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Auditor Raises Going Concern Doubts on Deltagen

NEW YORK, April 16 -- Auditor PricewaterhouseCoopers said there's substantial doubt about Deltagen's ability to continue as a going concern, according to the company's annual report filed Wednesday with the Securities and Exchange Commission, and first reported by the Dow Jones news service.

 

Deltagen of Redwood City, Calif., today reported revenues of $4.7 million for the fourth quarter of 2002, compared to $2.5 million for the year-ago period; and a net loss of $21 million for the quarter, compared to a net loss of $14.9 million for the same quarter in 2001. The company had a net loss of $107.2 million for 2002.

 

The results reflect a charge of $10 million for a restructuring that including the closing of Deltagen Research Labs, Deltagen Proteomics and Deltagen Europe, and workforce reductions in its San Francisco Bay Area reductions.

 

Last week the company said it would shuttered nine "premises" and fire approximately 50 of its staffers, or 25 percent of its workforce.

 

Earlier in April, the company's existing institutional investors agreed to purchase $10 million of the company's preferred stock in a private placement. The same investors have committed to a bridge loan of $5 million, at an annual interest of 10 percent, that can be increased to $6 million.

 

Additionally, Joseph Limber, former president and CEO of Aclara BioSciences, has become Deltagen's interim CEO and will move on to be president and CEO after the closing of the financing. Richard Hawkins, Deltagen's CFO, is expected to leave the company before the end of the month.

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