Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2012

Organization and Basis of Presentation [Abstract]

ORGANIZATION AND BASIS OF PRESENTATION

1. ORGANIZATION AND BASIS OF PRESENTATION

MELA Sciences, Inc., a Delaware corporation (the “Company”), is a medical device company focused on the commercialization of our flagship product, MelaFind^®, and the further design and development of MelaFind ^® and our technology. MelaFind ^® is a non-invasive, point-of-care (in the doctor’s office) instrument to aid in the detection of melanoma. MelaFind ^® features a hand-held component that emits light of multiple wavelengths to capture digital data from clinically atypical pigmented skin lesions. The data are then analyzed utilizing sophisticated classification algorithms, ‘trained’ on our proprietary database of melanomas and benign lesions, to provide information to assist in the management of the patient’s disease, including information useful in the decision of whether to biopsy the lesion.

The Company received the Food and Drug Administration’s (“FDA”) approval of the Pre-Market Approval (“PMA”) application for Melafind ^® in November 2011 and in September 2011 the Company received Conformite Europeenne (“CE”) Mark approval for MelaFind ^®. The Company initiated a controlled launch of MelaFind ^® in selected U.S. and German markets in March 2012. Prior to March of 2012 the Company had not generated any revenues from MelaFind ^®.

During the second quarter of 2012, the Company continued the MelaFind^® controlled launch with additional installations of MelaFind ^® systems in both the U.S. and Germany. In the U.S., MelaFind ^® systems were placed principally in the Northeast with additional installations in certain Southeastern, Southwestern and Middle-Atlantic states.

The Company anticipates that it will continue to incur net losses for the foreseeable future in the commercialization of the Melafind ^® device, the conduct of a Post Approval Study (“PAS”) evaluating the sensitivity of physicians in diagnosing melanomas and high-grade lesions and the false positive rate after using MelaFind^®, the further development of Melafind^® and the Company’s technology and the expansion of its corporate infrastructure. From inception, the Company has financed operations initially through the sale of convertible preferred stock prior to becoming a public company in 2005 and subsequently through the sale of common stock

On June 15, 2012, the Company entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”) to sell shares of its common stock with aggregate gross proceeds of up to $20,000,000, from time to time, through an “at-the-market” equity offering program (“ATM Program”) under which Cowen will act as sales agent. There were no shares of the Company’s common stock sold through the ATM Program as of June 30, 2012.

The Company faces certain risks and uncertainties which are present in many emerging medical device companies regarding future profitability, ability to obtain future capital, protection of patents and intellectual property rights, competition, rapid technological change, government regulations, changing health care marketplace, recruiting and retaining key personnel, and reliance on third party manufacturing organizations.

As of June 30, 2012, the Company’s total of cash and cash equivalents was approximately $17.2 million. Management believes that this cash balance along with anticipated revenues and the utilization of the Company’s ATM Program will be sufficient to fund the Company’s anticipated level of operations for at least the next twelve months. However, the Company will need substantial funds to broaden the commercial expansion of MelaFind^®, including further development of a direct sales force and expansion of the Company’s contract manufacturing capacity.

The net proceeds anticipated from the ATM Program are intended to be used to continue the commercial launch of MelaFind^® in the U.S. and the European Union, for continued research & development activities and for general corporate purposes, including working capital. There can be no assurances that the Company will be able to obtain additional financing in the future. Additional funds may not become available on acceptable terms, and there can be no assurance that any additional funding that the Company does obtain will be sufficient to meet the Company’s needs in the long term. In the event that the Company is unable to raise additional funds, the Company has the ability and intent to reduce certain discretionary expenditures.

The unaudited condensed financial statements included herein have been prepared from the books and records of the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. The information and note disclosures normally included in complete financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

The Company’s management is responsible for the financial statements included in this document. The Company’s interim financial statements are unaudited. Interim results may not be indicative of the results that may be expected for the year. However, the Company believes all adjustments considered necessary for a fair presentation of these interim financial statements have been included and are of a normal and recurring nature.