☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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) |
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 |
Large Accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☐ |
iCAD, Inc.
INDEX
Page | ||||||
PART I | ||||||
FINANCIAL INFORMATION | ||||||
Item 1 | Financial Statements | |||||
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2 | ||||||
Item 3 | ||||||
24 | ||||||
Item 4 | ||||||
25 | ||||||
PART II | ||||||
26 | ||||||
Item 1A | 26 | |||||
Item 6 | 27 | |||||
28 |
June 30, | December 31, | |||||||||||||||
2022 | 2021 | September 30, 2022 | December 31, 2021 | |||||||||||||
Assets | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 27,180 | $ | 34,282 | $ | 24,590 | $ | 34,282 | ||||||||
Trade accounts receivable, net of allowance for doubtful accounts of $778 in 2022 and $268 in 2021 | 10,171 | 8,891 | ||||||||||||||
Trade accounts receivable, net of allowance for doubtful accounts of $778 and $268 as of September 30, 2022 and December 31, 2021, respectively | 8,472 | 8,891 | ||||||||||||||
Inventory, net | 5,001 | 4,171 | 5,630 | 4,171 | ||||||||||||
Prepaid expenses and other current assets | 2,953 | 2,962 | 3,787 | 2,962 | ||||||||||||
Total current assets | 45,305 | 50,306 | 42,479 | 50,306 | ||||||||||||
Property and equipment, net of accumulated depreciation of $7,275 in 2022 and $7,106 in 2021 | 968 | 882 | ||||||||||||||
Property and equipment, net of accumulated depreciation of $7,275 and 7,106 as of September 30, 2022 and December 31, 2021, respectively | 986 | 882 | ||||||||||||||
Operating lease assets | 3,102 | 1,059 | 2,945 | 1,059 | ||||||||||||
Other assets | 55 | 899 | 67 | 899 | ||||||||||||
Intangible assets, net of accumulated amortization of $8,820 in 2022 and $8,724 in 2021 | 587 | 683 | ||||||||||||||
Intangible assets, net of accumulated amortization of $8,820 and $8,724 as of September 30, 2022 and December 31, 2021, respectively | 535 | 683 | ||||||||||||||
Goodwill | 8,362 | 8,362 | 8,362 | 8,362 | ||||||||||||
Total assets | $ | 58,379 | $ | 62,191 | $ | 55,374 | $ | 62,191 | ||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 2,198 | $ | 2,779 | $ | 2,423 | $ | 2,779 | ||||||||
Accrued and other expenses | 5,271 | 5,642 | 5,544 | 5,642 | ||||||||||||
Lease payable—current portion | 566 | 889 | 508 | 889 | ||||||||||||
Deferred revenue—current portion | 6,171 | 5,652 | 6,126 | 5,652 | ||||||||||||
Total current liabilities | 14,206 | 14,962 | 14,601 | 14,962 | ||||||||||||
Lease payable, net of current | 2,598 | 266 | 2,480 | 266 | ||||||||||||
Deferred revenue, net of current | 581 | 441 | 631 | 441 | ||||||||||||
Deferred tax | 4 | 5 | 4 | 5 | ||||||||||||
Total liabilities | 17,389 | 15,674 | 17,716 | 15,674 | ||||||||||||
Commitments and Contingencies (Note 13) | 0 | 0 | ||||||||||||||
Stockholders’ equity: | ||||||||||||||||
Preferred stock, $0.01 par value: authorized 1,000,000 shares; NaN issued. | 0— | 0— | ||||||||||||||
Common stock, $0.01 par value: authorized 60,000,000 shares; issued 25,373,858 as of June 30, 2022 and 25,326,086 as of December 31, 2021. | ||||||||||||||||
Outstanding 25,188,027 as of June 30, 2022 and 25,140,255 as of December 31, 2021. | 254 | 253 | ||||||||||||||
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 25,428,935 as of September 30, 2022 and 25,326,086 as of December 31, 2021. | ||||||||||||||||
Outstanding 25,243,104 as of September 30, 2022 and 25,140,255 as of December 31, 2021. | 254 | 253 | ||||||||||||||
Additional paid-in capital | 301,994 | 300,859 | 302,560 | 300,859 | ||||||||||||
Accumulated deficit | (259,843 | ) | (253,180 | ) | (263,741 | ) | (253,180 | ) | ||||||||
Treasury stock at cost, 185,831 shares in 2022 and 2021 | (1,415 | ) | (1,415 | ) | ||||||||||||
Treasury stock at cost, 185,831 shares as of both September 30, 2022 and December 31, 2021 | (1,415 | ) | (1,415 | ) | ||||||||||||
Total stockholders’ equity | 40,990 | 46,517 | 37,658 | 46,517 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 58,379 | $ | 62,191 | $ | 55,374 | $ | 62,191 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue: | ||||||||||||||||
Products | $ | 4,475 | $ | 4,552 | $ | 9,035 | $ | 10,109 | ||||||||
Service and supplies | 3,100 | 3,274 | 6,063 | 6,361 | ||||||||||||
Total revenue | 7,575 | 7,826 | 15,098 | 16,470 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Products | 1,008 | 1,377 | 2,095 | 2,786 | ||||||||||||
Service and supplies | 1,001 | 832 | 2,050 | 1,699 | ||||||||||||
Amortization and depreciation | 75 | 79 | 150 | 158 | ||||||||||||
Total cost of revenue | 2,084 | 2,288 | 4,295 | 4,643 | ||||||||||||
Gross profit | 5,491 | 5,538 | 10,803 | 11,827 | ||||||||||||
Operating expenses: | ||||||||||||||||
Engineering and product development | 2,367 | 2,268 | 4,642 | 4,460 | ||||||||||||
Marketing and sales | 3,435 | 3,429 | 7,000 | 6,853 | ||||||||||||
General and administrative | 2,742 | 2,652 | 5,673 | 4,803 | ||||||||||||
Amortization and depreciation | 61 | 60 | 124 | 115 | ||||||||||||
Total operating expenses | 8,605 | 8,409 | 17,439 | 16,231 | ||||||||||||
Loss from operations | (3,114 | ) | (2,871 | ) | (6,636 | ) | (4,404 | ) | ||||||||
Other income/ (expense): | ||||||||||||||||
Interest expense | — | (29 | ) | (1 | ) | (129 | ) | |||||||||
Interest income | 14 | 19 | 16 | 33 | ||||||||||||
Other loss, net | (18 | ) | (13 | ) | (41 | ) | (37 | ) | ||||||||
Loss on extinguishment of debt | — | (386 | ) | — | (386 | ) | ||||||||||
Other expense, net | (4 | ) | (409 | ) | (26 | ) | (519 | ) | ||||||||
Loss before provision for income taxes | (3,118 | ) | (3,280 | ) | (6,662 | ) | (4,923 | ) | ||||||||
Provision for tax expense | — | — | (1 | ) | — | |||||||||||
Net loss and comprehensive loss | $ | (3,118 | ) | $ | (3,280 | ) | $ | (6,663 | ) | $ | (4,923 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic and diluted | $ | (0.12 | ) | $ | (0.13 | ) | $ | (0.26 | ) | $ | (0.20 | ) | ||||
Weighted average number of shares used in computing loss per share: | ||||||||||||||||
Basic and diluted | 25,185 | 24,989 | 25,172 | 24,462 | ||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue: | ||||||||||||||||
Products | $ | 3,207 | $ | 6,320 | $ | 12,242 | $ | 16,429 | ||||||||
Service and supplies | 3,149 | 3,041 | 9,212 | 9,401 | ||||||||||||
Total revenue | 6,356 | 9,361 | 21,454 | 25,830 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Products | 1,416 | 1,807 | 4,530 | 4,592 | ||||||||||||
Service and supplies | 494 | 763 | 1,524 | 2,462 | ||||||||||||
Amortization and depreciation | 73 | 79 | 224 | 237 | ||||||||||||
Total cost of revenue | 1,983 | 2,649 | 6,278 | 7,291 | ||||||||||||
Gross profit | 4,373 | 6,712 | 15,176 | 18,539 | ||||||||||||
Operating expenses: | ||||||||||||||||
Engineering and product developmen t | 2,137 | 2,285 | 6,780 | 6,745 | ||||||||||||
Marketing and sales | 3,473 | 3,886 | 10,473 | 10,739 | ||||||||||||
General and administrative | 2,667 | 2,658 | 8,341 | 7,461 | ||||||||||||
Amortization and depreciation | 56 | 64 | 180 | 178 | ||||||||||||
Total operating expenses | 8,333 | 8,893 | 25,774 | 25,123 | ||||||||||||
Loss from operations | (3,960 | ) | (2,181 | ) | (10,598 | ) | (6,584 | ) | ||||||||
Other income/ (expense): | ||||||||||||||||
Interest expense | (7 | ) | — | (7 | ) | (141 | ) | |||||||||
Interest income | 71 | 21 | 89 | 53 | ||||||||||||
Other loss, net | (2 | ) | (16 | ) | (45 | ) | (41 | ) | ||||||||
Loss on extinguishment of debt | — | — | — | (386 | ) | |||||||||||
Other expense, net | 62 | 5 | 37 | (515 | ) | |||||||||||
Loss before provision for income taxes | (3,898 | ) | (2,176 | ) | (10,561 | ) | (7,099 | ) | ||||||||
Provision for tax expense | — | — | — | — | ||||||||||||
Net loss and comprehensive loss | $ | (3,898 | ) | $ | (2,176 | ) | $ | (10,561 | ) | $ | (7,099 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic and diluted | $ | (0.15 | ) | $ | (0.09 | ) | $ | (0.42 | ) | $ | (0.29 | ) | ||||
Weighted average number of shares used in computing loss per share: | ||||||||||||||||
Basic and diluted | 25,204 | 25,053 | 25,183 | 24,662 | ||||||||||||
For the three months ended June 30, 2022 | For the three months ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Number of | Paid-in | Accumulated | Treasury | Stockholders’ | Number of | |||||||||||||||||||||||||||||||||||||||||||
Shares Issued | Par Value | Capital | Deficit | Stock | Equity | Shares Issued | Par Value | |||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | 25,359,175 | $ | 253 | $ | 301,640 | $ | (256,725 | ) | $ | (1,415 | ) | $ | 43,753 | |||||||||||||||||||||||||||||||||||
