icad20240930c

icad20240930c_10q.htm

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-09341

iCAD, Inc.

(Exact name of registrant as specified in its charter)

Delaware	02-0377419
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

98 Spit Brook Road, Suite 100, Nashua, NH	03062
(Address of principal executive offices)	(Zip Code)

(603) 882-5200

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

symbol(s)

Name of each exchange

on which registered

Common Stock, $0.01 par value

ICAD

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, an emerging growth company or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒.

As of the close of business on November 12, 2024, there were 26,540,030 shares outstanding of the registrant’s Common Stock, $0.01 par value.

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iCAD, Inc.

INDEX

		Page
PART I	FINANCIAL INFORMATION

Item 1	Financial Statements

	Condensed Consolidated Balance Sheets (unaudited) as of September 30, 2024 and December 31, 2023	1

	Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2024 and 2023	2

	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 2024 and 2023	3

	Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2024 and 2023	4

	Notes to Condensed Consolidated Financial Statements (unaudited)	5

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3	Quantitative and Qualitative Disclosures about Market Risk	23

Item 4	Controls and Procedures	23

PART II	OTHER INFORMATION	24

Item 1A	Risk Factors	24

Item 5	Other Information	24

Item 6	Exhibits	25

	Signatures	26

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iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except for share and per share data)

(Unaudited)

	*September 30,*			*December 31,*
	*2024*			*2023*
Assets
Current assets:
Cash and cash equivalents	$	18,793		$	21,670
Trade accounts receivable, net of allowance for credit losses of $305 and $277 as of September 30, 2024 and December 31, 2023, respectively		5,415			6,392
Inventory, net		689			917
Prepaid expenses and other current assets		1,209			699
Total current assets		26,106			29,678
Property and equipment, net of accumulated depreciation of $1,333 and $1,045 as of September 30, 2024 and December 31, 2023, respectively		1,669			1,823
Operating lease assets		232			461
Other assets		549			849
Intangible assets, net of accumulated amortization of $8,525 and $8,488 as of September 30, 2024 and December 31, 2023, respectively		111			148
Goodwill		8,362			8,362
Deferred tax assets		78			97
Total assets	$	37,107		$	41,418
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	422		$	712
Accrued and other expenses		2,375			2,448
Lease payable—current portion		224			188
Deferred revenue—current portion		3,475			3,400
Total current liabilities		6,496			6,748
Lease payable, net of current		191			273
Deferred revenue, net of current		1,023			974
Deferred tax		7			6
Other		17			—
Total liabilities		7,734			8,001

Commitments and Contingencies (Notes 9 and 12)
Stockholders’ equity:
Preferred stock, $0.01 par value: authorized 1,000,000 shares; none issued.		—			—
Common stock, $0.01 par value: authorized 60,000,000 shares; issued 26,540,030 as of both September 30, 2024 and December 31, 2023, respectively; outstanding 26,354,199 as of both September 30, 2024 and December 31, 2023, respectively.		265			265
Additional paid-in capital		306,968			306,250
Accumulated deficit		(276,445	)		(271,683	)
Treasury stock at cost, 185,831 shares as of both September 30, 2024 and December 31, 2023		(1,415	)		(1,415	)
Total stockholders’ equity		29,373			33,417
Total liabilities and stockholders’ equity	$	37,107		$	41,418

See accompanying notes to condensed consolidated financial statements.

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iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except for per share data)

(Unaudited)

