falseQ3ICAD INC0000749660--12-31YesNHYesRepresents a Level 3 unobservable input, as defined in Note 8 - Fair Value Measurements, below. 0000749660 2021-09-30 0000749660 2020-12-31 0000749660 2021-07-01 2021-09-30 0000749660 2020-07-01 2020-09-30 0000749660 2021-01-01 2021-09-30 0000749660 2020-01-01 2020-09-30 0000749660 2020-02-21 0000749660 2019-12-31 0000749660 2020-09-30 0000749660 2020-02-01 2020-02-29 0000749660 2020-03-30 2020-03-30 0000749660 2021-02-21 0000749660 2021-11-01 0000749660 2021-04-27 2021-04-27 0000749660 2021-04-13 2021-04-13 0000749660 2021-03-02 2021-03-02 0000749660 2021-03-02 0000749660 2021-04-01 2021-06-30 0000749660 2021-06-30 0000749660 2020-06-30 0000749660 us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember 2021-09-30 0000749660 us-gaap:MoneyMarketFundsMember 2021-09-30 0000749660 us-gaap:FairValueInputsLevel1Member 2021-09-30 0000749660 us-gaap:AccountingStandardsUpdate201602Member 2021-09-30 0000749660 icad:MakeWholeProvisionMember us-gaap:ConvertibleDebtMember 2021-09-30 0000749660 us-gaap:ConvertibleDebtMember 2021-09-30 0000749660 us-gaap:ShortTermContractWithCustomerMember 2021-09-30 0000749660 us-gaap:LongTermContractWithCustomerMember 2021-09-30 0000749660 icad:IcadWesternAllianceBankMember 2021-09-30 0000749660 icad:IcadWesternAllianceBankMember icad:TerminationLoansMember 2021-09-30 0000749660 icad:SiliconValleyBankMember 2021-09-30 0000749660 icad:IcadWesternAllianceBankMember icad:UnamortizedDebtIssuanceExpenseMember 2021-09-30 0000749660 icad:TwoZeroOneNineEmployeeStockPurchasePlanMember 2021-09-30 0000749660 icad:ConsolidatedReportingUnitMember 2021-09-30 0000749660 icad:DetectionMember 2021-09-30 0000749660 icad:TherapyMember 2021-09-30 0000749660 icad:TwoThousandAndTwentyFourMember 2021-09-30 0000749660 icad:TwoThousandAndTwentyFiveMember 2021-09-30 0000749660 icad:TwoThousandAndTwentySixMember 2021-09-30 0000749660 icad:TwoThousandAndTwentyThreeMember 2021-09-30 0000749660 icad:TwoThousandAndTwentyOneMember 2021-09-30 0000749660 icad:TwoThousandAndTwentyTwoMember 2021-09-30 0000749660 us-gaap:EmployeeStockOptionMember 2021-07-01 2021-09-30 0000749660 us-gaap:CostOfSalesMember 2021-07-01 2021-09-30 0000749660 us-gaap:ResearchAndDevelopmentExpenseMember 2021-07-01 2021-09-30 0000749660 us-gaap:SellingAndMarketingExpenseMember 2021-07-01 2021-09-30 0000749660 us-gaap:GeneralAndAdministrativeExpenseMember 2021-07-01 2021-09-30 0000749660 icad:BlackScholesOptionPricingModelMember 2021-07-01 2021-09-30 0000749660 us-gaap:RestrictedStockMember 2021-07-01 2021-09-30 0000749660 us-gaap:AccountingStandardsUpdate201602Member 2021-07-01 2021-09-30 0000749660 us-gaap:ProductMember 2021-07-01 2021-09-30 0000749660 us-gaap:ServiceMember 2021-07-01 2021-09-30 0000749660 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0000749660 us-gaap:CommonStockMember 2021-07-01 2021-09-30 0000749660 us-gaap:TransferredAtPointInTimeMember 2021-07-01 2021-09-30 0000749660 us-gaap:TransferredOverTimeMember icad:DetectionMember 2021-07-01 2021-09-30 0000749660 us-gaap:TransferredOverTimeMember icad:TherapyMember 2021-07-01 2021-09-30 0000749660 us-gaap:TransferredOverTimeMember 2021-07-01 2021-09-30 0000749660 icad:DetectionMember 2021-07-01 2021-09-30 0000749660 icad:TherapyMember 2021-07-01 2021-09-30 0000749660 us-gaap:SalesChannelDirectlyToConsumerMember icad:DetectionMember 2021-07-01 2021-09-30 0000749660 us-gaap:SalesChannelDirectlyToConsumerMember icad:TherapyMember 2021-07-01 2021-09-30 0000749660 us-gaap:SalesChannelDirectlyToConsumerMember 2021-07-01 2021-09-30 0000749660 icad:OemPartnersMember icad:DetectionMember 2021-07-01 2021-09-30 0000749660 icad:OemPartnersMember 2021-07-01 2021-09-30 0000749660 icad:ChannelPartnersMember icad:TherapyMember 2021-07-01 2021-09-30 0000749660 icad:ChannelPartnersMember 2021-07-01 2021-09-30 0000749660 us-gaap:TransferredAtPointInTimeMember icad:TherapyMember 2021-07-01 2021-09-30 0000749660 us-gaap:TransferredAtPointInTimeMember icad:DetectionMember 2021-07-01 2021-09-30 0000749660 icad:ProfessionalServicesMember 2021-07-01 2021-09-30 0000749660 icad:ProfessionalServicesMember icad:TherapyMember 2021-07-01 2021-09-30 0000749660 icad:SupplyAgreementsMember 2021-07-01 2021-09-30 0000749660 icad:SupplyAgreementsMember icad:TherapyMember 2021-07-01 2021-09-30 0000749660 icad:ServiceLineContractsMember 2021-07-01 2021-09-30 0000749660 icad:ServiceLineContractsMember icad:TherapyMember 2021-07-01 2021-09-30 0000749660 icad:ServiceLineContractsMember icad:DetectionMember 2021-07-01 2021-09-30 0000749660 icad:ProductsMember 2021-07-01 2021-09-30 0000749660 icad:ProductsMember icad:TherapyMember 2021-07-01 2021-09-30 0000749660 icad:ProductsMember icad:DetectionMember 2021-07-01 2021-09-30 0000749660 us-gaap:EmployeeStockOptionMember srt:MinimumMember 2021-07-01 2021-09-30 0000749660 us-gaap:EmployeeStockOptionMember srt:MaximumMember 2021-07-01 2021-09-30 0000749660 icad:TherapyMember us-gaap:ServiceMember 2021-07-01 2021-09-30 0000749660 icad:DetectionMember us-gaap:ProductMember 2021-07-01 2021-09-30 0000749660 icad:TwoZeroOneNineEmployeeStockPurchasePlanMember 2021-07-01 2021-09-30 0000749660 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0000749660 us-gaap:EmployeeStockOptionMember 2020-07-01 2020-09-30 0000749660 us-gaap:CostOfSalesMember 2020-07-01 2020-09-30 0000749660 us-gaap:ResearchAndDevelopmentExpenseMember 2020-07-01 2020-09-30 0000749660 us-gaap:SellingAndMarketingExpenseMember 2020-07-01 2020-09-30 0000749660 us-gaap:GeneralAndAdministrativeExpenseMember 2020-07-01 2020-09-30 0000749660 us-gaap:RestrictedStockMember 2020-07-01 2020-09-30 0000749660 us-gaap:ProductMember 2020-07-01 2020-09-30 0000749660 us-gaap:ServiceMember 2020-07-01 2020-09-30 0000749660 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0000749660 icad:ProductsMember icad:DetectionMember 2020-07-01 2020-09-30 0000749660 icad:ProductsMember icad:TherapyMember 2020-07-01 2020-09-30 0000749660 icad:ProductsMember 2020-07-01 2020-09-30 0000749660 icad:ServiceLineContractsMember icad:DetectionMember 2020-07-01 2020-09-30 0000749660 icad:ServiceLineContractsMember icad:TherapyMember 2020-07-01 2020-09-30 0000749660 icad:ServiceLineContractsMember 2020-07-01 2020-09-30 0000749660 icad:SupplyAgreementsMember icad:TherapyMember 2020-07-01 2020-09-30 0000749660 icad:SupplyAgreementsMember 2020-07-01 2020-09-30 0000749660 icad:OthersMember icad:DetectionMember 2020-07-01 2020-09-30 0000749660 icad:OthersMember 2020-07-01 2020-09-30 0000749660 icad:DetectionMember 2020-07-01 2020-09-30 0000749660 icad:TherapyMember 2020-07-01 2020-09-30 