MELA Sciences Announces Fourth Quarter and Year End 2012 Financial Results IRVINGTON, N.Y., March 5, 2013 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (Nasdaq:MELA), the medical device company that has developed and is commercializing MelaFind^®, today announced financial results for the fourth quarter and year ended December 31, 2012. Fourth Quarter 2012 Performance Highlights: *Accelerated our rate of signed user agreements, system placements, and the training of new customers in connection with our controlled and deliberate launch of MelaFind in the US and in several key cities throughout Germany. *Obtained signed user agreements for 115 MelaFind systems in the US and Germany by the end of the fourth quarter. *Ended the fourth quarter with 95 MelaFind systems installed in dermatologists' offices in the US and Germany and continue to work with customers to train and assist them in using MelaFind appropriately in order to incorporate its use successfully into their practices. *Entered into discussions with over 100 additional dermatologist practices that either have a user agreement currently under evaluation, or have been classified as "highly interested" by the Company as of year-end 2012. *Expanded and enhanced commercial sales presence. *Added territory managers with extensive dermatology sales experience, and as of the fourth quarter, have eight territory managers in the US and four in Germany. Expanded the team of Practice Support managers to five managers in the US and one in Germany to focus on practice-wide adoption of MelaFind. *Embarked upon several initiatives to promote patient awareness and increased usage. *Introduced peer to peer videos where dermatologists who are experienced MelaFind users explain how to best use MelaFind. *Created and distributed in-office literature, posters and tear sheets for dermatologists to better educate patients about MelaFind. *Announced the engagement of Rpr Marketing Communications, a highly experienced marketing communications agency, singularly focused on dermatology and skincare. *MelaFind was designated by the Cleveland Clinic as one of the Top 10 Innovations for 2013 based on its significant clinical impact, high probability for commercial success, and significant human interest. *Completed a simultaneous installation of seven MelaFind systems in a large dermatology practice with over twenty dermatology care providers. *Trained the entire staff and worked in conjunction with them to launch a large scale one-week melanoma detection campaign. *During the campaign, over 344 lesions underwent full MelaFind analysis, with overall excellent clinical performance in a real world setting. "As of the end of 2012, we have completed our first nine months on the market with MelaFind, and are pleased to report that we have escalated the pace of our commercial activities, consistent with our planned deliberate and controlled launch of MelaFind in the US and Germany. We are thrilled with the level of demand we are experiencing and broad based clinician acceptance," said Dr. Joseph V. Gulfo, President and CEO of MELA Sciences. "We look forward to finishing our first year on the market strong and beginning phase two of our launch with a focus on system usage and patient mobilization with a more robust base of customers." "During the American Academy of Dermatology meeting in Miami in early March, we experienced tremendous booth traffic, with over 650 dermatologists engaging us to learn more about MelaFind; 350 of which received in-depth demonstrations. Several dermatologists signed user agreements on site. Many others obtained additional information to share with their partners and practice managers at home, as they seriously consider obtaining MelaFind systems. We believe that this is a testament to the excellent clinical results and increasing awareness and demand for MelaFind in the community." "From a financing perspective, we are pleased that we have recently fortified our balance sheet. Upon closing of our equity offering in Februaryand consummation of the initial funding of the debt financing in the coming weeks, together with the remaining $4 million that would be available under the debt financing contingent on certain performance milestones, the cash committed to the Company's balance sheetwould beroughly $30 million.We envision being able to execute the second phase of our launch strategy with confidence throughout 2013 and well into 2014," said Dr. Joseph V. Gulfo, President and CEO of MELA Sciences. MelaFind is the Company's breakthrough non-invasive and objective automated point of care system for use when a dermatologist chooses to obtain additional information for a decision to biopsy clinically atypical pigmented skin lesions with one or more clinical or historical characteristics of melanoma. Fourth Quarter and 2012 Financial Results Revenues for the three months ended December 31, 2012 were $122,327 compared to no revenues reported for the same period in 2011. The Company's net loss for the three months ended December 31, 2012 was $6.1 million, or $0.19 per diluted share, compared to a net loss of $4.5 million, or $0.17 per diluted share, for the same period in 2011. Revenues for the