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 | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
Page |
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PART I |
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Item 1 |
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1 |
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2 |
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3 |
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4 |
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5 |
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Item 2 |
18 |
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Item 3 |
25 |
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Item 4 |
25 |
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PART II |
26 |
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Item 1A |
26 |
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Item 6 |
27 |
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28 |
March 31, |
December 31, |
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2022 |
2021 |
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(Unaudited) |
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Assets |
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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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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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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 13) |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Outstanding |
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as of December 31, 2021. |
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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 March 31, |
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2022 |
2021 |
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Revenue: |
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Products |
$ | $ | ||||||
Service and supplies |
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|
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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 (expense) |
( |
) | ||||||
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Other expense, net |
( |
) | ( |
) | ||||
Loss before income tax expense |
( |
) | ( |
) | ||||
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Tax expense |
(1 | ) | ||||||
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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 three months ended March 31, |
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2022 |
2021 |
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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 |
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Deferred tax |
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Amortization of debt discount and debt costs |
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Changes in operating assets and liabilities: |
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Accounts receivable |
( |
) | ( |
) | ||||
Inventory |
( |
) | ||||||
Prepaid and other 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: |
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Proceeds from option exercises pursuant to stock option plans |
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Proceeds from issuance of common stock pursuant to Employee Stock Purchase Plans |
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Proceeds from issuance of common stock, net |
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Net cash provided by financing activities |
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(Decrease) increase in cash and cash equivalents |
( |
) | ||||||
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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Common Stock |
Additional |
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Number of Shares Issued |
Par Value |
Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Stockholders’ Equity |
|||||||||||||||||||
Balance at December 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Issuance of common stock relative to vesting of restricted stock |
— | — | ||||||||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— | — | ||||||||||||||||||||||
Issuance of common stock pursuant Employee Stock Purchase Plans |
— | — | ||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | ||||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
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Balance at March 31, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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Common Stock |
Additional |
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Number of Shares Issued |
Par Value |
Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Stockholders’ Equity |
|||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | ( |
) | ( |
) | $ | ||||||||||||||||
Issuance of common stock relative to vesting of restricted stock |
— | — | ||||||||||||||||||||||
Issuance of common stock, net |
— | — | ||||||||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— | — | ||||||||||||||||||||||
Issuance of common stock pursuant Employee Stock Purchase Plan |
— | — | — | |||||||||||||||||||||
Stock-based compensation |
— | — | — | — | ||||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
