þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 13-3986004 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) | |
50 South Buckhout Street, Suite 1 | ||
Irvington, New York | 10533 | |
(Address of Principal Executive offices) | (Zip Code) |
Large accelerated filer o | Accelerated filer þ |
Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
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PART I. FINANCIAL INFORMATION
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ITEM 1. Financial Statements
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EX-10.1 | ||||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT |
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
June 30,
December 31,
2011
2010
(unaudited)
*
$
20,942,709
$
30,520,812
934,029
523,672
21,876,738
31,044,484
1,826,578
2,073,602
65,158
71,108
62,391
62,391
337,705
337,705
$
24,168,570
$
33,589,290
$
645,643
$
1,096,505
591,312
559,975
28,891
29,538
1,265,846
1,686,018
121,260
104,304
121,260
104,304
1,387,106
1,790,322
25,263
25,263
131,650,548
130,916,326
(108,894,347
)
(99,142,621
)
22,781,464
31,798,968
$
24,168,570
$
33,589,290
*
Derived from the audited balance sheet as of December 31, 2010
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(unaudited)
Three months ended June 30,
Six months ended June 30,
2011
2010
2011
2010
$
2,620,554
$
2,552,689
$
5,196,682
$
5,339,759
2,208,059
2,048,157
4,601,179
4,319,322
(4,828,613
)
(4,600,846
)
(9,797,861
)
(9,659,081
)
13,934
3,009
34,465
3,961
5,022
4,999
11,670
12,497
1,500
27
$
(4,809,657
)
$
(4,591,338
)
$
(9,751,726
)
$
(9,642,596
)
$
(0.19
)
$
(0.20
)
$
(0.39
)
$
(0.42
)
25,262,538
23,028,854
25,262,538
22,886,964
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Six Months Ended June 30,
2011
2010
$
(9,751,726
)
$
(9,642,596
)
283,785
253,492
734,222
366,382
(410,357
)
322,685
(419,525
)
(124,669
)
(273,220
)
16,956
52,152
(647
)
(8,484
)
(9,547,292
)
(9,054,258
)
(30,811
)
(637,014
)
1,473
(30,811
)
(635,541
)
26,070
1,691,633
(130,086
)
3,750,000
(6,717
)
5,330,900
(9,578,103
)
(4,358,899
)
30,520,812
29,673,420
$
20,942,709
$
25,314,521
$
$
23,179
Table of Contents
a
hand-held imaging device
, which employs high precision optics and multi-spectral illumination
(multiple colors of light including near infra-red);
a
proprietary database
of pigmented skin lesions, which we believe to be the largest in the U.S.; and
lesion classifiers
, which are sophisticated mathematical algorithms that extract lesion feature
information and classify lesions.
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June 30,
2011
2010
2,107,429
2,164,598
546,781
614,906
2,654,210
2,779,504
For the Six Months
For the Six Months
Ended June 30, 2011
Ended June 30, 2010
6.5 years
5-10 years
70.54-76.32%
61%
2.47-3.34%
2.26-3.56%
0%
0%
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Weighted
Weighted
Average
Average
Remaining
Exercise
Contractual
Aggregate
Number of
Price per
Term in
Intrinsic
Shares
Share
Years
Value
2,132,879
$
5.19
5.4
439,800
3.27
9.8
(465,250
)
6.59
2,107,429
$
4.48
6.6
$
66
850,791
$
4.53
5.6
$
66
Options Outstanding
Weighted-
Options Exercisable
Average
Weighted
Weighted-
Remaining
Average
Average
Number
Contractual
Exercise
Number
Exercise
Range of Exercise Prices
Outstanding
Life
Price
Exercisable
Price
48,952
1.4 years
$
1.00
48,952
$
1.00
1,578,952
7.4 years
$
3.68
591,789
$
3.70
479,525
4.5 years
$
7.48
210,050
$
7.71
2,107,429
6.6 years
$
4.48
850,791
$
4.53
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$
191
410
439
456
455
456
$
2,407
Table of Contents
Table of Contents
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2007
2009
Total
346,781
200,000
546,781
346,781
200,000
546,781
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OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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The schedule, costs, and results of our clinical trials;
The success of our research and development efforts;
The costs and timing of regulatory approval;
Reimbursement amounts for the use of MelaFind
®
that we are able to
obtain from Medicare and third party payers;
The amount of direct payments we are able to obtain from patients and/or physicians
utilizing MelaFind
®
;
The cost of commercialization activities, including product marketing and building a
domestic direct sales force;
The emergence of competing or complementary technological developments;
The costs of filing, prosecuting, defending and enforcing any patent claims and other rights;
The costs involved in defending any patent infringement actions or other litigation claims
brought against us by third parties;
The costs of maintaining or potentially building our inventory and other manufacturing
expenses; and
Our ability to establish and maintain any collaborative, licensing or other arrangements,
and the terms and timing of any such arrangements.
