8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported)May 7, 2008

iCAD, INC. 

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdictionof Incorporation)

1-9341	02-0377419
(Commission File Number)	(IRS Employer Identification No.)

98 Spit Brook Road, Suite 100, Nashua, New Hampshire	03062
(Address of Principal Executive Offices)	(Zip Code)

(603) 882-5200

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02	Results of Operations and Financial Condition.
	On May 7, 2008 iCAD, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2008. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01	Financial Statements and Exhibits
	Exhibit 99. 1 referenced below is being furnished pursuant to Item 2.02, is not to be considered filed under the Securities Exchange Act of 1934, as amended ("Exchange Act"), and shall not be incorporated by reference into any of the Company's previous or future filings under the Securities Act of 1933, as amended, or the Exchange Act.

(d) Exhibits.

Exhibit No.	Description of Exhibit
99.1	Press Release of iCAD, Inc., dated May 7, 2008.

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)
By:	/s/ Darlene M. Deptula-Hicks
	Darlene M. Deptula-Hicks
	Executive Vice President of Finance, Chief Financial Officer

Date: May 7, 2008

EXHIBIT INDEX

Exhibit No.	Description of Document
99.1	Press Release of iCAD, Inc. dated May 7, 2008.

EX-99.1

For Immediate Release

Press Release

iCAD REPORTS FIRST QUARTER 2008 FINANCIAL RESULTS

Strong Digital Mammography Revenue Growth and FDA Approval of Fujifilm

CAD Product Expected to Drive Growth in 2008;

Affirms First Half 2008 Financial Guidance

Conference Call Begins Today at 10:00 a.m. ET

NASHUA, N.H. (May 7, 2008) - iCAD, Inc. (NASDAQ: ICAD), anindustry-leading provider of Computer-Aided Detection (CAD) solutions for the early identification of cancer, today announced financial results for the three months ended March 31, 2008. Financial highlights for the first quarter of 2008 include the following (all comparisons are with the first quarter of 2007):

· Total revenue of $6.4 million, up 5 percent

· Digital revenue of $4.3 million, up 24 percent

· International revenue of $728,000 up 34 percent

· Gross margin of 82.3 percent improved by 200 basis points

· Net loss reduced 24 percent to $446,000, or $0.01 per share

· Third consecutive quarter with positive cash flow from operations

“Our financial performance during the first quarter of 2008 was one of ongoing improvement,” commented Ken Ferry, iCAD’s President and CEO. “We saw continued strong demand for our digital products and were particularly pleased to have received U.S. Food and Drug Administration (FDA) approval for our SecondLook® Digital product for use with Fujifilm’s Computed Radiography for Mammography (FCRm) systems. SecondLook® Digital for FCRm is the first CAD product approved and available in the U.S. for use with computed radiography. This represents a considerable market opportunity for iCAD as Fujifilm has enjoyed record domestic sales, having sold 500 FCRm systems since receiving their FDA approval in July 2006. In March we introduced a new version of our comparative reading solution, TotalLook and while it temporarily slowed film based product sales as customers wanted to see a demonstration before making a purchase decision, we expect substantial increased demand as we get a full quarter of traction in the second quarter.”

“The digital CAD market opportunity continues to be strong with considerable room for sustained growth. According to the FDA website, 561 full field digital mammography (FFDM) units were placed in service in the first quarter, an increase of 39percent over the first quarter of 2007. Even with this substantial growth, approximately 67percent of the installed base is still film based, reflecting a substantial growth opportunity for us over the next two to three years, as more centers continue to migrate to digital technology.”

2008 First Quarter Results

Total revenue for the first quarter of 2008 was $6.4 million, a 5percent increase compared with total revenue of $6.1 million for the first quarter of 2007. The increase reflects continued growth in sales of the Company’s digital products, offset by declines in film-based revenue and service and supply revenue. Lower film-based revenue was largely due to the mid-quarter introduction of the Company’s new version of its TotalLook product, as customers held off purchases awaiting the new product, which began shipping toward the end of the quarter. The Company expects that second quarter results will benefit from the launch of this new product and that film-based product revenue will increase as a result. The decline in service and supply revenue is primarily due to a reduction this quarter in time and material billings for repair services and related parts sales. Service and supply revenue is expected to increase as the installed base of digital CAD systems grows and transitions from warranty to service contracts.

