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Akela Pharma reports results the three months and year ended 2009 and files its fourth default status report

^{Published on 2010-05-31 17:20:10 - Market Wire}
 

 During the past year, the Company has achieved the following: - On February 9, 2009 we announced the implementation of measures to cut costs and preserve cash. The reduction in costs targeted the Pharmaceutical Development programs as well as, PharmaForm. The measures were taken to allow sufficient time for the completion of ongoing financing and M&A efforts. - On March 10, 2009, the Company agreed to accept a payment of $2,000 Cdn ($1,563 US) and 500,000 common share purchase warrants with an exercise price of $0.50 Cdn ($0.39 US) from LAB Research Inc. (LRI) as full and final settlement of its lawsuit relating to a failed Fentanyl TAIFUN(R) toxicology study. - On May 21, 2009, we acquired all of the issued and outstanding securities of Nventa Biopharmaceuticals Corporation ("Nventa") by way of plan of arrangement (the "Arrangement") under the Business Corporations Act (British Columbia). Bob Rieder and Greg McKee were appointed to our Board of Directors. - On June 26, a new Board was elected consisting of Gordon Busenbark, Michael Lagueux, Raj Maheshwari, Greg McKee, Bob Rieder, Robert Williams - On September 2, 2009, Akela announced a change in leadership with the appointment of Greg McKee to the position of President and Chief Executive Officer and Robert Rieder to the position of Chairman of the Board of Directors. - On September 3, 2009, we announced a comprehensive corporate restructuring designed to achieve several operational objectives. As part of its efforts to preserve its ability to execute on its development strategy for Fentanyl TAIFUN(R) and to optimize the infrastructure required to support its PharmaForm clients, the Company reduced its head count by 32 employees to a workforce of 65. Further, Akela announced the closure of its international operations and the centralization of the Company's operational headquarters in Austin, Texas. - During the first quarter of 2010, we began negotiating the sale of our contract service operations, PharmaForm. Proceeds from this disposition, will be dedicated to the reduction of the Company's outstanding liabilities. Remaining funds will be utilized in the further advancement of Fentanyl TAIFUN(R). - On February 4, 2010 Akela announced the outcomes of two legal cases involving former employees. In Michael Crowley v. Formulation Technologies, LLC d/b/a PharmaForm, the arbitrator found in favour of Mr. Crowley. As a result, Mr. Crowley has been awarded $325 for payment under Mr. Crowley's employment agreement, commissions and vacation accruals earned over his employment period, partial payment of Mr. Crowley's legal fees and Mr. Crowley's out-of-pocket expenses. - On February 4, 2010 Akela also announced in the matter of Stephen Lermer v. Akela Pharma Inc. and Formulation Technologies, LLC d/b/a PharmaForm, a jury sided with Mr. Lermer and awarded him $189 in severance pay and approximately $47 in vacation pay earned during the period which he was employed by the company. The judgment was solely against Akela Pharma. On May 11, 2010, Akela announced the The District Court of Travis County, Texas issued an Order Denying Plaintiff's Motion for Judgment and issued a final judgment in the legal case involving former employee Stephen Lermer. The May 11, 2010 ruling reduced the judgment and previous award by $189 disallowing the claim of severance to Mr. Lermer. - On February 11, 2010, Akela achieved a near term development milestone in the pharmaceutical development of the Fentanyl TAIFUN(R) inhaler (the "Product"). The milestone achievement was related to Akela's Fentanyl TAIFUN(R) license and co-development agreement with Teikoku Seiyaku Co. Ltd which was amended in June 2009 in order to advance certain milestone payments to support the continued development of the Product. - On April, 16, 2010 Akela announced that PharmaForm reached agreement with HEP Davis Spring, L.P. to terminate its lease for a planned new laboratory facility located at 9825 Spectrum Drive, Austin, Texas, eliminating $14,481 in future lease payment obligations to the Company. As part of the agreement, Akela released $937 of funds from an associated cash secured letter-of-credit. Akela also undertook to issue 1,250,000 common shares and assumed an obligation to pay HEP Davis Spring, L.P. in monthly instalments of $10 through March 2020. 