0000749660 us-gaap:TransferredAtPointInTimeMember icad:DetectionMember 2020-07-01 2020-09-30 0000749660 us-gaap:TransferredAtPointInTimeMember icad:TherapyMember 2020-07-01 2020-09-30 0000749660 us-gaap:TransferredAtPointInTimeMember 2020-07-01 2020-09-30 0000749660 us-gaap:TransferredOverTimeMember icad:DetectionMember 2020-07-01 2020-09-30 0000749660 us-gaap:TransferredOverTimeMember icad:TherapyMember 2020-07-01 2020-09-30 0000749660 us-gaap:TransferredOverTimeMember 2020-07-01 2020-09-30 0000749660 icad:DetectionMember us-gaap:SalesChannelDirectlyToConsumerMember 2020-07-01 2020-09-30 0000749660 icad:TherapyMember us-gaap:SalesChannelDirectlyToConsumerMember 2020-07-01 2020-09-30 0000749660 us-gaap:SalesChannelDirectlyToConsumerMember 2020-07-01 2020-09-30 0000749660 icad:DetectionMember icad:OemPartnersMember 2020-07-01 2020-09-30 0000749660 icad:OemPartnersMember 2020-07-01 2020-09-30 0000749660 icad:TherapyMember icad:ChannelPartnersMember 2020-07-01 2020-09-30 0000749660 icad:ChannelPartnersMember 2020-07-01 2020-09-30 0000749660 icad:TherapyMember icad:ProfessionalServicesMember 2020-07-01 2020-09-30 0000749660 icad:ProfessionalServicesMember 2020-07-01 2020-09-30 0000749660 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0000749660 us-gaap:EmployeeStockOptionMember srt:MinimumMember 2020-07-01 2020-09-30 0000749660 us-gaap:EmployeeStockOptionMember srt:MaximumMember 2020-07-01 2020-09-30 0000749660 icad:TherapyMember us-gaap:ServiceMember 2020-07-01 2020-09-30 0000749660 icad:DetectionMember us-gaap:ProductMember 2020-07-01 2020-09-30 0000749660 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0000749660 us-gaap:RestrictedStockMember 2021-01-01 2021-09-30 0000749660 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-09-30 0000749660 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-09-30 0000749660 us-gaap:CostOfSalesMember 2021-01-01 2021-09-30 0000749660 us-gaap:ResearchAndDevelopmentExpenseMember 2021-01-01 2021-09-30 0000749660 us-gaap:SellingAndMarketingExpenseMember 2021-01-01 2021-09-30 0000749660 us-gaap:GeneralAndAdministrativeExpenseMember 2021-01-01 2021-09-30 0000749660 icad:BlackScholesOptionPricingModelMember 2021-01-01 2021-09-30 0000749660 us-gaap:RestrictedStockMember 2021-01-01 2021-09-30 0000749660 us-gaap:AccountingStandardsUpdate201602Member 2021-01-01 2021-09-30 0000749660 us-gaap:ProductMember 2021-01-01 2021-09-30 0000749660 us-gaap:ServiceMember 2021-01-01 2021-09-30 0000749660 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-09-30 0000749660 us-gaap:CommonStockMember 2021-01-01 2021-09-30 0000749660 icad:ProductsMember icad:DetectionMember 2021-01-01 2021-09-30 0000749660 icad:ProductsMember icad:TherapyMember 2021-01-01 2021-09-30 0000749660 icad:ProductsMember 2021-01-01 2021-09-30 0000749660 icad:ServiceLineContractsMember icad:DetectionMember 2021-01-01 2021-09-30 0000749660 icad:ServiceLineContractsMember icad:TherapyMember 2021-01-01 2021-09-30 0000749660 icad:ServiceLineContractsMember 2021-01-01 2021-09-30 0000749660 icad:SupplyAgreementsMember icad:TherapyMember 2021-01-01 2021-09-30 0000749660 icad:SupplyAgreementsMember 2021-01-01 2021-09-30 0000749660 icad:ProfessionalServicesMember icad:TherapyMember 2021-01-01 2021-09-30 0000749660 icad:ProfessionalServicesMember 2021-01-01 2021-09-30 0000749660 icad:DetectionMember 2021-01-01 2021-09-30 0000749660 icad:TherapyMember 2021-01-01 2021-09-30 0000749660 us-gaap:TransferredAtPointInTimeMember icad:DetectionMember 2021-01-01 2021-09-30 0000749660 us-gaap:TransferredAtPointInTimeMember icad:TherapyMember 2021-01-01 2021-09-30 0000749660 us-gaap:TransferredAtPointInTimeMember 2021-01-01 2021-09-30 0000749660 us-gaap:TransferredOverTimeMember icad:DetectionMember 2021-01-01 2021-09-30 0000749660 us-gaap:TransferredOverTimeMember icad:TherapyMember 2021-01-01 2021-09-30 0000749660 us-gaap:TransferredOverTimeMember 2021-01-01 2021-09-30 0000749660 us-gaap:SalesChannelDirectlyToConsumerMember icad:DetectionMember 2021-01-01 2021-09-30 0000749660 us-gaap:SalesChannelDirectlyToConsumerMember icad:TherapyMember 2021-01-01 2021-09-30 0000749660 us-gaap:SalesChannelDirectlyToConsumerMember 2021-01-01 2021-09-30 0000749660 icad:OemPartnersMember icad:DetectionMember 2021-01-01 2021-09-30 0000749660 icad:OemPartnersMember 2021-01-01 2021-09-30 0000749660 icad:ChannelPartnersMember icad:TherapyMember 2021-01-01 2021-09-30 0000749660 icad:ChannelPartnersMember 2021-01-01 2021-09-30 0000749660 us-gaap:EmployeeStockOptionMember srt:MinimumMember 2021-01-01 2021-09-30 0000749660 us-gaap:EmployeeStockOptionMember srt:MaximumMember 2021-01-01 2021-09-30 0000749660 icad:TherapyMember us-gaap:ServiceMember 2021-01-01 2021-09-30 0000749660 icad:DetectionMember us-gaap:ProductMember 2021-01-01 2021-09-30 0000749660 us-gaap:ConvertibleDebtMember icad:MonteCarloSimulationMember 2021-01-01 2021-09-30 0000749660 us-gaap:ConvertibleDebtMember 2021-01-01 2021-09-30 0000749660 icad:MakeWholeProvisionMember us-gaap:ConvertibleDebtMember 2021-01-01 2021-09-30 0000749660 icad:WesternAllianceBankMember 2021-01-01 2021-09-30 0000749660 icad:IcadWesternAllianceBankMember 2021-01-01 2021-09-30 0000749660 icad:IcadWesternAllianceBankMember icad:FinalPaymentOfLoanMember 2021-01-01 2021-09-30 0000749660 icad:TwoZeroOneNineEmployeeStockPurchasePlanMember 2021-01-01 2021-09-30 0000749660 icad:DermebxAndRadionMember icad:TherapyMember 2021-01-01 2021-09-30 0000749660 icad:DermebxAndRadionMember 2021-01-01 2021-09-30 0000749660 icad:DetectionMember icad:VucompMvuBreastDensitySoftwareMember 2021-01-01 2021-09-30 0000749660 icad:VucompMvuBreastDensitySoftwareMember 2021-01-01 2021-09-30 0000749660 us-gaap:RetainedEarningsMember 2021-01-01 2021-09-30 0000749660 icad:IcadWesternAllianceBankMember icad:DebtPrepaymentCostMember 2021-01-01 2021-09-30 0000749660 us-gaap:RestrictedStockMember 2020-01-01 2020-09-30 0000749660 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-09-30 0000749660 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-09-30 0000749660 us-gaap:CostOfSalesMember 2020-01-01 2020-09-30 0000749660 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-09-30 0000749660 us-gaap:SellingAndMarketingExpenseMember 2020-01-01 2020-09-30 0000749660 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-09-30 0000749660 us-gaap:RestrictedStockMember 2020-01-01 2020-09-30 0000749660 us-gaap:ProductMember 2020-01-01 2020-09-30 0000749660 us-gaap:ServiceMember 2020-01-01 2020-09-30 0000749660 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-09-30 0000749660 icad:DetectionMember icad:ProductsMember 2020-01-01 