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Balance at March 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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• | 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 March 31, 2022 |
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Level 1 |
Level 2 |
Level 3 |
Total |
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Assets |
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Money market accounts |
$ | |
— | — | $ | |
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Total Assets |
$ | — | — | $ | ||||||||||||
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|
Fair Value Measurements (in thousands) as of December 31, 2021 |
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Level 1 |
Level 2 |
Level 3 |
Total |
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Assets |
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Money market accounts |
$ | |
— | — | $ | |
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Total Assets |
$ | — | — | $ | ||||||||||||
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|
Three months ended March 31, 2022 |
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Reportable Segments |
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Detection |
Therapy |
Total |
||||||||||
Major Goods/Service Lines |
||||||||||||
Products |
$ | |
$ | $ | |
|||||||
Service |
||||||||||||
Sources and source usage agreements |
— | |||||||||||
Disposable applicators |
— | |||||||||||
Other |
— | |||||||||||
|
|
|
|
|
|
|||||||
$ | $ | |
$ | |||||||||
|
|
|
|
|
|
|||||||
Timing of Revenue Recognition |
||||||||||||
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 |
— | |||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
Three months ended March 31, 2021 |
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Reportable Segments |
||||||||||||
Detection |
Therapy |
Total |
||||||||||
Major Goods/Service Lines |
||||||||||||
Products |
$ | |
$ | |
$ | |
||||||
Service |
||||||||||||
Sources and source usage agreements |
— | |||||||||||
Disposable applicators |
— | |||||||||||
Other |
— | |||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
|||||||
Timing of Revenue Recognition |
||||||||||||
Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
||||||||||||
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|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
|||||||
Sales Channels |
||||||||||||
Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
Balance at March 31, 2022 |
Balance at December 31, 2021 |
|||||||
Receivables, which are included in ‘Trade accounts receivable’ |
$ | |
$ | |
||||
Current contract assets, which are included in “Prepaid and other assets” |
$ | $ | ||||||
Non-current contract assets, which are included in “other assets” |
$ | $ | ||||||
Contract liabilities, which are included in “Deferred revenue” |
$ | $ |
Three Months Ended March 31, 2022 |
||||
Balance at beginning of period |
$ | |||
Deferral of revenue |
||||
Recognition of deferred revenue |
( |
) | ||
|
|
|||
Balance at end of period |
$ | |||
|
|
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Net loss |
$ |
( |
$ |
( |
||||
|
|
|
|
|||||
Shares used in the calculation of basic and diluted net loss per share |
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|
|
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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 |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
As of March 31, |
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2022 |
2021 |
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Stock options |
||||||||
Restricted stock |
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|
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Total |
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|
|
March 31, 2022 |
December 31, 2021 |
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Raw materials |
$ | |
$ | |
||||
Work in process |
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Finished Goods |
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Inventory Gross |
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Inventory Reserve |
( |
) | ( |
) | ||||
|
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Inventory Net |
$ | $ | ||||||
|
|
|
|
• | 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. |
• | A significant decrease in the market price of a long-lived asset (or asset group); |
• | A significant adverse change in the extent or manner in which a long-lived asset (or 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 (or 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 (or asset group); and |
• | A current operating period, 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 (or asset group). |
Lease Cost |
Classification |
Three Months Ended March 31, 2022 |
||||
Operating lease cost—Right of Use Asset |
Operating expenses | $ | ||||
Operating lease cost—Variable |
Operating expenses | |||||
|
|
|||||
Total |
$ | |||||
|
|
Three Months Ended March 31, 2022 |
||||
Cash paid from operating cash flows for operating leases |
$ | |||
As of March 31, 2022 |
||||
Weighted-average remaining lease term of operating leases (in year) |
||||
Weighted-average discount rate for operating leases |
% |
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 March 31, |
||||||||
2022 |
2021 |
|||||||
Cash interest expense |
$ | $ | ||||||
Accrual of notes payable final payment |
||||||||
Amortization of debt costs |
