MISSISSAUGA, ON, Feb. 27 /PRNewswire-FirstCall/ -- Vasogen Inc.
(NASDAQ:VSGN; TSX:VAS) today reported the results of operations for
the fiscal year ended November 30, 2008. All dollar amounts
referenced herein are in Canadian dollars unless otherwise noted.
At November 30, 2008, our cash and cash equivalents totaled $8.6
million, compared with $23.5 million at November 30, 2007 and $9.8
million at August 31, 2008. As of January 31, 2009, our cash
balance was $8.5 million. The net loss for the fourth quarter of
2008 was $0.8 million, or $0.03 per common share. We incurred a net
loss for the year ended November 30, 2008 of $16.1 million, or
$0.72 per common share, compared with a net loss of $28.8 million,
or $1.46 per common share for the same period in 2007. A key driver
of this decrease was lower compensation 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 period. In
addition, the decrease was impacted by a reduction in expenses
resulting from the repayment of the senior convertible notes in
April 2007. Corporate Update - During 2008, we implemented our
restructuring plan to significantly reduce the rate at which we use
our cash and to focus our efforts on opportunities that the Board
and Management believe are most likely to provide shareholder
value. As a result, we discontinued maintaining the necessary
quality processes and personnel to support European
commercialization and any clinical development of our Celacade
technology, materially reduced expenses associated with the VP
series of drugs, and reduced the number of full-time employees from
104 to six. We also retained JMP Securities LLC to assist in
exploring potential strategic alternatives. 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, Chris Waddick, our
President and CEO, will be terminated effective March 1, 2009. Mr.
Waddick has agreed to fulfill the role of CEO, in a consulting
capacity at a 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 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 part of our restructuring, a new tenant was secured for our
37,111 sq. ft. leased facility located at 2505 Meadowvale Boulevard
in Mississauga, Ontario, and we 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. - 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 US$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 were provided a compliance period of 180
calendar days, or until October 21, 2008, to regain compliance with
this requirement. In October 2008, the NASDAQ Stock Market had
suspended the enforcement of the rules requiring a minimum US$1.00
closing price until January 20, 2009. Subsequently, on December 9,
2008, the NASDAQ extended this suspension. Accordingly, the NASDAQ
will not take action to delist any security, including our shares,
for a violation of the minimum bid price rule during the
suspension, which now has been extended until April 20, 2009. - As
at November 30, 2008, we had cash and cash equivalents of $8.6
million and had 22.4 million common shares issued and outstanding.
Other than our accounts payable and accrued liabilities we do not
have any debt. As of January 31, 2009, our cash balance was $8.5
million. - Subsequent to November 30, 2008 we entered into an
agreement to sell 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 its Celacade System. 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, as well as in our other public
filings, including our Management's Discussion and Analysis for the
year ended November 30, 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
consolidated financial statements, accompanying notes to the
consolidated financial statements, and Management's Discussion and
Analysis for the year ended November 30, 2008, will be accessible
on Vasogen's web site at http://www.vasogen.com/ and will be
available on SEDAR and EDGAR. Financial statements are provided
below Vasogen Inc. (A DEVELOPMENT STAGE COMPANY) Consolidated
Balance Sheets (In thousands of Canadian dollars) November 30, 2008
and 2007
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2008 2007
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Assets Current assets: Cash and cash equivalents $ 8,556 $ 23,545
Clinical supplies - 1,363 Tax credits recoverable 582 1,565 Prepaid
expenses and deposits 188 787 Change in fair value of forward
foreign exchange contracts - 376
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9,326 27,636 Property and equipment 16 414
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$ 9,342 $ 28,050
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Liabilities and Shareholders' Equity Current liabilities: Accounts
payable $ 101 $ 1,175 Accrued liabilities 1,141 3,519
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1,242 4,694 Shareholders' equity Share capital: Authorized:
