VHB Victhom Human Bionics Inc.

QUEBEC, Nov. 29 /CNW/ -- QUEBEC, Nov. 29 /CNW Telbec/ - Victhom Human Bionics Inc. (("Victhom", or "the Company") (TSX-V: VHB)) today reported its third quarter 2010 financial results. Mr. Normand Rivard, President and CEO of Victhom said: "While Neurostream has not yet met the partnership milestone on the product registration in Europe that was due on May 1, 2010, Neurostream continued to make progress on the development and registration of the commercial version of the Neurostep(®) product with the European regulatory authorities". He added: "Concerning the Biotronix business, our partner Ossur is in the process of completing the Power Knee Second Generation final validation and the full commercial launch of the product is anticipated in the near future. Third Quarter Results For the quarter ended on September 30, 2010, the Company recorded revenues of $10,914 compared with $264,186 in 2009, representing a decrease of $253,272 or 95.9%. 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 nine-month period ended on September 30, 2010 are composed of royalties on its Power Knee II for an amount of $38,704 ($0 in 2009), of non-refundable advance royalties for an amount of $0 ($1,393,591 in 2009), of support activities for an amount of $0 ($16,398 in 2009), and of other sources for an amount of $2,594 ($31,845 in 2009). R&D expenses, before tax credits and grants, amounted to $1,071,394 for the three-month period ended on September 30, 2010, compared with $1,603,252 for the same period in 2009, representing a decrease of $531,858 or 33.2%. For the nine-month period ended on September 30, 2010, R&D expenses, before tax credits and grants, amounted to $3,667,759 compared with $7,029,257 for the same period in 2009, representing a decrease of $3,361,498 or 47.8%. 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 September 30, 2010, tax credits and grants amounted to $128,771 compared with $35,018 for the same period in 2009, representing an increase of $93,753 or 267.7%. Tax credits and grants amounted to $1,312,141 for the nine-month period ended on September 30, 2010, compared with $694,927 for the same period in 2009, representing an increase of $617,214 or 88.8%. The increase is mainly explained by amended tax credit claims for previous years for which the Company received, during the second quarter of 2010, positive confirmation and payment from tax authorities. For the three-month period ended on September 30, 2010, G&A expenses, net of non-cash stock-based compensation charges of $166, amounted to $278,608 compared with $728,311 for the same period in 2009, representing a decrease of $449,703 or 61.7%. G&A expenses, net of non-cash stock-based compensation of $498, for the nine-month period ended on September 30, 2010, amounted to $1,300,849 compared with $1,838,772 for the same period in 2009, representing a decrease of $537,923 or 29.3%. The decrease in G&A expenses is mainly due to staff reduction in administrative functions and lower depreciation of property, plant and equipment. The decrease is partially offset by non-recurring professional fees of $358,048 in May 2010 related to amended investment tax credits compared to non-recurring professional fees of $94,424 in June 2009 related to the completion of the transaction approved by plan of arrangement. Financial expenses, net of exchange rate gain on preferred shares of $279,655, for the three-month period ended on September 30, 2010, amounted to $425,628 compared with financial expenses, net of exchange rate gain on preferred shares of $548,525, for the same period in 2009, which amounted to $351,883, representing an increase of $73,745 or 21.0%. For the nine-month period ended on September 30, 2010, financial expenses, net of exchange rate gain on preferred shares of $281,624, amounted to $1,158,984 compared with financial expenses, net of exchange rate gains on convertible debentures and preferred shares of $2,240,384, for the same period in 2009, which amounted to $1,696,776, representing a decrease of $537,792 or 31.7%. 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 partially offset by higher interest on long-term debts and negative impact of foreign exchange fluctuations on operations. For the three-month period ended on September 30, 2010, the consolidated net loss amounted to $1,437,244 compared with $1,752,033 for the same period in 2009, representing a decrease of $314,789 or 18.0%, which is mainly explained by the restructuring of our Biotronix business and the downsizing of our administrative functions. The net loss for the nine-month period ended on September 30, 2010 amounted to $4,573,815 compared with a net profit of $3,770,727 for the same period in 2009, representing a decrease of $8,344,542 or 221.3%. The decrease is mainly explained by the special non-cash gains of $9,974,597 on the transactions approved by plan of arrangement in June 2009 partially offset by the R&D expenses from the Neurobionix division which, since May 1, 2009, have been presented using the proportionate consolidation method with a 44.4% interest. Shareholders' equity (deficiency) amounted to $(3,341,878) on September 30, 2010, compared with $1,080,520 on December 31, 2009. Total assets amounted to $8,082,752 on September 30, 2010, compared with $10,859,697 on December 31, 2009. Financial Situation As of September 30, 2010, the company had $455,737 in cash. For the nine-month period ended on September 30, 2010, the net decrease in cash was $654,475 compared with a decrease of $195,461 for the same period in 2009. During the third quarter 2010, the cash was provided by a demand loan and a note payable to Otto Bock through the Neurostream joint venture, partially offset by cash used in operating activities. 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 September 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 a going concern. Even so, the unaudited interim consolidated financial statements ended on September 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 November 22, 2010, the number of common shares outstanding totaled 18,529,313 while 256,263 options were outstanding under the stock option plan. The outstanding options are exercisable at a weighted average exercise price of $6.08 per share. On November 22, 2010, the number of Series A preferred shares outstanding totaled 18,065,361, for a redemption amount of US$ 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 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. p/p table valign="top" border="0"trtd align="left"bSource:/b /td td valign="top" align="left"Victhom Human Bionics Inc.br/ br//td/tr trtd valign="top" align="left"bFor more information:/b br/ br/ br/ br//td td valign="top" align="left"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/abr/ br/ a href="http://www.victhom.com/"iwww.victhom.com/i/abr//td/tr/table

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