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, 2008. All dollar amounts
referenced herein are in Canadian dollars unless otherwise noted.
At August 31, 2008, our cash and cash equivalents totaled $9.8
million, compared with $12.4 million at May 31, 2008. The net loss
for the third quarter of 2008 was $2.6 million, or $0.12 per common
share, compared with a net loss of $5.3 million, or $0.24 per
common share for the same period in 2007. We incurred a net loss
for the nine months ended August 31, 2008 of $15.3 million, or
$0.68 per common share, compared with a net loss of $22.7 million,
or $1.21 per common share for the same period in 2007. Our net loss
included restructuring costs for the three months and nine months
ended August 31, 2008 of $0.8 million and $3.1 million,
respectively. In addition to the cost savings from the termination
of our lease, as discussed below, we expect a further reduction of
infrastructure and other support costs associated with the
facility. A key driver of our decreased loss in both these periods
was lower salary and benefit 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. In addition,
during the nine months ended August 31, 2008, the decrease was
impacted by a reduction in expenses resulting from the repayment of
the senior convertible notes in April 2007. Corporate Update - On
July 3, 2008, we announced the implementation of additional
restructuring plans to further reduce our cash burn rate while we
continued to explore strategic corporate alternatives with the goal
of enhancing shareholder value. As part of this restructuring, we
reduced the number of full-time employees to six and materially
reduced expenses associated with the VP series of drugs. - As at
August 31, 2008, Vasogen had cash and cash equivalents of $9.8
million and had 22.4 million shares outstanding. Our net cash used
in operating activities for the three months ended August 31, 2008,
was $2.7 million, which included restructuring costs of $1.4
million. Other than our accounts payable and accrued liabilities we
do not have any debt. - During the quarter, our Board of Directors
reviewed a number of nonbinding proposals that were submitted to
the Company as part of our ongoing strategic review process. We are
undertaking a review and due diligence process to finalize which of
these options, if any, to proceed with. Concurrent with this
assessment, the Board is continuing to consider other strategic
alternatives including the monetization of certain tangible and/or
intangible assets of the Company, as well as the out-licensing of
assets, potential asset divestiture, winding up, or liquidation of
the Company. - During the quarter, we had further communications
with the FDA regarding the use of a Bayesian approach for ACCLAIM
II and while we feel that we have addressed the issues raised by
the agency, they have given no indication that they are considering
changing their view. As a result, pending the outcome of our
current strategic review process we are not planning any additional
communications with the FDA regarding the design of ACCLAIM II. -
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 completed a lease surrender
agreement with our landlord. As a result, our lease for this
facility terminated on September 30, 2008 and our new corporate
address is 4 Robert Speck Parkway, 15th Floor, Mississauga,
Ontario, L4Z 1S1. 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 complete
a sale, merger, acquisition, or other strategic alternative,
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. 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, 2007, as well as in our
later public filings, including our Management's Discussion and
Analysis for the quarter ended August 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 nine months ended August 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)
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August 31, November 30, 2008 2007
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(Unaudited) Assets Current assets: Cash and cash equivalents $
9,788 $ 23,545 Clinical supplies - 1,363 Tax credits recoverable
577 1,565 Prepaid expenses and deposits 261 787 Change in fair
value of forward foreign exchange contracts - 376
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10,626 27,636 Property and equipment 42 414
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$ 10,668 $ 28,050
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Liabilities and Shareholders' Equity Current liabilities: Accounts
payable $ 617 $ 1,175 Accrued liabilities 1,327 3,519
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1,944 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 23,436 22,744
Deficit (397,107) (381,783)
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8,724 23,356
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$ 10,668 $ 28,050
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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)
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Period from December 1, Three months ended Nine months ended 1987
to August 31, August 31, August 31, 2008 2007 2008 2007 2008
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Expenses: Research and development $ 1,096 $ 2,588 $ 8,734 $ 9,347
$ 247,651 General and administration 1,627 2,887 7,237 11,363
124,465 Foreign exchange loss (gain) (59) 242 (194) 1,200 10,776
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Loss before the undernoted (2,664) (5,717) (15,777) (21,910)
(382,892) Interest expense on senior convertible notes payable - -
- (5) (1,279) Accretion in carrying value of senior convertible
notes payable - - - (728) (10,294) Amortization of deferred
financing costs - - - (154) (3,057) Loss on extinguishment of
senior convertible notes payable - - - (1,754) (6,749) Investment
income 78 370 453 1,003 13,778 Change in fair value of embedded
derivatives - - - 829 829
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Loss and comprehensive loss for the period (2,586) (5,347) (15,324)
(22,719) (389,664) Deficit, beginning of period: As originally
reported (394,521) (370,378) (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)
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As revised (394,521) (370,378) (381,783) (353,006) (7,148) Charge
for acceleration payments on equity component of senior convertible
notes payable - - - - (295)
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Deficit, end of period $(397,107) $(375,725) $(397,107) $(375,725)
$(397,107)
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Basic and diluted loss per share $ (0.12) $ (0.24) $ (0.68) $
(1.21) $ -
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VASOGEN INC. (A DEVELOPMENT STAGE COMPANY) Interim Consolidated
Statements of Cash Flows (In thousands of Canadian dollars)
(Unaudited)
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Period from December 1, Three months ended Nine months ended 1987
to August 31, August 31, August 31, 2008 2007 2008 2007 2008
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Cash provided by (used in): Operating activities: Loss for the
period $ (2,586) $ (5,347) $ (15,324) $ (22,719) $(389,664) Items
not involving cash: Amortization 191 125 378 378 6,536 Accretion in
carrying value of senior convertible notes payable - - - 728 10,294
Amortization of deferred financing costs - - - 154 3,057 Loss on
extinguishment of senior convertible notes payable - - - 1,754
6,749 Change in fair value of embedded derivatives - - - (829)
(829) Stock-based compensation 141 164 692 1,615 10,271 Common
shares issued for services - - - - 2,485 Unrealized gain on forward
foreign exchange contract - - - - (376) Unrealized foreign exchange
loss (gain) (98) 227 61 1,454 11,604 Other - - - - (35) Change in
non-cash operating working capital (348) 413 493 (3,890) 1,446
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(2,700) (4,418) (13,700) (21,355) (338,462) Financing activities:
Shares and warrants issued for cash - - - 17,345 326,358 Warrants
exercised for cash - - - - 16,941 Options exercised for cash - - -
- 7,669 Share issue costs - - - (1,440) (24,646) Issue (repayment)
of senior convertible notes payable, - - - (924) 38,512 Cash
released from restriction - 3,078 - 6,403 - Paid to related parties
- - - - (234)
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- 3,078 - 21,384 364,600 Investing activities: Purchases of
property and equipment - (8) (6) (49) (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
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- (8) (6) (39) (12,747) Foreign exchange gain (loss) on cash held
in foreign currency 99 (227) (51) (1,296) (3,603)
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Increase (decrease) in cash and cash equivalents (2,601) (1,575)
(13,757) (1,306) 9,788 Cash and cash equivalents, beginning of
period 12,389 30,696 23,545 30,427 -
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Cash and cash equivalents, end of period $ 9,788 $ 29,121 $ 9,788 $
29,121 $ 9,788
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DATASOURCE: Vasogen Inc. CONTACT: Glenn Neumann, Investor
Relations, 4 Robert Speck Parkway, 15th Floor, Mississauga, ON, L4Z
1S1, tel: (905) 817-2004, fax: (905) 847-6270,
http://www.vasogen.com/,
Copyright