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) |
June 5, 2015 (June 2, 2015) |
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 5 – Corporate Governance and Management
| Item 5.07 | Submission of Matters to a Vote of Security Holders. |
At the Annual Meeting
of Stockholders of VirtualScopics, Inc. (the “Company”) held on June 2, 2015 (the “Annual Meeting”),
the following nominees for director were elected to serve until the 2016 Annual Meeting of Stockholders and until a successor is
elected and qualified: Eric Converse, Robert G. Klimasewski, Bruce L. Lev, Charles E. Phelps, Terence A. Walts
and Michael Woehler. Andrew Levitch was elected in February 2015 by unanimous consent of the holders of the Company’s outstanding
Series C-1 Preferred Stock and will continue to serve as a director in that capacity. On other business conducted at the Annual
Meeting, the stockholders (i) ratified the appointment of Marcum LLP as the Company's Independent Registered Public Accounting
Firm for the year ending December 31, 2015, and (ii) approved, on an advisory basis, the compensation of certain of the
Company’s executive officers.
The following tables
present the final voting results for each of the proposals submitted to a vote of stockholders at the Annual Meeting. Unless otherwise
indicated, all results presented below reflect the voting power of the Common Stock, Series A Preferred Stock, Series B
Preferred Stock and Series C-1 Preferred Stock, voting together as a single class:
PROPOSAL 1: To elect six (6)
members to the Company’s Board of Directors to serve a one (1) year term.
| |
Number of Votes |
| |
For | |
Withheld | |
Broker Non-Votes |
Eric Converse | |
1,359,034 | |
131,379 | |
1,433,653 |
Robert G. Klimasewski | |
1,161,757 | |
328,656 | |
1,433,653 |
Bruce L. Lev | |
1,358,486 | |
131,927 | |
1,433,653 |
Charles E. Phelps | |
1,163,379 | |
327,034 | |
1,433,653 |
Terence A. Walts | |
1,163,409 | |
327,004 | |
1,433,653 |
Michael Woehler | |
1,359,364 | |
131,049 | |
1,433,653 |
PROPOSAL 2: To ratify the appointment
of Marcum LLP, as the Company’s independent registered public accounting firm for the fiscal year ending December 31,
2015.
| |
Number of Votes | |
| |
For | | |
Against | | |
Abstain | |
All Classes Voting Together | |
| 2,743,850 | | |
| 54,661 | | |
| 125,555 | |
PROPOSAL 3: To cast a non-binding
advisory vote approving the compensation of certain of the Company’s executive officers.
| |
Number of Votes | |
| |
For | | |
Against | | |
Abstain | | |
Broker Non-
Votes | |
All Classes Voting Together | |
| 1,333,806 | | |
| 31,341 | | |
| 125,266 | | |
| 1,433,653 | |
Section 7 – Regulation FD
| Item 7.01 | Regulation FD Disclosure. |
During the Annual Meeting,
presentations regarding the Company’s business and operations were made by members of the Company’s senior management
team. A copy of the transcript of the Annual Meeting is attached hereto as Exhibit 99.2. The slides attached hereto as Exhibit 99.3
were prepared in connection with the presentations.
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 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, or the Exchange Act except as shall be expressly
set forth by specific reference in such filing.
Section 8 – Other Events
On June 5, 2015,
the Company issued a press release announcing the results of the Annual Meeting. A copy of the press release is attached as Exhibit 99.1
to this current report on Form 8-K.
Section 9 – Financial Statements and Exhibits
| Item 9.01 | Financial Statement and Exhibits |
(d) Exhibits
| 99.1 | Press Release, dated June 5, 2015 |
| 99.2 | Transcript of Annual Meeting |
| 99.3 | Slides prepared in connection with Annual Meeting presentations |
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: June 5, 2015 |
VIRTUALSCOPICS, INC. |
|
|
|
|
By: |
s James Groff |
|
Name: |
James Groff |
|
Title: |
Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Press Release, dated June 5, 2015 |
|
|
|
99.2 |
|
Transcript of Annual Meeting |
|
|
|
99.3 |
|
Slides prepared in connection with Annual Meeting presentations |
Exhibit 99.1
![](tex99-1logo.jpg)
VIRTUALSCOPICS, INC. REPORTS VOTING
RESULTS AT ANNUAL MEETING OF SHAREHOLDERS; ALL BOARD SEATS RENEWED
ROCHESTER, N.Y., June 5, 2015—VirtualScopics, Inc.
(NASDAQ:VSCP), a leading provider of clinical trial imaging solutions, today announced that shareholders have voted for and ratified
all three proposals contained in the company’s 2015 proxy statement. The outcome of this morning’s vote at the Annual
Meeting of Shareholders is as follows:
| · | Re-elected to the Board of Directors to serve until the 2016 Annual Meeting of Shareholders are Eric T. Converse, Robert G.
Klimasewski, Bruce L. Lev, Charles E. Phelps, Ph.D., Terence A. Walts, and Michael Woehler, Ph.D. Andrew Levitch, Ph.D., who serves
as the director designee of the holders of the company’s Series C-1 preferred stock, has also been re-elected. |
| · | Marcum LLP was named the company’s independent registered public accounting firm for the fiscal year ending December
31, 2015. |
| · | Approval of compensation for certain executive officers. |
Five members of VirtualScopics’ management team made
presentations discussing “Operational Excellence” and the company’s future outlook. The Annual Meeting of Shareholders
was webcast live and a replay of the meeting and accompanying slide presentations can be found on the company’s website,
www.virtualscopics.com, under “investors” and “webcasts” or at http://www.investorcalendar.com/IC/CEPage.asp?ID=174030.
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 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 available, 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 on 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 the 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
-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 Ÿ
info@virtualscopics.com Ÿ
www.virtualscopics.com |
Annual Meeting Voting Results, page 2
limited to, statements regarding the expected benefits of the
company’s investment in infrastructure, sales and marketing efforts, the increase in backlog, awards and bookings and the
performance of existing projects 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,
2014 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 that contract awards do not turn into signed contracts. 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 on 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
Phone: 315-361-4672
Email: dstein1@twcny.rr.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 Ÿ
info@virtualscopics.com Ÿ
www.virtualscopics.com |
Exhibit 99.2
Transcript of
VirtualScopics, Inc.
2015 Annual Meeting
June 2, 2015
Participants
Greg Gribben – Corporate Secretary
Eric Converse – President and Chief Executive
Officer
Jim Groff – Chief Financial Officer
Ron Way – Vice President of Operations
Michael Barret – Director of Data Management
Team
Lianne Cox – Director of Project Management
Presentation
Eric Converse – President and Chief Executive
Officer
Good morning, ladies and gentlemen. If you'll take
your seats, we'll commence with the 2015 Annual Meeting of VirtualScopics, Inc. I'm Eric Converse, President and Chief Executive
Officer of VirtualScopics. I would also like to welcome those of you who are joining us this morning via webcast. Today's meeting
is being recorded, and a webcast and accompanying slide presentations will be archived on our investor relation's page at the
conclusion of this meeting.
I thank everyone for joining us today, and we look
forward to updating you on the progress of the company. At this time, I call this meeting to order.
I would like to take this opportunity to introduce
my colleagues on the board: our Chairman, Chuck Phelps; Robert Klimasewski; Bruce Lev; Terence Walts; and our two new members,
Michael Woehler and Andrew Levitch.
