MISSISSAUGA, ON, Oct. 15 /PRNewswire-FirstCall/ - Vasogen Inc. (NASDAQ:VSGN; TSX:VAS) today reported the results of operations for the three and nine months ended August 31, 2009. All dollar amounts referenced herein are in Canadian dollars unless otherwise noted.
At August 31, 2009, our cash and cash equivalents totaled $4.8 million, compared with $5.8 million at May 31, 2009. Our net cash used in operating activities for the three months ended August 31, 2009, was $1.0 million and included the payment of $0.4 million for fees mainly related to our ongoing strategic review and $0.3 million for restructuring costs.
The net loss for the third quarter of 2009 was $1.2 million, or $0.05 per common share, compared with a net loss of $2.6 million, or $0.12 per common share for the same period in 2008. The $1.2 million loss for the three months ended August 31, 2009 included a charge for fees of $0.7 million mainly related to our ongoing strategic review, which included the cost of the fairness opinion rendered by JMP Securities LLC in connection with the proposed business combination with IntelliPharmaCeutics.
We incurred a net loss for the nine months ended August 31, 2009 of $4.5 million, or $0.20 per common share, compared with a net loss of $15.3 million, or $0.68 per common share for the same period in 2008. The loss for the nine months ended August 31, 2009 has decreased when compared with the same period in 2008 due to the significant restructuring expenditures that were incurred during 2008 and the resulting lower number of employees in 2009. A portion of this decrease also relates to a $1.2 million non-cash provision taken against our clinical supplies during the nine months ended August 31, 2008.
We will conduct a live webcast presentation of our Special Meeting of Shareholders being held at the offices of McCarthy Tétrault, LLP, Suite 5300, Toronto Dominion Bank Tower, 66 Wellington Street West, Toronto, on Monday, October 19, 2009 at 10:00 a.m. ET. To participate via webcast, please go to www.vasogen.com. A re-broadcast of the presentation will be available at www.vasogen.com.
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 include, without limitation, our plans to complete the business combination resulting from our strategic review, which is described in the press release dated August 17, 2009, statements regarding the status of development, or expenditures relating to our business, 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 August 31, 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 and nine months ended August 31, 2009, will be accessible on Vasogen's Website at www.vasogen.com and will be available on SEDAR and EDGAR.
Summary financial tables are provided below.
SOURCE Vasogen Inc.
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At August 31, 2009, our cash and cash equivalents totaled $4.8 million, compared with $5.8 million at May 31, 2009. Our net cash used in operating activities for the three months ended August 31, 2009, was $1.0 million and included the payment of $0.4 million for fees mainly related to our ongoing strategic review and $0.3 million for restructuring costs.
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The net loss for the third quarter of 2009 was $1.2 million, or $0.05 per common share, compared with a net loss of $2.6 million, or $0.12 per common share for the same period in 2008. The $1.2 million loss for the three months ended August 31, 2009 included a charge for fees of $0.7 million mainly related to our ongoing strategic review, which included the cost of the fairness opinion rendered by JMP Securities LLC in connection with the proposed business combination with IntelliPharmaCeutics.
We incurred a net loss for the nine months ended August 31, 2009 of $4.5 million, or $0.20 per common share, compared with a net loss of $15.3 million, or $0.68 per common share for the same period in 2008. The loss for the nine months ended August 31, 2009 has decreased when compared with the same period in 2008 due to the significant restructuring expenditures that were incurred during 2008 and the resulting lower number of employees in 2009. A portion of this decrease also relates to a $1.2 million non-cash provision taken against our clinical supplies during the nine months ended August 31, 2008.
Corporate Update
- On Monday August 17, 2009, Vasogen Inc., IntelliPharmaCeutics Ltd.
("IPC US") and IntelliPharmaCeutics Corp. ("IPC Opco" and together
with IPC US, "IPC") announced that they had entered into an
arrangement agreement, (the "IPC Arrangement Agreement"), which is
subject to shareholder and regulatory approvals, whereby Vasogen will
combine with IPC under a plan of arrangement (the "Plan of
Arrangement") and merger to continue as a publicly-traded entity to
be called IntelliPharmaCeutics International Inc. ("New IPC"). IPC
are privately-held specialty pharmaceutical companies that are
focused on developing and manufacturing new and generic controlled-
release pharmaceutical products using its broadly applicable,
proprietary delivery technologies. Currently, IPC has 15 product
candidates in its development pipeline several of which are partnered
with third-party drug companies. IPC's lead product candidates
include Dexmethylphenidate XR, a generic version of the marketed drug
Focalin XR(R), which is partnered with Par Pharmaceutical and is
currently the subject of an Abbreviated New Drug Application (ANDA)
filing with the U.S. Food and Drug Administration (FDA), and
Carvedilol CR, a generic version of the brand name drug Coreg CR, an
internal pipeline now in pivotal bioequivalence studies.
- On August 17, 2009, we also announced we had entered into an
arrangement agreement, subject to shareholder, unitholder and
regulatory approvals, with Cervus LP (TSXV:CVL.UN), an Alberta based
limited partnership, and its general partner Cervus GP Ltd. (the
"Cervus Arrangement Agreement"), that will reorganize Vasogen prior
to completion of the transaction with IPC pursuant to the Plan of
Arrangement, and which will provide gross proceeds to Vasogen of
approximately $7.5 million in non-dilutive capital.
