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~~March 3031, ~~2024~~2025

☐ 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
2 Townsend West, Suite 6, Nashua, NH	03063
(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~~May 126, ~~2024~~2025, there were 2627,~~540~~445,~~030~~869 shares outstanding of the registrant’s Common Stock, $0.01 par value.

Table of Contents

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 Balance Sheets (unaudited) as of March 31, 2025 and December 31, 2024	1
	Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2024 and 2023	2
	Condensed Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2025 and 2024	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 Stockholders’ Equity (unaudited) for the three months ended March 31, 2025 and 2024	3
	Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2025 and 2024	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1817
Item 3	Quantitative and Qualitative Disclosures about Market Risk	2322
Item 4	Controls and Procedures	2322
PART II	OTHER INFORMATION	2423
Item 1A	Risk Factors	2423
Item 5	Other Information	2423
Item 6	Exhibits	2524
	Signatures	2625

Unless the context otherwise requires, the terms “iCAD”, the “Company”, “we”, “our”, “registrant”, and “us” mean iCAD, Inc. and its consolidated subsidiaries.

Table of Contents

iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

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

(Unaudited)

	September 30,			December 31,
	March 31,			December 31,
	2024			2023
	2025			2024
Assets
Current assets:
Cash and cash equivalents	$	1820,~~793~~032		$	2117,~~670~~206
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
Trade accounts receivable, net of allowance for credit losses of $238 as of both March 31, 2025 and December 31, 2024		6,627			7,207
Inventory, net		~~689~~694			~~917~~756
Prepaid expenses and other current assets		~~1,209~~769			~~699~~1,258
Total current assets		2628,~~106~~122			2926,~~678~~427
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
Property and equipment, net of accumulated depreciation of $1,656 and $1,496 as of March 31, 2025 and December 31, 2024, respectively		1,814			1,716
Operating lease assets		~~232~~122			~~461~~177
Other assets		~~549~~962			~~849~~757
Intangible assets, net of accumulated amortization of $8,525 and $8,488 as of September 30, 2024 and December 31, 2023, respectively		111			148
Intangible assets, net of accumulated amortization of $8,546 and $8,535 as of March 31, 2025 and December 31, 2024, respectively		90			101
Goodwill		8,362			8,362
Deferred tax assets		78			97
Total assets	$	39,472		$	37,540
Total assets	$	37,107		$	41,418
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	~~422~~1,136		$	~~712~~1,111
Accrued and other expenses		2,~~375~~368			2,~~448~~358
Lease payable—current portion		~~224~~234			~~188~~229
Deferred revenue—current portion		3,~~475~~954			3,~~400~~863
Total current liabilities		67,~~496~~692			67,~~748~~561
Lease payable, net of current		~~191~~73			~~273~~133
Deferred revenue, net of current		~~1,023~~898			~~974~~1,137
Deferred tax		74			68
Other		17			—17
Total liabilities		78,~~734~~684			8,~~001~~856
Commitments and Contingencies (Notes 9 and 12)
Commitments and Contingencies (Notes 8 and 11)
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
Common stock, $0.01 par value: authorized 60,000,000 shares; issued 27,365,682 and 26,540,030 as of March 31, 2025 and December 31, 2024, respectively; outstanding 27,179,851 and 26,354,199 as of March 31, 2025 and December 31, 2024, respectively.		273			265
Additional paid-in capital		~~306~~310,~~968~~062			~~306~~307,~~250~~133
Accumulated deficit		(~~276~~278,~~445~~132	)		(~~271~~277,~~683~~299	)
Treasury stock at cost, 185,831 shares as of both September 30, 2024 and December 31, 2023		(1,415	)		(1,415	)
Treasury stock at cost, 185,831 shares as of both March 31, 2025 and December 31, 2024		(1,415	)		(1,415	)
Total stockholders’ equity		2930,~~373~~788			3328,~~417~~684
Total liabilities and stockholders’ equity	$	3739,~~107~~472		$	4137,~~418~~540

See accompanying notes to condensed consolidated financial statements.

Table of Contents

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,
	March 31,
	2024			2023			2024			2023
	2025			2024
Revenue:
Products	$	2,508		$	2,198		$	8,864		$	6,961
Products and licenses	$	3,244		$	3,102
Services		1,~~709~~630			1,~~875~~852			~~5,336~~			~~5,617~~
Total revenue		4,~~217~~874			4,~~073~~954			~~14,200~~			~~12,578~~
Cost of revenue:
Products		197			263			1,047			1,099
Products and licenses		213			480
Services		~~273~~358			~~267~~321			~~922~~			~~951~~
Amortization and depreciation		~~113~~114			2240			~~266~~			65
Total cost of revenue		~~583~~685			~~552~~841			~~2,235~~			~~2,115~~
Gross profit		34,~~634~~189			34,~~521~~113			~~11,965~~			~~10,463~~
Operating expenses:
Engineering and product development		1,~~926~~476			1,~~147~~507			~~5,197~~			~~3,909~~
Marketing and sales		1,~~861~~533			12,~~495~~082			~~6,210~~			~~5,690~~
General and administrative		12,~~806~~253			21,~~042~~902			~~5,779~~			~~7,650~~
Amortization and depreciation		56			5663			~~182~~			~~186~~
Total operating expenses		5,~~649~~318			45,~~740~~554			~~17,368~~			~~17,435~~
Loss from operations		(21,~~015~~129	)		(1,~~219~~441	)		~~(5,403~~	)		~~(6,972~~	)
Other income/ (expense):
Other income (expense):
Interest expense		—			—			—			(2	)
Interest income		172			203
Interest income		210			195			619			528
Other income (expense), net		124			20
Other income (expense), net		10296			(9223	)		41			(8	)
Other income, net		220			186			660			518
Loss before provision for income taxes		(833	)		(1,218	)
Loss before provision for income taxes		(1,795	)		(1,033	)		(4,743	)		(6,454	)
Provision for income taxes		—			(4	)
Provision for income taxes		(6	)		(4	)		(19	)		(13	)
Net loss and comprehensive loss	$	(833	)	$	(1,222	)
Loss from continuing operations		(1,801	)		(1,037	)		(4,762	)		(6,467	)
Net loss per share:
Loss from discontinued operations, net of tax		—			(337	)		—			(435	)
Net loss per share, basic and diluted	$	(0.03	)	$	(0.05	)
Net loss and comprehensive loss	$	(1,801	)	$	(1,374	)	$	(4,762	)	$	(6,902	)
Weighted average number of shares used in computing loss per share:
Net loss per share:
Basic and diluted		26,710			26,354
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.

Table of Contents

iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except shares)

(Unaudited)

	For the three months ended September 30, 2024
	For the three months ended March 31, 2025
	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
Balance at December 31, 2024		26,540,030	$	265	$	307,133	$	(277,299	)	$	(1,415	)	$	28,684
Stock-based compensation		—		—		214		—			—			214
Issuance of common stock, net of issuance costs of $105		825,652		8		2,327		—			—			2,335
Net loss		—		—		—		(1,801	)		—			(1,801	)
Stock-based compensation		—		—		602		—			—			602
Balance at September 30, 2024		26,540,030	$	265	$	306,968	$	(276,445	)	$	(1,415	)	$	29,373
Net loss		—		—		—		(833	)		—			(833	)
Balance at March 31, 2025		27,365,682	$	273	$	310,062	$	(278,132	)	$	(1,415	)	$	30,788

	For the nine months ended September 30, 2024
	For the three months ended March 31, 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~~265		—			—			~~718~~265
Net loss		—		—		—		(41,~~762~~222	)		—			(41,~~762~~222	)
Balance at September 30, 2024		26,540,030	$	265	$	306,968	$	(276,445	)	$	(1,415	)	$	29,373
Balance at March 31, 2024		26,540,030	$	265	$	306,515	$	(272,905	)	$	(1,415	)	$	32,460

	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.

Table of Contents

iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	For the Nine Months Ended
	For the Three Months Ended
	September 30,
	March 31,
	2024			2023
	2025			2024
Cash flow from operating activities:
Net loss	$	(~~4,762~~833	)	$	(61,~~902~~222	)
Adjustments to reconcile net loss to net cash used for operating activities:
Amortization		3711			~~142~~12
Depreciation		~~412~~159			~~202~~91
Non-cash lease expense		~~166~~55			~~409~~60
Impairment of operating lease asset		184			—
Bad debt provision		—			21
Bad debt provision		21			189
Stock-based compensation		602			265
Stock-based compensation		718			1,114
Deferred tax		(4	)		4
Deferred tax		20			12
Other		5			—
Changes in operating assets and liabilities:
Accounts receivable		~~956~~580			~~1,903~~(144	)
Inventory		~~228~~62			~~1,472~~167
Prepaid and other assets		(~~210~~404	)		38(246	)
Accounts payable		~~(290~~25	)		(~~509~~77	)
Accrued and other expenses		~~(73~~10	)		(~~1,022~~693	)
Lease liabilities		(~~150~~55	)		(~~420~~60	)
Deferred revenue		~~124~~(148	)		~~(141~~642	)
Total adjustments		~~2,148~~893			~~3,389~~42
Net cash used for operating activities		(2,614	)		(3,513	)
Net cash provided by (used for) operating activities		60			(1,180	)
Cash flow from investing activities:
Additions to property and equipment		(163	)		(487	)
Proceeds from sale of business		688			—
Capitalization of internal-use software development costs		(100	)		(188	)
Additions to property and equipment		(2	)		(106	)
Net cash used for investing activities		(263	)		(675	)
Capitalization of internal-use software development costs		(255	)		(100	)
Net cash provided by (used for) investing activities		431			(206	)
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		2,335			—
Proceeds from issuances of common stock, net of issuance costs		—			1,841
Net cash provided by financing activities		2,335			—
Net cash provided by financing activities		—			1,921
Increase (decrease) in cash and cash equivalents		2,826			(1,386	)
Decrease in cash and cash equivalents		(2,877	)		(2,267	)
Cash and cash equivalents, beginning of period		17,206			21,670
Cash and cash equivalents, beginning of period		21,670			21,313
Cash and cash equivalents, end of period	$	20,032		$	20,284
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
Right-of-use asset obtained in exchange for operating lease liability	$	121		$	—

See accompanying notes to condensed consolidated financial statements.

Table of Contents

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~~March 3031, ~~2024~~2025, the results of operations of the Company for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, cash flows of the Company for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, and stockholders’ equity of the Company for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024.

AsThe ~~discussed~~Company had recorded $0.7 million in ~~Note~~the 2caption Prepaid expenses and other current assets as of December 31, 2024 related to an escrow balance owed to the Company ~~completed~~from the sale of ~~its~~a ~~Xoft~~former business ~~line~~completed ~~on October~~in ~~23,~~ 2023. In February ~~Accordingly~~2025, the Company ~~now~~received ~~operates~~the infull ~~one~~escrow ~~segment,~~balance ~~Cancer~~in ~~Detection~~cash ~~("Detection"). Unless~~which ~~otherwise~~is ~~indicated,~~reflected ~~all disclosures and amounts~~ in the ~~Notes~~investing tosection of Condensed Consolidated ~~Financial~~ Statements ~~relate~~of toCash ~~the~~Flows ~~Company’s~~for ~~continuing~~the ~~operations,~~three ormonths ~~its~~ended March ~~Detection~~31, ~~segment~~2025.

~~Although~~As ~~the~~discussed ~~Company believes that the disclosures made~~ in ~~these~~Note ~~interim financial statements are adequate to make the information presented not misleading~~12, 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,~~April ~~2023~~15, ~~filed with the SEC on March 29~~2025, ~~2024. The results for~~ the ~~three~~Company ~~and~~entered ~~nine~~into ~~months~~an ~~ended September~~agreement ~~30,~~to ~~2024, are not necessarily indicative of the results that may~~ be ~~expected~~acquired ~~for~~by ~~the fiscal year ending December 31~~RadNet, ~~2024, or any interim or any future period~~Inc.

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, 2024, filed with the SEC on March 31, 2025. The results for the three months ended March 31, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025, 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.