Issuance of common stock related to vesting of restricted stock | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | 25,373,858 | $ | 254 | $ | 301,994 | $ | (259,843 | ) | $ | (1,415 | ) | $ | 40,990 | |||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock option plans | 6,000 | 1 | 12 | — | — | 13 | 45,000 | — | 127 | — | — | 127 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant Employee Stock Purchase Plans | 8,683 | — | 33 | — | — | 33 | 10,077 | — | 34 | — | — | 34 | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 309 | — | — | 309 | — | — | 405 | — | — | 405 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (3,118 | ) | — | (3,118 | ) | — | — | — | (3,898 | ) | — | (3,898 | ) | ||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | 25,373,858 | $ | 254 | $ | 301,994 | $ | (259,843 | ) | $ | (1,415 | ) | $ | 40,990 | |||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | 25,428,935 | $ | 254 | $ | 302,560 | $ | (263,741 | ) | $ | (1,415 | ) | $ | 37,658 | |||||||||||||||||||||||||||||||||||
For the six months ended June 30, 2022 | For the nine months ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Number of | Paid-in | Accumulated | Treasury | Stockholders’ | Number of | Paid-in Capital | Accumulated Deficit | Treasury Stock | Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||
Shares Issued | Par Value | Capital | Deficit | Stock | Equity | Shares Issued | Par Value | |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 25,326,086 | $ | 253 | $ | 300,859 | $ | (253,180 | ) | $ | (1,415 | ) | $ | 46,517 | 25,326,086 | $ | 253 | $ | 300,859 | $ | (253,180 | ) | $ | (1,415 | ) | $ | 46,517 | ||||||||||||||||||||||
Issuance of common stock related to vesting of restricted stock | 875 | — | — | — | — | — | 875 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock option plans | 28,833 | 1 | 78 | — | — | 79 | 73,833 | 1 | 205 | — | — | 206 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant Employee Stock Purchase Plans | 18,064 | — | 93 | — | — | 93 | 28,141 | — | 127 | — | — | 127 | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 964 | — | — | 964 | — | — | 1,369 | — | — | 1,369 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (6,663 | ) | — | (6,663 | ) | — | — | — | (10,561 | ) | — | (10,561 | ) | ||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | 25,373,858 | $ | 254 | $ | 301,994 | $ | (259,843 | ) | $ | (1,415 | ) | $ | 40,990 | |||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | 25,428,935 | $ | 254 | $ | 302,560 | $ | (263,741 | ) | $ | (1,415 | ) | $ | 37,658 | |||||||||||||||||||||||||||||||||||
For the three months ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares Issued | Par Value | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 25,213,302 | $ | 251 | $ | 299,049 | $ | (246,858 | ) | $ | (1,415 | ) | $ | 51,027 | |||||||||||||||||||||||||||||||||||
Issuance of common stock related to vesting of restricted stock | 14,665 | 1 | (60 | ) | — | — | (59 | ) | ||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net | 54,702 | 1 | 296 | — | — | 297 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant Employee Stock Purchase Plans | 5,168 | — | 76 | — | — | 76 | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 656 | — | — | 656 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (2,176 | ) | — | (2,176 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | 25,287,837 | $ | 253 | $ | 300,017 | $ | (249,034 | ) | $ | (1,415 | ) | $ | 49,821 | |||||||||||||||||||||||||||||||||||
For the nine months ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares Issued | Par Value | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 23,694,406 | $ | 236 | $ | 273,639 | $ | (241,935 | ) | $ | (1,415 | ) | $ | 30,525 | |||||||||||||||||||||||||||||||||||
Issuance of common stock related to vesting of restricted stock | 43,831 | 1 | (60 | ) | — | — | (59 | ) | ||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net | 1,393,738 | 14 | 23,215 | — | — | 23,229 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock option plans | 138,450 | 2 | 931 | — | — | 933 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant Employee Stock Purchase Plans | 17,412 | — | 190 | — | — | 190 | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 2,102 | — | — | 2,102 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (7,099 | ) | — | (7,099 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | 25,287,837 | $ | 253 | $ | 300,017 | $ | (249,034 | ) | $ | (1,415 | ) | $ | 49,821 | |||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2021 | ||||||||||||||||||||||||
Common Stock | Additional | |||||||||||||||||||||||
Number of | Paid-in | Accumulated | Treasury | Stockholders’ | ||||||||||||||||||||
Shares Issued | Par Value | Capital | Deficit | Stock | Equity | |||||||||||||||||||
Balance at March 31, 2021 | 25,143,432 | $ | 251 | $ | 298,106 | $ | (243,578 | ) | $ | (1,415 | ) | $ | 53,364 | |||||||||||
Issuance of common stock related to vesting of restricted stock | 9,166 | — | — | — | — | — | ||||||||||||||||||
Issuance of common stock, net | 54,814 | — | 365 | — | — | 365 | ||||||||||||||||||
Issuance of common stock pursuant to stock option plans | — | — | — | — | — | — | ||||||||||||||||||
Issuance of common stock pursuant Employee Stock Purchase Plans | 5,890 | — | 67 | — | — | 67 | ||||||||||||||||||
Stock-based compensation | — | — | 511 | — | — | 511 | ||||||||||||||||||
Net loss | — | — | — | (3,280 | ) | — | (3,280 | ) | ||||||||||||||||
Balance at June 30, 2021 | 25,213,302 | $ | 251 | $ | 299,049 | $ | (246,858 | ) | $ | (1,415 | ) | $ | 51,027 | |||||||||||
For the six months ended June 30, 2021 | ||||||||||||||||||||||||
Common Stock | Additional | |||||||||||||||||||||||
Number of | Paid-in | Accumulated | Treasury | Stockholders’ | ||||||||||||||||||||
Shares Issued | Par Value | Capital | Deficit | Stock | Equity | |||||||||||||||||||
Balance at December 31, 2020 | 23,694,406 | $ | 236 | $ | 273,639 | $ | (241,935 | ) | $ | (1,415 | ) | $ | 30,525 | |||||||||||
Issuance of common stock related to vesting of restricted stock | 29,166 | — | — | — | — | — | ||||||||||||||||||
Issuance of common stock, net | 1,393,738 | 14 | 23,215 | — | — | 23,229 | ||||||||||||||||||
Issuance of common stock pursuant to stock option plans | 83,748 | 1 | 635 | — | — | 636 | ||||||||||||||||||
Issuance of common stock pursuant Employee Stock Purchase Plans | 12,244 | — | 114 | — | — | 114 | ||||||||||||||||||
Stock-based compensation | — | — | 1,446 | — | — | 1,446 | ||||||||||||||||||
Net loss | — | — | — | (4,923 | ) | — | (4,923 | ) | ||||||||||||||||
Balance at June 30, 2021 | 25,213,302 | $ | 251 | $ | 299,049 | $ | (246,858 | ) | $ | (1,415 | ) | $ | 51,027 | |||||||||||
For the Six Months ended June 30, | ||||||||
2022 | 2021 | |||||||
Cash flow from operating activities: | ||||||||
Net loss | $ | (6,663 | ) | $ | (4,923 | ) | ||
Adjustments to reconcile net loss to net cash used for operating activities: | ||||||||
Amortization | 105 | 115 | ||||||
Depreciation | 169 | 157 | ||||||
Non-cash lease expense | 391 | 388 | ||||||
Bad debt provision | 510 | (3 | ) | |||||
Stock-based compensation | 964 | 1,446 | ||||||
Amortization of debt discount and debt costs | — | 17 | ||||||
Loss on extinguishment of debt | — | 386 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (1,790 | ) | (924 | ) | ||||
Inventory | (830 | ) | 284 | |||||
Prepaid and other assets | 853 | 122 | ||||||
Accounts payable | (581 | ) | (1,829 | ) | ||||
Accrued and other expenses | (371 | ) | (432 | ) | ||||
Lease liabilities | (425 | ) | (304 | ) | ||||
Deferred revenue | 659 | (77 | ) | |||||
Total adjustments | (346 | ) | (654 | ) | ||||
Net cash used for operating activities | (7,009 | ) | (5,577 | ) | ||||
Cash flow from investing activities: | ||||||||
Additions to patents, technology and other | (10 | ) | — | |||||
Additions to property and equipment | (255 | ) | (336 | ) | ||||
Net cash used for investing activities | (265 | ) | (336 | ) | ||||
Cash flow from financing activities: | ||||||||
Proceeds from option exercises pursuant to stock option plans | 79 | 636 | ||||||
Proceeds from issuance of common stock pursuant to Employee Stock Purchase Plans | 93 | 114 | ||||||
Proceeds from issuance of common stock, net | — | 23,229 | ||||||
Issuance of stock upon conversion of debentures | — | (7,363 | ) | |||||
Net cash provided by financing activities | 172 | 16,616 | ||||||
(Decrease) increase in cash and cash equivalents | (7,102 | ) | 10,703 | |||||
Cash and cash equivalents, beginning of period | 34,282 | 27,186 | ||||||
Cash and cash equivalents, end of period | $ | 27,180 | $ | 37,889 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Interest paid | $ | 9 | $ | 92 | ||||
Amendment to right-of-use | $ | 2,434 | $ | — | ||||
For the Nine Months ended September 30, | ||||||||
2022 | 2021 | |||||||
Cash flow from operating activities: | ||||||||
Net loss | $ | (10,561 | ) | $ | (7,099 | ) | ||
