FMX Ventures Inc. formerly Footmaxx Holdings Inc.
NEX BOARD : FMX.H

FMX Ventures Inc. formerly Footmaxx Holdings Inc.

November 28, 2008 10:44 ET

FMX Ventures Inc.: Financial Statements and MD&A for the Three Months Ended September 30, 2008

TORONTO, ONTARIO--(Marketwire - Nov. 28, 2008) - FMX Ventures Inc (NEX BOARD:FMX.H) formerly operating as Footmaxx Holdings Inc., ("Footmaxx"), a leading orthorpaedic and diagnostic company announces that:

As a result of sale of its orthotics business in November, 2007, the only remaining material assets of the Company are its tax loss carryforwards and its listing and status as a reporting issuer. Accordingly, the board of directors initiated a process to determine the marketable value of the tax losses and reporting issuer status pursuant to which a wide range of entities, including legal, tax, financial and consulting firms, have been solicited to determine their interest in potentially acquiring the benefit of the Company's tax losses and reporting issuer status. Based on feedback from these entities, the board intends to establish a formal process to evaluate any proposals which are received in order to maximize value to shareholders generally. The Company has received certain informal proposals and inquiries which it is considering but nothing has materialized into a concrete proposal. There can be no assurance that the Company will determine such proposals and inquiries will be determined to be worth pursuing. In addition, since there have been no formal proposals, and the company has limited resources at this time, the board intends to explore what the alternatives are for the company.

Overall Performance

During the first nine months of 2008 the Company did not operate due the sale late last year of all of the Company's assets and operations. The Company had $ $131,313 of expenses during the third quarter of 2008 to bring the total for the year to $245,053 relating to legal and accounting expenses as it looks for alternatives in marketing the Company's public shell and tax losses.

Non-GAAP Measures

In the Management Discussion and Analysis, and elsewhere, measures such as earnings before interest, taxes, depreciation and amortization (EBITDA) and other terms that are used are not defined by generally accepted accounting principles ("GAAP"). The use of these terms may not be consistent with the way these terms are used by others. Where possible, in particular for EBITDA, tables and other information are provided that enables readers to reconcile between such non-GAAP measures and standard GAAP measures. While these measures are not defined by or required by GAAP, this information is provided to readers to help them better understand significant measures.

Forward-looking Statements

This release may contain projections and other forward-looking statements regarding future events. Such statements are predications involving known and unknown risks, uncertainties and other factors that may cause the actual events or results to be materially different. Although the Company believes that the forward-looking statements contained herein are reasonable, it can give no assurance that the Company's expectations are correct. For information concerning factors affecting the Company's business, the reader is referred to the documents that the Company files from time to time with applicable Canadian securities and regulatory authorities.

FMX VENTURES INC.

formerly operating as FOOTMAXX HOLDINGS INC.

For the Nine Months Ended September 30, 2008

Management Discussion and Analysis

Overall Performance

As a result of sale of its orthotics business in November, 2007, the only remaining material assets of the Company are its tax loss carryforwards and its listing and status as a reporting issuer. Accordingly, the board of directors has initiated a process to determine the marketable value of the tax losses and reporting issuer status pursuant to which a wide range of entities, including legal, tax, financial and consulting firms, have been solicited to determine their interest in potentially acquiring the benefit of the Company's tax losses and reporting issuer status. Based on feedback from these entities, the board intends established a formal process to evaluate any proposals which are received in order to maximize value to shareholders generally. The Company has received certain informal proposals and inquiries which it is considering but nothing has materialized into a concrete proposal. There can be no assurance that the Company will determine such proposals and inquiries will be determined to be worth pursuing. In addition, since there have been no formal proposals, and the company has limited resources at this time, the board intends to explore what the alternatives are for the company.

During the first nine months of 2008 the Company did not operate due the sale late last year of all of the Company's assets and operations. The Company had $ $131,313 of expenses during the second quarter of 2008 to bring the total for the year to $245,053 relating to legal and accounting expenses as it looks for alternatives in marketing the Company's public shell and tax losses.

Results of Operations

Non-GAAP Measures

In the Management Discussion and Analysis, and elsewhere, measures such as earnings before interest, taxes, depreciation and amortization (EBITDA) and other terms that are used are not defined by generally accepted accounting principles ("GAAP"). The use of these terms may not be consistent with the way these terms are used by others. Where possible, in particular for EBITDA, tables and other information are provided that enables readers to reconcile between such non-GAAP measures and standard GAAP measures. While these measures are not defined by or required by GAAP, this information is provided to readers to help them better understand significant measures.

Net Loss

Net loss for the first nine months of 2008 was $253,000, which represents accounting and legal services required during the period.

