Durch Gedanken mit einem Computer Kommunizieren ! - 500 Beiträge pro Seite

[BrauchGeld]

Hallo


Die Zukunft beginnt...

Frankfurt, 13. Januar 2005

Global Life Science Ventures (GLSV), ein Team im Portfolio der Heliad Equity Partners, konnte mit der Cyberkinetics Neurotechnology Inc. (vormals Cyberkinetics Inc.), Foxborough, Massachusetts, das erste durch den GLSV II Fonds finanzierte Unternehmen an die Börse bringen. Cyberkinetics wurde am OTC Bulletin Board gelistet (OTC BB: CYKN) und kurze Zeit später folgte am 04. November eine erfolgreiche PIPE (Private Placement in Public Equity) Finanzierungsrunde in Höhe von 6 Millionen US-Dollar. Die im Rahmen dieser Finanzierungsrunde eingeworbenen Finanzmittel werden für die Förderung der firmeneigenen neurotechnologischen Plattform und die Entwicklung von Forschungsprogrammen im Frühstadium verwendet.

Cyberkinetics Neurotechnology Systems entwickelt innovative Geräte zur Behandlung von Störungen des Nervensystems, indem es jüngste Errungenschaften aus den Bereichen der Neurowissenschaften und Computerwissenschaften kombiniert. Das erste System des Unternehmens in einem fortgeschrittenen Entwicklungsstadium, BrainGate™, ermöglicht die Messung und Auswertung von Gehirnsignalen und deren Übersetzung in computergesteuerte Bewegungen. Das System ermöglicht es Patienten erstmalig, nur durch Gedanken mit einem Computer zu kommunizieren. BrainGate™ wird von der U.S. Food and Drug Administration unter IDE-Status (Investigational Device Exemption) in einer laufenden Versuchsstudie getestet.

Philip Morgan, Partner von GLSV, erklärte: “Der Börsengang von Cyberkinetics durch einen Reverse Merger ist eine bedeutsame Entwicklung für das Unternehmen. Durch die im Rahmen der Börsennotierung eingeworbenen Mittel kann das Unternehmen die klinische Studie für BrainGate™ fortsetzen und seine anderen Forschungs- und Entwicklungs- programme beschleunigen.”

[BrauchGeld]

Published Tuesday 22nd March 2005 12:26 GMT
A US company has carried out trials on a brain implant which offers quadriplegics the possibility of controlling a computer by mind-power alone. Although the first volunteer to use the Cyberkinetics Neurotechnology Systems` BrainGate has so far been able only to move an on-screen cursor, play the game Pong and transmit simple instructions to a robotic arm, the developers hope that in the future, paralysis will not be an obstacle to surfing the web, sending email and generally enjoying the PC experience.

The Cyberkinetics Neurotechnology Systems` blurb explains:

The BrainGate™ System is based on Cyberkinetics` platform technology to sense, transmit, analyze and apply the language of neurons. The System consists of a sensor that is implanted on the motor cortex of the brain and a device that analyzes brain signals. The principle of operation behind the BrainGate™ System is that with intact brain function, brain signals are generated even though they are not sent to the arms, hands and legs. The signals are interpreted and translated into cursor movements, offering the user an alternate "BrainGate™ pathway" to control a computer with thought, just as individuals who have the ability to move their hands use a mouse.

In practical terms, a surgeon drills a hole in the subject`s skull and places a small implant containing 100 electrode sensors directly on the brain surface. The first volunteer to undergo the BrainGate procedure was Matt Nagle of Boston - a knife attack victim paralysed for over three years. He subsequently said of the robotic arm experience: "I was using my thoughts. When I wanted it to go left, it would go left, and, when I wanted it to go right, it would go right," the Chicago Sun-Times reports.

Following this success, the Food and Drug Administration has authorised Cyberkinetics to try out the system on four further volunteers. Cyberkinetics founder, Nicholas Hatsopoulos, admitted that the surgical procedure carried some risk of infection or brain damage, and praised the volunteers thus: "We`re doing it in the safest and best way we know how. These people who participate deserve a lot of credit. They`re pioneers."

