Diversinet reports net loss of $1.1 million for first quarter 2011

Diversinet Corp. (TSXV: DIV), (OTCBB: DVNTF), a leader in "connected and protected" mobile healthcare communications, reported its first quarter 2011 results for the period ended March 31, 2011. All dollar amounts are in U.S. dollars.

Effective for the 2010 fiscal year, the company has adopted U.S. generally accepted accounting principles ("U.S. GAAP") for the presentation of its consolidated financial statements for Canadian and U.S. reporting requirements, and in this release has restated comparative historical periods accordingly.

Financial Highlights
Revenues for the first quarter were $444,000, compared to $576,000 in the same period a year ago. Revenues in the first quarter of 2011 included $382,000 from the company's license and reseller agreement with Mihealth Global Systems while revenues in the first quarter of 2010 included $346,000 from the company's license and VAR agreement with Intersections, Inc., (Nasdaq: INTX) a global provider of consumer and corporate identity risk management services.

Net loss in the first quarter was $1.1 million or $(0.03) per share, compared to $1.0 million or $(0.02) per share in the same period a year ago. First quarter 2011 net loss included non-cash items of $189,000 in stock-based compensation, $14,000 in depreciation, and a foreign exchange gain of $25,000. This compares to non-cash items in the same year-ago quarter of $223,000 in stock-based compensation, $16,000 in depreciation, and a foreign exchange gain of $188,000.

Cash and cash equivalents at March 31, 2011 were $11.2 million and $12.5 million at December 31, 2010.

Operational Highlights

• During the first quarter the company remained focused on the key elements of its mobile health strategy, which includes introducing new products and product enhancements, creating customized mobile health applications, and expanding its network of healthcare partners.
• Based on the strong progress of its Mihealth pilot program, in January, the company entered into a five-year, $5 million exclusive Canadian reseller agreement with Mihealth Global Systems for our MobiSecure health solutions. This new relationship, subject to certain termination rights, enables the company to focus on the large opportunities in the U.S., while Mihealth serves Canada and other international markets. Under the new agreement, Mihealth will initially make the solution tested in North Bay available to medical clinics in Ontario, then eventually throughout Canada.
• Diversinet's board of directors renewed CEO Wahbe's employment agreement for an additional year (until March 31, 2012). The board believes his leadership will continue to be important to Diversinet's success in the healthcare marketplace.
• In February, Diversinet announced enhancements to the MobiSecure Platform with more than 50 new features. The improvements also extend support to 70 additional smart phones and tablets, strengthen security compliance and enable faster deployment.
• In March, the company introduced Clinical Communicator, a new application that enables secure mobile communication between healthcare professionals and patients. It is a HIPAA compliant clinical solution that increases clinician productivity and enhances patient outcomes.

"In the first quarter of 2011, we continued to leverage our proven secure mobile solutions in the rapidly-growing wireless health and mHealth marketplace, and build upon the strong foundation of accomplishments we made in 2010," stated Albert Wahbe, Diversinet's chairman and CEO.

"As we advance through 2011, we expect more doors to open to us, as we continue to benefit from the strengthening, widespread market demand for the secure mobilisation of health information, driven by the clear economics for healthcare organizations."

SOURCE Diversinet Corp.