Diversinet Announces Sale of its Business, Proposed Liquidation and Second Quarter 2013 Financial Results PR Newswire TORONTO, Aug. 9, 2013 TORONTO, Aug. 9, 2013 /PRNewswire/ - Diversinet Corp. (TSX Venture: DIV, OTCQB: DVNTF), announced today that it has entered into an asset purchase agreement ("Agreement") with certain subsidiaries of IMS Health Incorporated ("IMS Health"). Under the Agreement, IMS Health has agreed to purchase substantially all of the intellectual property, software, customer contracts and certain other assets of Diversinet for $3,500,000. An amount equal to one-half of the sale proceeds will be deposited with an independent escrow agent to be available to satisfy indemnity claims by IMS Health, if any, made prior to the proposed winding-up described below. Certain employees of Diversinet have been offered employment by IMS Health, subject to closing of the transaction contemplated by the Agreement. The closing is subject to customary conditions precedent at closing, including Diversinet shareholder approval. Shareholders will be asked to approve the transaction at the annual and special meeting of shareholders ("AGM"), scheduled for September 11, 2013. Holders of an aggregate of appropriately 38% of the outstanding common shares of Diversinet, including shareholders who are Directors and their respective affiliated companies, have agreed with IMS Health to vote in favour of the transaction. Under the Agreement, IMS Health is entitled to a break fee in certain circumstances, including a $750,000 payment upon the acceptance by Diversinet of an unsolicited superior proposal from a third party. IMS Health has also been granted other typical deal protection provisions including a right to match any superior proposal that is received by Diversinet on an unsolicited basis. Craig-Hallum Capital Group LLC acted as financial advisor to Diversinet. Furthermore, the Board will be proposing the voluntary winding up of the Company pursuant to the Business Corporations Act (Ontario). This will involve the appointment of a liquidator to discontinue the business of the Company and to satisfy all claims and obligations and to distribute to shareholders, on a pro rata basis, the remaining funds and assets of the Company. At the AGM, shareholders will be asked to approve a Plan of Liquidation and Distribution to take all necessary steps to effect the voluntary winding up of the Company. A one time distribution to shareholders is not expected before early 2014. While there is no guarantee as to the amount of the shareholder distribution, Diversinet currently expects to distribute a per share amount in the range of $0.05 to $0.065 based on recent estimates of anticipated claims and obligations to be settled. Both the approval by shareholders of the sale transaction and the voluntary winding up of the Company will require the approval of two thirds of the votes cast at the AGM. Shareholders will receive additional details on the transaction contemplated by the Agreement and winding up process in the management information circular to be sent to shareholders as part of the AGM materials. The Company is also delisting its common shares from the TSX Venture Exchange effective August 13, 2013. Trading of the Company's common shares will continue for a transitional period prior to the wind up, which is expected to start on or about September 16, 2013, on the OTCQB under the trading symbol DVNTF. Q2 Financial Highlights Revenues for the second quarter were $263,000, compared to $419,000 in the same year-ago period. Revenues for the six months ended June 30, 2013 were $566,000 compared to $701,000 in the same period in 2012. Net loss in the second quarter totalled $794,000 or $(0.02) per share, compared to $1.1 million or $(0.03) per share in the same year ago period. Net loss for the six months ended June 30, 2013 was $1.8 million, or $(0.04) per share, compared to $2.6 million or $(0.06) per share in the first six months of 2012. Cash and cash equivalents were $1.6 million at June 30, 2013 and $3.2 million at December 31, 2012. At June 30, 2013, the Company had 43,497,000 common shares outstanding. Financial Summary Q2 2013 Q2 2012 Revenues $262,844 $419,258 Cost of revenues 12,980 64,934 Gross margin 249,864 354,324 Expenses Research and development 429,101 702,828 Sales and marketing 139,721 344,359 General and administrative 421,482 444,635 Depreciation 44,436 13,231 1,034,740 1,505,053 Loss before the undernoted (784,876) (1,150,729) Foreign exchange gain (10,113) 453 Interest income 961 3,059 Loss for the period $(794,028) $(1,147,217) Basic and diluted earnings (loss) per share $(0.02) $(0.03) Cash and cash equivalents $1,637,978 $5,098,650 Total assets $1,907,324 $5,539,210 Total current liabilities $529,368 $749,699 Total shareholders' equity $1,377,956 $4,789,511 Weighted average basic and fully diluted common 43,496,847 43,179,333 shares outstanding For complete financial statements, including the notes and management's discussion and analysis, please visit our website at http://www.diversinet.com/financial-reports.html. The unaudited financial statements have not been reviewed by Diversinet's auditor. About Diversinet Diversinet Corp. (TSX Venture: DIV, OTCQB: DVNTF) provides healthcare organizations and partners with ultra-secure, patented mobile technologies and connected health solutions. The company's core publishing platform supports rapid deployment of secure and HIPAA-compliant Web-to-mobile applications. Diversinet solutions lead with an innovative, virtual health wallet designed for patient-centric engagement to improve care coordination, health outcomes and resilience. Learn more about Diversinet at www.diversinet.com. The Private Securities Litigation Reform Act of 1995 and Canadian securities laws provide a "safe harbour" for forward-looking statements. 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 the closing of the proposed transaction, costs of the proposed transaction ,the voluntary winding up of the Company and the anticipated distribution of proceeds to shareholders. Such forward-looking information involves important risks and uncertainties, including the uncertainty of receipt of the required regulatory and shareholder approvals, 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. There can be no assurance that the proposed transaction or voluntary winding up of the company will occur or that it will occur on the timetable described or on the terms and conditions contemplated in this news release or that the amount of the distribution to shareholders will be as anticipated. The amount of the proposed distribution to shareholders is based on an assumption that the amount of obligations of the Company will not exceed the amount currently estimated by the Company. For a description of additional risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission available at www.sec.gov and Canadian securities regulatory authorities available at www.sedar.com. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. MobiSecure is a registered trademark of Diversinet Corp. SOURCE Diversinet Corp. Contact: Company Contact Diversinet Corp. David Hackett Chief Financial Officer 416-756-2324 ext. 275 firstname.lastname@example.org
Diversinet Announces Sale of its Business, Proposed Liquidation and Second Quarter 2013 Financial Results
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