MELA Sciences Announces First Quarter 2013 Financial Results

MELA Sciences Announces First Quarter 2013 Financial Results

IRVINGTON, N.Y., April 30, 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 first
quarter ended March 31, 2013.

First Quarter 2013 Performance Highlights:

  *Ended the first twelve months of the MelaFind commercial launch with
    significant national distribution by having placements in 28 states in the
    US and 21 cities in Germany.

    *63% of US population within 75 miles of a MelaFind practice;
      
    *Launched national ongoing PR campaign.

  *Began concentrated effort on system usage, the second phase of our
    two-phase commercial launch while continuing our phase one efforts to
    enhance a firm and growing customer base.

    *Ended the first quarter with signed user agreements for 138 MelaFind
      systems in the US and Germany;
      
    *Ended the first quarter with an installed base of 126 MelaFind systems
      in the US and Germany and continue to work with dermatology customers to
      successfully incorporate MelaFind into their practices;
      
    *In discussions with over 140 additional dermatologist practices that
      either have a user agreement currently under evaluation, or have been
      classified as "highly interested" by the Company.

  *Successful dermatology meetings in the US and Germany:

    *American Academy of Dermatology (AAD) meeting in Miami, March 1st – 4th.

  • MelaFind data were presented at ten podium presentations;

  • Experienced strong booth traffic with over 650 dermatologists
  engaged to learn more about MelaFind;
   350 of which received in-depth demonstrations.

    *Fachtagung: Dermatologische Praxis 2013 meeting, Frankenthal, Germany
      March 15-17.

  • 76 in-depth demonstrations;

  • MelaFind workshop with 110 attendees.

  *Introduced additional pricing models to increase patient access and
    simplicity for practices.

    *Per session model; per lesion model, and monthly use options.

  *Increased public relations initiatives to promote patient awareness and
    increased usage.

    *MelaFind appearance on The View as well as local new stations by
      dermatologists in the US and Germany;
      
    *Expanded distribution of in-office literature, website content, and
      posters for dermatologists to better educate patients about MelaFind.

"We have now completed our first year on the market with MelaFind, and we are
pleased to report that we have established a significant nation-wide customer
base in the US and Germany, enabling us to move forward confidently with our
commercialization plans. We have now begun phase two of our launch – with
increased focus on patient awareness and engagement, as well as system usage,
and we believe that our efforts are starting to yield results– usage
represented 36% of our recognized revenue in the first quarter, up from 25% in
the fourth quarter of 2012," said Dr. Joseph V. Gulfo, President and CEO of
MELA Sciences."We look forward to continuing phase two of our launch as we
build upon a robust and growing base of customers and drive our business."

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.

First Quarter 2013 Financial Results

Revenues for the three months ended March 31, 2013 were $144,100 compared to
$11,250 reported for the same period in 2012. Deferred revenues reported as of
March 31, 2013 were $392,250 versus deferred revenue of $17,250 reported as of
March 31, 2012. Revenues were based on the installation of 31 MelaFind systems
and do not account for 12 additional user agreements that were signed in the
first quarter of 2013 that are pending installation, scheduling, and training
of staff.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 three months ended March 31, 2013 was $6.5
million, or $0.17 per diluted share, compared to a net loss of $5.8 million,
or $0.19 per diluted share, for the same period in 2012. 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.

As of March 31, 2013, the Company's cash and cash equivalents were $21.6
million.

Conference Call

MELA Sciences will host a conference call today at 4:30 PM EDT to discuss
first quarter 2013 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.

MELA SCIENCES, INC.
CONDENSED BALANCE SHEETS
                                                               
                                                  March 31,     December 31,
                                                   2013          2012
                                                  (unaudited)   *
ASSETS                                                          
Current Assets:                                                 
Cash and cash equivalents                         $21,647,046  $7,861,524
Accounts receivable, net                           169,403       179,956
Inventory                                          436,960       675,602
Prepaid expenses and other current assets          876,451       965,624
Total Current Assets                               23,129,860    9,682,706
Property and equipment, net                        8,495,801     7,349,531
Patents and trademarks, net                        45,602        47,308
Deferred financing costs                           79,877        106,141
Other assets                                       84,127        84,127
Total Assets                                       $31,835,267  $17,269,813
                                                               
