##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the quarterly period ended March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from ________
to ________
 Commission file number 0-27264
 VIA Pharmaceuticals, Inc.
 (Exact name of registrant as specified in its charter)
 DELAWARE
    
    33-0687976(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 750 Battery Street, Suite 330
San Francisco, CA 94111
(Address of principal executive offices)
 (415) 283-2200
(Registrants telephone number, including area code)
 þ o
  Large accelerated filer oAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company þ o þ




---



##### 



Page No.PART I.  FINANCIAL INFORMATION
    
    1Item 1. Condensed Financial Statements
    
    1Unaudited Condensed Balance Sheets as of March 31, 2008 and December 31, 2007
    
    1Unaudited Condensed Statements of Operations for the Three Month Period Ended March 31, 2008 and 2007, and for the Period from June 14, 2004 (date of inception) to March 31, 2008
    
    2Unaudited Condensed Statements of Cash Flows for the Three Month Period Ended March 31, 2008 and 2007, and for the Period from June 14, 2004 (date of inception) to March 31, 2008
    
    3Notes to the Unaudited Condensed Financial Statements
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    17Item 4T. Controls and Procedures
    
    29PART II.  OTHER INFORMATION
    
    30Item 1A. Risk Factors
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    30Item 6. Exhibits
    
    30SIGNATURE
    
    31EXHIBITSEXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2




---



##### Table of Contents



PART I.  FINANCIAL INFORMATION
 
 Item 1. Condensed Financial Statements
 VIA PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
 
 UNAUDITED CONDENSED BALANCE SHEETS
 MARCH 31,
    
    
    DECEMBER 31,2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    17,880,810
    
    
    $
    23,098,764Prepaid expenses and other current assets
    
    
    1,001,406
    
    
    
    953,347Total current assets
    
    
    18,882,216
    
    
    
    24,052,111Property and equipment-net
    
    
    305,293
    
    
    
    335,429Other non-current assets
    
    
    115,124
    
    
    
    97,401Total
    
    $
    19,302,633
    
    
    $
    24,484,941LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    804,911
    
    
    $
    748,719Accrued expenses and other liabilities
    
    
    3,438,624
    
    
    
    3,178,453Capital lease obligation-current portion
    
    
    1,307
    
    
    
    2,051Total current liabilities
    
    
    4,244,842
    
    
    
    3,929,223Deferred rent
    
    
    2,786
    
    
    
    3,980Total liabilities
    
    
    4,247,628
    
    
    
    3,933,203Commitments and contingenciesShareholders equity:Common stock, $0.001 par value-200,000,000
shares authorized at March 31, 2008 and
December 31, 2007, respectively; 19,707,257
shares issued and outstanding at March 31,
2008 and December 31, 2007, respectively
    
    
    19,707
    
    
    
    19,707Preferred stock Series A, $0.001 par
value-5,000,000 shares authorized at March
31, 2008 and December 31, 2007,
respectively; 0 shares issued and
outstanding at March 31, 2008 and December
31, 2007, respectively
    
    
    
    
    
    
    Convertible preferred stock Series C,
$0.001 par value-17,000 shares authorized
at March 31, 2008 and December 31, 2007,
respectively; 2,000 shares issued and
outstanding at March 31, 2008 and December
31, 2007, respectively; liquidation
preference of $2,000,000
    
    
    2
    
    
    
    2Additional paid-in capital
    
    
    61,279,530
    
    
    
    60,876,834Treasury stock- 0 and 2,014 shares at March
31, 2008 and December 31, 2007,
respectively
    
    
    
    
    
    
    (10,276
    )Accumulated other comprehensive income
    
    
    16,403
    
    
    
    16,884Deficit accumulated in the development stage
    
    
    (46,260,637
    )
    
    
    (40,351,413
    )Total shareholders equity
    
    
    15,055,005
    
    
    
    20,551,738Total
    
    $
    19,302,633
    
    
    $
    24,484,941
  1




---



##### Table of Contents



VIA PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
 
 UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
 PERIOD FROMJUNE 14, 2004(DATE OFTHREE MONTHS ENDED
    
    
    INCEPTION) TOMARCH 31,
    
    
    MARCH 31,
    
    
    MARCH 31,2008
    
    
    2007
    
    
    2008Revenue
    
    $
    
    
    
