ROCHESTER, N.Y., Nov. 14, 2013 /PRNewswire/
-- VirtualScopics, Inc. (NASDAQ: VSCP), a leading
provider of quantitative imaging, today announced revenues of
$2,227,877 for the quarter ended
September 30, 2013 compared to
$3,328,217 for the quarter ended
September 30, 2012. Net loss for the
three months ended September 30, 2013
was $751,322 compared to a net loss
of $79,249 for the three months ended
September 30, 2012. Year to date 2013
new project awards and bookings exceed $19
million which is more than double the amount of new project
awards and bookings when compared to the same period in 2012.
"From a financial results perspective, this was a challenging
quarter for VirtualScopics," said Eric
Converse, interim Chief Executive Officer. "While we have
demonstrated remarkable improvement in our new project awards in
2013, our revenues are impacted by the slowdown in project awards
we experienced in 2012. We are encouraged by our bookings in 2013,
and believe that this positive trajectory will continue."
Other third quarter ended September 30,
2013 results were:
- Gross profit of $816,129 compared
to $1,462,056 in the third quarter of
2012.
- Gross margin of 37% compared to 44% in the third quarter of
2012.
- Operating loss of $745,014
compared to an operating loss of $53,293 in the third quarter of 2012.
- Adjusted EBITDA loss of $619,147
compared to Adjusted EBITDA of $192,045 for the third quarter of 2012.
Year to date September 30, 2013
results were:
- Revenues of $8,467,141 compared
to $10,366,236 for the same period in
2012.
- Gross profit of $3,371,504
compared to $4,216,907 in the first
three quarters of 2012.
- Gross margin of 40% compared to 41% in the first three quarters
of 2012.
- Operating loss of $1,731,098
compared to an operating loss of $438,767 in the first nine months of 2012.
- Adjusted EBITDA loss of $1,166,057 compared to Adjusted EBITDA of
$347,124 for the first three quarters
of 2012.
The company expects that full year 2013 revenues will be in line
with previous guidance of $10.5 million -
$11.0 million.
Mr. Converse continued, "I am very pleased with our sales and
marketing effort which has resulted in greatly improved year to
date awards and bookings when compared to 2012. The team is
employing smart strategies, such as complementing our early phase
capabilities with late phase capabilities and further leveraging
our core technology to strengthen relationships with customers. I
believe that actions like these, along with our continued
investment in both research and talent, have positioned us quite
well to generate value for our customers, stockholders and
employees. I look forward to working with the team to continue
improving our operational quality and productivity, and as a
result, improving our bottom line."
The Company's management will hold a question and answer call
today at 11:00 a.m. ET. Interested
participants should call 877-407-8035 when calling within
the United States or +1 201 689
8035 when calling internationally. This call can also be
accessed at www.virtualscopics.com and will be available for 30
days after the call.
The Company provides Adjusted EBITDA as a supplemental measure
to Generally Accepted Accounting Principles ("GAAP") regarding the
Company's operational performance. The Company defines Adjusted
EBITDA as earnings less interest, taxes (if any), depreciation and
amortization as further adjusted to exclude stock-based
compensation expense and the loss/gain on derivative liabilities
(mark to market adjustment for warrants). This financial
measure excludes the impact of certain items and, therefore, has
not been calculated in accordance with GAAP. The Company's method
of calculating Adjusted EBITDA, however, may differ from methods
used by other companies, and, as a result, Adjusted EBITDA measures
disclosed herein may not be comparable to other similarly titled
measures used by other companies. The Company continues to provide
information in accordance with GAAP, however, with the adoption of
Accounting Standards Codification ("ASC") 815-40 and the non-cash
variable nature of stock-based compensation expense and their very
substantial impact on the overall reported net income/loss, the
Company believes it is also helpful for investors to receive
additional information relating more specifically to the Company's
operating results. Accordingly, the Company has presented Adjusted
EBITDA which excludes the non-cash effects of ASC 815-40 and ASC
718 on its financial results. Management uses Adjusted EBITDA (a)
to evaluate the Company's financial performance, (b) to set
internal spending budgets, and (c) to measure operational
profitability. In addition, investors have requested these non-GAAP
financial measures as a means of providing consistent and
comparable information with past reports of financial results.
Pursuant to the requirements of Regulation G, the Company has
provided a reconciliation of Adjusted EBITDA to the most directly
comparable GAAP financial measure, net income/(loss), below.
About VirtualScopics, Inc.
VirtualScopics, Inc. is a leading provider of imaging solutions
to accelerate drug and medical device development.
VirtualScopics has developed a robust software platform for
analysis and modeling of both structural and functional medical
images. In combination with VirtualScopics' industry-leading
experience and expertise in advanced imaging biomarker measurement,
this platform provides a uniquely clear window into the biological
activity of drugs and devices in clinical trial patients, allowing
sponsors to make better decisions faster. For more
information about VirtualScopics, visit www.virtualscopics.com.
