Cyberkinetics Announces Second Quarter 2006 Results.FOXBOROUGH, Mass. -- Cyberkinetics Neurotechnology Systems, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : CYKN; "Company;" "Cyberkinetics"), a neurotechnology company focused on neurostimulation and neural sensing, today released financial results for the quarter ended June 30, 2006, and provided updates on the Company's progress on key development programs. Total revenue, including research product sales and grant income, for the three months ended June 30, 2006, increased $305,000 to $471,000 as compared to $166,000 for the same period in 2005. Research product sales for the three months ended June 30, 2006, were $295,000 as compared to $127,000 for the three months ended June 30, 2005. Grant income for the three months ended June 30, 2006 was $177,000 as compared to $39,000 for the three months ended June 30, 2005. The Company reported a net loss of $2.6 million, or $0.09 per share, for the quarter ended June 30, 2006, compared to a net loss of $2.4 million, or $0.15 per share, for the same period in 2005. Cash used in operations was $1.9 million in the second quarter of 2006, as compared to $2.1 million in the second quarter of 2005. The Company ended the second quarter of 2006 with approximately $7.8 million in cash and cash equivalents. "This quarter has brought tremendous progress in all of our key program areas," stated Tim Surgenor, President and Chief Executive Officer of Cyberkinetics. "We initiated a manufacturing and engineering agreement with Minnetronix; and we are on track to commercialize the Andara(TM) Oscillating os·cil·late intr.v. os·cil·lat·ed, os·cil·lat·ing, os·cil·lates 1. To swing back and forth with a steady, uninterrupted rhythm. 2. Field Stimulator Device, designed to treat acute spinal cord injuries Spinal Cord Injury Definition Spinal cord injury is damage to the spinal cord that causes loss of sensation and motor control. Description Approximately 10,000 new spinal cord injuries (SCIs) occur each year in the United States. , in 2007. "During the quarter we presented updates on our BrainGate Neural Interface System pilot trials at two scientific conferences. In addition, just after the close of the second quarter, Nature featured Cyberkinetics' BrainGate System on the cover of the July 13 issue -- focusing worldwide attention on the scientific and clinical advances being made with our breakthrough brain-computer interface A brain-computer interface (BCI), sometimes called a direct neural interface or a brain-machine interface, is a direct communication pathway between a human or animal brain (or brain cell culture) and an external device. technology. Finally, we saw strong sales revenues in our research products business for the second quarter of 2006." Second Quarter 2006 and Recent Operational Highlights The Andara(TM) OFS (OFS, Norcross, GA, www.ofsbrightwave.com) A manufacturer of optical fibers and interconnect equipment. Formerly the Optical Fiber Solutions (OFS) Group of Lucent, OFS was turned into a stand-alone company acquired by Furukawa Electric in 2001. Device Technology - Designed to Repair Neural Connections that Result from Spinal Cord Injury --The Company's Humanitarian Use Device (HUD Hud (h  d), a pre-Qur'anic prophet of Islam. Hud unsuccessfully exhorted his South Arabian people, the Ad, to worship the One God. ) designation
filing for the Andara(TM) Oscillating Field Stimulator (OFS) Device is
under review by the U.S. Food and Drug Administration (FDA FDAabbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ). If we are successful in obtaining the designation, we expect to file a Humanitarian Device Exemption application on this treatment for acute spinal cord injuries in the second half of 2006. --In April, the Company's research collaborators at Indiana University Indiana University, main campus at Bloomington; state supported; coeducational; chartered 1820 as a seminary, opened 1824. It became a college in 1828 and a university in 1838. The medical center (run jointly with Purdue Univ. and the Center for Paralysis Research at Purdue University Purdue University (pərdy `, -d`), main campus at West Lafayette, Ind. presented basic research at the Annual Meeting of the American
Association American Association refers to one of the following professional baseball leagues:
--In April, the Journal of Neuroscience The Journal of Neuroscience (Online ISSN 1529-2401) is a weekly scientific journal published by the Society for Neuroscience. The journal publishes peer-reviewed empirical research articles in the field of neuroscience. published two basic research studies conducted by teams at Purdue University's Center for Paralysis Research concerning technology licensed to Cyberkinetics. Together, the studies indicate that hydralazine hydralazine /hy·dral·a·zine/ (hi-dral´ah-zen) a peripheral vasodilator used in the form of the hydrochloride salt as an antihypertensive. hy·dral·a·zine n. , already approved for other uses by the FDA, and certain related compounds may prevent neural cell death by halting the toxic chemical Any chemical which, through its chemical action on life processes, can cause death, temporary incapacitation, or permanent harm to humans or animals. This includes all such chemicals, regardless of their origin or of their method of production, and regardless of whether they are produced process that normally occurs following an injury. This fundamental discovery may ultimately enable us to tackle the root problem of the paralysis, including spinal cord