    $
    
    
    
    $
    Operating expenses:Research and development
    
    
    3,318,162
    
    
    
    3,189,663
    
    
    
    26,365,072General and administration
    
    
    2,664,957
    
    
    
    1,491,479
    
    
    
    15,855,524Merger transaction costs
    
    
    
    
    
    
    1,592,582
    
    
    
    3,824,090Total operating expenses
    
    
    5,983,119
    
    
    
    6,273,724
    
    
    
    46,044,686Operating loss
    
    
    (5,983,119
    )
    
    
    (6,273,724
    )
    
    
    (46,044,686
    )Other income (expense):Interest income
    
    
    102,754
    
    
    
    49,086
    
    
    
    827,726Interest expense
    
    
    (120
    )
    
    
    (55,292
    )
    
    
    (999,184
    )Other expense-net
    
    
    (28,739
    )
    
    
    (5,858
    )
    
    
    (44,493
    )Total other income (expense)
    
    
    73,895
    
    
    
    (12,064
    )
    
    
    (215,951
    )Net Loss
    
    $
    (5,909,224
    )
    
    $
    (6,285,788
    )
    
    $
    (46,260,637
    )Loss per share of common stock-basic and diluted
    
    $
    (0.30
    )
    
    $
    (13.05
    )Weighted average shares outstanding-basic and diluted
    
    
    19,532,057
    
    
    
    481,568
  2




---



##### Table of Contents



VIA PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
 
 UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
 PERIOD FROMJUNE 14, 2004(DATE OFTHREE MONTHS ENDED
    
    
    INCEPTION) TOMARCH 31,
    
    
    MARCH 31,
    
    
    MARCH 31,2008
    
    
    2007
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (5,909,224
    )
    
    $
    (6,285,788
    )
    
    $
    (46,260,637
    )Adjustments to reconcile net loss to net
cash used in operating activities:Depreciation and amortization
    
    
    39,752
    
    
    
    20,012
    
    
    
    227,346Change in unrealized gain on foreign
currency hedge
    
    
    (481
    )
    
    
    2,037
    
    
    
    16,403Stock compensation expense
    
    
    412,972
    
    
    
    247,822
    
    
    
    1,803,821Deferred rent
    
    
    (1,194
    )
    
    
    
    
    
    
    2,786Changes in assets and liabilities:Prepaid expenses and other assets
    
    
    (66,106
    )
    
    
    (45,205
    )
    
    
    (1,119,538
    )Accounts payable
    
    
    52,012
    
    
    
    1,672,827
    
    
    
    800,730Accrued expenses and other
liabilities
    
    
    260,169
    
    
    
    598,571
    
    
    
    3,538,623Interest payable
    
    
    
    
    
    
    55,111
    
    
    
    992,722Net cash used in operating
activities
    
    
    (5,212,100
    )
    
    
    (3,734,613
    )
    
    
    (39,997,744
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (5,110
    )
    
    
    (101,905
    )
    
    
    (512,477
    )Cash provided in the Merger
    
    
    
    
    
    
    
    
    
    
    11,147,160Capitalized merger transaction costs
    
    
    
    
    
    
    
    
    
    
    (350,069
    )Net cash provided by (used in)
investing activities
    
    
    (5,110
    )
    
    
    (101,905
    )
    
    
    10,284,614Cash flows from financing activities:Proceeds from convertible promissory notes
    
    
    
    
    
    
    5,000,000
    
    
    
    24,425,000Capital lease payments
    
    
    (744
    )
    
    
    (634
    )
    
    
    (10,666
    )Issuance of common stock
    
    
    
    
    
    
    
    
    
    
    23,141,360Exercise of stock options for the issuance
of common stock
    
    
    
    
    
    
    42,323
    
    
    
    44,046Repurchase and retirement of common stock
    
    
    
    
    
    
    
    
    
    
    (5,800
    )Net cash provided by (used in)
financing activities
    
    
    (744
    )
    
    
    5,041,689
    
    
    
    47,593,940Increase in cash and cash equivalents
    
    
    (5,217,954
    )
    
    
    1,205,171
    
    
    
    17,880,810Cash and cash equivalents-beginning of period
    
    
    23,098,764
    
    
    
    3,337,360
    
    
    
