MISSISSAUGA, ON, July 9 /PRNewswire-FirstCall/ -- Vasogen Inc.
(NASDAQ:VSGN; TSX:VAS) today reported the results of operations for
the three and six months ended May 31, 2008. All dollar amounts
referenced herein are in Canadian dollars unless otherwise noted.
At May 31, 2008, our cash and cash equivalents totaled $12.4
million, compared with $19.9 million at February 29, 2008. The net
loss for the second quarter of 2008 was $7.4 million, or $0.33 per
common share, compared with a net loss of $9.7 million, or $0.54
per common share for the same period in 2007. We incurred a net
loss for the six months ended May 31, 2008 of $12.7 million, or
$0.57 per common share, compared with a net loss of $17.4 million,
or $1.02 per common share for the same period in 2007. A key driver
of this decrease was a reduction in expenses resulting from the
repayment of the senior convertible notes in April 2007, lower
restructuring costs, reduced stock compensation expense, lower
infrastructure and other support costs driven by lower employee
numbers in 2008, and a decrease in the foreign exchange loss that
was incurred in the prior periods. Corporate Update - On April 14,
2008, we announced the implementation of a strategic restructuring
plan to significantly reduce our cash burn rate and focus our
efforts on opportunities that the Board and Management believe are
most likely to provide shareholder value. As a result of this
restructuring, our work force was reduced by approximately 85%
during the quarter. As a result, we are no longer maintaining the
necessary quality processes or personnel to support European
commercialization or clinical development of Celacade. We also
retained JMP Securities to assist in exploring potential strategic
alternatives with the goal of enhancing shareholder value. -
Subsequent to the end of our second quarter and following an
extensive review of our VP series of drugs program, we announced a
halt to the expenses associated with the VP program, including an
additional reduction in our work force, to further reduce our cash
burn rate as we continue to explore strategic alternatives. - As
part of our restructuring, a new tenant has been secured for our
37,111 sq. ft. leased facility located at 2505 Meadowvale Boulevard
in Mississauga, Ontario, and we have negotiated a lease surrender
agreement with our landlord. As a result, our lease for this
facility will terminate on September 30, 2008. - On April 24, 2008,
we received a letter from the Listing Qualifications Department of
The NASDAQ Stock Market indicating that the minimum closing bid
price of our common stock had fallen below $1.00 for 30 consecutive
trading days, and therefore, we were not in compliance with
Marketplace Rule 4310(c)(4) (the "Rule"). In accordance with the
NASDAQ Marketplace Rule 4310(c)(8)(D), we are provided a compliance
period of 180 calendar days, or until October 21, 2008, to regain
compliance with this requirement. 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 resume operations, to advance the development of 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.
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 halting development of the
Celacade System and VP series of drugs, 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, 2007, as well as in our
later public filings, including our Management's Discussion and
Analysis for the quarter ended May 31, 2008. 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 six months ended May 31, 2008, 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)
-------------------------------------------------------------------------
May 31, November 30, 2008 2007
-------------------------------------------------------------------------
(Unaudited) Assets Current assets: Cash and cash equivalents $
12,389 $ 23,545 Clinical supplies - 1,363 Tax credits recoverable
580 1,565 Prepaid expenses and deposits 500 787 Change in fair
value of forward foreign exchange contracts - 376
-------------------------------------------------------------------------
13,469 27,636 Property and equipment 234 414
-------------------------------------------------------------------------
$ 13,703 $ 28,050
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity Current liabilities: Accounts
payable $ 349 $ 1,175 Accrued liabilities 2,185 3,519
-------------------------------------------------------------------------
2,534 4,694 Shareholders' equity: Share capital: Authorized:
Unlimited common shares, without par value Issued and outstanding:
22,391,386 common shares (November 30, 2007 - 22,391,386) 365,670
365,670 Warrants 16,725 16,725 Contributed surplus 23,295 22,744
Deficit (394,521) (381,783)
-------------------------------------------------------------------------
11,169 23,356
-------------------------------------------------------------------------