injury. We hold an exclusive, worldwide license to this technology. --In June, we announced that we had finalized an agreement with Minnetronix, Inc. (Minnetronix), a private Minnesota-based device manufacturer, to provide engineering and manufacturing services to support our Humanitarian Device Exemption (HDE HDE Hauptverband des Deutschen Einzelhandels (Central Association of German Retail Trade) HDE Humanitarian Device Exemption HDE Heavy-Duty Engine HDE Holdrege, Nebraska (airport code) ) marketing application for the Andara(TM) Oscillating Field Stimulator (OFS) Device. The Minnetronix agreement also provides the Company with the ability to obtain a CE Mark, which will enable us to market the Andara(TM) OFS Device internationally. BrainGate System - Designed to Restore Function via Direct Brain-Computer Control of Communication and Other Devices --As previously reported, a total of four participants have been enrolled in pilot trials of the Company's BrainGate(TM) Neural Interface System, including one participant in the pilot trial for ALS Als (äls), Ger. Alsen, island, 121 sq mi (313 sq km), Sønderjylland co., S Denmark, in the Lille Bælt, separated from the mainland by the narrow Alensund. (amyotrophic lateral sclerosis amyotrophic lateral sclerosis (ALS) (ā'mīətrōf`ik, sklĭrō`sĭs) or motor neuron disease, or Lou Gehrig's disease Lou Geh·rig's disease n. See amyotrophic lateral sclerosis. ) and other motor neuron diseases motor neuron disease: see amyotrophic lateral sclerosis. . During the quarter development and clinical testing with these participants continued, with a focus on developing a broader understanding of the overall potential of the neural interface as well as exploring, for the first time, whether a person with ALS can utilize the BrainGate system. --In June, clinical investigators engaged in Cyberkinetics' ongoing BrainGate Neural Interface System (BrainGate System) clinical trial presented new, preliminary data from the pilot clinical trial at the American Society of Stereotactic stereotactic /ster·eo·tac·tic/ (-tak´tik) 1. characterized by precise positioning in space; said especially of discrete areas of the brain that control specific functions. 2. pertaining to stereotactic surgery. and Functional Neurosurgery functional neurosurgery n. The surgical destruction or chronic excitation of a part of the brain as treatment of a physiological or psychological disorder. (ASSFN) Biennial Meeting and at the American Spinal Cord Injury Association (ASIA Asia (ā`zhə), the world's largest continent, 17,139,000 sq mi (44,390,000 sq km), with about 3.3 billion people, nearly three fifths of the world's total population. ) Meeting -- both in Boston, Massachusetts “Boston” redirects here. For other uses, see Boston (disambiguation). Boston is the capital and most populous city of Massachusetts.[3] The largest city in New England, Boston is considered the unofficial economic and cultural center of the entire New . The data reported demonstrate the progress in developing of proprietary techniques that make the BrainGate System performance more intuitive and controllable, including the ability to replicate the intuitive control of a computer 'mouse'. These advances are directly related to a person's ability to use the BrainGate system to operate communications devices, as well as other electronically-controlled devices, such as a motorized mo·tor·ize tr.v. mo·tor·ized, mo·tor·iz·ing, mo·tor·iz·es 1. To equip with a motor. 2. To supply with motor-driven vehicles. 3. To provide with automobiles. wheel chair. --In July, scientific findings from the first participant in the Company's ongoing pilot clinical trials of the BrainGate System were featured on the cover of the journal Nature. Unlocking new information about how to restore movement following damage to the nervous system, the reported data provide direct, compelling evidence that the area of the brain that controls movement remains functional even years after a spinal cord injury in the absence of a neural connection from the brain to the limbs. These data suggest that limb movement originates in the brain as distinct and predictable patterns of neural activity and that this information may ultimately be tapped to enable paralyzed par·a·lyze tr.v. par·a·lyzed, par·a·lyz·ing, par·a·lyz·es 1. To affect with paralysis; cause to be paralytic. 2. To make unable to move or act: paralyzed by fear. people to move their own limbs. Conference Call Instructions Cyberkinetics' management will hold a conference call at 11:00 am Eastern Time, Monday, August 7, 2006, to discuss results of the second quarter of 2006. Those who would like to participate in the conference call should dial 866-510-0676, or 617-597-5361 for international participants, and use the pass code 32317565. To access a replay of the conference call, which will be available from 1:00 pm Eastern Time on August 7 until 5:00 pm Eastern Time on August 14, please dial 888-286-8010, or 617-801-6888 for international callers, and use the pass code 64885613. An audio webcast of the conference call will also be available at www.cyberkineticsinc.com. The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. can access the call via www.streetevents.com, a password-protected event management site. About Cyberkinetics Neurotechnology Systems, Inc. Cyberkinetics Neurotechnology Systems, Inc., a leader in the neurotechnology industry, is developing neural stimulation, sensing and processing technology to improve the lives of those with severe paralysis resulting from