QUEBEC, April 30 /CNW Telbec/ - Victhom Human Bionics Inc. (("Victhom") (TSX-V: VHB)) today reported its 2009 annual and fourth quarter financial results.
Mr. Normand Rivard, President and CEO of Victhom said: "During 2009, we have completed major transactions with partners that will allow us to bring products from both of our divisions to the market and generate revenues on a going forward basis. With the contribution of our new partner Otto Bock HealthCare, our joint venture Neurostream has continued to make good progress on product development of the Neurostep(R) System commercial version in preparation for the European market launch and the start of the U.S. clinical trial." He added: "We are also very proud to have completed the development of the second generation of the Power Knee. The transactions completed with our partner Ossur in the last quarter of 2009 allowed the Company to proceed with the restructuring of its Biotronix division to reduce costs and transfer the product support and development activities to Ossur to facilitate the successful commercial launch of the second generation of the Power Knee. With these two strategic transactions and the downsizing of its administrative functions, the Company has significantly reduced its cash flow requirements."
2009 Annual and Fourth Quarter Results
In 2009, the Company completed transactions approved under a Plan of Arrangement which had significant impacts on its financial statements. The net profit was generated mainly by non-cash gains related to the following transactions: CAN$ 8.3 million related to the extinguishment of the convertible debentures and their conversion into preferred shares; and CAN$ 1.5 million related to the assets and liabilities transfer to our newly created Neurostream joint venture. Furthermore, while we previously reported results from our Neurobionix activities as a division of Victhom, the 2009 results reflect our 44.4% interest in Neurostream joint venture and are presented using the proportionate consolidation method from May 1, 2009.
For the year ended on December 31, 2009, the Company recorded revenues of $1,570,476 compared with $2,286,468 in 2008, representing a decrease of $715,992 or 31.3%. For the fourth quarter of 2009, the Company recorded revenues of $128,642 compared with $597,700 in 2008, a decrease of $469,058 or 78.5%. The decrease is attributable to the reduction of non-refundable advance royalty payments from Ossur related to the reduction in activity level in the Biotronix division in the last phase of the development of the Power Knee Second Generation product, which represented the last project to be funded under the collaboration agreement with Ossur.
R&D expenses, before tax credits and grants, amounted to $8,411,117 for the year ended on December 31, 2009, compared with $10,100,239 for the same period in 2008, representing a decrease of $1,689,122 or 16.7%. For the fourth quarter of 2009, R&D expenses, before tax credits and grants, amounted to $1,381,860 compared with $2,736,976 in 2008, a decrease of $1,355,116 or 49.5%. The decrease is mainly due to the reduction of activities in the Biotronix division and to the transfer of our Neurobionix division activities into the Neurostream joint venture, in which the Company has a 44.4% interest.
For the year ended on December 31, 2009, G&A expenses, net of non-cash stock-based compensation charges of $16,375, amounted to $2,138,258 compared with $2,361,344 for the same period in 2008, representing a decrease of $223,086 or 9.4%. For the fourth quarter of 2009, G&A expenses, net of non-cash stock-based compensation charges of $165, amounted to $299,487 compared with $626,595 for the same period in 2008, a decrease of $327,108 or 52.2%. The decrease in G&A expenses is mainly due to staff reduction in administrative functions and to shared administrative services provided to Neurostream which are recorded through the Neurostream joint venture at 44.4% that were partially offset by non-recurring professional fees related to the completion of the transactions approved by plan of arrangement in June 2009.
For the year ended on December 31, 2009, financial expenses, net of exchange rate gain on convertible debentures and preferred shares of $2,394,500, amounted to $2,061,295 compared with financial expenses, net of exchange rate loss on convertible debentures of $3,288,836, for the same period in 2008, which amounted to $2,503,049, representing a decrease of $441,754 or 17.6%. Financial expenses for the fourth quarter of 2009, net of exchange rate gain on preferred shares of $154,116, amounted to $364,519 compared with financial expenses, net of exchange rate loss on convertible debentures of $2,473,040, for the same period in 2008, which amounted to $730,414, representing a decrease of $365,895 or 50.1%. The decrease is mainly explained by lower interests on the liability component of the financial instruments due to the conversion of the convertible debentures into preferred shares on June 17, 2009. The decrease is partially offset by lower interest income on cash and cash equivalents and short-term investments. The financial expenses are mainly the result of non-cash interest fees in connection with convertible debentures and Series A preferred shares.
Shareholders' equity (deficiency) amounted to $1,080,520 on December 31, 2009, compared with $(2,010,547) on December 31, 2008. Total assets amounted to $10,859,697 on December 31, 2009, compared with $17,295,019 on December 31, 2008.
As of December 31, 2009, the Company had cash and cash equivalents of $1,205,408 including short-term investments. For the year ended on December 31, 2009, the net decrease in cash and cash equivalents was $7,967 compared with $11,324,198 for year 2008. During 2009, the cash was provided by capital contribution from partner Otto Bock in the Neurostream joint venture, offset by cash used in operating activities. The Company expects to incur additional expenditures to complete the development and marketing of its Neurobionix products. Management believes that, with its current financial resources and with the financial commitment of its joint venture partner, the Company will have sufficient liquidity to support its cash flow requirements for at least the next twelve months.
On April 27, 2009, the number of common shares outstanding totaled 15,529,313 while 584,050 options were granted under the stock option plan and 2,596,494 share purchase warrants are in circulation pursuant to past unit offerings. The number of preferred shares outstanding totaled 21,065,361 after conversion of 1,877,139 preferred shares into common shares during 2009. The outstanding options and share purchase warrants are exercisable respectively at a weighted average exercise price of $3.85 and $7.63 per share.
Victhom discovers, develops and manufactures bionic devices involved in the treatment of a variety of physical and physiological dysfunctions. Victhom Biotronix business developed the Power Knee, the world's first and only motor-powered, artificially intelligent prosthesis for above-knee amputees. The Power Knee is commercialized by Ossur, a global leader in the orthotics and prosthetics ("O&P") market. Victhom also has a 44.4% interest in Neurostream Technologies, General Partnership, a joint venture with Otto Bock HealthCare, which objective is to bring to market the Neurostep(R) System, and to develop neuromodulation products in other indications such as sleep apnea.
Some of the statements made herein may constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause Victhom's actual results, performance or achievements to be materially different from those expressed or implied by any of Victhom's statements. Actual events or results may differ materially. We disclaim any intention, and assume no obligation, to update these forward-looking statements.
SOURCE Victhom Human Bionics Inc.
For further information: For further information: Normand Rivard, President & CEO, Victhom Human Bionics Inc., (418) 872-5665, Fax: (418) 864-7034, firstname.lastname@example.org; www.victhom.com; Source: Victhom Human Bionics Inc.