FMX Ventures Inc. formerly Footmaxx Holdings Inc.
TSX VENTURE : FMX

FMX Ventures Inc. formerly Footmaxx Holdings Inc.

December 13, 2006 17:12 ET

Footmaxx Holdings Inc.: Statements Q2 2006

TORONTO, ONTARIO--(CCNMatthews - Dec. 13, 2006) - Footmaxx Holdings Inc., ("Footmaxx")(TSX VENTURE:FMX) -



FOOTMAXX HOLDINGS INC.
Consolidated Balance Sheet
As at June 30, 2006
Unaudited

-------------- ------------------
June 30, 2006 December 31, 2005
-------------- ------------------
Current assets

Cash $ 47,091 $ 113,990
Accounts receivable 1,533,613 1,357,479
Inventory
Systems 287,667 77,155
Materials 308,311 427,978
Other assets 47,696 38,832
-------------- ------------------
Total current assets 2,224,378 2,015,434

Capital assets 483,921 648,454
Deferred financing costs 85,238 131,731
-------------- ------------------
Total assets $ 2,793,537 $ 2,795,619
-------------- ------------------
-------------- ------------------

Liabilities and Shareholders Deficiency

Current liabilities

Accounts payable and accruals $ 1,028,073 $ 899,177
Current portion of Penfund loan
(note 7) 1,201,452 1,110,566
Demand loan - bank (note 8) 200,000 220,000
-------------- ------------------
Total current liabilities 2,429,525 2,229,743

Long term liabilities

Convertible debentures (note 6) 14,947,706 14,300,740
Long term portion of Penfund loan
(note 7) - 786,705
Total long term liabilities 14,947,706 15,087,445
-------------- ------------------
Total liabilities 17,377,231 17,317,188
-------------- ------------------

Shareholders' deficiency

Capital stock 20,248,082 20,248,082

Closing deficit (34,831,776) (34,769,651)
-------------- ------------------
Total shareholders' deficiency (14,583,694) (14,521,569)
-------------- ------------------

-------------- ------------------
Total liabilities and shareholders'
deficiency $ 2,793,537 $ 2,795,619
-------------- ------------------
-------------- ------------------

The interim Consolidated Financial Statements for the six months ended June
30, 2006 have not been reviewed by an auditor.

See accompanying notes to Consolidated Financial Statements.


FOOTMAXX HOLDINGS INC.

Consolidated Statement of Operations and Deficit
For Quarterly Periods ended June 30, 2006 & 2005
Unaudited

-------------- -------------- ------------- --------------
Year-to-date Year-to-date
Q2 2006 Q2 2005 Q2 2006 Q2 2005
-------------- -------------- ------------- --------------
Sales $ 3,448,688 $ 3,389,671 $ 6,792,871 $ 6,174,846
Cost of sales 1,639,178 1,542,357 3,256,953 2,844,300
-------------- -------------- ------------- --------------
Gross profit 1,809,510 1,847,314 3,535,918 3,330,546
-------------- -------------- ------------- --------------

Expenses
Selling and
administration
(note 3) 1,102,434 1,077,802 2,224,827 2,165,510
Information
technology 219,254 223,751 434,435 445,263
Accrued
interest on
convertible
debentures 331,355 273,001 646,968 531,297
Interest on
long term loan 54,415 107,398 123,149 227,683
Other interest 723 5,067 1,270 9,785
Foreign
exchange
loss (gain) (19,599) (4,488) (47,084) (16,616)
Amortization of
capital assets 81,083 97,713 167,985 202,576
Amortization of
deferred
financing
expenses 23,246 23,246 46,493 46,493
-------------- -------------- ------------- --------------
Total expenses 1,792,911 1,803,490 3,598,043 3,611,991
-------------- -------------- ------------- --------------

-------------- -------------- ------------- --------------
Net Income
(loss) before
income taxes 16,599 43,824 (62,125) (281,445)
-------------- -------------- ------------- --------------

Income taxes - - - 6,149

-------------- -------------- ------------- --------------
Net Income
(loss) for
the period 16,599 43,824 (62,125) (287,594)
-------------- -------------- ------------- --------------