spinal cord injuries, neurological disorders This is a list of major and frequently observed neurological disorders (e.g. Alzheimer's disease), symptoms (e.g.back pain), signs (e.g. aphasia) and syndromes (e.g. Aicardi syndrome). and other conditions of the nervous system. Cyberkinetics' product development pipeline includes: the Andara(TM) Oscillating Field Stimulator (OFS) Device, an investigative device designed to stimulate regeneration of the neural tissue surrounding the spinal cord spinal cord, the part of the nervous system occupying the hollow interior (vertebral canal) of the series of vertebrae that form the spinal column, technically known as the vertebral column. ; the BrainGate System, an investigative device designed to provide communication and control of a computer, assistive devices assistive device Public health Any device designed or adapted to help people with physical or emotional disorders to perform actions, tasks, and activities. See Americans with Disabilities Act, Architectural barriers, Assistive technology. , and, ultimately, limb movement; and the FDA cleared-to-market NeuroPort(TM) System, a neural monitor designed for acute inpatient applications and labeled for temporary (less than 30 days) recording and monitoring of brain electrical activity. Additional Information is available at Cyberkinetics' website at http://www.cyberkineticsinc.com. Forward-Looking Statements This announcement contains forward-looking statements, including statements about Cyberkinetics' product development plans and progress, potential development of proprietary inventions and benefits that may be realized by certain research programs. These statements are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, and can be identified by the use of forward-looking terminology such as "may," "will," "believe," "expect," "anticipate" or other comparable terminology. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements and reported results shall not be considered an indication of our future performance. Factors that might cause or contribute to such differences include our limited operating history; our lack of profits from operations; our ability to successfully develop and commercialize our proposed products; a lengthy approval process and the uncertainty of FDA and other governmental regulatory requirements; clinical trials may fail to demonstrate the safety and effectiveness of our products; the degree and nature of our competition; our ability to employ and retain qualified employees; compliance with recent legislation regarding corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. , including the Sarbanes-Oxley Act See SOX. of 2002; as well as those risks more fully discussed in our public filings with the Securities and Exchange Commission, all of which are difficult to predict and some of which are beyond our control. Financial results for the quarter ended June 30, 2006, are summarized in the tables below.
Cyberkinetics Neurotechnology Systems, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenues:
Product sales $ 294,752 $ 127,175 $ 426,952 $ 376,667
Grant income 176,659 39,125 429,139 210,923
------------ ------------ ------------ ------------
Total revenues 471,411 166,300 856,091 587,590
Operating expenses:
Cost of product
sales 145,557 32,013 195,325 76,669
Research and
development 1,604,485 1,383,982 3,000,763 2,837,605
Sales and
marketing 219,376 85,691 329,355 168,183
General and
administrative 1,102,531 989,740 2,156,620 2,076,770
Purchased in-
process research
and development - - 1,602,239 -
------------ ------------ ------------ ------------
Total operating
expenses 3,071,949 2,491,426 7,284,302 5,159,227
------------ ------------ ------------ ------------
Operating loss (2,600,538) (2,325,126) (6,428,211) (4,571,637)
Other income (expense):
Interest income 95,217 17,950 204,049 33,281
Interest expense (140,607) (106,877) (322,423) (123,070)
------------ ------------ ------------ ------------
Other expense, net (45,390) (88,927) (118,374) (89,789)
------------ ------------ ------------ ------------
Net loss $(2,645,928) $(2,414,053) $(6,546,585) $(4,661,426)
============ ============ ============ ============
Basic and diluted
net loss per
common share $ (0.09) $ (0.15) $ (0.24) $ (0.30)
============ ============ ============ ============
Shares used in
computing basic
and diluted net
loss per common
share 27,899,813 15,718,368 27,390,839 15,694,064
============ ============ ============ ============
Cyberkinetics Neurotechnology Systems, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
As of
June 30, December 31,
2006 2005
------------ ------------
Assets
Current Assets
Cash and cash equivalents $ 7,816,494 $ 11,346,372
Other current assets 1,067,455 1,051,038
Net property and equipment 680,490 619,433
Other assets 2,175,202 348,545
------------ ------------
Total assets $ 11,739,641 $ 13,365,388
============ ============
Liabilities and stockholders' equity
Current liabilities 3,079,567 2,158,810
Long-term liabilities 3,066,073 2,864,327
Stockholders' equity:
Common stock, $0.001 par value 30,196 27,158
Additional paid-in-capital 34,121,041 31,112,108
Common stock held in escrow (13,000) (13,000)
Deferred stock-based compensation - (786,364)
Accumulated deficit (28,544,236) (21,997,651)
------------ ------------
Total stockholders' equity 5,594,001 8,342,251
------------ ------------
Total liabilities and stockholders'
equity $ 11,739,641 $ 13,365,388
============ ============
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