MISSISSAUGA, ON, April 13 /PRNewswire-FirstCall/ -- Vasogen Inc. (NASDAQ:VSGN; TSX:VAS) today reported the results of operations for the three months ended February 28, 2009. All dollar amounts referenced herein are in Canadian dollars unless otherwise noted.
At February 28, 2009, our cash and cash equivalents totaled $7.3 million, compared with $8.6 million at November 30, 2008.
We incurred a net loss for the three months ended February 28, 2009 of $1.9 million, or $0.09 per common share, compared with a net loss of $5.3 million, or $0.24 per common share for the same period in 2008. This decrease is the result of a significant reduction in the number of employees and a decision not to incur material expenditures to advance our products during the Company's ongoing strategic review process. Restructuring costs of $1.1 million were included in our net loss for the three months ended February 28, 2009.
Corporate Update - To further reduce the rate at which we use our cash during our strategic review process, in February 2009 we further reduced our number of full-time employees to two. As part of this restructuring, the employment of Chris Waddick, our President and CEO, was terminated effective February 28, 2009. Mr. Waddick has agreed to fulfill the role of CEO, in a consulting capacity at substantially reduced compensation, to assist the Board in bringing closure to the ongoing strategic review process. - Pursuant to our restructuring plan, our Board of Directors and Management has been actively involved in a process of screening, reviewing, and short-listing potential opportunities including the sale of the Company, or a merger or acquisition, and exploring the monetization of certain tangible and intangible assets. The process has also included a review of the potential out-licensing of assets, lapsing of patents and patent applications, asset divestiture, or liquidation of the Company. At this time, we have significantly narrowed down the number of third party proposals under consideration. If a definitive agreement that the Board believes is in the best interest of our shareholders cannot be reached in the near future, the Board will consider the other alternatives that it has also been evaluating. These alternatives include the potential to realize value from the monetization of certain intangible assets either alone or potentially in combination with a strategic transaction. The Board will continue to assess the merits of these options relative to liquidating the Company and distributing the remaining cash to the shareholders. - As at February 28, 2009, we had cash and cash equivalents of $7.3 million and had 22.5 million common shares issued and outstanding. Other than our accounts payable and accrued liabilities, we do not have any debt. - We sold a United States patent application and its related foreign counterparts for US$0.4 million. This device-based intellectual property has not been used to date in the Celacade System; however, we have retained rights to this technology for any potential use as it relates to our Celacade System. - Subsequent to quarter end, on March 25, 2009, the NASDAQ Stock Market further suspended the enforcement of the Minimum Bid Price Rule requiring a minimum US$1.00 closing price until July 20, 2009. Accordingly, the NASDAQ indicated that it will not take action to delist any security, including our common shares, for a violation of the minimum bid price rule during the suspension.
Certain statements in this document constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and/or "forward-looking information" under the Securities Act (Ontario). These statements may include, without limitation, plans to consider a sale, merger, acquisition, or other alternatives resulting from our strategic review, statements regarding the status of development, or expenditures relating to the Celacade(TM) System or our VP series of drugs including VP015 and VP025, plans to fund our current activities, statements concerning our partnering activities, health regulatory submissions, strategy, future operations, future financial position, future revenues and projected costs. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimated", "predicts", "potential", "continue", "intends", "could", or the negative of such terms or other comparable terminology. We made a number of assumptions in the preparation of these forward-looking statements. You should not place undue reliance on our forward-looking statements, which are subject to a multitude of risks and uncertainties that could cause actual results, future circumstances or events to differ materially from those projected in the forward-looking statements. These risks include, but are not limited to, the outcome of our strategic review, securing and maintaining corporate alliances, the need for additional capital and the effect of capital market conditions and other factors, including the current status of our programs, on capital availability, the potential dilutive effects of any financing and other risks detailed from time to time in our public disclosure documents or other filings with the Canadian and U.S. securities commissions or other securities regulatory bodies. Additional risks and uncertainties relating to our Company and our business can be found in the "Risk Factors" section of our Annual Information Form and Form 20-F for the year ended November 30, 2008, as well as in our other public filings, including our Management's Discussion and Analysis for the period ended February 28, 2009. The forward-looking statements are made as of the date hereof, and we disclaim any intention and have no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The unaudited interim consolidated financial statements, accompanying notes to the unaudited interim consolidated financial statements, and Management's Discussion and Analysis for the three months ended February 28, 2009, will be accessible on Vasogen's Website at http://www.vasogen.com/ and will be available on SEDAR and EDGAR.
