QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading symbol(s) |
Name of each exchange on which registered | ||
Large Accelerated filer | ☐ | ☒ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
Page | ||||||
PART I |
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Item 1 |
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3 | ||||||
4 | ||||||
5 | ||||||
6 | ||||||
8 | ||||||
Item 2 |
35 | |||||
Item 3 |
51 | |||||
Item 4 |
51 | |||||
PART II |
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Item 1 |
52 | |||||
Item 1A |
53 | |||||
Item 6 |
55 | |||||
56 |
June 30, |
December 31, |
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Assets |
2020 |
2019 |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Trade accounts receivable, net of allowance for doubtful accounts of $ |
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Inventory, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net of accumulated depreciation of $ |
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Operating lease assets |
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Other assets |
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Intangible assets, net of accumulated amortization of $ |
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Goodwill |
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Total assets |
$ | $ | ||||||
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued and other expenses |
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Notes payable - current portion |
— | |||||||
Lease payable - current portion |
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Deferred revenue |
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Total current liabilities |
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Lease payable, long-term portion |
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Notes payable, long-term portion |
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Convertible debentures payable to non-related parties, at fair value |
— | |||||||
Convertible debentures payable to related parties, at fair value |
— | |||||||
Deferred revenue, long-term portion |
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Deferred tax |
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Total liabilities |
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Commitments and Contingencies (Note 7) |
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Stockholders’ equity: |
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Preferred stock, $ par value: authorized |
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Common stock, $ par value: authorized as of June 30, 2020 and as of December 31, 2019. Outstanding as of June 30, 2020 and as of December 31, 2019. |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
Treasury stock at cost, |
( |
) | ( |
) | ||||
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ | $ | ||||||
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Three Months Ended June 30, |
Six Months Ended June 30, |
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2020 |
2019 |
2020 |
2019 |
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Revenue: |
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Products |
$ | $ | $ | $ | ||||||||||||
Service and supplies |
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Total revenue |
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Cost of revenue: |
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Products |
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Service and supplies |
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Amortization and depreciation |
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Total cost of revenue |
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Gross profit |
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Operating expenses: |
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Engineering and product development |
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Marketing and sales |
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General and administrative |
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Amortization and depreciation |
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Total operating expenses |
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Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income |
||||||||||||||||
Loss on extinguishment of debt |
— | — | ( |
) | — | |||||||||||
Loss on fair value of convertible debentures |
— | ( |
) | ( |
) | ( |
) | |||||||||
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Other expense, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Loss before income tax expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Tax expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Net loss and comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Net loss per share: |
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Basic |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Weighted average number of shares used in computing loss per share: |
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Basic |
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Diluted |
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For the Six Months ended June 30, |
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2020 |
2019 |