    Cash and cash equivalents-end of period
    
    $
    17,880,810
    
    
    $
    4,542,531
    
    
    $
    17,880,810Supplemental disclosure of noncash activities:Interest on convertible debt
converted to notes payable
    
    $
    
    
    
    $
    334,222
    
    
    $
    992,722Conversion of notes to preferred
stock Series A
    
    $
    
    
    
    $
    13,334,222
    
    
    $
    25,517,722Accrued compensation converted to
notes payable
    
    $
    
    
    
    $
    
    
    
    $
    100,000Equipment acquired under capital lease
    
    $
    
    
    
    $
    
    
    
    $
    11,973Stock issuance for license acquisition
    
    $
    
    
    
    $
    
    
    
    $
    1,000Retirement of treasury stock
    
    $
    10,276
    
    
    $
    
    
    
    $
    10,276Supplemental disclosure of cash flow
information:Interest paid
    
    $
    72
    
    
    $
    181
    
    
    $
    1,899Taxes paid
    
    $
    3,470
    
    
    $
    
    
    
    $
    39,449
  3




---



##### Table of Contents



VIA PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
 
 NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
 1. ORGANIZATION
 Overview
     4




---



##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation Accounting and Reporting by Development Stage Enterprises
   Use of Estimates
 Significant Risks and Uncertainties
  Cash and Cash Equivalents
 Property and Equipment
 5




---



##### Table of Contents



Long-Lived Assets
 Acquired Intellectual Property Rights
 Research and Development Expenses Accounting for Research and Development
Costs.
  Income Taxes Accounting for
Uncertainty in Income Taxes  an Interpretation of FASB
Statement No. 109
 Earnings (Loss) Per Share of Common Stock
 6




---



##### Table of Contents



Three months endedMarch 31,
    
    
    March 31,2008
    
    
    2007Net loss
    
    $
    (5,909,224
    )
    
    $
    (6,285,788
    )Basic and diluted net loss per share:Weighted-average shares of common stock outstanding
    
    
    19,707,257
    
    
    
    722,095Less: Weighted-average shares of common stock subject to repurchase
    
    
    (175,200
    )
    
    
    (240,527
    )Weighted-average shares used in computing basic net loss per share
    
    
    19,532,057
    
    
    
    481,568Dilutive effect of common share equivalents
    
    
    
    
    
    
    Weighted-average shares used in computing diluted net loss per share
    
    
    19,532,057
    
    
    
    481,568Basic and diluted net loss per share
    
    $
    (0.30
    )
    
    $
    (13.05
    )
  Three months endedMarch 31, 2008
    
    March 31, 2007Common stock equivalents (in shares):Shares of common stock subject to outstanding options
    
    
    2,888,992
    
    
    
    369,708Shares of common stock subject to outstanding warrants
    
    
    231,520
    
    
    
    Shares of common stock subject to conversion from Series A preferred stock
    
    
    
    
    
    
    6,775,335Total shares of common stock equivalents
    
    
    3,120,512
    
    
    
    7,145,043
  Comprehensive Income (Loss)
 Three months
    
    
    Three monthsended
    
    
    endedMarch 31,
    
    
    March 31,2008
    
    
    2007Net loss
    
    $
    (5,909,224
    )
    
    $
    (6,285,788
    )Change in unrealized gain (loss) on foreign currency cash flow hedges
    
    
    (481
    )
    
    
    2,037Total comprehensive loss
    
    $
    (5,909,705
    )
    
    $
    (6,283,751
    )
 Derivative Instruments Accounting for Derivative
Instruments and Hedging Activities.
 7




---



##### Table of Contents



New Accounting Pronouncements Disclosures about
Derivative Instruments and Hedging Activities, an amendment of FASB
Statement No. 133
 Share-based Payment  Certain Assumptions Used in Valuation
Methods  Expected Term Share-Based Payment
 Business
Combinations Non-controlling Interest In Consolidated Financial
Statements an amendment of Accounting Research Bulletin
No. 51.
 Accounting for Nonrefundable Advance Payments for
Goods or Services Received for Use in Future Research and Development Activities
 Fair Value Measurements,
 The Fair Value Option for Financial Assets and Financial Liabilities.
 8




---



##### Table of Contents



3. MERGER WITH CORAUTUS
    Cash
    
    $
    11,147,160Accrued expenses
    
    
    (286,408
    )Merger transaction costs expensed
    
    
    3,824,090Total purchase price
    
    $
    14,684,842
  4. STOCK-BASED COMPENSATION
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
  9