Ladies and gentlemen, each of you were given an agenda
and a sheet entitled, "Rules of Procedure," and I ask that you please review these at this time. So that we may conduct
an orderly meeting, we will first proceed with the business items of the meeting. Please save all questions that are not related
to the matters presented for consideration by the stakeholders until the conclusion of this meeting.
I'd now like to introduce our Corporate Secretary,
Greg Gribben [ph] to attend to some preliminary items of business concerning the meeting. Greg?
Greg Gribben – Corporate Secretary
Thank you, Eric. Ladies and gentlemen, notice of
the meeting was duly and properly mailed on or about April 23, 2015. I have an affidavit to that effect on Continental Stock Transfer
& Trust Company, the company's transfer agent. It mailed the notice to stakeholders on that date. These documents are available
if any stockholder wishes to examine them, and they will be included in the minutes of the meeting.
The board has appointed an inspector of elections
for this meeting to receive the proxies, judge the qualifications of voters, describe rules for voting, collect and count the
votes, report in writing the results of ballots taken at the meeting and perform such other duties as may be required by the chairman
of the board. Martha Bielski [ph] has been designated to act as Inspector of Elections. She assigned an oath of office agreeing
to perform such duties, and the oath will be included in the minutes of the meeting. At this time, all persons holding proxies
which they desire to have recorded, please hand them to Martha.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
A list of VirtualScopics stockholders of record as
of the record date is at this meeting and open for inspection should any stockholder wish to examine it. I've been advised by
the Inspector of Elections that prior to this meeting, 86% of the company's outstanding shares is present in person or by proxy.
Since the majority of the voting shares are represented here today, a quorum is present, and the business of the meeting may proceed.
Eric?
Eric Converse – President and Chief Executive
Officer
Okay. Let's move on to business. The notice of the
annual meeting and proxy statement of VirtualScopics dated April 22, 2015, which was distributed to stakeholders along with proxy
cards respite that there were three items of business to be voted upon today. First, we have the election of six directors as
members of the board of directors to serve a one-year term: Eric Converse, Robert Klimasewski, Bruce Lev, Charles Phelps, Terence
Walts and Michael Woehler have been nominated by the board of directors of the company to stand for election as directors.
The next item on the agenda is to ratify the appointment
of Marcum LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2015.
The last item on the agenda is to have a non-binding
advisory vote approving the compensation of certain of our executive officers.
Since there are no other nominations or proposals
that have been brought to the attention of the company, I hereby declare the nominations and proposals closed.
We will now proceed to ballot. The polls are now
open here on June 2, 2015 at 10:02 a.m. on all of these matters and will remain open until everyone present has had an opportunity
to vote. As stated in the notice of meeting and proxy materials, only stakeholders of record as of the record date are entitled
to vote at the meeting. If your name does not appear on the list of stakeholders of record, you must present to the Inspector
of Elections with your identification and the duly-issued proxy from a stockholder of record as of the record date in order to
vote at the meeting. If you are a record holder and have already submitted a proxy, please inform the Inspector of Elections so
that she may correctly reflect your vote in the vote count.
If you are a stockholder of record, please raise
your hand if you need a ballot and identify yourself so the Inspector of Elections may verify your name on our list of stakeholders
of record. Please return your ballots to the Inspector after voting. Since all stakeholders desiring to vote have done so, I will
declare the polls closed. Will the Inspector of Elections please collect and tabulate all the votes? The Inspector of Elections
will now tabulate the votes and provide us with a report following the management presentations.
There being no further business, I declare the meeting
to be adjourned. We will hold an informal session with a business update from the management followed by the voting results.
I'm now going to turn to Slide 3. Today's presentation
may contain forward-looking statements, and I ask that you review the Safe Harbor statement on the screen and forward-looking
statements that may be made in our presentations today.
I'm turning to Slide 4, and I will be turning the
meeting over to Jim Groff, our Chief Financial Officer, to provide a summary of the financial results of VirtualScopics. Jim?
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
Jim Groff – Chief Financial Officer
Thank you, Eric. Good morning. I would like to start
off this morning by recapping some highlights from the first quarter of 2015 conference call. Let's turn to Slide number 5.
Revenues for the quarter ended March 31, 2015 were
approximately $2.8 million as compared to $2.4 million for the quarter ended March 31, 2014 representing a $461,000 increase or
20% increase. This is a direct result from the increase on project bookings in 2014 as the sights are being trained, recruitment
of participants has begun to produce studies and time points start to be received. Time points are the images received from the
sites that we analyze and provide the data back to our customers. We are experiencing an increase in the number of time points
received during the second quarter which we believe will continue going forward and is an indication of a positive trend.
Excluding the six-week retrospective Phase III breast
cancer study, which generated over $1 million in revenue during the second quarter of 2013, this is the highest revenue achieved
for a quarter since the third quarter of 2012, almost three years ago. We view this as a significant achievement.
The next item that I would like to point out is the
improvement in our net loss, which was $552,000, down 14% from $647,000 in the prior year's quarter. The decrease in our net loss
was related to increase in revenue and higher gross margin recognized during the first quarter of 2015 as compared to the first
quarter of 2014. We believe this trend will continue throughout the year as we work our way towards profitability.
Let's now review the balance sheet on Slide number
6. As of March 31, 2015, we had a cash balance of $2.4 million as compared to $4 million at the close of 2014. Our cash balance
declined during the first quarter of 2015 as a result of payments made during this period relating to previous year's expenses,
continued losses and the timing of receivables. We anticipate the cash balance to decrease going forward as revenues continue
to climb and expenses to support growth remain constant, therefore the funding of losses reduces.
As part of our efforts in managing our overall cash
position, we are evaluating several credit facility financing options that have been presented to us from various financial institutions
for which we expect to close within the next few months. A portion of the funding will be used for hardware and software investments
in our infrastructure, which will further enhance our Phase III capabilities.
Additionally, the company has a strong balance sheet
with no long-term debt and blue chip receivables represented by large pharmaceutical companies. These positive factors are useful
in establishing debt financing without diluting the position of shareholders.
Overall, the first quarter of 2015 demonstrated considerable
increase in revenues over the prior year's quarter and the highest quarter revenue recognized in years. As a result of this momentum,
we believe we're on our way to return to a solid growth rate and profitability.
I will now turn it over to Eric. Please proceed to
Slide number 7 in the presentation.
Eric Converse – President and Chief Executive
Officer
Thanks, Jim. I'm now going to move to Slide number
8. I just want to report a little bit on the progress we made in 2014 because we're all very proud of the year we've delivered.
One of the biggest issues or pieces we've developed is our alliances, and what these alliances have done is they’ve really
helped strengthen our global offering, and the feedback from customers in the past about some of our global coverage and we feel
that we addressed this this year with some of the new alliances.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
IXICO is the first one. They're the brain company.
They're based in London. That gave us a European foothold. With that, they also brought software that we've been very keen to
use which is TrialTracker. Some of my colleagues will speak to that later.
We've already had three wins in that alliance, which
we're very encouraged by because it's just showing that we're taking traction on some of these alliances we're building. In addition
to that, we met a company by the name of Micron in Japan mid-year. We had a project in Japan and we needed more boots on the ground
there; we met them, we worked with them, and we've had a very successful delivery of a project there. As a result of that, we
decided to make this also part of our commercial alliance. So, they have joined in the alliance we signed with IXICO and now the
three of us are working on a global coverage. The nice part about that is underlying all of that we have a relationship with TTB,
which is continuously creating more and more opportunities to us as a result of the alliance we've had with them for quite a few
years.