	*Three Months Ended*						*Nine Months Ended*
	*September 30,*						*September 30,*
	*2024*			*2023*			*2024*			*2023*
Revenue:
Products	$	2,508		$	2,198		$	8,864		$	6,961
Services		1,709			1,875			5,336			5,617
Total revenue		4,217			4,073			14,200			12,578
Cost of revenue:
Products		197			263			1,047			1,099
Services		273			267			922			951
Amortization and depreciation		113			22			266			65
Total cost of revenue		583			552			2,235			2,115
Gross profit		3,634			3,521			11,965			10,463
Operating expenses:
Engineering and product development		1,926			1,147			5,197			3,909
Marketing and sales		1,861			1,495			6,210			5,690
General and administrative		1,806			2,042			5,779			7,650
Amortization and depreciation		56			56			182			186
Total operating expenses		5,649			4,740			17,368			17,435
Loss from operations		(2,015	)		(1,219	)		(5,403	)		(6,972	)
Other income/ (expense):
Interest expense		—			—			—			(2	)
Interest income		210			195			619			528
Other income (expense), net		10			(9	)		41			(8	)
Other income, net		220			186			660			518
Loss before provision for income taxes		(1,795	)		(1,033	)		(4,743	)		(6,454	)
Provision for income taxes		(6	)		(4	)		(19	)		(13	)
Loss from continuing operations		(1,801	)		(1,037	)		(4,762	)		(6,467	)
Loss from discontinued operations, net of tax		—			(337	)		—			(435	)
Net loss and comprehensive loss	$	(1,801	)	$	(1,374	)	$	(4,762	)	$	(6,902	)
Net loss per share:
Loss from continuing operations, basic and diluted	$	(0.07	)	$	(0.04	)	$	(0.18	)	$	(0.25	)
Loss from discontinued operations, basic and diluted	$	—		$	(0.01	)	$	—		$	(0.02	)
Net loss per share	$	(0.07	)	$	(0.05	)	$	(0.18	)	$	(0.27	)
Weighted average number of shares used in computing loss per share:
Basic and diluted		26,354			25,597			26,354			25,374

See accompanying notes to condensed consolidated financial statements.

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iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except shares)

(Unaudited)

	*For the three months ended September 30, 2024*
	*Common Stock*				*Additional*
	*Number of*				*Paid-in*		*Accumulated*			*Treasury*			*Stockholders’*
	*Shares Issued*		*Par Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance at June 30, 2024		26,540,030	$	265	$	306,754	$	(274,644	)	$	(1,415	)	$	30,960
Stock-based compensation		—		—		214		—			—			214
Net loss		—		—		—		(1,801	)		—			(1,801	)
Balance at September 30, 2024		26,540,030	$	265	$	306,968	$	(276,445	)	$	(1,415	)	$	29,373

	*For the nine months ended September 30, 2024*
	*Common Stock*				*Additional*
	*Number of*				*Paid-in*		*Accumulated*			*Treasury*			*Stockholders*
	*Shares Issued*		*Par Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance at December 31, 2023		26,540,030	$	265	$	306,250	$	(271,683	)	$	(1,415	)	$	33,417
Stock-based compensation		—		—		718		—			—			718
Net loss		—		—		—		(4,762	)		—			(4,762	)
Balance at September 30, 2024		26,540,030	$	265	$	306,968	$	(276,445	)	$	(1,415	)	$	29,373

	*For the three months ended September 30, 2023*
	*Common Stock*				*Additional*
	*Number of*				*Paid-in*		*Accumulated*			*Treasury*			*Stockholders’*
	*Shares Issued*		*Par Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance at June 30, 2023		25,446,407	$	254	$	303,699	$	(272,364	)	$	(1,415	)	$	30,174
Issuance of common stock pursuant to stop option plans		35,809	$	—	$	80								80
Issuance of common stock, net of issuance costs of $336		958,248	$	10	$	1,831								1,841
Stock-based compensation		—		—		314		—			—			314
Net loss		—		—		—		(1,374	)		—			(1,374	)
Balance at September 30, 2023		26,440,464	$	264	$	305,924	$	(273,738	)	$	(1,415	)	$	31,035

	*For the nine months ended September 30, 2023*
	*Common Stock*				*Additional*
	*Number of*				*Paid-in*		*Accumulated*			*Treasury*			*Stockholders’*
	*Shares Issued*		*Par Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance at December 31, 2022		25,446,407	$	254	$	302,899	$	(266,836	)	$	(1,415	)	$	34,902
Issuance of common stock pursuant to stop option plans		35,809	$	—	$	80								80
Issuance of common stock, net of issuance costs of $336		958,248	$	10	$	1,831								1,841
Stock-based compensation		—		—		1,114		—			—			1,114
Net loss		—		—		—		(6,902	)		—			(6,902	)
Balance at September 30, 2023		26,440,464	$	264	$	305,924	$	(273,738	)	$	(1,415	)	$	31,035

See accompanying notes to condensed consolidated financial statements.

