Executive Summary

InVivo furnished preliminary unaudited FY2014 results: Net Loss ($18.5–$18.9M), Net Loss per Share ($0.21–$0.22), and Total Operating Expenses ($18.0–$18.5M), materially improved versus FY2013 Net Loss ($38.6M) and EPS ($0.52), driven largely by the absence of the prior-year warrant-related non-cash loss and lower R&D after the June 2014 reduction in force .
Year-end cash was $13.9M, down from $20.85M at 6/30/2014 and $17.63M at 9/30/2014; on Jan 28, 2015 the company entered into a $12M registered offering (8.0M shares at $1.50), bolstering working capital and extending runway .
Clinical program advanced: two patients enrolled in the five-subject early feasibility pilot study; full enrollment anticipated in 2015, with a pivotal HDE study expected to begin in 2016 and complete in 2017, setting key regulatory catalysts .
Legal overhang increased: SEC subpoena (Jan 9, 2015) and Massachusetts Securities Division subpoena (Aug 21, 2014), plus a July 2014 securities class action, which may affect investor sentiment and near-term volatility .
Wall Street consensus (S&P Global) for Q4/FY2014 EPS and revenue was unavailable; estimate comparisons are not applicable due to lack of SPGI mapping coverage for NVIV (S&P Global consensus unavailable).

What Went Well and What Went Wrong

What Went Well

“Research and development expenses are expected to decline by $0.9–$1.3 million from 2013 levels,” primarily due to the June 2014 reduction in force, improving cash burn trajectory .
Clinical execution improved: site count expanded to up to 20 and the first participant was enrolled; management laid out a clear HDE path and pivotal timeline (begin 2016; completion 2017) .
Financing access remained strong: $12M registered offering announced to fund working capital; terms include a 7% transaction fee and $50K expenses to the placement agent, supporting operational continuity .

What Went Wrong

Ongoing losses and dilution: FY2014 Net Loss ($18.5–$18.9M) and Stockholders’ Equity ($5.2–$5.6M) remain constrained; derivative warrant liability rose to $7.0–$7.5M at YE2014, adding non-cash volatility .
Regulatory/legal risk escalated: SEC and state subpoenas, plus a pending securities class action related to prior clinical timing communications, increase headline risk and potential distraction .
Cash trended down intra-year (Q2→Q3→YE), underscoring dependence on external capital to fund R&D and clinical milestones .

Financial Results

Quarterly Operating Performance (oldest → newest)

Metric ($USD Thousands, except per-share)	Q2 2014	Q3 2014
Research & Development	3,051	2,385
General & Administrative	1,688	1,800
Total Operating Expenses	4,739	4,185
Net Loss	(3,646)	(1,213)
Net Loss per Share, Basic	$(0.04)	$(0.01)
Weighted Avg Shares (Basic)	87,285,418	101,635,856

Annual Comparison

Metric ($USD Millions, except per-share)	FY 2013 (Actual)	FY 2014 (Prelim)
Research & Development	$10.5	$9.2–$9.6
General & Administrative	$8.5	$8.6–$9.0
Total Operating Expenses	$19.0	$18.0–$18.5
Derivative Loss (incl. Warrant Mod.)	$(19.6)	$(0.2)–$(0.5)
Net Loss	$(38.6)	$(18.5)–$(18.9)
Net Loss per Share (Basic/Diluted)	$(0.52)	$(0.21)–$(0.22)
Weighted Avg Shares (Basic/Diluted)	74.0M	88.3M

Revenue and Margins

Metric	FY 2013	FY 2014
Revenue	Development stage; no revenue reported	Development stage; no revenue reported
Gross Margin %	N/A (no revenue)	N/A (no revenue)
Net Income Margin %	N/A (no revenue)	N/A (no revenue)

Balance Sheet and Other KPIs (oldest → newest)