One of the most important things we've done as well
is investments on our infrastructure. What that’s done is it's really strengthened the backbone of this company. There's
been a lot of attention this year on making sure that we're going to have the proper support for the new systems we're putting
in because on top of that has been our investments in operational efficiency. As I just mentioned, TrialTracker is one of them.
We've had a great achievement here with operational excellence, but what you really need to do is make sure that you become more
efficient but at the same time not compromise any of the operational excellence that the team has built.
This business is a lot about our people, and getting
out there and having our team meet with our customers has been a critical focus as well. We've had more face-to-face interactions
with our customers this year because what we're doing is building their trust. I will tell you when I came on as CEO, when I went
to meet the customers, they were more focused on their project management than they were who was leading this company because
this project management team and the operations was really going to keep the trust in our customers and keep them coming back
to us; getting our people out there to meeting with the sponsors face-to-face has been a very good decision on our part and we're
seeing a lot of benefits coming back to us as a result.
I've also had someone mention to me this morning
that they're seeing a lot more activity in the markets about our company. We have really stepped up our marketing campaign this
year. Some of you may have already seen our new website. We have our direct marketing message which we focused quite a bit on
early this year, and as many of you are also aware, we opened an office in New Hope last year.
This year we had recently a live seminar broadcast
from New Hope. What was great about that is because we're right in the pharma corridor, we had people there from large pharma
attending. What was also nice about our location is the next day we had a large pharma company come and present to us. That’s
not something we were able to do here in Rochester. I think opening the office in New Hope is paying dividends already. The nice
thing about that is when you're close to your customers, you're able to work with them, and as we say, collaboration is at our
core and it's something we're pushing very much so through our interaction with our customers.
I'm now going to turn to Slide 9. This is my favorite
part. Last year when we gathered for this meeting, I had members of the Image Science and Business Development teams here to present
with me. Ed and John explained the complexity of the science, and Eric walked you through the sales process. It was the first
time we included members of the management team in the shareholder meeting. We thought it would be helpful in order to allow our
shareholders to get to know more of the team.
This year, we want to continue to introduce more
of the team as our team is our greatest asset. No investment in infrastructure is more important than the investment we've made
in human capital. Fortunately, we have been investing in operational improvements by way of infrastructure and our people. Today,
I want to focus on the people.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
Ron Way, our Vice President of Operations and his
team will speak for the majority of the meeting today, but before I hand over to Ron, I just want to make a few introductions
to some of my colleagues so investors will see some of the faces behind our investments and the human capital over the past year.
Today with us, we have a deepened strength in imaging science. Please [audio skipping] who joined us in July 2014 with a master's
in biomedical engineering; and Dr. Jennifer Fox, PhD in neuroscience who joined us in March 2014. Both professionals have extended
the coverage in our imaging science team as far as research and charter writing.
Also with us today is a 14-year veteran of VirtualScopics,
Larry Molinelli, the Production Support Manager for imaging science. Larry transferred into imaging science this year and has
been focused on developing a cardiac program with multiple modalities which include echo cardiac MRI, MUGA and our 2D speckle
tracking. Larry also oversees more complicated MRI site training and the training of new radiologists.
Not present with us today is Dr. Vijay Shah who has
been with VirtualScopics since January 2011 and has a PhD in computer engineering. Dr. Shah is not with us today as part of his
increased responsibility over the past year now has him presenting at a conference in Toronto.
These individuals have helped strengthen our scientific
credibility and capabilities. We welcome these additions and increased responsibility from existing colleagues and look forward
to continue to strengthen the key department of VirtualScopics.
Next, I want to introduce you to Patrick Rox, Power
Director of Software Development. Pat joined us in April 2014 with over 20 years of experience in software development. Pat is
responsible for all the changes we have made to our platform and operational efficiencies with both in-house developments and
third-party software. Pat brings with him an open mind to how best manage gains and operational efficiencies and embrace software
packages, which can help increase these efficiencies much more quickly than an in-house development as we advance our goals and
operational excellence. Pat's balanced approach on in-house versus buy has helped unify and focus the team under one goal of operational
efficiency and the most cost efficient way to improve it.
We also have another familiar face with us, Therese
Crilly who's been with the company over a dozen years. Therese leads the Incoming Image Quality Department and manages the technologists
and radiologists for Image Analysis. Therese is also leading the recruitment of more specialized readers into our network as a
result of customer feedback we've received over the past year.
I should also mention that it was Therese who originally
requested more company training for everyone in order to give everyone a better understanding of what each person at the company
does as part of the VirtualScopics machine. This is exactly the mindset we need in order to advance the quality of our team. Under
the leadership of our management team, Therese's suggestion has become a policy and has led to further training and education
among her VirtualScopics' colleagues. Unlocking this potential is an extreme source of pride for me.
Now, with a renewed focus on human resources, we
added a Director to Human Resources last fall. Barbara Ulrich joined the team with a degree in organizational development and
over 25 years' experience in a senior HR leadership role. Further, Barbara has recently achieved a new certification through the
Society of Human Resources which less than 2% of senior HR professionals hold in the country. With this, Barbara sets an example
of being in the top percentile among her HR colleagues in this society.
These professionals are a representation of the additional
talent and the investment in existing talent we've achieved over the past year, and I'm extremely proud to call these people my
colleagues.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
I'm now going to advance to Slide 10. Now, as I turn
the presentation to Ron and his team, I just want to remind everyone that since Ron joined the team in January of 2011, we have
been focused on improving our operational excellence. Four years later, under the leadership of Ron with his background as a Six
Sigma Black Belt and his ability to develop individuals and deepen our [indiscernible], we have achieved a level of operational
excellence which takes the complications associated with a clinical trial and breaks it down into a simple process which has performance
metrics to assure that our processes are monitored and maintain the level of excellence our customers have grown to expect from
its people and what keeps them coming back to us for repeat business.
I'll now turn it over to Ron and moving to Slide
11.
Ron Way – Vice President of Operations
Thank you, Eric. Good morning, everybody. This morning
I'd like to discuss how we're working to achieve operational excellence.
I'm moving to Slide 12. I'll start by describing
our process flow and try to simplify it by comparing it to a standard manufacturing process. I'll also discuss how we define and
measure operational excellence and how we've invested in our people and software tools to achieve it. Finally, I'll introduce
some key department heads that are leading the way on the path to excellence.
Let's move to Slide 13. It's easy to overcomplicate
our process. We have thousands of active sites across approximately 120 trials. Each scan that comes in has to be matched and
analyzed against a specific project protocol. Although some projects are similar, many require the development of customized software.
Up close, the process can become so complex it can
be overwhelming, but if we can simplify the operations, we can apply some standard principles that will help us to achieve operational
excellence. From the highest level, our finished products are the measurements resulting from the analysis. So, the process is
simply images coming in and numbers going out.