Table of Contents

Risk and Uncertainty

OnIn late ~~March 12~~February 2022, ~~2020,~~Russian military forces launched significant military action against Ukraine. ~~the~~In ~~World~~early October ~~Health~~2023, an ~~Organization~~armed ~~declared~~conflict ~~COVID~~between Hamas-~~19 to~~led bePalestinian militant groups and Israeli military forces broke out with a ~~pandemic.~~Hamas Inattack anon ~~effort~~southern Israel, to ~~contain~~which Israeli military forces retaliated. Sustained conflict and ~~mitigate~~disruption ~~the~~in ~~spread~~each ofregion has ~~COVID-19~~continued through March 31, ~~the~~ ~~United~~2025 ~~States~~and beyond. Economic, civil, military and ~~most~~political ~~countries~~uncertainty may arise ofor increase in regions where the ~~world~~Company ~~imposed~~operates ~~some~~or ~~level~~derives ofrevenue. ~~unprecedented~~Further, ~~restrictions~~countries ~~such~~from aswhich ~~travel~~the ~~bans~~Company ~~and~~derives ~~business~~revenue may experience ~~closures~~military ~~which~~action ~~caused~~and/or ~~substantial~~civil and political unrest; may ~~reductions~~be insubject to government export controls, economic ~~activity~~sanctions, embargoes, or trade restrictions; and experience currency, inflation, and interest rate uncertainties. While the ~~worst~~impact ofto the ~~disruptions~~Company ~~appear~~has been limited to ~~have~~date, ~~subsided~~it asis not possible ~~of September~~to ~~30,~~predict ~~2024,~~ the ~~Company~~potential ~~continues~~outcome toshould bethe ~~impacted~~conflict byexpand ~~slowness~~and/or inadditional sanctions be imposed. For the ~~overall~~three ~~economic~~months ~~recovery.~~ended March ~~The~~31, ~~Company’s~~2025 ~~expected~~and ~~results~~2024, approximately ~~for~~14% ~~future~~and ~~periods~~18%, respectively, ~~could~~of ~~reflect~~the aCompany’s ~~continuing~~total ~~negative~~revenue ~~impact~~was derived from ~~the~~customers ~~COVID-19 pandemic~~located ~~for~~outside ~~similar~~the orUnited ~~additional reasons~~States.

InWe ~~late February~~purchase ~~2022~~components of our products from U.S. domestic sources, ~~Russian~~ ~~military~~as ~~forces~~well ~~launched~~as ~~significant~~various ~~military~~global ~~action~~sources. ~~against~~The ~~Ukraine~~current U. InS. ~~early October~~presidential ~~2023, an~~administration ~~armed~~has ~~conflict~~proposed ~~between~~and ~~Hamas-led~~enacted ~~Palestinian~~a ~~militant~~number ~~groups~~of tariffs on products and ~~Israeli~~raw ~~military~~materials ~~forces~~from ~~broke~~various ~~out~~countries, ~~with~~which acould ~~Hamas~~increase ~~attack~~our onproduction ~~southern~~costs. ~~Israel~~If tariffs make purchases of materials from certain jurisdictions untenable, we may also need to obtain materials from other sources, when possible, which ~~Israeli~~could ~~military~~also ~~forces~~increase ~~retaliated~~our costs and delay our planned clinical trials and manufacture of our products and product candidates. While the impact to the Company has been limited to date, it is not possible to predict the impact of potential tariffs on the Company’s business and operations.

Sustained conflict and disruption in each region has continued through December 31, 2023 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 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. While the impact to the Company has been limited to date, it is not possible to predict the potential outcome should the conflict expand and/or additional sanctions be imposed. For the nine months ended September 30, 2024 and 2023, approximately 16% and 14%, respectively, of the Company’s total revenue was derived from customers located outside the United States.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). ASU 2023-07 is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses, including for single reportable segment entities. The new guidance is effective for us beginning with our annual reporting for fiscal year 2024 and for interim period reporting beginning in fiscal year 2025 and will be applied on a retrospective basis. We are evaluating the disclosure requirements related to the new standard.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are evaluating the disclosure requirements related to the new standard.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (ASU 2024-03). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement, but requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are evaluating the disclosure requirements related to the new standard.

Table of Contents

Note 2 – ~~Discontinued~~Fair ~~Operations~~Value Measurements

On October 22, 2023, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”), by and among (i) the Company, Xoft Solutions, LLC, a Delaware limited liability company, and Xoft, Inc., a Delaware corporation, each a wholly owned subsidiary of the Company (collectively with the Company, the “Sellers” and each, a “Seller”), and (ii) Elekta Inc., a Georgia corporation, and Nucletron Operations B.V., a company organized under the laws of the Netherlands (together, “Buyers” and each a “Buyer”), pursuant to which the Company agreed to transfer to the Buyers substantially all of the assets and liabilities primarily related to the Company’s Xoft business lines (the “Business”), including with respect to employees, contracts, intellectual property and inventory, for total cash consideration of approximately $5.76 million dollars from the Buyers to the Company, and the assumption by Buyers of all liabilities relating to the Business (the “Transaction”). This payment is guaranteed by Elekta AB, a company organized under the laws of Sweden, the ultimate parent company of the Buyers. In accordance with the Purchase Agreement, the Company received a cash payment of approximately $5 million in November 2023 with the remaining $0.7 million held in escrow for a period of 15 months following October 22, 2023. The escrow balance is reflected in the caption Prepaid expenses and other current assets as of September 30, 2024 and in Other assets in the long-term section of the Company's Consolidated Balance Sheet as of December 31, 2023.

The closing of the Transaction occurred simultaneously with the execution of the Purchase Agreement.

In connection with the Transaction, the parties entered into a transition services agreement pursuant to which the Company provided certain migration and transition services to facilitate an orderly transition of the operation of the Business to the Buyers during the five-month period following consummation of the Transaction, extendable at the option of the parties. The transition services agreement expired during the first quarter of 2024 in accordance with the terms.

The Purchase Agreement contains certain representations, warranties, covenants and indemnification provisions, including for breaches of covenants and for losses resulting from the Company’s liabilities specifically excluded from the Transaction.

The Business, which had previously been presented as a separate reporting segment, meets the criteria for being reported as a discontinued operation and has been segregated from continuing operations. The following table summarizes the results from discontinued operations:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2023			2023
Revenue	$	1,414		$	4,551
Total cost of sales		916			2,516
Gross profit	$	498		$	2,036
Total operating expenses		835			2,471
Provision for income taxes		—			—
Loss from discontinued operations, net of tax	$	(337	)	$	(435	)

Total operating expenses presented in the table above exclude amounts that had previously been allocated to the Business for certain shared marketing expenses. The previously allocated amounts were less than $0.1 million and $0.2 million for the three and nine months ended September 30, 2023, respectively. The previously allocated expenses are included in the Marketing and sales line for all periods presented in the Condensed Consolidated Statements of Operations.

Table of Contents

The Business is included in the Company's Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023. Estimated cash provided by the Business during the nine months ended September 30, 2023 was approximately $0.1 million given the previously announced furlough and limited investment during that time.

Note 3 – Fair Value Measurements

The Company follows the provisions of FASB ASC Topic 820, “Fair Value Measurement and Disclosures” (“ASC 820”), which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company applies the fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, which are the following:

•

Level 1 - Quoted prices in active markets for identical assets or liabilities.

•

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value

The assigned level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Money market funds included in cash and cash equivalents in the accompanying consolidated balance sheet are considered a Level 1 measurement as they are valued at quoted market prices in active markets.

The following table sets forth the Company’s assets which are measured at fair value on a recurring basis by level within the fair value hierarchy:

Fair Value Measurements as of ~~September~~March 3031, ~~2024~~2025

Level 1

Level 2

Level 3

Total

Assets

Money market accounts

1615,~~083~~868

—

1615,~~083~~868

Total Assets

1615,~~083~~868

—

1615,~~083~~868

Fair Value Measurements as of December 31, ~~2023~~2024

Level 1

Level 2

Level 3

Total

Assets

Money market accounts

1516,~~475~~520

—

1516,~~475~~520

Total Assets

1516,~~475~~520

—

1516,~~475~~520

There were no Level 2 or 3 instruments measured at fair value as of ~~September~~March 3031, ~~2024~~2025 or December 31, ~~2023~~2024.

Table of Contents

Note 43 - Revenue

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these goods or services and excludes any sales incentives or taxes collected from customers which are subsequently remitted to government authorities.

Disaggregation of Revenue

The following tables presents the Company’s revenues disaggregated by major good or service line, timing of revenue recognition, and sales channel, reconciled to its reportable segments.

	Three months ended September 30, 2024
	Three months ended March 31,
Major Goods/Service Lines
	2025		2024
Products	$	2,508
Major Goods/Service Lines
Service contracts		1,709
Products and perpetual licenses	$	1,245	$	2,290
	$	4,217
Subscription term licenses		1,785		812
Timing of Revenue Recognition
Cloud subscriptions		214		—
Goods transferred at a point in time	$	1,230
Services and support		1,630		1,852
Services transferred over time		2,987
	$	4,874	$	4,954
	$	4,217
Timing of Revenue Recognition
Sales Channels
Products and perpetual licenses	Point in time
Direct sales force		3,190
Subscription term licenses	Point in time
OEM partners		1,027
Cloud subscriptions	Over time
	$	4,217
Services and support	Over time
Sales Channels
Direct sales force		3,711		3,572
OEM partners		1,163		1,382
	$	4,874	$	4,954

	Three months ended September 30, 2023
Major Goods/Service Lines
Products	$	2,198
Service contracts		1,875
	$	4,073
Timing of Revenue Recognition
Goods transferred at a point in time	$	1,834
Services transferred over time		2,239
	$	4,073
Sales Channels
Direct sales force	$	2,825
OEM partners		1,248
	$	4,073

	Nine months ended September 30, 2024
Major Goods/Service Lines
Products	$	8,864
Service contracts		5,336
	$	14,200
Timing of Revenue Recognition
Goods transferred at a point in time	$	5,233
Services transferred over time		8,967
	$	14,200
Sales Channels
Direct sales force	$	10,459
OEM partners		3,741
	$	14,200

	Nine months ended September 30, 2023
Major Goods/Service Lines
Products	$	6,961
Service contracts		5,617
	$	12,578
Timing of Revenue Recognition
Goods transferred at a point in time	$	5,779
Services transferred over time		6,799
	$	12,578
Sales Channels
Direct sales force	$	8,287
OEM partners		4,291
	$	12,578

Table of Contents

Products. ~~Product revenue consists of sales of cancer detection systems~~ and perpetual licenses. ~~The~~Products ~~Company~~and ~~also~~perpetual ~~sells~~licenses ~~cancer~~revenue ~~detection~~represents ~~systems in~~ the ~~form~~sale of ~~term~~perpetual software licenses, which ~~generally commit the~~ may ~~customer~~also toinclude acomputer ~~three year, non cancellable subscription with annual billing at the start of each year~~hardware. The Company transfers control and recognizes arevenue ~~sale~~ when the product is shipped from the manufacturing or warehousing facility to the customer. Consideration is fixed in nature.

~~Service~~Subscription ~~Contracts~~term licenses. Subscription ~~The~~term ~~Company~~licenses ~~sells~~generally ~~service~~commit ~~contracts~~the customer into ~~which~~a three year, non-cancellable subscription with annual billing at the start of each year. The Company ~~provides~~recognizes ~~professional~~revenue ~~services~~for ~~including~~subscription ~~product~~term ~~installations,~~licenses ~~maintenance,~~when ~~training~~the ~~and~~customer ~~service~~has ~~repairs~~gone live. Contracts ~~The~~generally ~~service~~provide ~~contracts~~for ~~range~~a ~~from~~fixed 12volume ~~months~~of exams to 48be ~~months~~provided over each contract year. Customers ~~The~~are not given ~~Company~~credit ~~typically~~for ~~receives~~any ~~payment~~unused atvolume. If ~~the~~a ~~inception~~customer ofexceeds its contracted volume, the ~~contract~~Company would invoice and ~~recognizes~~recognize revenue onfor athe ~~straight-line~~excess ~~basis~~per ~~over~~ the ~~term~~terms of the ~~agreement~~contract.

AsCloud ~~discussed~~subscriptions. Cloud insubscriptions ~~Note~~allow 2customers the ability to utilize the Company's software via a hosted, web-based environment. The Company recognizes revenue ratably over the subscription term once a customer has gone live. The Company ~~completed~~invoices customers in accordance with the ~~sale~~contract terms, which may be monthly, quarterly, or annually at the start of ~~its~~the ~~Xoft~~term. Customers ~~(Therapy)~~are not given ~~business~~credit ~~line~~for ~~on October~~any 23unused volume. If a customer exceeds its contracted volume, ~~2023~~the Company would invoice and recognize revenue for the excess per the terms of the contract.

Services and support. The Company sells service contracts in which the Company provides professional services including product installations, maintenance, training and service repairs. The service contracts range from 12 months to 48 months. The Company typically receives payment at the inception of the contract and recognizes revenue on a straight-line basis over the term of the agreement. Revenue from fixed fee service contracts is recognized on a straight-line basis over the term of the agreement. Revenue from professional service contracts entered into with customers on a time and materials basis is recognized over the term of the agreement in proportion to the costs incurred in satisfying the obligations under the contract. Revenue from installations is recognized upon completion of the work.

Contract Balances

Contract liabilities are a component of deferred revenue, current contract assets are a component of prepaid and other assets and non-current contract assets are a component of other assets. The following table provides information about receivables, current and non-current contract assets, and contract liabilities from contracts with customers.