Cyberkinetics hopes that - all being well - it will have FDA approval to market BrainGate by 2007. ®

[BrauchGeld]

www.cyberkineticsinc.com

Cyberkinetics Announces Results for Fiscal Year Ended December 31, 2004
Thursday March 31, 1:18 pm ET
Product Development and Clinical Progress Highlight Year


FOXBOROUGH, Mass.--(BUSINESS WIRE)--March 31, 2005--Cyberkinetics Neurotechnology Systems, Inc. (OTCBB: CYKN - News) today released financial results for the fourth quarter and year ended December 31, 2004, and commented on highlights of the year as well as recent developments.
Financial and Organizational Highlights

Transformed the company into a publicly traded entity through a merger, effected a private placement financing of $6,000,000, and ended 2004 with $5.2 million in cash and cash equivalents. In the first quarter of 2005, the company secured a $3,000,000 line of credit.
Increased investments in product development and clinical activities, resulting in a net loss of $7,716,000 in 2004, compared to $4,177,000 in 2003. The increase in net loss also reflects costs associated with the merger and private placement, the cost of operating as a public company and non-cash stock compensation expenses.
Generated total revenues of $1,537,000 in 2004, compared to $1,284,000 in 2003.
Clinical and Product Development Highlights

Reported positive initial results from the BrainGate(TM) Neural Interface System pilot clinical trial, providing proof of concept that the direct brain-computer interface can be used to control a computer and other devices. In December 2004 Spaulding Rehabilitation Hospital (Boston, MA) joined Sargent Rehabilitation Center (Providence, RI) as a pilot study site, enhancing Cyberkinetics` clinical and patient recruitment networks. In March 2005, Cyberkinetics announced the addition of a third pilot study site at The Rehabilitation Institute of Chicago (Chicago, IL).
Submitted 510k premarket notification with the U.S. Food and Drug Administration for the NeuroPort(TM) system, a cortical monitor intended for temporary recording and monitoring of brain electrical activity.
Advanced development of a fully implantable cortical sensor utilizing short-range wireless telemetry, furthering progress toward Cyberkinetics` goal of eliminating percutaneous (through-the-skin) system elements.
"Cyberkinetics made tremendous progress in delivering on our strategy in 2004," said Chief Executive Officer Timothy R. Surgenor. "Most importantly, we generated encouraging preliminary results from our initial patient in the pilot clinical trial of the BrainGate(TM) Neural Interface System. We believe that these results provide proof of concept for our ability to detect, transmit and analyze complex neural signals. In addition, we made exciting progress in product development and we ended the year as a publicly traded company with enhanced financial resources, a strong management team and an outstanding board of directors."

"As exciting and productive as the past year was, we are all tremendously energized by the prospects and the challenges of the new year," Surgenor continued. "During 2005, we plan to accomplish the following:

Accelerate progress in the BrainGate(TM) pilot clinical trial;
Seek FDA and institutional approvals to investigate the utility of the BrainGate(TM) system in additional clinical indications, such as ALS (amyotrophic lateral sclerosis);
Obtain support from clinical partners and approval from the FDA to implement a second generation software into the BrainGate(TM) clinical trial, providing simpler set-up and system operations as well as an enhanced user interface and additional applications;
Prepare for a potential limited market release of the NeuroPort(TM) cortical monitor by obtaining 510(k) approval, completing necessary manufacturing improvements and facility inspections, finalizing sales and distribution arrangements, and developing marketing and training programs in support of product launch; and
Complete bench testing of a fully implantable cortical sensor."
For the fourth quarter of 2004, the net loss applicable to common stockholders was $2,719,000 or $0.19 per share based on 14,162,000 weighted average common shares outstanding, as compared to $1,361,000 or $0.34 per share for the fourth quarter of 2003 based on 4,044,000 weighted average common shares outstanding. For the year ended December 31, 2004, net loss applicable to common stockholders was $7,716,000 or $1.16 per share based on 6,660,000 weighted average common shares outstanding, as compared to $4,177,000 or $1.03 per share based on 4,044,000 weighted average common shares outstanding in 2003. Weighted average common shares outstanding increased primarily due to the conversion of 9,419,000 shares of Series A Redeemable Convertible Preferred Stock in connection with the reverse merger as well as the issuance of 2,000,000 shares of common stock in connection with the subsequent private placement.

Financial results for the quarter and year ended December 31, 2004 are summarized in the table below.

About Cyberkinetics Neurotechnology Systems, Inc.

Cyberkinetics Neurotechnology Systems, a leader in brain-machine interface technology, is developing products to treat nervous system diseases and disorders by bringing together advances in neuroscience, computer science and engineering. Cyberkinetics` products are based on over ten years of technology development and cutting-edge neuroscience research at leading academic institutions such as Brown University, the Massachusetts Institute of Technology, Emory University, and the University of Utah. Cyberkinetics is publicly traded on the Over the Counter Bulletin Board under the ticker symbol CYKN. The Company is headquartered in Foxborough, Massachusetts and conducts engineering and research in Salt Lake City, Utah. Additional information is available at www.cyberkineticsinc.com.

