N@N

Vasogen Announces Third Quarter 2009 Results

^{Published on 2009-10-15 04:07:18 - Market Wire}
 

 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. 

 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 ------------------------------------------------------------------------- $ 5,609 $ 9,342 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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) ------------------------------------------------------------------------- 4,276 8,100 ------------------------------------------------------------------------- $ 5,609 $ 9,342 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- -------------------------------------------------------------------------