Adjustments to reconcile net loss to net cash used for operating activities: | ||||||||
Amortization | 158 | 176 | ||||||
Depreciation | 246 | 242 | ||||||
Non-cash lease expense | 549 | 581 | ||||||
Bad debt provision | 510 | (25 | ) | |||||
Stock-based compensation | 1,369 | 2,102 | ||||||
Amortization of debt discount and debt costs | — | 17 | ||||||
Loss on extinguishment of debt | — | 386 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (91 | ) | (1,827 | ) | ||||
Inventory | (1,459 | ) | (146 | ) | ||||
Prepaid and other assets | 7 | 493 | ||||||
Accounts payable | (351 | ) | (217 | ) | ||||
Accrued and other expenses | (98 | ) | (2,095 | ) | ||||
Lease liabilities | (602 | ) | (514 | ) | ||||
Deferred revenue | 663 | 65 | ||||||
Total adjustments | 901 | (762 | ) | |||||
Net cash used for operating activities | (9,660 | ) | (7,861 | ) | ||||
Cash flow from investing activities: | ||||||||
Additions to patents, technology and other | (10 | ) | (24 | ) | ||||
Additions to property and equipment | (355 | ) | (426 | ) | ||||
Net cash used for investing activities | (365 | ) | (450 | ) | ||||
Cash flow from financing activities: | ||||||||
Proceeds from option exercises pursuant to stock option plans | 206 | 933 | ||||||
Proceeds from issuance of common stock pursuant to Employee Stock Purchase Plans | 127 | 190 | ||||||
Proceeds from issuance of common stock, net | — | 23,229 | ||||||
Issuance of stock upon conversion of debentures | — | (7,363 | ) | |||||
Taxes paid related to restricted stock program | — | (59 | ) | |||||
Net cash provided by financing activities | 333 | 16,930 | ||||||
(Decrease) increase in cash and cash equivalents | (9,692 | ) | 8,619 | |||||
Cash and cash equivalents, beginning of period | 34,282 | 27,186 | ||||||
Cash and cash equivalents, end of period | $ | 24,590 | $ | 35,805 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Interest paid | $ | 7 | $ | 92 | ||||
Amendment to right-of-use | $ | 2,434 | $ | — | ||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Money market accounts | $ | 22,047 | $ | — | $ | — | $ | 22,047 | ||||||||
Total Assets | $ | 22,047 | $ | — | $ | — | $ | 22,047 | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Money market accounts | $ | 17,998 | $ | — | $ | — | $ | 17,998 | ||||||||
Total Assets | $ | 17,998 | $ | — | $ | — | $ | 17,998 | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Money market accounts | $ | 30,573 | $ | — | $ | — | $ | 30,573 | ||||||||
Total Assets | $ | 30,573 | $ | — | $ | — | $ | 30,573 | ||||||||
Three months ended June 30, 2022 | Three months ended September 30, 2022 | |||||||||||||||||||||||
Reportable Segments | Reportable Segments | |||||||||||||||||||||||
Detection | Therapy | Total | Detection | Therapy | Total | |||||||||||||||||||
Major Goods/Service Lines | ||||||||||||||||||||||||
Products | $ | 3,467 | $ | 1,008 | $ | 4,475 | $ | 2,535 | $ | 671 | $ | 3,206 | ||||||||||||
Service contracts | 1,822 | 361 | 2,183 | 1,823 | 400 | 2,223 | ||||||||||||||||||
Supply and source usage agreements | — | 367 | 367 | — | 453 | 453 | ||||||||||||||||||
Disposable applicators | — | 463 | 463 | — | 377 | 377 | ||||||||||||||||||
Other | — | 87 | 87 | — | 97 | 97 | ||||||||||||||||||
$ | 5,289 | $ | 2,286 | $ | 7,575 | $ | 4,358 | $ | 1,998 | $ | 6,356 | |||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||
Goods transferred at a point in time | $ | 3,455 | $ | 1,547 | $ | 5,002 | $ | 2,510 | $ | 1,119 | $ | 3,629 | ||||||||||||
Services transferred over time | 1,834 | 739 | 2,573 | 1,848 | 879 | 2,727 | ||||||||||||||||||
$ | 5,289 | $ | 2,286 | $ | 7,575 | $ | 4,358 | $ | 1,998 | $ | 6,356 | |||||||||||||
Sales Channels | ||||||||||||||||||||||||
Direct sales force | $ | 3,505 | $ | 703 | $ | 4,208 | $ | 2,947 | $ | 788 | $ | 3,735 | ||||||||||||
OEM partners | 1,784 | — | 1,784 | 1,411 | — | 1,411 | ||||||||||||||||||
Channel partners | — | 1,583 | 1,583 | — | 1,210 | 1,210 | ||||||||||||||||||
$ | 5,289 | $ | 2,286 | $ | 7,575 | $ | 4,358 | $ | 1,998 | $ | 6,356 | |||||||||||||
Nine months ended September 30, 2022 | ||||||||||||
Reportable Segments | ||||||||||||
Detection | Therapy | Total | ||||||||||
Major Goods/Service Lines | ||||||||||||
Products | $ | 9,866 | $ | 2,376 | $ | 12,242 | ||||||
Service contracts | 5,301 | 1,155 | 6,456 | |||||||||
Supply and source usage agreements | — | 1,224 | 1,224 | |||||||||
Disposable applicators | — | 1,256 | 1,256 | |||||||||
Other | — | 276 | 276 | |||||||||
$ | 15,167 | $ | 6,287 | $ | 21,454 | |||||||
Timing of Revenue Recognition | ||||||||||||
Goods transferred at a point in time | $ | 9,844 | $ | 3,955 | $ | 13,799 | ||||||
Services transferred over time | 5,323 | 2,332 | 7,655 | |||||||||
$ | 15,167 | $ | 6,287 | $ | 21,454 | |||||||
Sales Channels | ||||||||||||
Direct sales force | $ | 9,347 | $ | 2,508 | $ | 11,855 | ||||||
OEM partners | 5,820 | — | 5,820 | |||||||||
Channel partners | — | 3,779 | 3,779 | |||||||||
$ | 15,167 | $ | 6,287 | $ | 21,454 | |||||||
Six months ended June 30, 2022 | ||||||||||||
Reportable Segments | ||||||||||||
Detection | Therapy | Total | ||||||||||
Major Goods/Service Lines | ||||||||||||
Products | $ | 7,330 | $ | 1,705 | $ | 9,035 | ||||||
Service contracts | 3,479 | 747 | 4,226 | |||||||||
Supply and source usage agreements | — | 780 | 780 | |||||||||
Disposable applicators | — | 878 | 878 | |||||||||
Other | — | 179 | 179 | |||||||||
$ | 10,809 | $ | 4,289 | $ | 15,098 | |||||||
Timing of Revenue Recognition | ||||||||||||
Goods transferred at a point in time | $ | 7,335 | $ | 2,812 | $ | 10,147 | ||||||
Services transferred over time | 3,474 | 1,477 | 4,951 | |||||||||
$10,809 | $4,289 | $15,098 | ||||||||||
Sales Channels | ||||||||||||
Direct sales force | $ | 6,399 | $ | 1,519 | $ | 7,918 | ||||||
OEM partners | 4,410 | — | 4,410 | |||||||||
Channel partners | — | 2,770 | 2,770 | |||||||||
$ | 10,809 | $ | 4,289 | $ | 15,098 | |||||||
Three months ended June 30, 2021 | Three months ended September 30, 2021 | |||||||||||||||||||||||
Reportable Segments | Reportable Segments | |||||||||||||||||||||||
Detection | Therapy | Total | Detection | Therapy | Total | |||||||||||||||||||
Major Goods/Service Lines | ||||||||||||||||||||||||
Products | $ | 3,164 | $ | 2,119 | $ | 5,283 | $ | 4,454 | $ | 2,358 | $ | 6,812 | ||||||||||||
Service contracts | 1,625 | 371 | 1,996 | 1,554 | 398 | 1,952 | ||||||||||||||||||
Supply and source usage agreements | — | 529 | 529 | — | 562 | 562 | ||||||||||||||||||
Other | — | 18 | 18 | — | 35 | 35 | ||||||||||||||||||
$ | 4,789 | $ | 3,037 | $ | 7,826 | $ | 6,008 | $ | 3,353 | $ | 9,361 | |||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||
Goods transferred at a point in time | $ | 3,164 | $ | 2,136 | $ | 5,300 | $ | 4,454 | $ | 2,393 | $ | 6,847 | ||||||||||||
Services transferred over time | 1,625 | 901 | 2,526 | 1,554 | 960 | 2,514 | ||||||||||||||||||
$ | 4,789 | $ | 3,037 | $ | 7,826 | $ | 6,008 | $ | 3,353 | $ | 9,361 | |||||||||||||
Sales Channels | ||||||||||||||||||||||||
Direct sales force | $ | 3,188 | $ | 1,252 | $ | 4,440 | $ | 3,629 | $ | 1,403 | $ | 5,032 | ||||||||||||
OEM partners | 1,601 | — | 1,601 | 2,379 | — | 2,379 | ||||||||||||||||||
Channel partners | — | 1,785 | 1,785 | — | 1,950 | 1,950 | ||||||||||||||||||
$ | 4,789 | $ | 3,037 | $ | 7,826 | $ | 6,008 | $ | 3,353 | $ | 9,361 | |||||||||||||
Six months ended June 30, 2021 | Nine months ended September 30, 2021 | |||||||||||||||||||||||
Reportable Segments | Reportable Segments | |||||||||||||||||||||||
Detection | Therapy | Total | Detection | Therapy | Total | |||||||||||||||||||
Major Goods/Service Lines | ||||||||||||||||||||||||
Products | $ | 7,325 | $ | 4,222 | $ | 11,547 | $ | 11,778 | $ | 6,580 | $ | 18,358 | ||||||||||||
Service contracts | 3,183 | �� | 711 | 3,894 | 4,737 | 1,109 | 5,846 | |||||||||||||||||
Supply and source usage agreements | — | 1,010 | 1,010 | — | 1,572 | 1,572 | ||||||||||||||||||
Other | — | 19 | 19 | — | 54 | 54 | ||||||||||||||||||
$ | 10,508 | $ | 5,962 | $ | 16,470 | $ | 16,515 | $ | 9,315 | $ | 25,830 | |||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||
Goods transferred at a point in time | $ | 7,325 | $ | 4,240 | $ | 11,565 | $ | 11,778 | $ | 6,633 | $ | 18,411 | ||||||||||||
Services transferred over time | 3,183 | 1,722 | 4,905 | 4,737 | 2,682 | 7,419 | ||||||||||||||||||
$ | 10,508 | $ | 5,962 | $ | 16,470 | $ | 16,515 | $ | 9,315 | $ | 25,830 | |||||||||||||
Sales Channels | ||||||||||||||||||||||||
Direct sales force | $ | 7,063 | $ | 1,926 | $ | 8,989 | $ | 10,691 | $ | 3,632 | $ | 14,323 | ||||||||||||
OEM partners | 3,445 | — | 3,445 | 5,824 | — | 5,824 | ||||||||||||||||||
Channel partners | — | 4,036 | 4,036 | — | 5,683 | 5,683 | ||||||||||||||||||
$ | 10,508 | $ | 5,962 | $ | 16,470 | $ | 16,515 | $ | 9,315 | $ | 25,830 | |||||||||||||
