,704 1,839,120 1,792,156
Depreciation and
amortization 365,458 145,598 502,838 267,474
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2,506,061 2,438,737 4,092,477 4,376,274
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Loss before the
following (2,109,448) (2,127,548) (3,264,674) (3,890,633)
Interest income (25,907) (64,224) (67,117) (102,351)
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Loss for the
period (2,083,541) (2,063,324) (3,197,557) (3,788,282)
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Loss per share (0.65) (0.74) (0.99) (1.39)
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Weighted average
common shares
outstanding 3,222,210 2,798,694 3,222,210 2,718,737
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Deficit, beginning
of period (55,549,322) (49,763,322) (54,435,306) (48,038,364)
Loss for the
period (2,083,541) (2,063,324) (3,197,557) (3,788,282)
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Deficit, end of
period (57,632,863) (51,826,646) (57,632,863) (51,826,646)
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Diversinet Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in Canadian dollars)
Three and six months ended April 30, 2003
(Unaudited)
Three months Six months
April 30 April 30
2003 2002 2003 2002
$ $ $ $
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OPERATING ACTIVITIES
Loss for the period (2,083,541)(2,063,324) (3,197,557)(3,788,282)
Add (deduct) items not
requiring an outlay of
cash:
Depreciation and
amortization 365,458 145,598 502,838 267,474
Changes in non-cash
working capital items
related to operations:
Accounts receivable and
other receivables 493,549 (115,771) 2,449,185 97,061
Prepaid expenses 146,904 100,899 (220,344) 277,713
Accounts payable and
accrued liabilities 295,293 (284,912) (392,648)(1,435,485)
Deferred revenue (12,962) (2,852) 11,326 3,853
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Cash used in operating
activities (795,299)(2,220,362) (847,200)(4,577,666)
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FINANCING ACTIVITIES
Issue of common shares,
common purchase options,
warrants for cash and
share consolidation costs(8,001) 4,773,626 (8,001) 4,773,626
Notes payable (87,131) - (1,359,305) -
Promissory notes payable (82,140) - (82,140) -
Bank indebtedness (380,000) - (380,000) -
Deferred financing costs 200 - (27,401) -
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Cash provided by
financing activities (557,072) 4,773,626 (1,856,847) 4,773,626
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INVESTING ACTIVITIES
Short-term investments - - 2,887,352 3,087,680
Acquisition, net of cash
received (13,549) - (351,152) -
Additions to capital
assets 58,210 (2,190) 57,347 (11,392)
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Cash provided by
investing activities 44,661 (2,190) 2,593,547 3,076,288
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Net increase in cash and
cash
equivalents during the
period (1,307,710) 2,551,074 (110,500) 3,272,248
Cash and cash
equivalents,
beginning of the period 2,150,482 3,783,018 953,272 3,061,844
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Cash and cash equivalents,
end of the period 842,772 6,334,092 842,772 6,334,092
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# of shares issued and outstanding: 9,212,308
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