Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-09341

iCAD, Inc.

(Exact name of registrant as specified in its charter)

Delaware	02-0377419
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

98 Spit Brook Road, Suite 100, Nashua, NH	03062
(Address of principal executive offices)	(Zip Code)

(603) 882-5200

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

symbol(s)

Name of each exchange

on which registered

Common Stock, $0.01 par value

ICAD

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, an emerging growth company or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒.

As of the close of business on August 10, 2023, there were 25,446,407 shares outstanding of the registrant’s Common Stock, $0.01 par value.

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iCAD, Inc.

INDEX

		Page
PART I	FINANCIAL INFORMATION

Item 1	Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022	1

	Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2023 and 2022	2

	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the three and six months ended June 30, 2023 and 2022	3

	Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2023 and 2022	4

	Notes to Condensed Consolidated Financial Statements (unaudited)	5

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3	Quantitative and Qualitative Disclosures about Market Risk	24

Item 4	Controls and Procedures	25

PART II	OTHER INFORMATION	26

Item 1A	Risk Factors	26

Item 6	Exhibits	27

	Signatures	28

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iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except for share data)

(Unaudited)

	*June 30,*			*December 31,*
	*2023*			*2022*
Assets
Current assets:
Cash and cash equivalents	$	19,037		$	21,313
Trade accounts receivable, net of allowance for credit losses of $984 and $922 as of June 30, 2023 and December 31, 2022, respectively		5,747			8,898
Inventory, net		4,248			5,389
Prepaid expenses and other current assets		2,304			2,641
Total current assets		31,336			38,241
Property and equipment, net of accumulated depreciation of $2,273 and $2,135 as of June 30, 2023 and December 31, 2022, respectively		1,471			1,074
Operating lease assets		3,113			3,361
Other assets		54			69
Intangible assets, net of accumulated amortization of $8,490 and $8,932 as of June 30, 2023 and December 31, 2022, respectively		388			482
Goodwill		8,362			8,362
Deferred tax assets		108			116
Total assets	$	44,832		$	51,705
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	857		$	1,973
Accrued and other expenses		4,363			4,681
Lease payable—current portion		644			582
Deferred revenue—current portion		6,027			6,216
Total current liabilities		11,891			13,452
Lease payable, net of current		2,478			2,803
Deferred revenue, net of current		283			542
Deferred tax		6			6
Total liabilities		14,658			16,803

Commitments and Contingencies (Note 12)
Stockholders’ equity:
Preferred stock, $0.01 par value: authorized 1,000,000 shares; none issued.		—			—
Common stock, $0.01 par value: authorized 60,000,000 shares; issued 25,446,407 as of both June 30, 2023 and December 31, 2022; outstanding 25,260,576 as of both June 30, 2023 and December 31, 2022.		254			254
Additional paid-in capital		303,699			302,899
Accumulated deficit		(272,364	)		(266,836	)
Treasury stock at cost, 185,831 shares as of both June 30, 2023 and December 31, 2022		(1,415	)		(1,415	)
Total stockholders’ equity		30,174			34,902
Total liabilities and stockholders’ equity	$	44,832		$	51,705

See accompanying notes to condensed consolidated financial statements.

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iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except for per share data)

(Unaudited)

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Revenue:
Products	$	2,644		$	4,475		$	5,387		$	9,035
Service and supplies		3,221			3,100			6,256			6,063
Total revenue		5,865			7,575			11,643			15,098
Cost of revenue:
Products		461			1,008			1,047			2,095
Service and supplies		1,000			1,001			1,993			2,050
Amortization and depreciation		55			75			125			150
Total cost of revenue		1,516			2,084			3,165			4,295
Gross profit		4,349			5,491			8,478			10,803
Operating expenses:
Engineering and product development		1,263			2,367			3,544			4,642
Marketing and sales		2,112			3,435			4,967			7,000
General and administrative		2,832			2,742			5,695			5,673
Amortization and depreciation		65			61			120			124
Total operating expenses		6,272			8,605			14,326			17,439
Loss from operations		(1,923	)		(3,114	)		(5,848	)		(6,636	)
Other income/ (expense):
Interest expense		—			—			—			(1	)
Interest income		182			14			332			16
Other income (expense), net		(5	)		(18	)		(3	)		(41	)
Other income (expense), net		177			(4	)		329			(26	)
Loss before provision for income taxes		(1,746	)		(3,118	)		(5,519	)		(6,662	)
Provision for tax expense		(4	)		—			(9	)		(1	)
Net loss and comprehensive loss	$	(1,750	)	$	(3,118	)	$	(5,528	)	$	(6,663	)
Net loss per share:
Basic and diluted	$	(0.07	)	$	(0.12	)	$	(0.22	)	$	(0.26	)
Weighted average number of shares used in computing loss per share:
Basic and diluted		25,261			25,185			25,261			25,172

See accompanying notes to condensed consolidated financial statements.

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iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except shares)

(Unaudited)

	*For the three months ended June 30, 2023*
	*Common Stock*				*Additional*
	*Number of*				*Paid-in*		*Accumulated*			*Treasury*			*Stockholders’*
	*Shares Issued*		*Par Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance at March 31, 2023		25,446,407	$	254	$	303,485	$	(270,614	)	$	(1,415	)	$	31,710
Stock-based compensation		—		—		214		—			—			214
Net loss		—		—		—		(1,750	)		—			(1,750	)
Balance at June 30, 2023		25,446,407	$	254	$	303,699	$	(272,364	)	$	(1,415	)	$	30,174

	*For the six months ended June 30, 2023*
	*Common Stock*				*Additional*
	*Number of*				*Paid-in*		*Accumulated*			*Treasury*			*Stockholders*
	*Shares Issued*		*Par Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance at December 31, 2022		25,446,407	$	254	$	302,899	$	(266,836	)	$	(1,415	)	$	34,902
Stock-based compensation		—		—		800		—			—			800
Net loss		—		—		—		(5,528	)		—			(5,528	)
Balance at June 30, 2023		25,446,407	$	254	$	303,699	$	(272,364	)	$	(1,415	)	$	30,174

	*For the three months ended June 30, 2022*
	*Common Stock*				*Additional*
	*Number of*				*Paid-in*		*Accumulated*			*Treasury*			*Stockholders’*
	*Shares Issued*		*Par Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance at March 31, 2022		25,359,175	$	253	$	301,640	$	(256,725	)	$	(1,415	)	$	43,753
Issuance of common stock pursuant to stock option plans		6,000		1		12		—			—			13
Issuance of common stock pursuant Employee Stock Purchase Plans		8,683		—		33		—			—			33
Stock-based compensation		—		—		309		—			—			309
Net loss		—		—		—		(3,118	)		—			(3,118	)
Balance at June 30, 2022		25,373,858	$	254	$	301,994	$	(259,843	)	$	(1,415	)	$	40,990

	*For the six months ended June 30, 2022*
	*Common Stock*				*Additional*
	*Number of*				*Paid-in*		*Accumulated*			*Treasury*			*Stockholders’*
	*Shares Issued*		*Par Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance at December 31, 2021		25,326,086	$	253	$	300,859	$	(253,180	)	$	(1,415	)	$	46,517
Issuance of common stock related to vesting of restricted stock		875		—		—		—			—			—
Issuance of common stock pursuant to stock option plans		28,833		1		78		—			—			79
Issuance of common stock pursuant Employee Stock Purchase Plans		18,064		—		93		—			—			93
Stock-based compensation		—		—		964		—			—			964
Net loss		—		—		—		(6,663	)		—			(6,663	)
Balance at June 30, 2022		25,373,858	$	254	$	301,994	$	(259,843	)	$	(1,415	)	$	40,990

See accompanying notes to condensed consolidated financial statements.