Cyberkinetics` first product, the BrainGate(TM) Neural Interface System, is designed to give severely paralyzed individuals a long-term, direct brain-computer interface for the purpose of communication and control of a computer and other devices. Patients are currently being enrolled into a pilot clinical trial to test the BrainGate(TM) System`s safety and effectiveness. For specific information about the BrainGate(TM) clinical study please send an email to [e-mail].

[BrauchGeld]

Ich werde mir ein paar kaufen ist einfach eine interessante geschichte.

4-Nov-04 MORGAN, PHILIP W
Director 104,000 Private Purchase at $3 per share. $312,000
4-Nov-04 HATSOPOULOS, GEORGE N.
Director 53,083 Private Purchase at $3 per share. $159,249
4-Nov-04 SURGENOR, TIMOTHY R.
Chief Executive Officer 40,000 Private Purchase at $3 per share. $120,000
4-Nov-04 OXFORD BIOSCIENCE PARTNERS IV LP
Beneficial Owner (10% or more) 318,501 Private Purchase at $3 per share. $955,503
15-Oct-04 SURGENOR, TIMOTHY R.
Chief Executive Officer 500 Purchase at $2.50 per share. $1,250

[BrauchGeld]

Hi

Aktie steigt aktuell um knapp 25%.

31-Mar-2005

Annual Report



ITEM 6. MANAGEMENT`S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This 10-KSB contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements and accompanying notes and the other financial information appearing else where in this Form 10-KSB. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events. Refer also to "Special Note Regarding Forward Looking Statements" below. Overview
Cyberkinetics. We are a clinical development medical device company focused on the development of neurotechnology products that record, monitor and analyze brain electrical activity, and further allow such complex signals from the brain, to be interpreted by computer equipment. We intend to develop implantable medical devices and software and hardware for human use that will be designed to detect and interpret brain activity in real time. Our lead product candidate, the BrainGatetm system, is intended to allow quadriplegic people to control computers using the technology identified above, has received IDE approval and is undergoing pilot clinical evaluation. Another product, the NeuroPorttm device, is intended to allow post-operative recording and monitoring of brain electrical activity, for use during neurological procedures where the cortex of the brain is exposed via a craniotomy in order to allow short term monitoring of the brain`s activity. We have filed two 510(k) applications with the FDA for the NeuroPorttm device.
In late 2002, we acquired Bionic Technologies, LLC ("Bionic"), a manufacturer of neural recording, stimulation and signal processing equipment for neuroscience research. Through the acquisition, we gained an engineering team, manufacturing facilities and key intellectual property. We continue to manufacture and market Bionic`s BIONIC® line of neural recording arrays and data acquisition systems to researchers.
We have a limited history of operations and, through December 31, 2004, we have generated limited revenues from products obtained in our acquisition of Bionic. However, the long-term success of our business is dependent on the development and commercialization of advanced neurological products such as the BrainGatetm system. We have also generated revenue from grant income, but we do not currently expect such revenues to be significant in the future.
We have been unprofitable since Cyberkinetics` inception in May 2001 and we expect to incur substantial additional operating losses for at least the foreseeable future as we continue to expand our product development activities. Accordingly, our activities to date are not as broad in depth or scope as the activities we may undertake in the future, and our historical operations and financial information are not necessarily indicative of our future operating results. We have incurred substantial net losses since inception. As of December 31, 2004, our accumulated deficit increased to $12,672,000. We expect to incur substantial and increasing losses for the next several years as we:
• Continue to develop the BrainGatetm system and the NeuroPorttm device;

• continue to enroll new patients in our clinical study(ies);



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• develop and commercialize our product candidates, if any, that receive regulatory approval;

• continue and expand our research and development programs;

• acquire or in-license products, technologies or businesses that are complementary to our own; and

• increase our general and administrative expenses related to operating as a public company.