---



##### Table of Contents



Three months endedMarch 31, 2008
    
    March 31, 2007Expected life from grant date
    
    
    2.5-6.08
    
    
    
    5.0-6.11Expected volatility
    
    
    79
    %
    
    
    67%-82
    %Risk free interest rate
    
    
    2.48
    %
    
    
    3.79%-4.64
    %Dividend yield
    
    
    
    
    
    
    
  Period fromJune 14, 2004Three months ended
    
    
    (date of inception) toMarch 31, 2008
    
    
    March 31, 2007
    
    
    March 31, 2008Research and development expense
    
    $
    114,034
    
    
    $
    91,205
    
    
    $
    613,243General and administrative expense
    
    
    298,938
    
    
    
    156,617
    
    
    
    1,183,200Total
    
    $
    412,972
    
    
    $
    247,822
    
    
    $
    1,796,443
  5. RESEARCH AND DEVELOPMENT
  10




---



##### Table of Contents



Period fromJune 14, 2004Three months ended
    
    
    (date of inception) toMarch 31, 2008
    
    
    March 31, 2007
    
    
    March 31, 2008Externally generated research and development expense
    
    $
    2,219,801
    
    
    $
    2,704,818
    
    
    $
    19,378,978Internally generated research and development expense
    
    
    1,098,361
    
    
    
    484,845
    
    
    
    6,986,094Total
    
    $
    3,318,162
    
    
    $
    3,189,663
    
    
    $
    26,365,072
  Period fromJune 14, 2004Three months ended
    
    
    (date of inception) toMarch 31, 2008
    
    
    March 31, 2007
    
    
    March 31, 2008In-licensing expenses
    
    $
    6,250
    
    
    $
    1,600,000
    
    
    $
    4,851,250CRO and investigator expenses
    
    
    1,456,290
    
    
    
    498,107
    
    
    
    6,273,754Consulting expenses
    
    
    312,598
    
    
    
    238,974
    
    
    
    4,371,689Other
    
    
    444,663
    
    
    
    367,737
    
    
    
    3,882,285Total
    
    $
    2,219,801
    
    
    $
    2,704,818
    
    
    $
    19,378,978
  Period fromJune 14, 2004Three months ended
    
    
    (date of inception) toMarch 31, 2008
    
    
    March 31, 2007
    
    
    March 31, 2008Personnel and related expenses
    
    $
    769,880
    
    
    $
    343,732
    
    
    $
    4,812,099Stock-based compensation expense
    
    
    114,034
    
    
    
    91,205
    
    
    
    613,243Travel and entertainment expense
    
    
    108,885
    
    
    
    49,430
    
    
    
    773,639Other
    
    
    105,562
    
    
    
    478
    
    
    
    787,113Total
    
    $
    1,098,361
    
    
    $
    484,845
    
    
    $
    6,986,094
 6. PROPERTY AND EQUIPMENT
  March 31,
    
    
    December 31,2008
    
    
    2007Property and equipment at cost:Computer equipment and software
    
    $
    300,440
    
    
    $
    291,149Furniture and fixtures
    
    
    102,547
    
    
    
    102,547Lab equipment
    
    
    46,946
    
    
    
    46,946Office equipment
    
    
    35,409
    
    
    
    35,409Leasehold Improvements
    
    
    31,315
    
    
    
    31,315Capital lease equipment
    
    
    11,973
    
    
    
    11,973Total property and equipment at cost
    
    
    528,630
    
    
    
    519,339Less: accumulated depreciation
    
    
    (223,337
    )
    
    
    (183,910
    )Total
    
    $
    305,293
    
    
    $
    335,429
  11




---



##### Table of Contents



7. FINANCING ARRANGEMENTS
   Debtors Accounting for a Modification or Exchange of Debt
Instruments
 8. EQUITY
  Common Stock
 (in shares)
    
    March 31, 2008
    
    December 31, 20072007 Incentive Award Plan-outstanding and available to grant
    
    
    3,767,515
    
    
    
    3,267,515Common stock warrants
    
    
    231,520
    
    
    
    106,520Total
    
    
    3,999,035
    
    
    