twelve months ended December 31, 2012 were $278,461 compared to no revenues reported for the same period in 2011. Deferred revenues reported as of December 31, 2012 were $303,377 versus no deferred revenue as of December 31, 2011. Revenues were based on the installation of 95 MelaFind systems and do not account for the revenue from 20 additional user agreements signed in the fourth quarter 2012. Deferred revenues reflect the timed recognition of the installation fee revenue over the term of the user agreement which is generally two years. The Company's net loss for the twelve months ended December 31, 2012 was $22.7 million, or $0.74 per diluted share, compared to a net loss of $20.4 million, or $0.80 per diluted share, for the twelve months ended December 31, 2011. The increase in the net loss was primarily attributable to Selling, General and Administrative expenses related to the expansion of the Company's sales force and the Company's incremental marketing costs as well as the increase in direct costs associated with the placement of MelaFind systems in dermatologists' offices. Conference Call MELA Sciences will host a conference call today at 4:30 PM EST to discussfourth quarter 2012 quarterly results. To participate in the call, dial 1-877-303-9205 approximately 10 minutes before the conference call is scheduled to begin. To listen via live webcast, please go to the investor relations section of the MELA Sciences website at http://www.melasciences.com approximately 10 minutes prior to the teleconference start time. If you are unable to participate during the live conference call and webcast, the conference call audio cast will be archived and available for replay for approximately 90 days. About MELA Sciences, Inc. MELA Sciences is a medical device company focused on the commercialization of its flagship product, MelaFind^®, and its further design and development. MelaFind is a non-invasive tool to provide additional information to dermatologists during melanoma skin examinations. The device uses light from visible to near-infrared wavelengths to evaluate skin lesions up to 2.5 mm beneath the skin. The device provides information on a lesion's level of morphologic disorganization to provide additional objective information that may be used by dermatologists in the biopsy decision-making process. MelaFind has been approved by the US Food and Drug Administration for use in the US. In addition, MelaFind has received CE Mark approval and is approved for use in the European Union. For more information on MELA Sciences, visit www.melasciences.com. 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 our plans, objectives, expectations and intentions and other statements that contain words such as "expects," "contemplates," "anticipates," "plans," "intends," "believes," "assumes," "predicts" and variations of such words or similar expressions that predict or indicate future events or trends, or that do not relate to historical matters. These statements are based on our current beliefs or expectations and are inherently subject to significant known and unknown uncertainties and changes in circumstances, many of which are beyond our control. There can be no assurance that our beliefs or expectations will be achieved. Actual results may differ materially from our beliefs or 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 facing the company such as those set forth in its reports on Forms 10-Q and 10-K filed with the US Securities and Exchange Commission (the "SEC"). Factors that might cause such a difference include whether MelaFind^® achieves market acceptance. Given the uncertainties affecting companies in the medical device industry such as the Company, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. The Company urges you to carefully review and consider the disclosures found in its filings with the SEC which are available at www.sec.gov and www.melasciences.com. TABLES TO FOLLOW MELA SCIENCES, INC. BALANCE SHEETS (Audited) December31, December31, 2011 2012 ASSETS Current Assets: Cash and cash equivalents $27,996,871 $7,861,524 Accounts receivable — 179,956 Inventory — 675,602 Prepaid expenses and other current assets 1,061,550 965,624 Total Current Assets 29,058,421 9,682,706 Property and equipment, net 1,626,791 7,349,531 Patents and trademarks, net 59,208 47,308 Deferred financing costs 62,391 106,141 Other assets 586,498 84,127 Total Assets $31,393,309 $17,269,813 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable (includes related parties of $36,027and $59,689 as of December31, 2011and $670,950 $1,850,102 December31, 2012, respectively) Accrued expenses 745,754 956,541 Deferred revenue — 171,726 Other current liabilities 30,993 40,811 Total Current Liabilities 1,447,697 3,019,180 Long Term Liabilities: Deferred rent 138,216 143,772 Deferred revenue — 131,651 Total Long Term Liabilities 138,216 275,423 Total Liabilities 1,585,913 3,294,603 COMMITMENTS, CONTINGENCIES and LITIGATION Stockholders' Equity Preferred stock — $.10 par value; authorized 10,000,000 shares; issued and outstanding: none Common stock — $.001 par value; authorized 45,000,000 shares; issued and outstanding 30,308 32,205 30,307,538 shares at December31, 