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(in thousands) | ||||||||
Cash flow from operating activities: |
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Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used for operating activities: |
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Amortization |
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Depreciation |
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Bad debt provision |
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Stock-based compensation expense |
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Amortization of debt discount and debt costs |
||||||||
Loss on extinguishment of debt |
— | |||||||
Deferred tax expense |
— | |||||||
Change in fair value of convertible debentures |
||||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ||||||
Inventory |
( |
) | ( |
) | ||||
Prepaid and other current assets |
( |
) | ||||||
Accounts payable |
( |
) | ||||||
Accrued expenses |
( |
) | ( |
) | ||||
Deferred revenue |
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Total adjustments |
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Net cash used for operating activities |
( |
) | ( |
) | ||||
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Cash flow from investing activities: |
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Additions to patents, technology and other |
( |
) | ( |
) | ||||
Additions to property and equipment |
( |
) | ( |
) | ||||
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Net cash used for investing activities |
( |
) | ( |
) | ||||
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Cash flow from financing activities: |
||||||||
Stock option exercises |
||||||||
Taxes paid related to restricted stock issuance |
— | ( |
) | |||||
Principal payments of capital lease obligations |
— | ( |
) | |||||
Principal repayment of debt financing |
( |
) | ( |
) | ||||
Repayment of credit line |
( |
) | — | |||||
Proceeds from debt financing |
— | |||||||
Debt issuance costs |
( |
) | ||||||
Proceeds from issuance of common stock, net |
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Net cash provided by financing activities |
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Decrease in cash and equivalents |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
$ | $ | ||||||
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Supplemental disclosure of cash flow information: |
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Interest paid |
$ | $ | ||||||
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Taxes paid |
$ | $ | ||||||
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|
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Issuance of stock upon conversion of debentures |
— | |||||||
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|
|||||
Right-of-use |
$ | $ | ||||||
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|
Common Stock |
Additional |
|||||||||||||||||||||||
Number of Shares Issued |
Par Value |
Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Stockholders’ Equity |
|||||||||||||||||||
Balance December 31, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Issuance of common stock relative to vesting of restricted stock |
— | ( |
) | ( |
) | |||||||||||||||||||
Issuance of common stock pursuant to stock option plans |
||||||||||||||||||||||||
Stock Issuance Net |
— | — | ||||||||||||||||||||||
Issuance of stock upon conversion of Debentures |
— | — | ||||||||||||||||||||||
Stock-based compensation |
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Net loss |
( |
) | ( |
) | ||||||||||||||||||||
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|
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Balance at June 30, 2020 |
$ |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
Common Stock |
Additional |
|||||||||||||||||||||||
Number of Shares Issued |
Par Value |
Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Stockholders’ Equity |
|||||||||||||||||||
Balance at March 31, 2020 |
$ | $ | $ | ( |
) | $ | ( |
)$ | $ | |||||||||||||||
Issuance of common stock relative to vesting of restricted stock |
— | ( |
) | ( |
) | |||||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— | |||||||||||||||||||||||
Stock Issuance Net |
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Stock-based compensation |
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Net loss |
( |
) | ( |
) | ||||||||||||||||||||
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Balance at June 30, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
|
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|
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|
Common Stock |
Additional |
|||||||||||||||||||||||
Number of Shares Issued |
Par Value |
Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Stockholders’ Equity |
|||||||||||||||||||
Balance at December 31, 2018 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||
Issuance of common stock relative to vesting of restricted stock shares forfeited for tax obligations |
( |
) |
— |
— |
( |
) | ||||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— |
— |
||||||||||||||||||||||
Stock Issuance Net |
||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
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Net loss |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||
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|