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iCAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	*For the Six Months ended*
	*June 30,*
	*2023*			*2022*
Cash flow from operating activities:
Net loss	$	(5,528	)	$	(6,663	)
Adjustments to reconcile net loss to net cash used for operating activities:
Amortization		94			105
Depreciation		138			169
Non-cash lease expense		248			391
Bad debt provision		62			510
Stock-based compensation		800			964
Deferred tax		8			—
Changes in operating assets and liabilities:
Accounts receivable		3,089			(1,790	)
Inventory		1,141			(830	)
Prepaid and other assets		352			853
Accounts payable		(1,116	)		(581	)
Accrued and other expenses		(510	)		(371	)
Lease liabilities		(263	)		(425	)
Deferred revenue		(448	)		659
Total adjustments		3,595			(346	)
Net cash used for operating activities		(1,933	)		(7,009	)
Cash flow from investing activities:
Additions to patents, technology and other		—			(10	)
Additions to property and equipment		(307	)		(255	)
Capitalization of internal-use software development costs		(36	)		—
Net cash used for investing activities		(343	)		(265	)
Cash flow from financing activities:
Proceeds from option exercises pursuant to stock option plans		—			79
Proceeds from issuance of common stock pursuant to Employee Stock Purchase Plans		—			93
Net cash provided by financing activities		—			172
Decrease in cash and cash equivalents		(2,276	)		(7,102	)
Cash and cash equivalents, beginning of period		21,313			34,282
Cash and cash equivalents, end of period	$	19,037		$	27,180
Supplemental disclosure of cash flow information:
Interest paid	$	—		$	9
Amendment to right-of-use assets obtained in exchange for operating lease liabilities	$	—		$	2,434

See accompanying notes to condensed consolidated financial statements.

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iCAD, INC. AND SUBSIDIARIES

(In thousands, except for share and per share data or as noted)

Notes to Condensed Consolidated Financial Statements:

Note 1 – Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements of iCAD, Inc. and its subsidiaries (together “iCAD” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. It is reasonably possible that changes may occur in the near term that would affect management’s estimates with respect to assets and liabilities. In the opinion of the Company’s management, these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position of the Company at June 30, 2023, the results of operations of the Company for the three and six months ended June 30, 2023 and 2022, cash flows of the Company for the six months ended June 30, 2023 and 2022, and stockholders’ equity of the Company for the three and six months ended June 30, 2023 and 2022.

Although the Company believes that the disclosures made in these interim financial statements are adequate to make the information presented not misleading, certain information normally included in the footnotes prepared in accordance with US GAAP has been omitted as permitted by the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 31, 2023. The results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for fiscal year ending December 31, 2023, or any interim or any future period.

Principles of Consolidation and Business Segments

The condensed consolidated financial statements include the accounts of iCAD, Inc. and its wholly owned subsidiaries: Xoft, Inc., Xoft Solutions, LLC, iCAD France, LLC and iCAD Italy, LLC. All material inter-company transactions and balances have been eliminated in consolidation.

The Company reports the results of two segments: Cancer Detection (“Detection”) and Cancer Therapy (“Therapy”). The Detection segment consists of advanced image analysis and workflow products for the detection of cancer. The Therapy segment consists of radiation therapy (“Xoft”, “Axxent”) products for the treatment of certain cancers.

Risk and Uncertainty

On March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of COVID-19, the United States and most countries of the world imposed some level of unprecedented restrictions such as travel bans and business closures which caused substantial reductions in economic activity. As a provider of devices and services to the health care industry, the Company believes its operations have been materially affected in all periods presented. While the worst of the disruptions appear to have subsided as of June 30, 2023, the Company continues to be impacted by slowness in the overall economic recovery. The Company’s expected results for future periods could reflect a continuing negative impact from the COVID-19 pandemic for similar or additional reasons.

In late February 2022, Russian military forces launched significant military action against Ukraine. Sustained conflict and disruption in the region has continued through June 30, 2023 and beyond. Economic, civil, military and political uncertainty may arise or increase in regions where the Company operates or derives revenue. Further, countries from which the Company derives revenue may experience military action and/or civil and political unrest; may be subject to government export controls, economic sanctions, embargoes, or trade restrictions; and experience currency, inflation, and interest rate uncertainties. While the impact to the Company has been limited to date, it is not possible to predict the potential outcome should the conflict expand and/or additional sanctions be imposed. For the three and six months ended June 30, 2023, approximately 20% and 17%, respectively, of the Company's revenue was derived from customers located outside the United States.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)” (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaced the then-existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. These changes will result in earlier recognition of credit losses. In November 2019, the FASB elected to defer the adoption date of ASU 2016-13 for public business entities that meet the definition of a smaller reporting company to fiscal years beginning after December 15, 2022. Early adoption of the guidance in ASU 2016-13 was permitted. The Company adopted ASU 2016-13 effective January 1, 2023. Adoption caused the Company to modify its approach to estimating its allowance for potentially uncollectable accounts receivable. Specifically, the Company began applying an expected credit loss model that uses historical loss rates of its accounts receivable for the previous twelve months as well as expectations about the future where the Company has been able to develop forecasts to support its estimates. Adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements.

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Note 2 – Fair Value Measurements

The Company follows the provisions of FASB ASC Topic 820, “Fair Value Measurement and Disclosures” (“ASC 820”), which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company applies the fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, which are the following:

•

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

The assigned level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Money market funds included in cash and cash equivalents in the accompanying consolidated balance sheet are considered a Level 1 measurement as they are valued at quoted market prices in active markets.

The following table sets forth the Company’s assets which are measured at fair value on a recurring basis by level within the fair value hierarchy:

Fair Value Measurements as of June 30, 2023

	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets
Money market accounts	$	15,811	$	—	$	—	$	15,811
Total Assets	$	15,811	$	—	$	—	$	15,811

Fair Value Measurements as of December 31, 2022

	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets
Money market accounts	$	15,067	$	—	$	—	$	15,067
Total Assets	$	15,067	$	—	$	—	$	15,067

There were no Level 2 or 3 instruments measured at fair value as of June 30, 2023 or December 31, 2022.

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Note 3 - Revenue

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these goods or services and excludes any sales incentives or taxes collected from customers which are subsequently remitted to government authorities.

Disaggregation of Revenue

The following tables presents the Company’s revenues disaggregated by major good or service line, timing of revenue recognition, and sales channel, reconciled to its reportable segments.