    3,374,035
 Preferred Stock
  12




---



##### Table of Contents



2007 Incentive Award Plan
  WeightedAverageNumber of
    
    
    ExerciseShares
    
    
    Price2007 Incentive Award Plan Options Outstanding  January 1, 2008
    
    
    2,642,110
    
    
    $
    7.02Granted
    
    
    247,000
    
    
    $
    2.91Exercised
    
    
    
    
    
    
    Canceled
    
    
    (118
    )
    
    $
    3.482007 Incentive Award Plan Options Outstanding  March 31, 2008
    
    
    2,888,992
    
    
    $
    6.67
  13




---



##### Table of Contents



Options Outstanding
    
    Options Vested or Expected to Vest
    
    Options ExerciseableAverage
    
    Weighted
    
    Number
    
    Average
    
    Weighted
    
    
    
    
    
    WeightedNumber of
    
    Remaining
    
    Average
    
    Exercisable or
    
    Remaining
    
    Average
    
    
    
    
    
    AverageOptions
    
    Contractual
    
    Exercise
    
    Expected to
    
    Contractual
    
    Exercise
    
    Number
    
    ExerciseRange of Exercise Prices
    
    Outstanding
    
    Life (Years)
    
    Price
    
    Vest
    
    Life (Years)
    
    Price
    
    Exercisable
    
    Price$0.03
    
    
    267,202
    
    
    
    7.19
    
    
    $
    0.03
    
    
    
    265,666
    
    
    
    7.19
    
    
    $
    0.03
    
    
    
    236,494
    
    
    $
    0.03$0.14
    
    
    102,493
    
    
    
    8.55
    
    
    $
    0.14
    
    
    
    101,344
    
    
    
    8.55
    
    
    $
    0.14
    
    
    
    79,526
    
    
    $
    0.14$2.38
    
    
    1,485,925
    
    
    
    9.72
    
    
    $
    2.38
    
    
    
    1,419,901
    
    
    
    9.72
    
    
    $
    2.38
    
    
    
    165,446
    
    
    $
    2.38$2.90
    
    
    235,000
    
    
    
    9.79
    
    
    $
    2.90
    
    
    
    223,250
    
    
    
    9.79
    
    
    $
    2.90
    
    
    
    
    
    
    $
    2.90$3.10
    
    
    12,000
    
    
    
    9.98
    
    
    $
    3.10
    
    
    
    11,400
    
    
    
    9.98
    
    
    $
    3.10
    
    
    
    
    
    
    $
    3.10$3.48
    
    
    414,325
    
    
    
    9.34
    
    
    $
    3.48
    
    
    
    396,626
    
    
    
    9.34
    
    
    $
    3.48
    
    
    
    60,364
    
    
    $
    3.48$5.10
    
    
    22,300
    
    
    
    9.18
    
    
    $
    5.10
    
    
    
    22,300
    
    
    
    9.18
    
    
    $
    5.10
    
    
    
    22,300
    
    
    $
    5.10$5.25
    
    
    47
    
    
    
    0.75
    
    
    $
    5.25
    
    
    
    47
    
    
    
    0.75
    
    
    $
    5.25
    
    
    
    47
    
    
    $
    5.25$5.55
    
    
    37,172
    
    
    
    9.18
    
    
    $
    5.55
    
    
    
    37,172
    
    
    
    9.18
    
    
    $
    5.55
    
    
    
    37,172
    
    
    $
    5.55$11.25-1023.75
    
    
    312,528
    
    
    
    6.65
    
    
    $
    42.36
    
    
    
    312,528
    
    
    
    6.65
    
    
    $
    42.36
    
    
    
    312,528
    
    
    $
    42.362,888,992
    
    
    
    9.05
    
    
    $
    6.67
    
    
    
    2,790,234
    
    
    
    9.05
    
    
    $
    6.82
    
    
    
