VSCP

I just looked at the VSCP 3Q results, they are not great, but thay are still in their planned conservative target. In my opinion, the market is still overvaluing the rebranded VSCP. They are still not profitable and they have an E/R value of 2.69 and a P/S of 3.08. Now that they finished the DOD work they are exactly like any other Imaging CRO( BIOC has an E/R of 0.67 and a P/S of 0.86). Therefore, the rebranded VSCP valuation is larger than its competitor. I have to clarify, that the market is a mystery to me, but how is possible that:

• a non-profitable company
• that has not differentiated products or services,
• that has not done any strategic alliances in the last four years,
• that has reduced its service portfolio, becuse it has not been able to get any more DOD jobs

has a better P/S ratio than their competitors?

Other mystery of the market is the existence of a buyer(s) that are trying to keep VSCP stock higher. I’ve seen in this stock that there is some kind of low volume speculation (100 shares) that constantly pushes the stock from a low value to a higher value. 
More mysteries, the University of Rochester (UofR) sold several thousand shares the due date of the option conversion. How is possible that VSCP and the UofR didn’t agree to postpone the sale at least one day?

As a fouder, I want that this company to grow bigger, but it looks like that is not the vision of the current BOD or management.

Last Quarter

4Q Imaging and IMITEK were present at OARSI 2009.


It was a very successful meeting and we made large improvement in all grounds.

• 4Q secured a new project

• We actively participated in the definition of MRI based OA

• IMITEK created an atlas based analytical procedures that enabled the quantification of spatial features over time

• IMITEK added the potential to do T2 mapping and the new pseudo color images are awesome

• 4Q has added surface rendering capabilities to it product/service portfolio.



We are so proud in all this achievements.

Life After VirtualScopics INC

As I moved out from VirtualScopics INC. Saara, Ed, Patricia and I started a new company 4Qimaging in Rochester NY, and Patricia and I started IMITEK in Monterrey Mexico. 4Q imaging has been very successful in attracting researchers and Pharma attention. Soon 4Q will start analyzing thousands of knees  from several knee studies. 4Q is using the software that I created from scratch CiPAS. CiPAS has been used extensively in the last year and more than 50,000 MRI images have been analyzed using the software. We still enhancing the software and testing with multiple image vendors, so we are happy with all the achievements that we have made over the last year.

VirtualScopics INC II

Now that VS has announced the 2009 2nd Quarter revenues, I had a flash back. I remembered the events of last October.
Once I left VS, I proposed to the CEO that the Board of directors should buy my stock, so I can get some money back from my effort and they can have more control over the stock price. My proposal was not taken seriously so I kept my stock. Then I sold some at the fair market price in March and then I was waiting for the next sale at a good market price. In the mean time I was approached by VS BoD, and they made a very bad proposal to get my stock. I rejected the offer and I continue my life. In September of 2008 I got a new proposal from an unknown client. I listen to the proposal It was better than previous but no great. I wasn't eager to sell, but it seems that the new interested party was willing to get me some cash. After some hurdles, we made an agreement and I sold my stock. At that time I wasn't aware that the interested party was VS BoD. I was a total surprise to me that VS BoD and some other interested parties, were the ones that got my stock. I'm not sure, if all this event was made public to the other VS stock owners or that intention was announced by the BoD to the other interested parties. To be honest I wasn't happy that VS had to made a very elaborated plan to get my stock and that they have to hide their faces to get my stock. This event is just a reflection on how VS BoD behaves and way of thinking.

On the other hand, and coming back to the present, I'm still surprise by the current VS stock price. I still believe that VSCP is overvalued, but the market will dictate that, I'm not longer have a great stock participation, but I still have some shares. I'm hopping that VS share holders at some point realize that the current VS directors hare not that the company need. Anyway, right now I have two other companies to take care: 4Qimaging and IMITEK.

Although I was one of the co-founders of VirtualScopics I was not happy there since the company became a public company. (VSCP) I told the every VS CEO since 2004 that my long term plans were not in VS. The current CEO was aware of my intention of leaving VS and continuing a good relationship with VS Suddenly everything changed in November 2007, when the current CEO decided that for "financial" reasons to fire me and Patricia, and Saara. It still a mystery why he decided to do that when we has aware that I was planning leaving VS. In his termination agreement letter included some restrictions in how I can sell my founding stock and employment restrictions. I didn't sign the letter, not because I wanted to can be free to work anywhere and be free to sell my stock to dump VS stock. I didn’t sign because: 1.- The CEO did not ask me if I was still willing to look for other employment opportunities, when I was eager to do so, and he knew it. if he had asked, a mutual termination agreement could have been reached. 2.- In the same token he never showed any indications to consider any options besides laying people off. There were several alternatives, but he never gave the opportunity to present them. 3.- He did not want to negotiate any point of his termination agreement letter. I just asked for a larger compensation and to raise some stock selling restrictions. 4.-He did not want to extend the negation period, when it was clear that more time was required. 5.-He was aware that I did not have any change of getting a residency in the US, and to continue my living in the US, and if I was laid off, the only source of income for the next year will be through selling my stock. The stock sale will be used to move my home to México, get a new home and pay for all the relocation for me and my family. So even knowing this, he decided that it was more important for him to meet a negotiation deadline, that to negotiate the terms of the agreement letter. The last point explains why we needed some cash in early 2008, and it was childish to say that we sold the sock in vengeance of the employment termination. Furthermore, I sold that stock knowing that at that point VS was still overvalued compared to other similar companies. When I left VS, VS has already been proven that it was a respectable company. Therefore, in my opinion, the current grow is not a statement of the changes that the CEO has implemented but just a testimony of the company foundations, they were laid before his arrival. On the other hand, when Saara and I tried to change the current board of directors, so real changes could take place in VS, we did not have the real support from the other share holders. The initial share holders have lost his investment in VS; the initial sale price of >$2.00 will be reached by the end of 2009 or mid 2010. Many open market investors got shares at >$4.00 that price, will be hard to achieve in the next five years. The current VS price will be hard to change drastically under the current direction. In my opinion, the current VS share price is still overvalued: they lost most of the R&D capability and their development capability, the management team is from the old school, and they do not have proven innovation material in their team. In my opinion, the current price increase in VS is mainly due to the global markets and not due to outstanding news from VS. Therefore it is very sad to me to see how the current CEO gets unrealistic compensations and bonuses for something that he does not deserve. Anyway, at this point I happy to be back in Mexico doing what VS did not want me to do: Creating the next generation of image-based diagnosis tools.