Summary financial tables are provided below. VASOGEN INC. (A DEVELOPMENT STAGE COMPANY) Interim Consolidated Balance Sheets (In thousands of Canadian dollars) ------------------------------------------------------------------------- February 28, November 30, 2009 2008 ------------------------------------------------------------------------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 7,333 $ 8,556 Tax credits recoverable 383 582 Prepaid expenses and deposits 64 188 ----------------------------------------------------------------------- 7,780 9,326 Property and equipment 14 16 ------------------------------------------------------------------------- $ 7,794 $ 9,342 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 414 $ 101 Accrued liabilities 781 1,141 ----------------------------------------------------------------------- 1,195 1,242 Shareholders' equity Share capital: Authorized: Unlimited common shares, without par value Issued and outstanding: 22,519,737 common shares (November 30, 2008 - 22,424,719) 365,701 365,677 Warrants 16,725 16,725 Contributed surplus 23,971 23,555 Deficit (399,798) (397,857) ----------------------------------------------------------------------- 6,599 8,100 ------------------------------------------------------------------------- $ 7,794 $ 9,342 ------------------------------------------------------------------------- ------------------------------------------------------------------------- VASOGEN INC. (A DEVELOPMENT STAGE COMPANY) Interim Consolidated Statements of Operations, Deficit and Comprehensive Income (In thousands of Canadian dollars, except per share amounts) (Unaudited) ------------------------------------------------------------------------- Period from December 1, Three months ended 1987 to February 28, February 29, February 28, 2009 2008 2009 ------------------------------------------------------------------------- Expenses: Research and development $ 36 $ 2,778 $ 247,747 General and administration 2,446 2,681 127,772 Foreign exchange loss (gain) (30) 203 10,635 ------------------------------------------------------------------------- Loss before the undernoted (2,452) (5,662) (386,154) Interest expense on senior convertible notes payable - - (1,279) Accretion in carrying value of senior convertible notes payable - - (10,294) Amortization of deferred financing costs - - (3,057) Loss on extinguishment of senior convertible notes payable - - (6,749) Gain on sale of patents 487 - 487 Investment income 24 342 13,862 Change in fair value of embedded derivatives - - 829 ------------------------------------------------------------------------- Loss and comprehensive loss for the period (1,941) (5,320) (392,355) Deficit, beginning of period (397,857) (381,783) (1,510) Impact of change in accounting for stock-based compensation - - (4,006) Impact of change in accounting for financial instruments - - (1,632) Charge for acceleration payments on equity component of senior convertible notes payable - - (295) ------------------------------------------------------------------------- Deficit, end of period $ (399,798) $ (387,103) $ (399,798) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted loss per common share $ (0.09) $ (0.24) ------------------------------------------------------------------------- ------------------------------------------------------------------------- VASOGEN INC. (A DEVELOPMENT STAGE COMPANY) Interim Consolidated Statements of Cash Flows (In thousands of Canadian dollars) (Unaudited) ------------------------------------------------------------------------- Period from December 1, Three months ended 1987 to February 28, February 29, February 28, 2009 2008 2009 ------------------------------------------------------------------------- Cash provided by (used in): Operating activities: Loss for the period $ (1,941) $ (5,320) $ (392,355) Items not involving cash: Amortization 2 62 6,379 Loss on disposition of property and equipment - - 125 Gain on sale of patents (487) - (487) Accretion in carrying value of senior convertible notes payable - - 10,294 Amortization of deferred financing costs - - 3,057 Loss on extinguishment of senior convertible notes payable - - 6,749 Change in fair value of embedded derivatives - - (829) Stock-based compensation 416 235 10,806 Common shares issued for services - - 2,485 Unrealized foreign exchange gain (38) 192 11,381 Other - - (35) Change in non-cash operating working capital 299 1,398 737 ----------------------------------------------------------------------- (1,749) (3,433) (341,693) Financing activities: Shares and warrants issued for cash - - 326,358 Warrants exercised for cash - - 16,941 Options exercised for cash - - 7,669 Share issue costs - - (24,646) Repayment of senior convertible notes payable, net - - 38,512 Paid to related parties - - (234) ----------------------------------------------------------------------- - - 364,600 Investing activities: Purchases of property and equipment - - (2,471) Purchases of acquired technology - - (1,283) Proceeds on disposition of patents 487 - 487 Purchases of marketable securities - - (244,846) Proceeds on disposition of property and equipment - - 62 Settlement of forward foreign exchange contracts - - (4,824) Maturities of marketable securities - - 240,677 ----------------------------------------------------------------------- 487 - (12,198) Foreign exchange gain (loss) on cash held in foreign currency 39 (182) (3,376) ------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents (1,223) (3,615) 7,333 Cash and cash equivalents, beginning of period 8,556 23,545 - ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 7,333 $ 19,930 $ 7,333 ------------------------------------------------------------------------- -------------------------------------------------------------------------
Vasogen Inc.
CONTACT: Investor Relations, 4 Robert Speck Parkway, 15th Floor,
Mississauga, ON, L4Z 1S1, tel: (905) 817-2002, fax: (905) 847-6270,
http://www.vasogen.com/, investor@vasogen.com