- On August 11, 2009, the Staff of the NASDAQ Listing Qualifications
Department (the "Staff") notified the Company that it had not
regained compliance with the $1.00 minimum bid price requirement set
forth in Listing Rule 5550 (a)(2). On September 15, 2009, the Staff
further notified Vasogen that it believes the proposed transaction
with IPC is a business combination that will result in a "change of
control" and accordingly, under NASDAQ Listing Rule 5110(a), requires
that the post-combination entity apply and be approved for initial
listing on NASDAQ. Under NASDAQ's rules, if the Staff determines that
the post-combination entity does not qualify for initial listing, it
will be subject to delisting. Accordingly, on September 16, 2009, an
initial listing application was submitted to the NASDAQ Listing
Qualifications Department on behalf of the combined entity; the
application remains pending. On September 23, 2009, the parties
appeared before a NASDAQ Listing Qualifications Panel ("the Panel")
and presented their plan to comply with the minimum bid price
requirement and the initial listing requirements upon consummation of
the transaction. To date, the Panel has not rendered a decision.
Pending the Panel's decision, Vasogen's securities remain listed on
NASDAQ.
- To further reduce the rate at which we use our cash during our
strategic review process, the employment of Graham Neil, our Vice-
President, Finance, and CFO, was terminated effective July 14, 2009.
Mr. Neil has agreed to fulfill the role of CFO, in a consulting
capacity at substantially reduced compensation, to assist the board
of directors (the "Board") in bringing closure to the ongoing
strategic review process.
We will conduct a live webcast presentation of our Special Meeting of Shareholders being held at the offices of McCarthy Tétrault, LLP, Suite 5300, Toronto Dominion Bank Tower, 66 Wellington Street West, Toronto, on Monday, October 19, 2009 at 10:00 a.m. ET. To participate via webcast, please go to www.vasogen.com. A re-broadcast of the presentation will be available at www.vasogen.com.
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 include, without limitation, our plans to complete the business combination resulting from our strategic review, which is described in the press release dated August 17, 2009, statements regarding the status of development, or expenditures relating to our business, 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 August 31, 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 and nine months ended August 31, 2009, will be accessible on Vasogen's Website at 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)
-------------------------------------------------------------------------
August November
31, 2009 30, 2008
-------------------------------------------------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 4,843 $ 8,556
Tax credits recoverable 422 582
Prepaid expenses and deposits 332 188
-------------------------------------------------------------------------
5,597 9,326
Property and equipment 12 16
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$ 5,609 $ 9,342
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-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 286 $ 101
Accrued liabilities 1,047 1,141
-------------------------------------------------------------------------
1,333 1,242
Shareholders' equity
Share capital:
Authorized:
Unlimited common shares, without par value
Issued and outstanding:
22,623,195 common shares (November 30, 2008
- 22,424,719) 365,730 365,677
Warrants 16,725 16,725
Contributed surplus 24,172 23,555
Deficit (402,351) (397,857)
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4,276 8,100
-------------------------------------------------------------------------
$ 5,609 $ 9,342
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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 Nine months ended 1987 to
August 31, August 31, August 31,
2009 2008 2009 2008 2009
-------------------------------------------------------------------------
Expenses:
Research and
development $ 7 $ 1,096 $ 363 $ 8,734 $ 248,074
General and
administration 1,150 1,627 4,594 7,237 129,920
Foreign exchange
loss (gain) 4 (59) 58 (194) 10,723
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Loss before the
undernoted (1,161) (2,664) (5,015) (15,777) (388,717)
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 3 78 34 453 13,872
Change in fair
value of embedded
derivatives - - - - 829
-------------------------------------------------------------------------
Loss and
comprehensive loss
for the period (1,158) (2,586) (4,494) (15,324) (394,908)
Deficit, beginning
of period (401,193) (394,521) (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 $(402,351) $(397,107) $(402,351) $(397,107) $(402,351)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted
loss per common
share $ (0.05) $ (0.12) $ (0.20) $ (0.68)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
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 Nine months ended 1987 to
August 31, August 31, August 31,
2009 2008 2009 2008 2009
-------------------------------------------------------------------------
Cash provided by
(used in):
Operating
activities:
Loss for
the period $ (1,158) $ (2,586) $ (4,494) $ (15,324) $(394,908)
Items not
involving cash:
Amortization 2 191 4 378 6,381
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 51 141 617 692 11,007
Common shares
issued for
services - - - - 2,485
Unrealized
foreign exchange
gain (loss) 4 (98) 56 61 11,475
Other - - - - (35)
Change in non-cash
operating working
capital 114 (348) 156 493 594
-------------------------------------------------------------------------
(987) (2,700) (4,148) (13,700) (344,092)
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 - - - (6) (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 (6) (12,198)
Foreign exchange
gain (loss) on cash
held in foreign
currency (4) 99 (52) (51) (3,467)
-------------------------------------------------------------------------
Increase (decrease) in
cash and cash
equivalents (991) (2,601) (3,713) (13,757) 4,843
Cash and cash
equivalents,
beginning
of period 5,834 12,389 8,556 23,545 -
-------------------------------------------------------------------------
Cash and cash
equivalents, end
of period $ 4,843 $ 9,788 $ 4,843 $ 9,788 $ 4,843
-------------------------------------------------------------------------
-------------------------------------------------------------------------
SOURCE Vasogen Inc.