Contract balances

	Balance at		Balance at		Balance at
	September 30, 2024		December 31, 2023		December 31, 2022
	March 31, 2025		December 31, 2024		December 31, 2023
Receivables, which are included in ‘Trade accounts receivable’	$	56,~~415~~627	$	67,~~392~~207	$	56,~~769~~392
Current contract assets, which are included in “Prepaid and other assets”	$	7—	$	—11	$	~~748~~—
Non-current contract assets, which are included in “other assets”	$	~~485~~—	$	~~157~~—	$	15157
Contract liabilities, which are included in “Deferred revenue”	$	4,~~498~~852	$	45,~~374~~000	$	4,~~046~~374

109

Table of Contents

Timing of revenue recognition may differ from timing of invoicing of customers. The Company records a receivable when revenue is recognized prior to receipt of cash payment and the Company has the unconditional right to such consideration, or unearned revenue when cash payments are received or due in advance of performance. For multi-year agreements, the Company generally invoices customers annually at the beginning of each annual service period.

The Company records net contract assets or contract liabilities on a contract-by-contract basis. The Company records a contract asset for unbilled revenue when the Company’s performance is in excess of amounts billed or billable. The Company classifies the net contract asset as either a current or non-current based on the expected timing of the Company’s right to bill under the terms of the contract. The current contract asset balance primarily relates to a net unbilled revenue balance, which the Company expects to be able to bill for within one year. The non-current contract asset balance consists of net unbilled revenue balances with several customer which the Company expects to be able to bill for in more than one year.

Changes in deferred revenue from contracts with customers were as follows:

	Nine Months
	Three Months
	Ended September 30,
	Ended March 31,
	2024
	2025
Balance at beginning of period	$	45,~~374~~000
Deferral of revenue		52,~~891~~494
Recognition of deferred revenue		(52,~~767~~642	)
Balance at end of period	$	4,~~498~~852

AsDuring ~~of September 30, 2024,~~ the ~~aggregate~~three ~~amount~~months ofended March ~~unsatisfied~~31, ~~or partially satisfied~~2024, ~~performance~~the ~~obligations from contracts with customers was $4.5 million. The~~ Company ~~expects~~recognized ~~to recognize approximately~~ $32.5 3 million of ~~its~~revenue ~~remaining~~that ~~performance~~was ~~obligations~~included asin deferred revenue ~~over~~as ~~the next 12 months. The remainder~~ of December ~~the~~31, ~~balance is expected to be recognized over the next two to three years~~2023.

~~Note~~As 5–of March ~~Net~~31, ~~Loss~~2025, ~~per~~the ~~Common~~aggregate ~~Share~~amount of unsatisfied, or partially satisfied, performance obligations from contracts with customers was $4.9 million. The Company expects to recognize approximately $4.0 million of its remaining performance obligations as revenue over the next 12 months. The remainder of the balance is expected to be recognized over the next two to three years.

Note 4– Net Loss per Common Share

The Company’s basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period.

A summary of the Company’s calculation of loss per share is as follows:

	Three Months Ended						~~Nine Months Ended~~
	September 30,						September 30,
	March 31,
	2024			2023			2024			2023
	2025			2024
Loss from continuing operations	$	(1,801	)	$	(1,037	)	$	(4,762	)	$	(6,467	)
Net loss	$	(833	)	$	(1,222	)
Loss from discontinued operations		-			(337	)		-			(435	)
Shares used in the calculation of basic and diluted net loss per share		26,710			26,354
Net loss	$	(1,801	)	$	(1,374	)	$	(4,762	)	$	(6,902	)
Net loss per share - basic and diluted	$	(0.03	)	$	(0.05	)
Shares used in the calculation of basic and diluted net loss per share		26,354,370			25,597,125			26,354,370			25,374,105
Loss per share from continuing operations - basic and diluted	$	(0.07	)	$	(0.04	)	$	(0.18	)	$	(0.25	)
Loss per share from discontinued operations - basic and diluted		-			(0.01	)		-			(0.02	)
Net loss per share - basic and diluted	$	(0.07	)	$	(0.05	)	$	(0.18	)	$	(0.27	)

The shares of the Company’s common stock issuable upon the exercise of stock options that were excluded from the calculation of diluted net loss per share because their effect would have been antidilutive are as follows:

	September 30,
	March 31,
	2024		2023
	2025		2024
Stock options		3,~~092~~064,~~336~~678		3,~~209~~015,~~591~~924
Total		3,~~092~~064,~~336~~678		3,~~209~~015,~~591~~924

1110

Table of Contents

Note 6 5– Inventories

The Company values its inventory at the lower of cost or net realizable value. Cost includes materials, labor, and manufacturing overhead and is determined using the first-in, first-out (FIFO) method. On a quarterly basis, management reviews inventory quantities on hand and analyzes the provision for excess and obsolete inventory based primarily on product expiration dating and estimated sales forecast, which is based on sales history and anticipated future demand. Inventory consisted of the following at ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively:

	September 30, 2024			December 31, 2023
	March 31, 2025			December 31, 2024
Raw materials	$	~~496~~460		$	~~583~~545
Work in process		3986			5542
Finished goods		~~232~~203			~~324~~224
Inventory gross		~~767~~749			~~962~~811
Inventory reserve		(7855	)		(4555	)
Inventory net	$	~~689~~694		$	~~917~~756

Note 7 6– Goodwill

The Company tests goodwill for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of the reporting unit is less than its carrying value. Factors the Company considers important, which could trigger an impairment of such asset, include the following:

•

significant underperformance relative to historical or projected future operating results;

•

significant changes in the manner or use of the assets or the strategy for the Company’s overall business;

•

significant negative industry or economic trends;

•

significant decline in the Company’s stock price for a sustained period; and

•

a decline in the Company’s market capitalization below net book value.

The Company considered indicators of impairment, and there were no triggering events identified, no indication of impairment of the Company’s goodwill and no impairment charges recorded during the three ~~or nine~~ months ended ~~September~~March 3031, ~~2024~~2025 or ~~2023~~2024.

Note 8 7– Long-lived Assets

The Company assesses long-lived assets for impairment if events and circumstances indicate it is more likely than not that the fair value of the asset group is less than its carrying value.

There is no set interval or frequency for recoverability evaluation. Rather, the determination of when, if at all, an asset (or asset group) is evaluated for recoverability is based on “events and circumstances.” The following factors are examples of events or changes in circumstances that indicate the carrying amount of an asset (or asset group) may not be recoverable and thus is to be evaluated for recoverability.

•

A significant decrease in the market price of a long-lived asset (or asset group);

•

A significant adverse change in the extent or manner in which a long-lived asset (or asset group) is being used or in its physical condition;

•

A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (or asset group), including an adverse action or assessment by a regulator;

•

An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (or asset group); and

•

A current operating period, or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (or asset group).

The Company determined there were no such triggering events~~, other than the matter discussed in Note 9 - Lease Commitments,~~ during the three ~~or nine~~ months ended ~~September~~March 3031, ~~2024~~2025 or ~~2023~~2024.

1211

Table of Contents

Note 98 – Lease Commitments

In accordance with ASC Topic 842, "Leases" ("ASC 842"), the Company determines if an arrangement contains a lease at inception. A lease is an operating or financing contract, or part of a contract, that conveys the right to control the use of an identified tangible asset for a period of time in exchange for consideration.

At lease inception, the Company recognizes a lease liability equal to the present value of the remaining lease payments, and a right of use asset equal to the lease liability, subject to certain adjustments, such as for lease incentives. In determining the present value of the lease payments, the Company calculates an incremental borrowing rate, which is determined by estimating the Company’s applicable, fully collateralized borrowing rate, with adjustment as appropriate for lease term. The lease term at the lease commencement date is determined based on the non-cancellable period for which the Company has the right to use the underlying asset, together with any periods covered by an extension option if the Company is reasonably certain to exercise that option.

Assumptions made by the Company at the commencement date of each lease are re-evaluated upon occurrence of certain events, including a lease modification. A lease modification results in a separate contract when the modification grants the lessee an additional right of use not included in the original lease and when lease payments increase commensurate with the standalone price for the additional right of use. When a lease modification results in a separate contract, it is accounted for in the same manner as a new lease.

Right-of-use assets and obligations for leases with an initial term of 12 months or less are considered short term and are a) not recognized in the consolidated balance sheet and b) recognized as an expense on a straight-line basis over the lease term. The Company does not sublease any of its leased assets to third parties and the Company’s lease agreements do not contain any residual value guarantees or restrictive covenants. The Company has lessor agreements that contain lease and non-lease components, but the Company is accounting for the complete agreement under ASC Topic 606, Revenue Recognition, after determining that the non-lease component is the predominant component of these agreements.

ASC 842 includes a number of reassessment and remeasurement requirements for lessees based on certain triggering events or conditions. There were no impairment indicators identified~~, other than the matter discussed below,~~ during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 that would require impairment testing of the Company’s right-of-use assets.

Certain of the Company’s leases include variable lease costs to reimburse the lessor for real estate tax and insurance expenses, and certain non-lease components that transfer a distinct service to the Company, such as common area maintenance services. The Company has elected to separate the accounting for lease components and non-lease components for real estate and equipment leases.

In January 2024, in anticipation of the March 2024 end date of its leased warehouse in Nashua, NH, the Company entered into a 36 month lease for a new warehouse beginning February 1, 2024 through 2027. The new warehouse space, also in Nashua, NH, ~~is for approximately 3,000 square feet~~ with annual rent payments totaling approximately $46 thousand for the duration of the lease. The new lease includes an option to extend the term for two one year periods. The Company recorded a right-of-use asset and lease liability upon commencement of the lease for approximately $0.1 million. The Company did not include an assumed extension in determining the right-of-use asset.

During the quarter ended June 30, 2024, the Company committed to a plan to exit and sublease its corporate headquarters at 98 Spit Brook Road in Nashua, New Hampshire. In July 2024, the Company executed a sublease for the space. The sublease commences August 15, 2024 and ends on May 31, 2026. The sublease will provide the Company with monthly income of approximately $8 thousand and specifies that the sublessee shall reimburse the Company for all CAM expenses, electricity, and natural gas. The Company exited the space in August 2024. The sublease caused the Company to assess the fair value of its existing right of use asset related to the 98 Spit Brook Road facility. For the period ended June 30, 2024, the Company concluded that carrying value exceeded fair value. Accordingly, the Company recorded an impairment charge of $0.2 million at that time which is reflected in the General and administrative caption in the Condensed Consolidated Statements of Operations.

Components of Leases:

The Company has leases for office space and office equipment. The leases expire at various dates through 2028.

		Three Months Ended		~~Nine Months Ended~~
Lease Cost	Classification	~~September~~March 3031, ~~2024~~2025		~~September 30, 2024~~
Operating lease cost - Right of Use Asset	Operating expenses	$	6355	$	~~199~~

1312

Table of Contents

Other information related to leases was as follows:

	Three Months		~~Nine Months~~
	Ended September 30, 2024		Ended September 30, 2024
	Ended March 31, 2025
Cash paid from operating cash flows for operating leases	$	6362	$	~~199~~

	As of September 30,
	As of March 31,
	2024
	2025
Weighted-average remaining lease term of operating leases (years)		2.1.7
Weighted-average discount rate for operating leases		7.8	%

Maturity of the Company’s lease liabilities as of ~~September~~March 3031, ~~2024~~2025 was as follows:

2024	$	62
2025	$	187
2025		250
2026		131
2027		4
Total lease payments		~~447~~322
Less: effects of discounting		(3215	)
Total lease liabilities		~~415~~307
Less: current portion of lease liabilities		~~224~~234
Long-term lease liabilities	$	~~191~~73

1413

Table of Contents

Note 109– Stockholders Equity

2024 Omnibus Equity Incentive Plan

At the Company's 2024 annual meeting of stockholders held on June 13, 2024, the Company's stockholders approved the Company's 2024 Omnibus Equity Incentive Plan (the "2024 Plan"). The 2024 Plan permits the granting of any or all of the following types of awards to all grantees:

	•		stock options, including incentive stock options, or ISOs;
	•		stock appreciation rights, or SARs;
	•		restricted shares;
	•		deferred stock and restricted stock units;
	•		performance units and performance shares;
	•		dividend equivalents;
	•		bonus shares; and
	•		other stock-based awards.

