QUEBEC, April 18, 2012 /PRNewswire/ - Victhom Human Bionics Inc. ("Victhom") (TSXV: VHB) today reported its 2011 annual and fourth quarter financial results.
Mr. Normand Rivard, President and CEO of Victhom, said: "During 2011, the positive financial results generated from the significant gain on disposal of our participation in Neurostream represents a clear confirmation of the value creation achieved by our Neurobionix business over the last few years. Our significantly strengthened balance sheet and reduced cost base places us in a strong position to leverage the royalty potential from the leading-edge products developed by both of our divisions, the Neurostep® and the Power Knee. Furthermore, the increase in revenues coming from royalties on the sales of the Power Knee by our partner Ossur and the progress made by Neurostream in the development and registration of the commercial version of the Neurostep® product give us great confidence in our ability to generate value for our shareholders".
On June 30, 2011, the Company sold its 44.4% participation in Neurostream to a related party to its joint venture partner 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.
M. Rivard added: "Following the sale of our participation in Neurostream, Victhom is currently evaluating various business development opportunities to redefine its future activities and open new value creating opportunities beyond the realisation of the royalty revenue potential from the leading-edge products developed to date".
2011 Annual and Fourth Quarter Results
For the year ended on December 31, 2011, the Company recorded revenues of $83,159 compared with $60,143 for the same period in 2010, representing an increase of $23,016 or 38.3%. The increase is attributable to higher revenues from royalties on the Power Knee.
While there were no R&D expenses for the year ended on December 31, 2011, R&D expenses were $49,048 for the same period in 2010. 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 R&D activities in the near future.
For the year ended on December 31, 2011, tax credits amounted to a negative adjustment of $56,993 compared with tax credits of $1,703,653 for the same period in 2010, representing a decrease in tax credits of $1,760,646 or 103.3%. The decrease in tax credits is due to an adjustment made on our 2010 investment tax credits receivable to reflect the actual amounts claimed on Neurostream's R&D activities, and amended tax credit claims from previous years for which the Company received positive confirmation and payment from tax authorities in May 2010. The Company had not recognized these investment tax credits in previous periods since the government ruling on the nature of the claim was uncertain.
G&A expenses, for the year ended on December 31, 2011, amounted to $900,442 compared with $1,234,807 for the same period in 2010, representing a decrease of $334,365 or 27.1%. The decrease is mainly due to non-recurring professional fees related to amended investment tax credits, received in May 2010.
For the year ended on December 31, 2011, financial expenses amounted to a credit of $14,260 compared with financial expenses of $37,753 for the same period in 2010, representing a decrease in financial expenses of $52,013 or 137.8%. The decrease in financial expenses is mainly explained by higher interest and financing fees in 2010 related to demand loan.
For the year ended on December 31, 2011, the consolidated net income amounted to $9,658,573 compared with a net loss of $5,675,396 for the same period in 2010, representing an increase in net income of $15,333,969 or 270.2%. The increase in net income is mainly explained by the disposal of our interest in the joint venture and the gain on reevaluation of assumptions related to the preferred shares. The increase in net income was partially offset by lower investment tax credits, a loss on redemption of preferred shares and an exchange rate loss on preferred shares.
Shareholders' equity amounted to $4,982,964 on December 31, 2011, compared with a shareholders' deficiency (restated) of $4,888,728 on December 31, 2010. Total assets amounted to $8,174,026 on December 31, 2011, compared with total assets (restated) of $6,074,571 on December 31, 2010.
As of December 31, 2011, the Company had $2,292,407 in cash and cash equivalents. For the year ended on December 31, 2011, the net increase in cash and cash equivalents was $794,195 compared with an increase of $388,000 for the same period in 2010. During 2011, the cash was mainly provided by the disposal of our interest in Neurostream joint venture, which was partially offset by cash used for the redemption of a portion of our Series A preferred shares and cash used in operating activities.
As of April 13, 2012, the Company had $2,948,285 in cash and cash equivalents, representing an increase in cash of $655,878 since December 31, 2011. The increase in cash was due to the collection on February 1, 2012, of the final payment in the amount of CAN$ 5,000,000 for the sale of our interest in Neurostream joint venture. Consequently, the Company redeemed, on February 22, 2012, 6,132,089 series A preferred shares for a total redemption amount of US$ 4,047,178.
On April 13, 2012, the number of common shares outstanding totaled 19,297,654 while 167,000 options were outstanding under the stock option plan. The outstanding options are exercisable at a weighted average exercise price of $5.34 per share.
On April 13, 2012, the number of Series A preferred shares outstanding totaled 6,479,131 for a redemption amount of US$ 4,276,226, 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.
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.