MELA Sciences Announces Fourth Quarter and Year End 2012 Financial Results

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
 
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