Balance at | Balance at | |||||||
June 30, 2022 | December 31, 2021 | |||||||
Receivables, which are included in ‘Trade accounts receivable’ | $ | 10,171 | $ | 8,891 | ||||
Current contract assets, which are included in “Prepaid and other assets” | $ | 1,399 | $ | 1,895 | ||||
Non-current contract assets, which are included in “other assets” | $ | — | $ | 844 | ||||
Contract liabilities, which are included in “Deferred revenue” | $ | 6,752 | $ | 6,093 |
Balance at September 30, 2022 | Balance at December 31, 2021 | |||||||
Receivables, which are included in ‘Trade accounts receivable’ | $ | 8,472 | $ | 8,891 | ||||
Current contract assets, which are included in “Prepaid and other assets” | $ | 1,584 | $ | 1,895 | ||||
Non-current contract assets, which are included in “other assets” | $ | — | $ | 844 | ||||
Contract liabilities, which are included in “Deferred revenue” | $ | 6,757 | $ | 6,093 |
Six Months Ended June 30, 2022 | Nine Months Ended September 30, 2022 | |||||||
Balance at beginning of period | $ | 6,093 | $ | 6,093 | ||||
Deferral of revenue | 6,333 | 9,195 | ||||||
Recognition of deferred revenue | (5,674 | ) | (8,531 | ) | ||||
Balance at end of period | $ | 6,752 | $ | 6,757 | ||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2022 | 2021 | 2022 | 202 1 | |||||||||||||
Net loss | $ | (3,118 | ) | $ | (3,280 | ) | $ | (6,663 | ) | $ | (4,923 | ) | ||||
Shares used in the calculation of basic and diluted net loss per share | 25,185 | 24,989 | 25,172 | 24,462 | ||||||||||||
Net loss per share - basic and diluted | $ | (0.12 | ) | $ | (0.13 | ) | $ | (0.26 | ) | $ | (0.20 | ) | ||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net loss | $ | (3,898 | ) | $ | (2,176 | ) | $ | (10,561 | ) | $ | (7,099 | ) | ||||
Shares used in the calculation of basic and diluted net loss per share | 25,204 | 25,053 | 25,183 | 24,662 | ||||||||||||
Net loss per share - basic and diluted | $ | (0.15 | ) | $ | (0.09 | ) | $ | (0.42 | ) | $ | (0.29 | ) | ||||
June 30, | September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Stock options | 1,819,897 | 2,176,607 | 2,624,154 | 2,509,511 | ||||||||||||
Restricted stock | — | 21,613 | — | 1,750 | ||||||||||||
Total | 1,819,897 | 2,198,220 | 2,624,154 | 2,511,261 | ||||||||||||
June 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | |||||||||||||
Raw materials | $ | 2,549 | $ | 2,962 | $ | 2,665 | $ | 2,962 | ||||||||
Work in process | 218 | 173 | 121 | 173 | ||||||||||||
Finished Goods | 2,503 | 1,279 | 3,113 | 1,279 | ||||||||||||
Inventory Gross | 5,270 | 4,414 | 5,899 | 4,414 | ||||||||||||
Inventory Reserve | (269 | ) | (243 | ) | ( 269 | ) | (243 | ) | ||||||||
Inventory Net | $ | 5,001 | $ | 4,171 | $ | 5,630 | $ | 4,171 | ||||||||
Lease Cost | Classification | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | |||||||||
Operating lease cost - Right of Use Asset | Operating expenses | $ | 214 | $ | 644 |
Three Months | Six Months | |||||||||
Ended June 30, | Ended June 30, | |||||||||
Lease Cost | Classification | 2022 | 2022 | |||||||
Operating lease cost - Right of Use Asset | Operating expenses | $ | 215 | $ | 430 |
Three Months | Six Months | |||||||
Ended June 30, | Ended June 30, | |||||||
2022 | 202 2 | |||||||
Cash paid from operating cash flows for operating leases | $ | 236 | $ | 465 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
Cash paid from operating cash flows for operating leases | $ | 233 | $ | 698 |
As of 2022 | ||||
Weighted-average remaining lease term of operating leases | ||||
Weighted-average discount rate for operating leases | % |
2022 | $ | 467 | $ | 233 | ||||
2023 | 611 | 611 | ||||||
2024 | 642 | 642 | ||||||
2025 | 644 | 644 | ||||||
2026 | 664 | 664 | ||||||
2027 | 684 | 685 | ||||||
2028 | 172 | 173 | ||||||
Total lease payments | 3,884 | 3,652 | ||||||
Less: imputed interest | (720 | ) | (664 | ) | ||||
Total lease liabilities | 3,164 | 2,988 | ||||||
Less: current portion of lease liabilities | (566 | ) | (508 | ) | ||||
Long-term lease liabilities | $ | 2,598 | $ | 2,480 | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash interest expense | $ | — | $ | — | $ | — | $ | 141 | ||||||||
Total interest expense | $ | — | $ | — | $ | — | $ | 141 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash interest expense | $ | — | $ | 27 | $ | — | $ | 107 | ||||||||
Accrual of notes payable final payment | — | 2 | — | 9 | ||||||||||||
Amortization of debt costs | — | — | — | 13 | ||||||||||||
Total interest expense | $ | — | $ | 29 | $ | — | $ | 129 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
June 30, | June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||
Cost of revenue | $ | 1 | $ | 2 | $ | 1 | $ | 16 | $ | 1 | $ | 3 | $ | 2 | $ | 20 | ||||||||||||||||
Engineering and product development | 70 | 58 | 138 | 208 | 37 | 73 | 182 | 281 | ||||||||||||||||||||||||
Marketing and sales | 109 | 128 | 308 | 481 | 133 | 149 | 441 | 629 | ||||||||||||||||||||||||
General and administrative | 129 | 323 | 517 | 741 | 234 | 431 | 744 | 1,172 | ||||||||||||||||||||||||
$ | 309 | $ | 511 | $ | 964 | $ | 1446 | $ | 405 | $ | 656 | $ | 1,369 | $ | 2,102 | |||||||||||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Average risk-free interest rate | 2.56% | N/A | 1.90% | 0.20% | ||||
Expected dividend yield | NaN | NaN | NaN | NaN | ||||
Expected life | 3.5 years | 3.5 years | 3.5 years | 3.5 years | ||||
Expected volatility | 69.7% to 70.5% | N/A | 66.3% to 70.5% | 66.0% to 66.0% | ||||
Weighted average exercise price | $5.19 | N/A | $5.22 | $18.00 | ||||
Weighted average fair value | $1.72 | N/A | $2.46 | $8.37 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Average risk-free interest rate | n/a * | 0.41% | 1.90% | 0.28% | ||||
Expected dividend yield | None | None | None | None | ||||
Expected life | n/a * | 3.5 years | 3.5 years | 3.5 years | ||||
Expected volatility | n/a * | 65.6%-67.4% | 66.3% to 70.5% | 65.6% to 67.4% | ||||
Weighted average exercise price | n/a * | $15.04 | $5.22 | $16.61 | ||||
Weighted average fair value | n/a * | $6.18 | $2.46 | $7.34 |
Number of Options | Weighted Average Exercise Price | Intrinsic Value | ||||||||||
Outstanding as of December 31, 2021 | 2,486,511 | $ | 9.27 | $ | 3,820 | |||||||
Granted | 760,000 | $ | 5.22 | $ | 3 | |||||||
Exercised | (28,833 | ) | $ | 2.74 | $ | 75 | ||||||
Cancelled | (479,797 | ) | $ | 12.33 | $ | — | ||||||
Outstanding as of June 30, 2022 | 2,737,881 | $ | 7.68 | $ | 833 | |||||||
Options Exercisable as of December 31, 2021 | 1,619,855 | $ | 6.47 | $ | 3,730 | |||||||
Options Exercisable as of June 30, 2022 | 1,819,897 | $ | 7.44 | $ | 830 | |||||||
Number of Options | Weighted Average Exercise Price | Intrinsic Value | ||||||||||
Outstanding as of December 31, 2021 | 2,486,511 | $ | 9.27 | $ | 3,820 | |||||||
Granted | 760,000 | $ | 5.22 | $ | 3 | |||||||
Exercised | (73,500 | ) | $ | 2.45 | $ | 85,974 | ||||||
Cancelled | (548,857 | ) | $ | 11.96 | $ | — | ||||||
Outstanding as of September 30, 2022 | 2,642,154 | $ | 9.44 | $ | — | |||||||
Options Exercisable as of December 31, 2021 | 1,619,855 | $ | 6.47 | $ | 3,730 | |||||||
Options Exercisable as of September 30, 2022 | 1,835,848 | $ | 9.97 | $ | — | |||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Segment revenues: | ||||||||||||||||
Detection | $ | 5,289 | $ | 4,789 | $ | 10,809 | $ | 10,508 | ||||||||
Therapy | 2,286 | 3,037 | 4,289 | 5,962 | ||||||||||||
Total Revenue | $ | 7,575 | $ | 7,826 | $ | 15,098 | $ | 16,470 | ||||||||
Segment gross profit: | ||||||||||||||||
Detection | $ | 4,554 | $ | 4,005 | $ | 9,215 | $ | 8,730 | ||||||||
Therapy | 937 | 1,533 | 1,588 | 3,097 | ||||||||||||
Segment gross profit | $ | 5,491 | $ | 5,538 | $ | 10,803 | $ | 11,827 | ||||||||
Segment operating income (loss): | ||||||||||||||||
Detection | $ | 446 | $ | 52 | $ | 1,068 | $ | 993 | ||||||||
Therapy | (797 | ) | (250 | ) | (2,006 | ) | (562 | ) | ||||||||
Segment operating income (loss): | $ | (351 | ) | $ | (198 | ) | $ | (938 | ) | $ | 431 | |||||
General, administrative, depreciation and amortization expense | $ | (2,763 | ) | $ | (2,673 | ) | $ | (5,698 | ) | $ | (4,835 | ) | ||||
Interest expens e | — | (29 | ) | (1 | ) | (129 | ) | |||||||||
Interest income | 14 | 19 | 16 | 33 | ||||||||||||
Other expense | (18 | ) | (13 | ) | (41 | ) | (37 | ) | ||||||||
Loss on extinguishment of debt | — | (386 | ) | — | (386 | ) | ||||||||||
Loss before income tax | $ | (3,118 | ) | $ | (3,280 | ) | $ | (6,662 | ) | $ | (4,923 | ) | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Segment revenues: | ||||||||||||||||
Detection | $ | 4,359 | $ | 6,008 | $ | 15,168 | $ | 16,515 | ||||||||
Therapy | 1,997 | 3,353 | 6,286 | 9,315 | ||||||||||||
Total r evenue | $ | 6,356 | $ | 9,361 | $ | 21,454 | $ | 25,830 | ||||||||