$ 13,703 $ 28,050
-------------------------------------------------------------------------
-------------------------------------------------------------------------
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 Six months ended 1987 to
May 31, May 31, May 31, 2008 2007 2008 2007 2008
-------------------------------------------------------------------------
Expenses: Research and development $ 4,860 $ 3,736 $ 7,638 $ 6,759
$ 246,555 General and administration 2,929 4,888 5,610 8,476
122,838 Foreign exchange loss (gain) (338) 1,092 (135) 958 10,835
-------------------------------------------------------------------------
Loss before the undernoted (7,451) (9,716) (13,113) (16,193)
(380,228) Interest expense on senior convertible notes payable - -
- (5) (1,279) Accretion in carrying value of senior convertible
notes payable - (36) - (728) (10,294) Amortization of deferred
financing costs - (9) - (154) (3,057) Loss on extinguishment of
senior convertible notes payable - (470) - (1,754) (6,749)
Investment income 33 281 375 633 13,700 Change in fair value of
embedded derivatives - 256 - 829 829
-------------------------------------------------------------------------
Loss and comprehensive loss for the period (7,418) (9,694) (12,738)
(17,372) (387,078) Deficit, beginning of period: As originally
reported (387,103) (360,684) (381,783) (351,374) (1,510) Impact of
change in accounting for stock-based compensation - - - - (4,006)
Impact of change in accounting for financial instruments on
December 1, 2006 - - - (1,632) (1,632)
---------------------------------------------------------- As
revised (387,103) (360,684) (381,783) (353,006) Charge for
acceleration payments on equity component of senior convertible
notes payable - - - - (295)
-------------------------------------------------------------------------
Deficit, end of period $(394,521) $(370,378) $(394,521) $(370,378)
$(394,521)
-------------------------------------------------------------------------
Basic and diluted loss per common share $ (0.33) $ (0.54) $ (0.57)
$ (1.02) $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
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 Six months ended 1987 to
May 31, May 31, May 31, 2008 2007 2008 2007 2008
-------------------------------------------------------------------------
Cash provided by (used in): Operating activities: Loss for the
period $ (7,418) $ (9,694) $ (12,738) $ (17,372) $(387,078) Items
not involving cash: Amortization 125 127 187 253 6,347 Accretion in
carrying value of senior convertible notes payable - 36 - 728
10,294 Amortization of deferred financing costs - 9 - 154 3,057
Loss on extinguishment of senior convertible notes payable - 470 -
1,754 6,749 Change in fair value of embedded derivatives - (256) -
(829) (829) Stock-based compensation 316 890 551 1,453 10,130
Common shares issued for services - - - - 2,485 Unrealized gain on
forward foreign exchange contract - - - - (376) Unrealized foreign
exchange loss (gain) (33) 1,326 159 1,226 11,702 Other - - - - (35)
Change in non-cash operating working capital (557) (829) 841
(4,304) 1,792
-------------------------------------------------------------------------
(7,567) (7,921) (11,000) (16,937) (335,762) Financing activities:
Shares and warrants issued for cash - 17,345 - 17,345 326,358
Warrants exercised for cash - - - - 16,941 Options exercised for
cash - - - - 7,669 Share issue costs - (1,443) - (1,440) (24,646)
Issue (repayment) of senior convertible notes payable, net - (289)
- (924) 38,512 Cash released from restriction - 289 - 3,325 - Paid
to related parties - - - - (234)
-------------------------------------------------------------------------
- 15,902 - 18,306 364,600 Investing activities: Purchases of
property and equipment (6) (11) (6) (41) (2,471) Purchases of
acquired technology - - - - (1,283) Purchases of marketable
securities - - - - (244,846) Settlement of forward foreign exchange
contracts - - - 10 (4,824) Maturities of marketable securities - -
- - 240,677
-------------------------------------------------------------------------
(6) (11) (6) (31) (12,747) Foreign exchange gain (loss) on cash
held in foreign currency 32 (1,349) (150) (1,069) (3,702)
-------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents (7,541) 6,621
(11,156) 269 12,389 Cash and cash equivalents, beginning of period
19,930 24,075 23,545 30,427 -
-------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 12,389 $ 30,696 $ 12,389
$ 30,696 $ 12,389
-------------------------------------------------------------------------
-------------------------------------------------------------------------
DATASOURCE: Vasogen Inc. CONTACT: Glenn Neumann, Investor
Relations, 2505 Meadowvale Blvd, Mississauga, ON, Canada, L5N 5S2,
tel: (905) 817-2004, fax: (905) 569-9231, http://www.vasogen.com/,
Copyright