SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 16, 2011 (May 16, 2011)
VIRTUALSCOPICS, INC. |
(Exact Name of Registrant as Specified in Its Charter) |
| Delaware |
| (State or Other Jurisdiction of Incorporation) |
| 000-52018 | 04-3007151 |
| (Commission File Number) | (IRS Employer Identification No.) |
| 500 Linden Oaks, Rochester, New York | 14625 |
| (Address of Principal Executive Offices) | (Zip Code) |
(585) 249-6231 |
(Registrant’s Telephone Number, Including Area Code) |
_____________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
INFORMATION TO BE INCLUDED IN THE REPORT
Section 2 Financial Information
Item 2.02 Results of Operations and Financial Condition
On May 16, 2011, VirtualScopics, Inc. issued a press release announcing the financial results for the first quarter ended March 31, 2011. A copy of VirtualScopics, Inc.’s press release is attached as Exhibit 99.1 to this current report on Form 8-K.
The information furnished pursuant to this Item 2.02 and the exhibit hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing.
Section 9 Financial Statements and Exhibits
Item 9.01 Financial Statement and Exhibits
(d) Exhibits
99.1 Press Release dated May 16, 2011
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | VIRTUALSCOPICS, INC. | |
| | | | |
| By: | /s/ Molly Henderson | |
| | | Name: Molly Henderson | |
| | | Title: Chief Business and Financial Officer, Sr. Vice President | |
EXHIBIT INDEX
| Exhibit No. | | Description |
| 99.1 | | Press Release dated May 16, 2011 |
VirtualScopics, Inc. and Subsidiary
Condensed Consolidated Statements of Operations
(unaudited)
| | | For the Three Months Ended March 31, | |
| | | 2011 | | | 2010 | |
| Revenues | | $ | 3,349,610 | | | $ | 2,841,757 | |
| Reimbursement revenues | | | 309,367 | | | | 229,250 | |
| Total revenues | | | 3,658,977 | | | | 3,071,007 | |
| | | | | | | | | |
| Cost of revenues | | | 1,749,870 | | | | 1,243,643 | |
| Cost of reimbursement revenues | | | 309,367 | | | | 229,250 | |
| Total cost of services | | | 2,059,237 | | | | 1,472,893 | |
| Gross profit | | | 1,599,740 | | | | 1,598,114 | |
| | | | | | | | | |
| Operating expenses | | | | | | | | |
| Research and development | | | 314,257 | | | | 251,122 | |
| Sales and marketing | | | 302,095 | | | | 302,515 | |
| General and administrative | | | 600,213 | | | | 615,490 | |
| Stock-based compensation expense | | | 234,205 | | | | 170,586 | |
| Depreciation and amortization | | | 137,224 | | | | 124,920 | |
| Total operating expenses | | | 1,587,994 | | | | 1,464,633 | |
| Operating income | | | 11,746 | | | | 133,481 | |
| | | | | | | | | |
| Other income (expense) | | | | | | | | |
| Interest income | | | 1,227 | | | | 4,220 | |
| Other expense | | | (1,220 | ) | | | (170 | ) |
| Loss on derivative financial instrument | | | (212,134 | ) | | | (129,439 | ) |
| Total other expense | | | (212,127 | ) | | | (125,389 | ) |
| Net (loss) income | | | (200,381 | ) | | | 8,092 | |
| | | | | | | | | |
| Series B preferred stock cash dividend | | | 12,989 | | | | 55,966 | |
| Net loss attributable to common stockholders | | $ | (213,370 | ) | | $ | (47,874 | ) |
| | | | | | | | | |
| Basic and diluted net loss per common share | | $ | (0.01 | ) | | $ | (0.00 | ) |
| | | | | | | | | |
| Weighted average number of common shares outstanding basic and diluted | | | 28,038,723 | | | | 25,520,675 | |
* Cost of revenues includes non-cash stock-based compensation expense of $9,767 and $7,505 for the three months ended March 31, 2011 and 2010, respectively.
VirtualScopics, Inc. and Subsidiary
Consolidated Balance Sheets
| | | March 31, | | | December 31, | |
| | | 2011 | | | 2010 | |
| | | (unaudited) | | | | |
| Assets | | | | | | |
| Current assets | | | | | | |
| Cash | | $ | 3,767,710 | | | $ | 4,576,060 | |
| Accounts receivable, net | | | 3,406,549 | | | | 2,727,525 | |
| Prepaid expenses and other current assets | | | 367,027 | | | | 305,079 | |
| Total current assets | | | 7,541,286 | | | | 7,608,664 | |
| Patents, net | | | 1,683,004 | | | | 1,711,501 | |
| Property and equipment, net | | | 458,412 | | | | 404,426 | |
| Total assets | | $ | 9,682,702 | | | $ | 9,724,591 | |
| | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | |
| | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 1,181,119 | | | $ | 1,099,838 | |
| Accrued payroll | | | 378,652 | | | | 821,107 | |
| Unearned revenue | | | 191,712 | | | | 214,508 | |
| Derivative liability | | | 1,038,132 | | | | 2,609,708 | |
| Total current liabilities | | | 2,789,615 | | | | 4,745,161 | |
| | | | | | | | | |
| Commitments and Contingencies | | | - | | | | - | |
| | | | | | | | | |
| Stockholders' Equity | | | | | | | | |
| Convertible preferred stock, $0.001 par value; 15,000,000 shares authorized; | | | | | | | | |
| Series A 8,400 shares authorized; issued and outstanding, 3,045 and 3,188 at March 31, 2011 and December 31, 2010, respectively; liquidation preference $1,000 per share | | | 3 | | | | 3 | |
Series B 6,000 shares authorized; issued and outstanding, 600 and 800 at March 31, 2011 and December 31, 2010, respectively; liquidation preference $1,000 per share | | | 1 | | | | 1 | |
| Common Stock, $0.001 par value; 85,000,000 shares authorized; issued and outstanding, 28,408,670 and 27,414,620 shares at March 31, 2011 and December 31, 2010, respectively | | | 28,409 | | | | 27,415 | |
| Additional paid-in capital | | | 17,203,298 | | | | 15,090,254 | |
| Accumulated deficit | | | (10,338,624 | ) | | | (10,138,243 | ) |
| Total stockholders' equity | | | 6,893,087 | | | | 4,979,430 | |
| Total liabilities and stockholders' equity | | $ | 9,682,702 | | | $ | 9,724,591 | |
| | | Three Months Ended | | | Three Months Ended | |
| | | March 31, 2011 | | | March 31, 2010 | |
| | | (unaudited) | | | (unaudited) | |
| Adjusted EBITDA (non-GAAP measurement): | | | | | | |
| Net (loss) income | | $ | (200,381 | ) | | $ | 8,092 | |
| Interest income and other expenses | | | (7 | ) | | | (4,050 | ) |
| Depreciation and amortization | | | 137,224 | | | | 124,920 | |
| Stock-based compensation expense | | | 243,972 | | | | 178,091 | |
| Loss on derivative financial instrument | | | 212,134 | | | | 129,439 | |
| Adjusted EBITDA | | $ | 392,942 | | | $ | 436,492 | |
| Basic and diluted Adjusted EBITDA per common share, non-GAAP | | $ | 0.01 | | | $ | 0.02 | |