Forward-Looking Statements
The statements contained in this press release that are not
purely historical are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended, and
are intended to be covered by the safe harbors created thereby.
These forward-looking statements include, but are not limited to,
statements regarding new project awards and bookings, the expected
benefits of the Company's sales and marketing efforts and/or
statements preceded by, followed by or that include the words
"believes," "could," "expects," "anticipates," "estimates,"
"intends," "plans," "projects," "seeks," or similar expressions.
Forward-looking statements deal with the Company's current plans,
intentions, beliefs and expectations. Investors are cautioned that
all forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements. Many of these risks and
uncertainties are discussed in the Company's Annual Report on Form
10-K for the fiscal year ended December 31,
2012 filed with the Securities and Exchange Commission (the
"SEC"), and in any subsequent reports filed with the SEC,
all of which are available at the SEC's website at www.sec.gov.
These include without limitation: the risk of cancellation or delay
of customer contracts or specifically as it relates to contact
awards, the risk that they may not get signed. Other risks
include the company's dependence on its largest customers and risks
of contract performance, protection of our intellectual property
and the risks of infringement of the intellectual property rights
of others. All forward-looking statements speak only as of the date
of this press release and the Company undertakes no obligation to
update such forward-looking statements.
-Financial tables to follow-
CONTACT:
Investor Relations:
Nicole Schoenberg
FleishmanHillard
212-453-2445
nicole.schoenberg@fleishman.com
VirtualScopics,
Inc. and Subsidiary
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Condensed
Consolidated Statements of Operations
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(unaudited)
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For the Three
Months
Ended September
30,
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For the Nine
Months
Ended September
30,
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2013
|
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2012
|
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2013
|
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2012
|
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Revenues
|
|
$
2,144,535
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|
$
3,095,080
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|
$
7,973,973
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|
$
9,487,055
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|
|
|
|
|
Reimbursement
revenues
|
|
83,342
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|
233,137
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|
493,168
|
|
879,181
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|
|
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|
|
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|
Total
revenues
|
|
2,227,877
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|
3,328,217
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|
8,467,141
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|
10,366,236
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Cost of
revenues*
|
|
1,328,406
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|
1,633,024
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|
4,602,469
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|
5,270,148
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|
|
|
|
|
Cost of reimbursement
revenues
|
|
83,342
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|
233,137
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|
493,168
|
|
879,181
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|
|
|
|
|
|
|
Total cost of
services
|
|
1,411,748
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|
1,866,161
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|
5,095,637
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|
6,149,329
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Gross
profit
|
|
816,129
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|
1,462,056
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|
3,371,504
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|
4,216,907
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Operating
expenses
|
|
|
|
|
|
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|
|
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|
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Research and
development
|
|
364,204
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|
397,803
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|
1,131,472
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|
1,111,967
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|
|
|
|
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Sales and
marketing
|
|
345,188
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|
312,140
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|
1,127,170
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|
954,605
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|
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|
|
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General and
administrative
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|
738,793
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|
578,107
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|
2,317,042
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|
1,848,007
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|
|
|
|
|
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Stock-based
compensation expense
|
|
24,095
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|
125,906
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|
251,188
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|
421,092
|
|
|
|
|
|
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Depreciation and
amortization
|
|
88,863
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|
101,393
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|
275,730
|
|
320,003
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
1,561,143
|
|
1,515,349
|
|
5,102,602
|
|
4,655,674
|
|
|
|
|
|
Operating
loss
|
|
(745,014)
|
|
(53,293)
|
|
(1,731,098)
|
|
(438,767)
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|
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|
|
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|
|
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Other income
(expense)
|
|
|
|
|
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|
|
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|
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|
|
Interest
income
|
|
1,030
|
|
1,044
|
|
5,381
|
|
2,174
|
|
|
|
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|
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Other
expense
|
|
(6,680)
|
|
(7,206)
|
|
(17,561)
|
|
(12,920)
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Unrealized (loss)
gain on change in
|
|
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|
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|
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fair value of
derivative liabilities
|
|
(658)
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|
(19,794)
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13,295
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(306,247)
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Total other (expense)
income
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|
(6,308)
|
|
(25,956)
|
|
1,115
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|
(316,993)
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Net loss
|
|
(751,322)
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|
(79,249)
|
|
(1,729,983)
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|
(755,760)
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|
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Preferred stock
deemed dividend
|
|
-
|
|
-
|
|
-
|
|
1,806,919
|
|
|
|
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|
Preferred stock
dividends
|
|
42,000
|
|
42,000
|
|
126,000
|
|
95,333
|
|
|
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Net loss attributable
to common stockholders
|
|
$
(793,322)
|
|
$
(121,249)
|
|
$
(1,855,983)
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|
$
(2,658,012)
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Basic and diluted
loss per share
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$
(0.27)
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$
(0.04)
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$
(0.62)
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$
(0.90)
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Weighted average
number of common shares outstanding
|
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basic and
diluted
|
|
2,979,952
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|
2,974,776
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|
2,979,952
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|
2,960,868
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*
|
Cost of revenues
includes non-cash stock-based compensation expense of $12,909 and
$18,039 for the three months ended
September 30, 2013
and 2012, respectively and $38,123 and $44,796 for the nine months
ended September 30, 2013 and 2012, respectively.