Liquidity

Cash Flow

Cash outflow for the third quarter of 2008 was $84,838 brings the total cash outflow for 2008 to $284,175. The company has approximately $160,000 of cash which will be used to support the ongoing efforts to market the Company's public shell and tax losses over the coming months in addition to the yearend audit and other required costs.

Convertible debentures

The Company's convertible debentures were satisfied as a result of the sale of the Company's assets on November 1, 2007 except for an amount of $300,000 that remained in escrow as of September 30, 2008. The purchaser of the company, Footlevelers, did not indicate they had any claims to the escrow up to November 01, 2008. Subsequently the $300,000 escrow plus any accumulated interest was distributed to the holders of debenture series I, prorated as to the amount they had contributed.

Change in accounting policies

Standards of Financial Statement Presentation

On January 1, 2008 the Company adopted new Handbook Section 1400, General Standards of Financial Statement Presentation, effective for annual and interim periods beginning on or after January 1, 2008. This new section provides additional guidance related to management's assessment of the Company's ability to continue as a going concern. This revision is effective for fiscal years beginning on or after January 1, 2008. The Company's current and previous disclosures meet the reporting requirements of this section.

Financial Instruments and Capital Disclosures

On January 1, 2008 the Company adopted new Handbook Sections 1535, Capital Disclosures, Section 3862, Financial Instruments-Disclosures, and Section 3863, Financial Instruments-Presentation, effective for annual and interim periods relating to fiscal years beginning on or after October 1, 2007. Section 1535 establishes disclosure requirements about an entity's capital and how it is managed. The purpose will be to enable users of the financial statements to evaluate objectives, policies and processes for managing capital. Sections 3862 and 3863 replaces section 3861, Financial Instruments - Disclosure and Presentation, revising and enhancing its disclosure requirements while carrying forward its presentation requirements. These new sections place increased emphasis on disclosure about the nature and extent of risks arising from financial instruments and how the entity manages those risks. The adoption of these new accounting standards did not impact the amounts reported in the Company's financial statements.

Oversight Role of the Audit Committee

The Audit Committee reviews, with management, the Company's quarterly MD&A and related consolidated financial statements and approves the release to shareholders. Management also periodically presents to the Audit Committee a report of their assessment of the Company's internal controls and procedures for financial reporting.

Forward-looking statements

The foregoing may contain forward-looking statements. These statements are based on current expectations that are subject to risks and uncertainties, and the Company can give no assurance that these expectations are correct. Various factors could cause actual results to differ materially from those projected in such statements, including financial considerations and those predicting the timing and market acceptance of future products. The Company disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement.

Management's Responsibility for Financial Reporting

Disclosure Controls

The Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have reviewed the disclosure controls in place as at June 30, 2008 and have concluded that they provide reasonable assurance that all material information relating to the Company would be made known to them. While the CEO and CFO believe that the Company's disclosure controls and procedures provide reasonable assurance they are also aware that any control system can only provide reasonable, not absolute, assurance of achieving its control objectives.

Internal Controls Over Financial Reporting

Management is also responsible for the design of internal controls over financial reporting ("ICFR") within the Company in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian generally accepted accounting principles ("Canadian GAAP"). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, the design of any system of control is based upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all future events, no matter how remote, or that the degree of compliance with the policies or procedures may not deteriorate. Accordingly, even effective ICFR can only provide reasonable, not absolute, assurance of achieving the control objectives for financial reporting. Based on an the initial evaluation of the overall control structure and in accordance with criteria established in Multilateral Instrument 52-109 the following disclosable weaknesses existed, as at September 30, 2008 and require internal control improvements.

Limited Resources - Segregation of Duties

Given the Company's size it had limited resources within the finance department to adequately segregate duties and to permit or necessitate the comprehensive documentation of all policies and procedures that form the basis of an effective design of ICFR. As a result, the Company is highly reliant on the knowledge of a limited number of employees and on the performance of mitigating procedures during its financial close process to ensure that the consolidated financial statements are presented fairly in all material respects.



FOOTMAXX HOLDINGS INC.

Consolidated Balance Sheet
As at September 30, 2008

Unaudited

-------------------------------------------
September 30, 2008 December 31, 2007
------------------ -----------------

Current assets
Cash $ 157,644 $ 441,819
Short term investments 25,000 25,000
Accounts receivable, net - 11,277
Other receivable 300,000 300,000
Other assets 680 31,881
------------------ -----------------
Total current assets 483,324 809,977

Capital assets - -
Deferred financing costs - -
------------------ -----------------
Total assets $ 483,324 $ 809,977
------------------ -----------------
------------------ -----------------
Current liabilities

Accounts payable and accrued
liabilities $ 316,486 $ 390,139
Current portion of long term
debt - -
Current Portion Convertible
debentures - -
Demand loan - bank - -

------------------ -----------------
Total current liabilities 316,486 390,139
-

Shareholders' deficiency
Capital stock 20,248,082 20,248,082
Contributed surplus 2,119,715 2,119,715
Deficit (22,200,959) (21,947,959)
------------------ -----------------
Total shareholders' deficiency 166,838 419,838
------------------ -----------------

------------------ -----------------
Total liabilities and
shareholders' deficiency $ 483,324 $ 809,977
------------------ -----------------
------------------ -----------------


The interim Consolidated Financial Statements for the nine months ended September 30, 2008 have not been reviewed by an auditor.