Unlimited common shares, without par value Issued and outstanding:
22,424,719 common shares (2007 - 22,391,386) 365,677 365,670
Warrants 16,725 16,725 Contributed surplus 23,555 22,744 Deficit
(397,857) (381,783)
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8,100 23,356 $ 9,342 $ 28,050
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VASOGEN INC. (A DEVELOPMENT STAGE COMPANY) Consolidated Statements
of Operations, Deficit and Comprehensive Income (In thousands of
Canadian dollars, except per share amounts)
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Period from December 1, 1987 to Years ended November 30, November
30, 2008 2007 2006 2008
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Expenses: Research and development $ 8,794 $ 12,039 $ 32,732 $
247,711 General and administration 8,098 14,259 19,251 125,326
Foreign exchange loss (gain) (305) 1,977 104 10,665
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Loss before the undernoted (16,587) (28,275) (52,087) (383,702)
Interest expense on senior convertible notes payable - (5) (930)
(1,279) Accretion in carrying value of senior convertible notes
payable - (728) (7,824) (10,294) Amortization of deferred financing
costs - (154) (2,495) (3,057) Loss on extinguishment of senior
convertible notes payable - (1,754) (4,995) (6,749) Investment
income 513 1,310 1,971 13,838 Change in fair value of embedded
derivatives - 829 - 829
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Loss and comprehensive loss for the period (16,074) (28,777)
(66,360) (390,414) Deficit, beginning of period: As originally
reported (381,783) (351,374) (284,719) (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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revised (381,783) (353,006) (284,719) Charge for acceleration
payments on equity component of senior convertible notes payable -
- (295) (295)
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Deficit, end of period $ (397,857) $ (381,783) $ (351,374) $
(397,857)
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Basic and diluted loss per common share $ (0.72) $ (1.46) $ (7.05)
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VASOGEN INC. (A DEVELOPMENT STAGE COMPANY) Consolidated Statements
of Cash Flows (In thousands of Canadian dollars)
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Period from December 1, 1987 to Years ended November 30, November
30, 2008 2007 2006 2008
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Cash provided by (used in): Operating activities: Loss for the
period $ (16,074) $ (28,777) $ (66,360) $ (390,414) Items not
involving cash: Amortization 217 503 782 6,377 Loss on disposition
of property and equipment 125 - - 125 Accretion in carrying value
of senior convertible notes payable - 728 7,824 10,294 Amortization
of deferred financing costs - 154 2,495 3,057 Loss on
extinguishment of senior convertible notes payable - 1,754 4,995
6,749 Change in fair value of embedded derivatives - (829) - (829)
Stock-based compensation 811 1,995 3,083 10,390 Common shares
issued for services - - 36 2,485 Unrealized gain on forward foreign
exchange contract 376 (376) - - Unrealized foreign exchange loss
(gain) (124) 2,566 (65) 11,419 Other - - - (35) Change in non-cash
operating working capital (513) (3,535) (17,158) 438
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(15,182) (25,817) (64,368) (339,944) Financing activities: Shares
and warrants issued for cash - 17,345 23,106 326,358 Warrants and
options exercised for cash - - - 24,610 Share issue costs - (1,440)
(2,221) (24,646) Issue (repayment) of senior convertible notes
payable, net - (924) (3,976) 38,512 Cash released from restriction
- 6,403 5,298 - Paid to related parties - - - (234)
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- 21,384 22,207 364,600 Investing activities: Purchases of acquired
technology - - - (1,283) Purchases of property and equipment (6)
(49) (23) (2,471) Proceeds from disposition of property and
equipment 62 - - 62 Purchases of marketable securities - - (80)
(244,846) Settlement of forward foreign exchange contracts - 10
(102) (4,824) Maturities of marketable securities - - 23,079
240,677
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56 (39) 22,874 (12,685) Foreign exchange gain (loss) on cash held
in foreign currency 137 (2,410) (807) (3,415)
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Increase (decrease) in cash and cash equivalents (14,989) (6,882)
(20,094) 8,556 Cash and cash equivalents, beginning of period
23,545 30,427 50,521 -
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Cash and cash equivalents, end of period $ 8,556 $ 23,545 $ 30,427
$ 8,556
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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/
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