    913,877
    
    
    $
    15.52
  Warrants
     14




---



##### Table of Contents



9. RELATED PARTIES
   10. COMMITMENTS
 Operating Leases
  AmountApril through December 2008
    
    $
    298,0752009
    
    
    429,4172010
    
    
    437,5972011
    
    
    445,7772012
    
    
    362,4682013
    
    
    139,742Total minimum lease payments
    
    $
    2,113,076
  15




---



##### Table of Contents



Capital Leases
   Amount2008
    
    $
    1,3602009
    
    
    Total minimum lease payments
    
    
    1,360Less amount representing interest
    
    
    (53
    )Present value of net minimum lease payments
    
    
    1,307Capital lease obligation  long-term
    
    
    Capital lease obligation  short-term
    
    $
    1,307
 11. CONTINGENCY
  12. INCOME TAXES
     13. EMPLOYEE BENEFIT PLANS
  16




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following discussion and analysis of the Companys financial condition and results of
operations should be read in conjunction with the Companys financial statements and related notes
appearing elsewhere in this Quarterly Report on Form 10-Q . In addition to historical information,
this discussion and analysis contains forward-looking statements that involve risks, uncertainties
and assumptions. The Companys actual results may differ materially from those anticipated in these
forward-looking statements as a result of risks and uncertainties that exist in our operations,
development efforts and business environment, including but not limited to those set forth under
the Section entitled Risk Factors in our Annual Report on Form 10-K for the year ended December
31, 2007 and elsewhere in this Quarterly Report on Form 10-Q and in other documents we file with
the Securities and Exchange Commission. All forward-looking statements included in this report are
based on information available to us as of the date hereof, and, unless required by law, we assume
no obligation to update any such forward-looking statement.
 Background
  Overview
 Description of Business and Background
   17




---



##### Table of Contents




    
    terminate or delay clinical trials or studies of VIA-2291;
    
    terminate or delay the pre-clinical development of one or more of its other pre-clinical
candidates;
    
    curtail its licensing activities that are designed to identify molecular targets and
small molecules for treating cardiovascular disease;
    
    relinquish rights to product candidates, development programs, or discovery development
programs that it may otherwise seek to develop or commercialize on its own; and
    
    delay, reduce the scope of, or eliminate one or more of its research and development
programs, or ultimately cease operations.
 18




---



##### Table of Contents



Revenue
  Research and Development Expenses
   
    
    Compensation of personnel associated with research and development activities, including
consultants, investigators, and contract research organizations (CROs);
    
    In-licensing fees;
    
    Laboratory supplies and materials;
    
    Costs associated with the manufacture of product candidates for pre-clinical testing and
clinical studies;
    
    Pre-clinical costs, including toxicology and carcinogenicity studies;
    
    Fees paid to professional service providers for independent monitoring and analysis of
the Companys clinical trials;
    
    Depreciation and equipment; and
    
    Allocated costs of facilities and infrastructure.
  Period fromJune 14, 2004(Date of Inception)Three Months Ended
    
    
    toMarch 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008Externally generated research and development expense
    
    $
    2,219,801
    
    
    $
    2,704,818
    
    
    $
    19,378,978Internally generated research and development expense
    
    
    1,098,361
    
    
    
    484,845
    
    
    
    6,986,094Total
    
    $
    3,318,162
    
    
    $
    3,189,663
    
    
    $
    26,365,072
  Period fromJune 14, 2004(Date of Inception)Three Months Ended
    
    
    toMarch 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008In-licensing expenses
    
    $
    6,250
    
    
    $
    1,600,000
    
    
    
    4,851,250CRO and investigator expenses
    
    
    1,456,290
    
    
    
    498,107
    
    
    
    6,273,754Consulting expenses
    
    
    312,598
    
    
    
    238,974
    
    
    
    4,371,689Other
    
    
    444,663
    
    
    
    367,737
    
    
    
    3,882,285Total
    
    $
    2,219,801
    
    
    $
    2,704,818
    
    
    $
    19,378,978
 19




---



##### Table of Contents



Period fromJune 14, 2004Three Months Ended
    
    
    (Date of Inception) toMarch 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008Personnel and related expenses
    
    $
    769,880
    
    
    $
    343,732
    
    
    $
    4,812,099Stock-based compensation expense
    
    
    114,034
    
    
    
    91,205
    
    
    
    613,243Travel and entertainment expense
    
    
    108,885
    
    
    
    49,430
    
    
    
    773,639Other
    
    
    105,562
    
    
    
    478
    
    
    
    787,113Total
    
    $
    1,098,361
    
    
    $
    484,845
    
    
    $
    6,986,094
     20




---



##### Table of Contents



General and Administrative
  21




---



##### Table of Contents



Interest Income, Interest Expense and Other Expenses
  Results of Operations
 Comparison of the three months ended March 31, 2008 and 2007
  Three Months EndedMarch 31, 2008
    
