Deltagen Reports 2012 Fourth Quarter and Full-Year Financial Results

  Deltagen Reports 2012 Fourth Quarter and Full-Year Financial Results

Business Wire

SAN MATEO, Calif. -- April 10, 2013

Deltagen, Inc. (Pink Sheets: DGEN), a leading provider of drug discovery tools
and services to the biopharmaceutical industry, today reported unaudited
consolidated financial results for the three months and year ended December
31, 2012.

Revenues: The Company’s consolidated revenues for the three months and year
ended December 31, 2012 totaled $0.133 million and $1.054 million,
respectively. The revenues in the fourth quarter and in 2012 were attributable
to license fees associated with the provision of knockout mice and related
phenotypic data pursuant to orders placed by customers under the Company’s
DeltaOne^TM program. The Company’s consolidated revenues for the three months
and year ended December 31, 2012 included $0.088 million and $0.142 million,
respectively, in revenues of Xenopharm, Inc. (“Xenopharm”), a wholly owned
subsidiary of the Company. The revenues and expenses of Benten BioServices,
Inc. ("Benten BioServices") are no longer consolidated with those of Deltagen
and its wholly-owned subsidiaries, Xenopharm and Deltagen Research
Laboratories, L.L.C. because Benten BioServices ceased being a wholly-owned
subsidiary of Deltagen on August 15, 2012 due to the close of financing, after
which Deltagen held 43.8% of the outstanding shares of Benten BioServices The
application of the equity method of accounting now reports Benten BioServices'
operating results as a single line in Deltagen's financial statements, which
reflect Deltagen's 43.8% ownership interest in Benten BioServices.

Expenses: Total consolidated expenses for the three months and year ended
December 31, 2012 were $0.231 million and $1.107 million, respectively. The
expenses in the fourth quarter (and for full-year 2012) were attributable
primarily to labor costs and other general and administrative expenses,
including expenses of $0.039 million in the fourth quarter ($0.343 million for
full-year 2012) in royalty and commission expenses, and non-recurring expenses
of $0.047 million in the fourth quarter ($0.054 million for full-year 2012)
associated with the prosecution and issuance of patents licensed exclusively
to Xenopharm. As of December 31, 2012, the Company had incurred aggregate
royalties to Lexicon Pharmaceuticals, Inc. (“Lexicon”) of $5.705 million in
royalty payments pursuant to a March 2005 settlement agreement between Lexicon
and the Company. Under the settlement, the maximum aggregate amount of royalty
payments due to Lexicon is $6 million. Accordingly, $0.295 million in
contingent royalty payments remain owed to Lexicon as of December 31, 2012.

Net Income/Losses: Consolidated net losses before provision for income taxes
for the three months and year ended December 31, 2012 were $0.677 million and
$1.165 million, respectively. These consolidated net losses included
recognized net losses of $0.579 million and $1.113 million, respectively, or
43.8% of Benten BioServices' Net Operating Losses, which was accounted for
using the equity method of accounting.

Cash, Cash Equivalents and Accounts Receivable: As of December 31, 2012, the
Company had $0.095 million in consolidated cash and cash equivalents and
$0.163 million in accounts receivable. During the fourth quarter the Company
borrowed $0.100 million under a secured promissory note dated December 20,
2012 in a related-party transaction involving a trust managed by Robert
Driscoll, the Company's CEO, which note carries a 0.025% interest per annum,
compounded annually.

Major Events during 2012:

Benten BioServices: Benten BioServices received an aggregate total of $2.940
million in secured bridge financing between January and August 2012 ("Series
A"). The Series A financing was led by Life Sciences Green House of Central
Pennsylvania and closed on August 15, 2012, at which time Benten BioServices
ceased being a wholly-owned subsidiary of Deltagen. Following the Series A
closing, excluding Benten BioServices' stock options, Deltagen held 43.8% of
the outstanding shares of Benten BioServices. Deltagen shall retain a seat on
the board of directors of Benten BioServices solely representing Deltagen so
long as it beneficially owns at least 10% of the outstanding common stock of
Benten BioServices.

The unaudited consolidated financial statements for the fourth quarter and
year of 2012, accompanying notes, and Management’s Discussion and Analysis of
Financial Conditions and Results of Operations for such period will be posted
on Deltagen’s website (www.deltagen.com).

About Deltagen

Deltagen, Inc. is a provider of drug discovery tools to the biopharmaceutical
industry, and offers access to its inventory of knockout mouse lines and
related phenotypic data to enhance the efficiency of target validation and
drug discovery. In addition, Deltagen offers target validation data in the
areas of immunology and metabolic diseases. Deltagen's products and programs
have been validated by customers and partners such as Eli Lilly & Co.,
GlaxoSmithKline, Merck & Co., Inc. and Pfizer Inc. For more information on
Deltagen, visit the Company's website at www.deltagen.com.

