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 8, 2007

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 8, 2007 iCAD, Inc. (“Company”) issued a press release announcing its financial results for the quarter ended March 31, 2007. 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 8, 2007.

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 and Chief Financial Officer, Treasurer

Date: May 14, 2007

EXHIBIT INDEX

Exhibit No. Description of Document

99.1 Press Release of iCAD, Inc., dated May 8, 2007.

EX-99.1

Press Release

iCAD, INC. REPORTS FIRST QUARTER 2007 OPERATING RESULTS

Highlights include 41% revenue growth over first quarter

of 2006 and lower net loss

Nashua, NH—May 8, 2007—iCAD, Inc (Nasdaq: ICAD), an industry-leading provider of Computer-Aided Detection (CAD) solutions for the early detection of cancer, today announced financial results for its first quarter ended March 31, 2007.

Highlights of the quarter include 41% revenue growth, higher gross margin and a reduced loss from operations over the first quarter of 2006. The Company reported revenue of $6.1 million for the first quarter of 2007 as compared to $4.4 million for the same period of 2006. Gross margin for the first quarter increased to 80.3%, from 79.0% in the prior-year first quarter. Net loss for the first quarter of 2007, including equity based compensation of $277,000, decreased to $554,000, or ($0.02) per share, compared to a net loss, including equity based compensation of $8,000, of $1.6 million or ($0.04) per share in the first quarter of 2006.

Sales of iCAD’s digital solutions rose 76% over the prior year first quarter from $2.0 million to $3.5 million due to the continued strength in demand for full field digital mammography technology. Sales of film based products rose 3% over the prior year first quarter from $1.76 million to $1.8 million and service revenue rose 35% over the prior year first quarter from $650,000 to $877,000. Additionally, backlog rose 320% over the prior year first quarter from $493,000 to $2.1 million.

	Q1 2007		Q1 2006		% Growth
Digital revenue	$	3,453,370	$	1,964,060		75.8	%
Film based revenue		1,817,304		1,759,907		3.3	%
Service revenue		876,812		649,683		35.0	%
Total revenue	$	6,147,486	$	4,373,650		40.6	%

“Our first quarter performance demonstrates the continued strong demand for digital mammography CAD. Also, on a comparative basis, we’ve made significant progress against our key financial measures as well,” said Ken Ferry, Chief Executive Officer of iCAD, Inc. “We are also seeing business momentum on a global basis and believe that the increasing demand for digital mammography CAD in Europe and Japan will nicely compliment our U.S. performance in the coming quarters. This additional market reach will also serve us well as we bring new CAD products to the market that we expect will extend our reach beyond mammography.”

iCAD’s management will host a conference call today at 10:00 a.m. EDT to discuss financial results and answer investor questions. Shareholders and other interested parties may participate by dialing +1866 356 4123 (domestic) or +1617 597 5393 (international) and entering passcode 76366422, a few minutes before the start of the conference call. A replay of the conference call will be accessible two hours after its completion through May 15, 2007 by dialing +1 888 286 8010 (domestic) or +1617 801 6888 (international) and entering passcode 97889019. The call will also be broadcast live and archived for 90 days on the Internet at www.streetevents.com, www.fulldisclosure.com and www.icadmed.com.

About iCAD, Inc.

iCAD, Inc. (NASDAQ: ICAD) 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 almost one thousand women’s healthcare centers worldwide. For more information, call +1 877 iCADnow or visit www.icadmed.com.

For iCAD, contact Darlene Deptula-Hicks at 603-882-5200 x7944 or via email at ddeptula@icadmed.com

For iCAD Investor Relations, contact Kevin McGrath of Cameron Associates

at 212-245-4577 or via email at kevin@cameronassoc.com

For iCAD Public Relations, contact Wendy Ryan of Schwartz Communications

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

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

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 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.

iCAD, INC.
Consolidated Statements of Operations
(unaudited)
	Three Months Ended			Three Months Ended
	March 31, 2007			March 31, 2006
Sales	$	6,147,486		$	4,373,650
Cost of sales		1,208,628			918,879
Gross margin		4,938,858			3,454,771
Operating expenses:
Engineering and product development		1,064,875			1,319,198
General and administrative		1,813,355			1,749,053
Marketing and sales		2,508,759			1,985,687
Total operating expenses		5,386,989			5,053,938
Income (loss) from operations		(448,131	)		(1,599,167	)
Interest expense - net		105,806			6,727
Net loss		(553,937	)		(1,605,894	)
Preferred dividend		29,050			30,432
Net income (loss) attributable to common stockholders	$	(582,987	)	$	(1,636,326	)
Net income (loss) per share:
Basic and Diluted	$	(0.02	)	$	(0.04	)
Weighted average number of shares used in
computing income (loss) per share:
Basic and diluted		37,472,457			36,863,386

iCAD, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
	March 31,			December 31,
Assets	2007			2006
Current assets:
Cash and cash equivalents	$	3,431,049		$	3,623,404
Trade accounts receivable, net of allowance for doubtful
accounts of $91,000 in 2007 and $88,000 in 2006		3,874,547			3,683,178
Inventory, net		2,628,382			3,031,995
Prepaid and other current assets		276,126			219,723
Total current assets		10,210,104			10,558,300
Property and equipment:
Equipment		3,953,460			3,716,247
Leasehold improvements		59,856			70,164
Furniture and fixtures		306,059			296,170
Marketing assets		295,893			290,282
		4,615,268			4,372,863
Less accumulated depreciation and amortization		2,499,444			2,269,139
Net property and equipment		2,115,824			2,103,724
Other assets:
Deposits		63,194			60,444
Patents, net of accumulated amortization		126,863			146,394
Technology intangibles, net of accumulated amortization		3,577,905			3,731,926
Tradename, distribution agreements and other,
net of accumulated amortization		167,400			173,600
Goodwill		43,515,285			43,515,285
Total other assets		47,450,647			47,627,649
Total assets	$	59,776,575		$	60,289,673
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	2,062,352		$	2,557,108
Accrued interest		327,669			221,050
Accrued salaries and other expenses		2,247,014			2,547,231
Deferred revenue		917,595			788,122
Current maturities of notes payable		-			375,000
Total current liabilities		5,554,630			6,488,511
Convertible revolving loans payable to related party		2,258,906			2,258,906
Convertible loans payable to related parties		2,786,765			2,784,559
Convertible loans payable to non-related parties		669,118			663,970
Other long term liabilities		86,433			122,000
Total liabilities		11,355,852			12,317,946
Commitments and contingencies
Stockholders' equity:
Preferred stock, $ .01 par value: authorized
1,000,000 shares; issued and outstanding
6,295 in 2007 and 2006, with an aggregate liquidation
value of $1,660,000 plus 7% annual dividend,
in 2006 and 2005, respectively.		63			63
Common stock, $ .01 par value: authorized
50,000,000 shares; issued 37,865,333 in 2007
and 37,290,848 shares in 2006; outstanding
37,797,457 in 2007 and 37,222,971 shares in 2006		378,653			372,908
Additional paid-in capital		133,657,535			132,660,347
Accumulated deficit		(84,665,264	)		(84,111,327	)
Treasury stock at cost (67,876 shares)		(950,264	)		(950,264	)
Total Stockholders' equity		48,420,723			47,971,727
Total liabilities and stockholders' equity	$	59,776,575		$	60,289,673

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