ANNUAL 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 Class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large Accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Item 10. |
Directors, Executive Officers and Corporate Governance . |
Name |
Age |
Principal Occupation or Employment |
Director/Officer Since | |||
Michael Klein | 67 | Executive Chairman and Chief Executive Officer | 2018 | |||
Nathaniel Dalton | 54 | Director and Senior Advisor of Affiliated Manager’s Group, Inc. | 2020 | |||
Dr. Rakesh Patel | 48 | Chief Executive Officer of Precision Cancer Specialists Medical Group | 2018 | |||
Andy Sassine | 56 | Chief Financial Officer of Arcturus Therapeutics Holdings Inc. | 2015 | |||
Dr. Susan Wood | 58 | Chief Executive Officer of VIDA Diagnostics, Inc. | 2018 | |||
Stacey Stevens | 53 | President | 2006 | |||
R. Scott Areglado | 57 | Chief Financial Officer | 2018 | |||
Jonathan Go | 58 | Chief Technology Officer | 2019 |
Item 11. |
Executive Compensation . |
Name and Principal Position |
Year |
Salary ($) |
Option Awards (1) ($) |
Non-Equity Incentive Plan Compensation (2) ($) |
All Other Compensation ($) |
Total ($) |
||||||||||||||||||
Michael Klein (3) |
2020 | 374,795 | 565,779 | 234,000 | 12,226 | 1,186,799 | ||||||||||||||||||
Chief Executive Officer |
2019 | 400,000 | — | 95,370 | — | 495,370 | ||||||||||||||||||
Jonathan Go |
2020 | 281,096 | 12,023 | 110,000 | 25,243 | 428,362 | ||||||||||||||||||
Chief Technology Officer |
2019 | 299,077 | 45,250 | 135,000 | 26,769 | 506,096 | ||||||||||||||||||
Stacey Stevens |
2020 | 302,647 | 14,563 | 150,000 | 32,180 | 499,227 | ||||||||||||||||||
President |
2019 | 318,500 | 44,250 | 163,519 | 32,800 | 559,069 |
(1) | The amounts included in the “Option Awards” column represent the grant date fair value of the stock option awards granted to the named executive officers, computed in accordance with ASC Topic 718. For a discussion of valuation assumptions, see Note 6 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 |
(2) | In February 2021, the Compensation Committee reviewed the performance of the Company and its officers relative to predetermined goals established by the Compensation Committee under the 2020 Plan (described below) and determined that such goals had been met and accordingly, the Board approved the payment of bonuses treated as compensation for the year ended December 31, 2020. For Mr. Klein, 50% was paid in cash and the remaining 50% paid in the form of stock options. For Ms. Stevens and Mr. Go, 75% was paid in cash and the remaining 25% paid in the form of stock options. Such bonuses, attributable to performance for the year ended December 31, 2020, and reflected in the Summary Compensation Table above, were awarded as follows: Mr. Klein was awarded $234,000, with $117,000 of such amount paid in stock options granted on February 15, 2021; Ms. Stevens was awarded $150,000, with $37,500 of such amount paid in stock options granted on February 15, 2021; and Mr. Go was awarded $110,000, with $27,500 of such amount paid in stock options granted on February 15, 2021. All options are exercisable within 6 months of the grant date at an exercise price of $18.00 per share. The option amounts included in the “Non-Equity Incentive Plan Compensation” column represent the grant date fair value of the stock option awards granted to the named executive officers, computed in accordance with ASC Topic 718. For a discussion of valuation assumptions, see Note 6 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. |
(3) | On April 17, 2020, the Board and Mr. Klein agreed that in lieu of the cash compensation for base salary due to Mr. Klein pursuant to his employment agreement for the period from April 13, 2020 until June 30, 2020, Mr. Klein would be issued options to purchase up to 20,125 shares of the Company’s common stock, at a purchase price of $8.96 per share, exercisable commencing on June 30, 2020 and expiring on June 30, 2030. |
Element |
Description | |
Base Salary | Fixed annual cash amount to attract and retain top talent | |
Annual Cash Bonus | At-risk variable incentive compensation to reward for achievement of goals set by the Board | |
Long-Term Incentive Awards | Equity-based compensation that supports retention, incentivizes performance and promotes stockholder alignment | |
Select Benefits and Perquisites | Benefits such as health insurance, 401(k) and automobile allowances to remain competitive in our industry |
What We Do |
What We Don’t Do | |||
✓ | Consult an independent compensation consultant |