The 2024 Plan provides for the issuance of up to 2,000,000 shares of common stock, from time to time, under the terms of the 2024 Plan. As of ~~September~~March 3031, ~~2024~~2025, there were 2 1,~~000~~865,~~000~~ 426 shares available for future issuance under the 2024 Plan. ~~There have been no awards granted under the 2024 Plan since its approval.~~

Issuance of common stock

As previously disclosed, on August 11, 2023, the Company entered into an at-the-market issuance sales agreement (the “Sales Agreement”) with Craig-Hallum Capital Group LLC whereby the Company, at its discretion, may issue and sell up to $25 million of shares of the Company's common stock, from time to time, with Craig-Hallum acting as sales agent, by any method deemed to be an “at-the-market” offering, as defined in Rule 415 of the Securities Act, or any method specified in the Sales Agreement. The Company did not sell any shares of its common stock during the year ended December 31, 2024. During the three months ended March 31, 2025, the Company sold 825,652 shares of its common stock at a weighted average price of $2.97 per share resulting in cash proceeds of $2.3 million, net of issuance costs.

Stock-Based Compensation

The Company’s stock-based compensation expense, including options and restricted stock by category is as follows:

	Three Months Ended				~~Nine Months Ended~~
	September 30,				September 30,
	March 31,
	2024		2023		2024		2023
	2025		2024
Cost of revenue	$	—	$	1	$	1	$	3
Engineering and product development		2890		56		~~111~~		~~188~~
Marketing and sales		28127		7562		~~133~~		~~268~~
General and administrative		~~158~~385		~~171~~146		~~473~~		~~655~~
	$	~~214~~602	$	~~303~~265	$	~~718~~	$	~~1,114~~

During the three months ended March 31, ~~2023~~2025, the Company ~~recorded~~granted ~~incremental~~134,574 ~~stock-based~~shares ~~compensation~~ of ~~approximately~~fully ~~$0.2 million~~vested asrestricted astock ~~result~~awards ofto ~~modifications~~employees. ofThe ~~certain~~expense ~~stock~~associated ~~option~~with the awards~~. The~~ ~~modifications~~was ~~related~~calculated toas ~~extending~~ the ~~contractual~~number ~~life~~ of ~~certain~~gross ~~stock~~shares ~~options~~times bythe ~~five~~grant ~~years~~date ~~for~~closing ~~four~~quoted ~~grantees~~market ~~whose~~price of ~~awards~~the ~~were~~Company's ~~scheduled~~stock toand ~~expire~~totaled ~~during~~$390 ~~2023~~thousand. InThe ~~addition,~~expense is included in the ~~amount~~table ofabove, ~~time~~primarily toin ~~exercise~~General ~~vested~~and ~~stock~~administrative ~~options~~and ~~upon~~Engineering ~~termination~~and ~~for~~product ~~one~~development. The ~~grantee~~associated ~~was~~shares ~~extended~~were ~~from~~released ~~90 days~~to employees subsequent to March 2431, ~~months~~2025.

As of ~~September~~March 3031, ~~2024~~2025, there was approximately $~~1.0~~653 ~~million~~ thousand of total unrecognized compensation cost related to unvested options. That cost is expected to be recognized over a weighted average period of 2.2546 years.

Options granted under the Company’s stock incentive plans were valued utilizing the Black-Scholes model using the following assumptions and had the following fair values:

Three Months Ended

~~Nine Months Ended~~

September 30,

March 31,

2024

2023

2024

2023

2025

2024

Average risk-free interest rate

~~3.95~~

4.28

~~4.94~~

4.36

~~4.40~~

~~4.30~~

Expected dividend yield

None

~~None~~

Expected life (average, in years)

~~2.8~~

2.8

~~2.5~~

3.1

~~2.9~~

Expected volatility

~~83.8%-97.7%~~

81.8%-94.4%

~~84.3% to 134.4%~~

83.4% to 113.9%

~~83.4%-113.9%~~

~~72.7% to 134.4%~~

Weighted average exercise price

$~~1.40~~

2.32

$~~2.70~~

1.52

~~$1.50~~

~~$1.82~~

Weighted average fair value

$~~0.74~~

1.23

$~~1.34~~

0.86

~~$0.84~~

~~$0.97~~

The Company’s ~~2024~~2025 and ~~2023~~2024 average expected volatility and average expected life is based on the average of the Company’s historical information. The risk-free rate is based on the rate of U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of option grants. The Company has paid no dividends on its common stock in the past and does not anticipate paying any dividends in the future.

The Company did not grant any shares of restricted stock during the three-months ended September 30, 2024 or 2023. The Company’s restricted stock awards typically vest in either one year or three equal annual installments with the first installment vesting one year from the grant date. The grant date fair value for restricted stock awards is based on the quoted market value of Company stock on the grant date. 14

Table of Contents

A summary of stock option activity for all stock option plans for the period ended ~~September~~March 3031, ~~2024~~2025 is as follows:

	Number of			Weighted Average		Intrinsic
	Options			Exercise Price		Value
Outstanding as of December 31, 2023		2,897,663		$	5.57	$	252
Outstanding as of December 31, 2024		3,021,298		$	4.25	$	466
Granted		~~613~~203,~~354~~791		$	12.5032
Exercised		—		$	—	$	—
Cancelled		(~~418~~160,~~681~~411	)	$	8.5458
Outstanding as of September 30, 2024		3,092,336		$	4.36	$	180
Outstanding as of March 31, 2025		3,064,678		$	3.90	$	810
Options exercisable as of December 31, 2023		1,593,935		$	8.08	$	30
Options Exercisable as of December 31, 2024		1,962,416		$	5.59	$	192
Options exercisable as of September 30, 2024		1,882,453		$	6.02	$	57
Options Exercisable as of March 31, 2025		2,063,823		$	4.96	$	409

~~Note~~During ~~11–~~the ~~Income~~three ~~Taxes~~months ended March 31, 2025, stock options to purchase 33,291 shares of iCAD common stock vested with a weighted average exercise price of $3.69 and remaining contractual life of 9.9 years.

Note 10– Income Taxes

The determination of the annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pretax income in each tax jurisdiction in which the Company operates and the development of tax planning strategies during the year. As such, there can be significant volatility in interim tax provisions.

Income tax expense was ~~approximately~~ $6zero ~~thousand~~ and approximately $194 thousand for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024, respectively. Income~~2025 ~~tax expense was approximately $4 thousand~~ and ~~$13 thousand for the three and nine months ended September 30~~2024, ~~2023,~~ respectively. The effective tax rates for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 were less than 1% in each period. The difference between the Company’s effective tax rates in ~~2023~~ 2025 and ~~2022~~ 2024 compared to the U.S. statutory tax rate of 21% is primarily due to changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets. The Company has valuation allowances against ~~substantially~~ all of its net operating loss carryforwards and tax credit carryforwards.

1615

Table of Contents

Note 1211 – Commitments and Contingencies

Other Commitments

The Company is obligated to pay approximately $13.71 million for firm purchase obligations to suppliers for future product and service deliverables ~~and $0~~.~~4 million for minimum royalty obligations.~~

Litigation

The Company may be a party to various legal proceedings and claims arising out of the ordinary course of its business. Although the final results of all such matters and claims cannot be predicted with certainty, the Company currently believes that there are no current proceedings or claims pending against it the ultimate resolution of which would have a material adverse effect on its financial condition or results of operations. However, should the Company fail to prevail in any legal matter or should several legal matters be resolved against the Company in the same reporting period, such matters could have a material adverse effect on the Company’s operating results and cash flows for that particular period. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, “Contingencies.” Legal costs are expensed as incurred.

Note 1312 – ~~Restructuring~~Agreement to be Acquired by RadNet

On ~~March 20~~April 15, ~~2023~~2025, the Company ~~committed~~ toentered ainto ~~restructuring~~an ~~plan~~Agreement ~~intended~~and toPlan ~~support~~of ~~its~~Merger ~~long-term~~(the ~~strategic~~“Merger ~~goals~~Agreement”), with RadNet, Inc., a Delaware corporation (“RadNet”), and ~~reduce~~Trio ~~operating~~Merger ~~expenses~~Sub, byInc., ~~further~~a ~~aligning~~wholly ~~its~~owned ~~cost~~subsidiary ~~structure~~of toRadNet ~~focus~~(“Merger onSub”). ~~areas~~Pursuant to the ~~Company~~Merger ~~believes~~Agreement, ~~are~~and ~~more~~upon ~~likely~~the terms and subject to ~~generate~~the conditions therein and in accordance with the ~~best~~Delaware ~~long-term~~General ~~results~~Corporation Law, inMerger ~~light~~Sub ofwill ~~current~~merge ~~industry~~with and ~~macroeconomic~~into ~~environments~~iCAD, with iCAD surviving the Merger and continuing as a wholly owned subsidiary of RadNet (the “~~RIF~~Merger”). ~~The~~Subject ~~Company~~to ~~reduced~~the ~~its~~terms ~~workforce~~and byconditions ~~approximately~~of ~~28%~~the Merger Agreement, ~~decreasing~~at ~~its~~the ~~headcount~~effective bytime ~~approximately~~of 23the ~~employees~~Merger (the “Effective Time”), ~~predominantly~~each ~~from~~issued ~~the~~and ~~Company’s~~outstanding ~~detection~~share ~~business~~of ~~unit.~~common ~~Xoft~~stock of iCAD, ~~Inc~~par value $0.,01 aper ~~wholly-~~share (“common stock”) (excluding shares held by iCAD as treasury stock or owned ~~subsidiary~~by RadNet or Merger Sub or any of ~~the~~their ~~Company~~respective atsubsidiaries, ~~that~~in ~~time~~each case, ~~furloughed~~immediately 12prior ofto ~~its~~the ~~employees~~Effective Time), orwill ~~approximately~~be ~~50%~~converted ofinto ~~its~~the ~~workforce~~right to receive 0. As0677 ~~discussed~~shares in(the ~~Note~~“Exchange 2Ratio”) of common stock of RadNet, ~~the~~par ~~Company~~value ~~completed~~$0.0001 per share (the ~~sale~~“RadNet Common Stock”), and, if applicable, cash in lieu of ~~its~~fractional ~~Xoft~~shares, ~~business~~without ~~line~~interest. In connection with the proposed Merger, on ~~October~~May 236, ~~2023~~2025, RadNet filed with the SEC a registration statement on Form S-4 that constitutes a prospectus of RadNet and also includes a proxy statement of iCAD.

The Company ~~has~~expects ~~incurred~~the ~~charges~~transaction ~~of $0.2 million related~~ to ~~the~~close ~~RIF,~~in ~~all~~either ~~of which were recognized during~~ the ~~nine~~second ~~months~~or ~~ended September~~third ~~30,~~quarter ~~2023. All~~ of the ~~incurred~~year ~~charges~~ending December ~~were one-time~~31, ~~cash expenses and were recorded primarily in Cost of revenue and Marketing and sales in the Company's Condensed Consolidated Statements of Operations~~2025. ~~No further charges or payments related to the RIF will occur.~~

~~Note 14 – Issuances of Common Stock~~ 16

As previously disclosed, on August 11, 2023, the Company entered into an at-the-market issuance sales agreement (the “Sales Agreement”) with Craig-Hallum Capital Group LLC whereby the Company, at its discretion, may issue and sell up to $25 million of shares of the Company's common stock, from time to time, by any method deemed to be an “at-the-market” offering, as defined in Rule 415 of the Securities Act of 1933, as amended, or any method specified in the Sales Agreement. During the three months ended September 30, 2023, the Company sold 958,248 shares of its common stock at a weighted average price of $2.26 per share resulting in cash proceeds of $1.8 million, net of issuance costs, pursuant to the Sales Agreement. In addition, subsequent to September 30, 2023, the Company sold 99,566 shares of its common stock at a weighted average price of $1.44 per share resulting in cash proceeds of approximately $139 thousand, net of issuance costs, pursuant to the Sales Agreement. There were no sales of the Company's common stock during three and nine months ended September 30, 2024 , respectively. As of September 30, 2024, approximately $22.7 remains to be sold under the Sales Agreement.