	*Three months ended June 30, 2023*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	2,301	$	343	$	2,644
Service contracts		1,870		396		2,266
Supply and source usage agreements		—		460		460
Disposable applicators		—		459		459
Other		—		36		36
	$	4,171	$	1,694	$	5,865
Timing of Revenue Recognition
Goods transferred at a point in time	$	1,876	$	867	$	2,743
Services transferred over time		2,295		827		3,122
	$	4,171	$	1,694	$	5,865
Sales Channels
Direct sales force		2,743	$	1,124	$	3,867
OEM partners		1,428		570		1,998
Channel partners		—		—		—
	$	4,171	$	1,694	$	5,865

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	*Six months ended June 30, 2023*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	4,762	$	626	$	5,388
Service contracts		3,744		799		4,543
Supply and source usage agreements		—		952		952
Disposable applicators		—		685		685
Other		—		75		75
	$	8,506	$	3,137	$	11,643
Timing of Revenue Recognition
Goods transferred at a point in time	$	3,945	$	1,484	$	5,429
Services transferred over time		4,561		1,653		6,214
	$	8,506	$	3,137	$	11,643
Sales Channels
Direct sales force	$	5,461	$	2,179	$	7,640
OEM partners		3,045		—		3,045
Channel partners		—		958		958
	$	8,506	$	3,137	$	11,643

	*Three months ended June 30, 2022*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	3,467	$	1,008	$	4,475
Service contracts		1,822		361		2,183
Supply and source usage agreements		—		367		367
Disposable applicators		—		463		463
Other		—		87		87
	$	5,289	$	2,286	$	7,575
Timing of Revenue Recognition
Goods transferred at a point in time	$	3,455	$	1,547	$	5,002
Services transferred over time		1,834		739		2,573
	$	5,289	$	2,286	$	7,575
Sales Channels
Direct sales force	$	3,505	$	703	$	4,208
OEM partners		1,784		—		1,784
Channel partners		—		1,583		1,583
	$	5,289	$	2,286	$	7,575

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	*Six months ended June 30, 2022*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	7,330	$	1,705	$	9,035
Service contracts		3,479		747		4,226
Supply and source usage agreements		—		780		780
Disposable applicators		—		878		878
Other		—		179		179
	$	10,809	$	4,289	$	15,098
Timing of Revenue Recognition
Goods transferred at a point in time	$	7,335	$	2,812	$	10,147
Services transferred over time		3,474		1,477		4,951
	$	10,809	$	4,289	$	15,098
Sales Channels
Direct sales force	$	6,399	$	1,519	$	7,918
OEM partners		4,410		—		4,410
Channel partners		—		2,770		2,770
	$	10,809	$	4,289	$	15,098

Products. Product revenue consists of sales of cancer detection systems and perpetual licenses and cancer therapy systems and cancer therapy applicators. The Company transfers control and recognizes a sale when the product is shipped from the manufacturing or warehousing facility to the customer.

Service. The Company sells service contracts in which the Company provides professional services including product installations, maintenance, training and service repairs, and in certain cases leases equipment to hospitals, imaging centers, radiological practices and radiation oncologists and treatment centers. The service contracts range from 12 months to 48 months. The Company typically receives payment at the inception of the contract and recognizes revenue on a straight-line basis over the term of the agreement.

Sources and Source Usage Agreements. The Xoft Axxent controller utilizes a miniaturized high dose rate, low energy X-ray source (a "source") to apply the radiation dose directly to the size and shape of the cancerous area while sparing healthy tissue and organs. Customers are able to purchase sources as needed or through a contract for a stated number of sources over a term (a "source usage agreement"). Revenue from sources is recognized upon transfer of control to the customer. Revenue from source usage agreements is recognized on a straight-line basis over the term of the source agreement.

Disposable applicators. Revenue for the sale of disposable applicators is recognized upon the transfer of control to the customer.

Other. Other revenue consists primarily of miscellaneous products and services. The Company transfers control and recognizes a sale when the installation services are performed or when the Company ships the product from the Company’s manufacturing or warehouse facility to the customer.

Contract Balances

Contract liabilities are a component of deferred revenue, current contract assets are a component of prepaid and other assets and non-current contract assets are a component of other assets. The following table provides information about receivables, current and non-current contract assets, and contract liabilities from contracts with customers.

Contract balances

	*Balance at*		*Balance at*
	*June 30, 2023*		*December 31, 2022*
Receivables, which are included in ‘Trade accounts receivable’	$	5,747	$	8,898
Current contract assets, which are included in “Prepaid and other assets”	$	843	$	759
Non-current contract assets, which are included in “other assets”	$	—	$	15
Contract liabilities, which are included in “Deferred revenue”	$	6,310	$	6,758

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Timing of revenue recognition may differ from timing of invoicing of customers. The Company records a receivable when revenue is recognized prior to receipt of cash payment and the Company has the unconditional right to such consideration, or unearned revenue when cash payments are received or due in advance of performance. For multi-year agreements, the Company generally invoices customers annually at the beginning of each annual service period.

The Company records net contract assets or contract liabilities on a contract-by-contract basis. The Company records a contract asset for unbilled revenue when the Company’s performance is in excess of amounts billed or billable. The Company classifies the net contract asset as either a current or non-current based on the expected timing of the Company’s right to bill under the terms of the contract. The current contract asset balance primarily relates to the net unbilled revenue balances with two significant customers, which the Company expects to be able to bill for within one year. The non-current contract asset balance consists of net unbilled revenue balances with one customer which the Company expects to be able to bill for in more than one year.

Changes in deferred revenue from contracts with customers were as follows:

	*Six Months*
	*Ended June 30,*
	*2023*
Balance at beginning of period	$	6,758
Deferral of revenue		4,909
Recognition of deferred revenue		(5,357	)
Balance at end of period	$	6,310

As of June 30, 2023, the aggregate amount of unsatisfied, or partially satisfied, performance obligations from contracts with customers was $6.3 million. The Company expects to recognize approximately $6.0 million of its remaining performance obligations as revenue over the next 12 months. The remainder of the balance is expected to be recognized over the next two to three years.

Note 4 – Net Loss per Common Share

The Company’s basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period.

A summary of the Company’s calculation of net loss per share is as follows (in 000s, except for Net loss per share):

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Net loss	$	(1,750	)	$	(3,118	)	$	(5,528	)	$	(6,663	)
Shares used in the calculation of basic and diluted net loss per share		25,261			25,185			25,261			25,172
Net loss per share - basic and diluted	$	(0.07	)	$	(0.12	)	$	(0.22	)	$	(0.26	)

The shares of the Company’s common stock issuable upon the exercise of stock options and vesting of restricted stock that were excluded from the calculation of diluted net loss per share because their effect would have been antidilutive are as follows:

	*June 30,*
	*2023*		*2022*
Stock options		3,265,920		1,819,897
Total		3,265,920		1,819,897

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Note 5 – Inventories

The Company values its inventory at the lower of cost or net realizable value. Cost includes materials, labor, and manufacturing overhead and is determined using the first-in, first-out (FIFO) method. On a quarterly basis, management reviews inventory quantities on hand and analyzes the provision for excess and obsolete inventory based primarily on product expiration dating and estimated sales forecast, which is based on sales history and anticipated future demand. Inventory consisted of the following and includes an inventory reserve of $0.3 million at both June 30, 2023 and December 31, 2022.

	*June 30, 2023*			*December 31, 2022*
Raw materials	$	1,679		$	2,658
Work in process		20			101
Finished goods		2,811			2,892
Inventory gross		4,510			5,651
Inventory reserve		(262	)		(262	)
Inventory net	$	4,248		$	5,389

Note 6 – Goodwill

The Company tests goodwill for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of the reporting unit is less than its carrying value. Factors the Company considers important, which could trigger an impairment of such asset, include the following:

• 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.

