MELA still has a really long way to go, but it can get really exciting in a matter of hours whenever it finally does.
The day their Current Procedural Terminology (CPT®) code comes through, which is the first step in gaining Medicare Part B reimbursement from the Centers for Medicare and Medicaid Services (CMS), MELA will really TAKE OFF.
I just hope I see the news before The Street can react.
The Company's procedure would be eligible for payment under Part B maybe as early as 2016. The Company will also commence efforts to obtain reimbursement from private insurance companies as the CMS review process proceeds.
MELA Sciences Reports Second Quarter 2014 Financial Results and Provides a Business UpdateWed August 13, 2014 4:01 PM|GlobeNewswire | About: MELA IRVINGTON, N.Y., Aug. 13, 2014 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (MELA) (the Company), developer of the MelaFind ® system, a non-invasive optical diagnostic tool that assists dermatologists in the diagnosis of melanoma at its most curable and cost-effective stage and that has received both FDA Pre-Market Approval (PMA) for the U.S. and CE Marking certification for the European Union, today announced financial results for the three and six months ended June 30, 2014. The Company also provided a business update.
Business Highlights for the Second Quarter and Subsequent Weeks:
An application was submitted for a Current Procedural Terminology (CPT®) code, which is the first step in gaining Medicare Part B reimbursement from the Centers for Medicare and Medicaid Services (CMS). The Company's procedure could be eligible for payment under Part B as early as 2016. The Company will also commence efforts to obtain reimbursement from private insurance companies as the CMS review process proceeds.
Additional studies demonstrating the effectiveness of MelaFind predictive probability information when used by dermatology residents and dermoscopists strongly correlate with previous study findings showing the benefit of MelaFind on dermatologists' decisions to biopsy.
Significantly strengthened the balance sheet resulting from the previously announced closing of a private placement that will allow for continued efforts in obtaining reimbursement and the further commercialization of the MelaFind system.
Completed a 1-for-10 reverse stock split and regained compliance with NASDAQ listing requirements.
Named Michael R. Stewart to its Board of Directors, adding specific reimbursement and broad dermatology and medical device experience to the Board.
Rose Crane, MELA Sciences President and CEO, stated, "This has been a very productive quarter for MELA Sciences. We raised capital that will allow us to continue our progress and we took steps toward obtaining CMS reimbursement. As stated previously, our goal is to continue to expand the use of MelaFind toward becoming the standard of care."
Second Quarter Financial Results:
(Compares the second quarter of 2014 to the second quarter of 2013, unless otherwise stated)
Revenue increased to $225,000 from $144,000 due to new MelaFind®system sales as we implement the change in the Company's business model from a lease-based model to a sales-based model. A reduction in placement fees partially offset the increase in system sales.
Total expenses decreased by $2.6 million, consisting of $0.7 million in research and development expenses and $1.9 million in selling, general and administrative expenses in accordance with the cost reduction plan initiated in August 2013.
The change in the fair value of the Company's warrant liability increased to a benefit of $4.9 million from an expense of $105,000 and in each period represents warrants accounted for as derivatives in separate transactions. The benefit results from the reduction in the Company's stock price for the period.
Net income totaled $627,000, or $0.12 per share on a fully diluted basis, compared with a net loss of $7.4 million, or $1.72 per share on a fully diluted basis. The second quarter 2014 profitability resulted from the warrant liability benefit noted above. The operating loss, which is more reflective of the Company's operating activity, improved to $4.3 million compared with $7.0 million for the 2013 period.
Cash and cash equivalents totaled $4.2 million, compared with $3.8 million at December 31, 2013.
Year to Date Financial Results:
(Compares the six months ended June 30, 2014 to the six months ended June 30, 2013, unless otherwise stated)
Revenue increased to $323,000 from $288,000 due primarily to the change in business strategy from a lease-based model to a sales-based model, which resulted in sales for the current quarter and a decrease in placements of the MelaFind® systems quarter to quarter.
Costs of revenue decreased to $2.2 million from $2.5 million, primarily due to a one-time charge for inventory obsolescence of MelaFind accessories taken during the six months ended June 30, 2013.
R&D expenses decreased to $1.1 million from $2.4 million and SG&A expenses decreased to $6.0 million from $9.0 million, due to previously stated cost reduction measures, primarily due to headcount and related expense reductions.