2020-09-30 0000749660 icad:TherapyMember icad:ProductsMember 2020-01-01 2020-09-30 0000749660 icad:ProductsMember 2020-01-01 2020-09-30 0000749660 icad:DetectionMember icad:ServiceLineContractsMember 2020-01-01 2020-09-30 0000749660 icad:TherapyMember icad:ServiceLineContractsMember 2020-01-01 2020-09-30 0000749660 icad:ServiceLineContractsMember 2020-01-01 2020-09-30 0000749660 icad:TherapyMember icad:SupplyAgreementsMember 2020-01-01 2020-09-30 0000749660 icad:SupplyAgreementsMember 2020-01-01 2020-09-30 0000749660 icad:DetectionMember icad:OthersMember 2020-01-01 2020-09-30 0000749660 icad:OthersMember 2020-01-01 2020-09-30 0000749660 icad:DetectionMember 2020-01-01 2020-09-30 0000749660 icad:TherapyMember 2020-01-01 2020-09-30 0000749660 icad:DetectionMember us-gaap:TransferredAtPointInTimeMember 2020-01-01 2020-09-30 0000749660 icad:TherapyMember us-gaap:TransferredAtPointInTimeMember 2020-01-01 2020-09-30 0000749660 us-gaap:TransferredAtPointInTimeMember 2020-01-01 2020-09-30 0000749660 icad:DetectionMember us-gaap:TransferredOverTimeMember 2020-01-01 2020-09-30 0000749660 icad:TherapyMember us-gaap:TransferredOverTimeMember 2020-01-01 2020-09-30 0000749660 us-gaap:TransferredOverTimeMember 2020-01-01 2020-09-30 0000749660 icad:DetectionMember us-gaap:SalesChannelDirectlyToConsumerMember 2020-01-01 2020-09-30 0000749660 icad:TherapyMember us-gaap:SalesChannelDirectlyToConsumerMember 2020-01-01 2020-09-30 0000749660 us-gaap:SalesChannelDirectlyToConsumerMember 2020-01-01 2020-09-30 0000749660 icad:DetectionMember icad:OemPartnersMember 2020-01-01 2020-09-30 0000749660 icad:OemPartnersMember 2020-01-01 2020-09-30 0000749660 icad:TherapyMember icad:ChannelPartnersMember 2020-01-01 2020-09-30 0000749660 icad:ChannelPartnersMember 2020-01-01 2020-09-30 0000749660 icad:ProfessionalServicesMember icad:TherapyMember 2020-01-01 2020-09-30 0000749660 icad:ProfessionalServicesMember 2020-01-01 2020-09-30 0000749660 us-gaap:CommonStockMember 2020-01-01 2020-09-30 0000749660 us-gaap:EmployeeStockOptionMember srt:MinimumMember 2020-01-01 2020-09-30 0000749660 us-gaap:EmployeeStockOptionMember srt:MaximumMember 2020-01-01 2020-09-30 0000749660 icad:TherapyMember us-gaap:ServiceMember 2020-01-01 2020-09-30 0000749660 icad:DetectionMember us-gaap:ProductMember 2020-01-01 2020-09-30 0000749660 us-gaap:RetainedEarningsMember 2020-01-01 2020-09-30 0000749660 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member 2020-12-31 0000749660 us-gaap:MoneyMarketFundsMember 2020-12-31 0000749660 us-gaap:FairValueInputsLevel1Member 2020-12-31 0000749660 us-gaap:ShortTermContractWithCustomerMember 2020-12-31 0000749660 us-gaap:LongTermContractWithCustomerMember 2020-12-31 0000749660 icad:DetectionMember 2020-12-31 0000749660 icad:TermLoanAMember icad:SiliconValleyBankMember 2020-03-30 0000749660 icad:SiliconValleyBankMember us-gaap:RevolvingCreditFacilityMember 2020-03-30 0000749660 icad:SiliconValleyBankMember 2020-03-30 0000749660 icad:WesternAllianceBankMember us-gaap:BaseRateMember 2020-03-30 2020-03-30 0000749660 icad:WesternAllianceBankMember us-gaap:PrimeRateMember 2020-03-30 2020-03-30 0000749660 icad:WesternAllianceBankMember 2020-03-30 2020-03-30 0000749660 icad:SiliconValleyBankMember 2020-03-30 2020-03-30 0000749660 icad:SiliconValleyBankMember us-gaap:RevolvingCreditFacilityMember 2017-08-07 0000749660 us-gaap:MeasurementInputSharePriceMember us-gaap:ConvertibleDebtMember 2019-12-31 0000749660 us-gaap:MeasurementInputConversionPriceMember us-gaap:ConvertibleDebtMember 2019-12-31 0000749660 us-gaap:MeasurementInputExpectedTermMember us-gaap:ConvertibleDebtMember 2019-12-31 0000749660 icad:MeasurementInputEquityVolatilityMember us-gaap:ConvertibleDebtMember 2019-12-31 0000749660 us-gaap:MeasurementInputRiskFreeInterestRateMember us-gaap:ConvertibleDebtMember 2019-12-31 0000749660 us-gaap:MeasurementInputDefaultRateMember us-gaap:ConvertibleDebtMember 2019-12-31 0000749660 us-gaap:MeasurementInputUtilizationRateMember us-gaap:ConvertibleDebtMember 2019-12-31 0000749660 icad:MeasurementInputExerciseOfDefaultRedemptionMember us-gaap:ConvertibleDebtMember 2019-12-31 0000749660 us-gaap:MeasurementInputDiscountRateMember us-gaap:ConvertibleDebtMember 2019-12-31 0000749660 us-gaap:ConvertibleDebtMember 2019-12-31 0000749660 icad:TwoZeroOneNineEmployeeStockPurchasePlanMember 2019-12-31 0000749660 us-gaap:MeasurementInputSharePriceMember us-gaap:ConvertibleDebtMember 2020-02-21 0000749660 us-gaap:MeasurementInputConversionPriceMember us-gaap:ConvertibleDebtMember 2020-02-21 0000749660 us-gaap:MeasurementInputExpectedTermMember us-gaap:ConvertibleDebtMember 2020-02-21 0000749660 us-gaap:MeasurementInputUtilizationRateMember us-gaap:ConvertibleDebtMember 2020-02-21 0000749660 icad:TwoZeroOneNineEmployeeStockPurchasePlanMember 2019-12-01 2019-12-31 0000749660 icad:VersaVueSoftwareAndDynaCadProductAndRelatedAssetsMember icad:AssetPurchaseAgreementMember 2016-12-31 0000749660 icad:VersaVueSoftwareAndDynaCadProductAndRelatedAssetsMember icad:AssetPurchaseAgreementMember 2017-06-30 0000749660 srt:MinimumMember 2021-04-01 2021-09-30 0000749660 srt:MaximumMember 2021-04-01 2021-09-30 0000749660 us-gaap:CommonStockMember 2021-06-30 0000749660 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0000749660 us-gaap:RetainedEarningsMember 2021-06-30 0000749660 us-gaap:TreasuryStockMember 2021-06-30 0000749660 us-gaap:CommonStockMember 2021-09-30 0000749660 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0000749660 us-gaap:RetainedEarningsMember 2021-09-30 0000749660 us-gaap:TreasuryStockMember 2021-09-30 0000749660 us-gaap:CommonStockMember 2020-06-30 0000749660 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0000749660 us-gaap:RetainedEarningsMember 2020-06-30 0000749660 us-gaap:TreasuryStockMember 2020-06-30 0000749660 us-gaap:CommonStockMember 2020-09-30 0000749660 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0000749660 us-gaap:RetainedEarningsMember 2020-09-30 0000749660 us-gaap:TreasuryStockMember 2020-09-30 0000749660 us-gaap:CommonStockMember 2020-12-31 0000749660 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0000749660 us-gaap:RetainedEarningsMember 2020-12-31 0000749660 us-gaap:TreasuryStockMember 2020-12-31 0000749660 us-gaap:TreasuryStockMember 2019-12-31 0000749660 us-gaap:RetainedEarningsMember 2019-12-31 0000749660 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000749660 us-gaap:CommonStockMember 2019-12-31 iso4217:USD xbrli:shares xbrli:pure utr:Year icad:Segment utr:Y iso4217:USD xbrli:shares icad:Trial icad:customer
Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM
 