× No tax gross-up provisions× No guaranteed salary increases or bonuses × No excessive perquisites to NEOs × No pension plans or other post-employment benefit plans × No severance multipliers in excess of 2x pay × No hedging or pledging of Company stock × No option repricing without stockholder approval, or option backdating | ||
✓ | Consulted an independent proxy solicitor in 2021 | |||
✓ | Conduct an annual risk assessment of our pay practices | |||
✓ | Solicit stockholder input and incorporate feedback into decision-making process | |||
✓ | Generally use a “double-trigger” for accelerated equity vesting upon a change in control for current named executive officers | |||
✓ | Clawback policy for executive officers | |||
✓ | Stock ownership guidelines for executive officers and non-employee directors | |||
✓ | Insider trading policy prohibits directors, senior executives and other employees from trading in Company stock during blackout periods and while in possession of material non-public information. |
Name |
Fees Earned or Paid in Cash ($) |
Option Awards (1) ($) |
Stock Awards ($) |
Total ($) |
||||||||||||
Nathaniel Dalton |
— | 193,551 | — | 193,551 | ||||||||||||
Dr. Rakesh Patel |
— | 148,408 | — | 148,408 | ||||||||||||
Andy Sassine |
— | 153,908 | — | 153,908 | ||||||||||||
Susan Wood |
— | 153,033 | — | 153,033 |
1) | The amounts included in the “Option Awards” column represents the grant date fair value of the stock option awards to directors, computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 6 to our Consolidated financial statements on Form 10-K for the fiscal year ended December 31, 2020. Option awards for 2020 include awards to directors in lieu of cash compensation for 2020. |
* | Information with respect to the compensation of Michael Klein, an employee director, is set forth above in the Summary Compensation Table. |
Member |
Chair |
|||||||
Audit Committee |
$ | 9,500 | $ | 19,000 | ||||
Compensation Committee |
$ | 7,000 | $ | 14,000 | ||||
Nominating and Governance Committee |
$ | 4,500 | $ | 9,000 | ||||
Strategy Committee |
$ | 5,000 | $ | 10,000 | ||||
Lead Independent Director |
$ | — | $ | 20,000 |
Option Awards |
Stock Awards |
|||||||||||||||||||||||
Name |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares of Restricted Stock That Have Not Vested (#) (1) |
Market Value of Shares or Units of Stock That Have Not Vested ($) (2) |
||||||||||||||||||
Michael Klein |
559,809 | — | 2.89 | 11/16/2028 | — | — | ||||||||||||||||||
36,667 | 73,333 | 8.77 | 01/13/2030 | — | — | |||||||||||||||||||
20,125 | — | 8.96 | 04/17/2030 | — | — | |||||||||||||||||||
31,890 | — | 12.84 | 05/07/2030 | — | — | |||||||||||||||||||
Stacey Stevens |
235 | — | 6.68 | 06/19/2024 | 9,166 | 120,991 | ||||||||||||||||||
25,000 | — | 9.00 | 02/05/2025 | — | — | |||||||||||||||||||
8,333 | 16,667 | 4.38 | 03/25/2029 | — | — | |||||||||||||||||||
23,175 | — | 12.84 | 05/07/2030 | — | — | |||||||||||||||||||
Jonathan Go |
20,000 | — | 5.75 | 3/29/2021 | — | — | ||||||||||||||||||
30,000 | — | 3.15 | 11/10/2021 | — | — | |||||||||||||||||||
20,000 | — | 2.90 | 2/7/2022 | — | — | |||||||||||||||||||
45,000 | — | 2.27 | 9/25/2022 | — | — | |||||||||||||||||||
10,000 | — | 6.68 | 6/19/2024 | — | — | |||||||||||||||||||
12,500 | — | 9.00 | 2/5/2025 | — | — | |||||||||||||||||||
8,333 | 16,667 | 4.37 | 1/15/2029 | — | — | |||||||||||||||||||
19,134 | — | 12.84 | 05/07/2030 | — | — |
(1) | Represents outstanding and unvested awards of time-vested restricted stock at December 31, 2020. All unvested restricted stock awards set forth in this column vest in three equal annual installments with the first installment vesting on the first anniversary of the date of grant. |
(2) | Calculated by multiplying the closing price per share of the Company’s Common Stock on December 31, 2020, $13.20, by the number of shares subject to the award. |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . |
Name of Beneficial Owner |
Beneficially Owned (1)(2)(3) |
Percentage of Class |
||||||
Michael Klein |
674,823 | 2.6 | % | |||||
Nathaniel Dalton |
236,943 | * | ||||||
Dr. Rakesh Patel |
206,239 | * | ||||||
Andy Sassine |
1,433,234 | 5.7 | % | |||||
Dr. Susan Wood |
127,538 | * | ||||||
Stacey Stevens |
216,866 | * | % | |||||
Jonathan Go |
294,736 | 1.2 | % | |||||
All current executive officers and directors as a group (8 persons) (4) |
3,291,517 |
12.5 |
% | |||||
Portolan Capital Management, LLC(5) |
1,161,199 | 5.1 | % | |||||
BlackRock, Inc.(6) |
1,452,196 | 6.3 | % |