    March 31, 2007
    
    $ Change
    
    % ChangeRevenue
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    Research and development expense
    
    
    3,318,162
    
    
    
    3,189,663
    
    
    
    128,499
    
    
    
    4
    %General and administrative expense
    
    
    2,664,957
    
    
    
    1,491,479
    
    
    
    1,173,478
    
    
    
    79
    %Merger transaction costs
    
    
    
    
    
    
    1,592,582
    
    
    
    (1,592,582
    )
    
    
    (100
    )%Interest income
    
    
    102,754
    
    
    
    49,086
    
    
    
    53,668
    
    
    
    109
    %Interest expense
    
    
    120
    
    
    
    55,292
    
    
    
    (55,172
    )
    
    
    (100
    )%Other expense
    
    
    28,739
    
    
    
    5,858
    
    
    
    22,881
    
    
    
    391
    %
 Revenue
 Research and Development Expense.
 22




---



##### Table of Contents



General and Administrative Expense.
  Merger Transaction Costs.
 Interest Income.
 Interest Expense.
 Other Expense.
 Income Tax Expense
 23




---



##### Table of Contents



Liquidity and Capital Resources
       24




---



##### Table of Contents



Contractual Obligation and Commitments
  Payments Due by PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 YearsLong-term capital lease obligations(1)
    
    $
    1,307
    
    
    $
    1,307
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating lease obligations(2)
    
    
    2,113,076
    
    
    
    404,236
    
    
    
    871,104
    
    
    
    781,839
    
    
    
    55,897Stanford license(3)
    
    
    845,000
    
    
    
    25,000
    
    
    
    70,000
    
    
    
    100,000
    
    
    
    650,000Uncertain tax positions(4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,959,383
    
    
    $
    430,543
    
    
    $
    941,104
    
    
    $
    881,839
    
    
    $
    705,897
 
 (1)
    
    Long-term capital lease of a copier.(2)
    
    Operating lease obligations reflect contractual commitments for the
Companys office facilities for its headquarters in San Francisco,
California and its clinical operations location in Princeton, New
Jersey. In January 2008, the Company expanded and extended both leases
to ensure adequate facilities for current activities. The San
Francisco headquarter lease has been extended through May 2013 and has
been expanded to a total of 8,180 square feet. The lease amendment
resulted in an increase of approximately $1.5 million in future rent.
The lease amendment to the Princeton, New Jersey facility extends the
lease through March 2012 and has been expanded to a total of 4,979
square feet. The lease amendment resulted in an increase of
approximately $330,000 in future rent.(3)
    
    Agreement with the Board of Trustees of the Leland Stanford Junior
University granting the Company exclusive worldwide rights to any and
all patents derived from an invention describing approaches to
identify novel candidate genes implicated in the development of
atherosclerosis, which represent likely targets for future novel
diagnostic and therapeutic strategies in atherosclerosis. The Company,
in addition to the $26,000 license fees, net of related accumulated
amortization included in other long-term assets in the balance sheet,
has long term fixed and determinable commitments to remit to Stanford
license maintenance fees in the amount of $25,000 in 2008 and 2009
respectively, $35,000 in 2010 and 2011 respectively, and $50,000 in
2012 and beyond. The license maintenance fees can be applied to future
royalties the Company will pay to Stanford. The Company has agreed to
make certain royalty payments to Stanford related to the issuance and
sublicense of the Stanford license and payments corresponding to the
achievement of certain development and regulatory milestones. The
royalty rate varies from 1% to 6% of net sales depending on the type
of product sold and whether the Company holds an exclusive right to
the Stanford license at the time of sale. The Company is also
required, under the agreement, to make milestone payments to Stanford
for each of the Companys licensed products that use the Stanford
patent as the product reaches various development and regulatory
milestones. The Stanford license becomes non-exclusive after October
17, 2011 and terminates upon the expiration of the last licensed
patent. As of March 31, 2008, we are unable to determine or predict
the timing and amount of any potential royalty or milestone payments.(4)
    
    The Company adopted FIN No. 48 on the first day of its 2007 fiscal year.
The amount of unrecognized tax benefits at March 31, 2008 was
approximately $157,000. This amount has been excluded from the
contractual obligations table because a reasonably reliable estimate
of the timing of future tax settlements cannot be determined. 25