|||||||||||||
Balance at June 30, 2019 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
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|
Common Stock |
Additional |
|||||||||||||||||||||||
Number of Shares Issued |
Par Value |
Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Stockholders’ Equity |
|||||||||||||||||||
Balance at March 31, 2019 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||
Issuance of common stock relative to vesting of restricted stock shares forfeited for tax obligations |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— |
— |
||||||||||||||||||||||
Stock Issuance Net |
||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
||||||||||||||||||||
Net loss |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||
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Balance at June 30, 2019 |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
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Three months ended June 30, 2020 |
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Reportable Segments |
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Detection |
Therapy |
Total |
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Major Goods/Service Lines |
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Products |
$ | $ | $ | |||||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Other |
— | |||||||||||
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$ | $ | $ | ||||||||||
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Timing of Revenue Recognition |
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Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
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$ | $ | $ | ||||||||||
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Sales Channels |
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Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
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$ | $ | $ | ||||||||||
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Six months ended June 30, 2020 |
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Reportable Segments |
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Detection |
Therapy |
Total |
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Major Goods/Service Lines |
||||||||||||
Products |
$ | |
$ | $ | ||||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Professional services |
— | |||||||||||
Other |
— | |||||||||||
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$ | $ | $ | ||||||||||
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Timing of Revenue Recognition |
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Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
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$ | $ | $ | ||||||||||
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Sales Channels |
||||||||||||
Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
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$ | $ | $ | ||||||||||
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Three months ended June 30, |
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Reportable Segments |
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Detection |
Therapy |
Total |
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Major Goods/Service Lines |
||||||||||||
Products |
$ | $ | $ | |||||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Professional services |
— | |||||||||||
Other |
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|
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$ | $ | $ | ||||||||||
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|
|||||||
Timing of Revenue Recognition |
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Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
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$ | $ | $ | ||||||||||
|
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|
|||||||
Sales Channels |
||||||||||||
Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
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$ | $ | $ | ||||||||||
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|
Six months ended June 30, 2019 |
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Reportable Segments |
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Detection |
Therapy |
Total |
||||||||||
Major Goods/Service Lines |
||||||||||||
Products |
$ | $ | $ | |||||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Professional services |
— | |||||||||||
Other |
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|
|||||||
$ |
$ |
$ |
||||||||||
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|
|||||||
Timing of Revenue Recognition |
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Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
||||||||||||
|
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|
|
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|
|||||||
$ |
$ |
$ |
||||||||||
|
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|
|||||||
Sales Channels |
||||||||||||
Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
|
|
|
|
|
|
|||||||
$ |
$ |
$ |
||||||||||
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|
Balance at June 30, 2020 |
||||
Receivables, which are included in ‘Trade accounts receivable’ |
$ | |
||
Contract assets, which are included in “Prepaid and other current assets” |
||||