10-Q
 
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
    
    
    
    
to
    
    
    
    
Commission file number
001-09341
 
 
iCAD, Inc.
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
02-0377419
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
   
98 Spit Brook Road, Suite 100, Nashua, NH
 
03062
(Address of principal executive offices)
 
(Zip Code)
(603)
882-5200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
 
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
symbol(s)
 
Name of each exchange
on which registered
Common Stock, $0.01 par value
 
ICAD
 
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days.    YES  ☒    NO  ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    YES  ☒    NO  ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, an emerging growth company or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large Accelerated filer      Accelerated filer  
       
Non-accelerated
filer
     Smaller reporting company  
       
         Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  ☐.
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act)    YES  ☐    NO  .
As of the close of business on November 1, 2021, there were 25,109,380 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 (unaudited)
  
  
  
 
3
 
  
  
 
4
 
  
  
 
5
 
  
  
 
6
 
  
  
 
8
 
Item 2
  
  
 
28
 
Item 3
  
  
 
39
 
Item 4
  
  
 
39
 
PART II
  
  
 
40
 
Item 1A
  
  
 
40
 
Item 6
  
  
 
41
 
  
  
 
42
 
 
2

Table of Contents
iCAD, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands except for share data)
 
 
  
(Unaudited)
 
 
 
 
 
  
September 30,
 
 
December 31,
 
 
  
2021
 
 
2020
 
Assets
  
 
Current assets:
  
 
Cash and cash equivalents
   $ 35,805     $ 27,186  
Trade accounts receivable, net of allowance for doubtful accounts of $87 in 2021 and $111 in 2020
     11,792       10,027  
Inventory, net
     3,290       3,144  
Prepaid expenses and other current assets
     1,989       1,945  
    
 
 
   
 
 
 
Total current assets
     52,876       42,302  
    
 
 
   
 
 
 
Property and equipment, net of accumulated depreciation of $7,020 in 2021 and $6,778 in 2020
     925       744  
Operating lease assets
     1,176       1,758  
Other assets
     1,657       1,527  
Intangible assets, net of accumulated amortization of $8,667 in 2021 and $8,494 in 2020
     741       889  
Goodwill
     8,362       8,362  
    
 
 
   
 
 
 
Total assets
   $ 65,737     $ 55,582  
    
 
 
   
 
 
 
Liabilities and Stockholders’ Equity
                
Current liabilities:
                
Accounts payable
   $ 2,651     $ 2,869  
Accrued and other expenses
     5,523       7,039  
Lease payable
current portion
     856       726  
Deferred revenue
     5,930       6,117  
    
 
 
   
 
 
 
Total current liabilities
     14,960       16,751  
    
 
 
   
 
 
 
Lease payable, long-term portion
     431       1,075  
Notes payable, long-term portion
     —         6,960  
Deferred revenue, long-term portion
     520       267  
Deferred tax
     5       4  
    
 
 
   
 
 
 
Total liabilities
     15,916       25,057  
    
 
 
   
 
 
 
Commitments and Contingencies
             
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 25,287,837 as of September 30, 2021 and 23,693,735 as of December 31, 2020.
                
Outstanding 25,102,006 as of
September
 30, 2021 and 23,508,575 as of December 31, 2020.
     253       236  
Additional
paid-in
capital
     300,017       273,639  
Accumulated deficit
     (249,034     (241,935
Treasury stock at cost, 185,831 shares in 2021 and 2020
     (1,415     (1,415
    
 
 
   
 
 
 
Total stockholders’ equity
     49,821       30,525  
    
 
 
   
 
 
 
Total liabilities and stockholders’ equity
   $ 65,737     $ 55,582  
    
 
 
   
 
 
 
See accompanying notes to condensed consolidated financial statements.
 
3

Table of Contents
iCAD, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands except for per share data)
 
 
  
Three Months Ended September 30,
 
 
Nine Months Ended September 30,
 
 
  
2021
 
 
2020
 
 
2021
 
 
2020
 
Revenue:
  
 
 
 
Products
   $ 6,320     $ 4,538     $ 16,429     $ 11,220  
Service and supplies
     3,041       2,591       9,401       8,027  
    
 
 
   
 
 
   
 
 
   
 
 
 
Total revenue
     9,361       7,129       25,830       19,247  
Cost of revenue:
                                
Products
     1,807       1,345       4,592       2,899  
Service and supplies
     763       667       2,462       2,169  
Amortization and depreciation
     79       92       237       287  
    
 
 
   
 
 
   
 
 
   
 
 
 
Total cost of revenue
     2,649       2,104       7,291       5,355  
    
 
 
   
 
 
   
 
 
   
 
 
 
Gross profit
     6,712       5,025       18,539       13,892  
    
 
 
   
 
 
   
 
 
   
 
 
 
Operating expenses:
                                
Engineering and product development
     2,285       1,849       6,745       5,938  
Marketing and sales
     3,886       2,979       10,739       9,218  
General and administrative
     2,658       1,834       7,461       6,476  
Amortization and depreciation
     64       52       178       153  
    
 
 
   
 
 
   
 
 
   
 
 
 
Total operating expenses
     8,893       6,714       25,123       21,785  
    
 
 
   
 
 
   
 
 
   
 
 
 
Loss from operations
     (2,181     (1,689     (6,584     (7,893
Interest expense
              (115     (141     (360
Other income
     5       10       12       85  
Loss on extinguishment of debt
              —         (386     (341
Loss on fair value of convertible debentures
     —         —         —         (7,464
    
 
 
   
 
 
   
 
 
   
 
 
 
Other income (expense), net
     5       (105     (515     (8,080
Loss before income tax expense
     (2,176     (1,794     (7,099     (15,973
    
 
 
   
 
 
   
 
 
   
 
 
 
Tax expense
     —         (3     —         (34
    
 
 
   
 
 
   
 
 
   
 
 
 
Net loss and comprehensive loss
   $ (2,176   $ (1,797   $ (7,099   $ (16,007
    
 
 
   
 
 
   
 
 
   
 
 
 
Net loss per share:
                                
Basic
   $ (0.09   $ (0.08   $ (0.29   $ (0.73
    
 
 
   
 
 
   
 
 
   
 
 
 
Diluted
   $ (0.09   $ (0.08   $ (0.29   $ (0.73
    
 
 
   
 
 
   
 
 
   
 
 
 
Weighted average number of shares used in computing loss per share:
                                
Basic
     25,053       23,173       24,662       21,827  
    
 
 
   
 
 
   
 
 
   
 
 
 
Diluted
     25,053       23,173       24,662       21,827  
    
 
 
   
 
 
   
 
 
   
 
 
 
See accompanying notes to condensed consolidated financial statements.
 
4

Table of Contents
iCAD, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
 
  
For the Nine Months ended
September 30,
 
 
  
2021
 
 
2020
 
 
  
(in thousands)
 
Cash flow from operating activities:
  
 
Net loss
   $ (7,099   $ (16,007
Adjustments to reconcile net loss to net cash used for operating activities:
                
Amortization
     176       234  
Depreciation
     242       206  
Bad debt provision
     (25     80  
Stock-based compensation
     2,102       2,542  
Amortization of debt discount and debt costs
     17       65  
Loss on extinguishment of debt
     386       341  
Deferred tax expense
     —         1  
Change in fair value of convertible debentures
     —         7,464  
Changes in operating assets and liabilities:
                
Accounts receivable
     (1,827     1,151  
Inventory
     (146     (535
Prepaid and other assets
     493       69  
Accounts payable
     (217     96  
Accrued expenses
     (2,028     (2,322
Deferred revenue
     65       532  
    
 
 
   
 
 
 
Total adjustments
     (762     9,924  
    
 
 
   
 
 
 
Net cash used for operating activities
     (7,861     (6,083
    
 
 
   
 
 
 
Cash flow from investing activities:
                
Additions to patents, technology and other
     (24     (11
Additions to property and equipment
     (426     (275
    
 
 
   
 
 
 
Net cash used for investing activities
     (450     (286
    
 
 
   
 
 
 
Cash flow from financing activities:
                
Issuance of common stock pursuant to stock option plans
     933       415  
Issuance of common stock pursuant to Employee Stock Purchase Plan
     190       209  
Proceeds from issuance of common stock, net
     23,229       12,174  
Taxes paid related to restricted stock issuance
    
(59

)
 
    (225
Principal payments of capital lease obligations
     —         (4,638
Repayment of debt financing
     (7,363     775  
Repayment on line of credit
     —         (2,000
Proceeds from notes payable
     —         6,957  
Debt issuance costs
     —         22  
    
 
 
   
 
 
 
Net cash provided by financing activities
     16,930       13,689  
    
 
 
   
 
 
 
Increase in cash and equivalents
     8,619       7,320  
Cash and cash equivalents, beginning of period
     27,186       15,313  
    
 
 
   
 
 
 
Cash and cash equivalents, end of period
   $ 35,805     $ 22,633  
    
 
 
   
 
 
 
Supplemental disclosure of cash flow information:
                
Interest paid
   $ 92     $ 127  
    
 
 
   
 
 
 
Taxes paid
   $ —       $ 34  
    
 
 
   
 
 
 
Issuance of common stock upon conversion of debentures
     —         21,164  
    
 
 
   
 
 
 
Right-of-use
assets obtained in exchange for new operating lease liabilities
   $ —       $ 69  
    
 
 
   
 
 
 
See accompanying notes to condensed consolidated financial statements.
 