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iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	*For the Nine Months Ended*
	*September 30,*
	*2024*			*2023*
Cash flow from operating activities:
Net loss	$	(4,762	)	$	(6,902	)
Adjustments to reconcile net loss to net cash used for operating activities:
Amortization		37			142
Depreciation		412			202
Non-cash lease expense		166			409
Impairment of operating lease asset		184			—
Bad debt provision		21			189
Stock-based compensation		718			1,114
Deferred tax		20			12
Other		5			—
Changes in operating assets and liabilities:
Accounts receivable		956			1,903
Inventory		228			1,472
Prepaid and other assets		(210	)		38
Accounts payable		(290	)		(509	)
Accrued and other expenses		(73	)		(1,022	)
Lease liabilities		(150	)		(420	)
Deferred revenue		124			(141	)
Total adjustments		2,148			3,389
Net cash used for operating activities		(2,614	)		(3,513	)
Cash flow from investing activities:
Additions to property and equipment		(163	)		(487	)
Capitalization of internal-use software development costs		(100	)		(188	)
Net cash used for investing activities		(263	)		(675	)
Cash flow from financing activities:
Proceeds from option exercises pursuant to stock option plans		—			80
Proceeds from issuances of common stock, net of issuance costs		—			1,841
Net cash provided by financing activities		—			1,921
Decrease in cash and cash equivalents		(2,877	)		(2,267	)
Cash and cash equivalents, beginning of period		21,670			21,313
Cash and cash equivalents, end of period	$	18,793		$	19,046
Supplemental disclosure of cash flow information:
Interest paid	$	—		$	—
Right-of-use asset obtained in exchange for operating lease liability	$	121		$	—

See accompanying notes to condensed consolidated financial statements.

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iCAD, INC. AND SUBSIDIARIES

(In thousands, except for share and per share data or as noted)

Notes to Condensed Consolidated Financial Statements:

Note 1 – Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements of iCAD, Inc. and its subsidiaries (“iCAD” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. It is reasonably possible that changes may occur in the near term that would affect management’s estimates with respect to assets and liabilities. In the opinion of the Company’s management, these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position of the Company at September 30, 2024, the results of operations of the Company for the three and nine months ended September 30, 2024 and 2023, cash flows of the Company for the nine months ended September 30, 2024 and 2023, and stockholders’ equity of the Company for the three and nine months ended September 30, 2024 and 2023.

As discussed in Note 2, the Company completed the sale of its Xoft business line on October 23, 2023. Accordingly, the Company now operates in one segment, Cancer Detection ("Detection"). Unless otherwise indicated, all disclosures and amounts in the Notes to Condensed Consolidated Financial Statements relate to the Company’s continuing operations, or its Detection segment.

Although the Company believes that the disclosures made in these interim financial statements are adequate to make the information presented not misleading, certain information normally included in the footnotes prepared in accordance with US GAAP has been omitted as permitted by the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying 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 fiscal year ended December 31, 2023, filed with the SEC on March 29, 2024. The results for the three and nine months ended September 30, 2024, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024, or any interim or any future period.

Principles of Consolidation and Business Segments

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, iCAD France, LLC. All material inter-company transactions and balances have been eliminated in consolidation. The Company operates one reporting segment: Cancer Detection (“Detection”). The Detection segment consists of advanced image analysis and workflow products for the detection of cancer. As discussed in Note 2, the Company completed the sale of its Xoft business line on October 23, 2023. Unless otherwise indicated, all disclosures and amounts in the Notes to Condensed Consolidated Financial Statements relate to the Company’s continuing operations, or its Detection segment.

SEC Form 10-Q filed by iCAD Inc.