Contract liabilities, which are included in “Deferred revenue” |
Contract liabilities |
June 30, 2020 |
December 31, 2019 |
||||||
Short term |
$ | |
$ | |
||||
Long term |
||||||||
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|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
Six Months Ended |
||||
June 30, 2020 |
||||
Balance at beginning of period |
$ | |||
Deferral of revenue |
||||
Recognition of deferred revenue |
( |
) | ||
|
|
|||
Balance at end of period |
$ | |||
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Net loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||
|
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|||||||||
Shares used in the calculation of basic and diluted net loss per share |
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Diluted shares used in the calculation of net loss per share |
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|||||||||
Net loss per share - basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
Period Ended |
||||||||
June 30, |
||||||||
2020 |
2019 |
|||||||
Stock options |
||||||||
Restricted stock |
||||||||
Convertible Debentures |
— | |||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
As of June 30, 2020 |
As of December 31, 2019 |
|||||||
Raw materials |
$ | |
$ | |
||||
Work in process |
||||||||
Finished Goods |
||||||||
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|
|||||
Inventory Gross |
||||||||
Inventory Reserve |
( |
) | ( |
) | ||||
|
|
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|
|||||
Inventory Net |
$ | $ | ||||||
|
|
|
|
(a) |
Loan and Security Agreement – Western Alliance Bank |
(b) |
Loan and Security Agreement – Silicon Valley Bank |
(c) |
Convertible Debentures |
Input |
December 31, 2019 |
February 21, 2019 |
||||||
Company’s stock price |
$ | $ | ||||||
Conversion price |
||||||||
Remaining term (years) |
||||||||
Equity volatility |
% | N/A | ||||||
Risk free rate |
% | N/A | ||||||
1 Probabilty of default event |
% | N/A | ||||||
1 Utilization of Forced Conversion (if available) |
% | % | ||||||
1 Exercise of Default Redemption (if available) |
% | N/A | ||||||
1 Effective discount rate |
% | N/A |
1 |
Represents a Level 3 unobservable input, as defined in Note 8 - Fair Value Measurements, below. |
Convertible Debentures |
December 31, 2019 |
February 21, 2020 |
||||||
Fair value, in accordance with fair value option |
$ | |
$ | |
||||
|
|
|
|
|||||
Principal value outstanding |
$ | $ | ||||||
|
|
|
|
(d) |
Principal and Interest Payments Related to Financing Arrangements |
Fiscal Year |
Amount Due |
|||
2020 |
$ | |||
2021 |
|
|||
2022 |
||||
2023 |
||||
2024 |
||||
|
|
|||
Total |
$ | |||
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Cash interest expense |
$ | $ | $ | |
$ | |
||||||||||
Interest on convertible debentures |
||||||||||||||||
Accrual of notes payable final payment |
||||||||||||||||
Amortization of debt costs |
||||||||||||||||
Interest expense capital lease |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest expense |
$ | |
$ | |
$ | $ | ||||||||||
|
|
|
|
|
|
|
|
Lease Cost |
Classification |
Three Months Ended June 30, 2020 |
||||
Operating lease cost |
Operating expenses | $ | ||||
Capital lease costs |
||||||
Amortization of leased assets |
Amortization and depreciation | |||||
Interest on lease liabilities |
Interest expense | |||||
|
|
|||||
Total |
$ | |
||||
|
|
Three Months Ended June 30, 2020 |
||||
Cash paid for operating cash flows from operating leases |
$ | |
||
Cash paid for operating cash flows from capital leases |
||||
Cash paid for financing cash flows from capital leases |
As of June 30, 2020 |
||||
Weighted-average remaining lease term of operating leases (in |
||||
Weighted-average remaining lease term of capital leases (in years) |
||||
Weighted-average discount rate for operating leases |
% | |||
Weighted-average discount rate for capital leases |
% |
As of June 30, 2020: |
Operating Leases |
Finance Leases |
Total |
|||||||||
2020 |
$ |
|||||||||||
2021 |
— | |||||||||||
2022 |
— | |||||||||||
2023 |
— | |||||||||||
2024 |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total lease payments |
||||||||||||
Less: imputed interest |
( |
) | — | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Total lease liabilities |
||||||||||||
Less: current portion of lease liabilities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Long-term lease liabilities |
$ | |
$ | — | $ | |||||||
|
|
|
|
|
|
Three Months Ended |
Six Months Ended | |||||||
June 30, |
June 30, | |||||||
2020 |
2019 |
2020 |
2019 | |||||
Average risk-free interest rate |
||||||||
Expected dividend yield |
||||||||
Expected life |
||||||||
Expected volatility |
||||||||
Weighted average exercise price |
$ |
$ |
$ |
$ | ||||
Weighted average fair value |
$ |
$ |
$ |
$ |
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Cost of revenue |
$ | $ | $ | $ | ||||||||||||
Engineering and product development |
||||||||||||||||
Marketing and sales |
||||||||||||||||
General and administrative |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | |
$ | |
$ | |
$ | |
|||||||||
|
|
|
|
|
|
|
|
Remaining expense |
$ | |||
Weighted average term |
As of |
||||||||
June 30, |
||||||||
Aggregate intrinsic value |
2020 |
2019 |
||||||
Stock options |
$ | |
$ | |
||||
Restricted stock |
• |
Level 1 - Quoted prices in active markets for identical assets or liabilities. |
• |
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