(1) | A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from April 20, 2021, upon (i) the exercise of options; (ii) vesting of restricted stock; (iii) warrants or rights; (iv) through the conversion of a security; (v) pursuant to the power to revoke a trust, discretionary account or similar arrangement; or (vi) pursuant to the automatic termination of a trust, discretionary account or similar arrangement. Each beneficial owner’s percentage ownership is determined by assuming that the options or other rights to acquire beneficial ownership as described above, that are held by such person (but not those held by any other person) and which are exercisable within 60 days from April 20, 2021, have been exercised. |
(2) | Unless otherwise noted, we believe that the persons referred to in the table have sole voting and investment power with respect to all shares reflected as beneficially owned by them. |
(3) | Includes exercisable and vested options to purchase shares of common stock as follows: |
Name of Beneficial Owner |
Exercisable Options |
|||
Michael Klein |
648,491 | |||
Dr. Rakesh Patel |
144,022 | |||
Andrew Sassine |
118,352 | |||
Dr. Susan Wood |
124,904 | |||
Stacey Stevens |
65,078 | |||
Jonathan Go |
173,301 | |||
Nathaniel Dalton |
59,896 |
(4) | Includes securities beneficially owned by R. Scott Areglado, the Company’s Chief Financial Officer, including 64,227 exercisable options. |
(5) | Solely based on the Company’s review of filings made on Schedule 13G with the SEC, as of February 12, 2021, 1,161,199 shares of common stock are beneficially owned (i) directly by Portolan Capital Management, LLC, a registered investment adviser, in its capacity as investment manager for various clients, and (ii) indirectly by George McCabe, the Manager of Portolan Capital Management, LLC. The address of Portolan Capital Management, LLC is 2 International Place, FL 26, Boston, MA 02110. |
(6) | Solely based on the Company’s review of filings made on Schedule 13G with the SEC, as of February 2, 2021, 1,452,196 shares of common stock are beneficially owned by BlackRock, Inc. (“BlackRock”), in its capacity as a parent holding company of various subsidiaries under Rule 13d-1(b)(1)(ii)(G). In its capacity as a parent holding company or control person, BlackRock has sole voting power with respect to 1,442,823 shares and sole dispositive power with respect to 1,452,196 shares which are held by the following of its subsidiaries: BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Fund Advisors, BlackRock Institutional Trust Company, National Association, BlackRock Financial Management, Inc., and BlackRock Investment Management, LLC. The address of BlackRock is 55 East 52nd Street, New York, NY 10055. |
Plan Category: |
Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants and rights |
Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) |
|||||||||
Equity compensation plans approved by security holders |
1,898,673 | $ | 5.91 | 462,218 | ||||||||
Equity compensation plans not approved by security holders |
0 | $ | 0.00 | 0 | ||||||||
|
|
|
|
|
|
|||||||
Total |
1,898,673 | $ | 5.91 | 462,218 |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence . |
• | Dr. Rakesh Patel is a principal of TME Consulting LLC (“TME”), a medical consulting firm. During the year ended December 31, 2020, the Company furnished to TME an aggregate of $125,000 in connection with various consulting services provided by TME to the Company. All TME services are provided by physicians who are members of TME’s network, on an hourly basis, and consulting fees are furnished to the individual physicians providing such services. As such, Dr. Patel received no direct interest in any such fees payable by the Company to TME. |
Item 14. |
Principal Accounting Fees and Services . |
Fiscal Year Ended |
||||||||
Services Rendered(1) |
December 31, 2020 |
December 31, 2019 |
||||||
Audit Fees |
$ | 464,735 | $ | 482,745 | ||||
Audit Related Fees |
— | — | ||||||
Tax Fees |
— | — | ||||||
All Other Fees |
— | — | ||||||
|
|
|
|
|||||
Total |
$ | 464,735 | $ | 482,745 | ||||
|
|
|
|
(1) | The aggregate fees included in Audit Fees are fees billed for the fiscal years. |
Item 15. |
Exhibits, Financial Statement Schedules . |
* | Filed herewith |
iCAD, Inc. | ||||||
Date: April 30, 2021 | By: | /s/ Michael Klein | ||||
Michael Klein | ||||||
Chief Executive Officer and Executive Chairman (Principal Executive Officer) | ||||||
Date: April 30, 2021 | By: | /s/ R. Scott Areglado | ||||
R. Scott Areglado | ||||||
Chief Financial Officer (Principal Financial and Accounting Officer) |