Vaxgen Files 10-Q for First Quarter With SEC, Provides Future Burn Rate Guidance
, a biopharmaceutical company, today provided
guidance on its expected monthly cash expenditures following the most recent
restructuring undertaken on
April 9, 2008. VaxGen expects that its average
monthly cash expenditures going forward are unlikely to exceed
$1 million,
made up of the following categories:
* Costs related to the Company's real estate and facility, estimated at
32% of monthly expenditures.
* Costs related to maintaining public company status, including
professional fees, at approximately 32% of monthly expenditures.
* Costs related to the company's six remaining permanent staff and
temporary support, at approximately 21% of monthly expenditures.
* Interest payments associated with the outstanding convertible debt at
approximately 15% of monthly expenditures.
'With the completion of the most recent reduction in force, we have
concluded those significant cost-reduction measures that are under the
Company's sole control,' said James P. Panek, VaxGen President and CEO.
'While we continue to explore every avenue to reduce costs, a further
significant reduction will be a function of the resolution of our efforts to
sell the manufacturing plant and assign the associated lease. We are in
discussions with parties interested in the plant, but cannot at this point
provide assurance that a transaction will result.'
VaxGen further announced today the filing of its financial results for the
quarter ending March 31, 2008 on Form 10-Q with the Securities and Exchange
Commission. These results reflect a number of significant impacts consequent
to the termination of the proposed merger with Raven biotechnologies as
follows:
* Consistent with SFAS 144, 'Accounting for the Impairment and Disposal of
Long-Lived Assets' the property and equipment related to VaxGen's
manufacturing facility have been reclassified as 'assets held for sale'.
This reclassification shifts $10.3 million of assets on the balance
sheet out of Property and Equipment and into Current Assets. As it
relates to the Statement of Operations depreciation is not charged
against assets held for sale, and as a consequence there will be a
significant reduction in the depreciation charge going forward.
* VaxGen's net loss of $7.5 million for the first quarter of 2008 reflects
$2.3 million of expenses associated with the terminated merger and also
reflects a non-cash charge of $1.6 million related to the increase in
value of the derivative liability associated with the Company's
convertible notes.