 AKELA PHARMA INC. Consolidated Balance Sheets As at December 31st (in thousands of US dollars) ------------------------------------------------------------------------- ------------------------------------------------------------------------- 2009 2008 ------------------------------------------------------------------------- Assets Current assets: Cash $ 107 $ 2,345 Restricted cash 938 600 Accounts receivable 1,679 6,070 Prepaid expenses and other current assets 417 346 ----------------------------------------------------------------------- 3,141 9,361 Restricted cash and deposits - 1,258 Property and equipment 4,217 5,229 Intangible assets - 4,755 Goodwill - 6,457 Other assets 598 1,397 ------------------------------------------------------------------------- $ 7,956 $ 28,457 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders' Deficiency Current liabilities: Accounts payable and accrued liabilities $ 7,801 $ 7,307 Deferred revenue 2,795 4,515 Current portion of long-term debt 1,015 1,311 ----------------------------------------------------------------------- 11,611 13,133 Deferred revenue 14,630 16,266 Long-term debt 6,615 4,894 Income taxes 799 610 Shareholders' deficiency: Common shares (unlimited authorized, 30,890,338 and 21,655,577 common shares issued and outstanding with no par value at December 31, 2009 and December 31, 2008, respectively) 67,544 66,346 Warrants 2,954 2,814 Additional paid-in capital 8,511 8,105 Accumulated other comprehensive income 3,110 3,110 Deficit (107,818) (86,821) ----------------------------------------------------------------------- Total shareholders' deficiency (25,699) (6,446) Commitments, contingencies and guarantees ------------------------------------------------------------------------- $ 7,956 $ 28,457 ------------------------------------------------------------------------- ------------------------------------------------------------------------- See accompanying notes to audited consolidated financial statements. AKELA PHARMA INC. Consolidated Statements of Operations and Comprehensive Loss Periods ended December 31st (in thousands of US dollars, except share and per share data) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended Year ended December 31, December 31, ----------------------------------------------- 2009 2008 2009 2008 ------------------------------------------------------------------------- Revenues $ 3,048 $ 3,527 $ 13,893 $ 14,774 Expenses: Direct costs 1,773 2,132 8,158 7,730 Selling, general and administrative 1,667 1,618 6,183 7,103 Research and development 1,019 2,934 3,711 11,563 Stock-based compensation 37 93 238 477 Depreciation of property and equipment 342 461 1,464 1,866 Amortization of intangible assets 424 715 1,693 2,875 Interest on long-term debt 81 46 268 158 Unrealized loss on securities held for trading 92 - 23 - Foreign exchange loss (188) 473 600 471 ----------------------------------------------------------------------- 5,247 8,472 22,338 32,243 Loss before under noted items (2,199) (4,945) (8,445) (17,469) Other (expenses) income: Settlement with LRI - - 1,664 - Impairment of goodwill, intangible and other assets (9,601) (9,635) (9,601) (9,635) Lease termination (1,936) - (1,936) - Provision for repayment of government grants - - (1,544) - Restructuring (263) - (1,071) - ----------------------------------------------------------------------- Loss before income taxes (13,999) (14,580) (20,933) (27,104) (Provision for) recovery of income taxes: Current (64) - (64) - Future - 976 - 1,115 ----------------------------------------------------------------------- (64) 976 (64) 1,115 ------------------------------------------------------------------------- Net loss and comprehensive loss $ (14,063) $ (13,604) $ (20,997) $ (25,989) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted net loss per share $ (0.46) $ (0.63) $ (0.77) $ (1.35) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted weighted average number of shares outstanding 30,890,338 21,615,577 27,283,487 19,276,943 ------------------------------------------------------------------------- ------------------------------------------------------------------------- See accompanying notes to audited consolidated financial statements. AKELA PHARMA INC. Consolidated Statements of Cash Flows Periods ended December 31st (in thousands of US dollars) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended Year ended December 31, December 31, ----------------------------------------------- 2009 2008 2009 2008 ------------------------------------------------------------------------- Cash flows from operating activities: Net loss $ (14,063) $ (13,604) $ (20,997) $ (25,989) Adjustments for: Depreciation of property and equipment 342 461 1,464 1,866 Amortization of intangible assets 424 715 1,693 2,875 Impairment of intangible and other assets 9,601 9,635 9,601 9,635 Lease termination 1,936 - 1,936 - Provision for repayment of government grants - - 1,544 - Restructuring 153 - 471 - Settlement with LRI - - (101) - Stock-based compensation 37 93 238 477 Unrealized foreign exchange loss (29) (48) 649 54 Unrealized loss on securities held for trading 92 - 23 - Income taxes 64 (976) 64 (1,115) Net changes in working capital 607 2,825 1,653 5,375 ------------------------------------------------------------------------- (836) (899) (1,762) (6,822) Cash flows from financing activities: Repayments of long-term debt (897) (163) (1,517) (626) Proceeds from issuance of units - - - 10,200 Unit issue costs - 31 - (1,182) ------------------------------------------------------------------------- (897) (132) (1,517) 8,392 Cash flows from investing activities: Acquisition of property and equipment 88 (1,289) (1,036) (4,315) Acquisition of Nventa 25 - 1,157 - Restricted cash 920 - 920 (1,258) Addition to intangible assets - - - (340) ------------------------------------------------------------------------- 1,033 (1,289) 1,041 (5,913) Net decrease in cash (700) (2,320) (2,238) (4,343) Cash, beginning of year 807 4,665 2,345 6,688 ------------------------------------------------------------------------- Cash, end of year $ 107 $ 2,345 $ 107 $ 2,345 ------------------------------------------------------------------------- ------------------------------------------------------------------------- See accompanying notes to audited consolidated financial statements.