We have financed our operations and internal growth since inception primarily through private placements of equity and debt securities, as well as through revenue from product sales and sponsored research. During 2004, we received additional funding of $698,000 through an equipment financing arrangement. In November 2004, we completed a private placement, whereby we
(i) sold 2,000,000 shares of our common stock at a price of $3.00 per share for aggregate proceeds of $6,000,000; and (ii) issued five-year warrants to purchase up to an additional 660,000 shares of our common stock at an exercise price of $6.00 per share. In addition, our placement agent received a five-year warrant to purchase 100,000 shares of our common stock as partial consideration for its services during the private placement. Each of the issuees qualified as an accredited investor. On March 31, 2005, we entered into a one-year revolving line-of-credit agreement (the "Line" or "Agreement") for up to $3.0 million with a financial institution. Borrowings under the Line are available in amounts and at the time of our discretion. Borrowings are collateralized by our assets, excluding intellectual property. We agree not to sell, transfer or otherwise dispose of our intellectual property rights outside the ordinary course of business, except with the prior consent of the financial institution. The Line provides for customary conditions to our ability to borrow, as well as customary covenants and default provisions; the Agreement also contains certain acceleration clauses. Borrowings under the line bear interest at prime rate plus 3 percent. Interest is payable monthly and the principal is due on March 30, 2006. We also will issue to the financial institution a ten-year warrant to purchase 71,429 shares of common stock at an exercise price of $2.10 per share. Our business is subject to significant risks, including but not limited to the risks inherent in our ongoing clinical trials and the regulatory approval process, the results of our research and development efforts, competition from other products and uncertainties associated with obtaining and enforcing intellectual property rights. Accordingly, our activities to date are not as broad in depth or in scope as the activities we may undertake in the future, and our operating results or financial position or our ability to operate profitably as a commercial enterprise are not indicative of our future operating results. Reverse Merger. We were originally incorporated in the State of Nevada on February 6, 2002 as Trafalgar Ventures Inc. ("Trafalgar"). On July 23, 2004, Trafalgar, certain stockholders of Trafalgar, Trafalgar Acquisition Corporation, a Nevada corporation ("Merger Sub"), and Cyberkinetics, Inc., a privately-held Delaware corporation ("Cyberkinetics"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Trafalgar, through its wholly-owned subsidiary, Merger Sub, agreed to acquire Cyberkinetics in exchange for shares of Trafalgar`s common stock (the "Merger"). The Merger closed on October 7, 2004. We recorded the transaction as the issuance of stock for the net monetary assets of Trafalgar, accompanied by a recapitalization and consequently, no goodwill or intangible assets were recorded with respect to this transaction. All costs associated with the Merger were expensed as incurred. The Merger was treated as a reverse merger of Cyberkinetics. Accordingly, from an historical accounting perspective, our period of inception begins on May 2, 2001, the date of inception of Cyberkinetics. The financial statements of the Company presented reflect the historical results of Cyberkinetics prior to the Merger, and of the combined entities following the Merger, and do not include historical financial results of Trafalgar prior to the consummation of the Merger. Immediately upon closing, Trafalgar effected a reincorporation from the State of Nevada to the State of Delaware and a corporate name change to "Cyberkinetics Neurotechnology Systems, Inc." Until the effective time of the Merger, we were in the business of mineral exploration. We obtained an option to acquire a 90% interest in two mineral claims located in the Sudbury Mining Division, Province of Ontario, Canada. This option was exercisable either by making cash payments to the grantor of the option or by funding the required exploration expenditures described in the option agreement. During the period ended July 31, 2004, we allowed the option to expire. We had not generated revenues from operations.



