VICTHOM DISCLOSES FIRST QUARTER 2011 FINANCIAL RESULTS

QUEBEC, June 27, 2011 /CNW Telbec/ - Victhom Human Bionics Inc. (("Victhom") (TSXV: VHB)) today reported its first quarter 2011 financial results.

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

Revenues

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.

Financial Situation

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 continuing operations.

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 statements.

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 basis.

About Victhom

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.

FORWARD-LOOKING STATEMENTS

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:

Source:  Victhom Human Bionics Inc.
For more information:   Normand Rivard
President & CEO
Victhom Human Bionics Inc.
Tel.: 418-872-5665 ext 107
Fax: 418-864-7034
normand.rivard@victhom.com
www.victhom.com

 

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VICTHOM HUMAN BIONICS INC.

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