MISSISSAUGA, ON, July 14 /PRNewswire-FirstCall/ -- Vasogen Inc.
(NASDAQ:VSGN; TSX:VAS) today reported the results of operations for
the three and six months ended May 31, 2009. All dollar amounts
referenced herein are in Canadian dollars unless otherwise noted.
At May 31, 2009, our cash and cash equivalents totaled $5.8
million, compared with $7.3 million at February 28, 2009. Our net
cash used in operating activities for the three and six months
ended May 31, 2009, was $1.4 million and $3.2 million,
respectively, compared with $7.6 million and $11.0 million for the
same periods in 2008. The $1.4 million of net cash used in
operating activities for the three months ended May 31, 2009
included the payment of $0.6 million in accounts payable and
accrued liabilities that were outstanding as at February 28, 2009
and $0.4 million in one-time payments for our insurance programs
which should provide the necessary coverage in the event that our
strategic review process results in our Company being sold, merged,
acquired, dissolved, or liquidated. The net loss for the second
quarter of 2009 was $1.4 million, or $0.06 per common share,
compared with a net loss of $7.4 million, or $0.33 per common share
for the same period in 2008. The $1.4 million loss for the three
months ended May 31, 2009 included a charge for restructuring costs
of $0.5 million, professional fees, mainly related to our ongoing
strategic review, of $0.3 million, the amortization of insurance
that has been previously paid in the amount of $0.1 million, and a
non-cash stock compensation expense of $0.1 million during the
second quarter of 2009. We incurred a net loss for the six months
ended May 31, 2009 of $3.3 million, or $0.15 per common share,
compared with a net loss of $12.7 million, or $0.57 per common
share for the same period in 2008. The loss for the three and six
months ended May 31, 2009 has decreased when compared with the same
periods in 2008 due to the significant expenditures that were
incurred during the 2008 periods to implement the restructuring
that was announced on April 14, 2008. A portion of this decrease
also relates to a $1.2 million non-cash provision taken against our
clinical supplies during the three and six months ended May 31,
2008. This decrease is also 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. Corporate Update - 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 in bringing closure to
the ongoing strategic review process. As a result of this
termination the number of full-time employees has been reduced to
one. - On April 24, 2009, we announced that Dr. Eldon R. Smith
would succeed Terrance H. Gregg as Chairman of our Board of
Directors due to the retirement of Mr. Gregg. Mr. Gregg's
resignation from our Board is due to the requirements of his role
as President and CEO of DexCom, Inc. In connection with his
appointment, Dr. Smith's position as our Senior Vice President,
Scientific Affairs and Chief Medical Officer was terminated. -
Pursuant to our restructuring plan, our Board of Directors and
Management had 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. The process involved
narrowing down the number of third-party proposals. At this time,
we are in the process of negotiating agreements that may result in
one or more transactions with regard to the foregoing. There can be
no assurances that we will be able to finalize any such agreements.
The Board will also consider alternatives to these that it has also
been evaluating. The Board will continue to assess the merits of
these options relative to liquidating the Company and distributing
the remaining cash to the shareholders. 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, 2009, will be accessible on Vasogen's website at
http://www.vasogen.com/ and will be available on SEDAR and EDGAR.
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 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 May 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. Summary financial tables are provided
below. VASOGEN INC. (A DEVELOPMENT STAGE COMPANY) Interim
Consolidated Balance Sheets (In thousands of Canadian dollars) May
November 31, 30, 2009 2008
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(Unaudited) Assets Current assets: Cash and cash equivalents $
5,834 $ 8,556 Tax credits recoverable 427 582 Prepaid expenses and
deposits 396 188
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6,657 9,326 Property and equipment 14 16
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$ 6,671 $ 9,342
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Liabilities and Shareholders' Equity Current liabilities: Accounts
payable $ 303 $ 101 Accrued liabilities 985 1,141
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1,288 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 24,121 23,555
Deficit (401,193) (397,857)
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5,383 8,100
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$ 6,671 $ 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 Six months
ended 1987 to May 31, May 31, May 31, 2009 2008 2009 2008 2009
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Expenses: Research and development $ 320 $ 4,860 $ 356 $ 7,638 $
248,067 General and administration 998 2,929 3,444 5,610 128,770
Foreign exchange loss (gain) 84 (338) 54 (135) 10,719
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Loss before the undernoted (1,402) (7,451) (3,854) (13,113)
(387,556) 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 7 33 31 375 13,869 Change in fair value of
embedded derivatives - - - - 829
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Loss and comprehensive loss for the period (1,395) (7,418) (3,336)
(12,738) (393,750) Deficit, beginning of period (399,798) (387,103)
(397,857) (381,783) (1,510) Impact of change in accounting for
stock-based compensation - - - - (1,632) Impact of change in
accounting for financial instruments - - - - (4,006) Charge for
acceleration payments on equity component of senior convertible
notes payable - - - - (295)
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Deficit, end of period $(401,193) $(394,521) $(401,193) $(394,521)
$(401,193)
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Basic and diluted loss per common share $ (0.06) $ (0.33) $ (0.15)
$ (0.57)
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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, 2009 2008 2009 2008 2009
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Cash provided by (used in): Operating activities: Loss for the
period $ (1,395) $ (7,418) $ (3,336) $ (12,738) $(393,750) Items
not involving cash: Amortization - 125 2 187 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 150 316
566 551 10,956 Common shares issued for services - - - - 2,485
Unrealized foreign exchange gain (loss) 90 (33) 52 159 11,471 Other
- - - - (35) Change in non-cash operating working capital (257)
(557) 42 841 480
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(1,412) (7,567) (3,161) (11,000) (343,105) 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)
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- - - - 364,600 Investing activities: Purchases of property and
equipment - (6) - (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
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- (6) 487 (6) (12,198) Foreign exchange gain (loss) on cash held in
foreign currency (87) 32 (48) (150) (3,463)
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Increase (decrease) in cash and cash equivalents (1,499) (7,541)
(2,722) (11,156) 5,834 Cash and cash equivalents, beginning of
period 7,333 19,930 8,556 23,545 -
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Cash and cash equivalents, end of period $ 5,834 $ 12,389 $ 5,834 $
12,389 $ 5,834
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DATASOURCE: 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/,
Copyright