QUEBEC, Aug. 27 /CNW/ -- QUEBEC, Aug. 27 /CNW Telbec/ - Victhom
Human Bionics Inc. (("Victhom", or "Company") (TSX-V: VHB))
today reported its second quarter 2010 financial results. Mr.
Normand Rivard, President and CEO of Victhom said: "During the
second quarter of 2010, our joint venture Neurostream, continued to
make good progress on the development and registration of the
commercial version of the Neurostep(®) product with the European
regulatory authorities. However, the overall Neurostep(®) project
is taking longer than anticipated and Neurostream is late on a
partnership milestone on the product registration in Europe that
was due on May 1, 2010. Therefore, the European market launch
and the start of the U.S. clinical trial for the Neurostep(®)
product have been postponed to next year. He added: "Even though
the full commercial launch of the Power Knee Second Generation is
only anticipated later this year, Victhom received its first
royalty payment for units sold as part of the early commercial
release to selected rehabilitation centers." Second Quarter Results
For the quarter ended on June 30, 2010, the Company recorded
revenues of $27,901 compared with $495,736 in 2009, representing a
decrease of $467,835 or 94.4%. The decrease is attributable to the
transfer of product support and development activities to Ossur
which was completed during the first quarter. The revenues for the
six-month period ended on June 30, 2010 are composed of royalties
on the Power Knee II for an amount of $27,790 ($0 in 2009), of
non-refundable advance royalties for an amount of $0 ($1,161,250 in
2009), of support activities for an amount of $0 ($16,398 in 2009),
and of other sources for an amount of $2,594 ($0 in 2009). R&D
expenses, before tax credits and grants, amounted to $1,241,150 for
the three-month period ended on June 30, 2010, compared with
$2,570,920 for the same period in 2009, representing a decrease of
$1,329,770 or 51.7%. For the six-month period ended on June 30,
2010, R&D expenses, before tax credits and grants, amounted to
$2,530,047 compared with $5,440,152 for the same period in 2009,
representing a decrease of $2,910,105 or 53.5%. The decrease is
mainly due to the restructuring of our Biotronix business 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 three-month period ended on June 30, 2010, tax
credits and grants amounted to $1,126,214 compared with $310,909
for the same period in 2009, representing an increase of $815,305
or 262.2%. Tax credits and grants amounted to $1,183,370 for the
six-month period ended on June 30, 2010, compared with $659,909 for
the same period in 2009, representing an increase of $523,461 or
79.3%. The increase is mainly explained by amended tax credit
claims for previous years for which the Company received positive
confirmation and payment from tax authorities. For the three-month
period ended on June 30, 2010, G&A expenses, net of non-cash
stock-based compensation charges of $166, amounted to $745,978
compared with $479,317 for the same period in 2009, representing an
increase of $266,661 or 55.6%. G&A expenses, net of non-cash
stock-based compensation of $332, for the six-month period ended on
June 30, 2010, amounted to $1,088,559 compared with $1,096,315 for
the same period in 2009, representing a decrease of $7,756 or 0.7%.
The decrease in G&A expenses is due to staff reduction in
administrative functions. However, the G&A expenses include
non-recurring professional fees related to amended investment tax
credits, received during the second quarter of 2010, offset by
non-recurring professional fees related to the completion of the
transaction approved by plan of arrangement in June 2009. Financial
expenses, net of exchange rate loss on preferred shares of
$274,614, for the three-month period ended on June 30, 2010,
amounted to $361,536 compared with financial expenses, net of
exchange rate gain on convertible debentures and preferred shares
of $2,409,401, for the same period in 2009, which amounted to
$662,867, representing a decrease of $301,331 or 45.5%. For the
six-month period ended on June 30, 2010, financial expenses, net of
exchange rate gain on preferred shares of $1,969, amounted to
$733,356 compared with financial expenses, net of exchange rate
gain on convertible debentures and preferred shares of $1,691,859,
for the same period in 2009, which amounted to $1,344,892,
representing a decrease of $611,536 or 45.5%. 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
also partially explained by higher interest on long-term debts and
negative impact of foreign exchange fluctuations on operations.
Shareholders' equity (deficiency) amounted to $(2,055,247) on June
30, 2010, compared with $1,080,520 on December 31, 2009. Total
assets amounted to $7,716,260 on June 30, 2010, compared with
$10,859,697 on December 31, 2009. Financial Situation As
of June 30, 2010, the company had $172,185 in cash. For the
six-month period ended on June 30, 2010, the net decrease in
cash was $938,027 compared with an increase of $809,154 for the
same period in 2009. During the second quarter 2010, the cash was
used in operating activities and to reimburse the demand loan,
partially offset by cash provided by capital contribution and a
note payable to Otto Bock through the Neurostream joint venture.
The Company expects to incur additional expenditures to complete
the development and marketing of its Neurobionix products. The
Management believes that, with its financial situation, the parent
company 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
June 30, 2010, even though Neurostream had not achieved a
milestone that was due on May 1, 2010, 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 going concern. Even so, the unaudited
interim consolidated financial statements ended on June 30, 2010 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 unaudited interim consolidated
financial statements. On August 26, 2010, the number of common
shares outstanding totaled 15,529,313 while 563,112 options
were granted under the stock option plan. The outstanding options
are exercisable at a weighted average exercise price of $3.61 per
share. On August 26, 2010, the number of Series A preferred shares
outstanding totaled 21,065,361 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 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, whose
objective is to bring to market the Neurostep(®) System, and to
develop neuromodulation products in other indications such as sleep
apnea. 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. table
border="0" valign="top"trtd align="left"
valign="top"bSource:/b /td td align="left" valign="top"Victhom
Human Bionics Inc./td/tr trtd align="left" valign="top"
colspan="2" /td/tr trtd align="left" valign="top"bFor more
information: /b /td
td align="left" valign="top"Normand Rivardbr/President &
CEObr/Victhom Human Bionics Inc. br/Tel.: 418-872-5665
br/Fax: 418-864-7034br/a
href="mailto:normand.rivard@victhom.com"inormand.rivard@victhom.com/i/a/td/tr
trtd align="left" valign="top" colspan="2" /td/tr trtd
align="left" valign="top" /td td align="left" valign="top"a
href="http://www.victhom.com/"iwww.victhom.com/i/a/td/tr/table
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