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Upon analysis of operations, we decided to focus on evaluating other opportunities that may enhance stockholder value, including the acquisition of a product or technology, or pursuing a merger or acquisition of another business entity with long-term growth potential. In furtherance of this strategy, we entered into the Merger Agreement with Merger Sub and Cyberkinetics on July 23, 2004. At the effective time of the Merger, Merger Sub was merged with and into Cyberkinetics. The separate existence of Merger Sub ceased and Cyberkinetics continued as the surviving corporation. Post-merger, we ceased all operations in the mineral exploration industry and now operate as the parent company of Cyberkinetics. Additionally, immediately following the closing of the Merger, the officers and directors of Trafalgar resigned and the officers and directors of Cyberkinetics became our officers and directors. We also completed a reincorporation from the State of Nevada to the State of Delaware and a corporate name change to Cyberkinetics Neurotechnology Systems, Inc. Since Trafalgar had no significant operations prior to the Merger, the discussions in this section relate to the financial condition and results of operations of Cyberkinetics.
Research and Development. Our research and development activities have been primarily focused on the development and pilot clinical trial of the BrainGatetm system. Since Cyberkinetics` inception in 2001 and through December 31, 2004, we have incurred research and development costs of approximately $7,429,000. Our research and development expenses consist primarily of compensation and other expenses for research and development personnel, non-cash stock compensation expense for non-employees, costs associated with the clinical trials of our product candidates, facility costs, supplies and materials, costs for consultants and related contract research and depreciation. We charge all research and development expenses to operations as they are incurred.
In the future, the rate of spending on the BrainGatetm system is likely to increase as additional clinical trials are performed. In addition, we are working to develop a fully implantable version of the BrainGatetm system. The initial version of the BrainGatetm system is not expected to be commercially launched for at least three to five years, if at all. A fully implantable version is in the early stages of development, will take longer to develop and is expected to be launched after the initial version of the BrainGatetm system. While we cannot estimate with any certainty the time required for commercial approval of the BrainGatetm system, we estimate that we will need to raise substantial additional capital in order to reach breakeven from the sales of advanced neurological products.
At this time, due to the risks inherent in the clinical trial process and given the early stage of development of our product candidates, we are unable to estimate with any certainty the costs we will incur in the continued development of our product candidates for commercialization. However, we expect our research and development costs to be substantial and to increase as we continue the development of current product candidates, as well as continue expansion of our research programs.
The lengthy process of seeking regulatory approvals for our product candidates, and the subsequent compliance with applicable regulations, requires the expenditure of substantial resources. Any failure by us to obtain, or any delay in obtaining, regulatory approvals could cause our research and development expenditures to increase and, in turn, have a material adverse effect on our results of operations. We cannot be certain when any net cash inflow from any of our current product candidates will commence.



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Results of Operations
The following table sets forth certain statement of operations data for the periods indicated:


Year Ended December 31,

2004 2003 2002

Consolidated Statement of Operations Data:
Product sales $ 653,000 $ 509,000 $ 234,000
Grant income 884,000 775,000 297,000

Total revenues 1,537,000 1,284,000 531,000
Operating expenses 8,617,000 4,863,000 1,150,000

Operating loss (7,079,000 ) (3,579,000 ) (619,000 )

Other income (expense), net (11,000 ) 59,000 27,000

Net loss (7,091,000 ) (3,520,000 ) (592,000 )
Dividends and accretion to redemption value of
redeemable convertible preferred stock (625,000 ) (657,000 ) (181,000 )

Net loss attributable to common stockholders $ (7,716,000 ) $ (4,177,000 ) $ (773,000 )




Years Ended December 31, 2004 and 2003
Revenues

Product Sales. Product sales increased $144,000 to $653,000 for the year ended December 31, 2004 from $509,000 for the year ended December 31, 2003. The increase in product sales is attributable to an overall 35% increase in the selling price per unit, offset by a 7% decrease due to phasing out certain line items and changes in product mix. The gross margin on product sales was approximately 60% and 49% for the year ended December 31, 2004 and 2003, respectively. The increase in gross margin is a result of the increases in the selling prices per unit. Our business focus since inception in May 2001 has been the development of our advanced neurological products, such as the BrainGatetm system. We expect that our sales from the BIONIC® products will continue to be limited and, therefore, are likely to continue to fluctuate in the future. For the years ended December 31, 2004 and 2003, customers to whom sales exceeded 10% of each year`s respective total product sales were as follows:


Customer 2004 2003

Brown University 22 % 14 %
Cold Spring USA Corporation 20 -
The Bionic Ear Institute 12 -
VA Med Ctr. MA 10 -
Stanford University - 13




Laval University, Centre Hospitalier Robert Giffard of Beauport QC (Canada) - 12 Unique Medical Distribution of Japan DBA Egg Co - 12 The University of Southern California - 11
Grants. Revenue from SBIR grants increased $109,000 to $884,000 for the year ended December 31, 2004 from $775,000 for the year ended December 31, 2003. The increase in grant income is due to availability of research and development staff to work on grant-related activities. We did not submit any SBIR grant applications during the year ended December 31, 2004. Additionally, there are uncertainties concerning the future availability of these types of grants to public companies. Therefore, we are not anticipating any new SBIR grant income after December 2004. We will continue, however, to evaluate available grants in the future.



