iCAD(ICAD) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenue for Q3 2024 was $4,217,000, a 3.5% increase from$ 4,073,000 in Q3 2023[8] - Product revenue increased to $2,508,000 in Q3 2024, up 14.1% from$ 2,198,000 in Q3 2023[8] - Gross profit for the nine months ended September 30, 2024, was $11,965,000, compared to$ 10,463,000 for the same period in 2023, reflecting a 14.4% increase[8] - The net loss for Q3 2024 was $1,801,000, compared to a net loss of$ 1,374,000 in Q3 2023[8] - For the nine months ended September 30, 2024, the net loss was $4,762,000 compared to a net loss of$ 6,902,000 for the same period in 2023, representing a 30.9% improvement[13] - Total revenue for the nine months ended September 30, 2024, increased by approximately $1.6 million or 12.9% to$ 14.2 million compared to $12.6 million for the same period in 2023[108] - Product revenue for the nine months ended September 30, 2024, increased by approximately$ 1.9 million or 27.3% to $8.9 million, attributed to higher demand for subscription licenses[108] Operating Expenses - Operating expenses rose to$ 5,649,000 in Q3 2024, compared to $4,740,000 in Q3 2023, marking a 19.2% increase[8] - Operating expenses for the nine months ended September 30, 2024 were approximately flat at$ 17.4 million compared to the same period in 2023, with a slight decrease of $67 thousand or 0.4%[123] - Engineering and product development costs increased by approximately$ 0.8 million or 67.9% to $1.9 million for the three months ended September 30, 2024, primarily due to higher personnel costs[120] - Marketing and sales expenses rose by approximately$ 0.5 million, or 9.1%, from $5.7 million in the nine months ended September 30, 2023 to$ 6.2 million in 2024, driven by higher commissions on increased sales revenue[125] - 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 $5.8 million in 2024, mainly due to cost-saving measures[126] Cash Flow and Liquidity - Cash and cash equivalents decreased to$ 18,793,000 as of September 30, 2024, down from $21,670,000 at the end of 2023[6] - The company had cash on hand of$ 18.8 million, which is deemed sufficient to sustain operations through at least the next 12 months[96] - Net cash used for operating activities improved to $2.6 million for the nine months ended September 30, 2024, compared to$ 3.5 million in the same period of 2023, due to cost-saving initiatives[139] - Net cash used for investing activities decreased to $263 thousand in the nine months ended September 30, 2024, from$ 675 thousand in 2023, primarily related to the completion of the ProFound Cloud software project[140] Assets and Liabilities - Total assets decreased to $37,107,000 as of September 30, 2024, from$ 41,418,000 at the end of 2023[6] - Total liabilities decreased to $7,734,000 as of September 30, 2024, down from$ 8,001,000 at the end of 2023[6] - Stockholders' equity decreased to $29,373,000 as of September 30, 2024, compared to$ 33,417,000 at the end of 2023[6] - The company reported total assets measured at fair value of $16.083 million as of September 30, 2024, all classified as Level 1 measurements[36] Business Operations and Strategy - The company completed the sale of its Xoft business line on October 23, 2023, and now operates solely in the Cancer Detection segment[16] - Approximately 16% of the company's total revenue for the nine months ended September 30, 2024, was derived from customers located outside the United States, compared to 14% in the same period of 2023[22] - The Company provided migration and transition services under a transition services agreement for five months following the sale of the Xoft business[29] - The Company completed the sale of its Xoft business line for total cash consideration of approximately$ 5.76 million, with $5 million received in November 2023 and$ 0.7 million held in escrow[27] Stock and Compensation - The Company has 3,092,336 stock options outstanding as of September 30, 2024, compared to 3,209,591 options as of September 30, 2023[52] - The 2024 Omnibus Equity Incentive Plan allows for the issuance of up to 2,000,000 shares of common stock, with no awards granted since its approval[73] - The total stock-based compensation expense was $214 thousand for the three months ended September 30, 2024, compared to$ 303 thousand for the same period in 2023, representing a decrease of approximately 29.4%[74] - Stock-based compensation for the nine months ended September 30, 2024, was $718,000, down from$ 1,114,000 in the same period of 2023, a decline of 35.5%[13] Tax and Regulatory - The effective tax rates for the three and nine months ended September 30, 2024, were less than 1%, consistent with the previous year, primarily due to changes in valuation allowances[79] - The effective date for ASU No. 2023-09, requiring detailed income tax disclosures, is for fiscal years beginning after December 15, 2024[24] - ASU No. 2024-03, requiring disaggregated disclosure of income statement expenses, will be effective for fiscal years beginning after December 15, 2026[25] - The Company is evaluating the disclosure requirements related to the new segment reporting standard effective for fiscal year 2024[23]