MRI contrast developer Epix Pharmaceuticals of Lexington, MA, said yesterday that its auditors had issued a "going concern" opinion regarding the company's future viability.
In a 10-K form filed with the U.S. Securities and Exchange Commission, Epix noted its current lack of compliance with Nasdaq stock exchange listing requirements. If Epix is delisted from Nasdaq, it could trigger a clause in which holders of $100 million in convertible senior notes could redeem their holdings at face value.
The company said that it currently does not have enough cash on hand to repurchase more than a nominal amount of the notes, and the firm would have to raise "significant additional capital" to fund its operations beyond August 2009 or if it is required to redeem the notes. Given the current economic environment, the company said that "there can be no assurance" as to the availability of additional financing.
Due to the need for additional financing and its recurring operating losses, Epix said that its auditing firm, Ernst & Young, included a statement regarding the company's ability to continue as a going concern in its consolidated financial statements for fiscal 2008 (end-December 31).
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