See accompany notes to the Consolidated Financial Statements.



FOOTMAXX HOLDINGS INC.

Consolidated Statement of Operations and Deficit
For Quarterly Periods ended September 30, 2008 & 2007
Unaudited

--------- --------------- --------------- ----------------
Year-to-Date Year-to-Date
September 30, September 30,
Q2 2008 Q2 2007 2008 2007
--------- --------------- --------------- ----------------


Sales $ - $ 2,997,056 $ - $ 9,785,634
Cost of sales - 1,476,878 - 4,742,228
--------- --------------- --------------- ----------------
Gross profit - 1,520,178 - 5,043,406
--------- --------------- --------------- ----------------

Expenses
Selling and
administration
(note 3) 128,778 1,036,468 250,465 3,253,773
Information
technology - 200,882 - 638,541
Accrued
interest on
convertible
debentures - 423,671 - 1,210,718
Interest on
Penfund loan - - - 21,480
Other
interest - 1,863 - 3,764
Foreign
exchange loss
(gain) (5,412) 5,064 (5,412) 2,749
Amortization
of capital
assets - 72,836 - 184,292
Amortization
of deferred
financing
expenses - - - 38,744
--------- --------------- --------------- ----------------
Total
expenses 123,366 1,740,784 245,053 5,354,061
--------- --------------- --------------- ----------------
Loss before
income taxes (123,366) (220,606) (245,053) (310,655)
- -
Income taxes 7,947 - 7,947 -
- -
--------- --------------- --------------- ----------------
Net loss for
the period (131,313) (220,606) (253,000) (310,655)
--------- --------------- --------------- ----------------
Deficit,
beginning of
period (22,069,646) (35,243,771) (21,947,959) (35,153,722)
--------- --------------- --------------- ----------------
Deficit, end
of period $ (22,200,959) $ (35,464,377) $ (22,200,959) $ (35,464,377)
--------- --------------- --------------- ----------------
--------- --------------- --------------- ----------------
Outstanding
shares 39,342,894 41,131,205 39,342,894 41,131,205

Basic and
diluted loss
per common
share
(note 5) $ 0.00 $ -0.01 $ -0.01 $ -0.01
--------- --------------- --------------- ----------------


The interim Consolidated Financial Statements for the nine months ended September 30, 2008 have not been reviewed by an auditor.

See accompany notes to the Consolidated Financial Statements.



FOOTMAXX HOLDINGS INC.

Consolidated Statement of Cash Flows
For Quarterly Periods ended September 30, 2008 & 2007
Unaudited

------------------------ -------------------------
Year-to- Year-to-
Date Date
September September
Q3 2008 Q3 2007 30,2008 30,2007
------------- --------- ----------- ------------

Cash flows from (used in)
operating activities:

Loss for the period: $ (131,313) $ (220,606) $ (253,000) $ (310,655)

Items not involving cash:
Amortization of capital
assets - 72,836 - 184,292
Amortization of deferred
financing costs - - - 38,744
Interest on convertible
debentures - 423,671 - 1,210,718
Imputed interest on
Penfund loan - - - (420,488)
--------------- --------- ----------- -----------
(131,313) 275,901 (253,000) 702,611
--------------- --------- ----------- -----------

Change in other non-cash
working capital:

Decrease (increase) in
accounts receivable 1,435 174,279 11,277 35,316
Decrease (increase) in
inventory - (46,414) - (156,000)
Decrease (increase) in
other assets 20,353 35,379 31,201 5,615
(Decrease) increase in
accounts payable and
accruals 24,687 (74,655) (73,653) (308,300)
--------------- --------- ----------- -----------
46,475 88,589 (31,175) (423,369)
--------------- --------- ----------- -----------

(84,838) 364,490 (284,175) 279,242
--------------- --------- ----------- -----------

Cash flows from (used in)
financing activities

Increase (decrease) in
bank indebtedness - (200,000) - 40,000
Repayment of Penfund
loan - - - (444,444)
--------------- --------- ----------- -----------
- (200,000) - (404,444)
--------------- --------- ----------- -----------
Cash flows used in
investing activities:

Purchase of capital
assets - (92,159) - (115,896)
--------------- --------- ----------- -----------

Increase (decrease) in
cash (84,838) 72,331 (284,175) (241,098)

Cash, beginning of period 242,182 9,184 441,819 322,613
--------------- --------- ----------- -----------

Cash, end of period $ 157,344 $ 81,515 $ 157,644 $ 81,515
--------------- --------- ----------- -----------
--------------- --------- ----------- -----------

-------------------------- ------------------------


The interim Consolidated Financial Statements for the nine months ended September 30, 2008 have not been reviewed by an auditor.