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Critical Accounting Policies
     Research and Development Accruals
   26




---



##### Table of Contents



Stock-based Compensation
 Share-Based Payment, Accounting for Stock-Based
Compensation Accounting for Stock Issued
to Employees.
  Certain Assumptions Used in Valuation Methods  Expected Term
 27




---



##### Table of Contents



Period fromJune 14, 2004Three Months Ended
    
    
    (Date of Inception) toMarch 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008Research and development expense
    
    $
    114,034
    
    
    $
    91,205
    
    
    $
    613,243General and administrative expense
    
    
    298,938
    
    
    
    156,617
    
    
    
    1,183,200Total
    
    $
    412,972
    
    
    $
    247,822
    
    
    $
    1,796,443
 Forward-looking statements
  
    
    the Companys ability to obtain necessary financing;
    
    the Companys ability to control its operating expenses;
    
    the Companys ability to recruit and enroll patients for the ACS and FDG-PET clinical
trials;
    
    the Companys failure to obtain sufficient data from enrolled patients that can be used
to evaluate VIA-2291, thereby impairing the validity or statistical significance of its
clinical trials;
    
    the Companys ability to successfully complete its clinical trials of VIA-2291 on
expected timetables and the outcomes of such clinical trials;
    
    complexities in designing and implementing cardiovascular clinical trials using
histological examinations, measurement of biomarkers, medical imaging, and atherosclerotic
plaque bioassays;
    
    the results of the Companys clinical trials, including without limitation, with respect
to the safety and efficacy of VIA-2291;
    
    the outcome of any legal proceedings;
    
    the Companys ability to obtain necessary FDA approvals;
    
    the Companys ability to successfully commercialize VIA-2291;
    
    the Companys ability to obtain and protect its intellectual property related to its
product candidates;
    
    the Companys potential for future growth and the development of its product pipeline;
    
    the Companys ability to form and maintain collaborative relationships to develop and
commercialize our product candidates;
    
    general economic and business conditions; and
    
    the other risks described under the heading Risk Factors in the Companys Annual Report
on Form 10-K for the year ended December 31, 2007.
 28




---



##### Table of Contents



Item 4T. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  29




---



##### Table of Contents



PART II.  OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
 Item 6. Exhibits
 Exhibit No.
    
    Description3.1
    
    Fourth Amended and Restated Bylaws of VIA Pharmaceuticals, Inc. (filed as Exhibit 3.1 to the Form 8-K
filed on April 17, 2008 and incorporated herein by reference)4.1
    
    Warrant issued to Redington, Inc., dated March 1, 2008 (filed as Exhibit 4.2 to the Form 10-K filed
on March 28, 2008 and incorporated herein by reference)10.1
    
    Change in Control Agreement by and between VIA Pharmaceuticals, Inc. and Rebecca Taub, dated January
14, 2008 (filed as Exhibit 10.25 to the Form 10-K filed on March 28, 2008 and incorporated herein by
reference)10.2
    
    Office Lease, dated October 13, 2005, between VIA Pharmaceuticals, Inc. and James P. Edmondson, as
amended by Lease Amendment No. One, dated January 15, 2008 (filed as Exhibit 10.28 to the Form 10-K
filed on March 28, 2008 and incorporated herein by reference)10.3
    
    Lease, dated July 24, 2006, between VIA Pharmaceuticals, Inc. and 100 & RW CRA LLC, as amended by
First Extension and Modification of Lease, dated January 15, 2008 (filed as Exhibit 10.29 to the Form
10-K filed on March 28, 2008 and incorporated herein by reference)31.1*
    
    Principal Executive Officers Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2*
    
    Principal Financial Officers Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1*
    
    Certification Pursuant to 18 U.S.C. § 1350 (Section 906 of Sarbanes-Oxley Act of 2002)32.2*
    
    Certification Pursuant to 18 U.S.C. § 1350 (Section 906 of Sarbanes-Oxley Act of 2002)
 
 *
    
    Filed herewith 30




---



##### Table of Contents



VIA PHARMACEUTICALS, INC.By:
    /s/ James G. StewartJames G. StewartSenior Vice President, Chief Financial Officer
Duly Authorized Officer and Principal Financial Officer 31