Segment gross profit: | ||||||||||||||||
Detection | $ | 3,703 | $ | 5,058 | $ | 12,918 | $ | 13,788 | ||||||||
Therapy | 670 | 1,654 | 2,258 | 4,751 | ||||||||||||
Segment gross profit | $ | 4,373 | $ | 6,712 | $ | 15,176 | $ | 18,539 | ||||||||
Segment operating income (loss): | ||||||||||||||||
Detection | $ | (330 | ) | $ | 671 | $ | 758 | $ | 1,664 | |||||||
Therapy | (948 | ) | (173 | ) | (2,954 | ) | (735 | ) | ||||||||
Segment operating income (loss): | $ | (1,278 | ) | $ | 498 | $ | (2,196 | ) | $ | 929 | ||||||
General, administrative, depreciation and amortization expense | $ | (2,682 | ) | $ | (2,679 | ) | $ | (8,402 | ) | $ | (7,513 | ) | ||||
Interest expense | (7 | ) | — | (7 | ) | (141 | ) | |||||||||
Interest income | 71 | 21 | 89 | 53 | ||||||||||||
Other expense | (2 | ) | (16 | ) | (45 | ) | (41 | ) | ||||||||
Loss on extinguishment of debt | — | — | — | (386 | ) | |||||||||||
Loss before income tax | $ | (3,898 | ) | $ | (2,176 | ) | $ | (10,561 | ) | $ | (7,099 | ) | ||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the accompanying notes included in Part I, Item 1 of this Form 10-Q, as well as our Annual Report on Form 10-K for the year ended December 31, 2021. Some of the information contained in this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. As a result of many factors, including those factors set forth in the section titled “Risk Factors,” our actual results could differ materially from those discussed in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors.” Please also refer to the section titled “Special Note Regarding Forward Looking Statements.”
Special Note Regarding Forward Looking Statements
Certain information included in this Item 2 and elsewhere in this Form
Unless the context otherwise requires, the terms “iCAD”, the “Company”, “we”, “our”, “registrant”, and “us” mean iCAD, Inc. and its consolidated subsidiaries.
Results of Operations
Overview
iCAD, Inc. is a global medical technology company providing innovative cancer detection and therapy solutions. The Company reports in two segments: Detection and Therapy.
In the Detection segment, the Company’s solutions include (i) advanced image analysis and workflow solutions that enable healthcare professionals to better serve patients by identifying pathologies and pinpointing the most prevalent cancers earlier, and (ii) a solutions suite of high-performance, Artificial Intelligence and Computer-Aided Detection (CAD) systems and workflow solutions for 2D and 3D mammography, Magnetic Resonance Imaging (MRI) and Computed Tomography (CT) that focus on cancer detection, breast density assessment, and
In the Therapy segment, the Company offers the Xoft System, an isotope-free cancer treatment platform technology. The Xoft System can be used for the treatment of early-stage breast cancer, endometrial cancer, cervical cancer and nonmelanoma skin cancer and is in clinical studies for treatment of brain cancers.
The Company’s headquarters are located in Nashua, New Hampshire, with a manufacturing facility in New Hampshire, an operations, research, development, manufacturing and warehousing facility in San Jose, California, and an office in Lyon, France.
COVID-19
On March 12, 2020, the World Health Organization declared
18
We believe that itsour current liquidity and capital resources are sufficient to sustain operations through at least the next 12 months, primarily due to cash on hand of $27.2$24.6 million at JuneSeptember 30, 2022 and anticipated revenue and cash collections. However, the resurgence of the
Eastern European Conflict Impact
In late February 2022, Russian military forces launched significant military action against Ukraine. Sustained conflict and disruption in the region is likely. The aggregatehas continued through September 30, 2022 and beyond. Economic, civil, military and political uncertainty may arise or increase in regions where the Company operates or derives revenue. Further, countries from which we derive revenue may experience military action and/or civil and political unrest; may be subject to government export controls, economic sanctions, embargoes, or trade restrictions; and experience currency, inflation, and interest rate uncertainties. While the impact to Eastern Europe and Europe as a whole, as well as actions taken by other countries, including new and stricter sanctions by the United States, Canada, the United Kingdom, the European Union, and other countries and organizations against officials, individuals, regions, and industries in Russia, Belarus and Ukraine, and each country’s potential responseus has been limited to such sanctions, tensions and military actions,date, it is not knowable at this time, and could have a material adverse effect onpossible to predict the Company, its business and operations. Any such material adverse effect frompotential outcome should the conflict and enhancedexpand and/or additional sanctions activity may disrupt the Company’s sales to customers in the region. Prolonged unfavorable economic conditions or uncertainty may have an adverse effect on the Company’s sales and profitability.be imposed. For the fiscal year ended 2021, approximately 8.6% of the Company’sour total revenue and approximately 39.0% of the Company’sour export revenue was derived from customers located in Europe.
Critical Accounting Estimates
Our discussion and analysis of its financial condition, results of operations, and cash flows are based on the Company’sour consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluateswe evaluate these estimates, including those related to revenue recognition, allowance for doubtful accounts, inventory valuation and obsolescence, intangible assets, goodwill, income taxes, contingencies, and litigation. Additionally, the Company useswe use assumptions and estimates in calculations to determine stock-based compensation, and evaluation of litigation. The Company bases itsWe base estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Due to the
Other than as described herein, there have been no additional material changes to our critical accounting policies as discussed in our 2021 Annual Report on Form
Three and sixnine months ended JuneSeptember 30, 2022 compared to three and sixnine months ended JuneSeptember 30, 2021 (in thousands, except share data or as noted)
Revenue
Three months ended JuneSeptember 30, 2022 and 2021:
Three months ended June 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Detection revenue | ||||||||||||||||
Product revenue | $ | 3,467 | $ | 3,164 | $ | 303 | 9.6 | % | ||||||||
Service and supplies revenue | 1,822 | 1,625 | 197 | 12.1 | % | |||||||||||
Subtotal | 5,289 | 4,789 | 500 | 10.4 | % | |||||||||||
Therapy revenue | ||||||||||||||||
Product revenue | 1,008 | 1,388 | (380 | ) | -27.4 | % | ||||||||||
Service and supplies revenue | 1,278 | 1,649 | (371 | ) | -22.5 | % | ||||||||||
Subtotal | 2,286 | 3,037 | (751 | ) | -24.7 | % | ||||||||||
Total revenue | $ | 7,575 | $ | 7,826 | $ | (251 | ) | -3.2 | % | |||||||
Three months ended September 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Detection revenue | ||||||||||||||||
Product revenue | $ | 2,535 | $ | 4,454 | $ | (1,919 | ) | (43.1 | )% | |||||||
Service and supplies revenue | 1,823 | 1,554 | 269 | 17.3 | % | |||||||||||
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Subtotal | 4,358 | 6,008 | (1,650 | ) | (27.5 | )% | ||||||||||
Therapy revenue | ||||||||||||||||
Product revenue | 671 | 1,866 | (1,195 | ) | (64.0 | )% | ||||||||||
Service and supplies revenue | 1,327 | 1,487 | (160 | ) | (10.8 | )% | ||||||||||
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Subtotal | 1,998 | 3,353 | (1,355 | ) | (40.4 | )% | ||||||||||
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| |||||||||||
Total revenue | $ | 6,356 | $ | 9,361 | $ | (3,005 | ) | (32.1 | )% | |||||||
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Total revenue decreased by approximately $0.2$3.0 million or (3.2%(32.1%), from $7.8$9.4 million for the three months ended JuneSeptember 30, 2021 to $7.6$6.4 million for the three months ended JuneSeptember 30, 2022. The decrease is due to an increase in Detection revenue of approximately $0.5 million offset by a decrease in Therapy revenue of $0.7 million. During the first halfnine months of 2022, the Company haswe have seen an increased customer demand for subscription licenses, which currently remains a small portion of the Company’s total license revenue. The Company believesWe believe this trend could accelerate.accelerate, and have begun to shift to a subscription model. An increase in subscription revenue would negatively impact revenue in the short term, because revenue from subscription licenses are recognized over time, as opposed to onbeing recognized upon delivery for perpetual licenses.