Table of Contents

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, ~~2023~~2024 filed with the SEC on March 2931, ~~2024~~2025. 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. 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 10-Q ~~that~~and ~~are~~the ~~not~~documents ~~historical~~incorporated ~~facts~~by ~~contain~~reference ~~statements~~herein, that ~~may~~are benot ~~deemed~~historical facts, contain “forward looking statements” within the meaning of the ~~Private~~federal ~~Securities~~securities ~~Litigation~~laws ~~Reform~~made ~~Act~~pursuant ofto ~~1995, Section 27A of~~ the ~~Securities~~“safe ~~Act~~harbor” ofprovisions ~~1933, as amended and Section 21E~~ of the Private Securities ~~Exchange~~Litigation Reform Act of ~~1934, as amended (the “Exchange Act”)~~1995. ~~Such~~ These statements involve ~~or may involve~~ a number of known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, the ~~following:~~risk that the ~~continuing~~transaction ~~impact~~between of the ~~COVID-19~~Company ~~pandemic,~~and ~~the~~RadNet ~~outcomes~~may ofnot ~~our~~be ~~commercial~~completed on anticipated terms and ~~strategic~~timing, ~~arrangements~~or (at all, including ~~our~~obtaining ~~respective~~regulatory ~~arrangements~~approvals ~~with~~that ~~Google~~may ~~Health~~be required on anticipated terms and ~~Radiology~~the ~~Partners),~~Company’s stockholder approval; the ~~continuing~~possibility ~~impact~~that any of ~~military~~the ~~and~~anticipated ~~political~~benefits ~~conflict~~of inthe ~~Eastern~~transaction ~~Europe~~will ~~and~~not be realized or will not be realized within the ~~Middle~~expected ~~East~~time period, the ~~outcomes~~risk ofthat disruptions from the ~~2024~~transaction ~~U.S.~~will ~~presidential~~harm ~~election~~the Company’s business, including current plans and operations and that management's time and attention will be diverted on transaction-related issues; the ability to achieve business and strategic objectives,; the risks of uncertainty of patent protection,; the impact of supply and manufacturing constraints or difficulties,; uncertainty of future sales levels,; protection of patents and other proprietary rights, ; the ~~impact~~ability ofto ~~supply~~consummate ~~and~~or ~~manufacturing~~derive ~~constraints~~value orfrom ~~difficulties,~~strategic transactions including but not limited to joint ventures; product market acceptance,; possible technological obsolescence of products, development and regulatory approval of our products and proposed products increased competition,; litigation and/or government regulation,; changes in Medicare reimbursement policies,; risks relating to ~~potential~~our existing and future debt obligations, competitive factors,; the effects of a decline in the economy or markets served by the Company; cyber-attacks, acts of terrorism, acts of war, severe weather, a solar event, an electromagnetic event, a natural disaster, the age and condition of information technology assets, human error, or other factors could disrupt the Company’s operations and cause the Company to incur unanticipated losses and expense; and other risks detailed in this report and in the Company’s other filings with the ~~United States Securities and Exchange Commission (the “~~SEC”). The words “believe”, “~~plan~~demonstrate”, “intend”, “expect”, “estimate”, “anticipate”, “likely”, “seek”, “~~should~~would”, “~~would~~could”, “~~could~~may”, “consider”, “confident” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Except as required by law, we ~~undertake~~assume no obligation to update ~~any~~or ~~such~~revise these forward-looking statements tofor ~~reflect~~any ~~events~~reason, oreven ~~circumstances~~if ~~after~~new ~~the~~information ~~date~~becomes ofavailable ~~such~~in ~~statements~~the future.

Planned Merger with RadNet

On April 15, 2025, the Company entered into the Merger Agreement with RadNet, and Merger Sub. Pursuant to the Merger Agreement, and upon the terms and subject to the conditions therein and in accordance with the Delaware General Corporation Law, the parties will consummate the “Merger,” whereby Merger Sub will merge with and into the Company, with the Company surviving the Merger and continuing as a wholly owned subsidiary of RadNet. Subject to the terms and conditions of the Merger Agreement, at the Effective Time, each issued share of iCAD common stock (excluding shares held by the Company as treasury stock or owned by RadNet or RadNet Merger Sub or any of their respective subsidiaries, in each case, immediately prior to the Effective Time), will be converted into the right to receive 0.0677 shares of RadNet's common stock, and, if applicable, cash in lieu of fractional shares, without interest. In connection with the proposed Merger, on May 6, 2025, RadNet filed with the SEC a registration statement on Form S-4 that constitutes a prospectus of RadNet and also includes a proxy statement of iCAD.

The Company expects the transaction to close in either the second or third quarter of the year ending December 31, 2025. The Merger Agreement imposes restrictions on the Company's business and operations during the pendency of the Merger. While the Company does not believe those restrictions are unduly burdensome, they may delay or prevent the Company from taking actions it could otherwise take. Accordingly, the Company's results of operations from before the Merger Agreement may not be comparable to results of operations since the Company entered into the Merger Agreement.

Unless the context otherwise requires, the terms “iCAD”, the “Company”, “we”, “our”, “registrant”, and “us” mean iCAD, Inc. and its consolidated subsidiaries.

Overview

iCAD, Inc. is a global leader  in AI-powered cancer detection onwhose a mission is to create a world where cancer can’t hide. ~~Cancer wins when it hides.~~ Remaining undetected, cancer poses one of the greatest threats to life, and may grow and spread the longer it remains undetected. With iCAD’s clinically validated, regulatory cleared industry-leading ProFound Breast Health Suite, cancer has no easy way to hide. The Company’s ProFound Breast Health Suite enables medical providers and professionals to accurately and reliably identify where cancer may be hiding, and ~~when~~because cancer may be found earlier, it ~~might~~is ~~make~~likely ~~its~~more ~~move~~easily eliminated. The ProFound Breast Health Suite currently offers solutions for  breast  cancer detection, ~~density~~breast density assessment, and one- or two-year ~~years~~ breast cancer risk evaluation~~, and cardiovascular risk related to elevated levels of breast arterial calcifications~~. ~~As discussed in Note 2 to the Condensed Consolidated Financial Statements herein~~Additionally, the Company ~~completed~~is ~~the sale of its Xoft business line on October 23, 2023. Unless otherwise indicated, all disclosures and amounts~~ in the ~~Notes~~early tostages ~~the~~of ~~Condensed~~development ~~Consolidated~~of ~~Financial~~a ~~Statements~~product ~~herein~~that ~~relate~~can toidentify ~~the~~breast ~~Company’s~~arterial ~~continuing~~calcification ~~operations,~~from ormammogram ~~its Detection segment~~images.

Powered by ~~the~~advances ~~latest innovations~~ in artificial intelligence ("AI"), and built on one of the largest, most diverse US~~-based~~ and global data sets, the ProFound Breast Health Suite uniquely offers ~~360-degree~~ solutions for cancer detection, density assessment, and personalized risk evaluation, all based on a 2D or 3D mammogram’s collection of images. The ProFound Detection solution scores cases and suspicious lesions, helping radiologists identify and focus on areas of most concern and highest suspicion of cancer. The ProFound Suite’s Density Assessment standardizes and simplifies breast density reporting, algorithmically examining a woman’s breast anatomy from the mammogram image. The ProFound AI Risk solution provides a near-term probability for developing breast cancer in the next one or two years, making it more ~~actionable and~~ relevant than generalized lifetime risk scores. The ProFound Heart Health solution identifies the presence and quantity of breast arterial calcification which is proven to correlate with calcifications elsewhere in the body, raising concern for cardiovascular or heart health concerns.

The ProFound Detection and Density AI solutions within the ProFound Breast Health Suite isare cleared by the US Food & Drug Administration (the "FDA") and ~~has~~have received CE mark and Health Canada licensing. The ProFound Risk solution has received CE mark and Health Canada licensing. In ~~November~~Based ~~2024~~on the adoption rate of iCAD’s products, and the patient volume of the Company’s ~~announced~~customers, iCAD estimates that ~~its~~the suite of ProFound ~~Detection~~solutions ~~Version~~have ~~4.0~~been used for ~~Digital~~over ~~Breast~~40 ~~Tomosynthesis~~million ~~received~~mammograms ~~clearance~~worldwide ~~from~~in the ~~FDA~~last five years alone. ~~Used~~ byWith ~~thousands~~over 25 years of ~~providers~~experience ~~serving~~in ~~millions~~AI cancer detection, iCAD has secured 45 patents, completed over 50 clinical studies, and trains its algorithms on one of ~~patients~~the largest, ~~ProFound~~most isdiverse ~~available~~data insets, pulling data regularly from over 50100 ~~countries~~global locations. The combination of iCAD’s ~~estimates~~deep experience and unique capabilities differentiate iCAD from its competition and we believe positions the Company as an industry leader, with AI solutions that ~~ProFound~~will ~~has~~continue ~~been~~to ~~used~~be enhanced ~~for~~and ~~more~~improved ~~than~~as 40the ~~million~~Company ~~mammograms~~upgrades ~~worldwide~~its inalgorithm models using its extensive data set and research partners. Used by thousands of providers serving millions of patients, certain products within the ~~last~~ProFound ~~five~~Breast ~~years~~Health Suite are available in over 50 countries.

~~The~~iCAD is strengthening its position as a premiere breast AI solution by growing as a platform-based SaaS/DaaS (Software as a Service/Data as a Service) organization through ProFound Cloud, the Company’s ~~headquarters is~~SaaS ~~located~~platform. inProFound ~~Nashua,~~Cloud ~~New~~has ~~Hampshire~~proven to make our solutions more affordable, ~~with~~easier afor ~~manufacturing~~leading ~~facility~~medical ~~also~~providers ~~located~~to inadopt ~~Nashua,~~around ~~New~~the ~~Hampshire~~ globe and anincrease ~~office~~speed inof ~~Lyon~~service. At the same time, ~~France~~the Company has benefitted from a growing and more predictable recurring revenue stream.

~~COVID-19~~The ~~Impact~~Company’s headquarters are located in Nashua, New Hampshire. iCAD France LLC is a wholly owned subsidiary of iCAD, Inc., and is consolidated for reporting purposes.

On March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of COVID-19, the United States and most countries of the world imposed some level of unprecedented restrictions such as travel bans and business closures which caused substantial reductions in economic activity. While the worst of the disruptions seem to have subsided as of September 30, 2024, and the pandemic emergency has been deemed to be over, we continue dealing with the impact of slowness in the overall economic recovery. Our expected results for the year ended December 31, 2024, including any interim or future periods, could reflect a continuing negative impact from continuing negative economic conditions. 17

Table of Contents

We believe that our current liquidity and capital resources are sufficient to sustain operations through at least the next 12 months from the issuance of this Form 10-Q, primarily due to cash on hand of $1820.80 million at ~~September~~March 3031, ~~2024~~2025 and anticipated revenue and cash collections as well as cost savings actions taken.

Global Conflicts Impact

In late February 2022, Russian military forces launched significant military action against Ukraine. In early October 2023, an armed conflict between Hamas-led Palestinian militant groups and Israeli military forces broke out with a Hamas attack on southern Israel, to which Israeli military forces retaliated. Sustained conflict and disruption in each region has continued and is likely to continue further. 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 of the aforementioned global conflicts to us has been limited to date, it is not possible to predict the potential outcome should such conflicts continue or expand and/or additional sanctions be imposed. For the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, approximately 1614% and 1418%, respectively, of the Company's revenue was derived from customers located outside the United States.

~~Xoft~~Tariffs ~~Sale~~Impact

~~The~~We ~~Company~~purchase ~~completed~~components ~~the~~of ~~sale~~our ofproducts ~~its~~from ~~Xoft~~U.S. ~~business~~domestic ~~line~~sources, onas ~~October~~well ~~23,~~as ~~2023~~various global sources. The ~~results~~ current U.S. presidential administration has proposed and enacted a number of ~~its~~tariffs ~~operations~~on ~~for~~products ~~all~~and ~~periods~~raw ~~presented~~materials ~~are~~from ~~reflected~~various ascountries, ~~discontinued~~which ~~operations~~could inincrease ~~the~~our ~~Condensed~~production ~~Consolidated~~costs. ~~Statements~~If tariffs make purchases of ~~Income. Unless~~materials ~~otherwise~~from ~~indicated~~certain jurisdictions untenable, ~~all~~we ~~disclosures~~may also need to obtain materials from other sources, when possible, which could also increase our costs and ~~amounts~~delay ~~relate~~our planned clinical trials and manufacture of our products and product candidates. While the impact to the Company’s ~~continuing~~has ~~operations. In~~been ~~addition~~limited to date, it is not possible to predict the ~~Company~~impact ~~now~~of ~~has one~~potential ~~reporting~~tariffs ~~segment,~~on ~~Detection~~the Company’s business and operations.

Critical Accounting Estimates

Our discussion and analysis of financial condition, results of operations, and cash flows are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the U.S. requires management to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company considers an accounting estimate to be critical to the financial statements if the estimate is complex in nature, requires judgment, and if different estimates were used, the results could have a material impact on the consolidated financial statements. On an ongoing basis, the Company evaluates its estimates and the application of its policies. The Company bases its estimates on historical experience, current conditions and on various other assumptions that are believed to be reasonable under the circumstances. See the section entitled "Critical Accounting Estimates" in our annual report on Form 10-K for the year ended December 31, ~~2023~~2024 filed with the SEC on March 2931, ~~2024~~ 2025 for further discussion.

Due to ~~the COVID-19 pandemic and its lingering impact,~~ global armed conflicts and related political uncertainty, as well as dramatic inflation, there has been uncertainty and disruption in the global economy and financial markets. We are not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Other than as described herein, there have been no additional material changes to our critical accounting estimates as discussed in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024 filed with the SEC on March 2931, ~~2024~~2025. For a comprehensive list of our critical accounting estimates, reference should be made to the ~~2023~~2024 10-K.