Safe Harbor Statement

This press release contains “forward-looking statements,” including statements
about Deltagen’s future revenues, cash flows and operating results,
first-party royalty obligations and first-party licenses and intellectual
property, as well as other matters that are not historical facts or
information. These forward-looking statements are based on management’s
current assumptions and expectations and involve risks, uncertainties and
other important factors, specifically including those relating to Deltagen’s
ability to achieve its operational objectives and revenue projections, that
may cause Deltagen’s actual results to be materially different from any future
results expressed or implied by such forward-looking statements. Information
identifying such important risk factors is contained in the Company's annual
financial disclosure's “Management’s Discussion and Analysis of Financial
Conditions and Results of Operations”, which can be found at Deltagen’s
website at www.deltagen.com. Deltagen undertakes no obligation to update or
revise any such forward-looking statements, whether as a result of new
information, future events or otherwise.


DELTAGEN, INC.



CONSOLIDATED BALANCE SHEET

(UNAUDITED)
                                                                
Consolidated Balance Sheet
As of 12/31/12
                                                                  Unaudited
                          (In Thousands)                       12/31/12
                                                                  Consolidated
Assets
Current assets:
               Cash and cash equivalents                          $ 95
               Accounts receivable, net                             163
               Prepaid expenses, deposits and deferred tax         53       
               assets
                               Total current assets               $ 311
                                                                  
Property and equipment, net                                         26
                                                                  
Investment in Benten BioServices, Inc. accounted for using the      4,530
equity method
Goodwill                                                            -
Non-current portion of deferred tax assets                         1,586    
                               Total assets                       $ 6,453    
                                                                             
Liabilities and Stockholders' Equity
Current liabilities:
               Accounts payable                                   $ 275
               Accrued expenses                                    26       
                               Total liabilities                  $ 301
Non-Current liabilities:
               Deferred rent                                      $ -
               Note payable                                        100      
                               Total long-term liabilities        $ 100
                                                                  
Stockholders' equity:
               Common stock                                         39
               Treasury Stock                                       (867     )
               Additional paid-in capital                           230,638
               Retained Earnings                                    (224,160 )
               Foreign currency translation adjustment             402      
                               Total stockholders' equity         $ 6,052    
                               Total liabilities and              $ 6,453    
                               stockholders' equity
                                                                             
                                                                             

DELTAGEN, INC.



CONSOLIDATED INCOME STATEMENT

(UNAUDITED)
                                                              
Consolidated Income Statements and

Statements of Retained Earnings

For Quarter ended 12/31/12 & Full Year 2012
                                                Unaudited         Unaudited
(In Thousands)                                  Quarter Ended     Full-Year
                                                12/31/12          2012
                                                Consolidated      Consolidated
                                                                  
Revenue                                         $  133            $ 1,054
Royalty and Commission Costs                       39               343
Other Operating Costs                             192            764      
                                                                  
Income From Operations                          $  (98      )     $ (53      )
                                                                  
Interest Income                                    0                1
Income (Loss) from Benten Investment using        (579     )      (1,113   )
the equity method
Total Other Income (Loss)                         (579     )      (1,112   )
                                                                  
Income before provision for income taxes        $  (677     )     $ (1,165   )
                                                                  
Provision for income taxes
Current income tax expense                         -                -
                                                                  
Total income tax expense                           -                -
                                                                 
Net Income (Loss)                               $  (677     )     $ (1,165   )
                                                                  
Retained earnings at beginning of period          (223,483 )      (222,995 )
                                                                  
Retained earnings at end of period              $  (224,160 )     $ (224,160 )
                                                                             
                                                                             

DELTAGEN, INC.



CONSOLIDATED CASH FLOW

(UNAUDITED)
                                                              
Consolidated Cash Flows
For Quarter ended 12/31/12 & Full Year 2012     Unaudited         Unaudited
                                                Quarter Ended     Full-Year
                                                12/31/12          2012
(Dollars In Thousands)                          Consolidated      Consolidated
                                                                  
Cash flows from operating activities:
                                                                  
Net Income (Loss)                               $    (678  )      $  (1,166  )
                                                                  
Adjustments to reconcile net income to net
cash provided
by operating activities:
Depreciation                                         3               175
                                                                  
(Increase)/Decrease in operating assets
Accounts receivable                                  (100  )         (87     )
Prepaids, deposits and tax assets                    16              293
Purchase of assets                                   -               (65     )
Deferred rent                                        -               457
                                                                  
Increase/(Decrease) in operating liabilities
Accounts payable                                     (23   )         (227    )
Accrued expenses                                    11            (46     )
                                                                  
Notes payable                                        100             -
Benten stock issuance                                -               1,895
Issuance of convertible note                         -               (1,275  )
Cumulative effect of equity method                  579           (1,269  )
recognition
                                                                  
Net Increase/(Decrease) in cash                 $    (92   )      $  (1,314  )
                                                                  
                                                                  
Cash and cash equivalents, at beginning of          188           1,409   
period
                                                                  
Cash and cash equivalents, at end of period         95            95      

Contact:

Deltagen, Inc.
Robert J. Driscoll, 650-345-7601
President & CEO
 
Press spacebar to pause and continue. Press esc to stop.