19
Detection product revenue increaseddecreased by approximately $0.3$1.9 million, or 9.6%(43.1%), from $3.2$4.5 million for the three months ended JuneSeptember 30, 2021 to $3.5$2.5 million for the three months ended JuneSeptember 30, 2022. The overall increasedecrease is due primarily to an increaseone-time revenue items in direct customer revenue2021 that did not repeat in addition to the impact of $0.3 million relating primarilyour transition to revenue from 3D imaging and density assessment products. The Companya subscription model . We also believesbelieve that the
Detection service and supplies revenue, which is primarily sold to direct customers, increased by $0.2approximately $0.3 million, or 12.1%17.3%, from $1.6 million infor the three months ended JuneSeptember 30, 2021 to $1.8 million in the three months ended JuneSeptember 30, 2022.
Therapy product revenue decreased by approximately $0.4$1.2 million, or (27.4)(64.0)%, from $1.4$1.9 million for the three months ended JuneSeptember 30, 2021 to $1.0$0.7 million for the three months ended JuneSeptember 30, 2022. Therapy product revenue is related to the sale of our Axxent systems and can vary significantly from quarter to quarter due to changes in the number of units sold and the average selling price.
Therapy service and supplies revenue decreased by approximately $0.4$0.2 million, or (22.5)(10.8)%, from $1.7$1.5 million for the three months ended JuneSeptember 30, 2021 to $1.3 million for the three months ended JuneSeptember 30, 2022. The Company believesWe believe that Therapy product revenue was adversely affected by the
Nine months ended JuneSeptember 30, 2022 and 2021:
Six months ended June 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Detection revenue | ||||||||||||||||
Product revenue | $ | 7,331 | $ | 7,325 | $ | 6 | 0.1 | % | ||||||||
Service and supplies revenue | 3,478 | 3,183 | 295 | 9.3 | % | |||||||||||
Subtotal | 10,809 | 10,508 | 301 | 2.9 | % | |||||||||||
Therapy revenue | ||||||||||||||||
Product revenue | 1,704 | 2,784 | (1,080 | ) | -38.8 | % | ||||||||||
Service and supplies revenue | 2,585 | 3,178 | (593 | ) | -18.7 | % | ||||||||||
Subtotal | 4,289 | 5,962 | (1,673 | ) | -28.1 | % | ||||||||||
Total revenue | $ | 15,098 | $ | 16,470 | $ | (1,372 | ) | -8.3 | % | |||||||
Nine months ended September 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Detection revenue | ||||||||||||||||
Product revenue | $ | 9,866 | $ | 11,778 | $ | (1,912 | ) | (16.2 | )% | |||||||
Service and supplies revenue | 5,301 | 4,737 | 564 | 11.9 | % | |||||||||||
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Subtotal | 15,167 | 16,515 | (1,348 | ) | (8.2 | )% | ||||||||||
Therapy revenue | ||||||||||||||||
Product revenue | 2,376 | 6,580 | (4,204 | ) | (63.9 | )% | ||||||||||
Service and supplies revenue | 3,911 | 2,735 | 1,176 | 43.0 | % | |||||||||||
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Subtotal | 6,287 | 9,315 | (3,028 | ) | (32.5 | )% | ||||||||||
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Total revenue | $ | 21,454 | $ | 25,830 | $ | (4,376 | ) | (16.9 | )% | |||||||
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Total revenue decreased by approximately $1.4$4.4 million, or (8.3%(16.9%), from $16.5$25.8 million for the sixnine months ended JuneSeptember 30, 2021 to $15.1$21.5 million for the sixnine months ended JuneSeptember 30, 2022. The decrease is due to a decreasedeclines in both Detection and Therapy revenue of approximately $1.7 million offset by an increase in Detection revenue of $0.3 million.revenue. During the first halfnine months of 2022, the Company haswe have seen increased customer demand for subscription licenses, which currently remains a small portion of the Company’s total license revenue. The Company believesWe believe this trend could accelerate. An increase in subscription revenue would negatively impact revenue in the short term, because revenue from subscription licenses are recognized over time, as opposed to on delivery for perpetual licenses.
Detection product revenue was relatively flat at $7.3decreased by approximately $1.9 million, or (16.2%), from $11.8 million for both the sixnine months ended JuneSeptember 30, 2022 and 2021.
Detection service and supplies revenue, which is primarily sold to direct customers, increased by $0.3approximately $0.6 million, or 9.3%11.9%, from $3.2$4.7 million in the sixnine months ended JuneSeptember 30, 2021 to $3.5$5.3 million infor the sixnine months ended JuneSeptember 30, 2022.
Therapy product revenue decreased by approximately $1.1$4.2 million, or (38.8%(63.9%), from $2.8$6.6 million for the sixnine months ended JuneSeptember 30, 2021 to $1.7$2.4 million for the sixnine months ended JuneSeptember 30, 2022. Therapy product revenue is related to the sale of our Axxent systems and can vary significantly from quarter to quarter due to changes in the number of units sold, and the average selling price. The Company believesWe also believe that Therapy product revenue was adversely affected by the COVID-19 pandemic during the sixnine months ended JuneSeptember 30, 2022 and 2021.
Therapy service and supplies revenue decreasedincreased by approximately $0.6$1.2 million, or (18.7)%43.0%, from $3.2$2.7 million for the sixnine months ended JuneSeptember 30, 2021 to $2.6$3.9 million for the sixnine months ended JuneSeptember 30, 2022. The Company believesWe believe that Therapy service and supplies revenue was adversely affected by the
20
Cost of Revenue and Gross Profit:
Three months ended JuneSeptember 30, 2022 and 2021:
Cost of Revenue and Gross Profit: | Three months ended June 30 | |||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Products | $ | 1,008 | $ | 1,377 | $ | (369 | ) | -26.8 | % | |||||||
Service and supplies | 1,001 | 832 | 169 | 20.3 | % | |||||||||||
Amortization and depreciation | 75 | 79 | (4 | ) | -5.1 | % | ||||||||||
Total cost of revenue | $ | 2,084 | $ | 2,288 | $ | (204 | ) | -8.9 | % | |||||||
Three months ended June 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Detection gross profit | $ | 4,554 | $ | 4,005 | $ | 549 | 13.7 | % | ||||||||
Therapy gross profit | 937 | 1,533 | (596 | ) | -38.9 | % | ||||||||||
Gross profit | $ | 5,491 | $ | 5,538 | $ | (47 | ) | -0.8 | % | |||||||
Cost of Revenue and Gross Profit: | Three months ended September 30 | |||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Products | $ | 1,416 | $ | 1,807 | $ | (391 | ) | (21.6 | )% | |||||||
Service and supplies | 494 | 763 | (269 | ) | (35.3 | )% | ||||||||||
Amortization and depreciation | 73 | 79 | (6 | ) | (7.3 | )% | ||||||||||
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Total cost of revenue | $ | 1,983 | $ | 2,649 | $ | (666 | ) | (25.1 | )% | |||||||
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Three months ended September 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Detection gross profit | $ | 3,703 | $ | 5,058 | $ | (1,355 | ) | (26.8 | )% | |||||||
Therapy gross profit | 670 | 1,654 | (984 | ) | (59.5 | )% | ||||||||||
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Gross profit | $ | 4,373 | $ | 6,712 | $ | (2,339 | ) | (34.8 | )% | |||||||
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Gross profit for the three months ended JuneSeptember 30, 2022 was approximately $5.5$4.4 million, or 72.5%68.8% of revenue, as compared to $5.5$6.7 million, or 70.8%71.7% of revenue, for the three months ended JuneSeptember 30, 2021. Detection gross profit percentage increased from 83.6%84.2% for the three months ended JuneSeptember 30, 2021 to 86.1%85.0% for the three months ended JuneSeptember 30, 2022. Therapy gross profit percentage increaseddecreased from 70.8%49.3% for the three months ended JuneSeptember 30, 2021 to 72.5%33.5% for the three months ended JuneSeptember 30, 2022. Detection gross profit represented 72.3%75.4% of total Company gross profit for the three months ended JuneSeptember 30, 2021 compared to 82.9%84.7% for the three months ended JuneSeptember 30, 2022.
Cost of products decreased by approximately $0.4 million, or (26.8%(21.6%), from $1.8 million for the three months ended September 30, 2021 to $1.4 million for the three months ended June 30, 2021 to $1.0 million for the three months ended JuneSeptember 30, 2022. Cost of product revenue as a percentage of product revenue was approximately 30.3%28.6% for the three months ended JuneSeptember 30, 2021 as compared to 22.5%44.2% for the three months ended JuneSeptember 30, 2022. The product mix in the three-month period ended JuneSeptember 30, 2022 compared to the same period in 2021 included more Detection products which havewith a lowerhigher relative cost of sales.