Deficit,
beginning
of period (34,848,375) (36,787,473) (34,769,651) (36,456,055)

-------------- -------------- ------------- --------------
Deficit, end
of period $ (34,831,776) $ (36,743,649) $ (34,831,776) $ (36,743,649)
-------------- -------------- ------------- --------------
-------------- -------------- ------------- --------------

-------------- -------------- ------------- --------------
Outstanding
Shares
(note 5) 41,131,205 37,554,534 41,131,205 37,554,534
-------------- -------------- ------------- --------------
-------------- -------------- ------------- --------------

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


The interim Consolidated Financial Statements for the six months ended June
30, 2006 have not been reviewed by an auditor.

See accompanying notes to Consolidated Finanical Statements.

FOOTMAXX HOLDINGS INC.

Consolidated Statement of Cash Flows
For Quarterly Periods ended June 30, 2006 & 2005
Unaudited

----------------------------------------------------
Year-to-date Year-to-date
Q2 2006 Q2 2005 Q2 2006 Q2 2005
----------- --------- ------------- -------------
Cash flows from (used
in) operating
activities:

Net income (loss) for
the period: $ 16,599 $ 43,824 $ (62,125) $ (287,594)

Items not involving
cash:
Amortization of
capital assets 81,083 97,713 167,985 202,576
Amortization of
deferred financing
costs 23,246 23,246 46,493 46,493
Interest on
convertible
debentures 331,355 273,001 646,968 531,297
Imputed interest on
long term loan (279,215) (107,239) (251,394) (58,552)
----------- --------- ------------- -------------
173,068 330,545 547,927 434,220
----------- --------- ------------- -------------

Change in other
non-cash working
capital:

Decrease (increase)
in accounts
receivable (40,960) (96,706) (176,134) (75,338)
Decrease (increase)
in inventory (42,628) (81,745) (90,845) (103,941)
Decrease (increase)
in other assets (12,223) 9,116 (8,864) 9,078
(Decrease) increase
in accounts payable
and accrued
liabilities (115,896) (8,708) 128,913 (12,681)
----------- --------- ------------- -------------
(211,707) (178,043) (146,930) (182,882)
----------- --------- ------------- -------------

----------- --------- ------------- -------------
Cash flows from (used
in) operations (38,639) 152,502 400,997 251,338
----------- --------- ------------- -------------

Cash flows from (used
in) financing
activities

Increase (decrease)
in bank indebtedness 200,000 90,000 (20,000) 213,000
Proceeds (repayment)
of Penfund loan (222,222) (222,222) (444,444) (444,444)
----------- --------- ------------- -------------
(22,222) (132,222) (464,444) (231,444)
----------- --------- ------------- -------------

Cash flows used in
investing activities:

Purchase of capital
assets 12,449 (21,107) (3,452) (29,352)
----------- --------- ------------- -------------

Increase (decrease) in
cash (48,412) (827) (66,899) (9,458)
----------- --------- ------------- -------------
----------- --------- ------------- -------------

----------- --------- ------------- -------------
Cash, beginning of
period 95,502 19,247 113,990 27,878
----------- --------- ------------- -------------

----------- --------- ------------- -------------
Cash, end of period $ 47,091 $ 18,420 $ 47,091 $ 18,420
----------- --------- ------------- -------------
----------- --------- ------------- -------------

The interim Consolidated Financial Statements for the six months ended
June 30, 2006 have not been reviewed by an auditor.

See accompanying notes to Consolidated Finanical Statements.


FOOTMAXX HOLDINGS INC.

Notes to Financial Statements

As at June 30, 2006

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 annual audited consolidated financial 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 2005 Annual Report.

These statements have been prepared on the basis of accounting principles applicable to a going concern. The Company's ability to continue as a going concern is dependant upon the Company being able to meet its financial covenant tests for Penfund Inc and its ability to improve the profitability of the business to permit it to realize its assets and discharge its liabilities in the normal course of operations. During the quarter, the Company achieved its coveneants with Penfund Mezzanine Fund (note 7). If the going concern assumption is not appropriate for these consolidated financial statements, adjustments would be necessary to the carrying value of assets and liabilities and the reported revenue and expenses.

