VIRTUALSCOPICS INC
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.
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Imaging Solutions for Clinical Trials
500 Linden Oaks Second Floor Rochester, NY 14625 P:585.249.6231
F:585.218.7350 info@virtualscopics.com 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."
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.comor at: http://www.investorclendar.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.comor at:
http://www.investorcalendar.com/IC/CEPage.asp?ID=173036.
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
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Imaging Solutions for Clinical Trials
500 Linden Oaks Second Floor Rochester, NY 14625 P:585.249.6231
F:585.218.7350 info@virtualscopics.com www.virtualscopics.com
VirtualScopics, Inc. Second Quarter 2014 Financial Results, page 3
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.
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.
Donna Stein & Partners
315-361-4672
Email: dstein1@twcny.rr.com
Imaging Solutions for Clinical Trials
500 Linden Oaks Second Floor Rochester, NY 14625 P:585.249.6231
F:585.218.7350 info@virtualscopics.com www.virtualscopics.com
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VirtuaiScopics. lnc. and SubsidiaiY Condensed Consolidaled Slalemenls of Operalions (unaudiled)
For the Three Mmths Ended Forthe Six Mmths Ended June10, June10,Revenues | $ 2,542,048 | $ 3,546,607 | $ 4,789,001 | $ 5,829,438 | ||||
Reimbursemenlrevenues | 106,699 | 160,070 | 212,731 | 409,826 | ||||
Tolalrevenues | 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 | ||||
Tolal cost of services | 1,708,378 | 1,936,594 | 3,303, 489 | 3,683,889 | ||||
Gross profil | 940,369 | 1,770,083 | 1,698,243 | 2,555,375 | ||||
Operaling expenses | ||||||||
Research & developmenl | 306,289 | 349,754 | 592,185 | 803,164 | ||||
Sales & markeling | 482,807 | 430,153 | 827,884 | 787,805 | ||||
Generai & administratilte | 807,642 | 777,354 | 1, 494,643 | 1,772,656 | ||||
Depreciation & amortization | 75,526 | 90,554 | 162,028 | 186,867 | ||||
Tolal operaling expenses | 1,672,264 | 1,647,815 | 3,076,740 | 3,550,492 | ||||
Operaling (loss) income | ( 731,895) | 122,268 | (1,378,497) | ( 995,117) | ||||
Olher income (expense) | ||||||||
Olher income | 1,051 | 12,425 | 2,057 | 18,304 | ||||
Olher expense Tolal olher income | 687J 364 | 407J 12,018 | 1,464J 593 | 1,848J 16,456 | ||||
NelQoss) income | ( 731,531 ) | 134,286 | (1,377,904) | ( 978,661 ) | ||||
Preferred stock diltidends | 42,000 | 42,000 | 84,000 | 84,000 | ||||
Nel(loss) income available lo 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 diluled(loss) earnings per share | $ (026) | $ 0.03 | $ (o 49) | $ (036) |
lmagmg Sotut1ons for Chmcal Tnals500 Linden Oaks • Second Floor • Rochester,NY14625 • P:585.249.6231 •
F:585.218.7350 • in1o@ rtualscopics.oom • 'II'WW'Il rtualscopics.oom
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VirtuaiScopics, Inc.
Condens ed Consolidated Balance Sheets
C urrent a ssets
Cash
Aceo unts receiv able, net
Prepaid e xp enses and other current a ssets
Total current assets
Assets
June 30.
2014
(Unaudited)
$ 5.573.576
1.861.735
371 341
7.806.652
December 31.
2013
$ 7.330.630
1.725.070
Patents, net | 1.271.586 | 1.334.420 | |
Pro perty and equipment, net | 261 608 | 221 700 | |
Total assets | $ 9.339.846 | $ 11.009.519 |
Current liabilities
Liabilities and Stockholders• Equity
Aceo unts p ayable and accrued e xp ense s | $ 840.540 | $ 846.071 | |
Accrued p ayroll | 685.595 | 837.611 | |
Unearne d revenue | 588.187 | 745.028 | |
DW idends payable | 335.333 | 293.333 | |
Total current liabilities | 2.449.655 | 2.722.043 |
C ommitments and C ontingencies
Stockholders• Equity
C onvertible preferred stock, $0.001 par value; 1,000 ,000 and
15.ooo poo shares authorized alJune 30.2014 and De cemb er 31 •
2013.re spectw ely;
Series C-1 3,000 share s authorized; issue d and outstanding,
3 poo shares alJune 30. 2014 and December 31. 2013;
liquidation preference $1,000 per share 3 3
Series 8 6,000 shares authorized; issued and outstanding, 600 share s at June 30,2014 and De cemb er 31 ,2013; liquidatio n preference $1,000 per share
Series A 8,400 shares authorized; issued and outstanding, 2,190
share s at June 30,2014 and De cemb er 31 ,2013; liquidatio n
preference $1,000 per share 2 2
Series C-2 3,000 shares authorized; issued and outstanding,O share s at June 30,2014 and De cemb er 31 ,2013; liquidatio n preference $1,000 per share
C ommon stock. $0.001 par value; 20 .ooo.ooo and 85 .ooo poo
shares authorized at June 30,2014 and Decemb er 31,2013,
respectively;
issued 2 ,992.853 shares at June 30. 2014 and December 31•
2013.re spectively; outstanding. 2.992 J353 and 2.991.869 share s
at June 30,2014 and December 31,2013, respectively
Additional p aid in capitai
Accumulated deficit
Total sto ckholders' equity
Total liabilities and sto ckholders' equity
2.993
21.973.237
( 15,086,045)
6.890.191
$ 9.339.846
2.992
21.992.619 (13,708,141)
8.287.476
$ 11.009.519
lmagmg Solut1ons for Chmcal Tnals
500 Linden Oaks • Second Floor • Rochester.NY14625 • P:585.249.6231 • F:585.218.7350 • in1o@ rtualscopics.oom • 'IIIIW'If. rtualscopics.oom
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500 Linden Ooks • Sec:ond Floor • Rochesier,NV14625 • P:585.249.6231 •
F:585.218.7350 • infp@ 'irtualscopics.oom • VlfliAlvirtu a l sc o pi cs. com
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