The Company considered indicators of impairment, and there were no triggering events identified, no indication of impairment of the Company’s goodwill and no impairment charges recorded during the three months ended June 30, 2023 or 2022.

Note 7 – Long-lived Assets

The Company assesses long-lived assets for impairment if events and circumstances indicate it is more likely than not that the fair value of the asset group is less than its carrying value.

There is no set interval or frequency for recoverability evaluation. Rather, the determination of when, if at all, an asset (or asset group) is evaluated for recoverability is based on “events and circumstances.” The following factors are examples of events or changes in circumstances that indicate the carrying amount of an asset (or asset group) may not be recoverable and thus is to be evaluated for recoverability.

• 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).

The Company determined there were no such triggering events in the period ended June 30, 2023.

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Note 8 – Lease Commitments

In accordance with ASC Topic 842, "Leases" ("ASC 842"), the Company determines if an arrangement contains a lease at inception. A lease is an operating or financing contract, or part of a contract, that conveys the right to control the use of an identified tangible asset for a period of time in exchange for consideration.

At lease inception, the Company recognizes a lease liability equal to the present value of the remaining lease payments, and a right of use asset equal to the lease liability, subject to certain adjustments, such as for lease incentives. In determining the present value of the lease payments, the Company calculates an incremental borrowing rate, which is determined by estimating the Company’s applicable, fully collateralized borrowing rate, with adjustment as appropriate for lease term. The lease term at the lease commencement date is determined based on the non-cancellable period for which the Company has the right to use the underlying asset, together with any periods covered by an extension option if the Company is reasonably certain to exercise that option.

Assumptions made by the Company at the commencement date of each lease are re-evaluated upon occurrence of certain events, including a lease modification. A lease modification results in a separate contract when the modification grants the lessee an additional right of use not included in the original lease and when lease payments increase commensurate with the standalone price for the additional right of use. When a lease modification results in a separate contract, it is accounted for in the same manner as a new lease.

Right-of-use assets and obligations for leases with an initial term of 12 months or less are considered short term and are a) not recognized in the consolidated balance sheet and b) recognized as an expense on a straight-line basis over the lease term. The Company does not sublease any of its leased assets to third parties and the Company’s lease agreements do not contain any residual value guarantees or restrictive covenants. The Company has lessor agreements that contain lease and non-lease components, but the Company is accounting for the complete agreement under ASC 606 after determining that the non-lease component is the predominant component of these agreements.

ASC 842 includes a number of reassessment and remeasurement requirements for lessees based on certain triggering events or conditions. There were no impairment indicators identified during the three and six months ended June 30, 2023 that would require impairment testing of the Company’s right-of-use assets.

Certain of the Company’s leases include variable lease costs to reimburse the lessor for real estate tax and insurance expenses, and certain non-lease components that transfer a distinct service to the Company, such as common area maintenance services. The Company has elected to separate the accounting for lease components and non-lease components for real estate and equipment leases.

Components of Leases:

The Company has leases for office space and office equipment. The leases expire at various dates through 2028.

		*Three Months Ended*		*Six Months Ended*
Lease Cost	*Classification*	*June 30, 2023*		*June 30, 2023*
Operating lease cost - Right of Use Asset	Operating expenses	$	116	$	332

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Other information related to leases was as follows:

	*Three Months*		*Six Months*
	*Ended June 30, 2023*		*Ended June 30, 2023*
Cash paid from operating cash flows for operating leases	$	161	$	248

	*As of June 30,*
	*2023*
Weighted-average remaining lease term of operating leases (years)		3.5
Weighted-average discount rate for operating leases		7.0	%

Maturity of the Company’s lease liabilities as of June 30, 2023 was as follows:

2023	$	434
2024		846
2025		848
2026		749
2027		685
2028		172
Total lease payments		3,734
Less: effects of discounting		(612	)
Total lease liabilities		3,122
Less: current portion of lease liabilities		644
Long-term lease liabilities	$	2,478

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Note 9– Stockholders Equity

Stock-Based Compensation

The Company granted options to purchase 562,774 and 1,103,916 shares of the Company’s stock during the three and six months ended June 30, 2023 , respectively. The full amount of options were granted in the first six months of 2023.

The Company’s stock-based compensation expense, including options and restricted stock by category is as follows:

	*Three Months Ended*				*Six Months Ended*
	*June 30,*				*June 30,*
	*2023*		*2022*		*2023*		*2022*
Cost of revenue	$	1	$	1	$	2	$	1
Engineering and product development		59		70		132		138
Marketing and sales		62		109		193		308
General and administrative		92		129		473		517
	$	214	$	309	$	800	$	964

During the three months ended March 31, 2023, the Company recorded incremental stock-based compensation of approximately $0.23 million as a result of modifications of certain stock option awards. The modifications related to extending the contractual life of certain stock options by five years for four grantees whose awards were scheduled to expire during 2023. In addition, the amount of time to exercise vested stock options upon termination for one grantee was extended from 90 days to 24 months.

As of June 30, 2023, there was approximately $1.4 million of total unrecognized compensation cost related to unvested options. That cost is expected to be recognized over a weighted average period of 1.67 years.

Options granted under the Company’s stock incentive plans were valued utilizing the Black-Scholes model using the following assumptions and had the following fair values:

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Average risk-free interest rate		4.10	%		2.56	%		4.14	%		1.90	%
Expected dividend yield	None			None			None			None
Expected life (in years)		3.1			3.5			3.0			3.5
Expected volatility		77.7% - 96.3%			69.7% - 70.5%			72.7% to 96.3%			66.3% to 70.5%
Weighted average exercise price	$	1.38		$	5.19		$	1.76		$	5.22
Weighted average fair value	$	0.76		$	1.72		$	0.95		$	2.46

The Company’s 2023 and 2022 average expected volatility and average expected life is based on the average of the Company’s historical information. The risk-free rate is based on the rate of U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of option grants. The Company has paid no dividends on its common stock in the past and does not anticipate paying any dividends in the future.

The Company did not grant any shares of restricted stock during the three-months ended June 30, 2023 or 2022. The Company’s restricted stock awards typically vest in either one year or three equal annual installments with the first installment vesting one year from the grant date. The grant date fair value for restricted stock awards is based on the quoted market value of Company stock on the grant date.

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A summary of stock option activity for all stock option plans for the period ended June 30, 2023 is as follows:

	Number of			Weighted Average		Intrinsic
	Options			Exercise Price		Value
Outstanding as of December 31, 2022		2,610,992		$	7.54	$	—
Granted		1,103,916		$	1.76	$	969
Exercised		—		$	—	$	—
Cancelled		(448,988	)	$	7.80	$	—
Outstanding as of June 30, 2023		3,265,920		$	5.61	$	969
Options Exercisable as of December 31, 2022		1,619,855		$	6.47	$	—
Options Exercisable as of June 30, 2023		2,042,460		$	7.13	$	47

There were no exercises of outstanding stock options in the three and six months ended June 30, 2023.

Employee Stock Purchase Plan

In December 2019, the Company’s Board of Directors adopted, and the stockholders approved the 2019 Employee Stock Purchase Plan (“ESPP”), effective January 1, 2020. The ESPP provides for the issuance of up 950,000 shares of common stock, subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. The ESPP may be terminated or amended by the Board of Directors at any time. Certain amendments to the ESPP require stockholder approval. In October 2022, the Company suspended the ESPP such that the accumulation period from October 1, 2022 through December 31, 2022 and beyond will not occur.