2011 and 32,204,720 at December31, 2012 Additional paid-in capital 149,304,424 156,142,873 Accumulated deficit (119,527,336) (142,199,868) Stockholders' Equity 29,807,396 13,975,210 Total Liabilities and Stockholders' Equity $31,393,309 $17,269,813 MELA SCIENCES, INC. STATEMENTS OF OPERATIONS Three months ended Twelve months ended December31, December31, (unaudited) (unaudited) 2012 2011 2012 2011 Revenue $122,327 $— $278,461 $— Cost of revenue 970,976 — 2,042,333 — Gross profit (848,649) — (1,763,872) — Operating expenses: Research and 1,285,344 2,021,510 6,791,940 9,656,003 development General and 3,953,253 2,515,058 14,168,754 10,806,228 administrative Operating loss (6,087,246) (4,536,568) (22,724,566) (20,462,231) Interest income (3,803) (9,177) (32,083) (54,371) Other income (5,001) (5,056) (19,951) (23,145) Net loss: $(6,078,442) $(4,522,335) $(22,672,532) $(20,384,715) Basic and diluted net loss per common $(0.19) $(0.17) $(0.74) $(0.80) share Basic and diluted weighted average 31,727,391 25,870,908 30,762,610 25,415,880 number of common shares outstanding MELA SCIENCES, INC. STATEMENTS OF STOCKHOLDERS' EQUITY Years Ended December31, 2010, 2011 and 2012 (Audited) Additional Total Common Stock Paid-in Accumulated Stockholders' Shares Amount Capital Deficit Equity Balance at $ January1, 22,354,317 $ 22,354 109,513,582 $ (79,220,106) $ 30,315,830 2010 Exercise of 12,944 13 33,075 33,088 options Cashless exercise of 16,262 16 (16) — options Exercise of 239,723 240 1,691,394 1,691,634 warrants Cashless exercise of 32,548 33 (33) — warrants Issuance of shares of common stock in connection 2,200,000 2,200 15,231,471 15,233,671 with a public offering (net of expenses) Issuance of shares of common stock in connection with a Committed 406,744 407 3,719,697 3,720,104 Equity Financing Facility (CEFF) (net of expenses) Share-based compensation 727,156 727,156 expense Net loss (19,922,515) (19,922,515) Balance at December31, 25,262,538 25,263 130,916,326 (99,142,621) 31,798,968 2010 Exercise of 5,000 5 13,345 13,350 options Issuance of common stock 40,000 40 171,960 172,000 award Issuance of shares of common stock in connection 5,000,000 5,000 15,019,662 15,024,662 with a public offering (net of expenses) Share-based compensation 3,183,131 3,183,131 expense Net loss (20,384,715) (20,384,715) Balance at December31, 30,307,538 30,308 149,304,424 (119,527,336) 29,807,396 2011 Cashless exercise of 11,868 12 (12) -- options Exercise of 21,484 21 44,738 44,759 options Issuance of shares of common stock in connection 1,863,830 1,864 5,306,173 5,308,037 with an ATM public offering (net of expenses) Share-based compensation 1,487,550 1,487,550 expense Net loss (22,672,532) (22,672,532) Balance at December31, 32,204,720 $32,205 $156,142,873 $(142,199,868) $13,975,210 2012 MELA SCIENCES, INC. STATEMENTS OF CASH FLOWS (Audited) Year Ended December31, December31, December31, 2010 2011 2012 Cash flows from operating activities: Net loss $(19,922,515) $(20,384,715) $(22,672,532) Adjustments to reconcile net loss to net cash used in operating activities: Gain on sale of fixed assets (8,811) — — Depreciation and amortization 552,860 562,803 969,500 Issuance of common stock award — 172,000 — Write off of unamortized financing — — 62,391 costs Noncash compensation 727,156 3,183,131 1,487,550 Changes in operating assets and liabilities: Increase in accounts receivable — — (179,956) Increase in inventory — — (675,602) Decrease (increase) in prepaid 141,290 (537,878) 95,926 expenses and other current assets (Decrease) increase in accounts (121,321) (239,776) 1,389,939 payable and accrued expenses (Decrease) increase in other (3,747) 1,455 9,818 current liabilities Increase in other assets (289,705) (248,793) (19,643) Increase in deferred rent 104,304 33,912 5,556 Increase in deferred revenue — — 303,377 Net cash used in operating (18,820,489) (17,457,861) (19,223,676) activities Cash flows from investing activities: Purchases of property and (1,044,079) (104,092) (6,158,326) equipment Proceeds from disposal of fixed 10,284 — — assets Net cash used in investing (1,033,795) (104,092) (6,158,326) activities Cash flows from financing activities: Net proceeds from private 15,233,671 15,024,662 5,201,896 placements/public offerings Net proceeds from Committed Equity 3,743,283 — — Financing Facility Proceeds from exercise of stock 33,088 13,350 44,759 options Proceeds from exercise of stock 1,691,634 — — warrants Net cash provided by financing 20,701,676 15,038,012 5,246,655 activities Net increase (decrease) in cash 847,392 (2,523,941) (20,135,347) and cash equivalents Cash and cash equivalents at 29,673,420 30,520,812 27,996,871 beginning of year Cash and cash equivalents at end $ 30,520,812 $ 27,996,871 $ 7,861,524 of year Supplemental Schedule of Noncash Investing and Financing Activities: Amortization of deferred financing $23,179 — $41,179 costs Reclassification of MelaFind^®components from other — — $522,014 assets to property and equipment CONTACT: For Investors Lynn Pieper Westwicke Partners 415-202-5678 For Media Claudia Beqaj PR@melasciences.com
MELA Sciences Announces Fourth Quarter and Year End 2012 Financial Results
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