• |
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value. |
Fair Value Measurements (in thousands) as of December 31, 2019 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Money market accounts |
$ | $ | — | $ | — | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Assets |
$ | $ | — | $ | — | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities |
||||||||||||||||
Convertible debentures |
$ | — | $ | — | $ | |
$ | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Liabilities |
$ | — | $ | — | $ | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair Value Measurements (in thousands) as of June 30, 2020 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Money market accounts |
$ | $ | — | $ | — | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Assets |
$ | $ | — | $ | — | $ | ||||||||||
|
|
|
|
|
|
|
|
Convertible Debenture | ||||
Balance, December 31, |
$ | |
||
Fair value adjustments |
||||
Conversion |
|
|
( |
) |
|
|
|||
Balance, June 30, 2020 |
$ | — | ||
|
|
• | significant underperformance relative to historical or projected future operating results; |
• | significant changes in the manner or use of the assets or the strategy for the Company’s overall business; |
• | significant negative industry or economic trends; |
• | significant decline in the Company’s stock price for a sustained period; and |
• | a decline in the Company’s market capitalization below net book value. |
Consolidated reporting unit |
Detection | Therapy | Total | |||||||||||||
Accumulated Goodwill |
$ | — | $ | — | ||||||||||||
Accumulated impairment |
( |
) | — | — | ( |
) | ||||||||||
Fair value allocation |
( |
) | — | |||||||||||||
Acquisition of DermEbx and Radion |
— | — | ||||||||||||||
Acquisition measurement period adjustments |
— | — | ||||||||||||||
Acquisition of VuComp |
— | — | ||||||||||||||
Sale of MRI assets |
— | ( |
) | ( |
) | |||||||||||
Impairment |
— | — | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Prior to December 31, 201 9 |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at June 30, 2020 |
$ | — | $ | $ | — | $ | ||||||||||
|
|
|
|
|
|
|
|
• |
A significant decrease in the market price of a long-lived asset (asset group); |
• |
A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition; |
• |
A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator; |
• |
An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group); |
• |
A current period operating, or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group). |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Segment revenues: |
||||||||||||||||
Detection |
$ | $ | $ | $ | ||||||||||||
Therapy |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenue |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment gross profit: |
||||||||||||||||
Detection |
$ | $ | $ | $ | ||||||||||||
Therapy |
$ | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment gross profit |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment operating income (loss): |
||||||||||||||||
Detection |
$ | $ | $ | ( |
) | $ | ||||||||||
Therapy |
( |
) | ( |
) | ( |
) | $ | ( |
) | |||||||
|
|
|
|
|
|
|
|
|||||||||
Segment operating income (loss) |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
|
|
|
|
|
|
|
|
|||||||||
General, administrative, depreciation and amortization expense |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income |
||||||||||||||||
Loss on extinguishment of debt |
— | — | ( |
) | — | |||||||||||
Fair value of convertible debentures |
— | ( |
) | ( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income tax |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three months ended June 30, |
||||||||||||||||
2020 |
2019 |
$ Change |
% Change |
|||||||||||||
Detection revenue |
||||||||||||||||
Product revenue |
$ | 2,702 | $ | 3,808 | $ | (1,106 | ) | (29.0 | )% | |||||||
Service revenue |
1,415 | 1,401 | 14 | 1.0 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
4,117 | 5,209 | (1,092 | ) | (21.0 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Therapy revenue |
||||||||||||||||
Product revenue |
186 | 545 | (359 | ) | (65.9 | )% | ||||||||||
Service revenue |
1,264 | 1,575 | (311 | ) | (19.7 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
1,450 | 2,120 | (670 | ) | (31.6 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 5,567 | $ | 7,329 | $ | (1,762 | ) | (24.0 | )% | |||||||
|
|
|
|
|
|
|
|
Six months ended June 30, |
||||||||||||||||
2020 |
2019 |
$ Change |
% Change |
|||||||||||||
Detection revenue |
||||||||||||||||
Product revenue |
$ | 5,802 | $ | 6,598 | $ | (796 | ) | (12.1 | )% | |||||||
Service revenue |
2,791 | 2,779 | 12 | 0.4 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
8,593 | 9,377 | (784 | ) | (8.4 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Therapy revenue |
||||||||||||||||
Product revenue |
881 | 1,577 | (696 | ) | (44.1 | )% | ||||||||||
Service revenue |
2,644 | 3,148 | (504 | ) | (16.0 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
3,525 | 4,725 | (1,200 | ) | (25.4 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 12,118 | $ | 14,102 | $ | (1,984 | ) | (14.1 | )% | |||||||
|
|
|
|
|
|
|
|
Three months ended June 30, |
||||||||||||||||
2020 |
2019 |
$ Change |
% Change |
|||||||||||||
Products |
$ | 537 | $ | 645 | $ | (108 | ) | (16.7 | )% | |||||||
Service and supplies |
575 | 858 | (283 | ) | (33.0 | )% | ||||||||||
Amortization and depreciation |
