PARIS & SAN FRANCISCO–(BUSINESS WIRE)–Regulatory News:

SpineGuard (FR0011464452 – ALSGD), an innovative company that develops and markets disposable medical devices designed to make spine surgery safer, reported today its full-year 2016 financial results as approved by the Board of Directors on March 23, 2017.

Pierre Jérôme, CEO and co-founder of SpineGuard, said: “2016 saw SpineGuard’s sales momentum continue and showed the great potential of our DSG™ technology platform. Our commercial organization keeps delivering double-digit growth via our PediGuard family of smart drilling probes, which we expanded with the successful launch of the PediGuard Threaded. At the same time, our R&D investments for the integration of the DSG technology into implantable devices such as pedicle screws has begun to bear fruit with first surgeries in Europe and FDA clearance early in 2017. The US is a key market for SpineGuard where we keep growing significantly year after year. Our focus on operating expenses also allowed the company to improve its operating result. We will continue to pursue this path as one of our corporate objectives for 2017.”

Operating income improves by 9%

In 2016, SpineGuard reported full-year revenue of €7,463k compared with €6,346k for 2015, an 18% increase both on reported basis and cc. 8,603 PediGuard units were sold compared with 7,449 in 2015, including 4,948 in the United States.

The gross margin improved by nearly €1M and 60 bps at 85.1% compared with the prior year of 84.5%, and remains strong. The improvement year-on-year is the result of a combined stability of average selling prices and more favorable country mix with an improved performance on manufacturing cost despite headwinds on currency vs. prior year.

Operating costs increased by €648k (+7%); mainly due to R&D expenses related to the clearance of both PediGuard Threaded and the DSG™ screw (€438k).

With the combination of an improved gross margin and the control of operating expenses, the operating result improved by +€340 k (or +9%) vs. prior year.

The Company reported a net loss of €4,178k for the full-year 2016 compared with a loss of €3,878k for the full-year 2015, impacted by the increase of financial costs related to lower Fx gains of €114k and an increase of interest on loans by €439k.

Working capital was €955k compared with €-65k for the full-year 2015. The increase is mainly due to the building of the inventory of the new products prior to their commercial launch (PediGuard Threaded and DSG modules for the screw), the anticipation of purchases with our Singapore-based manufacturing partner and the Fx Euro/dollar unfavorable impact on the manufacturing cost.

At December 31, 2016, cash and cash equivalents were €1,804k compared with €3,229k at December 31, 2015. The Company has the possibility under certain conditions to draw a €1.5M tranche of debt with IPF Partners.

2016: Excellent sales momentum and strategic objectives achieved

Sales; marketing and regulatory:

2016 was a year of significant breakthroughs in the United States:

• Contracts with important hospital systems were either signed or consolidated;
• A partnership agreement with OrthoPediatrics for the exclusive commercialization of PediGuard® in pediatric hospitals was signed;
• A commercial agreement with Spartan, which is dedicated to veteran and military institutions;
• The expansion to 36 spine teaching institutions using DSG-enabled devices in their curriculum;
• A number of non-stocking distributors growing from 77 to 80;
• The sales team was reinforced with the hiring of a Sr. Sales Manager for the South region and by repositioning a product specialist in the Northeast region;
• FDA clearance of the PediGuard Threaded was received in June 2016, with a product launch in October 2016 at the North American Spine Society (NASS) congress.

In the rest of the world, the Company focused on procuring extensive training and marketing support to the network of distributors making significant progress in various markets:

• PediGuard now used in 50% of the French spine teaching institutions (CHU);
• more than 800 PediGuard units sold in Saudi Arabia through a tender;
• over 70 surgeons participated to the PediGuard Threaded workshop at EuroSpine congress in Berlin in October 2016.

Clinical:

Eleven surgeons presented their experience with PediGuard in international scientific conventions and five new clinical studies were initiated:

• 2 prospective mono-centric studies for the use of PediGuard in minimally invasive surgery in France and United Arab Emirates;
• 1 retrospective mono-centric study for the PediGuard use in so-called bi-cortical techniques in the US;
• 1 prospective randomized and mono-centric study comparing PediGuard to navigation in the US;
• 1 study on specimen about the use of the DSG™ screw with Zavation in the US.

2017 perspectives:

After the FDA clearance in the US early 2017 for the DSG™ screw, SpineGuard intends to:

• Foster adoption of the DSG™ technology through sustained efforts towards surgeons, distributors, teaching institutions and industrial partners;
• Sign new deals to expand the commercial penetration of the DSG™-enabled screws;
• Enlarge the scope of the DSG™ platform to other applications such as Bone Quality Measurement (BQM), combination with robotic, licensing agreements for non-spine (trauma, maxillo facial);
• Continue to grow sales and improve its operating result.