Results of Operations (in thousands, except share data or as noted)

Three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 compared to three ~~and nine~~ months ended ~~September~~March 3031, ~~2023~~2024

Revenue

Three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024:

	Three Months Ended September 30,
	Three Months Ended March 31,
	2024		2023		$ Change			% Change
	2025		2024		$ Change			% Change
Product revenue	$	23,~~508~~244	$	23,~~198~~102	$	~~310~~142			144.16	%
Services		1,~~709~~630		1,~~875~~852		(~~166~~222	)		(812.90	)%
Total revenue		4,~~217~~874		4,~~073~~954		~~144~~(80	)		3(1.56	)%

Total revenue ~~increased~~decreased by approximately $~~0.1~~80 ~~million~~ thousand or 31.56%, from $45.10 million for the three months ended ~~September~~March 3031, ~~2023~~2024 to $4.29 million for the three months ended ~~September~~March 3031, ~~2024~~2025. The ~~increase~~decrease is due primarily to ~~higher~~lower ~~product~~services revenue asresulting ~~we have seen an increase in~~from customer ~~demand~~migrations ~~for~~to our subscription licenses and our cloud model, which currently remains a small portion of the Company’s total revenue. We believe this trend could accelerate and we have begun to shift our marketing efforts to a subscription and cloud model.

1918

Table of Contents

Product revenue increased by approximately $~~0.3 million~~142 thousand, or 144.16%, from $23.21 million for the three months ended ~~September~~March 3031, ~~2023~~2024 to $23.52 million for the three months ended ~~September~~March 3031, ~~2024~~2025. The overall increase is due primarily to higher software license revenue, including the impact of our transition to a subscription and cloud model.

Services revenue, which is primarily sold to direct customers, decreased by approximately $~~0.1 million~~ 222 thousand or 812.90%, from $1.9 million for the three months ended ~~September~~March 3031, ~~2023~~2024 to $1.76 million for the three months ended ~~September~~March 3031, ~~2024~~2025. The decrease is partially due to customers previously on service contracts being migrated to subscription licenses and our cloud model.

Nine months ended September 30, 2024 and 2023:

	Nine Months Ended September 30,
	2024		2023		$ Change			% Change
Product revenue	$	8,864	$	6,961	$	1,903			27.3	%
Services		5,336		5,617		(281	)		(5.0	)%
Total revenue		14,200		12,578		1,622			12.9	%

Total revenue increased by approximately $1.6 million or 12.9%, from $12.6 million for the nine months ended September 30, 2023 to $14.2 million for the nine months ended September 30, 2024. The increase is due primarily to higher product revenue as we have seen an increase in customer demand for subscription licenses and our cloud model, which currently remains a small portion of the Company's total revenue. We believe this trend could accelerate and we have begun shifting our marketing efforts to a subscription and cloud model.

Product revenue increased by approximately $1.9 million, or 27.3%, from $7.0 million for the nine months ended September 30, 2023 to $8.9 million for the nine months ended September 30, 2024. The overall increase is due primarily to higher software license revenue, including the impact of our transition to a subscription and cloud model.

Services revenue, which is primarily sold to direct customers, decreased by approximately $0.3 million or 5.0% from $5.6 million for the nine months ended September 30, 2023 to $5.3 million for the nine months ended September 30, 2024. The decrease is partially due to customers previously on service contracts being migrated to subscription licenses and our cloud model.

Cost of Revenue and Gross Profit:

Three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024:

Cost of Revenue and Gross Profit:	Three Months Ended ~~September~~March 3031,
	2024		2023		$ Change			% Change
	2025		2024		$ Change			% Change
Products	$	~~197~~213	$	~~263~~480	$	(66267	)		(2555.16	)%
Services		~~273~~358		~~267~~321		637			211.25	%
Amortization and depreciation		~~113~~114		2240		9174			~~413~~185.60	%
Total cost of revenue	$	~~583~~685	$	~~552~~841	$	31(156	)		5(18.65	)%

	Three Months Ended September 30,
	Three Months Ended March 31,
	2024		2023		$ Change		% Change
	2025		2024		$ Change		% Change
Gross profit	$	34,~~634~~189	$	34,~~521~~113	$	~~113~~76		31.28	%

Gross profit for the three months ended ~~September~~March 3031, ~~2024~~2025 was approximately $34.62 million, or 86% of revenue, as compared to $34.51 million, ~~also 86~~83% of revenue, for the three months ended ~~September~~March 3031, ~~2023~~2024.

Cost of products decreased by approximately 2555.16%, from $~~0.3~~480 ~~million~~thousand for the three months ended ~~September~~March 3031, ~~2023~~2024 to $~~0.2~~213 thousand ~~million~~ for the three months ended ~~September~~March 3031, ~~2024~~2025. The decrease is due primarily to the mix of products, including hardware, sold over the comparable periods.

Cost of services was approximately flat for the three months ended ~~September~~March 3031, ~~2023~~2024 and ~~September~~March 3031, ~~2024 consistent with services revenue~~2025.

Amortization and depreciation, which relates primarily to intangible assets and depreciation of property and equipment, increased by approximately $91 74 thousand, or ~~413~~185.60%, from $22 40 thousand for the three months ended ~~September~~March 3031, ~~2023~~2024 to $~~113~~ 114 thousand for the three months ended ~~September~~March 3031, ~~2024~~2025. The increase results from the expense associated with the Company's ProFound Cloud solution which went live in March 2024.

~~Nine months ended September 30, 2024 and 2023:~~ 19

Cost of Revenue and Gross Profit:	Nine Months Ended September 30,
	2024		2023		$ Change			% Change
Products	$	1,047	$	1,099	$	(52	)		(4.7	)%
Services		922		951		(29	)		(3.0	)%
Amortization and depreciation		266		65		201			309.2	%
Total cost of revenue	$	2,235	$	2,115	$	120			5.7	%

	Nine Months Ended September 30,
	2024		2023		$ Change		% Change
Gross profit	$	11,965	$	10,463	$	1,502		14.4	%

Gross profit for the nine months ended September 30, 2024 was approximately $12.0 million, or 84% of revenue, as compared to $10.5 million, or 83% of revenue, for the nine months ended September 30, 2023.

Cost of products decreased by approximately $52 thousand, or 4.7%, from $1.1 million for the nine months ended September 30, 2023 to $1.0 million for the nine months ended September 30, 2024. Cost of products did not increase proportionately with product revenue to the mix of products, including hardware, sold over the comparable periods.

Cost of services decreased by approximately $29 thousand, or 3.0%, from $951 thousand for the nine months ended September 30, 2023 to $922 thousand for the nine months ended September 30, 2024. Cost of services as a percentage of service and supplies revenue was approximately 16.9% for the nine months ended September 30, 2023 as compared to 17.3% for the nine months ended September 30, 2024.

Amortization and depreciation, which relates primarily to intangible assets and depreciation of property and equipment, increased by approximately $201 thousand, or 309.2%, from $65 thousand for the nine months ended September 30, 2023 to $266 thousand for the nine months ended September 30, 2024. The increase results from the expense associated with the Company's ProFound Cloud solution which went live in March 2024.

Table of Contents

Operating Expenses:

Three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024:

	Three Months Ended September 30,
	Three Months Ended March 31,
	2024		2023		$ Change			% Change
	2025		2024		$ Change			% Change
Operating expenses:
Engineering and product development	$	1,~~926~~476	$	1,~~147~~507	$	~~779~~(31	)		67(2.91	)%
Marketing and sales		1,~~861~~533		12,~~495~~082		~~366~~(549	)		24(26.54	)%
General and administrative		12,~~806~~253		21,~~042~~902		~~(236~~351	)		~~(11~~18.65	)%
Amortization and depreciation		56		5663		—(7	)		0(11.01	)%
Total operating expenses	$	5,~~649~~318	$	45,~~740~~554	$	~~909~~(236	)		19(4.2	)%

Operating expenses ~~increased~~decreased by approximately $~~0.9~~236 ~~million~~thousand, or 194.2%, from $45.76 million in the three months ended ~~September~~March 3031, ~~2023~~2024 ~~compared~~ to $5.63 million in the three months ended ~~September~~March 3031, ~~2024~~2025.

Engineering and Product Development. Engineering and product development costs ~~increased~~were by approximately ~~$0.8 million,~~flat orfor ~~67.9%, from $1.1 million in~~ the three months ended ~~September~~March 3031, ~~2023~~2024 compared to ~~$1.9 million in~~ the three months ended ~~September~~March 3031, ~~2024~~2025. ~~The increase was related primarily to higher personnel costs across the periods.~~

Marketing and Sales. Marketing and sales expenses ~~increased~~decreased by approximately $~~0.4~~549 ~~million~~thousand, or 24264.54%, from $12.51 million in the three months ended ~~September~~March 3031, ~~2023~~2024 to $1.95 million in the three months ended ~~September~~March 3031, ~~2024~~2025. The ~~increase~~decrease was primarily related to ~~higher~~lower ~~payroll~~personnel costs ~~from~~outside ~~increased~~the ~~headcount and commissions~~US.

General and Administrative. General and administrative expenses ~~decreased~~increased by approximately $~~0.2~~351 ~~million~~thousand, or 1118.65%, from $21.09 million in the three months ended ~~September~~March 3031, ~~2023~~2024 to $12.8 3 million in the three months ended ~~September~~March 3031, ~~2024~~2025. The ~~decrease~~increase was primarily related to ~~management's~~expenses ~~cost~~associated ~~saving~~with ~~actions~~the ~~implemented~~announced inacquisition ~~early~~by ~~2023~~RadNet ~~and~~subsequent ~~is primarily related~~ to ~~payroll~~March ~~costs~~31, 2025.

Amortization and Depreciation. Amortization and depreciation, which relates primarily to intangible assets and depreciation of property and equipment, was approximately flat when comparing the three months ended ~~September~~March 3031, ~~2023~~2024 to the three months ended ~~September~~March 3031, ~~2024~~2025.

~~Nine months ended September 30, 2024 and 2023:~~ 20

	Nine Months Ended September 30,
	2024		2023		$ Change			% Change
Operating expenses:
Engineering and product development	$	5,197	$	3,909	$	1,288			32.9	%
Marketing and sales		6,210		5,690		520			9.1	%
General and administrative		5,779		7,650		(1,871	)		(24.5	)%
Amortization and depreciation		182		186		(4	)		(2.2	)%
Total operating expenses	$	17,368	$	17,435	$	(67	)		(0.4	)%

Operating expenses were approximately flat at $17.4 million for each of the nine months ended September 30, 2023 and the nine months ended September 30, 2024.

Engineering and Product Development. Engineering and product development costs increased by approximately $1.3 million, or 32.9%, from $3.9 million in the nine months ended September 30, 2023 to $5.2 million the nine months ended September 30, 2024. The increase was related primarily to higher personnel costs across the periods.

Marketing and Sales. Marketing and sales expenses increased by approximately $0.5 million, or 9.1%, from $5.7 million in the nine months ended September 30, 2023 to $6.2 million in the nine months ended September 30, 2024. The increase was primarily related to higher commissions on increased sales revenue across the periods.

General and Administrative. General and administrative expenses decreased by approximately $1.9 million, or 24.5%, from $7.7 million in the nine months ended September 30, 2023 to $5.8 million in the nine months ended September 30, 2024. The decrease was primarily related to management's cost saving actions implemented in early 2023 and is primarily related to payroll costs. Offsetting the decrease is a one-time impairment charge of approximately $0.2 million related to an operating lease asset of the Company's corporate headquarters.

Amortization and Depreciation. Amortization and depreciation, which relates primarily to intangible assets and depreciation of property and equipment, was approximately flat when comparing the nine months ended September 30, 2023 to the nine months ended September 30, 2024.

Table of Contents

Other Income and Expense:

Three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024:

Other Income and Expense:
	Three Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			$ Change			% Change
	2025			2024			$ Change			% Change
Interest income	$	~~210~~172		$	~~195~~203		$	15(31	)		7(15.73	)%
Other income (expense), net		10			(9	)		19			(211.1	)%
Other income, net		124			20			104			520.0	%
	$	~~220~~296		$	~~186~~223		$	3473			1832.37	%
Tax expense	$	(6—	)	$	(4	)	$	(24	)		(100.0	)%
Loss from discontinued operations	$	—		$	(337	)	$	337			(100.0	)%

Interest income. Interest income ~~increased~~decreased by approximately $15 31 thousand, or 715.73%, from $~~195~~ 203 thousand for the three months ended ~~September~~March 3031, ~~2023~~2024 to $~~210~~ 172 thousand for the three months ended ~~September~~March 3031, ~~2024~~2025. The ~~increase~~decrease results from ~~higher~~ lower invested balances at ~~similar~~ lower interest rates in ~~2024~~2025 compared to ~~2023~~2024.