2. Revenue Recognition

The Company recognizes revenue from the sales of orthotics, proprietary computer systems and other accessories for orthotpedic appliances 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



Q2 2006 Q2 2005 YTD Q2 2006 YTD Q2 2005
--------------------------------------------------------
Selling and
administration
Field sales
force $ 605,653 $ 603,149 $ 1,217,858 $ 1,239,446
Marketing 57,714 52,700 112,389 104,687
Finance and
administration 439,067 421,953 894,580 821,377
--------------------------------------------------------
$ 1,102,434 $ 1,077,802 $ 2,224,827 $ 2,165,510
--------------------------------------------------------
--------------------------------------------------------

4. Summary of Stock Options
The following summarizes the stock options outstanding:

Weighted
average
Number exercise
of shares price
----------- ------------
Outstanding,
January 1, 2006 1,014,871 $ 0.10
Granted 0 0.00
Exercised 0 0.00
Retired 0 0.00
----------- ------------
Outstanding, June 30, 2006 1,014,871 $ 0.10
----------- ------------
----------- ------------


The Company grants stock options to employees, directors and members of the advisory board of the Company. The stock options vest over varying time periods from the date of grant to four years and expire approximately five years from the date of grant.



5. Loss per Common Share

Q2 2006 Q2 2005 YTD Q2 2006 YTD Q2 2005
---------------------------------------------------
Net
Income(Loss) $ 16,599 $ 43,824 $ (62,125) $ (287,594)
Weighted
average
common shares 41,131,205 37,554,534 41,131,205 37,554,534
Basic and
diluted loss
per common
share $ 0.00 $ 0.00 $ (0.00) $ (0.01)


The exercise of stock options which would result in the issuance of 1,014,874 shares and the conversion of debentures which would result in the issuance of 149,477,070 shares have not been considered in the calculation of diluted shares since they would cause the calculation of the year to date loss per share to be anti-dilutive.

6. Convertible debentures

The Company's convertible debentures mature on June 30, 2007. During the balance of 2006 the Company will evaluate various alternatives to refinance this debt. There can be no assurance that the company will be able to repay the debentures and if it is able to repay or refinance the debentures there is no assurance that this could be done under favorable terms.

7. Penfund Long Term Loan

The Company was in compliance with all of its covenants of the Penfund loan at the end of June 30, 2006.

8. Bank Indebtedness:

The Royal Bank has removed all financial covenants in the most recent renewal of the Company's credit facility agreement dated May 16, 2005.

9. 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.



Q2 2006 Q2 2005 YTD Q2 2006 YTD Q2 2005
------------------------------------------------------
Revenue
Canada $ 1,799,341 $ 1,617,563 $ 3,533,671 $ 2,849,598
International 1,649,347 1,772,108 3,259,200 3,325,248
------------------------------------------------------
$ 3,448,688 $ 3,389,671 $ 6,792,871 $ 6,174,846
------------------------------------------------------
------------------------------------------------------

Q2 2006 Q2 2005 YTD Q2 2006 YTD Q2 2005
------------------------------------------------------

Gross profit
Canada $ 996,799 $ 929,380 $ 1,934,075 $ 1,600,449
International 812,711 917,934 1,601,843 1,730,097
------------------------------------------------------
$ 1,809,510 $ 1,847,314 $ 3,535,918 $ 3,330,546
------------------------------------------------------
------------------------------------------------------

June 30, 2006 June 30, 2005
-------------------------------
Capital assets and deferred financing costs
Canada $ 343,806 $ 654,587
United States 225,353 257,324
-------------------------------
$ 569,159 $ 911,911
-------------------------------
-------------------------------

Q2 2006 Q2 2005 YTD Q2 2006 YTD Q2 2005
------------------------------------------------------
9. Supplemental Cash
flow disclosure
Cash paid for
interest $ 333,611 $ 219,704 $ 375,795 $ 286,263
Cash paid for
income taxes $ - $ - $ - $ -


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