5

Table of Contents
Consolidated Statements of Stockholders’ Equity Year to Date
(In thousands except shares)
 
 
  
Common Stock
 
  
Additional

Paid-in

Capital
 
 
 
 
 
 
 
 
 
 
 
  
Number of
Shares Issued
 
  
Par
Value
 
 
Accumulated
Deficit
 
 
Treasury
Stock
 
 
Stockholders’
Equity
 
Balance at December 31, 2020
     23,694,406        236        273,639       (241,935     (1,415)     $ 30,525  
Issuance of common stock relative to vesting of restricted stock
     43,831        1        (60     —         —         (59
Issuance of common stock, net
     1,393,738        14        23,215       —         —         23,229  
Issuance of common stock pursuant to stock option plans
     138,450        2        931       —         —         933  
Issuance of common stock pursuant Employee Stock Purchase Plan
     17,412        —          190       —         —         190  
Stock-based compensation
     —          —          2,102       —         —         2,102  
Net loss
     —          —          —         (7,099     —         (7,099
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
 
Balance at September 30, 2021
     25,287,837      $ 253      $ 300,017     $ (249,034   $ (1,415   $ 49,821  
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
 
Consolidated Statements of Stockholders’ Equity Quarter to Date
(In thousands except shares)
 
 
  
Common Stock
 
  
Additional

Paid-in

Capital
 
 
 
 
 
 
 
 
 
 
 
  
Number of
Shares Issued
 
  
Par
Value
 
 
Accumulated
Deficit
 
 
Treasury
Stock
 
 
Stockholders’
Equity
 
Balance at June 30, 2021
     25,213,302        251        299,049       (246,858     (1,415   $ 51,027  
Issuance of common stock relative to vesting of restricted stock
     14,665        1        (60     —         —         (59
Issuance of common stock, net
     54,702        1        296       —         —         297  
Issuance of common stock pursuant to stock option plans
     —          —          —         —         —         —    
Issuance of common stock pursuant Employee Stock Purchase Plan
     5,168        —          76       —         —         76  
Stock-based compensation
     —          —          656       —         —         656  
Net loss
     —          —          —         (2,176     —         (2,176
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
 
Balance at September 30, 2021
     25,287,837      $ 253      $ 300,017     $ (249,034   $ (1,415   $ 49,821  
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
 
 
6

Table of Contents
Consolidated Statements of Stockholders’ Equity Year to Date
(In thousands except shares)
 
 
  
Common Stock
 
  
Additional

Paid-in
Capital
 
 
 
 
 
 
 
 
 
 
 
  
Number of
Shares Issued
 
  
Par
Value
 
 
Accumulated
Deficit
 
 
Treasury
Stock
 
 
Stockholders’
Equity
 
Balance at December 31, 2019
     19,546,151      $ 196      $ 230,615     $ (224,325   $ (1,415)     $ 5,071  
Issuance of common stock relative to vesting of restricted stock, net 
     97,830        —          (225     —         —         (225
Issuance of common stock pursuant to stock option plans
     94,678        1        416       —         —         417  
Stock Issuance Net
     1,562,500        16        12,158       —         —         12,174  
Issuance of common stock pursuant Employee Stock Purchase Plan
     34,857                 209                       209  
Issuance of stock upon conversion of Debentures
     1,819,466        18        21,146       —         —         21,164  
Stock-based compensation
     —          —          2,542                       2,542  
Net loss
     —          —          —         (16,007     —         (16,007
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
 
Balance at September 30, 2020
     23,155,482      $ 231      $ 266,861     $ (240,332   $ (1,415   $ 25,345  
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
 
Consolidated Statements of Stockholders’ Equity Quarter to Date
(In thousands except shares)
 
 
  
Common Stock
 
  
Additional

Paid-in

Capital
 
 
 
 
 
 
 
 
 
 
 
  
Number of
Shares Issued
 
  
Par
Value
 
 
Accumulated
Deficit
 
 
Treasury
Stock
 
 
Stockholders’
Equity
 
Balance at June 30, 2020
     23,060,272      $ 231      $ 266,211     $ (238,535   $ (1,415   $ 26,492  
Issuance of common stock relative to vesting of restricted stock
     29,106        —          (94     —         —         (94
Issuance of common stock pursuant to stock option plans
     49,712        —          185       —         —         185  
Stock Issuance Net
     —          —          —         —         —         —    
Issuance of common stock pursuant Employee Stock Purchase Plan
     16,392        —          94       —         —         94  
Issuance of stock upon conversion of Debentures
     —          —          —         —         —         —    
Stock-based compensation
     —          —          465       —         —         465  
Net loss
     —          —          —         (1,797     —         (1,797
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
 
Balance at September 30, 2020
     23,155,482      $ 231      $ 266,861     $ (240,332   $ (1,415   $ 25,345  
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
 
 
7

Table of Contents
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 (together “iCAD” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of the Company’s management, these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position of the Company at September 30, 2021, the results of operations of the Company for the three and nine-months ended September 30, 2021 and 2020, cash flows of the Company for the nine-months ended September 30, 2021 and 2020, and stockholders’ equity for the Company for the three and nine-months ended September 30, 2021 and 2020.
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, 2020 filed with the SEC on March 15, 2021. The results for the three and nine-months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021, or any future period.
Segments
The Company
reports the results of two segments: Cancer Detection (“Detection”) and Cancer Therapy (“Therapy”). The Detection segment consists of advanced image analysis and workflow products. The Therapy segment consists of radiation therapy (“Axxent”) products.
Risk and Uncertainty
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 the
COVID-19
pandemic, the United States, many countries in Europe, as well as Canada and China, imposed unprecedented restrictions on travel, and there have been business closures and reductions in economic activity in countries that have had significant outbreaks of
COVID-19.
As a provider of devices and services to the health care industry, the Company’s operations have been materially affected in part due to
stay-at-home
and social distancing orders as well as uncertainty in the market. Significant uncertainty remains as to the continuing impact of the
COVID-19
pandemic on the Company’s operations and on the global economy as a whole.
 
8

Table of Contents
It is currently not possible to predict the duration of the pandemic or the time needed for economic activity to return to prior levels. The
COVID-19
pandemic has resulted in significant financial market volatility and uncertainty. Although the United States and other countries have made significant progress related to vaccinating large portions of their populations, the efficacy of each individual vaccine against the multiple strains of the
COVID-19
virus is unknown. Moreover, a new “wave” of
COVID-19
cases may exacerbate the increased levels of market disruption and volatility seen in the recent past will have an adverse effect on the Company’s ability to access capital, on its business, results of operations and financial condition, and on the market price of its common stock.
The Company’s results for the quarter ending September 30, 2021 reflect a negative impact from the
COVID-19
pandemic due to some healthcare facilities’ additional focus on
COVID-19
and from the effect on our customers and po
t
ential customers of supply chain issues relating thereto. Although the Company does not provide guidance to investors relating to its future results of operations, its results for the quarter ending December 31, 2021, and possibly future quarters, could reflect a continued negative impact from the
COVID-19
pandemic for similar reasons. The duration and severity of the pandemic is unknown, and so the continued effect on the Company’s results over the long term is uncertain.
Although the Company did not experience any material impact to trade accounts receivable losses in the quarter ended September 30, 2021, the Company’s exposure may increase if its customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the current
COVID-19
pandemic, or other customer-specific factors. The Company has not historically experienced significant trade account receivable losses, but it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade account receivables as clinical customers’ cash flows are impacted by healthcare business considerations related to the
COVID-19
pandemic.
Recently Adopted Accounting Pronouncements
There are no significant recently adopted accounting pronouncements. For a full list of the Company’s response to all relevant recent accounting pronouncements, please refer to Note 13 below.
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.
 
9

Table of Contents
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 (in thousands).
 