The change in fair value of the Company's warrant liability increased to a benefit of $5.0 million from an expense of $90,000 and in each period represents warrants accounted for as derivatives in separate transactions. Net loss totaled $7.4 million, or $1.46 per share on a fully diluted basis, compared with $13.9 million, or $3.38 per share on a fully diluted basis, for the same period in 2013. This reduction resulted from the $5.0 million benefit from the warrant liability offset by $3.4 million in liquidating damages from the February 2014 financing. The reduction in operating loss of $4.5 million from $13.5 million in 2013 to $9.0 million in 2014 is more reflective of operating activities and resulted from Company's cash conservation and cost reduction activities.
Conference Call and Webcast Details:
Conference Call: U.S. 800-274-0251; International: 719-325-2284; Passcode: 2866769
Replay through Aug. 29: U.S.: 877-870-5176; International: 858-384-5517; Replay PIN: 2866769; Click here for: Live Webcast and Replay
About MelaFind www.melafind.com
MelaFind® is the first and only medical device with FDA Pre-Market Approval (PMA) for the U.S. and CE Marking certification for the European Uniondesigned to assist dermatologists in the evaluation and diagnosis of melanoma at its most curable and cost-effective stage. The MelaFind®system utilizes innovative software driven technology and state-of-the-art 3-D optical imaging to non-invasively extract data 2.5 mm below the skin surface from patient's pigmented ambiguous moles and objectively analyzes them with proprietary algorithms. MelaFind provides important additional perspective to physicians to help them better understand the structural disorganization of a patient's pigmented ambiguous moles (before cutting the skin) for a more accurate biopsy management decision.
About MELA Sciences, Inc. www.melasciences.com
MELA Sciences is a medical technology company dedicated to designing and developing innovative software-driven technology for the clinical early detection and prevention of skin cancer. MELA Sciences conducted the largest, positive prospective study ever done on the melanoma disease, and is the first and only medical technology company to receive both FDA Pre-Market Approval (PMA) for the U.S. and CE Marking certification for theEuropean Union for a device of this nature.
Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "could be," "will," "may," "seeks," "look forward," and "there seems" that suggest future events or trends. These statements, including the Company's ability to obtain a CPT code, gaining Medicare Part B reimbursement from CMS and reimbursement from private insurance companies, study results, acceptance of MelaFind by practitioners and the use of MelaFind in becoming the standard of care, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC (SCUR) reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available atwww.sec.gov and www.melasciences.com .
MELA SCIENCES, INC.
CONDENSED BALANCE SHEETS
June 30, December 31,
2014 2013
(unaudited) *
ASSETS
Current Assets:
Cash and cash equivalents $ 4,202,279 $ 3,782,881
Accounts receivable (net of allowance of $43,080 and $46,130 as of June 30, 2014 and December 31, 2013, respectively) 49,472 57,151
Inventory (net of reserves of $863,559 as of June 30, 2014 and $325,000 as of December 31, 2013) 3,946,852 5,631,205
Prepaid expenses and other current assets 332,327 879,698
Total Current Assets 8,530,930 10,350,935
Property and equipment, net 3,872,574 3,690,784
Patents and trademarks, net 39,257 41,795
Other assets 48,000 48,000
Total Assets $ 12,490,761 $ 14,131,514
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable (includes related parties of $35,554 and $32,902 as of June 30, 2014 and December 31, 2013, respectively) $ 1,116,913 $ 1,478,995
Accrued expenses (includes related parties of $0 and $48,000 as of June 30, 2014 and December 31, 2013, respectively) 302,834 844,131
Deferred placement revenue 151,508 243,605
Warrant liability 3,559,227 3,017,142
Other current liabilities 103,348 67,934
Total Current Liabilities 5,233,830 5,651,807
Long-Term Liabilities:
Deferred placement revenue 14,787 63,754
Deferred rent 100,102 120,120