A typical manufacturing process has suppliers, raw
materials and production process that we use to a finished product. Our process is no different. The sites represent our suppliers,
and after the site is selected, we need to provide them the exact specifications to produce raw materials. In our case, the specification
is the imaging protocol that the site must follow to create top quality images for the patient. The raw material, the images,
are received and checked against the specification. This is our incoming inspection process. Images that meet this specification
move on to the next process. If an image fails QC, then the site is contacted to reconcile any issues.
Let's move to Slide 14. The raw material images move
on to the next steps of the semi-automated manufacturing process. For VirtualScopics, we use multiple analysis platforms that
have either been developed in house or purchased from a third party and integrated into our database. Along the way, at every
step, quality control measures are built into the process steps to ensure conformance to specifications.
Finally, the measured values from the analysis are
placed into a results grid consisting of rows and columns of numbers. This is our finished product. The delivery grid contains
thousands, if not millions, of entries. Each of these entries must be perfect. For some companies, a Six Sigma quality level or
a defect level of about three parts per million is a goal. For us, it's just our starting point. We can't afford to have any defect
level.
So, how does this help us achieve operational excellence?
By simplifying our process, we can use proven systems such as Lean Six Sigma to improve our process steps, improve efficiencies
and achieve best in class operational excellence.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
Moving to Slide 15, we think there are three aspects
to operational excellence. First is that everyone on the team is focused on meeting and exceeding customer requirements. Each
day we need to do the right things to ensure that customer delivery is met. Second is that we cannot be satisfied with our present
state. We must always look to improve.
Finally, our people have to be empowered to make
the decisions needed to provide world-class customer service. Although getting there is difficult, it's easy to measure if you’ve
achieved it. We must deliver quality data on time within budget on a consistent basis all of the time. We have hundreds of deliveries
each month and achieve those goals greater than 99% of the time. We are consistently working toward perfection and our sponsors
are noticing. This year, we have already exceeded our repeat customer business compared to 2014.
Let's move to Slide 16. We've been focusing on this
path to operational excellence over the past four years. We'll get there by investing in our people and our systems. Our people
have a passion for what we do. Everyone in the company understands the importance of our role in new drug approval process.
I spoke earlier about how we can compare our process
to a standard manufacturing process that’s familiar to most people, but the fact is our job is about improving the lives
of people, and what we deliver can't be held in your hand. We are constantly reminded of the special responsibilities that we
have here.
Last month we were having our regular morning meeting
that we have as a kickoff to establish the priorities for the day, and one of the project managers brought up that a technologist
at a site was having some special difficulties matching the protocol, they needed a lot more support. The fact was she said that
a little boy was coming in for the scan next week. One of our trainers volunteered to change his personal schedule to accommodate
another training, and our data analysts knew that it would be also a long day to expedite the qualification images and documentation.
This dedication and commitment is what makes us different. It's a culture that we have. It's in our DNA.
One of the ways that we continue that culture is
through our interview process. A strong resume will get you consideration, but a commitment to customer service and exceeding
customer expectations will be the quality that we're searching for. We need our sponsors to view us as partners and count on us
to provide input into their projects. This collaboration is at our core.
Moving to Slide 17, we also have invested in our
internal systems and tools. These systems allow us to create repeatable process steps that can easily be monitored. Each of our
process steps have key performance indicators such as right first-time quality to help us improve our operations.
Eric Converse has spoken in the past about these
investments. We have invested in improving our internally-developed platform, and today we introduced some of the people responsible
for those improvements.
We also have added third-party tools that are now
integrated into our database. These tools provide us with analysis options for each project. Our investment in TrialTracker and
TrialWire, query management and site interface systems from IXICO, provide us with the ability to manage even more sites for larger
late-based trials. All new projects are now scheduled to move on to the TrialTracker platform.
Moving to Slide 18, our plans are to add another
third-party system into our portfolio solution. This new system provides more flexibility and efficiency while providing world-wide
access. All of these systems provide us with increased efficiencies but not at the expense of quality. Quality continues to be
the primary focus of everything that we do.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
Slide 19, in addition to our investment in tools,
we also continue to invest in our people. We are providing support for our project managers to obtain the project manager professional
certification. This PNP certification is global recognized and shows our sponsors that they are getting the most qualified resource
to run their projects.
We also support our data analysts and maintaining
their status as certified technologists. These investments in people, tools and systems is a basis for achieving operational excellence.
We also continue to build our alliances. The PPD alliance is closing in on five years. We continue to grow this alliance to create
a one-stop solution for our sponsors. The PPD alliance represents over 30% of our new awards in 2015.
About one year ago, we announced our alliance with
IXICO, an imaging core lab located in the UK, and most recently we announced the partnership with Micron, an imaging core lab
in Japan. These relationships improve our global reach and provide our sponsors with even more support.
Most importantly, with all of our partners, our focus
is on operational excellence. We are working with each other to maintain the highest level of performance.
Move to Slide 20. To maintain these high levels of
performance, you must have key performance indicators, or KPIs, to drive improvement. We must focus on the quality of our deliveries
while delivering on time, but on-time deliveries aren't only to our external customers. It's also being on time internally. Each
of our departments represent suppliers and customers to other areas within the company. We monitor these internal deliveries as
well and strive for 100% conformance.
Frequently, sponsors require a fast response to the
site per image quality or analysis. These quick turns can come in at any time during the day or weekend, and we must deliver.
To date in 2015, we have met 100% on-time delivery for these critical images. Monitoring and improving performance will drive
operational excellence and customer loyalty, and as I stated previously, our customer loyalty is training higher than ever before.
Slide 21, it's quality data, on-time, within budget,
on a consistent basis, that’s what we strive for as operational excellence.
Slide number 22, I'd now like to introduce some of
our department leaders, and first, Michael Barrett; he's the Director of our Data Management Team. Mike is a graduate of the Simon
School of Business and has been with VirtualScopics for over 5 years, has over 25 years' experience in the health and clinical
trial fields; he's a recognized experienced senior level leader. Mike leads the Data Management Team that’s responsible
for setting delivery specifications and delivering results.
I'd now like to turn it over to Mike and I'm moving
to Slide 23.
Michael Barret – Director of Data Management
Team
Good morning, and thank you for this opportunity
to present. As Ron indicated, I've been at VirtualScopics for a little over five years and I will say that I've never been more
excited about the opportunities that we have in front of us right now.
Moving to Slide 24, data management, our job is really
to translate all the complex aspects of the trial into a custom deliverable for each sponsor. Each deliverable is unique to its
form and format and frequency. It involves a lot of collaboration, both internally within VirtualScopics as well as externally
with our sponsor teams. Our job is to become part of their team, to really embed with their data management group so that they
view us as a logical extension. In that role, we can listen and understand, but we can also advise.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
One of the huge advantages we have at a company like
VirtualScopics is I've seen hundreds of trials, hundreds of specifications. Most of the people on the other side, during their
entire career, might work on three or four projects that are sponsored. So, we bring to bear a lot of ability to collaborate and
consult on behalf of the sponsors.
We engage early and we align. We also steer heavy
efforts internal to VirtualScopics to get the project set up. We know the deliverables, we know the timeframe. We understand what's
being built and what needs to be delivered, and we just want to make certain that that trial is ready to receive data and produce
analysis results. So, in the end, we manage data, lots and lots of data.
Moving to Slide 25, what do we mean when we say data?
