Diversinet Corp. Announces Second 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 Focuses on Execution as it Launches its MobiSecure Strong 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. Solution and Significantly Expands Distribution Through 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 Agreement with VeriSign VeriSign, Inc. (NASDAQ: VRSN) is an American company based in Mountain View, California that operates a diverse array of network infrastructure, including two of the Internet's thirteen root nameservers, the generic top-level domains for .com and . Diversinet Corp. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :DVNTF), a leading provider of mobile device security and authentication solutions for the mobile data and on-line ecosystems, today announced its second quarter 2005 results. Revenues for the quarter were $330,000, compared to $611,000 in the second quarter of 2004. In January January: see month. 2005 Diversinet began to focus on the evolving protection and trust needs of mobile users. These financial results reflect this shift in focus and time is now required to rebuild the sales and marketing efforts of the company as well as the customer base. The net loss for the quarter was $1,458,000, or $0.08 per share, compared to the 2004 second quarter loss of $1,347,000 or $0.11 per share. Included in the Q2 net loss are stock-based compensation, depreciation and amortization expenses of $522,000 ($349,000 in Q2 2004). Cash 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 for the second quarter was $661,000, a decrease from the $884,000 used in the second quarter of 2004 and $789,000 in the first quarter of 2005. In the second quarter of 2005, Diversinet entered into an OEM licensing agreement with VeriSign, Inc. to deliver its OATH-compliant suite of mobile tokens and mobile authentication services for distribution by VeriSign with the VeriSign(R) Unified Authentication solution. By licensing Diversinet's MobiSecure soft token product suite for the VeriSign Unified Authentication solution, VeriSign will provide enterprises, banks, online service providers and retailers with a cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. means to provide strong authentication protection to their customers, business partners and employees. "Since we refocused the company in January of 2005, there has been an enthusiastic industry response to the opportunity to use our MobiSecure products and services to protect corporate profits, brand equity, and consumer confidence in on-line services," 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 is delivering the business infrastructure and product solutions that customers need to address the challenges of identity theft, phishing Pronounced "fishing," it is a scam to steal valuable information such as credit card and social security numbers, user IDs and passwords. Also known as "brand spoofing," an official-looking e-mail is sent to potential victims pretending to be from their ISP, bank or retail establishment. and on-line fraud," said Kashif Hassan Hassan (häsän`), d. 1894, sultan of Morocco (1873–94). He brought the weak and disorganized country firmly under his control and held in check attempts by European powers at domination. , President of Diversinet. "The licensing agreement with VeriSign provides distribution channels and 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. services that complement our growing line of MobiSecure soft token products and associated provisioning and management services. We believe that we are still on schedule to deliver pilot activity in the second half of 2005." Diversinet's second quarter 2005 highlights also include: - The Company launched the industry's first open mobile security platform to support standards-based strong authentication for mass-market mass-mar·ket adj. Of, relating to, or produced for consumption in large numbers, especially when sold in supermarkets, in drugstores, and at newstands: a mass-market paperback. tr.v. deployments. Diversinet MobiSecure Tokens and MobiSecure Authentication Service Center (MASC MASc, n.pr See Master of Ayurvedic Science. ) are designed to protect individuals, companies and enterprises from security threats such as identity theft and online fraud. MobiSecure Tokens eliminate the need for consumer and enterprise users to carry additional hard tokens A physical authentication device such as a smart card. See authentication token. See also hard tag. , USB USB in full Universal Serial Bus Type of serial bus that allows peripheral devices (disks, modems, printers, digitizers, data gloves, etc.) to be easily connected to a computer. toggles or smart cards Example of widely used contactless smart cards are Hong Kong's Octopus card, Paris' Calypso/Navigo card and Lisbon' LisboaViva card, which predate the ISO/IEC 14443 standard. The following tables list smart cards used for public transportation and other electronic purse applications. with smart card readers for 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. . The MobiSecure suite of soft tokens are available on all intelligent mobile device platforms, including Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. , RIM, Symbian, Palm and Java-based phones, as well as personal computers running Microsoft Windows See Windows. (operating system) Microsoft Windows - Microsoft's proprietary window system and user interface software released in 1985 to run on top of MS-DOS. Widely criticised for being too slow (hence "Windoze", "Microsloth Windows") on the machines available then. 98, 2000 and XP operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. . - The Company appointed international telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. veteran Brian Barry Brian Barry (born 1936) is a contemporary moral and political philosopher. He was educated at the University of Oxford, obtaining the degrees of M.A. and D.Phil. Along with David Braybrooke, Richard E. to its Board of Director and security expert Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Sigmond of BlueStream Ventures to its Advisory Board. - The Company continued its strong support of the Open AuTHentication (OATH) industry alliance for mobile-optimized strong authentication solution delivery, successfully showing its own MobiSecure soft token products interoperating with services from other OATH members at Digital ID World in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden and InfoSecurity See infosec. 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 in Toronto. As a leading mobile and on-line authentication service provider, Diversinet provides enterprises, banks, online service providers and retailers with cost effective, mobile-optimized strong authentication products and services that reduce identity theft and improve brand trust. Diversinet MobiSecure solutions leverage more than 2 billion consumer and enterprise mobile devices and PCs 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. . 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 2 billion mobile device and PC 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 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) 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.
Diversinet Corp.