The gross margin for the first quarter of 2008, increased to 82.3percent from 80.3percent in the prior-year first quarter. The net loss for the first quarter of 2008, including stock-based compensation expense of $392,000, narrowed to $446,000 or $0.01 per share, from a net loss, including stock-based compensation expense of $277,000, of $583,000 or $0.02 per share in the first quarter of 2007.

For the first quarter of 2008, sales of iCAD’s digital products increased 24percent to $4.3 million from $3.5 million in the prior-year period.  Sales of film-based products decreased 25percent to $1.4 million from $1.8 million, and service and supply revenue declined 11percent to $777,000 from $877,000, both compared with first quarter 2007 results.

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	Three Months Ended March 31,
	2008		2007		percent Change
Digital revenue	$	4,285,666	$	3,453,370		24.1percent
Film based revenue		1,368,957		1,817,304		24.7percent
Service & supply revenue		777,393		876,812		11.3percent
Total revenue	$	6,432,016	$	6,147,486		4.6percent

Commenting on the balance sheet, Darlene Deptula-Hicks, Executive Vice President and Chief Financial Officer, said, “We continue to strengthen our balance sheet and are pleased to report that during the first quarter iCAD generated over $900,000 in cash, marking our third consecutive quarter of positive cash flow. During the quarter we held operating expenses to the lower end of our projected range and consequently we remain in a strong position moving forward.”

As of March 31, 2008, iCAD had cash and cash equivalents of $5.3 million, compared with $4.3 million as of December 31, 2007. As of March 31, 2008 inventories increased modestly to $2.0 million from $1.8 million as of December 31, 2007, primarily due to preparing for the launch of Fuji CAD. Accounts payable were $1.6 million, down 20percent from $2.0 million and accounts receivable decreased 30percent to $4.5 million, from $6.5 million as of December 31, 2007.

2008 Financial Guidance

iCAD affirms financial guidance for the first six months of 2008. As previously reported the Company expects total revenue for the first half of 2008 to be in the range of $15 million to $16 million. The Company also expects to achieve a first-half gross margin consistent with or slightly better than 2007, and anticipates operating expenses will be between $5.6 million and $5.9 million per quarter for the first two quarters of 2008. This guidance includes sales of iCAD’s SecondLook® Digital and TotalLook products to Fujifilm globally, which commenced in the second quarter.

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Conference Call

iCAD management will host an investment community conference call beginning at 10:00 a.m. ET today to discuss these results and to answer questions. Stockholders and other interested parties may participate in the conference call by dialing 866-383-8119 (domestic) or +617-597-5344 (international) and entering passcode 45812263. The call will also be broadcast live on the Internet at www.streetevents.com, www.fulldisclosure.com or www.icadmed.com.

A replay of the conference call will be accessible two hours after its completion through May 14, 2008 by dialing 888-286-8010 (domestic) or +617-801-6888 (international) and entering passcode 16440562. The call will also be archived for 90 days at www.streetevents.com, www.fulldisclosure.com and www.icadmed.com.

About iCAD, Inc.

iCAD, Inc. is an industry-leading provider of Computer-Aided Detection (CAD) solutions that enable healthcare professionals to better serve patients by identifying pathologies and pinpointing cancer earlier. iCAD offers a comprehensive range of high-performance, upgradeable CAD systems for the high, mid and low volume mammography markets. iCAD is entrusted with the task of early cancer detection by more than 2,000 women’s healthcare centers worldwide. For more information, call (877) iCADnow or visit www.icadmed.com.