That's a fairly nebulous term where it often starts with the image files, the raw materials. These image files are being captured
all around the world. Many people on the [indiscernible] may have actually had an image taken very similar to what we see in a
clinical trial. It's a CT, a computer tomography scan. It's an MRI, it's an x-ray, a DEXA scan.
Those are all components. Those are all the raw materials,
and depending on the requirements of the trial, that’s what has to come to VirtualScopics, and as we like to say, nothing
good happens until the data arrives so one of the investments we made this year was in a much simpler mechanism to get those files
from around the world to VirtualScopics. That investment is a product called TrialTracker. I'm going to talk a little bit more
about that specifically in a minute, but TrialTracker allows those images that are captured around the world to be transferred
to us virtually in real time.
So, an image that’s acquired in Germany can
end up in our lap ready for us to do one of the quick turns that Ron alluded to and be able to produce results quickly. In a lot
of cases, it's the difference between an individual person being allowed to enroll in the trial or not because we do a lot of
it inclusion, exclusion, which really means you have to, for example, beat a certain criteria that can be evaluated radiologically.
So, these quick turns are really important because they're the difference between being in a trial and not in a trial. In other
cases, they may be related to safety factors, which means that one of the aspects of the trial may have safety challenges with
it especially the echocardiogram area.
As Ron alluded to, Larry has helped improve our responsibility,
Larry Molinelli, our capabilities and managing quick turns on safety studies. So, we can very quickly indicate whether or not
a person who's engaged in a clinical trial meets the profile or not.
Those images go right into our database at VirtualScopics,
and as we like to say, images go in and numbers come out. It's really that simple. It’s kind of complicated, but it's really
that simple.
The way those numbers get delivered back to those
data transfer specifications I talked about before, the form, format and frequency, are in what we call a biomarker delivery.
The term biomarker really means that we're delivering a result. We can charge more because we call it biomarker instead of result.
This is the part you all are supposed to laugh. Just to put things in perspective, each of those deliveries can contain over a
million discrete biomarkers, discrete pieces of information, so back to the theme lots and lots of data.
Moving to Slide 26, we also—not only do we
manage lots of data, but we have to manage it perfectly. We have a term we use internally called Audit Ready Data Integrity. What
that means is our data has to be able to stand the test of time. So, from the standpoint of how an audit occurs, the FDA starts
with the data that we deliver to the sponsors. So, they start with our results from the sponsors' perspective. They then take
the individual data that was delivered to the sponsor and they make us map it back painstakingly at the data element level, back
to our database to show from whence it came.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
Then, it's a matter of fact that those image files
that were being analyzed by our radiologists and technologists, and then ultimately, high back to the original image files, the
raw material looking in the door. Processes mean we have to be audit ready at any time.
Moving on to Slide 27, this concept of audit ready
is not just a theoretical thing. In October of last year, we had an FDA audit. I happened to be down in Disney World and got a
text message from my boss, Ron Way, saying by the way, when you arrive back from Disney World, an FDA auditor will be coming in
to audit a very large Phase III trial that we had. That’s the kind of notice you get. You don’t get a lot of ramp
up. They're going to tell you we're going to be here on this day and they're going to be here.
This particular audit was conducted over a four-day
period of time. It covered all aspects of the data life cycle, pretty much what I showed on the prior slide. Walked through the
door with the data and walked out with an understanding of whether or not we had audit ready data. The results of that, there
were no findings, and in the audit perspective, that’s a really good thing. No findings means that they were content and
they were convinced that our processes were correct and that the data as submitted in support of this clinical trial by the sponsor
was valid.
The FDA approved that new drug application NDA months
ahead of schedule. This was a fast track project. That’s what we mean when we talk about being audit ready. You can also
imagine that that engenders a lot of sponsor loyalty when you can stand up to the rigor of an FDA audit, and yes, we have received
additional trials from this sponsor and we're very proud of that.
Moving on to Slide 28, we talk about investing in
our people, and we say that our people are our strongest asset. Everybody says that; we mean it. And so, when you have somebody
like Peggy Monroe who unfortunately couldn’t be here this morning, she has a personal obligation, Peggy is the kind of person
that when she sees that says prove it. What Peggy wanted to do in her new role as Director of Commercialization managing our setup
process, she wanted formal training and formal recognition to be able to do that.
Peggy joined VirtualScopics in 2006. She was a senior
project manager starting in 2012, became my manager of commercialization and data management last year, and in the end of last
year, toward the end of last year, she was sponsored by the company to go get her professional project management certification.
To do that, you need a minimum of 35 hours of professional training in PMP, took well over 300 hours of preparation, homework
if you will. It's a four-hour examination you have to sit for, and she earned her certification in December of 2014, and she did
it in the first try.
This is us investing in Peggy; Peggy investing in
the company. We have others in the company that have done this. This is what we mean when we say our people are our strongest
asset and we are investing in them.
Moving on to Slide 29, we also talk about investing
in infrastructure, and for several years, we listened. We listened while sites complained that our frontend process of getting
the images in the door and resolving issues, queries if you will, with them was really lagging behind. We listened. Last year
and the beginning of this year, we stopped listening and we started actually doing.
We hit a big investment in TrialTracker with Site
Interface which has dramatically [indiscernible] to being able to be very efficient, very effective with the sites and have those
sites be able to transfer those image files to us right away. When there are inevitable issues with queries, and a query is simply
I got your data, there's a problem with it, the process of resolving those queries is very much like text messaging now, and without
getting into the bones of the way it used to happen, it's literally an order of magnitude more effective and efficient than it
was before, adds to our professional reputation.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
The interface itself provides a repository for all
the electronic study documents which is really nice, so all in one place. It's a web-based system; you don’t need any special
software. Those images themselves can be uploaded very readily through there. It's intuitive. We give them a guide; they train
themselves to upload these images. It's really that simple.
When there are queries, they can—first off,
the number of queries is significantly lower just because of the way the infrastructure works here but it also allows for a speedy
resolution of data queries. The very first query we did on the system was resolved in 25 minutes, which just blew us away. Our
average is now measured in hours, but to put it in perspective, it previously was measured in weeks.
Moving on to Slide 30, collaboration is at our core.
We talked about that in here. We live it every day. So, the daily collaborations in my group with site management can manage the
electronic data transfer and make sure that we have those sites ready when they're ready to capture that first image, that they're
up and they're running and they're ready with TrialTracker.
The image science group, we work very closely with
them to make sure that we're correctly translating the requirements of the study that people have worked so painstakingly to document
into the proper data formats that are being delivered. From a sponsor perspective, it's a daily thing that we're working on data
transfer specifications. It's never ended, and within the sponsor organization, there are dozens of organizations that feed that
into their data transfer process and we're part of that team.
Software development, we work along with Pat Rox's
team to make sure that the analysis is set up, any new software that needs to be required is on schedule and factored into the
overall schedule to get that project up and running. We work closely with Lianne's team in project management who schedules those
deliveries and make sure those deliveries occur on time and complete.
At the end of it, or course, is quality, which makes
sure that my deliverables, every single thing that goes outside of the company, every single deliverable that goes outside of
the company goes through data management and gets certified as being 100% in compliance with regulations and with contractual
obligations. This happens all day every day across dozens of sponsors, hundreds of sites, thousands of subjects and millions of
discrete data [indiscernible].