Other income ~~(expense)~~, net. Other expense was $~~9 thousand~~20 ~~during~~thousand for the three months ended ~~September~~March 3031, ~~2023~~2024 compared to income of $10 124 thousand during the three months ended ~~September~~March 3031, ~~2024~~2025. ~~The increase was driven primarily by foreign currency transactional gains.~~

Tax expense. Income tax expense was ~~approximately~~ $6zero ~~thousand~~ and approximately $4 ~~thousand~~ thousand for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~September~~March 3031, ~~2023~~2024, respectively. The effective tax rates for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 were less than 1% in each period. The difference between the Company’s effective tax rates in ~~2024~~2025 and ~~2023~~2024 compared to the U.S. statutory tax rate of 21% is primarily due to changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets. The Company has valuation allowances against ~~substantially~~ all of its net operating loss carryforwards and tax credit carryforwards.

~~Discontinued operations, net of tax. This line represents the net income of the Company's former Xoft business line which was sold in October, 2023.~~ 21

Nine months ended September 30, 2024 and 2023:

Other Income and Expense:
	Nine Months Ended September 30,
	2024			2023			$ Change			% Change
Interest expense	$	—		$	(2	)	$	2			(100.0	)%
Interest income		619			528			91			17.2	%
Other income (expense)		41			(8	)		49			100.0	%
	$	660		$	518		$	142			27.4	%
Tax expense	$	(19	)	$	(13	)	$	(6	)		46.2	%
Loss from discontinued operations	$	—		$	(435	)	$	435			(100.0	)%

Interest income. Interest income increased by approximately $91 thousand, or 17.2%, from $528 thousand for the nine months ended September 30, 2023 to $619 thousand for the nine months ended September 30, 2024. The increase results from higher invested balances at similar interest rates in 2024 compared to 2023.

Other income, net. Other expense was $8 thousand during the nine months ended September 30, 2023 compared to income of $41 thousand during the nine months ended September 30, 2024. Included in the nine months ended September 30, 2024 were amounts related to services rendered in connection with the transition services agreement related to the October 2023 sale of the former Xoft business.

Tax expense. Income tax expense was approximately $19 thousand and $13 thousand for the nine months ended September 30, 2024 and September 30, 2023, respectively. The effective tax rates for the nine months ended September 30, 2024 and 2023 were less than 1% in each period. The difference between the Company’s effective tax rates in 2024 and 2023 compared to the U.S. statutory tax rate of 21% is primarily due to changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets. The Company has valuation allowances against substantially all of its net operating loss carryforwards and tax credit carryforwards.

Discontinued operations, net of tax. This line represents the net loss of the Company's former Xoft business line which was sold in October, 2023.

Table of Contents

Liquidity and Capital Resources (in thousands, except as noted)

The Company believes that its cash and cash equivalents balance of $1820.80 million as of ~~September~~March 3031, ~~2024~~2025, and projected cash balances are sufficient to sustain operations through at least the next 12 months from the issuance of this Form 10-Q. 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. We will continue to closely monitor liquidity and the capital and credit markets.

The Company had net working capital of $1920.64 million as of ~~September~~March 3031, ~~2024~~2025. The ratio of current assets to current liabilities at ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024 was 43.0266 and 43.4050, respectively.

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023
	2025			2024
Net cash used for operating activities	$	(2,614	)	$	(3,513	)
Net cash provided by (used for) operating activities	$	60		$	(1,180	)
Net cash used for investing activities		(263	)		(675	)
Net cash provided by (used for) investing activities		431			(206	)
Net cash provided by financing activities		—			1,921
Net cashed provided by financing activities		2,335			—
Decrease in cash and equivalents	$	(2,877	)	$	(2,267	)
Increase (decrease) in cash and equivalents	$	2,826		$	(1,386	)

Net cash ~~used~~provided ~~for~~ by operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 was $~~2.6~~60 ~~million~~thousand, compared to net cash used for operating activities of $31.52 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024. The improvement in net cash used for operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 resulted primarily from the Company’s focus on cost saving initiatives as well as timing associated with working capital accounts. We expect that net cash used for or provided by operating activities to fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, the timing of when we recognize revenue, collections of accounts receivable, inventory expansion due to supply chain risk, and the timing of other payments. Included in these figures are the cash flows from our discontinued Xoft business. For the nine months ended September 30, 2023, the impact on cash flows from operating activities related to the Xoft business was cash inflows of approximately $0.1 million when excluding previously allocated marketing expenses.

Net cash used ~~for~~provided by investing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 was $~~263~~ 431 thousand, compared to ~~$675~~net cash used for investing activities of $206 thousand for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024. Net cash provided by investing activities for the three months ended March 31, 2025 was primarily driven by the final cash proceeds related to the sale of the Company's former Xoft business which was sold in 2023. The net cash used for investing activities for the ~~nine~~three months ended ~~September~~March 3031, 2024 was primarily related to the completion of the ProFound Cloud software project.

Net cash provided by financing activities for the ~~nine~~ three months ended ~~September~~March 3031, ~~2023~~2025 was $12.9 3 million related to sales of our common stock ~~as well as stock option exercises by employees~~.

During the second quarter of 2024, we determined that, through an administrative error, a marketing certificate in the European Union (the “EU”) for one of our non-breast products was not renewed. Sales of such product in the EU have constituted an immaterial amount of our total sales over the relevant five-year period. In addition, we do not expect future sales from this product to materially contribute to our total revenue. Working with relevant authorities, we resolved the administrative error during the third quarter of 2024. Sales of the non-breast product have commenced and we do not anticipate disruption to our business.

Recent Accounting Pronouncements

See Note 1 to the Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

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 ~~September~~March 3031, ~~2024~~2025, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective at a reasonable level of assurance.

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 cost-effective control system, misstatements due to error or fraud may occur and not be detected. The Company conducts periodic evaluations to enhance, where necessary, its controls and procedures.

There were no changes to the Company's internal controls over financial reporting during the quarter ended ~~September~~March 3031, ~~2024~~2025 that have materially affected or which are reasonably likely to materially affect internal control over financial reporting.

2322

Table of Contents

PART II OTHER

INFORMATION

Item 1A. Risk Factors:

Our business is subject to various risks, including those described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2023~~2024, filed with the SEC on March 2931, ~~2024~~ 2025 (our "Annual Report"), which we strongly encourage you to review. ~~There~~Other than as set forth below, there have been no material changes to the risk factors described in the Annual Report.

The Exchange Ratio is fixed and will not be adjusted in the event of any change in either RadNet’s or the Company’s stock price. Therefore, the Company’s stockholders cannot be sure of the value of the Merger Consideration they will receive.

If the Merger is completed, each share common stock outstanding immediately prior to the Merger (except for the excluded shares) will automatically be converted into the right to receive 0.0677 shares of RadNet Common Stock, with any cash proceeds from the sale of fractional shares. This Exchange Ratio was fixed in the Merger Agreement and will not be adjusted for changes in the market price of either RadNet Common Stock or the Company’s common stock. Any change in the market price of RadNet Common Stock prior to completion of the Merger could affect the value of the consideration that the Company’s stockholders will receive upon completion of the Merger.

It is impossible to accurately predict the market price of RadNet Common Stock at the completion of the Merger and, therefore, impossible to accurately predict the market value of the shares of RadNet Common Stock that the Company’s stockholders will receive in the Merger. The market price for RadNet Common Stock has fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate from the date of this report to the date of the special meeting of the Company’s stockholders (the “Special Meeting”), and the date the Merger is completed and thereafter. Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in RadNet’s and the Company’s respective businesses, operations and prospects, market assessments of the likelihood that the Merger will be completed, the timing of the Merger and regulatory considerations, the public’s response to press releases or other public announcements by RadNet, the Company or third parties, announcements relating to litigation and investor perceptions of the investment opportunity associated with shares of RadNet Common Stock and shares of the Company’s common stock relative to other investment alternatives. Many of these factors are beyond RadNet’s and the Company’s control and neither the Company nor RadNet are permitted to terminate the Merger Agreement solely due to a decline in the market price. As a result, the market value represented by the Exchange Ratio will also vary. Accordingly, at the time of the Special Meeting, the Company stockholders will not know or be able to determine the market value of the Merger Consideration they would be entitled to receive upon completion of the Merger. You are urged to obtain current market quotations for each of the RadNet Common Stock and the Company’s common stock traded on The Nasdaq Global Market and The Nasdaq Capital Market, respectively (trading symbols “RDNT” and “ICAD”, respectively).

The Company may have difficulty attracting motivating and retaining employees in light of the Merger.

Uncertainty about the effect of the Merger on the Company employees may impair the Company’s ability to attract, retain and motivate personnel prior to and following the Merger. Employee retention may be particularly challenging during the pendency of the Merger, as employees of the Company may experience uncertainty about their future roles. In addition, pursuant to certain change-in-control provisions set forth in employment-related agreements with the Company, each executive officer and certain other key employees of the Company are eligible to receive cash severance and continued health benefits and, under certain agreements, accelerated vesting of all unvested stock options and any other equity awards assumed by RadNet in the Merger, in each case, in the event the employee resigns for “good reason” (as such term is defined in the applicable agreement) within a certain period of time following the Merger. In general, such employees potentially could resign for “good reason” as a result of certain changes to their job titles and/or a material diminution in their position, authority, duties and/or responsibilities following the Merger if the Company does not remedy the “good reason” condition pursuant to a process set forth in their agreements. If employees of the Company depart, the integration of the Company may be more difficult and RadNet’s business following the Merger may be harmed. Furthermore, RadNet may have to incur significant costs in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the businesses of RadNet or the Company, and RadNet’s ability to realize the anticipated benefits of the Merger may be adversely affected. In addition, there could otherwise be disruptions to or distractions for the workforce and management associated with integrating employees into RadNet.

Completion of the Merger is subject to certain conditions and if these conditions are not satisfied, waived or fulfilled in a timely manner, the Merger may be delayed or not completed.

The obligation of each of RadNet, the Company and Merger Sub to complete the Merger is subject to the satisfaction (or, to the extent permitted by applicable law, waiver) of a number of conditions.

Many of the conditions to completion of the Merger are not within either the Company’s or RadNet’s control, and neither company can predict when, or if, these conditions will be satisfied. If any of these conditions are not satisfied or waived prior to the Outside Date, it is possible that the Merger Agreement may be terminated. Although the Company and RadNet have agreed in the Merger Agreement to cooperate with each other and use (and to cause their respective subsidiaries to use) their respective reasonable best efforts to consummate the transactions contemplated by the Merger Agreement and cause the conditions to the Merger to be satisfied as promptly as reasonably practicable, these and other conditions to the completion of the Merger may fail to be satisfied. In addition, satisfying the conditions to and completion of the Merger may take longer, and could cost more, than the Company and RadNet expect.

Furthermore, the requirements for obtaining the required clearances and approvals could delay the completion of the Merger for a significant period of time or prevent the Merger from occurring. Any delay in completing the Merger may adversely affect the cost savings and other benefits that the Company and RadNet expect to achieve if the Merger and the integration of the companies’ respective businesses are not completed within the expected time frame.

There can be no assurance that the conditions to the Closing of the Merger will be satisfied, waived or fulfilled in a timely fashion or that the Merger will be completed.

If the Merger were to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), the Company’s stockholders may be required to pay substantial U.S. federal income taxes.

The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and the Company and RadNet intend to report the Merger consistent with such qualification. However, the Closing is not conditioned upon the receipt of an opinion of counsel or a ruling from the IRS that the Merger will so qualify, and neither RadNet nor the Company intends to request an opinion of counsel or a ruling from the IRS regarding the U.S. federal income tax consequences of the Merger. Consequently, no assurance can be given that the Merger will so qualify, that the IRS will not challenge such qualification or that a court would not sustain such a challenge. If the Merger were to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, a U.S. holder of the Company’s common stock generally would recognize gain or loss for U.S. federal income tax purposes upon the exchange of the Company’s common stock for RadNet Common Stock in the Merger.

Please consult your tax advisors as to the specific tax consequences to you of the Merger, including the consequences if the Merger were to fail to qualify as a “reorganization.”

The Company’s business relationships may be subject to disruption due to uncertainty associated with the Merger.

Parties with which the Company does business may experience uncertainty associated with the Merger, including with respect to current or future business relationships with the Company. The Company’s business relationships may be subject to disruption as parties with which the Company does business may attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than the Company. The risk, and adverse effect, of such disruptions could be exacerbated by a delay in completion of the Merger or termination of the Merger Agreement.

The Company or RadNet may waive one or more of the closing conditions without re-soliciting stockholder approval.