Prior to the Company's suspension of the ESPP, any eligible employee could enroll as of the beginning of a respective quarterly accumulation period. Employees who participated in the ESPP were able to purchase shares by authorizing payroll deductions of up to 15% of their base compensation during an accumulation period. Unless the participating employee withdrew from participation, accumulated payroll deductions were used to purchase shares of common stock on the last business day of the accumulation period (the “Purchase Date”) at a price equal to 85% of the lower of the fair market value on (i) the Purchase Date or (ii) the first day of such accumulation period. Under applicable tax rules, no employee was able to purchase more than $25,000 worth of common stock, valued at the start of the purchase period, under the ESPP in any calendar year. Substantially all of the Company’s employees whose customary employment is for more than 20 hours a week are eligible to participate in the ESPP. Any employee who owns 5% or more of the voting power or value of the Company’s shares of common stock is not eligible to purchase shares under the ESPP.

The Company issued 8,683 and 18,064 shares under the ESPP in the three and six month periods ended June 30, 2022, respectively. The Company recorded approximately $12,000 and $22,000 of stock-based compensation expense pursuant to ESPP for the three and six month periods ended June 30, 2022, respectively.

Note 10– Income Taxes

The determination of the annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pretax income in each tax jurisdiction in which the Company operates and the development of tax planning strategies during the year. As such, there can be significant volatility in interim tax provisions.

Income tax expense was approximately $4,000 and $9,000 for the three and six months ended June 30, 2023, respectively. The effective tax rates for the three and six months ended June 30, 2023 and 2022 were less than 1% in each period. The difference between the Company’s effective tax rates in 2023 and 2022 compared to the U.S. statutory tax rate of 21% is primarily due changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets. The Company has valuation allowances against substantially all of its net operating loss carryforwards and tax credit carryforwards.

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Note 11 – Segment Reporting

Operating segments are the components of the Company’s business for which separate financial information is available. This is evaluated regularly by the chief operating decision maker (“CODM”) who decides how to allocate resources and assess performance. The Company’s CODM is the chief executive officer. The Company’s operating segments are generally organized by the type of product or service offered and by geography. Each reportable segment generates revenue from the sale of medical equipment and related services and/or sale of supplies. The Company has determined there are two segments: Detection and Therapy.

The Detection segment consists of the Company’s advanced image analysis and workflow products, and the Therapy segment consists of the Company’s radiation therapy products, and related services. The primary factors used by the Company’s CODM to allocate resources are based on revenues, gross profit, operating income or loss, and earnings or loss before interest, taxes, depreciation, amortization, and other specific and non-recurring items of each segment. Included in segment operating income are stock compensation, amortization of technology and depreciation expense. There are no intersegment revenues.

The Company does not track its assets by operating segment and the CODM does not use asset information by segment to allocate resources or make operating decisions. Segment revenues, gross profit, segment operating income or loss, and a reconciliation of segment operating income or loss to GAAP loss before income tax is as follows:

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Segment revenues:
Detection	$	4,171		$	5,289		$	8,506		$	10,809
Therapy		1,694			2,286			3,137			4,289
Total revenue	$	5,865		$	7,575		$	11,643		$	15,098
Segment gross profit:
Detection	$	3,398		$	4,554		$	6,942		$	9,215
Therapy		951			937			1,536			1,588
Segment gross profit	$	4,349		$	5,491		$	8,478		$	10,803
Segment operating income (loss):
Detection	$	391		$	446		$	267		$	1,068
Therapy		593			(797	)		(290	)		(2,006	)
Segment operating income (loss):	$	984		$	(351	)	$	(23	)	$	(938	)
General, administrative, depreciation and amortization expense	$	(2,907	)	$	(2,763	)	$	(5,825	)	$	(5,698	)
Interest expense		—			—			—			(1	)
Interest income		182			14			332			16
Other expense		(5	)		(18	)		(3	)		(41	)
Loss before income tax	$	(1,746	)	$	(3,118	)	$	(5,519	)	$	(6,662	)

Note 12 – Commitments and Contingencies

Other Commitments

The Company is obligated to pay approximately $5.5 million for firm purchase obligations to suppliers for future product and service deliverables and $0.4 million for minimum royalty obligations.

Litigation

The Company may be a party to various legal proceedings and claims arising out of the ordinary course of its business. Although the final results of all such matters and claims cannot be predicted with certainty, the Company currently believes that there are no current proceedings or claims pending against it the ultimate resolution of which would have a material adverse effect on its financial condition or results of operations. However, should the Company fail to prevail in any legal matter or should several legal matters be resolved against the Company in the same reporting period, such matters could have a material adverse effect on the Company’s operating results and cash flows for that particular period. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, “Contingencies.” Legal costs are expensed as incurred.

Note 13 – Restructuring

On March 20, 2023, the Company committed to a restructuring plan intended to support its long-term strategic goals and reduce operating expenses by further aligning its cost structure to focus on areas the Company believes are more likely to generate the best long-term results, in light of current industry and macroeconomic environments (the “RIF”). The Company reduced its workforce by approximately 28%, decreasing its headcount by approximately 23 employees, predominantly from the Company’s detection business unit. Xoft, Inc., a wholly-owned subsidiary of the Company, furloughed 12 of its employees, or approximately 50% of its workforce.

The Company has incurred charges of $0.2 million related to the RIF, all of which were recognized during the six months ended June 30, 2023. All of the incurred charges are one-time, cash expenses and were recorded primarily in Cost of revenue and Marketing and sales in the Company's Condensed Consolidated Statements of Operations. While the Company does not expect to record additional charges related to the RIF, the amounts are subject to change until finalized and the Company may incur additional costs during the remainder of 2023.

The Company's accrual for restructuring charges for the six months ended June 30, 2023 was follows (in thousands):

Balance as of January 1, 2023	$	—
Charges		178
Cash payments		(110)
Balance as of June 30, 2023	$	68

Note 14 – Subsequent Events

The Company has evaluated events and transactions subsequent to the balance sheet date to the date of the filing and is not aware of any events or transactions that occurred subsequent to the balance sheet date that would require recognition or disclosure in the consolidated financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the accompanying notes included in Part I, Item 1 of this Form 10-Q, as well as our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023. Some of the information contained in this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. As a result of many factors, including those factors set forth in the section titled “Risk Factors,” our actual results could differ materially from those discussed in or implied by these forward-looking statements. Please also refer to the section titled “Special Note Regarding Forward Looking Statements.”

Special Note Regarding Forward Looking Statements

Certain information included in this Item 2 and elsewhere in this Form 10-Q that are not historical facts contain statements that may be deemed “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements involve or may involve a number of known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to the following: the continuing impact of the COVID-19 pandemic, the outcomes of our commercial and strategic arrangements (including our respective arrangements with Google Health and Radiology Partners), the continuing impact of military and political conflict in Eastern Europe, the ability to achieve business and strategic objectives, the risks of uncertainty of patent protection, the impact of supply and manufacturing constraints or difficulties, uncertainty of future sales levels, protection of patents and other proprietary rights, the impact of supply and manufacturing constraints or difficulties, product market acceptance, possible technological obsolescence of products, increased competition, litigation and/or government regulation, changes in Medicare reimbursement policies, risks relating to potential future debt obligations, competitive factors, the effects of a decline in the economy or markets served by the Company, and other risks detailed in this report and in the Company’s other filings with the United States Securities and Exchange Commission (the “SEC”). The words “believe”, “plan”, “intend”, “expect”, “estimate”, “anticipate”, “likely”, “seek”, “should”, “would”, “could” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date the statement was made. Except as required by law, we undertake no obligation to update any such forward-looking statements to reflect events or circumstances after the date of such statements.