Moving on to Slide 31, so how do we know if we're
doing this right? A couple things that we look at as they're key measurable for us is how easy for the sponsors to do business
with because after all, if we're not, they're going to choose not to do business with us; it's really that simple. We've moved
from as a company and certainly as a group from meeting the needs to delighting the customers. We're always trying to figure out
how can we do this better, how can we respond better and faster and be more flexible than any other alternative they have. That’s
what sets us apart from their other choices.
It's also very important that imaging sites recommend
us. Probably not too big of a surprise that those imaging sites, that’s where the subject in a trial gets fed in from. That’s
where the principal investigators, the key opinion leaders are located, and if they don’t like doing business with you,
they’ll make it known to the sponsor. So, we work very hard to make sure that our sites that we work with recommend us and
like doing business with us. We do that by being very respectful of their time and needs.
Those sites are doing not just clinical trial work;
most of their day is just acquiring regular standard of care imaging. They're going to do a hundred things today; one of them
is for us. So, if we don’t respect the fact that that one thing they're doing for us has to be easy and intuitive and straightforward,
we're going to lose their share of mind. We work diligently to make sure we don’t.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
Of course, can we scale? We can't put something in
place that just allows us to get through one large trial. We have to be ready to go from one to ten to a hundred, and that’s
something we're always looking for both in terms of our tools as well as our processes. So, we're looking at inside of our group
can we do this better, can we be more flexible, can we take steps out, but never, never using quality as a variable. We have to
be perfect. Our slogan, our motto in data management is we deliver.
Thank you. I'd like to turn this back over now to
Ron Way.
Ron Way – Vice President of Operations
Thank you, Mike. I'm moving to Slide 32. The second
department leader that I'd like to introduce is Lianne Cox. She's our Director of Project Management.
She came to us in 2009, background in biology, and
prior to VirtualScopics, she spent nine years at Tyco Electronics and Logistics. At VirtualScopics, she started as a project manager,
then managed our newly formed site management group, and she was just recently promoted again to her current role and she's a
respected leader with emphasized customer service.
I'd now like to turn it over Lianne. I'm advancing
to Slide 33.
Lianne Cox – Director of Project Management
Thank you, Ron. Good morning, everyone. I'd like
to start by thanking all of you here today and those attending remotely for giving us the opportunity to share with you some of
our experiences, responsibilities and to introduce you to some of our team members.
Slide 34, what does a project manager at VirtualScopics
do? If you ask this question to anyone on our Project Management Team, you may receive a very long answer. Our project managers
hold their relationships with our sponsors' clinical trial teams and their imaging experts. They build trust and confidence by
being knowledgeable in their field, accurate in their reporting and transparent in their communications.
Most of our project managers feel that they are part
of the sponsor team as well as their team at VirtualScopics. It is a unique and rewarding position. Our project managers coordinate
each study's scope of work with all of our internal teams.
As you just heard from Mike Barrett in Data Management,
we have many departments that provide important work for our studies. Our project managers perform many activities on any given
day including teleconferences, budgeting, risk management, data reporting. Our team is customer-minded and quality focused and
we strive for excellence each day.
Moving to Slide 35, as I mentioned previously, relations
are at the center of what project managers do both internally and externally with our sponsors and with our imaging sites that
we work with. The characteristics shown in this slide are just some of the very important traits that are project management team
is trained to and are ingrained in how we interact with our customers every day. As several of the presenters before me have noted,
it really is our people that make us great.
I would like to now, very proudly, introduce some
of our Project Management Team who have exemplified these traits the last year and whose dedication and commitment to our superior
service have gained us great advantage in the industry.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
Slide 36, Alan Soanes; Alan is one of our managers
of Project Management. Alan has been with VirtualScopics for almost four years and manages a team of nine project managers. Alan
provides critical coaching and support to our entire team and he also engages with external teams. Alan has established a key
relationship with one of the industry's leading imaging experts. This relationship was built on a strong foundation of trust and
communication and has led to several imaging protocol collaborations and continued new awards.
Slide 37, Robin Mastin-Gill; Robin is our manager
of Site Operations, and she's been with VirtualScopics for over six years. Robin has a strong background in regulated environments
and training and has helped to ensure that our Site Management Team operates at the highest and most reliable level of service.
Robin's team is responsible for building and maintaining the relationships with our imagine sites. Over the last year, the growth
has been substantial, and the number of sites that we are working with has increased by over 50%. Robin and her team have acclimated
to this growth flawlessly through continuous improvement efforts which have increased the efficiencies allowing our team to scale.
Slide 38, Michael Cox; Michael has been with VirtualScopics
for over six years and is one of our Senior Project Managers. Michael works closely with several others on our team and has built
and grown the repeat business and customer loyalty with a very important strategic sponsor. Michael's dedication to operational
excellence has resonated with this account through process standardization and consistent and frequent communication. Our team
that is dedicated to this sponsor was able to prove VirtualScopics' ability to perform on both large and complicated imaging studies.
This has led to VirtualScopics' first program award as well as many others.
Slide 39, Danielle Staffo; Danielle has been with
VirtualScopics for almost five years and works within our Project Management Team as a Project Manager Level II. Last year, Danielle
was assigned to a study with a sponsor who had not previously worked with an imaging CRO. It was critical in this situation for
Danielle to provide strong guidance throughout the study allowing the sponsor to feel comfortable and confident that the information
and direction we provided was accurate. This study has proven to be very successful, and based on the great connection Danielle
has built with the sponsor team, VirtualScopics was directly awarded a second, very large Phase III study a few months ago.
Slide 40, Mariah Kazabinski; [ph] Mariah, a Project
Manager Level II has been with VirtualScopics for almost four years and works in our New Hope, Pennsylvania Office. Mariah accompanies
our Business Development Team on many sponsor-facing meetings and she's well located in the northeast pharma corridor. She has
worked very closely over the last year with several clinical teams from a leading pharmaceutical company. The collaboration between
our two companies continues to grow because of Mariah's teamwork. We have seen significant increases in awarded studies from this
sponsor since Mariah has been working with their team.
Slide 41, the five individuals sitting with us today,
they're all very important but just a sample of the truly incredible Project Management Team that we have. I wish I could have
brought each team member here today as each one has their own story about how they’ve helped to make our organization successful.
Our team is dedicated, committed and customer focused, and our customers have seen and responded to that. We rely on this team
to ensure our customers are happy and that they continue to come back to VirtualScopics for their imaging needs. This team is
at the heart of our growing customer loyalty, and it's a true privilege to be a part of it.
Thank you. I'm going to turn the meeting back to
Eric.
Eric Converse – President and Chief Executive
Officer
Thank you, Lianne. I know she takes great pride in
her team, and as she said, I know she wishes she could have all of them here. This is just an example or a sampling of the great
project management and the greater good of operations we have.
![](tex99-2logo.jpg) |
Transcript:
VirtualScopics,
Inc.
2015 Annual Meeting
June 2, 2015 |
I just want to also mention you may know that some
of our business development people are not here because they were recently in Asko in Chicago for the weekend with Erik Jensen,
our VP of Sales and Marketing, and Erik has returned to pass the baton to me to go and meet the rest of the team in Toronto at
another conference.
I'm going to turn now to Slide 42, and I'll be turning
the meeting back to Greg Gribben and Ms. Bielski to report on the results of the voting.
Greg Gribben – Corporate Secretary
Thanks, Eric. I have the Inspector of Elections'
report with the final results for today's meeting. Marty's going to bring them up to us.