KPI	Q2 2014	Q3 2014	FY 2014 (Prelim YE)
Cash & Cash Equivalents ($USD)	$20,850,000	$17,634,000	$13.9M
Derivative Warrant Liability ($USD)	$5,721,000	$2,716,000	$7.0–$7.5M
Stockholders’ Equity ($USD)	$14,015,000	$13,550,000	$5.2–$5.6M
Shares Outstanding (Period-end, common)	93,428,943	93,547,062	N/A (prelim focuses on weighted avg)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Pilot Study Enrollment (5 subjects)	2015	Not previously dated	Full enrollment anticipated 2015	New/Specified timeline
Pivotal HDE Study Start	2016	Not previously dated	Begin 2016	New/Specified timeline
Pivotal HDE Study Completion	2017	Not previously dated	Estimated 2017	New/Specified timeline
Cash Runway	Through Mar 2016	Sufficient until Mar 2016 (Q2 disclosure)	Sufficient until Mar 2016 (Q3 reaffirmation)	Maintained

Earnings Call Themes & Trends

(No Q4 2014 earnings call transcript identified; themes synthesized from Q2/Q3 10-Qs and Q4 filings.)

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2014)	Trend
R&D focus / cost actions	June 2014 realignment; ~$3M annualized savings targeted	FY2014 R&D expected to decline $0.9–$1.3M YoY	Improving cost discipline
Clinical progress	Sites opened (U. Arizona, Carolinas, Barrow); staggered enrollment design	Two patients enrolled; full enrollment 2015; pivotal HDE 2016/2017	Advancing toward pivotal
Financing access	May 2014 equity & warrants ($14.6M net)	$12M registered share offering announced (Jan 28, 2015)	Additional capital raised
Legal/regulatory	Securities class action filed July 31, 2014	SEC and MA subpoenas disclosed	Elevated scrutiny
Corporate governance	—	Director appointment (Nov 2014); CEO housing benefits extended (Dec 2014)	Incremental governance updates

Management Commentary

“Research and development expenses are expected to decline by $0.9–$1.3 million from 2013 levels. The decline is predominately due to the reduction in force that occurred in the second quarter of 2014.”
“General and administrative costs are expected to experience a modest increase from 2013… higher stock compensation and business development expenses offset by lower headcount costs related to the reduction in force.”
“The Company anticipates full enrollment of five patients… in 2015… expects the pivotal study will begin in 2016, with estimated completion in 2017.”
“We expect this amount to be sufficient to meet our operating and capital requirements until March 2016,” referring to proceeds from the May 2014 offering; reiterated in Q3 liquidity discussion .

Q&A Highlights

No earnings call transcript was found for Q4 2014; no Q&A themes to report [ListDocuments returned none for earnings-call-transcript].

Estimates Context

S&P Global consensus estimates for NVIV (EPS, revenue) were unavailable due to missing CIQ company mapping; as a result, we cannot present a comparison versus Wall Street consensus for Q4 or FY2014 (S&P Global consensus unavailable).

Key Takeaways for Investors

Pre-revenue, development-stage profile persists; revenue/margins are not applicable, so stock catalysts hinge on clinical enrollment, regulatory milestones, and financing updates .
Cash declined intra-year to $13.9M at YE2014, but the $12M registered offering announced Jan 28, 2015 should augment working capital; monitor dilution and share count dynamics from the 8.0M share issuance at $1.50 .
R&D spend and total OpEx trended lower vs FY2013, aided by mid-2014 cost actions; this supports runway to the pivotal HDE study, contingent on clinical progress .
Legal and regulatory investigations (SEC and state subpoenas) plus a pending class action represent headline risk and potential incremental costs; track disclosures closely for resolution and any financial impact .
Derivative warrant liability introduces non-cash P&L volatility; the FY2013 swing was a major driver of the prior year’s loss, while FY2014 reflects minimal derivative loss—expect sensitivity to stock/warrant terms .
Clinical roadmap is clearer: full pilot enrollment in 2015, pivotal start in 2016, completion in 2017 under HDE—these events are primary value inflection points to watch .
Investor communications emphasized updated investor presentations (Nov 4, Nov 20, Jan 12, Jan 26), signaling active IR engagement; continue to monitor for data and timeline updates .

INVIVO THERAPEUTICS HOLDINGS CORP. (NVIV)·Q4 2014 Earnings Summary