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Expenses
Research and Development. Research and development expenses increased $1,709,000 to $4,309,000 for the year ended December 31, 2004 from $2,600,000 for the year ended December 31, 2003. The increase was attributable to an increase in non-cash stock compensation expense of $1,274,000, due to an increase in the market value of the stock; increased salaries, benefits and related travel of $264,000 from the hiring of additional research and development staff; increased costs associated with our on-going pilot clinical trial of the BrainGatetm system, which began in 2004, our filing the 510(k) for the NeuroPorttm device and expansion of our other research and development programs and legal costs associated with supporting our intellectual property portfolio. Non-cash stock compensation expense included in research and development expenses were $1,293,000 and $20,000 for the year ended December 31, 2004 and 2003, respectively. These non-cash stock compensation charges can fluctuate substantially from quarter to quarter based on the market value of our stock and the number of options outstanding at the end of each quarter.
Sales and Marketing. Sales and marketing expenses increased $35,000 to $298,000 for the year ended December 31, 2004, from $263,000 for the year ended December 31, 2003. The increase is the result of an increase in travel and entertainment related to additional sales efforts.
General and Administrative. General and administrative expenses increased $2,006,000 to $3,747,000 for the year ended December 31, 2004 from $1,741,000 for year ended December 31, 2003. The increase was mainly attributable to an increase in salaries benefits and travel of $697,000 for the expansion of the management team, an increase in legal and accounting fees, and other public company charges of approximately $1,152,000 related to the cost of the Merger, preparing to become a public company and additional efforts to raise capital and an increase in non-cash stock compensation expense of $72,000.
Other Income and Expenses

Other Income (Expense), Net. Interest income decreased $27,000 to $40,000 for year ended December 31, 2004 from $67,000 for the year ended December 31, 2003. The decrease in interest income is a result of a reduction in net cash invested. Interest expense increased $44,000 to $51,000 for the year ended December 31, 2004 from $7,000 for the year ended December 31, 2003. The increase is related to borrowings for equipment purchases under an equipment loan and security agreement with a lender.
Net Loss

Net Loss. Net loss increased $3,571,000 to $7,091,000 for the year ended December 31, 2004 from a net loss of $3,520,000 for the year ended December 31, 2003. The increase is largely a result of operating expenses associated with the Merger and preparing to be a public company, advances in our clinical trial of BrainGatetm and the expansion of our research and development projects. Net loss per common share increased $.13 per share to $1.16 per share for the year ended December 31, 2004 from $1.03 for the year ended December 31, 2003. The increase is due to the increase in net loss offset by an increase in the weighted average common shares outstanding to 6,660,000 at December 31, 2004 from 4,044,180 at December 31, 2003 due to the conversion of 9,419,000 shares of Series A Redeemable Convertible Preferred Stock in connection with the Merger and the 2,000,000 shares issued in connection with the private placement in November. Years Ended December 31, 2003 and 2002
Revenues

Product Sales. Revenue from product sales for the year ended December 31, 2003 was $509,000, or $275,000 over product sales of $234,000 for the year ended December 31, 2002. The increase in product sales was primarily due to the full 12-month inclusion of the Bionics business in 2003, as compared to approximately five months inclusion in 2002. The gross margin on product sales in 2003 and 2002 was approximately 50% in both years.



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For the years ended December 31, 2003 and 2002, customers to whom sales exceeded 10% of each year`s respective total product sales were as follows:


Customer 2003 2002

The University of Southern California 11 % -
Laval University, Centre Hospitalier Robert Giffard of Beauport
QC (Canada) 12 -
Unique Medical Distribution of Japan DBA Egg Co 12 -
Stanford University 13 -
Brown University 14 -
Carnegie Mellon University - 19 %
MCP Hanneman - 19
Kresge Eye Institute of Wayne State University School of
Medicine - 21
Cold Spring Distribution Company of China - 25




Grants. Revenue recognized from SBIR grants was $775,000 for the year ended December 31, 2003, or $478,000 over SBIR grant revenues of $297,000 for the year ended December 31, 2002. This increase was attributable to the full 12-month inclusion of the Bionics business in 2003, as compared to approximately five months inclusion in 2002.
Expenses