  
Three months ended September 30, 2021
 
 
  
Reportable Segments
 
  
 
 
 
  
Detection
 
  
Therapy
 
  
Total
 
Major Goods/Service Lines
  
     
  
     
  
     
Products
   $ 4,454      $ 2,358      $ 6,812  
Service contracts
     1,554        398        1,952  
Supply and source usage agreements
     —          562        562  
Professional services
     —          35        35  
Other
     —          —          —    
    
 
 
    
 
 
    
 
 
 
     $ 6,008      $ 3,353      $ 9,361  
Timing of Revenue Recognition
                          
Goods transferred at a point in time
   $ 4,454      $ 2,393      $ 6,847  
Services transferred over time
     1,554        960        2,514  
    
 
 
    
 
 
    
 
 
 
     $ 6,008      $ 3,353      $ 9,361  
Sales Channels
                          
Direct sales force
   $ 3,629      $ 1,403      $ 5,032  
OEM partners
     2,379        —          2,379  
Channel partners
     —          1,950        1,950  
    
 
 
    
 
 
    
 
 
 
     $ 6,008      $ 3,353      $ 9,361  
   
 
  
Nine months ended September 30, 2021
 
 
  
Reportable Segments
 
  
 
 
 
  
Detection
 
  
Therapy
 
  
Total
 
Major Goods/Service Lines
  
     
  
     
  
     
 
 
 
 
 
 
 
 
 
 
 
 
 
Products
   $ 11,778      $ 6,580      $ 18,358  
Service contracts
     4,737        1,109        5,846  
Supply and source usage agreements
     —          1,572        1,572  
Professional services
     —          54        54  
Other
     —          —          —    
    
 
 
    
 
 
    
 
 
 
     $ 16,515      $ 9,315      $ 25,830  
    
 
 
    
 
 
    
 
 
 
Timing of Revenue Recognition
                          
Goods transferred at a point in time
   $ 11,778      $ 6,633      $ 18,411  
Services transferred over time
     4,737      $ 2,682        7,419  
    
 
 
    
 
 
    
 
 
 
     $ 16,515      $ 9,315      $ 25,830  
Sales Channels
                          
Direct sales force
   $ 10,691      $ 3,632      $ 14,323  
OEM partners
     5,824        —          5,824  
Channel partners
     —          5,683        5,683  
    
 
 
    
 
 
    
 
 
 
     $ 16,515      $ 9,315      $ 25,830  
 
 
10

Table of Contents
 
  
Three months ended September 30, 2020
 
 
  
Reportable Segments
 
  
 
 
 
  
Detection
 
  
Therapy
 
  
Total
 
Major Goods/Service Lines
  
     
  
     
  
     
Products
   $ 3,889      $ 1,038      $ 4,927  
Service contracts
     1,400        347        1,747  
Supply and source usage agreements
     —          444        444  
Professional services
     —          9        9  
Other
     2        —          2  
    
 
 
    
 
 
    
 
 
 
     $ 5,291      $ 1,838      $ 7,129  
    
 
 
    
 
 
    
 
 
 
Timing of Revenue Recognition
                          
Goods transferred at a point in time
   $ 3,889      $ 1,051      $ 4,940  
Services transferred over time
     1,402        787        2,189  
    
 
 
    
 
 
    
 
 
 
     $ 5,291      $ 1,838      $ 7,129  
    
 
 
    
 
 
    
 
 
 
Sales Channels
                          
Direct sales force
   $ 2,904      $ 857     
$
3,761  
OEM partners
     2,387        —          2,387  
Channel partners
     —          981        981  
    
 
 
    
 
 
    
 
 
 
     $ 5,291      $ 1,838      $ 7,129  
 
  
 
 
 
  
 
 
 
  
 
 
 
   
 
  
Nine months ended September 30, 2020
 
 
  
Reportable Segments
 
  
 
 
 
  
Detection
 
  
Therapy
 
  
Total
 
Major Goods/Service Lines
  
     
  
     
  
     
 
 
 
 
 
 
 
 
 
 
 
 
 
Products
   $ 9,690      $ 2,959      $ 12,649  
Service contracts
     4,151        1,079        5,230  
Supply and source usage agreements
     —          1,305        1,305  
Professional services
     —          20        20  
Other
     43        —          43  
    
 
 
    
 
 
    
 
 
 
     $ 13,884      $ 5,363      $ 19,247  
    
 
 
    
 
 
    
 
 
 
Timing of Revenue Recognition
                          
Goods transferred at a point in time
   $ 9,731      $ 3,039      $ 12,770  
Services transferred over time
     4,153        2,324        6,477  
    
 
 
    
 
 
    
 
 
 
     $ 13,884      $ 5,363      $ 19,247  
    
 
 
    
 
 
    
 
 
 
Sales Channels
                          
Direct sales force
   $ 7,785      $ 3,131      $ 10,916  
OEM partners
     6,099        —          6,099  
Channel partners
     —          2,232        2,232  
    
 
 
    
 
 
    
 
 
 
     $ 13,884      $ 5,363      $ 19,247  
    
 
 
    
 
 
    
 
 
 
 
11

Table of Contents
Products.
Product revenue consists of sales of cancer detection products, cancer therapy systems, cancer therapy applicators (including disposable applicators) and other accessories that are typically shipped with a cancer therapy system. The Company transfers control and generally recognizes a sale when the product is shipped from the manufacturing or warehousing facility to the customer unless an individual contract states otherwise.
Service Contracts.
The Company sells service contracts under which it provides professional services, including product installations, maintenance, training, and service repairs, and in certain cases equipment leases, to hospitals, imaging centers, radiology practices, radiation oncologists and treatment centers. These contracts represent separate performance obligations of the Company. The Company allocates revenue to each performance obligation based on the Standalone Selling Price (“SSP”). Revenue for lease and
non-lease
components, or the entire arrangement when accounted for under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”), is recognized on a straight-line basis over the term of the agreement. 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.
Supply and Source Usage Agreements.
Revenue from supply and source usage agreements is recognized on a straight-line basis over the term of the supply or source usage agreement.
These agreements represent a separate performance obligation of the Company. The Company allocates revenue to each performance obligation based on the SSP.
Professional Services.
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.
Other.
Other revenue consists primarily of miscellaneous products and services. The Company transfers control and recognizes a sale when the product is shipped from the manufacturing or warehousing facility to the customer or the installation services are performed.
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 (in thousands).
Contract balances
 
Contract balances
  
 
 
  
 
 
 
  
Balance at
 
  
Balance at
 
 
  
September 30, 2021
 
  
December 31, 2020
 
Receivables, which are included in ‘Trade accounts
receivable’
   $  11,792      $  10,027  
Current
 
contract
 
assets,
 
which
 
are
 
included
 
in
 
“Prepaid
 
and
other assets”
     658        481  
Non-current
contract assets, which are included in “other
assets”
     1,602        1,434  
Contract liabilities, which are included in “Deferred
revenue”
     6,450        6,384  
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 invoiced or invoiceable. 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 invoice under the terms of the contract. The current contract asset balance primarily relates to the net unbilled revenue balances with two significant customers, which the Company expects to be able to invoice within one year. The
non-current
contract asset balance consists of net unbilled revenue balances with one customer which the Company expects to be able to invoice in more than one year.
 
12

Table of Contents
Contract liabilities, or deferred revenue from contracts with customers, is primarily composed of fees related to long-term service arrangements, which are generally invoiced in advance. Deferred revenue also includes payments for installation and training that has not yet been completed and other offerings for which the Company has been paid in advance and earn
ed
the revenue when it transfers control of the product or service. The balance of deferred revenue at September 30, 2021 and December 31, 2020 was as follows (in thousands):
 
Contract liabilities
  
September 30, 2021
 
  
December 31, 2020
 
 
 
 
 
 
 
 
 
 
Short term
   $  5,930      $  6,117  
Long term
     520        267  
    
 
 
    
 
 
 
Total
   $ 6,450      $ 6,384  
    
 
 
    
 
 
 
Changes in deferred revenue from contracts with customers were as follows (in thousands):
 
 
 
 
 
 
    
Nine Months Ended
September 30, 2021
 
          
Balance at beginning of period
   $ 6,384  
Deferral of revenue
     9,761  
Recognition of deferred revenue
     (9,695
    
 
 
 
Balance at end of period
   $ 6,450  
    
 
 
 
The Company
 expects to recognize estimated revenues related to performance obligation that
are
unsatisfied (or partially satisfied) in
the
amounts of approximately $2.3 million in 2021, $4.3 million in 2022, and $1.7 
million in 2023, $1.1 million in 2024, $1.1 million in 2025 and $0.2 million in 2026.
Note 2 – 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 net loss per share is as follows (in thousands except per share amounts):
 
 
  
Three Months Ended
 
  
Nine Months Ended
 
 
  
September 30,
 
  
September 30,
 
 
  
2021
 
  
2020
 
  
2021
 
  
2020
 
Net loss
  
$
(2,176
)
  
$
(1,797
)
  
$
(7,099
)
  
$
(16,007
)
    
 
 
    
 
 
    
 
 
    
 
 
 
Shares used in the calculation of basic and diluted net loss per share
     25,053        23,173        24,662        21,827  
    
 
 
    
 
 
    
 
 
    
 
 
 
Diluted shares used in the calculation of net loss per share
     25,053        23,173        24,662        21,827  
    
 
 
    
 
 
    
 
 
    
 
 
 
Net loss per share—basic and diluted
   $ (0.09    $ (0.08    $ (0.29    $ (0.73
 
13

Table of Contents
The shares of the Company’s common stock issuable upon the exercise of convertible securities, stock options and vesting of restricted stock that were excluded from
the
calculation of diluted net loss per share because their effect would have been antidilutive are as follows:
 
 
 
 
 
 
 
 
 
 
    
As of
September 30,
 
               
    
2021
    
2020
 
                   
Stock options
     2,509,511        1,971,704  
Restricted stock
     1,750        29,166  
    
 
 
    
 
 
 
Total
     2,511,261        2,000,870  
    
 
 
    
 
 
 
Note 3 – Inventory
Inventory is valued at the lower of cost or net realizable value, with cost determined by the
first-in,
first-out
method. The Company regularly reviews inventory quantities on hand and records a reserve for excess and/or obsolete inventory primarily based upon the estimated usage of its inventory as well as other factors. Inventory consisted of the following (in thousands) and includes an inventory reserve of approximately
$0.2 million for both periods ended September 30, 2021
and
December 31, 2020.
 
