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AKELA Pharma reports financial results for the three months ended March 31, 2010

^{Published on 2010-06-18 19:00:08 - Market Wire}
 

 - During the first quarter of 2010, Akela 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 (Unaudited) March 31, 2010 and December 31, 2009 (in thousands of US dollars) ------------------------------------------------------------------------- ------------------------------------------------------------------------- March 31, December 31, 2010 2009 ------------------------------------------------------------------------- Assets Current assets: Cash $ 160 $ 107 Restricted cash 705 938 Accounts receivable 1,104 1,679 Prepaid expenses and other current assets 393 417 ----------------------------------------------------------------------- 2,362 3,141 Property and equipment 3,860 4,217 Other assets 618 598 ------------------------------------------------------------------------- $ 6,840 $ 7,956 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders' Deficiency Current liabilities: Accounts payable and accrued liabilities $ 7,509 $ 7,801 Deferred revenue 2,954 2,795 Current portion of long-term debt 1,801 1,015 ----------------------------------------------------------------------- 12,264 11,611 Deferred revenue 13,994 14,630 Long-term debt 5,886 6,615 Income taxes 827 799 Shareholders' deficiency: Common shares (unlimited authorized, 30,890,338 common shares issued and outstanding with no par value at March 31, 2010 and December 31, 2009) 67,544 67,544 Warrants 2,651 2,954 Additional paid-in capital 8,821 8,511 Accumulated other comprehensive income 3,110 3,110 Deficit (108,257) (107,818) ----------------------------------------------------------------------- (26,131) (25,699) ------------------------------------------------------------------------- $ 6,840 $ 7,956 ------------------------------------------------------------------------- ------------------------------------------------------------------------- AKELA PHARMA INC. Consolidated Statements of Operations and Comprehensive Loss (Unaudited) Three month periods ended March 31, 2010 and 2009 (in thousands of US dollars, except share and per share data) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended March 31, ---------------------------- 2010 2009 ------------------------------------------------------------------------- Revenues $ 2,601 $ 3,770 Expenses: Direct costs 1,444 2,068 Selling, general and administrative 1,403 1,434 Research and development 129 1,389 Restructuring costs - 676 Stock-based compensation 7 77 Depreciation of property and equipment 357 372 Amortization of intangible assets - 423 Interest on long-term debt 63 37 Unrealized loss on securities held for trading 29 87 Foreign exchange gain (392) (40) ----------------------------------------------------------------------- 3,040 6,523 Loss before under noted items (439) (2,753) Other income (expense): Settlement with LRI - 1,664 Provision for repayment of government grants - (1,544) ----------------------------------------------------------------------- - 120 ------------------------------------------------------------------------- Net loss and comprehensive loss $ (439) $ (2,633) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted net loss per share $ (0.01) $ (0.12) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted weighted average number of shares outstanding 30,890,338 21,615,577 ------------------------------------------------------------------------- ------------------------------------------------------------------------- See accompanying notes to unaudited consolidated financial statements. AKELA PHARMA INC. Consolidated Statements of Cash Flows (Unaudited) Three months ended March 31, 2010 and 2009 (in thousands of US dollars) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended March 31, ---------------------------- 2010 2009 ------------------------------------------------------------------------- Cash flows from operating activities: Net loss $ (439) $ (2,633) Adjustments for: Depreciation of property and equipment 357 372 Amortization of intangible assets - 423 Provision for repayment of government grants - 1,544 Resctructuring charges - 571 Stock-based compensation 7 77 Unrealized foreign exchange gain (392) (43) Unrealized loss on securities held for trading 30 87 Net changes in operating assets and liabilities (129) 1,300 ----------------------------------------------------------------------- (566) 1,698 Cash flows from financing activities: Repayments of long-term debt (94) (162) Proceeds from issuance of long-term debt 500 - ------------------------------------------------------------------------- 406 (162) Cash flows from investing activities: Acquisition of property and equipment (20) (792) Restricted cash 233 - ------------------------------------------------------------------------- 213 (792) Net increase in cash 53 744 Cash, beginning of period 107 2,345 Cash, end of period $ 160 $ 3,089 ------------------------------------------------------------------------- ------------------------------------------------------------------------- See accompanying notes to unaudited consolidated financial statements.