R2 TECHNOLOGY AND ICAD ANNOUNCE SETTLEMENT OF
                            PATENT INFRINGEMENT SUITS

         SUNNYVALE, CALIF. AND NASHUA, N.H., SEPT. 8, 2003 - R2 Technology, Inc.
and  iCAD,  Inc.,  (Nasdaq:  ICAD)  announced  today  the  settlement  of patent
infringement  lawsuits filed by each party against the other. As a result of the
settlement,  R2 will dismiss with  prejudice  Civil  Action No.  02-472-GMS,  R2
Technology,  Inc. and Shih-Ping Wang v. Intelligent Systems Software, Inc., ISSI
Acquisition  Corporation  and iCAD,  Inc.,  filed in the United States  District
Court for the District of  Delaware.  iCAD will  dismiss  with  prejudice  Civil
Action No. C-03-280-B, iCAD, Inc. and Scanis, Inc. v. R2 Technology, Inc., filed
in the United States District Court for the District of New Hampshire.
         Under  the terms of the  settlement,  iCAD is  granted a  non-exclusive
license  to the  patents  named in the  suit  filed by R2.  In  connection  with
settlement  of the suit,  iCAD agreed to pay R2 an aggregate  of $1.25  million,
with $250,000 deferred and payable on a quarterly basis through December,  2005.
In  addition,  iCAD  will  issue to R2  shares of iCAD  Common  Stock  valued at
$750,000.  iCAD also agreed to certain continuing royalties,  which are based on
the category  and  configuration  of products  sold by iCAD.  Further,  iCAD has
granted R2 a partial credit against future purchase of iCAD digitizers  worth up
to $2.5  million over five years to  encourage  R2 to purchase  film  digitizers
manufactured  by iCAD.  This  partial  credit is meant to provide a  significant
purchasing  advantage to R2, while  maintaining  a reasonable  profit margin and
creating additional economies of scale for iCAD.
         "We are pleased that our  intellectual  property has been  validated in
the settlement of the patent suit against  iCAD," said Michael Klein,  president
and CEO,  R2  Technology.  "As we have  said  from the  beginning,  R2  welcomes
competition  in the  area  of  computer  aided  detection.  However,  we  have a
significant investment in breakthrough technology designed to help detect cancer
earlier.  As a result, R2 will vigorously protect its intellectual  property and
fully enforce its patent rights against any form of infringement."
         W.  Scott  Parr,   iCAD's   President   and  CEO,   expressed   similar
satisfaction,  "This  settlement  provides  benefits for both iCAD and R2, while
eliminating the enormous costs and  distractions  of continuing  litigation both
parties would otherwise face. We are particularly  pleased at the opportunity to
convert an  adversarial  relationship  into one in which a mutual and continuing
business relationship may be formed." ABOUT R2 TECHNOLOGY, INC.
For more information about R2 Technology, visit www.r2tech.com.

ABOUT ICAD, INC.
For more information about iCAD, Inc., visit www.icadmed.com.
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Certain statements  contained in this News Release 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 that may cause actual results to differ
materially from such forward-looking statements. Such risks include, but are not
limited  to,   uncertainties   associated  with  litigation   and/or  government
regulation, changes in Medicare reimbursement policies, competitive factors, and
other  risks  that are  detailed  in the  Company's  periodic  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 to avoid  placing
undue reliance on such  forward-looking  statements,  which speak only as of the
date the statements were made.


       R2 MEDIA CONTACT: Chris K. Joseph, 408.481.5668, cjoseph@r2tech.com
                                                        ------------------

  ICAD MEDIA CONTACT: R.J. Falkner & Company, Inc., Investor Relations Counsel,
               (800) 377-9893 or via email at info@rjfalkner.com