Total Long-Term Liabilities 114,889 183,874
Total Liabilities 5,348,719 5,835,681
COMMITMENTS AND CONTINGENCIES
Stockholders' Equity:
Preferred stock - $0.10 par value; authorized 10,000,000 shares: issued and outstanding: 12,300 at June 30, 2014 and 0 at December 31, 2013 1,230 --
Common stock - $0.001 par value; authorized 50,000,000 shares: issued and outstanding 5,213,969 shares at June 30, 2014 and 4,750,160 at December 31, 2013 5,214 4,750
Additional paid-in capital 182,637,024 176,438,961
Accumulated deficit (175,501,426) (168,147,878)
Total Stockholders' Equity 7,142,042 8,295,833
Total Liabilities and Stockholders' Equity $ 12,490,761 $ 14,131,514
* Derived from the audited balance sheet as of December 31, 2013
MELA SCIENCES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended June 30, Six months ended June 30,
2014 2013 2014 2013
Net revenues $ 225,155 $ 144,399 $ 322,793 $ 288,499
Cost of revenue 1,277,061 1,381,447 2,195,584 2,461,710
Gross Profit (1,051,906) (1,237,048) (1,872,791) (2,173,211)
Operating expenses:
Research and development 370,648 1,122,962 1,078,472 2,384,963
Selling, general and administrative 2,835,548 4,672,540 6,039,081 8,959,768
Total operating expenses 3,206,196 5,795,502 7,117,553 11,344,731
Operating Loss (4,258,102) (7,032,550) (8,990,344) (13,517,942)
Other income (expenses):
Interest income 688 2,710 1,306 4,815
Interest expense (1,158) (291,622) (2,357) (340,385)
Change in fair value of warrant liability 4,905,638 (105,292) 5,042,780 (89,859)
Registration rights liquidated damages (29,758) -- (3,419,698) --
Other income, net 9,740 5,000 14,765 10,000
Total Other Income/(Loss) 4,885,150 (389,204) 1,636,796 (415,429)
Net Income/(Loss) $ 627,048 $ (7,421,754) $ (7,353,548) $ (13,933,371)
Basic net income/(loss) per common share $ 0.12 $ (1.72) $ (1.46) $ (3.38)
Diluted net income/(loss) per common share $ 0.12 $ (1.72) $ (1.46) $ (3.38)
Basic weighted average number of common shares outstanding 5,212,765 4,308,660 5,053,587 4,117,091
Diluted weighted average number of common shares outstanding 5,212,765 4,308,660 5,053,587 4,117,091
MELA SCIENCES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended June 30,
2014 2013
Cash flows from operating activities:
Net loss $ (7,353,548) $ (13,933,371)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 881,535 1,107,009
Bad debt expense 700 40,290
Inventory reserves 538,559 325,000
Non-cash interest expense -- 98,706
Change in fair value of warrant liability (5,042,780) 89,859
Write-off of unamortized financing costs -- 41,166
Stock-based equity compensation 332,115 1,097,106
Gain on sale of fixed assets (4,740) --
Changes in operating assets and liabilities:
Accounts receivable 6,979 (68,593)
Inventory 21,509 74,100
Melafind® systems sold 62,238 --
Prepaid expenses and other current assets 547,371 218,204
Other assets -- (3,500)
Accounts payable and accrued expenses (903,379) 224,958
Other current liabilities 35,414 12,981
Deferred revenue (141,064) 130,653
Deferred rent (20,018) (11,826)
Long-term interest payable -- 51,922
Net cash used in operating activities (11,039,109) (10,505,336)
Cash flows from investing activities:
Purchases of property and equipment -- (3,766,264)
Proceeds from the sale of fixed assets 6,000 --
Net cash provided by (used in) investing activities 6,000 (3,766,264)
Cash flows from financing activities:
Net proceeds from private placements/public offerings 11,452,507 15,789,873
Net proceeds from long-term debt -- 6,000,000
Expenses related to borrowings and issuance of warrant -- (245,358)
Proceeds from exercise of stock options -- 18,059
Net cash provided by financing activities 11,452,507 21,562,574
Net increase in cash and cash equivalents 419,398 7,290,974
Cash and cash equivalents at beginning of period 3,782,881 7,861,524
Cash and cash equivalents at end of period $ 4,202,279 $ 15,152,498
Non-cash investing activity:
Reclassification of warrant liability to stockholders' equity $ -- $ 652,442
CONTACT: Diana Garcia Redruello
MELA Sciences, Inc.
212-518-4226
dgarcia@melasciences.com
Andrew McDonald, Ph.D.
LifeSci Advisors, LLC
646-597-6987
andrew@lifesciadvisors.com
Source: MELA Sciences 2014 GlobeNewswire, Inc.
