Xcorporeal Inc. (XCR) filed Quarterly Report for the period ended 2009-06-30.
Xcorporeal Inc. is a medical device company developing an innovative extra-corporeal platform technology that may be used in devices to replace the function of various human organs. The platform will lead to three initial products; a device for home hemodialysis another device for hospital Renal Replacement Therapy and the WAK for continuous ambulatory hemodialysis. These devices will seek to provide patients with improved efficient and cost effective therapy. The RRT markets represent multibillion dollar opportunities. Xcorporeal Inc. has a market cap of $3.4 million; its shares were traded at around $0.23 .
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In addition, the Xcorp Parties agreed to contribute $500,000 in cash to the bank account established by the Joint Venture, on the later of (x) three business days of the consummation of the first to occur of the Proposed Transaction or another Transaction (as such terms are defined below) and (y) the date on which the Joint Venture establishes such bank account, for which the Parties (or their representatives) shall be joint signatories. Furthermore, provided that the Proposed Transaction or a Transaction has been consummated, NQCI agreed to contribute on the Xcorp Parties behalf an additional $500,000 in cash to the Joint Venture at such time as the JV Board reasonably determines that such funds are required to facilitate the Joint Venture s development of the Polymer Technology. This additional contribution amount will be reimbursed to NQCI by the Xcorp Parties from the first funds distributed to the Xcorp Parties by the Joint Venture (other than pursuant to certain quarterly tax related distributions). Additionally, with respect to the Joint Venture, the Parties agreed to certain liquidity rights consisting of customary rights of first refusal and co-sale rights, unlimited piggyback registration rights and the right to up to two demand registrations (subject to lock-ups and other underwriter requirements), customary preemptive rights (available to a member of the Joint Venture for so long as such member holds at least 10% of the Membership Interests then outstanding), customary anti-dilution protections and other standard distribution and information rights.
Initially, as consideration for entering into the License Agreement, we agreed to pay to NQCI a minimum annual royalty of $250,000, or 7% of net sales. Although, under the terms of the Partial Final Award the Arbitrator denied NQCI\'s application for interim royalties, we recorded $645,833 in royalty expenses, covering the minimum royalties, from commencement of the License Agreement through March 31, 2009. Pursuant to the terms of the Partial Final Award issued on April 13, 2009 and the Stipulation and the Memorandum, we have obtained a Perpetual License in the Technology, the License Agreement will not be terminated and transfer of the Technology will not occur. In addition, under the terms of the Partial Final Award, the Arbitrator denied the royalty payments requested by NQCI to be awarded in the Proceeding and as a result of the execution of the Stipulation and the Memorandum, we will not be obligated to pay to NQCI any royalties under the License Agreement going forward. Pursuant to the terms of the Stipulation and the Memorandum, the accrued royalty expenses of $645,833 were reversed, resulting in a $645,833 non-operating reduction in arbitration liabilities to the statement of operations for the three and six months ended June 30, 2009.
We have not generated any revenues since inception. We incurred a net loss of $1.1 million and $1.2 million for the three and six months ended June 30, 2009, respectively, compared to a net loss of $5.3 million and $11.7 million for the three and six months ended June 30, 2008, respectively. The decrease in net loss was primarily due to (i) non-operating income resulting from accrual reversals resulting from the issuance of the Partial Final Award and the execution of the Stipulation and the Memorandum entered into with NQCI in connection with the Proceeding, (ii) corporate restructuring, (iii) completion and termination of the Aubrey Agreement, (iv) less legal fees, (v) forfeitures of terminated employees unvested stock options, and (vi) continuous efforts to minimize current operating expenses. At June 30, 2009, we had a negative working capital of $2.5 million compared to a positive working capital of $6.2 million at June 30, 2008. At June 30, 2009, our total assets were $1.3 million compared to $4.4 million at December 31, 2008, which consisted primarily of cash raised from the sale of our common stock sold in December 2006.
For the three and six months ended June 30, 2009, respectively, we earned interest income of $2,835 and $10,742 compared to $82,226 and $234,694 for
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