Next financial press release: First Quarter 2017 revenue, on April 6, 2017.

About SpineGuard®

Co-founded in 2009 in France and the USA by Pierre Jérôme and Stéphane Bette, SpineGuard’s mission is to make spine surgery safer by bringing real-time digital technology into the operating room. Its primary objective is to establish its proprietary DSG™ (Dynamic Surgical Guidance) technology as the global standard of surgical care, starting with safer screw placement in spine surgery and then in other surgeries. PediGuard®, the first device designed using DSG, was co-invented by Maurice Bourlion, Ph.D., Ciaran Bolger, M.D., Ph.D., and Alain Vanquaethem, Biomedical Engineer. It is the world’s first and only handheld device capable of alerting surgeons to potential pedicular or vertebral breaches. Over 50,000 surgical procedures have been performed worldwide with DSG enabled devices. Numerous studies published in peer-reviewed medical and scientific journals have demonstrated the multiple benefits that PediGuard delivers to patients, surgical staff and hospitals. SpineGuard is expanding the scope of its DSG platform through strategic partnerships with innovative medical device companies and the development of smart instruments and implants. SpineGuard has offices in San Francisco and Paris. For further information, visit www.spineguard.com.

For further information, visit www.spineguard.com.

Disclaimer

The SpineGuard securities may not be offered or sold in the United States as they have not been and will not be registered under the Securities Act or any United States state securities laws, and SpineGuard does not intend to make a public offer of its securities in the United States. This is an announcement and not a prospectus, and the information contained herein does and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in the United States in which such offer, solicitation or sale would be unlawful prior to registration or exemption from registration.

TOULOUSE, France–(BUSINESS WIRE)–Regulatory News:

VEXIM (Paris:ALVXM) (FR0011072602 – ALVXM), a medical device company specializing in the minimally invasive treatment of vertebral fractures, today announces its consolidated annual results (IFRS¹) as of December 31^st, 2016².

« Our 2016 results represent a historic turning point for VEXIM. VEXIM has reached profitability and generated a positive cash flow over the second half of 2016. These excellent results validate our profitable growth strategy. This trend should continue during 2017, as we expect sales growth of 30% to 35%, and full-year profitability. We expect to launch SpineJack® in the United States – the largest market for vertebral fractures – in 2018, further generating strong sales growth. We will decide and announce our business strategy for the US, aimed at capturing market share and building shareholder value, later this year. These achievements demonstrate that VEXIM is on the right track to become a global leader in the market of spine trauma », said Vincent Gardès, CEO of VEXIM.

Strong sales increase, solid gross margin on sales and positive net income in the second half of 2016

For the first time, and in order to comply with international standards, VEXIM issues its consolidated financial statements, in accordance with International Financial Reporting Standards (IFRS). Appendixes, on page 9 of this press release, include the conversion tables from French accounting standards to IFRS for the consolidated income statements of the financial years 2015 and 2016.

2016 highlights

• New sales record in the 4^th quarter, at €5.2 million;
• Finalized patient enrollment for the international clinical trial intended to support our 510(k) submission to the FDA – announced on February 21^st, 2017;
• Initiated a medico-economic study comparing the SpineJack® to conservative orthopedic management (bracing) on 100 patients with a 1 and 2-year follow-up;
• Secured long-term cash position, thanks to a successful private placement of €10.4 million in January 2016;
• Strengthened our management team with the appointments of François Cathelineau as VP Operations, Sébastien Lemoine as VP International Sales & Market Development, followed by the appointment of Russell Powers as VP & General Manager of the US activities, in January 2017.

€18.5 million in sales: VEXIM continues to expand at a steady pace (+33%)

VEXIM’s sales for 2016 have reached €18.5 million, an increase of 33% compared to 2015. This significant growth underlines the effectiveness of the direct sales strategy implemented by the company for SpineJack® in Europe, as well as the broader adoption of the technology.

The gross margin on sales (“gross margin”) also increased by 35% compared to 2015, reaching €13.4 million (€6.3 million in the first half of 2016), representing 72.2% of sales.

The gross margin maintained itself at a high percentage due to growing sales in Europe and competitive pricing, with the support of our direct-sales strategy. The 70.9% gross margin on sales in the second half of 2016 is explained by growing sales performance in countries with indirect distribution.

Impact of gross margin and cost control: strongly reducing annual losses and generating net profit in the second half of 2016

The second half of 2016 marked a historic turning point for VEXIM, which proved its ability to achieve profitable growth and financial discipline.

Operating expenses only increased by 12% in 2016, up to €16.5 million, while sales grew 33% over the same period. Such control of operating costs contributed to further decrease the operating losses, from €4.8 million loss in 2015 to €3.2 million loss to in 2016. The net loss recorded in 2016, which includes income tax and finance costs of €0.5 million, is €2.7 million compared to €4.8 million in 2015.