Cost of service and supplies increaseddecreased by approximately $0.2$0.3 million, or (35.3%) from $0.8 million for the three months ended JuneSeptember 30, 2021 to $1.0$0.5 million for the three months ended JuneSeptember 30, 2022. Cost of service and supplies revenue as a percentage of service and supplies revenue was approximately 25.4%25.1% for the three months ended JuneSeptember 30, 2021 as compared to 32.3%15.7% for the three months ended JuneSeptember 30, 2022. The cost of service and supplies as a percentage of revenue increaseddecreased primarily as a result of a temporary reductionthe relative mix of service and supplies in average selling price for certain supplies to certain customers, including clinical trial participants.
Amortization and depreciation, which relates primarily to acquired intangible assets and depreciation of machinery and equipment, was approximately $0.1 million for the three months ended JuneSeptember 30, 2022 and 2021.
Nine months ended JuneSeptember 30, 2022 and 2021:
Cost of Revenue and Gross Profit: | ||||||||||||||||
Six months ended June 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Products | $ | 2,095 | $ | 2,786 | $ | (691 | ) | -24.8 | % | |||||||
Service and supplies | 2,050 | 1,699 | 351 | 20.7 | % | |||||||||||
Amortization and depreciation | 150 | 158 | (8 | ) | -5.1 | % | ||||||||||
Total cost of revenue | $ | 4,295 | $ | 4,643 | $ | (348 | ) | -7.5 | % | |||||||
Six months ended June 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Detection gross profit | $ | 9,215 | $ | 8,730 | $ | 485 | 5.6 | % | ||||||||
Therapy gross profit | 1,588 | 3,097 | (1,509 | ) | -48.7 | % | ||||||||||
Gross profit | $ | 10,803 | $ | 11,827 | $ | (1,024 | ) | -8.7 | % | |||||||
Cost of Revenue and Gross Profit: | ||||||||||||||||
Nine months ended September 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Products | $ | 4,531 | $ | 4,592 | $ | (61 | ) | (1.3 | )% | |||||||
Service and supplies | 1,524 | 2,462 | (938 | ) | (38.1 | )% | ||||||||||
Amortization and depreciation | 224 | 237 | (13 | ) | (5.6 | )% | ||||||||||
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Total cost of revenue | $ | 6,279 | $ | 7,291 | $ | (1,012 | ) | (13.9 | )% | |||||||
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Nine months ended September 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Detection gross profit | $ | 12,918 | $ | 13,788 | $ | (870 | ) | (6.3 | )% | |||||||
Therapy gross profit | 2,258 | 4,751 | (2,493 | ) | (52.5 | )% | ||||||||||
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Gross profit | $ | 15,176 | $ | 18,539 | $ | (3,363 | ) | (18.1 | )% | |||||||
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Gross profit for the sixnine months ended JuneSeptember 30, 2022 was approximately $10.8$15.2 million, or 71.6%70.1% of revenue, as compared to $11.8$18.5 million, or 71.8%71.7% of revenue, for the sixnine months ended JuneSeptember 30, 2021. Detection gross profit percentage increased from 83.1%83.5% for the sixnine months ended JuneSeptember 30, 2021 to 85.3%85.2% for the sixnine months ended JuneSeptember 30, 2022. Therapy gross profit percentage decreased from 51.9%51.0% for the sixnine months ended JuneSeptember 30, 2021 to 37.0%35.9% for the sixnine months ended JuneSeptember 30, 2022. Detection gross profit represented 73.8%74.4% of total Company gross profit for the sixnine months ended JuneSeptember 30, 2021 compared to 85.3%85.1% for the sixnine months ended JuneSeptember 30, 2022.
21
Cost of products decreased by approximately $0.7$0.1 million, or (24.8)%(1.3%), from $2.8$4.6 million for the sixnine months ended JuneSeptember 30, 2021 to $2.1$4.5 million for the sixnine months ended JuneSeptember 30, 2022. Cost of product revenue as a percentage of product revenue was approximately 27.6%28.0% for the sixnine months ended JuneSeptember 30, 2021 as compared to 23.2%37.0% for the sixnine months ended JuneSeptember 30, 2022. The product mix in the
Cost of service and supplies increaseddecreased by approximately $0.4$0.9 million, or 20.7%38.1%, from $1.7$2.5 million for the sixnine months ended JuneSeptember 30, 2021 to $2.1$1.5 million for the sixnine months ended JuneSeptember 30, 2022. Cost of service and supplies revenue as a percentage of service and supplies revenue was approximately 26.7%32.9% for the sixnine months ended JuneSeptember 30, 2021 as compared to 33.8%16.5% for the sixnine months ended JuneSeptember 30, 2022. The cost of service and supplies as a percentage of revenue increaseddecreased primarily as a result of a temporary reduction in average selling price for certainthe mix of service and supplies to certain customers, including clinical trial participants.
Amortization and depreciation, which relates primarily to acquired intangible assets and depreciation of machinery and equipment, was approximately $0.2 million for both the sixnine months ended JuneSeptember 30, 2022 and 2021.
Operating Expenses:
Three months ended JuneSeptember 30, 2022 and 2021:
Three months ended June 30, | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Operating expenses: | ||||||||||||||||
Engineering and product development | $ | 2,367 | $ | 2,268 | $ | 99 | 4.4 | % | ||||||||
Marketing and sales | 3,435 | 3,429 | 6 | 0.2 | % | |||||||||||
General and administrative | 2,742 | 2,652 | 90 | 3.4 | % | |||||||||||
Amortization and depreciation | 61 | 60 | 1 | 1.7 | % | |||||||||||
Total operating expenses | $ | 8,605 | $ | 8,409 | $ | 196 | 2.3 | % | ||||||||
Three months ended September 30, | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Operating expenses: | ||||||||||||||||
Engineering and product development | $ | 2,137 | $ | 2,285 | $ | (148 | ) | (6.5 | )% | |||||||
Marketing and sales | 3,473 | 3,886 | (413 | ) | (10.6 | )% | ||||||||||
General and administrative | 2,667 | 2,658 | 9 | 0.3 | % | |||||||||||
Amortization and depreciation | 56 | 64 | (8 | ) | (12.5 | )% | ||||||||||
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Total operating expenses | $ | 8,333 | $ | 8,893 | $ | (560 | ) | (6.3 | )% | |||||||
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Operating expenses increaseddecreased by approximately $0.2$0.6 million, or 2.3%(6.3%), from $8.4$8.9 million in the three months ended JuneSeptember 30, 2021 to $8.6$8.3 million in the three months ended JuneSeptember 30, 2022.
Engineering and Product Development
Marketing and Sales
General and Administrative. General and administrative expenses were $2.7 million forduring both the three months ended JuneSeptember 30, 2022. The increase is due to higher personnel costs partially offset by reduced external services as multiple functions were brought
Amortization and Depreciation.
Other Income and Expense:
Three months ended JuneSeptember 30, 2022 and 2021:
Other Income and Expense: | ||||||||||||||||
Three months ended June 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Interest expense | $ | — | $ | (29 | ) | $ | 29 | -100.0 | % | |||||||
Interest income | 14 | 19 | (5 | ) | -26.3 | % | ||||||||||
Other loss | (18 | ) | (13 | ) | (5 | ) | 38.5 | % | ||||||||
Loss on extinguishment of debt | — | (386 | ) | 386 | -100.0 | % | ||||||||||
$ | (4 | ) | $ | (409 | ) | $ | 405 | -99.0 | % | |||||||
Tax benefit (expense) | $ | — | $ | — | $ | — | 0.0 | % |
Other Income and Expense: | ||||||||||||||||
Three months ended September 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Interest expense | $ | (7 | ) | $ | — | $ | (7 | ) | (100 | )% | ||||||
Interest income | 71 | 21 | 50 | 238.6 | % | |||||||||||
Other (income) loss | (2 | ) | (16 | ) | 14 | (87.5 | )% | |||||||||
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$ | 62 | $ | 5 | $ | 57 | 11.4 | % | |||||||||
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Tax benefit (expense) | $ | — | $ | — | $ | — | — | % |
Interest expense
Interest income. Interest income increased by approximately $50,000, or 238.6%, from $21,000 for the three months ended JuneSeptember 30, 2021 to $71,000 for the three months ended September 30, 2022. The increase results from higher interest rates in 2022 compared to 2021.
22
Other income (loss). Other income (loss) was a loss of $16,000 during the three months ended September 30, 2021 compared to a loss of $2,000 during the three months ended September 30, 2022. The change is driven lower foreign exchange losses recorded in 2022 compared to 2021.
Tax expense. Tax expense was flat at zero for the three months ending September 30, 2022 and 2021.
Operating Expenses:
Nine months ended September 30, 2022 and 2021:
Nine months ended September 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Operating expenses: | ||||||||||||||||
Engineering and product development | $ | 6,780 | $ | 6,745 | $ | 35 | 0.5 | % | ||||||||
Marketing and sales | 10,473 | 10,739 | (266 | ) | (2.5 | )% | ||||||||||
General and administrative | 8,341 | 7,461 | 880 | 11.8 | % | |||||||||||
Amortization and depreciation | 180 | 178 | 2 | 1.2 | % | |||||||||||
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Total operating expenses | $ | 25,774 | $ | 25,123 | $ | 651 | 2.6 | % | ||||||||
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Operating expenses increased by approximately $0.6 million, or 2.6%, from $25.1 million in the nine months ended September 30, 2021 to $25.8 million in the nine months ended September 30, 2022.
Engineering and Product Development. Engineering and product development costs were flat when comparing the nine months ended September 30, 2021 to the nine months ended September 30, 2022.
