Victhom Human Bionics Inc., (Victhom, TSX: VHB), today reported its 2008 second quarter results.
Mr. Normand Rivard, Acting President and CFO of Victhom said: "During the second quarter of 2008, the Neurobionix business unit continued to make good progress towards its objective to commercialize its first neuromodulation product, the Neurostep in 2009". He added: "In parallel, the Biotronix business unit will be completing the development of the second generation of the Power Knee later this year that will feature significant improvements as compared with the first generation of this motorized prosthesis already available on the market". Finally, he said: "I am happy to report that both business units have a clear line of sight to product market introduction".
Second Quarter Results
For the three-month period ended on June 30, 2008, the Company recorded revenues of $582,548 compared with $547,854 in 2007, representing an increase of $34,694 or 6.3%. Revenues for the six-month period ended on June 30, 2008, were $1,156,791 compared with $1,108,089 for the same period in 2007, representing an increase of $48,702 or 4.4%.
The revenues for the six-month period ended on June 30, 2008 are composed of non-refundable advance royalties for an amount of $1,085,747 ($1,103,267 in 2007), of support activities for an amount of $25,354 ($0 in 2007), and of other sources for an amount of $45,690 ($4,822 in 2007). Revenues are mostly derived from a European medical device company located in Iceland. For the six-month period ended on June 30, 2008, compared to the same period in 2007, U.S. dollar currency fluctuations had an unfavorable impact on our revenues of $147,784.
R&D expenses, before tax credits and grants, amounted to $3,881,221 for the three-month period ended on June 30, 2008, compared with $2,118,042 for the same period in 2007, representing an increase of $1,763,179 or 83.2%. For the six-month period ended on June 30, 2008, R&D expenses, before tax credits and grants, amounted to $6,157,529 compared with $4,102,220 for the same period in 2007, representing an increase of $2,055,309 or 50.1%. For the second quarter and the first six-month period of 2008, the increase can be explained by the $1,261,338 non-cash write-down of intangible asset related to none-core projects in the Neurobionix business unit. The balance of the increase is mainly related to the ongoing clinical trial and the development of the commercial version of the Neurostep.
G&A expenses, net of non-cash stock-based compensation charges of $26,393, for the three-month period ended on June 30, 2008, amounted to $486,262 compared with $680,009 for the same period in 2007, representing a decrease of $193,747 or 28.5%. For the six-month period ended on June 30, 2008, G&A expenses, net of non-cash stock-based compensation charges of $50,649, amounted to $1,347,956 compared with $1,283,985 for the same period in 2007, representing an increase of $63,971 or 5.0%. The increase in G&A expenses is mainly due to the non-recurring financing charges of $324,503 offset by a decrease of $260,532 mainly due to staff reduction in administrative functions and lower administrative expenses.
Financial expenses for the three-month period ended on June 30, 2008 amounted to $593,567 compared with $494,194 for the same period in 2007, representing an increase of $99,373 or 20.1%. For the six-month period ended on June 30, 2008, financial expenses amounted to $1,114,714 compared with $1,001,571 for the same period in 2007, representing an increase of $113,143 or 11.3%. The increase is mainly explained by lower interest income on cash and cash equivalents and higher interest on convertible debentures. The financial expenses are mainly the result of interest fees in connection with the issuance of a 7% convertible unsecured debenture on March 22, 2005.
Consolidated net loss for the three-month period ended on June 30, 2008 amounted to $4,153,547 compared with $2,647,037 for the same period in 2007, representing an increase of $1,506,510 or 56.9%. The net loss, net of non-cash charges of $2,166,358, for the three-month period ended on June 30, 2008 amounted to $1,987,189 compared to a net loss, net of non-cash charges of $941,845, for the same period in 2007, which amounted to $1,705,192, representing an increase of $281,997 or 16.5%.
For the six-month period ended on June 30, 2008, the net operational results amounted to $6,921,865 compared with $4,901,345 for the same period in 2007, representing an increase of $2,020,520 or 41.2%. The net loss, net of non-cash charges of $3,021,812, for the six-month period ended on June 30, 2008, amounted to $3,900,053 compared to a net loss, net of non-cash charges of $1,736,838, for the same period in 2007, which amounted to $3,164,507, representing an increase of $735,546 or 23.2%. The increase in net loss, net of non-cash charges, is mainly the result of higher R&D expenses related to the ongoing clinical trial and the development of the commercial version of the Neurostep.
Shareholders' equity amounted to $3,457,736 on June 30, 2008, compared with $9,620,761 on December 31, 2007. Total assets amounted to $20,495,652 on June 30, 2008, compared with $26,013,384 on December 31, 2007.
Financial Situation
As of June 30, 2008, the Company had a cash and cash equivalents position of $7.9 million compared with $12.4 million as of December 31, 2007. The decrease was mainly driven by the net loss (after adding back non-cash adjustments) of $3,900,053 and by changes in the working capital items. The Company believes that with its current financial resources it will have sufficient liquidity to support its cash flow requirements for at least the next twelve months.
On June 30, 2008, the number of common shares outstanding totaled 100,904,277 while 6,708,000 options were granted under the stock option plan and 25,964,942 share purchase warrants are in circulation pursuant to past unit offerings. The outstanding options and share purchase warrants are exercisable respectively at a weighted average exercise price of $0.41 and $0.76 per share. -- www.cnxmarketlink.com
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