98 | 100 | (2 | ) | (2.0 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
$ | 1,210 | $ | 1,603 | $ | (393 | ) | (24.5 | )% | |||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 4,357 | $ | 5,726 | $ | (1,369 | ) | (23.9 | )% | |||||||
|
|
|
|
|
|
|
|
|||||||||
Three months ended June 30, |
||||||||||||||||
2020 |
2019 |
$ Change |
% Change |
|||||||||||||
Detection gross profit |
$ | 3,533 | $ | 4,356 | $ | (823 | ) | (18.9 | %) | |||||||
Therapy gross profit |
824 | 1,370 | (546 | ) | (39.9 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 4,357 | $ | 5,726 | $ | (1,369 | ) | (23.9 | )% | |||||||
|
|
|
|
|
|
|
|
Six months ended June 30, |
||||||||||||||||
2020 |
2019 |
$ Change |
% Change |
|||||||||||||
Products |
$ | 1,554 | $ | 1,325 | $ | 229 | 17.3 | % | ||||||||
Service and supplies |
1,502 | 1,575 | (73 | ) | (4.6 | )% | ||||||||||
Amortization and depreciation |
195 | 194 | 1 | 0.5 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
$ | 3,251 | $ | 3,094 | $ | 157 | 5.1 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 8,867 | $ | 11,008 | $ | (2,141 | ) | (19.4 | )% | |||||||
|
|
|
|
|
|
|
|
|||||||||
Six months ended June 30, |
||||||||||||||||
2020 |
2019 |
$ Change |
% Change |
|||||||||||||
Detection gross profit |
$ | 7,000 | $ | 7,823 | $ | (823 | ) | (10.5 | %) | |||||||
Therapy gross profit |
1,867 | 3,185 | (1,318 | ) | (41.4 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
8,867 | 11,008 | (2,141 | ) | (19.4 | %) | ||||||||||
|
|
|
|
|
|
|
|
Three months ended June 30, |
||||||||||||||||
2020 | 2019 | Change | Change % | |||||||||||||
Operating expenses: |
||||||||||||||||
Engineering and product development |
$ | 1,878 | $ | 2,139 | $ | (261 | ) | (12.2 | )% | |||||||
Marketing and sales |
2,631 | 3,120 | (489 | ) | (15.7 | )% | ||||||||||
General and administrative |
2,110 | 1,858 | 252 | 13.6 | % | |||||||||||
Amortization and depreciation |
49 | 67 | (18 | ) | (26.9 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
$ | 6,668 | $ | 7,184 | $ | (516 | ) | (7.2 | )% | |||||||
|
|
|
|
|
|
|
|
Six months ended June 30, |
||||||||||||||||
2020 | 2019 | Change | Change % | |||||||||||||
Operating expenses: |
||||||||||||||||
Engineering and product development |
$ | 4,089 | $ | 4,266 | $ | (177 | ) | (4.1 | )% | |||||||
Marketing and sales |
6,239 | 5,693 | 546 | 9.6 | % | |||||||||||
General and administrative |
4,642 | 3,404 | 1,238 | 36.4 | % | |||||||||||
Amortization and depreciation |
101 | 137 | (36 | ) | (26.3 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
$ | 15,071 | $ | 13,500 | $ | 1,571 | 11.6 | % | ||||||||
|
|
|
|
|
|
|
|
Three months ended June 30, |
||||||||||||||||
2020 | 2019 | Change | Change % | |||||||||||||
Interest expense |
$ | (115 | ) | $ | (202 | ) | $ | 87 | (43.1 | )% | ||||||
Other income |
33 | 64 | (31 | ) | (48.4 | )% | ||||||||||
Loss on fair value of debentures |
— | (1,915 | ) | 1,915 | (100.0 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | (82 | ) | $ | (2,053 | ) | $ | 1,971 | (96.0 | )% | |||||||
|
|
|
|
|
|
|
|
|||||||||
Tax benefit (expense) |
(5 | ) | (19 | ) | 14 | (73.7 | )% |
Six months ended June 30, |
||||||||||||||||
2020 | 2019 | Change | Change % | |||||||||||||
Interest expense |
$ | (245 | ) | $ | (411 | ) | $ | 166 | (40.4 | )% | ||||||
Other income |
75 | 123 | (48 | ) | (39.0 | )% | ||||||||||
Loss on fair value of debentures |
(7,464 | ) | (4,440 | ) | (3,024 | ) | 68.1 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | (7,634 | ) | $ | (4,728 | ) | $ | (2,906 | ) | 61.5 | % | ||||||
|
|
|
|
|
|
|
|
|||||||||
Tax expense |
$ | (31 | ) | $ | (27 | ) | $ | (4 | ) | 14.8 | % |
For the six-months ended June 30, |
||||||||
2020 |
2019 |
|||||||
(in thousands) | ||||||||
Net cash used for operating activities |
$ | (3,573 | ) | $ | (2,404 | ) | ||
Net cash used for investing activities |
(186 | ) | (143 | ) | ||||
Net cash provided by financing activities |
12,671 | 9,929 | ||||||
|
|
|
|
|||||
Decrease in cash and equivalents |
$ | 8,912 | $ | 7,382 | ||||
|
|
|
|
Total |
Less than 1 year |
1-3 years |
3-5 years |
5+ years |
||||||||||||||||
Operating Lease Obligations |
$ | 2,496,532 | $ | 922,858 | $ | 1,564,314 | $ | 9,360 | $ | — | ||||||||||
Finance Lease Obligations |
4,683 | 4,683 | — | — | — | |||||||||||||||
Settlement Obligations |
463,262 | 463,262 | — | — | — | |||||||||||||||
Notes Payable |
8,039,336 | 372,604 | 5,312,740 | 2,353,992 | — | |||||||||||||||
Other Commitments |
4,456,329 | 4,456,329 | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Contractual Obligations |
$ | 15,460,143 | $ | 6,219,737 | $ | 6,877,054 | $ | 2,363,352 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors: |
Item 6. |
Exhibits |
* | Filed herewith |
** | Furnished herewith |
† | Portions of this exhibit, marked by brackets, have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K under the Securities Act of 1933, as amended, because they are both (i) not material and (ii) would likely cause competitive harm to the registrant if publicly disclosed. |
iCAD, Inc. | ||||||
(Registrant) | ||||||
Date : August 7, 2020 |
By: | /s/ Michael Klein | ||||
Name: | Michael Klein | |||||
Title: | Chief Executive Officer | |||||
(Principal Executive Officer) | ||||||
Date : August 7, 2020 |
By: | /s/ R. Scott Areglado | ||||
Name: | R. Scott Areglado | |||||
Title: | Chief Financial Officer | |||||
(Principal Financial Officer) |