UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities
Exchange Act of 1934
Date of report (Date of earliest event reported) |
August 14, 2014 (August 14, 2014) |
VIRTUALSCOPICS, INC. |
(Exact name of registrant as specified in its charter) |
Delaware |
(State or other jurisdiction of incorporation) |
000-52018 |
04-3007151 |
(Commission File Number) |
(IRS Employer Identification No.) |
500 Linden Oaks, Rochester, New York |
14625 |
(Address of principal executive offices) |
(Zip Code) |
Registrant's telephone number, including area code |
(585) 249-6231 |
|
(Former Name or Former Address, if Changed Since Last Report) |
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
INFORMATION TO BE INCLUDED IN THE REPORT
Section 2 – Financial Information
Item 2.02 Results of Operations and Financial Condition
On August 14,
2014, VirtualScopics, Inc. (the “Company”) issued a press release announcing the financial results for the second quarter
ended June 30, 2014. A copy of the press release is attached hereto as Exhibit 99.1.
The information furnished
pursuant to this Item 2.02 and the exhibits hereto shall not be deemed “filed” for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated
by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act
except as shall be expressly set forth by specific reference in such filing.
Section 7 – Regulation FD
Item 7.01 Regulation FD Disclosure
On August 14,
2014, at 8:30 a.m. Eastern Time, VirtualScopics, Inc. held a conference call to discuss the financial results for the second quarter
ended June 30, 2014. The slides attached hereto as Exhibit 99.2 were prepared in connection with the conference call.
The information furnished
pursuant to this Item 7.01 and the exhibits hereto shall not be deemed “filed” for purposes of Section 18
of the Exchange Act, and shall not be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange
Act except as shall be expressly set forth by specific reference in such filing.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statement and Exhibits
(d) Exhibits
| 99.1 | Press Release, dated August 14, 2014 |
| 99.2 | Slides prepared in connection with Second Quarter 2014
Earnings Call |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Dated: August 14, 2014 |
VIRTUALSCOPICS, INC. |
|
|
|
|
|
|
|
By: |
/s/ James Groff |
|
Name: |
James Groff |
|
Title: |
Acting Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
Description |
99.1 |
Press Release, dated August 14, 2014 |
99.2 |
Slides prepared in connection with Second Quarter 2014 Earnings Call |
Exhibit 99.1
FOR IMMEDIATE RELEASE
VIRTUALSCOPICS, INC. REPORTS SECOND
QUARTER AND SIX MONTHS 2014 FINANCIAL RESULTS; AWARDS OUTSTANDING AND BOOKINGS REFLECT A TWO-FOLD INCREASE OVER 2013 FIRST SIX
MONTHS
ROCHESTER, N.Y., August 14, 2014—VirtualScopics, Inc.
(NASDAQ:VSCP), a leading provider of clinical trial imaging solutions, today reported the financial results for the second quarter
and six months ended June 30, 2014. Awards outstanding and bookings for the first six months of 2014 increased to $17.6 million,
more than double the $7.7 million reported during the same period in 2013. Year to date 2014 awards outstanding and bookings are
approximately $23.5 million, 115% of the $20.5 million recognized in the full year 2013 with over four months still left in the
year.
“We are very pleased with these year over year comparisons
and the fact that the positive momentum established in the first quarter of 2014 is continuing,” said Eric T. Converse, president
and chief executive officer. “New business wins this year include the return of two big pharma companies to VirtualScopics
and a Phase III clinical study with a significant new customer in addition to our first-ever program award in the first quarter
of 2014. We believe this year’s significant increase in awards outstanding and bookings will result in improved revenues
and the company’s return to profitability in 2015.”
“During the second quarter of 2014,” Mr. Converse
continued, “we completed a number of strategic initiatives that centered around the formation of an international commercial
and operational alliance with London-based IXICO plc, the brain health company. Less than two months after signing our strategic
alliance, we have already experienced the benefit of our two companies working together with our first joint win of an award. Additionally,
in June we opened a joint office in New Hope, Pennsylvania, in the heart of the Big Pharma corridor where many of our customers
are located. VirtualScopics and IXICO also announced the formation of a joint Scientific Advisory Board with seven initial members
that will focus on current and future roles of imaging in clinical trials for early and late phase oncology, cardiology, metabolic
disorders and neurology studies.”
Revenues for the second quarter of 2014 were $2,648,747 compared
to $3,706,677 in the second quarter of 2013. Revenues for the first six months of 2014 were $5,001,732 compared to $6,239,264 in
the first six months of 2013. In the second quarter of 2013, the company completed a six week, Phase III breast cancer study that
generated over $1 million in revenue. In addition, the decrease in revenues in the 2014 periods is indicative of the related slowdown
in the amount of new projects awarded in 2012, the timing of the initiation of projects, and the large number of studies that ended
during 2013 and the first six months of 2014.