Research and Development. Research and development expenses increased $2,017,000 to $2,600,000 for the year ended December 31, 2003 from $583,000 for the year ended December 31, 2002. In 2002, research and development was primarily related to conducting grant funded research. Expenses in 2002 reflect 12 months of activity at our Salt Lake City, Utah facility, but only limited activities, which commenced in August 2002, in our east coast offices which were initially located in Providence, Rhode Island. In early 2003, we initiated a focused program to develop and file an IDE on the BrainGatetm system. Salaries and benefits increased approximately $1,287,000 related to the establishment and expansion of our headquarters in Foxborough, Massachusetts, expansion of the research and development staff in Salt Lake City, and the creation of a clinical and regulatory team to develop and file an IDE on the BrainGatetm system. Consulting and professional fees increased approximately $329,000 related to testing and validation of the BrainGatetm system, development of the BrainGatetm pilot trial protocol, and the preparation of the filing of the IDE with the FDA. Lab materials and supplies increased approximately $325,000 as a result of an increase in headcount, the purchase of materials to be used in the pilot trial and for the sponsored grant contract research.
Sales and Marketing. Sales and marketing expenses grew to $263,000 for the year ended December 31, 2003, compared to $23,000 for the year ended December 31, 2002. The $240,000 increase was a result of increased salary, benefits and travel and entertainment expense due to the addition of a full-time general manager to oversee sales of the BIONIC® line of neural recording arrays and data acquisition in May of 2003, as well as the fact that 2002 only includes five months of sales and marketing expenses from the Bionics business.
General and Administrative. General and administrative expenses increased $1,315,000 to $1,741,000 for the year ended December 31, 2003 from $426,000 for the year ended December 31, 2002. This increase was attributable to an increase of approximately $442,000 in salaries, benefits, travel and entertainment as a result of expansion of the general and administrative staff, an increase of approximately $355,000 in professional fees and expenses related to general corporate matters and intellectual property, and the costs of setting up an office in Foxborough, Massachusetts, as well as the fact that 2002 only includes five months of general and administrative expenses from the Bionics business.
Other Income and Expenses

Net Other Income. Net other income was $59,000 for the year ended December 31, 2003, compared to $27,000 for the year ended December 31, 2002. The increase in net other income resulted primarily from higher average cash balances during 2003.



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Net Loss
Net Loss. Net loss increased by $2,928,000 to $3,520,000 for the year ended December 31, 2003 from a net loss of $592,000 for the year ended December 31, 2002. The larger net loss is largely a result of the expanded infrastructure and associated operating expenses incurred in 2003. Liquidity and Capital Resources
We have financed operations and internal growth since inception primarily through private placements of equity and debt securities, as well as through revenue from product sales and sponsored research. We received $14,433,000 from the private placement of equity securities through December 31, 2004. We also raised an additional $698,000 in 2004 under a capital lease line. As of December 31, 2004, we had $5,233,000 of cash and cash equivalents on hand.
Net cash used in operating activities was $5,631,000 for the year ended December 31, 2004. The primary use of cash was to fund our operations. The net loss for the year ended December 31, 2004 was $7,091,000. Included in this loss were non cash expenses of $1,393,000, $228,000 and $6,000 for stock-based compensation, depreciation and amortization and interest expense, respectively. The use of cash for operations included legal, audit and other fees related to completing the Merger, costs associated with preparing to be a public company and to execute on our clinical and research and development efforts. The net cash used for operating activities included an increase in accounts receivable of $151,000 and an increase in prepaid expenses and other current assets of $229,000, principally related to prepayment of insurance premiums and other services respectively, offset by an increase in accounts payable and accrued expenses of approximately $165,000 and $94,000, respectively. Since we are a developing business, our prior operating costs are not representative of our expected on-going costs. As we continue to develop our advanced stage neurological products, such as the BrainGatetm system and the NeuroPorttm device, and as we transition from a private company to a public company, we expect our monthly cash operating expenses in 2005 to increase.
Net cash used in investing activities was $340,000 for the year ended December 31, 2004. We used cash to purchase equipment to be used primarily for research and development activities.
Net cash provided from financing activities was $6,135,000 for the year ended December 31, 2004. We received proceeds from a capital lease line of $698,000 and we used approximately $144,000 of the proceeds to make payments under the capital lease line. On November 4, 2004, we completed a private placement whereby we sold 2,000,000 shares of our common stock (the "Shares") and issued warrants to purchase another 660,000 shares of our common stock (the "Warrant Shares") to accredited investors, resulting in net proceeds of . . .

[BrauchGeld]

Cyberkinetics Gives Update on BrainGate Clinical Trial
Monday April 4, 7:30 am ET
- Second Patient Implanted; Further Updates to Come Quarterly -


FOXBOROUGH, Mass.--(BUSINESS WIRE)--April 4, 2005--- Cyberkinetics Neurotechnology Systems, Inc. (OTCBB - CYKN) today provided an update on the status of the pilot clinical trial of the BrainGate(TM) Neural Interface System, and announced its intention to provide future updates on a quarterly basis.
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As of March 31, 2005, two patients have been implanted and are active in the pilot BrainGate(TM) trial. The trial is being conducted under an Investigational Device Exemption (IDE) from the FDA, which provides for implanting the BrainGate(TM) System in five patients with quadriplegia due to spinal cord injury, stroke or muscular dystrophy for a period of 12 months. The 12 month period for the first study patient will end during June 2005.