LIABILITIES AND STOCKHOLDERS' EQUITY                            
Current Liabilities:                                            
Accounts payable (includes related parties of
$59,750 and $59,689 as of March 31, 2013 and       $1,085,037  $1,850,102
December 31, 2012, respectively)
Accrued expenses                                   887,314       956,541
Deferred placement revenue                         230,779       171,726
Other current liabilities                          60,596        40,811
Total Current Liabilities                          2,263,726     3,019,180
Long Term Liabilities:                                          
Deferred placement revenue                         161,471       131,651
Loan payable                                       5,286,037     --
Warrant liability                                  547,150       --
Long-term interest payable                         7,417         --
Deferred rent                                      137,859       143,772
Total Long Term Liabilities                        6,139,934     275,423
Total Liabilities                                  $8,403,660  $3,294,603
                                                               
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          43,037        32,205
43,037,144 shares at March 31, 2013 and 32,204,720
at December 31, 2012
Additional paid-in capital                         172,100,055   156,142,873
Accumulated deficit                                (148,711,485) (142,199,868)
Stockholders' Equity                               23,431,607    13,975,210
Total Liabilities and Stockholders' Equity         $31,835,267  $17,269,813
                                                               
* Derived from the audited balance sheet as of December 31, 2012



MELA SCIENCES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
                                                               
                                                 Three months ended March 31,
                                                 2013           2012
Revenue                                           $144,100     $11,250
Cost of revenue                                   1,080,263      130,410
                                                 (936,163)      (119,160)
Operating expenses:                                             
Research and development                          1,262,001      2,434,758
General and administrative                        4,287,228      3,217,491
Operating loss                                    (6,485,392)    (5,771,409)
Interest income                                   (2,105)        (13,384)
Interest expense                                  48,763         --
Change in fair value of warranty liability        (15,433)       --
Other income, net                                 (5,000)        (5,000)
Net loss                                          $(6,511,617)  $(5,753,025)
Basic and diluted net loss per common share       $(0.17)       $(0.19)
                                                               
Basic and diluted weighted average number of      39,233,943     30,313,905
common shares outstanding



MELA SCIENCES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
                                                               
                                                 Three Months Ended March 31,
                                                 2013           2012
Cash flows from operating activities:                           
Net loss                                          $(6,511,617)  $(5,753,025)
Adjustments to reconcile net loss to net cash                   
used in operating activities:
Depreciation and amortization                     496,733        148,044
Allowance for uncollectible accounts              40,000         --
Non-cash interest expense                         14,101         --
Change in fair value of warrant liability         (15,433)       --
Write-off of unamortized financing costs          41,166         --
Non-cash compensation                             268,381        347,618
Changes in operating assets and liabilities:                    
Increase in accounts receivable                   (29,447)       (12,078)
Decrease (increase) in inventory                  238,642        (310,090)
Decrease in prepaid expenses and other current    89,173         155,071
assets
(Decrease) increase in accounts payable and       (834,292)      75,391
accrued expenses
(Decrease) increase in deferred rent              (5,913)        1,389
Increase in deferred placement revenue            88,873         17,250
Increase in long-term interest payable            7,417          
Increase in other current liabilities             19,785         13,887
 Net cash used in operating activities         (6,092,431)    (5,316,543)
Cash flows from investing activities:                           
Purchases of property and equipment               (1,641,297)    (408,079)
 Net cash used in investing activities         (1,641,297)    (408,079)
Cash flows from financing activities:                           
Proceeds from borrowings and issuance of warrant  6,000,000      --
Expenses related to borrowing and issuance of     (245,358)      
warrant
Proceeds from exercise of stock options           18,059         33,310
Net proceeds from public offerings                15,746,549     (4,293)
 Net cash provided by financing activities     21,519,250     29,017
Net increase (decrease) in cash and cash          13,785,522     (5,695,605)
equivalents
Cash and cash equivalents at beginning of period  7,861,524      27,996,871
Cash and cash equivalents at end of period        $21,647,046  $22,301,266
                                                               
Supplemental disclosure of cash flow information:               
Non-cash investing activity:                                    
Amortization of deferred financing costs          $41,166      $--
Reclassification of MelaFind^® components from    $--          $522,014
otherassets 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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