-more-
Imaging Solutions for Clinical
Trials |
500 Linden
Oaks Ÿ Second
Floor Ÿ Rochester,
NY 14625 Ÿ P:585.249.6231
Ÿ F:585.218.7350
info@virtualscopics.com
Ÿ www.virtualscopics.com |
VirtualScopics, Inc. Second Quarter 2014 Financial Results,
page 2
VirtualScopics reported a net loss for the second quarter of
2014 of $731,531 compared to net
income of $134,286 in the second quarter of 2013. In the first
six months of 2014, the company reported a net loss of $1,377,904 compared to a net loss of $978,661 in the 2013 six months period.
The net loss in the 2014 periods is primarily related to the decrease in the volume of revenue and VirtualScopics’ increased
investments in infrastructure, systems, training and human capital offset by no additional monies being spent on the personalized
medicine application.
“We look forward to our positive new business development
efforts continuing in the second half of 2014,” Mr. Converse said. “The entire VirtualScopics team is focused on providing
the
highest quality customer service and unsurpassed innovative
imaging solutions for all of our pharmaceutical and contract research organization (CRO) customers. We will continue to invest
in our business and believe the investments we are making this year will result in the company’s future prosperity.”
Conference Call and Webcast Information
The company’s management will host a conference call and
webcast today at 8:30 a.m. ET to discuss the company’s second quarter and six months 2014 financial results and business
outlook. The conference call dial in information, webcast URL and replay information is as follows:
| · | Domestic Call Dial In: 877-407-8035 |
| · | International Call Dial In: 201-689-8035 |
| · | Conference Call ID: 13587794 |
An accompanying slide presentation to enhance managements’
formal remarks, as well as a webcast of the call, can be accessed at www.virtualscopics.com/webcasts.aspx
or at:
http://www.investorcalendar.com/IC/CEPage.asp?ID=173036.
A replay and slide presentation will be available one hour after
the conclusion of the conference call for 90 days, and can be accessed accordingly:
| · | Replay Domestic Call Dial In: 877-660-6853 |
| · | Replay International Call Dial In: 201-612-7415 |
| · | Replay Conference Call ID: 13587794 |
| · | Webcast and
slide presentation can be accessed at www.virtualscopics.com/webcasts.aspx
or at: http://www.investorcalendar.com/IC/CEPage.asp?ID=173036. |
About VirtualScopics, Inc.
VirtualScopics, Inc. (NASDAQ:VSCP) is a leading provider of
clinical trial imaging solutions to accelerate drug and medical device development. For risk-averse, time-constrained Clinical
-more-
Imaging Solutions for Clinical
Trials |
500 Linden
Oaks Ÿ Second
Floor Ÿ Rochester,
NY 14625 Ÿ P:585.249.6231
Ÿ F:585.218.7350
info@virtualscopics.com
Ÿ www.virtualscopics.com |
VirtualScopics, Inc. Second Quarter 2014 Financial Results,
page 3
Trial Study Teams, Medical Directors and Imaging Scientists
who require quality imaging data delivered on-time, within budget and on a consistent basis, VirtualScopics’ clinical trial
imaging solutions are an inspired true exception to commonly accepted services provided by other clinical trial imaging providers.
Because of the scientific and operational flexibility and responsiveness they can offer, VirtualScopics’ clinical trial
imaging solutions deliver special performance advantages compared to other image service providers that offer common, every day
clinical trial imaging services. For more information about VirtualScopics, Inc. please 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 the expected benefits of the company’s
investment in infrastructure, new office in New Hope, Pennsylvania, the Scientific Advisory Board, the strategic alliance with
IXICO plc, the increase in awards outstanding and bookings and new customer contract signings and awards 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, 2013 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 contract
awards, the risk that they may not get signed. Other risks include the company’s dependence on its largest customers and
risk 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.