See accompany notes to the Consolidated Financial Statements.


FOOTMAXX HOLDINGS INC.

Notes to Consolidated Financial Statements

As at September 30, 2008

1. Basis of Presentation

The unaudited interim period consolidated financial statements have been prepared by the Company in accordance with Canadian generally accepted accounting principles. The preparation of financial data is based on accounting policies and practices consistent with those used in the preparation of the audited annual consolidated statements. These unaudited interim period financial statements do not include all the disclosures required by generally accepted accounting principles and accordingly should be read together with the audited annual consolidated financial statements and the accompanying notes included in the Company's 2007 Annual Report.

On November 1, 2007, the Company completed the sale of substantially all of the assets utilized in carrying on its orthotics business and the assumption of obligations related to the Company's business. The shareholders of the Company also completed a name change for the Company from Footmaxx Holdings Inc. to FMX Ventures Inc. The Company no longer has any ongoing operations and it is exploring potential alternatives to maximize the final payout to the shareholders through the sale of the shell company and its accumulated tax losses.

2. Revenue Recognition

The Company recognizes revenue from the sales of orthotics, proprietary computer systems, footwear and other accessories for orthopedic products when shipment occurs, title is transferred and collection is reasonably assured. Revenue is recorded at the invoice price for each product net of estimated returns and incentives provided to customers.

3. Analysis of Fixed Expenses



Year-to-date Year-to-date
September 30, September 30,
Q3 2008 Q3 2007 2008 2007
---------- ----------- ------------ -------------
Selling and
administration
Field sales force $ - $ 513,652 $ - $ 1,681,144
Marketing expense 0 63,404 0 170,262
Finance and
administration 128,778 459,412 250,465 1,402,367
---------- ----------- ------------ -------------
$ 128,778 $ 1,036,468 $ 250,465 $ 3,253,773
---------- ----------- ------------ -------------
---------- ----------- ------------ -------------


4. Summary of Stock Options

There were no stock options outstanding during the period January 1 to June 30, 2008.

5. Loss per Common Share



Year-to-date Year-to-date
September 30, September 30,
Q3 2008 Q3 2007 2008 2007
---------- ----------- ------------ -------------
Loss for the quarter $ (131,313) $ (220,608) $ (253,000) $ (310,655)
---------- ----------- ------------ -------------
---------- ----------- ------------ -------------
Weighted average
common shares 39,342,894 41,131,205 39,342,894 41,131,205
---------- ----------- ------------ -------------
---------- ----------- ------------ -------------
Basic loss per
common share $ (0.00) $ (0.01) $ (0.01) $ (0.01)
---------- ----------- ------------ -------------
---------- ----------- ------------ -------------


6. Penfund Long Term Loan

The Company made final payment to Pendfund on May 31, 2007 to retire all indebtedness to Penfund Inc.

7. Segmented Information

The Company operates in Canada and internationally in one dominant segment, foot orthotics and associated computer systems. Revenue is attributed to geographic areas based on location of the customer. International sales are predominantly sales to the United States.



Year-to-date Year-to-date
September 30, September 30,
Q3 2008 Q3 2007 2008 2007
---------- ----------- ------------ -------------
Revenue
Canada $ - $1,593,445 $ - $ 5,142,352
International 0 1,403,611 0 4,643,282
---------- ----------- ------------ -------------
$ - $2,997,056 $ - $ 9,785,634
---------- ----------- ------------ -------------
---------- ----------- ------------ -------------

Year-to-date Year-to-date
September 30, September 30,
Q3 2008 Q3 2007 2008 2007
---------- ----------- ------------ -------------
Gross profit
Canada $ - $ 786,139 $ - $ 2,695,006
International 0 734,039 0 2,348,400
---------- ----------- ------------ -------------
$ - $1,520,178 $ - $ 5,043,406
---------- ----------- ------------ -------------
---------- ----------- ------------ -------------

September 30, September 30,
2008 2007
------------ -------------
Capital assets and
deferred financing
costs
Canada $ - $ 278,150
United States 0 186,968
------------ -------------
$ - $ 465,118
------------ -------------
------------ -------------


Number of Common Shares issued to date -39,342,894

Contact Information