QUEBEC, June 27, 2011 /CNW Telbec/ - Victhom Human Bionics Inc.
(("Victhom") (TSXV: VHB)) today reported its first quarter 2011
Mr. Normand Rivard, President and CEO of Victhom, said: "Subsequent to
the end of the first quarter, the sale of our participation in the
Neurostream joint venture to our partner Otto Bock allowed us to
significantly strengthen our balance sheet while keeping good potential
for royalties to be generated from Neurostream's unique neuromodulation
technology platform. As a result, we are now well positioned to
generate revenues on a going-forward basis from leading-edge products
developed by both of our divisions, the Neurostep® and the Power Knee. The fact that two global market leaders in the
prosthetic and orthotic field, Otto Bock for the Neurostep® and Ossur for the Power Knee, are fully committed to commercialize
these products gives us great confidence in our ability to generate
good value for our shareholders".
On June 16, 2011, the Company announced that the 44.4% participation of
its wholly-owned subsidiary, 4504054 Canada Inc., in Neurostream
Technologies, G.P. ("Neurostream") was acquired by its joint venture
partner 4491343 Canada Inc., a related party to Otto Bock Healthcare
for an aggregate consideration of $10 million in cash as well as the
payment of royalties on the future net sales of the Neurostep® System and eventual monetization proceeds of the sleep apnea and
epilepsy technologies of Neurostream. The following financial results
do not take into account this transaction, which will be reflected in
our financial statements for the period ended on June 30, 2011.
First Quarter Results
R&D expenses, before tax credits, amounted to $21,657 for the
three-month period ended on March 31, 2011, compared with $70,955 for
the same period in 2010, representing a decrease of $49,298 or 69.5%.
The decrease is mainly due to the restructuring of our Biotronix
business in 2009. At this time, the Company does not expect to engage
in additional and new R&D activities in the near future.
For the quarter ended on March 31, 2011, tax credits amounted to $97,431
compared with $57,156 for the same period in 2010, representing an
increase of $40,275 or 70.5%. The increase is mainly explained by the
increase in R&D expenses engaged by Neurostream, from which Victhom is
eligible for refundable investment tax credits.
G&A expenses, net of non-cash stock-based compensation charges of $104,
for the three-month period ended on March 31, 2011, amounted to
$223,718 compared with $241,825 for the same period in 2010,
representing a decrease of $18,107 or 7.5%. The decrease in G&A
expenses is mainly due to lower professional fees.
For the three-month period ended on March 31, 2011, financial expenses,
net of exchange rate gain on preferred shares of $333,892, amounted to
$352,463 compared with financial expenses, net of exchange rate gains
on preferred shares of $274,466, for the same period in 2010, which
amounted to $364,394, representing a decrease of $11,931 or 3.3%. The
decrease is mainly explained by the lower interest paid on the demand
loan and the favorable exchange rate variation on operations, partially
offset by higher imputed interests on the preferred shares.
For the quarter ended on March 31, 2011, the consolidated net loss from
continuing operations amounted to $151,691 compared with a net loss of
$343,152 for the same period in 2010, representing a decrease in net
loss of $191,461 or 55.8%. The decrease is mainly explained by a
favorable exchange rate variation on operations and preferred shares
and by lower R&D expenses mainly due to the restructuring of our
Biotronix business in 2009.
For the three-month period ended on March 31, 2011, the consolidated net
loss amounted to $1,120,592 compared with a net loss of $1,673,342 for
the same period in 2010, representing a decrease in net loss of
$552,750 or 33.0%.
The net loss, net of non-cash items of $40,012, amounted to $1,080,580
for the quarter ended on March 31, 2011, compared with a net loss, net
of non-cash items of $99,891 for the same period in 2010, which
amounted to $1,573,451, representing a decrease of $492,871 or 31.3%.
The decrease in net loss is mainly explained by the decrease in net
loss from discontinued operations for an amount of $361,289 and by the
restructuring of our Biotronix business in 2009.
Shareholders' deficiency amounted to $4,840,752 on March 31, 2011,
compared with $3,720,264 on December 31, 2010. Total assets amounted
to $7,550,965 on March 31, 2011, compared with $8,130,753 on
December 31, 2010.
As of March 31, 2011, the Company had $808,135 in cash and short-term
investment. For the three-month period ended on March 31, 2011, the net
decrease in cash was $1,268,594 compared with a decrease of $683,006
for the same period in 2010. During the first quarter of 2011, the cash
was mainly used for the acquisition of short-term investment and for
the repayment of the demand loan.
Management believes that, with its financial situation, Victhom will
have sufficient liquidity to support its cash flow requirements for at
least the next twelve months. However, Management believes that its
joint venture Neurostream will require additional financing to fund its
As of April 27, 2011, even though Neurostream had not achieved
milestones that were due on May 1, 2010 and February 1, 2011, Otto Bock
has continued funding Neurostream's operations on a voluntary basis.
The outcome of this situation is dependent on a number of factors that
are not entirely under the Company's control. As a result, there is
uncertainty as to whether the Company's joint venture will have the
ability to continue as a going concern.
Even so, the unaudited condensed interim consolidated financial
statements ended on March 31, 2011 do not reflect any adjustments that
might be necessary if Neurostream is not successful in achieving the
partnership milestones and in obtaining its required financing from its
joint venture partner. Such adjustments could be material and could
have a significant adverse effect on the Company's condensed financial
On June 17, 2011, the number of common shares outstanding totaled
18,529,313 while 248,050 options were outstanding under the stock
option plan. The outstanding options are exercisable at a weighted
average exercise price of $6.21 per share. On June 17, 2011, the number
of preferred shares outstanding totaled 18,065,361 for a redemption
amount of US$ 11,940,093, which can be converted into common shares, at
any time and from time to time, at the holder's option on a 1-for-1
Victhom is a company which owns patents in the field of orthotics and
prosthetics ("O&P"), including intellectual property used in the Power
Knee, the world's first and only motor-powered prosthesis for
above-knee amputees, a product distributed under license agreement by
Ossur, a global leader in the O&P market. The Company also has a
royalty agreement related to the Neurostep® System and neuromodulation products in other indications (sleep apnea
and epilepsy) using the Neurobionix technology platform currently under
development by Neurostream Technologies, a General Partnership now
owned by Otto Bock, a global leader in the O&P market.
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.
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