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EX-99.1 - VirtualScopics, Inc.v222824_ex99-1.htm
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
 
 
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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.
 
       
Date:  May 16, 2011
By:
/s/ Molly Henderson  
    Name: Molly Henderson   
   
Title: Chief Business and Financial Officer,
Sr. Vice President
 
 
 
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EXHIBIT INDEX
 
Exhibit No.
 
Description
99.1
 
Press Release dated May 16, 2011
               
 
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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.
 
 
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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  
 
 
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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  

 
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