Proposal number one was election of directors, and
on that proposal, Eric Converse, Robert Klimasewski, Bruce Lev, Charles Phelps, Terence Walts and Michael Woehler have been duly
elected as directors of the company. Andrew Levitch who serves as the designee of the holders of our Series C preferred stock
was elected in February and will continue to serve in that capacity.
Proposal number two, Marcum LLP has been appointed
as the company's independent registered public accounting firm.
Proposal number three, the compensation of certain
of the company's executive officers has been approved.
I now turn the meeting back to Eric for some closing
comments.
Eric Converse – President and Chief Executive
Officer
I'll move to Slide 43. I'd like to end today's meeting
with the following closing comments: our team has been through a year of transition and we're excited about the opportunities
we've uncovered in this journey. We see a core business which is growing. We see growth in later-stage trials which means more
revenue and better margin. We see investment opportunities to increase profitability and yet defend and maintain our operational
excellence. We see customer relationships which are built on trust and collaboration and an atmosphere of a constant challenging
ourselves and one another how we can do better.
We also see ourselves in a position to make a difference,
not just to our shareholders but to a common cause in the fight against cancer and disease which touches everyone. On behalf of
the board of directors, the management team and all of my colleagues at VirtualScopics, I would like to thank our customers for
their confidence and ever-growing support, our alliance partners for working with us and our shareholders for your patience and
support as we work to build long-term shareholder value. Thank you and have a great rest of the day.
Exhibit 99.3
![](image_001.jpg)
Annual Shareholders Meeting June 2, 2015 1
![](image_002.jpg)
Meeting Overview 2 Proxy Tally and Results Eric Converse, President and Chief Executive Officer Project and Site Management Lianne Cox, Director of Project Management Data Management Mike Barrett, Director of Data Management Achieving Operational Excellence Ron Way, Vice President of Operations Financial Review Jim Groff, Chief Financial Officer Proxy Summons Introductions and Opening Remarks Eric Converse, President and Chief Executive Officer
![](image_003.jpg)
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, sales and marketing efforts, the Scientific Advisory Board, backlog, awards and bookings and the performance of existing projects 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, 2014 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 that contract awards do not turn into signed contracts. 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. 3
![](image_004.jpg)
Finance Update Jim Groff, Chief Financial Officer
![](image_005.jpg)
First Quarter 2015 Financial Review 5 2015 2014 Change Revenues 2,814$ 2,353$ 20% Cost of Services 1,840$ 1,595$ 15% Gross Profit 974$ 758$ 28% Gross Margin 35% 32% Operating Expenses Research and Development 350$ 286$ 22% Sales and Marketing 280$ 345$ -19% General and Administrative 799$ 687$ 16% Depreciation and Amortization 97$ 87$ 11% Total Operating Expenses 1,526$ 1,405$ 9% Operating Loss (552)$ (647)$ -14% March 31, (thousands of dollars) Three Months Ended
![](image_006.jpg)
First Quarter 2015 Financial Review 6 March 31, December 31, 2015 2014 (Unaudited) 2,393,968$ 4,046,599$ 2,097,513 1,814,143 535,549 410,188 5,027,030 6,270,930 1,166,284 1,211,770 337,174 330,873 Other Assets 8,486 10,661 6,538,974$ 7,824,234$ 1,015,871$ 1,289,099$ 414,966 681,964 475,299 670,332 335,333 335,333 2,241,469 2,976,728 Total stockholders' equity 4,297,505 4,847,506 6,538,974$ 7,824,234$ Total liabilities and stockholders' equity Accounts payable and accrued expenses Accrued payroll Unearned revenue Dividends payable Total current liabilities Patents, net Property and equipment, net Total assets Liabilities and Stockholders’ Equity Current liabilities Total current assets Assets Current assets Cash Accounts receivable, net Prepaid expenses and other current assets
![](image_007.jpg)
Eric T. Converse , President and Chief Executive Officer
![](image_008.jpg)
Progress in 2014 • Alliances • IXICO – TrialTracker - three wins for the Alliance • Micron – Currently working on a Project in Japan • Investments in Infrastructure • Investments in Operational Efficiencies • More Face to Face Interaction with Sponsors • Strengthened and rebuilt relationships • Stepped Up Marketing Campaign • Just in New Hope for a live seminar 8
![](image_009.jpg)
Investment in Our Team • Imaging Science • Rhiannon Gaborski – Masters in Biomedical Engineering • Dr. Jennifer Fox – Ph.D. Neuroscience • Larry Molinelli – Radiological Technologist • Dr. Vijay Shah – Ph.D. Computer Engineering • Software Development • Patrick Rox • Incoming Imaging • Therese Crilly • Human Resources • Barbara Ulrich 9
![](image_010.jpg)
Operations – Vice President Ron Way • Focus of Today’s Meeting • Operational Excellence • Reason Customers Stay with VSCP • Reputation! – Collaboration is at our Core • Lean Six Sigma Black Belt • Built a Deep Bench • Keeps it Simple • It’s the People! 10
![](image_011.jpg)
Achieving Operational Excellence Ron Way, Vice President of Operations 11
![](image_012.jpg)
Achieving Operational Excellence • The VirtualScopics Process Flow • Understanding the process • Operational Excellence • Definition • Measurement • Methods • Investments • People • Tools • Performance Monitoring • Key performance indicators • Department Leaders 12
![](image_013.jpg)
The VirtualScopics Process Flow • Simplifying our Operations • Easy to overcomplicate • Images in, Numbers out • Similar to any manufacturing company • Suppliers, Raw Materials, Process, Finished Product • Suppliers (sites ) • Identifying suppliers • Providing detailed specifications • Raw Materials (images ) • Incoming/receiving • Inspection to specifications 13 2.2688 1.8036 4.0920 2.6095 1.6906 4.4118 2.2680 1.3945 3.1627 3.8279 2.6312 10.0721 2.6655 1.3337 3.5548 1.7442 1.0491 1.8298
![](image_014.jpg)
The VirtualScopics Process Flow • Suppliers, Raw Materials, Process, Finished Product • Processing (analysis) • Customized Equipment in the form of software • Analysis - Multiple tools available • Quality Controls to ensure conformance • Finished Product (Results) • Delivering results of the analysis • Millions of values representing our finished product • Achieving Six Sigma performance levels • Defects at a level of no more than 3.4 per million 14
![](image_015.jpg)
Achieving Operational Excellence • What is it? • Everyone focusing on customer needs • Continuous Improvement • Empowering people • How we measure it? • Quality Data, On Time, Within Budget and on a consistent basis • On time delivery • Hundreds of deliveries each month • >99% on time • Customer Loyalty – repeat customers • Performance brings customers back 15
![](image_016.jpg)
Achieving Operational Excellence • How we get there • People • A passion for what we do • Dedication • Commitment • Customer Service • Exceeding customer expectations • It’s part of our interviewing process • Collaboration • Understanding customer needs • Providing our expertise and experience 16
![](image_017.jpg)
Achieving Operational Excellence: Investments • Systems and Tools • Create repeatable process steps • Monitor key performance indicators • Past Investments in Solutions • Internally developed software • 3 rd Party Analysis Tools • Site and Query Management System • Trial Tracker from IXICO 17 50% 70% 90%
![](image_018.jpg)
Achieving Operational Excellence: Investments • Systems and Tools • Future Investments – Part of our R&D spending • New 3 rd party analysis platform coming in the Fall • Efficiencies achieved • But not at the expense of quality 18
![](image_019.jpg)
Achieving Operational Excellence: Investments • Investments in People • Commitment to training • Project Manager Professional (PMP certification) • Technologist Certification • Building Alliances 19
![](image_020.jpg)
Measuring Performance • On Time Deliveries • External to sponsors and internal to departments • Quick turn analysis • Repeat Customers • Winning confidence of sponsors • Quality • Delivering ‘Right the First Time’ 20
![](image_021.jpg)
The Result • Quality Data • On Time • Within Budget • On a Consistent Basis Achieving the goal of Operational Excellence 21
![](image_022.jpg)
Achieving Operational Excellence • Operations Leadership • Mike Barrett • Director of Data Management • MBA Graduate of Simon School of Business • Started in 2010 at VirtualScopics • Over 25 years at Eastman Kodak • Experience in Health Field and Clinical Trials • Experienced Senior Level Leader • Data Management • Involvement in setting delivery specifications and delivering results 22
![](image_023.jpg)
Michael J. Barrett, Director of Data Management 23
![](image_024.jpg)
Data Management • What do we do? • Translate overall trial needs into Data Specifications • Form, format, frequency of data elements in the trial • Dozens of contributors across multiple disciplines • How do we do it? • Connect with Sponsor team right upfront • Become integral part of their Data Management team • Manage the deployment of the trial set - up process within VS WE MANAGE DATA – LOTS AND LOTS OF DATA! 24
![](image_025.jpg)
What Types of Data? 25 Image Files (“raw material”) (CT, MRI, Xray , DXA) VirtualScopics Database VS Analysis Platform “Biomarker” Delivery Images in… …Numbers out! Each delivery can contain > 1,000,000 data elements!