Unless the context otherwise requires, the terms “iCAD”, the “Company”, “we”, “our”, “registrant”, and “us” mean iCAD, Inc. and its consolidated subsidiaries.

Results of Operations

Overview

iCAD, Inc. is a global medical technology company providing innovative cancer detection and therapy solutions. The Company reports in two segments: Detection and Therapy.

In the Detection segment, the Company’s solutions include (i) advanced image analysis and workflow solutions that enable healthcare professionals to better serve patients by identifying pathologies and pinpointing the most prevalent cancers earlier, and (ii) a solutions suite of high-performance, Artificial Intelligence and Computer-Aided Detection (CAD) systems and workflow solutions for 2D and 3D mammography, Magnetic Resonance Imaging (MRI) and Computed Tomography (CT) that focus on cancer detection, breast density assessment, and short-term cancer risk estimation.

In the Therapy segment, the Company offers the Xoft System, an isotope-free cancer treatment platform technology. The Xoft System can be used for the treatment of early-stage breast cancer, endometrial cancer, cervical cancer and nonmelanoma skin cancer and is in clinical studies for treatment of brain cancers.

The Company’s headquarters is located in Nashua, New Hampshire, with a manufacturing facility in New Hampshire, an operations, research, development, manufacturing and warehousing facility in San Jose, California, and an office in Lyon, France.

COVID-19 Impact

On March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of COVID-19, the United States and most countries of the world imposed some level of unprecedented restrictions such as travel bans and business closures which caused substantial reductions in economic activity. As a provider of devices and services to the health care industry, we believe our operations have been materially affected in all periods presented. While the worst of the disruptions seem to have subsided as of June 30, 2023, and the pandemic emergency has been deemed to be over, we continue dealing with the impact of slowness in the overall economic recovery. Our expected results for the year ended December 31, 2023, including any interim or future periods, could reflect a continuing negative impact from continuing negative economic conditions.

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We believe that our current liquidity and capital resources are sufficient to sustain operations through at least the next 12 months, primarily due to cash on hand of $19.0 million at June 30, 2023 and anticipated revenue and cash collections as well as cost savings actions taken.

Eastern European Conflict Impact

In late February 2022, Russian military forces launched significant military action against Ukraine. Sustained conflict and disruption in the region has continued through June 30, 2023 and beyond. Economic, civil, military and political uncertainty may arise or increase in regions where the Company operates or derives revenue. Further, countries from which we derive revenue may experience military action and/or civil and political unrest; may be subject to government export controls, economic sanctions, embargoes, or trade restrictions; and experience currency, inflation, and interest rate uncertainties. While the impact to us has been limited to date, it is not possible to predict the potential outcome should the conflict expand and/or additional sanctions be imposed. For the three and six months ended June 30, 2023, approximately 20% and 17%, respectively, of the Company's revenue was derived from customers located outside the United States.

Xoft

As previously announced, the Company has engaged investment bankers to explore strategic options for its Therapy business line.

Critical Accounting Estimates

Our discussion and analysis of financial condition, results of operations, and cash flows are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates, including those related to revenue recognition, allowances for credit losses on accounts receivable, inventory valuation and obsolescence, intangible assets, goodwill, income taxes, contingencies, and litigation. Additionally, we use assumptions and estimates in calculations to determine stock-based compensation, and evaluation of litigation. We base estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Due to the COVID-19 pandemic and its lingering impact, global armed conflicts and related political uncertainty, as well as dramatic inflation, there has been uncertainty and disruption in the global economy and financial markets. We are not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Other than as described herein, there have been no additional material changes to our critical accounting policies as discussed in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023. For a comprehensive list of our critical accounting policies, reference should be made to the 2022 10-K.

Three and six months ended June 30, 2023 compared to three and six months ended June 30, 2022 (in thousands, except share data or as noted)

Revenue

Three months ended June 30, 2023 and 2022:

	Three Months Ended June 30,
	2023		2022		$ Change			% Change
Detection revenue
Product revenue	$	2,301	$	3,467	$	(1,166	)		(33.6	)%
Service and supplies revenue		1,870		1,822		48			2.6	%
Subtotal		4,171		5,289		(1,118	)		(21.1	)%
Therapy revenue
Product revenue		343		1,008		(665	)		(66.0	)%
Service and supplies revenue		1,351		1,278		73			5.7	%
Subtotal		1,694		2,286		(592	)		(25.9	)%
Total revenue	$	5,865	$	7,575	$	(1,710	)		(22.6	)%

Total revenue decreased by approximately $1.7 million or (22.6%), from $7.6 million for the three months ended June 30, 2022 to $5.9 million for the three months ended June 30, 2023. The decrease is due primarily to reduced demand and our shift to a subscription model as well as continued weakness in recovery to pre-pandemic levels prior to Covid-19. During the second quarter of 2023, we have seen an increased customer demand for subscription licenses, which currently remains a small portion of the Company’s total license revenue. We believe this trend could accelerate, and have begun to shift our marketing efforts to a subscription model. An increase in subscription revenue would negatively impact revenue in the short term, because revenue from subscription licenses are recognized over time, as opposed to being recognized upon delivery for perpetual licenses.

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Detection product revenue decreased by approximately $1.1 million, or (33.6%), from $3.5 million for the three months ended June 30, 2022 to $2.3 million for the three months ended June 30, 2023. The overall decrease is due primarily to the impact of our transition to a subscription model and ongoing challenges faced in the economy.

Detection service and supplies revenue, which is primarily sold to direct customers, was flat at approximately $1.8 million for the three months ended June 30, 2022 compared to the three months ended June 30, 2023.

Therapy product revenue decreased by approximately $0.7 million, or (66.0)%, from $1.0 million for the three months ended June 30, 2022 to $0.3 million for the three months ended June 30, 2023. Therapy product revenue is related to the sale of our Axxent systems and can vary significantly from quarter to quarter due to changes in the number of units sold and the average selling price.

Therapy service and supplies revenue increase by approximately $0.1 million, or 5.7%, from $1.3 million for the three months ended June 30, 2022 to $1.4 million for the three months ended June 30, 2023. The increase was due primarily to timing related to service and supplies agreements.