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|
VirtualScopics,
Inc. and Subsidiary
|
Condensed
Consolidated Balance Sheets
|
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|
September
30,
|
|
December
31,
|
|
2013
|
|
2012
|
Assets
|
(unaudited)
|
|
|
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|
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|
Current
assets
|
|
|
|
Cash
|
$
7,003,656
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|
$
8,523,807
|
Accounts receivable,
net
|
2,264,488
|
|
1,762,507
|
Prepaid expenses and
other current assets
|
420,572
|
|
437,698
|
Total current
assets
|
9,688,716
|
|
10,724,012
|
Patents,
net
|
1,364,688
|
|
1,470,436
|
Property and
equipment, net
|
226,530
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|
399,569
|
Other
assets
|
-
|
|
5,428
|
Total
assets
|
$
11,279,934
|
|
$
12,599,445
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
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Current
liabilities
|
|
|
|
Accounts payable and
accrued expenses
|
$
673,131
|
|
$
872,652
|
Accrued
payroll
|
569,309
|
|
481,661
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Unearned
revenue
|
505,543
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|
272,509
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Dividends
payable
|
251,333
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|
125,333
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Total current
liabilities
|
1,999,316
|
|
1,752,155
|
|
|
|
|
Commitments and
Contingencies
|
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Stockholders'
Equity
|
|
|
|
Convertible preferred
stock, $0.001 par value; 15,000,000 shares
authorized;
|
|
|
Series C-1 3,000
shares authorized; issued and outstanding, 3,000 shares at
September 30, 2013 and December 31, 2012; liquidation preference
$1,000 per share
|
3
|
|
3
|
Series B 6,000 shares
authorized; issued and outstanding, 600 at September 30, 2013 and
December 31, 2012; liquidation preference $1,000 per
share
|
1
|
|
1
|
Series A 8,400 shares
authorized; issued and outstanding, 2,190 at September 30, 2013 and
December 31, 2012; liquidation preference $1,000 per
share
|
2
|
|
2
|
Series C-2 3,000
shares authorized; issued and outstanding, 0 shares at September
30, 2013 and December 31, 2012; liquidation preference $1,000 per
share
|
-
|
|
-
|
Common Stock, $0.001
par value; 85,000,000 shares authorized; issued 2,992,928 and
2,979,952 shares at September 30, 2013 and December 31, 2012,
respectively; outstanding, 2,979,952 shares at September 30, 2013
and December 31, 2012, respectively
|
2,980
|
|
2,980
|
Additional paid-in
capital
|
21,971,215
|
|
21,807,904
|
Accumulated
deficit
|
(12,693,583)
|
|
(10,963,600)
|
Total stockholders'
equity
|
9,280,618
|
|
10,847,290
|
Total liabilities and
stockholders' equity
|
$
11,279,934
|
|
$
12,599,445
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Three Months
Ended
|
Adjusted EBITDA
(non-GAAP measurement):
|
|
September 30,
2013
|
September 30,
2012
|
|
|
(unaudited)
|
(unaudited)
|
|
|
|
|
Net loss
|
|
$
(751,322)
|
$
(79,249)
|
Interest income and
other expenses
|
|
5,650
|
6,162
|
Depreciation and
amortization
|
|
88,863
|
101,393
|
Stock-based
compensation expense
|
|
37,004
|
143,945
|
Unrealized loss on
change in fair value of derivative liabilities
|
|
658
|
19,794
|
Adjusted
EBITDA
|
|
$
(619,147)
|
$
192,045
|
Basic and
Diluted Adjusted EBITDA per common share, non-GAAP
|
|
$
(0.21)
|
$
0.06
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
Nine Months
Ended
|
Adjusted EBITDA
(non-GAAP measurement):
|
|
September 30,
2013
|
September 30,
2012
|
|
|
(unaudited)
|
(unaudited)
|
|
|
|
|
Net loss
|
|
$
(1,729,983)
|
$
(755,760)
|
Interest income and
other expenses
|
|
12,180
|
10,746
|
Depreciation and
amortization
|
|
275,730
|
320,003
|
Stock-based
compensation expense
|
|
289,311
|
465,888
|
Unrealized (gain)
loss on change in fair value of derivative liabilities
|
|
(13,295)
|
306,247
|
Adjusted
EBITDA
|
|
$
(1,166,057)
|
$
347,124
|
Basic and
Diluted Adjusted EBITDA per common share, non-GAAP
|
|
$
(0.39)
|
$
0.12
|
|
|
|
|
SOURCE VirtualScopics, Inc.