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

FMX Ventures Inc. formerly Footmaxx Holdings Inc.

December 13, 2006 17:13 ET

Footmaxx Holdings Inc.: Statements Q3 2006

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



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

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September 30, 2006 December 31, 2005
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Current assets

Cash $ 70,448 $ 113,990
Accounts receivable 1,542,514 1,357,479
Inventory
Systems 144,577 77,155
Materials 337,977 427,978
Other assets 37,291 38,832
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Total current assets 2,132,807 2,015,434

Capital assets 498,693 648,454
Deferred financing costs 61,991 131,731
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Total assets $ 2,693,491 $ 2,795,619
------------------------------------------
------------------------------------------

Liabilities and Shareholders'
Deficiency

Current liabilities

Accounts payable and accruals $ 1,048,547 $ 899,177
Current portion of Penfund loan
(note 7) 1,077,766 1,110,566
Demand loan - bank (note 8) 20,000 220,000
Convertible debentures (note 6) 15,295,646 -
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Total current liabilities 17,441,959 2,229,743

Long term liabilities

Convertible debentures (note 6) - 14,300,740
Long term portion of Penfund
loan (note 7) - 786,705
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Total Long term liabilities - 15,087,445
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Total liabilities 17,441,959 17,317,188
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Shareholders' deficiency

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

Deficit (34,996,550) (34,769,651)
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Total shareholders' deficiency (14,748,468) (14,521,569)
------------------------------------------

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Total liabilities and
shareholders' deficiency $ 2,693,491 $ 2,795,619
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The interim Consolidated Financial Statements for the nine months ended
September 30, 2006 have not been reviewed by an auditor.
See accompanying notes to Consolidated Finanical Statements.


FOOTMAXX HOLDINGS INC.
Consolidated Statements of Operations and Deficit
For Quarterly Periods ended September 30, 2006 & 2005
Unaudited

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Year-to-date Year-to-date
Q3 2006 Q3 2005 Q3 2006 Q3 2005
----------------------------------------------------------

Sales $ 3,248,870 $ 3,298,453 $ 10,041,741 $ 9,473,299
Cost of sales 1,605,030 1,521,758 4,861,983 4,366,058
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Gross profit 1,643,840 1,776,695 5,179,758 5,107,241
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Expenses
Selling and
administration
(note 3) 1,125,781 1,105,434 3,350,608 3,270,944
Information
technology 211,406 207,567 645,841 652,830
Accrued interest
on convertible
debentures 347,938 286,477 994,906 817,774
Interest on
Penfund loan 42,959 94,510 166,108 322,193
Other interest 2,398 6,354 3,668 16,139
Foreign exchange
loss (gain) (26,930) 35,112 (74,014) 18,496
Amortization of
capital assets 81,815 97,453 249,800 300,029
Amortization of
deferred financing
expenses 23,247 23,247 69,740 69,740
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Total expenses 1,808,614 1,856,154 5,406,657 5,468,145
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Net Income (loss)
before income
taxes (164,774) (79,459) (226,899) (360,904)
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Income taxes - - - 6,149
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Net Income
(loss) for
the period (164,774) (79,459) (226,899) (367,053)
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Deficit,
beginning of
period (34,831,776) (36,743,649) (34,769,651) (36,456,055)

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Deficit, end of
period $ (34,996,550) $ (36,823,108) $ (34,996,550) $ (36,823,108)
----------------------------------------------------------
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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 $ -0.01 $ -0.01

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

See accompanying notes to Consolidated Finanical Statements.