For iCAD, contact Darlene Deptula-Hicks, EVP and CFO at 603-882-5200 x7944 or

via email atddeptula@icadmed.com

For iCAD Investor Relations, contact Anne Marie Fields of Lippert/Heilshorn & Associates at 212-838-3777 x6604 or via email atafields@lhai.com

For iCAD Public Relations, contact Jill Testagrossa of Schwartz Communications

at 781-684-0770 or via email at icad@schwartz-pr.com

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"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

Certain statements contained in this News Release, including but not limited to, statements about the Company’s confidence or strategies or expectations about revenues, results of operations, timing of regulatory approval of products or market opportunities, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the risks of uncertainty of patent protection, the impact of supply and manufacturing constraints or difficulties, product market acceptance, possible technological obsolescence, increased competition, customer concentration and other risks detailed in the Company’s filings with the Securities and Exchange Commission. The words “believe”, “demonstrate”, “intend”, “expect”, “estimate”, “anticipate”, “likely”, and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. The Company is under no obligation to provide any updates to any information contained in this release.

-Tables to Follow-

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iCAD, INC.

Consolidated Statements of Operations

(unaudited)

	Three Months Ended			Three Months Ended
Revenue	March 31, 2008			March 31, 2007
Products	$	5,654,623		$	5,270,674
Service and supplies		777,393			876,812
Total revenue		6,432,016			6,147,486
Cost of revenue
Products		955,416			1,004,118
Service and supplies		182,769			204,510
Total cost of revenue		1,138,185			1,208,628
Gross margin		5,293,831			4,938,858
Operating expenses:
Engineering and product development		1,409,209			1,064,875
Marketing and sales		2,383,522			2,508,759
General and administrative		1,848,346			1,813,355
Total operating expenses		5,641,077			5,386,989
Loss from operations		(347,246	)		(448,131	)
Interest expense - net		98,607			105,806
Net loss		(445,853	)		(553,937	)
Preferred dividend		-			29,050
Net loss attributable to common stockholders	$	(445,853	)	$	(582,987	)
Net loss per share:
Basic and Diluted	$	(0.01	)	$	(0.02	)
Weighted average number of shares used in
computing loss per share:
Basic and diluted		39,171,876			37,472,457

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iCAD, INC.

Consolidated Balance Sheets

(unaudited)

	March 31,			December 31,
Assets	2008			2007
Current assets:
Cash and cash equivalents	$	5,255,657		$	4,348,729
Trade accounts receivable, net of allowance for doubtful
accounts of $50,000 in 2008 and 2007		4,544,996			6,483,618
Inventory, net		1,971,195			1,798,243
Prepaid and other current assets		327,100			320,169
Total current assets		12,098,948			12,950,759
Property and equipment:
Equipment		3,505,790			3,512,557
Leasehold improvements		71,611			71,611
Furniture and fixtures		330,077			330,077
Marketing assets		323,873			323,873
		4,231,351			4,238,118
Less accumulated depreciation and amortization		2,511,671			2,369,590
Net property and equipment		1,719,680			1,868,528
Other assets:
Deposits		63,194			63,194
Patents, net of accumulated amortization		48,738			68,269
Technology intangibles, net of accumulated amortization		2,961,823			3,115,843
Tradename, net of accumulated amortization		142,600			148,800
Goodwill		43,515,285			43,515,285
Total other assets		46,731,640			46,911,391
Total assets	$	60,550,268		$	61,730,678
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,609,407		$	2,010,717
Accrued salaries and other expenses		2,532,638			3,461,422
Deferred revenue		1,865,045			1,674,005
Convertible loans payable to related parties		2,795,588			2,793,382
Convertible loans payable to non-related parties		689,706			684,559
Total current liabilities		9,492,384			10,624,085
Convertible revolving loans payable to related party		2,258,906			2,258,906
Total liabilities		11,751,290			12,882,991
Commitments and contingencies
Stockholders' equity:
Common stock, $ .01 par value: authorized 85,000,000
shares; issued 39,243,708 in 2008 and 39,239,208
in 2007; outstanding 39,175,832 in 2008 and
39,171,332 in 2007		392,437			392,392
Additional paid-in capital		135,452,517			135,055,418
Accumulated deficit		(86,095,712	)		(85,649,859	)
Treasury stock at cost (67,876 shares)		(950,264	)		(950,264	)
Total Stockholders' equity		48,798,978			48,847,687
Total liabilities and stockholders' equity	$	60,550,268		$	61,730,678

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