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)August 9 , 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 2.02Results of Operations and Financial Condition.

On August 9, 2007 iCAD, Inc. ( the “Company”) issued a press release announcing its financial results for the quarter and six months ended June 30, 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 August 9, 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, Chief Financial Officer

Date: August 14, 2007

EXHIBIT INDEX

Exhibit No.	Description of Document
99.1	Press Release of iCAD, Inc. dated August 9, 2007.

EX-99.1

Press Release

iCAD, INC. REPORTS SECOND QUARTER 2007 OPERATING RESULTS

Highlights include 58% revenue growth and lower net loss over second quarter of 2006, record digital CAD revenues and second half financial guidance

Nashua, NH—August 9, 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 second quarter ended June 30, 2007 and expected financial performance for the second half of 2007.

Second Quarter 2007 Results

Highlights of the second quarter include 58% revenue growth, higher gross margin and a reduced loss from operations over the second quarter of 2006. Also of note, the Company reported record revenues from sales of its digital mammography CAD products. The Company reported total revenue of $6.1 million for the second quarter of 2007 as compared to $3.9 million for the same period of 2006. Gross margin for the second quarter increased to 80.0%, from 78.4% in the prior-year second quarter. Net loss for the second quarter of 2007, including share based compensation of $216,000, decreased to $866,000, or ($0.02) per share, compared to a net loss, including share based compensation of $539,000, of $2.6 million or ($0.07) per share in the second quarter of 2006.

Sales of iCAD’s digital CAD solutions rose 131% over the prior year second quarter from $1.7 million to $4.0 million due to the continued strong demand for full field digital mammography technology and CAD. Sales of film based products declined 8% over the prior year second quarter from $1.4 million to $1.3 million, and service revenue rose 13% over the prior year second quarter from $745,000 to $841,000. Additionally, backlog rose 67% over the prior year second quarter from approximately $900,000 to $1.5 million.

	Q2 2007		Q2 2006		% Growth
Digital revenue	$	3,961,880	$	1,714,515		131.1	%
Film based revenue		1,301,852		1,409,690		(7.6	%)
Service revenue		841,004		745,488		12.8	%
Total revenue	$	6,104,736	$	3,869,693		57.8	%

Year To Date 2007 Results

For the six months ended June 30, 2007, revenue increased 49%, to $12.3 million compared to revenue of $8.2 million in the six months ended June 30, 2006. Gross margin for the six months increased to 80.2% from 78.7% in the prior-year six months. Net loss for the six months ended June 30, 2007, including share based compensation of $493,000, decreased to $1.4 million, or ($0.04) per share, compared to a net loss, including share based compensation of $547,000, of $4.2 million or ($0.11) per share in the six months ended June 30, 2006.

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For the six months ended June 30, 2007, sales of iCAD’s digital solutions increased 102% over the prior year six month period from $3.7 million to $7.4 million. Sales of film based products declined slightly by 2% over the prior year six months, from $3.2 million to $3.1 million and service revenue rose 23% over the prior year six months from $1.4 million to $1.7 million.

	Six months ended June 30, 2007		Six months ended June 30, 2006		% Growth
Digital revenue	$	7,415,250	$	3,678,575		101.6	%
Film based revenue		3,119,156		3,169,597		(1.6	%)
Service revenue		1,717,816		1,395,171		23.1	%
Total revenue	$	12,252,222	$	8,243,343		48.6	%

“Our second quarter performance demonstrates continued strong progress. I am particularly pleased with the pace of the performance improvements generated by the new management team, which has now completed about four quarters together,” said Ken Ferry, President and Chief Executive Officer of iCAD, Inc. “It is also significant that we delivered record quarterly digital revenue, more than doubling over the second quarter of last year. We believe this pace will continue as only about 20% of the U.S. installed base of mammography systems have converted to digital technology, and the corresponding adoption rate of CAD may now exceed 90%. In addition, we see increasing demand in the international markets.”

Second Half 2007 Financial Outlook

For the second half of 2007, the Company anticipates revenue in the range of $13.7 million to $14.7 million, equating to a full year revenue estimate of $26 million to $27 million. This guidance does not include any potential revenue from the sale of iCAD’s SecondLook Digital and TotalLook products to Fuji in the U.S. The Company also expects to maintain gross margins in the 80% range and anticipates operating expenses will range between $5.3 million and $5.7 million per quarter, as previously guided.

Conference Call Information

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 +1-866-761-0748 (domestic) or +1-617-614-2706 (international) and entering passcode 56865575, 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 August 16, 2007 by dialing +1 888 286 8010(domestic) or +1 617 801 6888 (international) and entering passcode 17941240. 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.