CONSOLIDATED BALANCE SHEETS
(in United States dollars)
(Unaudited)
June 30, December 31,
2005 2004
(restated note 3)
$ $
---------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 446,296 723,498
Short-term investments 905,932 2,000,000
Accounts receivable 176,667 290,239
Other receivables 64,459 35,700
Prepaid expenses 191,151 187,653
Current assets of discontinued
operations (note 3) - 512,992
---------------------------------------------------------------------
Total current assets 1,784,505 3,750,082
---------------------------------------------------------------------
Capital assets, net 541,432 593,673
Purchase technology, net 31,416 125,667
Customer assets, net 385,896 551,280
Goodwill 1,894,692 2,286,932
---------------------------------------------------------------------
Total assets 4,637,941 7,307,634
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable 232,905 147,084
Accrued liabilities 468,031 478,781
Notes payable - 4,611
Deferred revenue 196,500 165,343
Current liabilities of
discontinued operations (note 3) 96,986 676,414
---------------------------------------------------------------------
Total current liabilities 994,422 1,472,233
---------------------------------------------------------------------
Shareholders' equity
Share capital 52,469,844 52,445,135
Cumulative translation adjustment (1,520,721) (1,520,721)
Share purchase warrants 2,927,399 2,830,929
Contributed surplus 1,709,712 1,265,549
Deficit (51,942,715) (49,185,491)
---------------------------------------------------------------------
Total shareholders' equity 3,643,519 5,835,401
---------------------------------------------------------------------
Total liabilities and
shareholders' equity 4,637,941 7,307,634
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Diversinet Corp.
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(in United States dollars)
(Unaudited)
Three months ended Six months ended
June 30 June 30
2005 2004 2005 2004
(restated (restated
note 3) note 3)
$ $ $ $
---------------------------------------------------------------------
REVENUE 329,514 611,147 683,925 1,464,347
Cost of sales 216,270 390,362 461,738 826,683
---------------------------------------------------------------------
Gross margin 113,244 220,785 222,187 637,664
EXPENSES
Research and
development 303,607 310,862 581,154 641,951
Sales and marketing 352,227 390,591 668,962 778,595
General and
administrative 747,963 601,351 1,262,023 1,343,316
Depreciation and
amortization 177,408 200,019 351,695 399,870
---------------------------------------------------------------------
1,581,205 1,502,823 2,863,834 3,163,732
---------------------------------------------------------------------
Loss before the
following (1,467,961) (1,282,038) (2,641,647) (2,526,068)
Foreign exchange
gain (11,441) (14,160) (18,527) (23,958)
Interest income (3,716) (2,901) (12,665) (9,230)
---------------------------------------------------------------------
Loss from continuing
operations (1,452,804) (1,264,977) (2,610,455) (2,492,880)
Loss from
discontinued
operations (note 3) (5,195) (82,233) (146,769) (197,239)
---------------------------------------------------------------------
Loss for the period (1,457,999) (1,347,210) (2,757,224) (2,690,119)
---------------------------------------------------------------------
Deficit, beginning
of period (50,484,716)(43,011,558)(49,185,491)(41,481,762)
Adjustment for
change in
accounting for
stock-based
compensation - - - (186,887)
Loss for the period (1,457,999) (1,347,210) (2,757,224) (2,690,119)
Deficit, end of
period (51,942,715)(44,358,768)(51,942,715)(44,358,768)
---------------------------------------------------------------------
Loss per share
Basic and diluted
loss per share
from continuing
operations (0.08) (0.11) (0.14) (0.21)
Basic and diluted loss
per share (0.08) (0.11) (0.14) (0.22)
Weighted average
common shares
outstanding 19,247,556 11,881,901 19,213,493 12,055,217
See accompanying notes to interim consolidated financial statements.
Diversinet Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In United States dollars)
(Unaudited)
Three months ended Six months ended
June 30 June 30
2005 2004 2005 2004
$ $ $ $
---------------------------------------------------------------------
OPERATING ACTIVITIES
Loss from continuing
operations (1,452,804) (1,264,977) (2,610,455) (2,492,880)
Add (deduct) items
not requiring an
outlay of cash:
Depreciation and
amortization 177,408 200,019 351,695 399,870
Stock-based
compensation expense 344,681 149,257 580,833 334,541
Changes in non-cash
working capital items
related to operations:
Accounts receivable
and other
receivables 99,958 (85,438) 84,813 (109,248)
Prepaid expenses 18,883 34,586 36,702 251,924
Accounts payable and
accrued liabilities 115,834 (34,322) 75,071 (543,252)
Deferred revenue 35,000 116,645 31,157 (25,695)
---------------------------------------------------------------------
Cash used in continuing
operations (661,040) (884,230) (1,450,184) (2,184,740)
Cash provided by
(used in)
discontinued
operations (30,179) 19,337 179,036 25,384
---------------------------------------------------------------------
Cash used in operations (691,219) (864,893) (1,271,148) (2,159,356)
---------------------------------------------------------------------
FINANCING ACTIVITIES
Issue of common
shares, common
purchase options,
warrants for cash (71,191) 3,026 (55,691) 1,887,740
Notes payable - (4,353) (4,611) (6,250)
---------------------------------------------------------------------
Cash provided by
(used in) financing
activities (71,191) (1,327) (60,302) 1,881,490
---------------------------------------------------------------------
INVESTING ACTIVITIES
Decrease (increase)
in short-term
investments 594,273 298,641 1,094,068 294,117
Net addition of
capital assets (37,571) (2,215) (39,820) (6,677)
---------------------------------------------------------------------
Cash provided by
investing activities 556,702 296,426 1,054,248 287,440
---------------------------------------------------------------------
Net increase (decrease)
in cash and cash
equivalents during
the period (205,708) (569,794) (277,202) 9,574
Cash and cash
equivalents, beginning
of the period 652,004 1,126,902 723,498 547,534
---------------------------------------------------------------------
Cash and cash
equivalents, end of
the period 446,296 557,108 446,296 557,108
---------------------------------------------------------------------
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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