For More Information, Contact:
Donna N. Stein, APR, Fellow PRSA
Managing Partner,
Donna Stein & Partners
315-361-4672
Email: dstein1@twcny.rr.com
Financial Tables to Follow
Imaging Solutions for Clinical
Trials |
500 Linden
Oaks Ÿ Second
Floor Ÿ Rochester,
NY 14625 Ÿ P:585.249.6231
Ÿ F:585.218.7350
info@virtualscopics.com
Ÿ www.virtualscopics.com |
VirtualScopics, Inc. and Subsidiary
Condensed Consolidated Statements of Operations
(unaudited)
| |
For the Three Months Ended | | |
For the Six Months Ended | |
| |
June 30, | | |
June 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
| |
| | |
| | |
| | |
| |
Revenues | |
$ | 2,542,048 | | |
$ | 3,546,607 | | |
$ | 4,789,001 | | |
$ | 5,829,438 | |
Reimbursement revenues | |
| 106,699 | | |
| 160,070 | | |
| 212,731 | | |
| 409,826 | |
Total revenues | |
| 2,648,747 | | |
| 3,706,677 | | |
| 5,001,732 | | |
| 6,239,264 | |
| |
| | | |
| | | |
| | | |
| | |
Cost of services | |
| 1,601,679 | | |
| 1,776,524 | | |
| 3,090,758 | | |
| 3,274,063 | |
Cost of reimbursement revenues | |
| 106,699 | | |
| 160,070 | | |
| 212,731 | | |
| 409,826 | |
Total cost of services | |
| 1,708,378 | | |
| 1,936,594 | | |
| 3,303,489 | | |
| 3,683,889 | |
Gross profit | |
| 940,369 | | |
| 1,770,083 | | |
| 1,698,243 | | |
| 2,555,375 | |
| |
| | | |
| | | |
| | | |
| | |
Operating expenses | |
| | | |
| | | |
| | | |
| | |
Research & development | |
| 306,289 | | |
| 349,754 | | |
| 592,185 | | |
| 803,164 | |
Sales & marketing | |
| 482,807 | | |
| 430,153 | | |
| 827,884 | | |
| 787,805 | |
General & administrative | |
| 807,642 | | |
| 777,354 | | |
| 1,494,643 | | |
| 1,772,656 | |
Depreciation & amortization | |
| 75,526 | | |
| 90,554 | | |
| 162,028 | | |
| 186,867 | |
Total operating expenses | |
| 1,672,264 | | |
| 1,647,815 | | |
| 3,076,740 | | |
| 3,550,492 | |
| |
| | | |
| | | |
| | | |
| | |
Operating (loss) income | |
| (731,895 | ) | |
| 122,268 | | |
| (1,378,497 | ) | |
| (995,117 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense) | |
| | | |
| | | |
| | | |
| | |
Other income | |
| 1,051 | | |
| 12,425 | | |
| 2,057 | | |
| 18,304 | |
Other expense | |
| (687 | ) | |
| (407 | ) | |
| (1,464 | ) | |
| (1,848 | ) |
Total other income | |
| 364 | | |
| 12,018 | | |
| 593 | | |
| 16,456 | |
| |
| | | |
| | | |
| | | |
| | |
Net (loss) income | |
| (731,531 | ) | |
| 134,286 | | |
| (1,377,904 | ) | |
| (978,661 | ) |
| |
| | | |
| | | |
| | | |
| | |
Preferred stock dividends | |
| 42,000 | | |
| 42,000 | | |
| 84,000 | | |
| 84,000 | |
Net (loss) income available to common stockholders | |
$ | (773,531 | ) | |
$ | 92,286 | | |
$ | (1,461,904 | ) | |
$ | (1,062,661 | ) |
| |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average basic shares outstanding | |
| 2,992,853 | | |
| 2,979,952 | | |
| 2,992,421 | | |
| 2,979,952 | |
Weighted average diluted shares outstanding | |
| 2,992,853 | | |
| 3,467,138 | | |
| 2,992,421 | | |
| 2,979,952 | |
Basic and diluted (loss) earnings per share | |
$ | (0.26 | ) | |
$ | 0.03 | | |
$ | (0.49 | ) | |
$ | (0.36 | ) |
Imaging Solutions for Clinical
Trials |
500 Linden
Oaks Ÿ Second
Floor Ÿ Rochester,
NY 14625 Ÿ P:585.249.6231
Ÿ F:585.218.7350
info@virtualscopics.com
Ÿ www.virtualscopics.com |
VirtualScopics, Inc.