Table of Contents
Less than
More than
Total
1 year
1-3 years
4-5 years
5 years
$
2,407
$
396
$
872
$
911
$
228
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professional service fees;
contract clinical service fees;
fees paid to contract manufacturers in conjunction with the
production of clinical components or materials; and
fees paid to third party data collection organizations and
investigators in conjunction with clinical trials.
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MELA SCIENCES, INC.
By:
/s/ Richard I. Steinhart
Richard I. Steinhart
Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer)
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Exhibit No.
Description
Supply Agreement with Arrow Electronics, Inc., April 8, 2011.*
Certification by the Chief Executive Officer pursuant to
Rule 13a-14(a) or Rule 15d-14(a) under the Securities
Exchange Act of 1934, as amended.
Certification by the Chief Financial Officer pursuant to
Rule 13a-14(a) or Rule 15d-14(a) under the Securities
Exchange Act of 1934, as amended.
Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
Interactive Data File.
Portions of this exhibit have been omitted pursuant to a request for confidential treatment.
1. | MELA Sciences will deposit $500,000.00 USD into an escrow account, # *** , for the benefit of MELA, which will be held in trust, interest free, and be applied to the invoices described herein, and according to the attached payment schedule. This payment is to be made via a wire transfer of funds to Arrows bank. That wire address being: |
2. | With respect to the Last Time Buy Agreement (LTB), CYII4SM1300AA-QDC, MELA Sciences has with Cypress Semiconductor Corporation (who was recently acquired by On Semiconductor Corporation and who will honor the LTB Agreement between the parties), MELA will provide Arrow with a purchase order for *** Cypress components, specifically part number CYII4SM1300AA-QDC, with a per unit price of $ *** USD. The total value of these components is $1,265,039.90 USD. After the trust deposit mentioned above is received, Arrow will acquire, from Cypress, the LTB components mentioned above after a Non-Cancelable, Non-Returnable (NCNR) contract is executed by MELA Sciences. |
3. | Arrow will be the facilitator by which components are returned, or credited, if the yield is not 90.0% as stated in section 5.1 of the Cypress Agreement. Pursuant to the LTB Agreement Cypress should replace, or credit, nonconforming goods in excess of the 10% agreed upon rate within 30 days following notice to Cypress from MELA Sciences regarding the same. Cypress will deliver replacement sensors to the MELA/Askion facility and will remit all credits to MELA Sciences through Arrow. Arrow shall credit MELA Sciences immediately following its receipt of any such |
***
|
This material has been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission. |
credit from Cypress. |
4. | MELA Sciences understands that there is a lead-time of approximately 20 weeks for Arrow to acquire the named components from Cypress. Arrow will promptly notify MELA Sciences once these components are available and ready for shipment. If there are unusual delays Arrow will promptly notify MELA Sciences. | ||
5. | Once the components are available for delivery MELA Sciences agrees to accept twelve (12) consecutive monthly shipments of *** pieces in accordance with the attached schedule, the first shipment to take place immediately. | ||