Six Months Ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023		2022		$ Change			% Change
Detection revenue
Product revenue	$	4,762	$	7,330	$	(2,568	)		(35.0	)%
Service and supplies revenue		3,744		3,479		265			7.6	%
Subtotal		8,506		10,809		(2,303	)		(21.3	)%
Therapy revenue
Product revenue		626		1,705		(1,079	)		(63.3	)%
Service and supplies revenue		2,511		2,584		(73	)		(2.8	)%
Subtotal		3,137		4,289		(1,152	)		(26.9	)%
Total revenue	$	11,643	$	15,098	$	(3,455	)		(22.9	)%

Total revenue decreased by approximately $3.5 million or (22.9%), from $15.1 million for the six months ended June 30, 2022 to $11.6 million for the six months ended June 30, 2023. The decrease is due primarily to reduced demand and our shift to a subscription model as well as continued weakness in recovery to pre-pandemic levels prior to Covid-19. During the first six months of 2023, we have seen an increased customer demand for subscription licenses, which currently remains a small portion of the Company’s total license revenue. We believe this trend could accelerate, and have begun to shift our marketing efforts to a subscription model. An increase in subscription revenue would negatively impact revenue in the short term, because revenue from subscription licenses are recognized over time, as opposed to being recognized upon delivery for perpetual licenses.

Detection product revenue decreased by approximately $2.6 million, or (35.0%), from $7.3 million for the six months ended June 30, 2022 to $4.7 million for the six months ended June 30, 2023. The overall decrease is due primarily to the impact of our transition to a subscription model and ongoing challenges faced in the economy.

Detection service and supplies revenue, which is primarily sold to direct customers, increased by approximately $0.3 million, or 7.6%, from $3.5 million for the six months ended June 30, 2022 to $3.7 million in the six months ended June 30, 2023. The increase is due primarily to the timing of delivery on service and supply agreements.

Therapy product revenue decreased by approximately $1.1 million, or (66.3)%, from $1.7 million for the six months ended June 30, 2022 to $0.6 million for the six months ended June 30, 2023. Therapy product revenue is related to the sale of our Axxent systems and can vary significantly from quarter to quarter due to changes in the number of units sold and the average selling price.

Therapy service and supplies revenue decreased by approximately $0.1 million, or (2.8)%, from $2.6 million for the six months ended June 30, 2022 to $2.5 million for the six months ended June 30, 2023. We saw lower service and supplies revenues due to lower balloon sales in the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.

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Cost of Revenue and Gross Profit:

Three months ended June 30, 2023 and 2022:

Cost of Revenue and Gross Profit:	Three Months Ended June 30,
	2023		2022		$ Change			% Change
Products	$	461	$	1,008	$	(547	)		(54.3	)%
Service and supplies		1,000		1,001		(1	)		(0.1	)%
Amortization and depreciation		55		75		(20	)		(26.7	)%
Total cost of revenue	$	1,516	$	2,084	$	(568	)		(27.3	)%

	Three Months Ended June 30,
	2023		2022		$ Change			% Change
Detection gross profit	$	3,398	$	4,554	$	(1,156	)		(25.4	)%
Therapy gross profit		951		937		14			1.5	%
Gross profit	$	4,349	$	5,491	$	(1,142	)		(20.8	)%

Gross profit for the three months ended June 30, 2023 was approximately $4.3 million, or 74.2% of revenue, as compared to $5.5 million, or 72.5% of revenue, for the three months ended June 30, 2022. Detection gross profit percentage decreased from 86.1% for the three months ended June 30, 2022 to 81.5% for the three months ended June 30, 2023. Therapy gross profit percentage increased from 40.9% for the three months ended June 30, 2022 to 56.1% for the three months ended June 30, 2023. Detection gross profit represented 82.9% of total Company gross profit for the three months ended June 30, 2022 compared to 78.1% for the three months ended June 30, 2023.

Cost of products decreased by approximately $0.5 million, or (54.3)%, from $1.0 million for the three months ended June 30, 2022 to $0.5 million for the three months ended June 30, 2023. The decrease is due primarily to lower product sales. Cost of product revenue as a percentage of product revenue was approximately 22.5% for the three months ended June 30, 2022 as compared to 17.4% for the three months ended June 30, 2023. The product mix in the three-month period ended June 30, 2023 compared to the same period in 2022 included more products with a lower relative cost of sales.

Cost of service and supplies was flat at $1.0 million for the three months ended June 30, 2022 and June 30, 2023. Cost of service and supplies revenue as a percentage of service and supplies revenue was approximately 16.5% for the three months ended June 30, 2022 as compared to 31.0% for the three months ended June 30, 2023. The cost of service and supplies as a percentage of revenue decreased primarily as a result of the relative mix of service and supplies in the comparable periods.

Amortization and depreciation, which relates primarily to acquired intangible assets and depreciation of machinery and equipment, was approximately $0.1 million for the three months ended June 30, 2023 and 2022.

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Six Months Ended June 30, 2023 and 2022:

Cost of Revenue and Gross Profit:	Six Months Ended June 30,
	2023		2022		$ Change			% Change
Products	$	1,047	$	2,095	$	(1,048	)		(50.0	)%
Service and supplies		1,993		2,050		(57	)		(2.8	)%
Amortization and depreciation		125		150		(25	)		(16.7	)%
Total cost of revenue	$	3,165	$	4,295	$	(1,130	)		(26.3	)%

	Six Months Ended June 30,
	2023		2022		$ Change			% Change
Detection gross profit	$	6,942	$	9,215	$	(2,273	)		(24.7	)%
Therapy gross profit		1,536		1,588		(52	)		(3.3	)%
Gross profit	$	8,478	$	10,803	$	(2,325	)		(21.5	)%

Gross profit for the six months ended June 30, 2023 was approximately $8.5 million, or 72.8% of revenue, as compared to $10.8 million, or 71.6% of revenue, for the six months ended June 30, 2022. Detection gross profit percentage decreased from 85.3% for the six months ended June 30, 2022 to 81.6% for the six months ended June 30, 2023. Therapy gross profit percentage increased from 37.0% for the six months ended June 30, 2022 to 48.9% for the six months ended June 30, 2023. Detection gross profit represented 85.3% of total Company gross profit for the six months ended June 30, 2022 compared to 81.9% for the six months ended June 30, 2023.

Cost of products decreased by approximately $1.0 million, or (50.0)%, from $2.1 million for the six months ended June 30, 2022 to $1.0 million for the six months ended June 30, 2023. The decrease is due primarily to lower product sales. Cost of product revenue as a percentage of product revenue was approximately 23.2% for the six months ended June 30, 2022 as compared to 19.4% for the six months ended June 30, 2023. The product mix in the six-month period ended June 30, 2023 compared to the same period in 2022 included more products with a lower relative cost of sales.

Cost of service and supplies decreased by approximately $0.1 million, or (2.8)% from $2.1 million for the six months ended June 30, 2022 to $2.0 million for the six months ended June 30, 2023. Cost of service and supplies revenue as a percentage of service and supplies revenue was approximately 33.8% for the six months ended June 30, 2022 as compared to 31.9% for the six months ended June 30, 2023. The cost of service and supplies as a percentage of revenue decreased primarily as a result of the relative mix of service and supplies in the comparable periods.

Amortization and depreciation, which relates primarily to acquired intangible assets and depreciation of machinery and equipment, was approximately $0.1 million for the six months ended June 30, 2023 and 2022.

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Operating Expenses:

Three months ended June 30, 2023 and 2022:

	Three Months Ended June 30,
	2023		2022		$ Change			% Change
Operating expenses:
Engineering and product development	$	1,263	$	2,367	$	(1,104	)		(46.6	)%
Marketing and sales		2,112		3,435		(1,323	)		(38.5	)%
General and administrative		2,832		2,742		90			3.3	%
Amortization and depreciation		65		61		4			6.6	%
Total operating expenses	$	6,272	$	8,605	$	(2,333	)		(27.1	)%

Operating expenses decreased by approximately $2.3 million, or (27.1)%, from $8.6 million in the three months ended June 30, 2022 to $6.3 million in the three months ended June 30, 2023.