||||||||
|
|
|
|
|||||
Total interest expense |
$ | $ | ||||||
|
|
|
|
Three Months Ended March 31, | ||||
2022 |
2021 | |||
Average risk-free interest rate |
||||
Expected dividend yield |
||||
Expected life |
||||
Expected volatility |
||||
Weighted average exercise price |
$ |
$ | ||
Weighted average fair value |
$ |
$ |
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Cost of revenue |
$ | $ | ||||||
Engineering and product development |
||||||||
Marketing and sales |
||||||||
General and administrative |
||||||||
$ | $ | |||||||
As of March 31, |
||||||||
Aggregate intrinsic value |
2022 |
2021 |
||||||
Stock options |
$ | $ | ||||||
Restricted stock |
Three Months Ended March 31, |
||||||||
2022 | 2021 | |||||||
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 (expense) income |
( |
) | ||||||
|
|
|
|
|||||
Loss before income tax |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three months ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Detection revenue |
||||||||||||||||
Product revenue |
$ | 3,864 | $ | 4,161 | $ | (297 | ) | (7.1 | )% | |||||||
Service and supplies revenue |
1,657 | 1,558 | 99 | 6.4 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
5,521 | 5,719 | (198 | ) | (3.5 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Therapy revenue |
||||||||||||||||
Product revenue |
696 | 1,396 | (700 | ) | (50.1 | )% | ||||||||||
Service and supplies revenue |
1,306 | 1,529 | (223 | ) | (14.6 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
2,002 | 2,925 | (923 | ) | (31.6 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 7,523 | $ | 8,644 | $ | (1,121 | ) | (13.0 | )% | |||||||
|
|
|
|
|
|
|
|
Three months ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Products |
$ | 1,087 | $ | 1,409 | $ | (322 | ) | (22.9 | )% | |||||||
Service and supplies |
1,049 | 867 | 182 | 21.0 | % | |||||||||||
Amortization and depreciation |
75 | 79 | (4 | ) | (5.1 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
$ | 2,211 | $ | 2,355 | $ | (144 | ) | (6.1 | )% | |||||||
|
|
|
|
|
|
|
|
Three months ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Detection gross profit |
$ | 4,661 | $ | 4,725 | $ | (64 | ) | (1.4 | %) | |||||||
Therapy gross profit |
651 | 1,564 | (913 | ) | (58.4 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 5,312 | $ | 6,289 | $ | (977 | ) | (15.5 | %) | |||||||
|
|
|
|
|
|
|
|
Three months ended March 31, |
||||||||||||||||
2022 | 2021 | Change $ | Change % | |||||||||||||
Operating expenses: |
||||||||||||||||
Engineering and product development |
$ | 2,275 | $ | 2,192 | $ | 83 | 3.8 | % | ||||||||
Marketing and sales |
3,565 | 3,424 | 141 | 4.1 | % | |||||||||||
General and administrative |
2,931 | 2,151 | 780 | 36.3 | % | |||||||||||
Amortization and depreciation |
63 | 55 | 8 | 14.5 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
$ | 8,834 | $ | 7,822 | $ | 1,012 | 12.9 | % | ||||||||
|
|
|
|
|
|
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Three months ended March 31, |
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2022 | 2021 | Change $ | Change % | |||||||||||||
Interest expense |
$ | (9 | ) | $ | (112 | ) | $ | 103 | (92.0 | )% | ||||||
Other income (expense) |
(13 | ) | 2 | (15 | ) | (750.0 | )% | |||||||||
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$ | (22 | ) | $ | (110 | ) | $ | 88 | (80.0 | )% | |||||||
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Tax expense |
$ | (1 | ) | $ | — | $ | (1) | 0.0 | % |
For the three months ended March 31, |
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2022 |
2021 |
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(in thousands) | ||||||||
Net cash used for operating activities |
$ | (4,449 | ) | $ | (3,563 | ) | ||
Net cash used for investing activities |
(161 | ) | (262 | ) | ||||
Net cash provided by financing activities |
126 | 23,546 | ||||||
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(Decrease) increase in cash and cash equivalents |
$ | (4,484 | ) | $ | 19,721 | |||
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Item 3 . |
Quantitative and Qualitative Disclosures about Market Risk |
Item 4. |
Controls and Procedures |
Item 1A. |
Risk Factors: |
Item 6. |
Exhibits |
Exhibit No. |
Description | |
10.1 | Employment Agreement, entered into March 22, 2022 and effective March 1, 2022 by and between the Company and Stacey Stevens (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 28, 2022) | |
31.1* | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1** | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2** | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101* | The following materials formatted in XBRL (eXtensible Business Reporting Language); (i) Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, (ii) Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021, (iii) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021, (iv) Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2022 and March 31, 2021 and (v) Notes to Condensed Consolidated Financial Statements. | |
104* | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). |
* | Filed herewith |
** | Furnished herewith |
iCAD, Inc. | ||||
(Registrant) |
Date: May 11, 2022 | By: | /s/ Stacey Stevens | ||
Name: | Stacey Stevens | |||
Title: | Chief Executive Officer (Principal Executive Officer) | |||
Date: May 11, 2022 | By: | /s/ Charles R. Carter | ||
Name: | Charles R. Carter | |||
Title: | Chief Financial Officer (Principal Financial Officer) |