The Company or RadNet may determine to waive, in whole or part, one or more of the conditions to Closing prior to being obligated to consummate the Merger. Any determination whether to waive any conditions to Closing, or to re-solicit stockholder approval or to amend or supplement the proxy statement/prospectus to be filed in connection with the Merger as a result of such a waiver, will be made by the Company or RadNet, as applicable, at the time of such waiver based on the facts and circumstances as they exist at that time.

Completion of the Merger may trigger change in control or other provisions in certain agreements to which the Company is a party.

The Company is a party to certain commercial agreements that give the counterparty certain rights following a “change in control,” including in some cases the right to terminate such agreements. Under some such agreements, the Merger may constitute a change in control and therefore the counterparty may exercise certain rights under the agreement upon the Closing of the Merger. Any such counterparty may request modifications of its respective agreements as a condition to granting a waiver or consent under its agreement. There is no assurance that such counterparties will not exercise their rights under the agreements, including termination rights where available and/or requiring payment of substantial financial penalties. Under the terms of the Merger Agreement, the Company has agreed to use commercially reasonable efforts to obtain all third-party consents or approvals, and provide all notices to third-parties, in each case to the extent reasonably requested by RadNet in writing and required in connection with the Merger.

The Company’s directors and executive officers have interests in the Merger that may be different from, or in addition to, your interests as a stockholder of the Company or as a stockholder of RadNet.

In considering the recommendation of the Company’s Board of Directors (the “Board”) to vote for the adoption of the Merger Agreement, the Company’s stockholders should be aware that the directors and executive officers of the Company have interests in the Merger that may be different from, or in addition to, the interests of the Company’s stockholders generally. In connection with the Merger, shares of the Company’s common stock owned by the directors and executive officers of the Company will be converted into the right to receive a number of shares of RadNet Common Stock, and RadNet will assume Eligible iCAD Options (as defined in the Merger Agreement) held by each of the directors and executive officers of the Company at the time of the Merger. In addition, all unvested outstanding Eligible iCAD Options held by each member of the Board immediately prior to the Effective Time will accelerate and automatically vest and become exercisable as of immediately prior to the Effective Time, and certain cash bonuses will become payable to the Company’s Chief Executive Officer and Chief Financial Officer upon closing of the Merger. Moreover, pursuant to certain change-in-control provisions set forth in an employment-related agreement with the Company, each executive officer of the Company is eligible to receive cash severance, continued health benefits and accelerated vesting of all unvested stock options and any other equity awards assumed by RadNet in the Merger in the event such executive officer’s employment is terminated without “cause” by the Company or the executive officer resigns for “good reason” (as such terms are defined in the applicable agreement) within a certain period of time following the Merger. The Merger Agreement also generally provides that, no later than 10 business days prior to the Effective Time, the Board may approve an amendment to the exercise provisions applicable to certain Company options, including certain Company options held by the directors and executive officers of the Company, such that, effective as of immediately prior to the Effective Time, the portion of all such Company options that is vested and exercisable will be exercisable for a period of the greater of (a) one year following the Closing Date and (b) the exercise period set forth in the applicable award agreement (after giving effect to any applicable acceleration provisions), subject to certain limitations and exceptions. The Board was aware of these interests and considered them, among other matters, in evaluating and negotiating the Merger Agreement and approving the Merger, and in making its recommendation that the Company stockholders vote to adopt the Merger Agreement.

The Merger Agreement limits the Company’s ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire the Company for greater consideration than what RadNet has agreed to pay pursuant to the Merger Agreement.

The Merger Agreement contains provisions that make it more difficult for the Company to be acquired by, or enter into certain alternative transactions with, a third party. The Merger Agreement contains certain provisions that restrict the Company’s ability to, among other things, solicit, directly or indirectly, solicit, initiate or knowingly encourage, or take any other action to knowingly facilitate, any inquiries relating to, the submission of, or the making of, any proposal the consummation of which would constitute an Alternative Transaction, or cooperate in any way with any person, with respect to any Alternative Transaction (as defined in the Merger Agreement) or amend or grant any waiver of any standstill or similar agreement. In addition, following receipt by the Company of any alternative transaction proposal that constitutes a Superior Offer, RadNet will have an opportunity to offer to modify the terms of the Merger Agreement before the Board may effect a change in the recommendation of the Merger. These provisions could discourage a potential third-party acquiror, strategic transaction partner or business combination partner that might have an interest in acquiring or combining with all or a significant portion of the Company or pursuing an alternative transaction from considering or proposing such a transaction.

If the Merger Agreement is terminated and either RadNet or the Company determines to seek another business combination transaction, RadNet or the Company may not be able to successfully negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger.

Failure to complete the Merger could negatively impact the stock price and the future business and financial results of the Company.

If the Merger is not completed for any reason, including as a result of the Company’s stockholders failing to adopt the Merger Agreement or any other condition not being satisfied or waived, the ongoing businesses of the Company may be adversely affected, and, without realizing any of the benefits of having completed the Merger, the Company would be subject to a number of risks, including the following:

●

the Company may experience negative reactions from the financial markets, including negative impacts on its stock price;

●

the Company may experience negative reactions from its customers, vendors and other business partners, regulators and employees;

●

the Company will be required to pay certain costs relating to the Merger, such as legal, accounting, financial advisor and printing fees, whether or not the Merger is completed;

●

the Merger Agreement places certain restrictions on the conduct of the Company’s businesses prior to completion of the Merger, and such restrictions, the waiver of which is subject to the written consent of RadNet, and subject to certain exceptions and qualifications, may prevent the Company from taking certain other specified actions or otherwise pursuing business opportunities during the pendency of the Merger that the Company would have made, taken or pursued if these restrictions were not in place;

●

matters relating to the Merger will require substantial commitments of time and resources by the Company management, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to the Company as an independent company;

●

in the event of a termination of the Merger Agreement under certain circumstances specified in the Merger Agreement, the Company may be required to pay a termination fee to RadNet of $1,000,000, plus up to $2,000,000 of all documented fees and expenses of RadNet incurred in connection with the negotiation and performance of the Merger Agreement and the transactions contemplated thereby; and

●

litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against the Company or RadNet preventing the performance of their respective obligations pursuant to the Merger Agreement.

There can be no assurance that the risks described above will not materialize. If the Merger is not completed, these risks may materialize and may materially and adversely affect the Company’s businesses, financial condition, financial results, ratings, stock prices and/or bond prices.

The shares of RadNet Common Stock to be received by the Company’s stockholders upon completion of the Merger will have different rights from shares of the Company’s common stock.

Upon completion of the Merger, the Company’s stockholders will no longer be stockholders of the Company, but will instead become stockholders of RadNet, and their rights as stockholders will be governed by the RadNet Certificate of Incorporation and the RadNet Bylaws. The terms of the RadNet Certificate of Incorporation and the RadNet Bylaws may be materially different than the terms of the Company certificate of incorporation and bylaws, each as respectively amended or restated through the date hereof, which currently govern the rights of the Company’s stockholders.

After the Merger, the Company’s stockholders, as a group, will have a significantly lower ownership and voting interest in RadNet than they currently have in the Company and will exercise less influence over management.

Under the terms of the agreement, the Company’s stockholders will receive 0.0677 shares of RadNet Common Stock for each share of the Company’s common stock they hold at the Effective Time. Based on (i) the Exchange Ratio of 0.0677 and (ii) the number of shares of the Company’s common stock and Eligible iCAD Options outstanding as of the record date for the Special Meeting, RadNet will issue a certain number of shares of RadNet Common Stock pursuant to the Merger Agreement, provided that if additional Company equity awards are granted to certain Company employees as permitted under the Merger Agreement, RadNet may be required to reserve additional shares of RadNet Common Stock for issuance. RadNet has a significantly larger market capitalization than the Company. Based upon the foregoing and the estimated number of shares of the Company’s common stock that are expected to be outstanding immediately prior to the consummation of the Merger, former Company stockholders, as a group, will have materially less influence over the management and policies of RadNet than they currently have over the management and policies of the Company.

The Company’s stockholders are not entitled to appraisal rights in connection with the Merger.

Appraisal rights are statutory rights that enable stockholders to dissent from certain extraordinary transactions, such as certain mergers, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the applicable transaction. Under Delaware law, holders of shares of the Company’s common stock will not have rights to an appraisal of the fair value of their shares in connection with the Merger.

Potential litigation against the Company could result in substantial costs, an injunction preventing the completion of the Merger and/or a judgment resulting in the payment of damages.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if such lawsuits are unsuccessful, defending against them can result in substantial costs.

Stockholders of the Company may file lawsuits against RadNet, the Company and/or the directors and officers of either company in connection with the Merger. These lawsuits could prevent or delay the completion of the Merger and result in significant costs to the Company and/or RadNet, including any costs associated with the indemnification of directors and officers. There can be no assurance that any of the defendants will be successful in the outcome of any potential lawsuits.

The Company will incur significant transaction and Merger-related costs in connection with the Merger.

The Company expect to incur a number of non-recurring costs associated with the Merger and combining the operations of the two companies. The significant, non-recurring costs associated with the Merger include, among others, fees and expenses of financial, legal, accounting and other advisors and representatives, certain employment-related costs relating to employees of the Company and filing fees and printing and mailing costs for the proxy statement/prospectus. Some of these costs have already been incurred or may be incurred regardless of whether the Merger is completed, including a portion of the fees and expenses of financial advisors and other advisors and representatives and filing fees for the proxy statement/prospectus.

The Company may not have discovered certain liabilities or other matters related to RadNet and RadNet may not have discovered certain liabilities or other matters related to the Company, which may adversely affect the future financial performance of RadNet following the Merger.

In the course of the due diligence review that each of RadNet and the Company conducted prior to the execution of the Merger Agreement, RadNet and the Company may not have discovered, or may have been unable to properly quantify, certain liabilities of the other party or other factors that may have an adverse effect on the business, results of operations, financial condition and cash flows of RadNet following the Merger or on the market price of RadNet Common Stock issued pursuant to the Merger Agreement after the consummation of the Merger, and neither RadNet stockholders nor the Company stockholders will be indemnified or otherwise compensated for any of these liabilities or other adverse effects resulting from other factors.

Former stockholders of the Company may be required to surrender necessary documents, duly executed and on a timely basis, to the exchange agent in order to receive their shares of RadNet Common Stock or their cash in lieu of fractional shares, if any, and if such Company stockholders fail to surrender all necessary documents, duly executed and on a timely basis, to the exchange agent, such former Company stockholders may experience a delay in receiving RadNet Common Stock or their cash in lieu of fractional shares, if any.

Former Company stockholders that hold their common stock as certificates or book entry shares but not through The Depository Trust Company, are required to surrender necessary documents, duly executed and on a timely basis, to the exchange agent in order to receive their RadNet Common Stock, or their cash in lieu of fractional shares, if any. Former Company stockholders who are required to surrender all necessary documents, duly executed and on a timely basis, to the exchange agent and who fail to do so may experience a delay prior to receiving their RadNet Common Stock, or their cash in lieu of fractional shares, if any. Until the distribution of RadNet Common Stock to the individual stockholder has been completed, the relevant holder of RadNet Common Stock will not be able to sell its RadNet Common Stock. Consequently, in case the market price for RadNet Common Stock should decrease during that period, the relevant stockholder would not be able to stop any losses by selling RadNet Common Stock. Similarly, the relevant former Company stockholder who is entitled to receive cash in lieu of fractional shares will not be able to invest the cash until the distribution to the relevant stockholder has been completed, and they will not receive any interest payments for this time period.

Item 5. Other Information:

During the three months ended ~~September~~March 3031, ~~2024~~2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).

2423

Table of Contents

Item 6. Exhibits

Exhibit No.		Description
2.1†		Agreement and Plan of Merger, dated as of April 15, 2025, by and among RadNet, Inc., iCAD, Inc., and Trio Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 15, 2025).
10.1		Form of Voting and Support Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 15, 2025).
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 Inline XBRL (eXtensible Business Reporting Language); (i) Condensed Consolidated Balance Sheets as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, (ii) Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, (iii) Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 and (v) Notes to Condensed Consolidated Financial Statements.
104*		Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

* Filed herewith

** Furnished herewith

25 † Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such schedules and exhibits, or any section thereof, to the SEC upon its request.

Table of Contents

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: November 13, 2024	By:	/s/ Dana Brown
Date: May 13, 2025	By:	/s/ Dana Brown
	Name: Title:	Dana Brown Chief Executive Officer (Principal Executive Officer)
Date: November 13, 2024	By:	/s/ Eric Lonnqvist
Date: May 13, 2025	By:	/s/ Eric Lonnqvist
	Name: Title:	Eric Lonnqvist Chief Financial Officer (Principal Financial Officer)

2625

Filing Compare · ICAD INC