Marketing and Sales. Marketing and sales expenses decreased by approximately $0.3 million, or (2.5%), from $10.7 million in the nine months ended September 30, 2021, to $10.5 million in the nine months ended September 30, 2022. The decrease was primarily due to lower employee-related costs during the three months ended September 30, 2022 which more than offset increases incurred during the first six months of 2022 associated with the U.S. commercial group reorganization and refocusing and increased travel costs resulting from the reduction of pandemic travel restrictions.
General and Administrative. General and administrative expenses increased by approximately $0.9 million, or 11.8%, from $7.5 million in the nine months ended September 30, 2021 to $8.3 million for the nine months ended September 30, 2022. The increase is due to higher personnel costs partially offset by reduced external services as multiple functions were brought in-house, recruiting costs associated with the U.S. commercial group reorganization and refocusing, increased travel costs, and an increase of $0.5 million to the allowance for doubtful accounts.
Amortization and Depreciation. Amortization and depreciation which relates primarily to acquired intangible assets and depreciation of machinery and equipment, was flat when comparing the nine months ended September 30, 2021 to the nine months ended September 30, 2022.
Other Income and Expense:
Nine months ended September 30, 2022 and 2021:
Other Income and Expense: | ||||||||||||||||
Nine months ended September 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Interest expense | $ | (7 | ) | $ | (141 | ) | $ | 134 | (94.7 | )% | ||||||
Interest income | 89 | 53 | 36 | 67.9 | % | |||||||||||
Other income (loss) | (45 | ) | (41 | ) | (4 | ) | (9.8 | )% | ||||||||
Loss on extinguishment of debt | — | (386 | ) | 386 | (100 | )% | ||||||||||
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$ | 37 | $ | (515 | ) | $ | 552 | (107.2 | )% | ||||||||
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Tax benefit (expense) | $ | — | $ | — | $ | — | % |
Interest expense. Interest expense decreased $0.1 million, or (94.7%), in the nine months ended September 30, 2021 when compared to the nine months ended September 30, 2022. The decrease is due to the timing of termination of the Loan Agreement in 2021.
Interest income
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Other income (loss)
Loss on extinguishment of debt:
Tax expense
Six months ended June 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Operating expenses: | ||||||||||||||||
Engineering and product development | $ | 4,642 | $ | 4,460 | $ | 182 | 4.1 | % | ||||||||
Marketing and sales | 7,000 | 6,853 | 147 | 2.1 | % | |||||||||||
General and administrative | 5,673 | 4,803 | 870 | 18.1 | % | |||||||||||
Amortization and depreciation | 124 | 115 | 9 | 7.8 | % | |||||||||||
Total operating expenses | $ | 17,439 | $ | 16,231 | $ | 1,208 | 7.4 | % | ||||||||
Other Income and Expense: | ||||||||||||||||
Six months ended June 30 | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
Interest expense | $ | (1 | ) | $ | (129 | ) | $ | 128 | -99.2 | % | ||||||
Interest income | 16 | 33 | (17 | ) | -51.5 | % | ||||||||||
Other loss | (41 | ) | (37 | ) | (4 | ) | 10.8 | % | ||||||||
Loss on extinguishment of debt | — | (386 | ) | 386 | -100.0 | % | ||||||||||
$ | (26 | ) | $ | (519 | ) | $ | 493 | -95.0 | % | |||||||
Tax benefit (expense) | $ | (1 | ) | $ | — | $ | (1 | ) | 0.0 | % |
Liquidity and Capital Resources (in thousands, except as noted)
The Company believes that its cash and cash equivalents balance of $27.2$24.6 million as of JuneSeptember 30, 2022, and projected cash balances are sufficient to sustain operations through at least the next 12 months. The Company’s ability to generate cash adequate to meet its future capital requirements will depend primarily on operating cash flow. If sales or cash collections are reduced from current expectations, or if expenses and cash requirements are increased, the Company may require additional financing, although there are no guarantees that the Company will be able to obtain the financing if necessary. In addition, the resurgence of the
The Company had net working capital of $31.2$27.9 million at JuneSeptember 30, 2022. The ratio of current assets to current liabilities at JuneSeptember 30, 2022 and December 31, 2021 was 3.192.91 and 3.36, respectively.
For the six months ended June 30, | ||||||||
2022 | 2021 | |||||||
Net cash used for operating activities | $ | (7,009 | ) | $ | (5,577 | ) | ||
Net cash used for investing activities | (265 | ) | (336 | ) | ||||
Net cash provided by financing activities | 172 | 16,616 | ||||||
(Decrease) increase in cash and equivalents | $ | (7,102 | ) | $ | 10,703 | |||
For the nine months ended September 30, | ||||||||
2022 | 2021 | |||||||
Net cash used for operating activities | $ | (9,660 | ) | $ | (7,861 | ) | ||
Net cash used for investing activities | (365 | ) | (450 | ) | ||||
Net cash provided by financing activities | 333 | 16,930 | ||||||
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(Decrease) increase in cash and equivalents | $ | (9,692 | ) | $ | 8,619 | |||
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Net cash used for operating activities for the sixnine months ended JuneSeptember 30, 2022 was $7.0$9.7 million, compared to $5.6$7.9 million for the sixnine months ended JuneSeptember 30, 2021. The increase in net cash used for operating activities for the sixnine months ended JuneSeptember 30, 2022 resulted primarily from the Company’s net loss and working capital changes. The working capital changes resulting from increasesincluded an increase in accounts receivable and inventory which increased in orderresulted from purchases made to
Net cash used for investing activities for the sixnine months ended JuneSeptember 30, 2022 was $265,000,$365,000, compared to $336,000$450,000 for the sixnine months ended JuneSeptember 30, 2021. The net cash used for investing activities for the sixnine months ended JuneSeptember 30, 2022 and 2021 is primarily for purchases of property and equipment.
Net cash provided by financing activities for the sixnine months ended JuneSeptember 30, 2022 was $172,000,$333,000, compared to $16.6$16.9 million for the sixnine months ended JuneSeptember 30, 2021. Net cash provided by financing activities for the sixnine months ended JuneSeptember 30, 2022 is primarily due to cash of $172,000proceeds from the issuance of common stock pursuant the Company’s stock option and employee stock purchase plans. Net cash provided by financing activities for the sixnine months ended JuneSeptember 30, 2021 is primarily from the March 2, 2021 underwritten public offering of 1,393,738 shares of the Company’s common stock at an offering price of $18.00 per share resulting in net proceeds of approximately $23.2 million.
Recent Accounting Pronouncements
See Note 1 to the Condensed Consolidated Financial Statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company believes that it is not subject to material foreign currency exchange rate fluctuations, as substantially all of its sales and expenses are denominated in the U.S. dollar. The Company does not hold derivative securities and has not entered into contracts embedded with derivative instruments, such as foreign currency and interest rate swaps, options, forwards, futures, collars or warrants, either to hedge existing risks or for speculative purposes.
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Item 4. Controls and Procedures
The Company’s management, with the participation of its principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, as of JuneSeptember 30, 2022, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures (as defined in Rule
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Because of the inherent limitations in a
The Company’s principal executive officer and principal financial officer conducted an evaluation of the Company’s internal control over financial reporting (as defined in Rule
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PART II OTHER
INFORMATION
Item 1A. Risk Factors:
We operate in a changing environment that involves numerous known and unknown risks and uncertainties that could materially adversely affect our operations. In addition to the risk factors below, factors that have affected our Company are described in Part I, Item 1A of our Annual Report on Form
The Company expects the novel coronavirus
As a provider of devices and services to the health care industry, the Company’s operations have been materially affected, and may continue to be impacted, by the
The
The Company’s exposure to trade accounts receivable losses may increase if its customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the current
Instability in geographies where the Company has operations and personnel or where the Company derives revenue could have a material adverse effect on the Company’s business, customers, operations and financial results.
Economic, civil, military and political uncertainty may arise or increase in regions where the Company operates or derives revenue. Further, countries from which the Company derives revenue may experience military action and/or civil and political unrest; may be subject to government export controls, economic sanctions, embargoes, or trade restrictions; and experience currency, inflation, and interest rate uncertainties. For the fiscal year ended 2021, approximately 8.6% of the Company’s
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revenue was derived from customers located in Europe, and approximately 39.0% of the Company’s export revenue was derived from customers located in Europe. In late February 2022, Russian military forces launched significant military action against Ukraine. Sustained conflict and disruption in the region is likely. The aggregate impact to Eastern Europe and Europe as a whole, as well as actions taken by other countries, including new and stricter sanctions by the United States, Canada, the United Kingdom, the European Union, and other countries and organizations against officials, individuals, regions, and industries in Russia, Belarus and Ukraine, and each country’s potential response to such sanctions, tensions and military actions, is not knowable at this time, and could have a material adverse effect on the Company, its business and operations. Any such material adverse effect from the conflict and enhanced sanctions activity may disrupt the Company’s sales to customers in the region. Prolonged unfavorable economic conditions or uncertainty may have an adverse effect on the Company’s sales and profitability.
Item 6. Exhibits
Exhibit No. | Description | |
31.1* | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1** | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2** | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101* | The following materials formatted in XBRL (eXtensible Business Reporting Language); (i) Condensed Consolidated Balance Sheets as of | |
104* | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). |
* | Filed herewith |
** | Furnished herewith |
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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 thereunto duly authorized.
iCAD, Inc. | ||||||
(Registrant) | ||||||
Date: | By: | /s/ Stacey Stevens | ||||
Name: Title: | Stacey Stevens Chief Executive Officer (Principal Executive Officer) | |||||
Date: | By: | /s/ Stephen P. Sarno | ||||
Name: Title: | Stephen P. Sarno Interim Chief Financial Officer (Principal Financial Officer) |
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