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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.

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iCAD, INC.
Consolidated Statements of Operations
(unaudited)
	Three Months						Six Months
	June 30,						June 30,
	2007			2006			2007			2006
Revenue
Products	$	5,263,732		$	3,124,205		$	10,534,406		$	6,848,172
Service and supplies		841,004			745,488			1,717,816			1,395,171
Total revenue		6,104,736			3,869,693			12,252,222		$	8,243,343
Cost of revenue
Products		947,172			656,555			1,951,290			1,383,041
Service and supplies		271,021			180,853			475,531			373,246
Total cost of revenue		1,218,193			837,408			2,426,821			1,756,287
Gross margin		4,886,543			3,032,285			9,825,401			6,487,056
Operating expenses:
Engineering and product development		1,133,424			1,265,196			2,198,299			2,584,394
General and administrative		1,689,951			2,435,385			3,503,306			4,184,438
Marketing and sales		2,793,446			1,869,042			5,302,205			3,854,729
Total operating expenses		5,616,821			5,569,623			11,003,810			10,623,561
Loss from operations		(730,278	)		(2,537,338	)		(1,178,409	)		(4,136,505	)
Interest expense - net		109,333			20,961			215,139			27,688
Net loss	$	(839,611	)	$	(2,558,299	)	$	(1,393,548	)	$	(4,164,193	)
Preferred dividend		26,830			30,771			55,880			61,203
Net loss attributable to common stockholders	$	(866,441	)	$	(2,589,070	)	$	(1,449,428	)	$	(4,225,396	)
Net loss per share
Basic and Diluted	$	(0.02	)	$	(0.07	)	$	(0.04	)	$	(0.11	)
Weighted average number of shares used in computing loss per   share
Basic and Diluted		38,035,094			36,879,445			37,755,330			36,871,460
See accompanying notes to consolidated financial statements.

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iCAD, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

	June 30,			December 31,
Assets	2007			2006
Current assets:
Cash and cash equivalents	$	3,416,770		$	3,623,404
Trade accounts receivable, net of allowance for doubtful
accounts of $90,000 in 2007 and $88,000 in 2006		4,020,702			3,683,178
Inventory, net		2,299,577			3,031,995
Prepaid and other current assets		321,555			219,723
Total current assets		10,058,604			10,558,300
Property and equipment:
Equipment		4,108,174			3,716,247
Leasehold improvements		67,356			70,164
Furniture and fixtures		323,990			296,170
Marketing assets		297,420			290,282
		4,796,940			4,372,863
Less accumulated depreciation and amortization		2,758,126			2,269,139
Net property and equipment		2,038,814			2,103,724
Other assets:
Deposits		63,194			60,444
Patents, net of accumulated amortization		107,332			146,394
Technology intangibles, net of accumulated amortization		3,423,884			3,731,926
Tradename, distribution agreements and other,
net of accumulated amortization		161,200			173,600
Goodwill		43,515,285			43,515,285
Total other assets		47,270,895			47,627,649
Total assets	$	59,368,313		$	60,289,673
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,751,981		$	2,557,108
Accrued interest		444,313			221,050
Accrued salaries and other expenses		2,175,826			2,547,231
Deferred revenue		1,026,681			788,122
Current maturities of capital lease		64,514			-
Current maturities of notes payable		-			375,000
Total current liabilities		5,463,315			6,488,511
Convertible revolving loans payable to related party		2,258,906			2,258,906
Convertible loans payable to related parties		2,788,970			2,784,559
Convertible loans payable to non-related parties		674,265			663,970
Other long term liabilities		21,505			122,000
Total liabilities		11,206,961			12,317,946
Commitments and contingencies
Stockholders' equity:
Preferred stock, $ .01 par value: authorized
1,000,000 shares; issued and outstanding
5,655 in 2007 and 6,295 in 2006, with an aggregate
liquidation value of $1,515,000 and $1,660,000
in 2007 and 2006, respectively, plus 7% annual dividend.		57			63
Common stock, $ .01 par value: authorized
50,000,000 shares; issued 38,204,250 in 2007
and 37,290,848 shares in 2006; outstanding
38,136,374 in 2007 and 37,222,971 shares in 2006		382,042			372,908
Additional paid-in capital		134,234,392			132,660,347
Accumulated deficit		(85,504,875	)		(84,111,327	)
Treasury stock at cost (67,876 shares)		(950,264	)		(950,264	)
Total Stockholders' equity		48,161,352			47,971,727
Total liabilities and stockholders' equity	$	59,368,313		$	60,289,673
See accompanying notes to consolidated financial statements.

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