For the first time since its creation in 2006, VEXIM recorded a net profit of €0.1 million in the second half of 2016. This major step is the result of the strategy followed over the past two years by VEXIM, with the aim of self-financing:

• Gained market shares in France and abroad, to drive further revenue growth;
• Used its technological advance to support competitive pricing and a high gross margin;
• Drew on productivity gains and effective cost control to maintain the beneficiary’s capacity and generate cash.

Positive cash flows in the second half of the year (+€0.3 million)

As of December 31^st, 2016, the Group’s cash position stood at €9.8 million (vs. €9.4 million as of June 30^th, 2016), boosted by a free cash flow of €0.3 million in the second half of the year. The current cash position and future cash flows should allow VEXIM to self-finance, in line with its ambitions. VEXIM plans to generate a positive free cash flow from operations over the full year in 2017.

2017 objectives: Perspectives for a strong and profitable growth

Despite an increasingly demanding “baseline” VEXIM aims to keep achieving significant sales growth in 2017, combined with full-year profitability:

• Expected strong sales growth of +30% to +35%;
• Achieve profitability on a full-year basis;
• FDA 510(k) filing in the United States during the last quarter, for an expected market launch in the first half of 2018;
• Continue to expand abroad with new partnerships in Brazil, Australia and South Korea;
• Keep on innovating in the treatment of vertebral fractures, by developing new products to extend the current portfolio.

To support VEXIM’s accelerated development, the Board of Directors has approved a “technical”³ project to transfer VEXIM’s listing from Alternext to the regulated market of Euronext Paris.

Financial reporting schedule:
1^st quarter sales: April 19^th, 2017⁴

About VEXIM, the innovative back microsurgery specialist

Based in Balma, near Toulouse (France), VEXIM is a medical device company created in February 2006. The Company has specialized in the creation and marketing of minimally invasive solutions for treating traumatic spinal pathologies. Benefitting from the financial support of it longstanding shareholder, Truffle Capital⁵, and from OSEO public subsidies, VEXIM has designed and developed the SpineJack®, a unique implant capable of repairing a fractured vertebra and restoring the balance of the spinal column. The company also developed the Masterflow^TM, an innovative solution for mixing and injecting orthopedic cement that enhances the accuracy of the injection and optimizes the overall surgical procedure. The company counts 66 employees, including its own sales teams in Europe and a network of international distributors. VEXIM has been listed on NYSE Alternext Paris since May 3^rd 2012. For further information, please visit www.vexim.com

SpineJack®⁶, an innovative implant for treating Vertebral Compression Fractures

The SpineJack® is designed to restore a fractured vertebra to its original shape, restore the spinal column’s optimal anatomy and thus remove pain and enable the patient to recover their functional capabilities. Thanks to a specialized range of instruments, inserting the implants into the vertebra is carried out by minimally invasive surgery, guided by X-ray, in approximately 30 minutes, which is intended to enable the patient to be discharged shortly after surgery. The SpineJack® range consists of 3 titanium implants with 3 different diameters, thus covering 95% of vertebral compression fractures and all patient morphologies. SpineJack® technology benefits from the support of international scientific experts in the field of spine surgery and worldwide patent protection through to 2029.

Nom : VEXIM
Code ISIN : FR0011072602
Code mnémonique : ALVXM

¹ The results have been audited and approved by the Board of Directors of Vexim on March 21^st, 2017.
² Consolidated financial statements presented in Appendix.
³ Transfer of listing with no capital raising.
⁴ Indicative date, subject to changes.
⁵ Founded in 2001 in Paris, Truffle Capital is a leading independent European private equity firm. It is dedicated to investing in and building technology leaders in the IT, life sciences and energy sectors. Truffle Capital manages €550m via FCPRs and FCPIs, the latter offering tax rebates (funds are blocked during 7 to 10 years). For further information, please visit www.truffle.fr and www.fcpi.fr.
⁶ This medical device is a regulated health product that, with regard to these regulations, bears the CE mark. Please refer to the Instructions for Use.

Appendixes

IFRS consolidated financial statements

(1) Share-based payments valued in accordance with IFRS 2 and relative to BSA and BSPCE plans. Expense allocated to each department based on the employees’ affiliation.

(2) Restatement of year 2015, regarding a project which, activated according to the French accounting standards in the previous years, does not meet all 6 criteria of IAS 38.57, namely of how the intangible fixed asset will generate probable future economic benefits.

(3) Recalculated pension liabilities as of December 31^st, 2015, to reveal actuarial gains pursuant to IAS 19.

(4) Reclassifications: depreciation on production equipment, namely mould manufacturing initially recorded under “General and administration costs”, which have been reclassified under “Cost of goods sold”.