![](image_026.jpg)
“Audit - ready” Data Integrity 26 “Biomarker” Delivery VS Analysis Platform VirtualScopics Database Image Files (CT, MRI, Xray , DXA) 1: FDA starts with the Data we delivered to the Sponsor… 2: Individual data elements are then meticulously traced back to the VS database… 3: and then mapped back to the actual analysis performed by VS Radiology… 4: Finally, back to the original Image Files!
![](image_027.jpg)
FDA Audit – October 2014 • Very Large Phase III Trial • Audit conducted over 4 days • Covered all aspects of the data life cycle • Result: No findings! • FDA approved NDA months ahead of plan! • That’s what “Audit - ready” means! 27
![](image_028.jpg)
Investing In Our People Peggy Munro • Joined VirtualScopics in 2006 • Senior Project Manager (2012) • Manager of Commercialization (2014) • Project Management Professional TM Certification • Minimum of 35 hours formal PMP education • 300+ hours of exam preparation • 4 Hour Examination • Earned her certification December 2014 • On the first try! 28
![](image_029.jpg)
Investing in our Infrastructure 29 Repository for Study Documents Safe, quick electronic transfer of radiology images Speedy resolution of Data Queries!
![](image_030.jpg)
Collaboration is at our Core • Daily collaborations with… • Site Management: “Ready for First Patient” • Image Science: Analysis deliverables understood • Sponsor: Data Transfer Specifications tested • Software Development: Coordinate Analysis Set - up • Project Management: Establish delivery schedules • Quality : 100% compliance to Regulations and Contract • Across dozens of Sponsors, hundreds of Sites, thousands of Subjects, and millions of discrete data elements EVERY BUSINESS DAY! 30
![](image_031.jpg)
How Do We Measure Success? • Are we easy for Sponsors to do business with? • Move from “Meeting Needs” to “Delighting” • Do Imaging Sites recommend us? • Do we respect their time and needs? • Can we scale? • Can we do it better at lower cost? • Quality is NEVER a variable! 31 Data Management – We Deliver!
![](image_032.jpg)
Achieving Operational Excellence • Operations Leadership • Lianne Cox • Director of Project Management • B.S. in Biology • Started in 2009 at VirtualScopics • Began in Project Management • Managed Site Management • Nine years experience at Tyco Electronics in logistics • Respected leader in VirtualScopics emphasizing customer service • Developing Project Management into industry leader 32
![](image_033.jpg)
VirtualScopics Operational Excellence Project and Site Management Lianne Cox, Director of Project Management 33
![](image_034.jpg)
What Does Project Management Do? • Works directly with sponsor Clinical Trial Teams • Provides information to and guides internal teams • Calls, Revenue, Forecasting, Emails, Data Reconciliation, Budgeting, Risk Management, Relationship Building, Imaging Guidance, Meetings, Travel…. • Ensures On - Time, Quality Deliverables within Scope 34
![](image_035.jpg)
Relationships Matter • Trust • Reliability • Loyalty • Guidance • Team Work 35
![](image_036.jpg)
Trust Alan Soanes, Manager of Project Management Trust: Created trust and respect for VirtualScopics’ operational capabilities with one of the industry’s leading Imaging Experts. Created opportunities at a new Pharmaceutical company in 2014 which continues to hold a promising future of bookings. Our sponsors must TRUST us to provide them the best information and support available 36
![](image_037.jpg)
Reliability Robin Mastin - Gill, Manager of Site Operations Reliability: Services all imaging sites to ensure the best level of service is provided by our team. Sites actively being managed has grown by over 50% during the last 12 months and the growth has appeared seamless. Imaging Site relationships are key to successful study execution. We must be RELIABLE in our performance and committed to providing on - time and quality service to all customers 37
![](image_038.jpg)
Loyalty Michael Cox, Senior Project Manager Loyalty: Standardized process and communications and helped to build a strategic partnership with a leading Pharmaceutical company. VirtualScopics has become one of two preferred imaging vendors attributing to VirtualScopics’ first Program Award. We must develop LOYALTY with our sponsors by providing standardized and consistent service and ensuring repeat business 38
![](image_039.jpg)
Guidance Danielle Staffo, Project Manager II Guidance: VirtualScopics was a sponsor’s first imaging core lab experience. Guided sponsor through successful imaging implementation. Sponsor’s confidence in VirtualScopics led to a second, Phase III study which was the direct result of this relationship. We must provide solid and reputable GUIDANCE so that our sponsors’ confidence in us will grow 39
![](image_040.jpg)
Team Work Marya Kaszubinski, Project Manager II - New Hope Office Team Work: Manages current portfolio for leading Pharmaceutical company. Became part of the study team and built relationships and confidence to increase number of active studies six fold. We become a part of the sponsor TEAM, allowing all elements of a relationship to be realized and the highest success for a study to be gained 40
![](image_041.jpg)
Relationships Matter • Alan Soanes • Robin Mastin - Gill • Michael Cox • Danielle Staffo • Marya Kaszubinski • An Entire TEAM of dedicated and talented individuals Collaboration is at our Core Project Management and Site Management help to ensure repeat business and customer loyalty 41
![](image_042.jpg)
Voting Results 42
![](image_043.jpg)
Thank you
Virtualscopics, Inc. (NASDAQ:VSCP)
Historical Stock Chart
From Jul 2024 to Aug 2024
Virtualscopics, Inc. (NASDAQ:VSCP)
Historical Stock Chart
From Aug 2023 to Aug 2024