Diversinet explains deal with VeriSign

Chief Executive of Diversinet, Nagy Moustafa, has adduced reasons for the firm’s recent licensing of MobiSecure to VeriSign, even as the introduction of the product is for corporate benefit of the company and its customers.

The company has also raked in some $330,000 in second quarter of this year.

Stating this at the unveiling of the firm’s second quarter results for 2005, the CEO said, “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”.

MobiSecure, he said is proving to be an effective and low-cost strong authentication solution upon which businesses could develop innovative solutions to address the threat of identity theft.

He also said the firm has extensively expanded its network of distribution through engaging partners led by VeriSign on OEM deal.

OEM is the abbreviation for the Original Equipment Manufacturer, which is a term for a company that has a special relationship with the original producer by way of purchasing in bulk and customizing same for a particular application.

Diversinet, a leading provider of mobile device security and authentication solutions for the mobile data and on-line ecosystems, said it has commenced focus on the evolving protection and trust needs of mobile users.

These financial results, the company said reflected the shift in focus and time, which has now required to rebuilding of its sales and marketing efforts, as well as the customer base.

Revenues for the quarter, he said was $330,000, compared to $611,000 in the second quarter of 2004.

The net loss for the quarter, he explained, 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 losses are stock-based compensation, depreciation and amortization expenses of $522,000 ($349,000 in Q2 2004).

Cash used in continuing operations 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 Unified Authentication solution.

By licensing Diversinet’s MobiSecure soft token product suite for the VeriSign entails the company to provide enterprises, banks, online service providers and retailers with a cost-effective means to provide strong authentication protection to their customers, business partners and employees.

President of Diversinet, Kashif Hassan, said “Diversinet is delivering the business infrastructure and product solutions that customers need to address the challenges of identity theft, phishing and on-line fraud.”

He also said that the licensing agreement with VeriSign provides distribution channels and validation services that complement the 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,” he said in a press statement from the company.