In February 2005, interim results of the pilot study of the BrainGate(TM) Neural Interface System were presented at the Association of Academic Physiatrists. This report summarized the initial findings from the first trial participant six months after implantation. The BrainGate(TM) device appears to be functioning as planned and the first participant continues to be able to use the system to control a computer using thoughts. There have been no reported adverse patient events observed in the trial to date.

The current roster of BrainGate(TM) clinical sites includes Sargent Rehabilitation Center (Warwick, RI), Spaulding Rehabilitation Center (Boston, MA) and the Rehabilitation Institute of Chicago (Chicago, IL). The Chicago site joined the trial during the most recent quarter. There is no present intention to further expand the number of sites for this initial trial.

"All of our clinical sites are actively engaged in recruiting additional patients into the BrainGate(TM) trial," said Timothy R. Surgenor, Cyberkinetics` President and Chief Executive Officer. "We are making good progress in developing the next generation of BrainGate(TM) software, including patient interface upgrades and we look forward to working with our partners and with FDA to integrate those enhancements into the ongoing clinical trial."

"With this update, we are initiating a policy of providing BrainGate(TM) trial status summaries on a quarterly basis," Surgenor said. "We will continue to keep the identity and location of patients in the trial confidential, until such time as an individual patient and his or her physician decide to be identified to the public. We will also continue to report results which are clinically or scientifically meaningful through posters, presentations or publications."

[BrauchGeld]

Cyberkinetics Receives Neuroport 510K Clearance
Monday April 4, 8:15 am ET
Acute Neural Monitor is Company`s First Commercial Clinical Product


FOXBOROUGH, Mass.--(BUSINESS WIRE)--April 4, 2005--Cyberkinetics Neurotechnology Systems, Inc. (OTCBB: CYKN - News; Cyberkinetics) today announced that it has obtained 510(k) clearances of its NeuroPort(TM) Cortical Microelectrode Array (NeuroPort(TM) Array) and NeuroPort(TM) Neural Signal Processor (NeuroPort(TM) NSP). Taken together, the NeuroPort(TM) Array and NeuroPort(TM) NSP comprise a neural monitoring system (the NeuroPort(TM) System) designed for acute inpatient applications, and labeled for temporary (less than 30 days) recording and monitoring of brain electrical activity.
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Potential clinical applications for invasive brain monitoring with the NeuroPort(TM) in the United States currently include patients undergoing elective surgery for diagnosis and treatment of severe epilepsy (approximately 5,000/year) and patients undergoing emergency craniotomies for brain injury and strokes (approximately 70,000/year).

The NeuroPort(TM) System is capable of providing neurologists and neurosurgeons a new resource to detect, transmit and analyze neural activity of patients who have undergone craniotomy. The Array allows the collection of aggregate or individual neural signals from the cortical region of the brain. The NSP allows these signals to be recorded and analyzed by the physician as a part of the diagnosis and treatment of neurological conditions. The NeuroPort(TM) System is covered by two issued patents, and system elements are including in a number of additional patent applications.

Cyberkinetics anticipates a limited market introduction of the NeuroPort(TM) System early in 2006, after completing necessary manufacturing upgrades during the remainder of 2005. Cyberkinetics is evaluating distribution strategies to support a broad product launch before the end of 2006.

"Marketing clearance of the NeuroPort(TM) System, our first commercial clinical product, is an important first step in our strategy to develop a broad family of products to diagnose, monitor and treat neurological diseases and injuries," said President and Chief Executive Officer Timothy R. Surgenor. "NeuroPort(TM) will provide us with entry into an established and growing invasive brain monitoring market of approximately $100 million annually. It also allows us work with clinicians to begin to explore applications of our technology in potentially much larger markets for long-term monitoring and treatment of neurological disease."

"The NeuroPort(TM) Array and the NeuroPort(TM) NSP are both critical components derived from our BrainGate(TM) Neural Interface System," Surgenor continued. "These approvals testify to the strong pre-clinical foundation of our technology platform. Furthermore, clinical use of the NeuroPort(TM) System will help familiarize neurologists and neurosurgeons with the characteristics and capabilities of our core technology and will provide invaluable clinical experience that will accelerate all of our programs, including the BrainGate(TM) program."