6. | Each of the twelve shipments will be booked with net 30-day terms, and each for $105,420.00 USD, plus any applicable tax, freight and handling fees. Arrow will apply $41,666.67 from the funds held in trust to each of the twelve invoices. MELA Sciences agrees to remit eleven (11) on-time payments of $63,753.33 net-30 days, subject to any credit issued, and one (1) final on-time payment of $63,753.23. At the same time MELA Sciences agrees to remit any applicable taxes, freight charges and handling fees with each of the twelve payments. See attached schedule. | ||
7. | If at any time MELA Sciences is unable to pay its obligation under this arrangement, Arrow reserves the right to use the balance of the trust deposit to satisfy the remaining obligation and to seek after any legal means available to it in order to satisfy the amount still owing. If for any reason Cypress notifies MELA Sciences, or Arrow, that it will no longer be providing the sensors contemplated hereby, or cannot do so within three (3) months of the delivery schedule attached hereto, then upon MELA Sciences request Arrow shall promptly remit the remainder of any funds in the trust account held by it for MELA Sciences and this agreement shall terminate. |
/s/ Joseph V. Gulfo | April 8, 2011 | |||
Joseph V. Gulfo, President & CEO, MELA Sciences, Inc. | Date | |||
***
|
This material has been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission. |
Shipment Schedule | Payment Schedule | |||||||||||||||
Components Shipped | Parts Remaining To | |||||||||||||||
Month | To MELA | Be Shipped | Payment From Trust | MELA Sciences Pays* | ||||||||||||
1
|
0 | 0 | $ | | $ | (500.000.00 | ) | |||||||||
2
|
0 | 0 | $ | | $ | | ||||||||||
3
|
0 | 0 | $ | | $ | | ||||||||||
4
|
0 | 0 | $ | | $ | | ||||||||||
5
|
* | ** | * | ** | $ | | $ | | ||||||||
6
|
* | ** | * | ** | $ | 41,666.67 | $ | 63,753.33 | ||||||||
7
|
* | ** | * | ** | $ | 41,666.67 | $ | 63,753.33 | ||||||||
8
|
* | ** | * | ** | $ | 41,666.67 | $ | 63,753.33 | ||||||||
9
|
* | ** | * | ** | $ | 41,666.67 | $ | 63,753.33 | ||||||||
10
|
* | ** | * | ** | $ | 41,666.67 | $ | 63,753.33 | ||||||||
11
|
* | ** | * | ** | $ | 41,666.67 | $ | 63,753.33 | ||||||||
12
|
* | ** | * | ** | $ | 41,666.67 | $ | 63,753.33 | ||||||||
13
|
* | ** | * | ** | $ | 41,666.67 | $ | 63,753.33 | ||||||||
14
|
* | ** | * | ** | $ | 41,666.67 | $ | 63,753.33 | ||||||||
15
|
* | ** | * | ** | $ | 41,666.67 | $ | 63,753.33 | ||||||||
16
|
* | ** | 0 | $ | 41,666.67 | $ | 63,753.33 | |||||||||
17
|
0 | 0 | $ | 41,666.67 | $ | 63,753.33 |
* | Plus Applicable Taxes, Freight & Handling Charges |
***
|
This material has been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission. |
1. | I have reviewed this report on Form 10-Q of MELA Sciences, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operations of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 5, 2011
|
||
|
||
/s/ Joseph V. Gulfo, M.D.
|
||
Joseph V. Gulfo, M.D.
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
1. | I have reviewed this report on Form 10-Q of MELA Sciences, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operations of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 5, 2011
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|
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/s/ Richard I. Steinhart
|
||
Richard I. Steinhart
|
||
Vice President and Chief Financial Officer
|
||
(Principal Accounting and Financial Officer)
|
* | A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to MELA Sciences, Inc. and will be retained by MELA Sciences, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. This written statement accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission, and will not be incorporated by reference into any filing of MELA Sciences, Inc. under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language contained in such filing. |