FOOTMAXX HOLDINGS INC.
Consolidated Statements of Cash Flows
For Quarterly Periods ended September 30, 2006 & 2005
Unaudited

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Year-to-date Year-to-date
Q3 2006 Q3 2005 Q3 2006 Q3 2005
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Cash flows from
(used in)
operating
activities:
Net income (loss)
for the period: $ (164,774) $ (79,459) $ (226,899) $ (367,053)

Items not
involving cash:
Amortization of
capital assets 81,815 97,453 249,800 300,029
Amortization of
deferred financing
costs 23,247 23,247 69,740 69,740
Interest on
convertible
debentures 347,938 286,477 994,906 817,774
Imputed interest
on Penfund loan 24,463 36,975 (226,931) (21,577)
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312,689 364,693 860,616 798,913
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Change in other
non-cash working
capital:

Decrease
(increase) in
accounts
receivable (8,865) 65,808 (185,016) (9,530)
Decrease
(increase) in
inventory 113,424 19,848 22,579 (84,093)
Decrease
(increase) in
other assets 10,405 25,245 1,541 34,323
(Decrease)
increase in
accounts payable
and accrued
liabilities 20,440 (57,675) 149,370 (70,356)
----------------------------------------------------------
135,404 53,226 (11,526) (129,656)
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Cash flows from
(used in)
operations 448,093 417,919 849,090 669,257
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Cash flows from
(used in)
financing
activities

Increase
(decrease) in
bank
indebtedness (180,000) (110,000) (200,000) 103,000
Repayment of
Penfund loan (148,149) (222,222) (592,593) (666,666)
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(328,149) (332,222) (792,593) (563,666)
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Cash flows
used in
investing
activities:

Purchase of
capital assets (96,587) (5,806) (100,039) (35,158)
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Increase
(decrease) in cash 23,357 79,891 (43,542) 70,433
----------------------------------------------------------
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Cash, beginning
of period 47,091 18,420 113,990 27,878
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Cash, end of
period $ 70,448 $ 98,311 $ 70,448 $ 98,311
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The interim Consolidated Financial Statements for the nine months ended
September 30, 2006 have not been reviewed by an auditor.

See Note 10 for supplemental cash flow information.

See accompanying notes to Consolidated Finanical Statements.

FOOTMAXX HOLDINGS INC.

Notes to Financial Statements

As at September 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). The Company's convertible debentures mature on June 30, 2007. 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. 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 orthopedic 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
Q3 2006 Q3 2005 YTD Q3 2006 YTD Q3 2005
----------- ----------- ----------- -----------
Selling and administration
Field sales force $ 600,505 $ 632,240 $ 1,818,363 $ 1,871,686
Marketing 59,831 53,985 172,220 158,672
Finance and
administration 465,445 419,209 1,360,025 1,240,586
----------- ----------- ----------- -----------
$ 1,125,781 $ 1,105,434 $ 3,350,608 $ 3,270,944
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

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 794,871 0.10
---------- ---------
Outstanding, September 30, 2006 220,000 $ 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
Q3 2006 Q3 2005 YTD Q3 2006 YTD Q3 2005
----------------------------------------------------

Net Income(Loss) $ (164,774) $ (79,459) $ (226,899) $ (367,053)

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) $ (0.01) $ (0.01)


The exercise of stock options which would result in the issuance of 220,000 shares and the conversion of debentures which would result in the issuance of 152,956,455 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 refinance the debentures and if it is able to refinance the debentures there is no assurance that this will 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 September 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.



Q3 2006 Q3 2005 YTD Q3 2006 YTD Q3 2005
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Revenue
Canada $ 1,561,724 $ 1,474,558 $ 5,095,395 $ 4,324,156
International 1,687,146 1,823,895 4,946,346 5,149,143
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$ 3,248,870 $ 3,298,453 $10,041,741 $ 9,473,299
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Q3 2006 Q3 2005 YTD Q3 2006 YTD Q3 2005
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Gross profit
Canada $ 800,033 $ 808,432 $ 2,734,108 $ 2,408,881
International 843,807 968,263 2,445,650 2,698,360
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$ 1,643,840 $ 1,776,695 $ 5,179,758 $ 5,107,241
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Sept 30, Sept 30,
2006 2005
-----------------------
Capital assets and
deferred financing costs
Canada $ 343,068 $ 547,952
United States 217,616 249,065
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$ 560,684 $ 797,017
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Q3 2006 Q3 2005 YTD Q3 2006 YTD Q3 2005
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10. Supplemental Cash
flow disclosure
Cash paid for interest $ 59,935 $ 63,888 $ 404,360 $ 359,909
Cash paid for income
taxes $ - $ - $ - $ -


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

Contact Information