 
  
September 30, 2021
 
  
December 31, 2020
 
Raw materials
  
$
 1,845
 
  
$
 1,538
 
Work in process
  
 
104
 
  
 
76
 
Finished Goods
  
 
1,567
 
  
 
1,774
 
 
  
 
 
 
  
 
 
 
Inventory Gross
  
 
3,516
 
  
 
3,388
 
Inventory Reserve
  
 
(225
)
 
  
 
(244
 
  
 
 
 
  
 
 
 
Inventory Net
  
$
3,290
 
  
$
3,144
 
 
  
 
 
 
  
 
 
 
 
14

Table of Contents
Note 4 – Financing Arrangements
(a) Loan and Security Agreement – Western Alliance Bank
On March 30, 2020, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Western Alliance Bank (the “Bank”) that provided an initial term loan (“Term Loan”) facility of $7.0 million and a $5.0 million revolving line of credit.
I
nterest in arrears on the Term Loan began to be repaid on April 1, 2020 and will continue to be paid on the first of each successive month thereafter until
the
 principal repayment starts. Commencing on the principal repayment date March 1, 2022 and continuing on the first day of each month thereafter, the Company will make equal monthly payments of principal, together with applicable interest in arrears, to the Bank. The interest rate is set at 1% above the Prime Rate, which is defined in the Loan Agreement as the greater of 4.25% or the Prime Rate published in the Money Rates section of the Western Edition of the Wall Street Journal. The Prime Rate as of September 30, 2020 was 3.25%.
In connection with the Loan Agreement, the Company incurred approximately $141,000 of closing costs. The closing costs have been deduced from the carrying value of the debt and will be amortized through March 30, 2022, the maturity date of the Term Loan.
On April 27, 2021, the Company repaid its obligations in the aggregate amount of $7,354,283 and terminated the Loan Agreement with the Bank, and the Company’s collateral securing the facility was released. The Company accounted for this repayment and retirement as an extinguishment of the Loan Agreement. In addition to the outstanding principal and accrued interest, the Company was required to pay the $122,500 final payment, a termination fee of $50,000 and other closing costs totaling approximately $15,000. The Company also wrote off unamortized original closing costs as of the extinguishment date. The Company recorded a loss on extinguishment of approximately $386,000 related to the repayment and retirement of the Loan Agreement. The loss on extinguishment was composed of approximately $140,000 for a prepayment fee, $122,000 for the unaccrued final payment, $65,000 termination and other fees, and $58,000 for the unamortized and other closing costs from origination of the loan.
(b) Loan and Security Agreement – Silicon Valley Bank
On August 7, 2017, the Company entered into a Loan and Security Agreement, which was subsequently modified several times through November 1, 2019 (as amended, the “SVB Loan Agreement”), with Silicon Valley Bank that provided an initial term loan facility of $6.0 million and a $4.0 million revolving line of credit.
On March 30, 2020, the Company elected to repay all outstanding obligations (including accrued interest) and retire the SVB Loan Agreement. The Company accounted for this repayment and retirement as an extinguishment of the SVB Loan Agreement. In addition to the outstanding principal and accrued interest, the Company was required to pay the $510,000 final payment, a termination fee of $114,000 and other costs totaling $10,000. The Company also wrote off unamortized original closing costs as of the extinguishment date. In March 2020 the Company recorded a loss on extinguishment of approximately $341,000 related to the repayment and retirement of the SVB Loan Agreement. The loss on extinguishment was composed of approximately $185,000 for the unaccrued final payment, $114,000 termination fee, and $42,000 of unamortized and other closing costs. 
 
15

Table of Contents
(c) Convertible Debentures
On December 20, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with certain institutional and accredited investors (the “Investors”), including, but not limited to, all directors and executive officers of the Company at the time, pursuant to which the Investors purchased unsecured subordinated convertible debentures (the “Convertible Debentures”) with an aggregate principal amount of approximately $7.0 million in a private placement.
On February 21, 2020 (the “Conversion Date”), the conditions permitting a forced conversion were met, and the Company elected to exercise its forced conversion right under the terms of the Convertible Debentures.
As a result of this election, all of the outstanding Convertible Debentures were converted, at a conversion price of $4.00 per share, into 1,742,500 shares of the Company’s common stock. In accordance with the make-whole provisions in the Convertible Debentures, the Company also issued an additional 76,966 shares of its common stock. The make-whole amount represented the total interest which would have accrued through the maturity date of the Convertible Debentures, less the amounts previously paid, totaling $697,000. The conversion prices related to the make-whole amount were dependent on whether the Investors were related parties or unrelated third parties.
Accounting Considerations and Fair Value Measurements Related to the Convertible Debentures
The Company had previously elected to make
a one-time, irrevocable
election to utilize the fair value option to account for the Convertible Debentures as a single hybrid instrument at its fair value, with changes in fair value from period to period being recorded either in current earnings, or as an element of other comprehensive income (loss), for the portion of the change in fair value determined to relate to the Company’s own credit risk. The Company believed that the election of the fair value option allowed for a more meaningful representation of the total fair value of its obligation under the Convertible Debentures and allowed for a better understanding of how changes in the external market environment and valuation assumptions impact such fair value.
As of the December 31, 2019 valuation and the prior measurement dates, the Company utilized a Monte Carlo simulation model to estimate the fair value of the Convertible Debentures. The simulation model was designed to capture the potential settlement features of the Convertible Debentures, in conjunction with simulated changes in the Company’s stock price and the probability of certain events occurring. The simulation utilized 100,000 trials or simulations to determine the estimated fair value.
The simulation utilized the assumptions that if the Company was able to exercise its forced conversion right (if the requirements to do so were met), that it would do so in 100% of such scenarios. Additionally, if an event of default occurred during the simulated trial (based on the Company’s probability of default), the Investors would opt to redeem the Convertible Debentures in 100% of such scenarios. If neither event occurred during a simulated trial, the simulation assumed that the Investor would hold the Convertible Debentures until the maturity date. The value of the cash flows associated with each potential settlement were discounted to present value in each trial based on either the risk-free rate (for an equity settlement) or the effective discount rate (for a redemption or cash settlement).
The Company also recorded a final adjustment to the Convertible Debentures based on their fair value on the Conversion Date, just prior to the forced conversion being completed. Given that the Company’s prior simulation model included the assumption that the Company would elect to force conversion in 100% of scenarios when the requirements were met, the final valuation was based on the actual results of the forced conversion. As such, the Company based the final fair value adjustment to the Convertible Debentures just prior to conversion on the number of shares of common stock that were issued to the Investors upon conversion and the fair value of the Company’s common stock as of the Conversion Date.
 
16

Table of Contents
The key inputs to the valuation models that were utilized to estimate the fair value of the Convertible Debentures included:
 
 
 
 
 
 
 
 
 
 
Input
  
December 31, 2019
   
February 21, 2020
 
                  
Company’s stock price
   $ 7.77     $ 11.64  
Conversion price
     4.00       4.00  
Remaining term (years)
     1.97       0.00  
Equity volatility
     49.00     N/A  
Risk free rate
     1.57     N/A  
Probability of default event
1
     0.45     N/A  
Utilization of Forced Conversion (if available)
1
     100.00     100.00
Exercise of Default Redemption (if available)
1
     100.00     N/A  
Effective discount rate
1
     18.52     N/A  
 
 
1
Represents a Level 3 unobservable input, as defined in Note 8—Fair Value Measurements, below.
The Company’s stock price was based on the closing stock price on the valuation date. The conversion price was based on the contractual conversion price included in the SPA.
The remaining term was determined based on the remaining time period to maturity of the Convertible Debentures, or remaining term under the expectation of the Company’s election of its forced conversion right.
The Company’s equity volatility estimate was based on the Company’s historical equity volatility, the Company’s implied and observed volatility of option pricing, and the historical equity and observed volatility of option pricing for a selection of public companies.
The risk-free rate was determined based on U.S. Treasury securities with similar terms.
The probability of the occurrence of a default event was based on Bloomberg’s
1-year
estimate of default risk for the Company (extrapolated over the remaining term).
The utilization of the forced conversion right and the default redemption right was based on management’s best estimate of both features being exercised upon the occurrence of the related contingent events.
The effective discount rate utilized at the December 31, 2019 valuation date was based on yields on
CCC-rated
debt instruments with terms equivalent to the remaining term of the Convertible Debentures. The credit rating estimate was based on the implied credit rating determined at issuance and no changes were identified by the Company that would impact this assessment.
 