Condensed Consolidated Balance Sheets
| |
June 30, | | |
December 31, | |
| |
2014 | | |
2013 | |
| |
(Unaudited) | | |
| |
Assets | |
| | | |
| | |
Current assets | |
| | | |
| | |
Cash | |
$ | 5,573,576 | | |
$ | 7,330,630 | |
Accounts receivable, net | |
| 1,861,735 | | |
| 1,725,070 | |
Prepaid expenses and other current assets | |
| 371,341 | | |
| 397,699 | |
Total current assets | |
| 7,806,652 | | |
| 9,453,399 | |
| |
| | | |
| | |
Patents, net | |
| 1,271,586 | | |
| 1,334,420 | |
Property and equipment, net | |
| 261,608 | | |
| 221,700 | |
Total assets | |
$ | 9,339,846 | | |
$ | 11,009,519 | |
| |
| | | |
| | |
Liabilities and Stockholders' Equity | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 840,540 | | |
$ | 846,071 | |
Accrued payroll | |
| 685,595 | | |
| 837,611 | |
Unearned revenue | |
| 588,187 | | |
| 745,028 | |
Dividends payable | |
| 335,333 | | |
| 293,333 | |
Total current liabilities | |
| 2,449,655 | | |
| 2,722,043 | |
| |
| | | |
| | |
Commitments and Contingencies | |
| | | |
| | |
| |
| | | |
| | |
Stockholders' Equity | |
| | | |
| | |
Convertible preferred stock, $0.001 par value; 1,000,000 and 15,000,000 shares authorized at June 30, 2014 and December 31, 2013, respectively; | |
| | | |
| | |
Series C-1 3,000 shares authorized; issued and outstanding, 3,000 shares at June 30, 2014 and December 31, 2013; liquidation preference $1,000 per share | |
| 3 | | |
| 3 | |
Series B 6,000 shares authorized; issued and outstanding, 600 shares at June 30, 2014 and December 31, 2013; liquidation preference $1,000 per share | |
| 1 | | |
| 1 | |
Series A 8,400 shares authorized; issued and outstanding, 2,190 shares at June 30, 2014 and December 31, 2013; liquidation preference $1,000 per share | |
| 2 | | |
| 2 | |
Series C-2 3,000 shares authorized; issued and outstanding, 0 shares at June 30, 2014 and December 31, 2013; liquidation preference $1,000 per share | |
| - | | |
| - | |
Common stock, $0.001 par value; 20,000,000 and 85,000,000 shares authorized at June 30, 2014 and December 31, 2013, respectively; | |
| | | |
| | |
issued 2,992,853 shares at June 30, 2014 and December 31, 2013, respectively; outstanding, 2,992,853 and 2,991,869 shares at June 30, 2014 and December 31, 2013, respectively | |
| 2,993 | | |
| 2,992 | |
Additional paid in capital | |
| 21,973,237 | | |
| 21,992,619 | |
Accumulated deficit | |
| (15,086,045 | ) | |
| (13,708,141 | ) |
Total stockholders' equity | |
| 6,890,191 | | |
| 8,287,476 | |
| |
| | | |
| | |
Total liabilities and stockholders' equity | |
$ | 9,339,846 | | |
$ | 11,009,519 | |
Imaging Solutions for Clinical
Trials |
500 Linden
Oaks Ÿ Second
Floor Ÿ Rochester,
NY 14625 Ÿ P:585.249.6231
Ÿ F:585.218.7350
info@virtualscopics.com
Ÿ www.virtualscopics.com |
# # #
Imaging Solutions for Clinical
Trials |
500 Linden
Oaks Ÿ Second
Floor Ÿ Rochester,
NY 14625 Ÿ P:585.249.6231
Ÿ F:585.218.7350
info@virtualscopics.com
Ÿ www.virtualscopics.com |
Exhibit 99.2
500 Linden Oaks, 2 nd Floor Rochester, New York 14625 (585) 249 - 6231 www.virtualscopics.com NASDAQ: VSCP Second Quarter 2014 Conference Call August 14, 2014 1
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 the expected benefits of the company’s investment in infrastructure, new office in New Hope, Pennsylvania, the Scientific Advisory Board, the strategic alliance with IXICO plc, the increase in awards outstanding and bookings and new customer contract signings and awards 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, 2013 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 contract awards, the risk that they may not get signed. Other risks include the company’s dependence on its largest customers and risk 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. 2
3
15.1% 10.2% 7.1% 5.1% 62.5% Loeb Investors Company Merck Global Health Innovation Fund, LLC University of Rochester Board Members and Executives Stockholders with less than 5% of holdings Beneficial Ownership Percentages As of April 30, 2014 4
5
6
x We believe 2014 revenues will be relatively flat with 2013 Timing of the initiation of 2013 and 2014 projects The number of projects that closed during 2013 and the first half of 2014 x We expect operating expenses to trend higher for the remainder of the year Investments in personnel, operations, and systems New office in Pennsylvania x Cash balance of approximately $5.6 million No long term debt Cash burn will continue through out 2014 We will monitor our cash and evaluate, if necessary, any financing needs as we proceed through out the year 7
x Strategic Alliance with IXICO plc signed in June x Joint office opened in New Hope, Pennsylvania Strategically located among many pharmaceutical customers x Joint Scientific Advisory Board finalized with a seven member team x Investments made in People, Operations, Systems and Infrastructure to strengthen and grow core business 8
x The TEAM x Planning/Forecasting Tools x IXICO Alliance – quick win! x PPD – great possibilities x Phase III Wins x Improved Messaging 9
x Mood of the Industry x Continued Outsourcing from Pharma to CROs x Sound Investments in People & Infrastructure x Trending of Awards and Bookings x The TEAM 10
Your feedback is always appreciated! 11
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