17

Table of Contents
The fair value and principal value of the Convertible Debentures as of December 31, 2019 and the Conversion Date was as follows (in thousands):
 
 
 
 
 
 
 
 
 
 
Convertible Debentures
  
December 31, 2019
    
February 21, 2020
 
                   
Fair value, in accordance with fair value option
   $ 13,642      $ 21,164  
    
 
 
    
 
 
 
Principal value outstanding
   $ 6,970      $ 6,970  
    
 
 
    
 
 
 
In February 2020 the Company recorded a loss from the change in fair value of the Convertible Debentures of approximately $7.5 million for period through the Conversion Date which is described in the additional fair value disclosures related to the Convertible Debentures in Note 8.
Upon the consummation of the forced conversion, the Company issued 1,816,466 shares of common stock with a fair value of approximately $21.2 million, which was reclassified to stockholders’ equity.
(d) Principal and Interest Payments Related to Financing Arrangements
The Company no longer has any financing agreements as of September 30, 2021.
The following amounts are included in interest expense in the Company’s consolidated statement of operations for the three and nine months ended September 30, 2021 and 2020 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
Three Months Ended
September 30,
    
Nine Months Ended
September 30,
 
    
2021
    
2020
    
2021
    
2020
 
                                     
Cash interest expense
   $          $ 94      $  141      $  232  
Interest on convertible debentures
     —          —          —          49  
Accrual of notes payable final payment
     —          8        —          47  
Amortization of debt costs
     —          13        —          32  
    
 
 
    
 
 
    
 
 
    
 
 
 
Total interest expense
   $         $  115      $ 141      $ 360  
    
 
 
    
 
 
    
 
 
    
 
 
 
 
18

Table of Contents
Note 5 – Lease Commitments
Under ASC 842, “Leases” (“ASC 842”), the Company determines if an arrangement contains a lease at inception. A lease is a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment (i.e., an identified asset) for a period of time in exchange for consideration. Leases are classified as either operating leases or financing leases. 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. The Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company determines the incremental borrowing rates for its leases by applying its applicable, fully collateralized borrowing rate, with adjustment as appropriate for the 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 option to extend the lease if the Company is reasonably certain to exercise that option. The Company considers a number of factors when evaluating whether the options in its lease contracts are reasonably certain of exercise, such as length of time before option exercise, expected value of the leased asset at the end of the initial lease term, importance of the lease to overall operations, costs to negotiate a new lease, and any contractual or economic penalties.
Right-of-use
assets and obligations for short-term leases (leases with an initial term of 12 months or less) are not recognized in the consolidated balance sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. The Company does not sublease any of its leased assets to third parties. 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. As the Company has determined that the
non-lease
component of these agreements is the predominant component, the Company accounted for the complete agreement under ASC 606 upon adoption of ASC 842.
ASC 842 includes a number of reassessment and
re-measurement
requirements for lessees based on certain triggering events or conditions, including whether a contract is or contains a lease, assessment of lease term and purchase options, measurement of lease payments, assessment of lease classification and assessment of the discount rate. The Company reviewed the reassessment and
re-measurement
requirements and identified two lease modifications which are reflected in the table below showing the maturity of the Company’s lease liabilities as of September 30, 2021. This includes an extension of an operating lease for the facility leased by the Company in San Jose, California as well as some equipment. In addition, there were no impairment indicators identified during the quarter ended September 30, 2021 that required an impairment test for the Company’s
right-of-use
assets or other long-lived assets in accordance with ASC 360 10 “Property Plant and Equipment” (“ASC 360”).
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 not separate its accounting of lease components and
non-lease
components for real estate and equipment leases.
 
19

Table of Contents
Components of Leases:
The Company has leases for office space and office equipment. The leases have remaining lease terms ranging from less than one year to four years and six months as of September 30, 2021.
The components of lease expense for the three and nine months ended September 30, 2021 are as follows (in thousands):
 
Lease Cost
  
Classification
  
Three Months Ended
September 30, 2021
 
  
Nine Months Ended
September 30, 2021
 
Operating lease cost—Right of Use Asset
  
Operating expenses
   $  214      $  649  
Operating lease cost—Variable
  
Operating expenses
     63      $ 127  
 
  
    
 
 
    
 
 
 
Total
  
     $ 277      $ 776  
         
 
 
    
 
 
 
Other information related to leases was as follows (in thousands):
 
 
  
Three Months Ended
September 30, 2021
 
  
Nine Months Ended
September 30, 2021
 
Cash paid from operating cash flows for operating leases
  
$
230
 
  
$
581
 
 
 
 
 
 
 
    
As of September 30,
2021
 
          
Weighted-average remaining lease term of operating leases (in years)
     1.47  
Weighted-average discount rate for operating leases
     5.5
 
20

Table of Contents
Maturity of the Company’s lease liabilities as of September 30, 2021 was as follows (in thousands):
 
 
 
 
 
 
As of September 30, 2021:
  
Operating
Leases
 
          
2021
     229  
2022
     899  
2023
     211  
2024
     5  
    
 
 
 
Total lease payments
     1,344  
Less: imputed interest
     (57
    
 
 
 
Total lease liabilities
     1,287  
Less: current portion of lease liabilities
     (856
    
 
 
 
Long-term lease liabilities
   $ 431  
Note 6 – Stockholders Equity
(a) Financing Activity
On March 2, 2021, the Company entered into an underwriting agreement with Guggenheim Securities, LLC, as representative of the several underwriters thereto, in connection with an underwritten public offering of 1,393,738 shares of the Company’s common stock at an offering price of $18.00 per share. The offering closed on March 5, 2021 for gross proceeds of approximately $25.1 million and net proceeds of approximately $23.2 million to the Company.
 
21

Table of Contents
(b) Stock-Based Compensation
The Company
granted options to purchase 403,000 and 831,938 shares of the Company’s stock during the three and nine months e
nded
September 30, 2021 respectively. 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 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
Three Months Ended
September 30,
 
 
Nine Months Ended
September 30,
 
        
 
   
 
         
    
2021
 
 
2020
 
 
2021
   
2020
 
        
 
   
 
         
Average risk-free interest rate
   0.41 %
 
0.15 %
 
0.28   0.79
Expected dividend yield
   None  
 
None  
 
None     None  
Expected life
   3.5 years  
 
3.5 years  
 
3.5 years     3.5 years  
Expected volatility
   65.57% to 67.42
 
66.0% to 66.0
%
 
65.57% to 67.42   50.2 to 65.7
Weighted average exercise price
   $15.04  
 
$8.84  
 
$16.61     $10.08  
Weighted average fair value
   $6.18  
 
$4.11  
 
$7.34     $4.34  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
Three Months Ended
September 30,
    
Nine Months Ended
September 30,
 
                             
    
2021
    
2020
    
2021
    
2020
 
                                     
Cost of revenue
   $ 3      $ 3      $ 20      $ 28  
Engineering and product development
     73        64        281        406  
Marketing and sales
     149        61        629        608  
General and administrative
     431        337        1,172        1,500  
    
 
 
    
 
 
    
 
 
    
 
 
 
     $  656      $  465      $  2,102      $  2,542  
    
 
 
    
 
 
    
 
 
    
 
 
 
 
22

Table of Contents
As of September 30, 2021, unrecognized compensation cost (in thousands) related to unvested options and unvested restricted stock and the weighted average term of such equity instruments is as follows:
 
 
 
 
 
 
Remaining expense
   $ 4,972  
Weighted average term
     1.3  
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 Company
did not grant any shares of restricted stock during the three-months ended September 30, 2021 or 2020. The Company granted 22,488 and 0 shares of restricted stock during the nine-months ended September 30, 2021 and 2020, respectively.
The Company’s aggregate intrinsic value for stock options and restricted stock outstanding is as follows (in thousands):
 
 
 
 
 
 
 
 
 
 
    
As of September 30,
 
               
Aggregate intrinsic value
  
2021
    
2020
 
Stock options
   $  8,765      $  6,679  
Restricted stock
     19