Engineering and Product Development. Engineering and product development costs decreased by approximately $1.1 million, or (46.6)%, from $2.4 million in the three months ended June 30, 2022 to $1.3 million in the three months ended June 30, 2023. The decrease is due primarily to cost savings actions taken by management.

Marketing and Sales. Marketing and sales expenses decreased by approximately $1.3 million, or (38.5)%, from $3.4 million in the three months ended June 30, 2022 to $2.1 million in the three months ended June 30, 2023. The decrease was primarily related to lower headcount and commission expense during the comparable periods.

General and Administrative. General and administrative expenses were consistent at approximately $2.8 million for the three months ended June 30, 2022 and the three months ended June 30, 2023.

Amortization and Depreciation. Amortization and depreciation, which relates primarily to acquired intangible assets and depreciation of machinery and equipment, were flat for the three months ended June 30, 2023 and 2022.

Six Months Ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023		2022		$ Change			% Change
Operating expenses:
Engineering and product development	$	3,544	$	4,642	$	(1,098	)		(23.7	)%
Marketing and sales		4,967		7,000		(2,033	)		(29.0	)%
General and administrative		5,695		5,673		22			0.4	%
Amortization and depreciation		120		124		(4	)		(3.2	)%
Total operating expenses	$	14,326	$	17,439	$	(3,113	)		(17.9	)%

Operating expenses decreased by approximately $3.1 million, or (17.9)%, from $17.4 million in the six months ended June 30, 2022 to $14.3 million in the six months ended June 30, 2023.

Engineering and Product Development. Engineering and product development costs decreased by approximately $1.1 million, or (23.7)%, from $4.6 million in the three months ended June 30, 2022 to $3.5 million in the three months ended June 30, 2023. The decrease is due primarily to cost savings actions taken by management.

Marketing and Sales. Marketing and sales expenses decreased by approximately $2.0 million, or (29.0)%, from $7.0 million in the six months ended June 30, 2022 to $5.0 million in the six months ended June 30, 2023. The decrease was primarily related to lower headcount and commission expense during the comparable periods.

General and Administrative. General and administrative expenses were consistent at approximately $5.7 million for the six months ended June 30, 2022 and the six months ended June 30, 2023.

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Other Income and Expense:

Three months ended June 30, 2023 and 2022:

Other Income and Expense:
	Three Months Ended June 30,
	2023			2022			$ Change			% Change
Interest income	$	182		$	14		$	168			1200.0	%
Other income (expense)		(5	)		(18	)		13			(72.2	)%
	$	177		$	(4	)	$	181			(4525.0	)%
Tax (expense) benefit	$	(4	)	$	—		$	(4	)		(100.0	)%

Interest income. Interest income increased by approximately $168,000, or 1,200%, from $14,000 for the three months ended June 30, 2022 to $182,000 for the three months ended June 30, 2023. The increase results from higher interest rates in 2023 compared to 2022.

Other income (expense). Other income (expense) was a loss of $(18,000) during the three months ended June 30, 2022 compared to a loss of $5,000 during the three months ended June 30, 2023. The change is driven by lower foreign exchange losses recorded in 2023 compared to 2022.

Tax (expense). Income tax expense was $(4,000) and $0 for the three months ended June 30, 2023 . The effective tax rates for the three months ended June 30, 2023 and 2022 were less than 1% in each period. The difference between the Company’s effective tax rates in 2023 and 2022 compared to the U.S. statutory tax rate of 21% is primarily due to changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets. The Company has valuation allowances against substantially all of its net operating loss carryforwards and tax credit carryforwards.

Six Months Ended June 30, 2023 and 2022:

Other Income and Expense:
	Six Months Ended June 30,
	2023			2022			$ Change			% Change
Interest expense	$	—		$	(1	)	$	1			(100.0	)%
Interest income		332			16			316			1975.0	%
Other income (loss)		(3	)		(41	)		38			(92.7	)%
	$	329		$	(26	)	$	355			(1365.4	)%
Tax benefit (expense)	$	(9	)	$	(1	)	$	(8	)		800.0	%

Interest expense. Interest expense was approximately $(1,000) for the six months ended June 30, 2022. There was no interest expense during the six months ended June 30, 2023.

Interest income. Interest income increased by approximately $316,000, or 1,975%, from $16,000 for the six months ended June 30, 2022 to $332,000 for the six months ended June 30, 2023. The increase results from higher interest rates in 2023 compared to 2022.

Other income (expense). Other income (expense) was a loss of $(41,000) during the six months ended June 30, 2022 compared to a loss of $3,000 during the six months ended June 30, 2023. The change is driven by lower foreign exchange losses recorded in 2023 compared to 2022.

Tax (expense). Income tax expense was $9,000 and $1,000 for the six months ended June 30, 2023 and 2022, respectively. The effective tax rates for the six months ended June 30, 2023 and 2022 were less than 1% in each period. The difference between the Company’s effective tax rates in 2023 and 2022 compared to the U.S. statutory tax rate of 21% is primarily due to changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets. The Company has valuation allowances against substantially all of its net operating loss carryforwards and tax credit carryforwards.

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Liquidity and Capital Resources (in thousands, except as noted)

The Company believes that its cash and cash equivalents balance of $19.0 million as of June 30, 2023, and projected cash balances are sufficient to sustain operations through at least the next 12 months. The Company’s ability to generate cash adequate to meet its future capital requirements will depend primarily on operating cash flow. If sales or cash collections are reduced from current expectations, or if expenses and cash requirements are increased, the Company may require additional financing, although there are no guarantees that the Company will be able to obtain the financing if necessary. We will continue to closely monitor liquidity and the capital and credit markets.

The Company had net working capital of $19.5 million at June 30, 2023. The ratio of current assets to current liabilities at June 30, 2023 and December 31, 2022 was 2.64 and 2.84, respectively.

	Six Months Ended June 30,
	2023			2022
Net cash used for operating activities	$	(1,933	)	$	(7,009	)
Net cash used for investing activities		(343	)		(265	)
Net cash provided by financing activities		—			172
Decrease in cash and equivalents	$	(2,276	)	$	(7,102	)

Net cash used for operating activities for the six months ended June 30, 2023 was $1.9 million, compared to $7.0 million for the six months ended June 30, 2022. The improvement in net cash used for operating activities for the six months ended June 30, 2023 resulted primarily from the Company’s focus on collections of accounts receivable and ongoing cost saving initiatives. We expect that net cash used for or provided by operating activities to fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, the timing of when we recognize revenue, collections of accounts receivable, inventory expansion due to supply chain risk, and the timing of other payments.

Net cash used for investing activities for the six months ended June 30, 2023 was $343,000, compared to $265,000 for the six months ended June 30, 2022. The net cash used for investing activities for the six months ended June 30, 2023 and 2022 is primarily for purchases of property and equipment.

Net cash provided by financing activities for six months ended June 30, 2022 was $172,000 related to the issuance of common stock pursuant to the Company’s stock option and employee stock purchase plans.

The Company is obligated to pay approximately $5.5 million for firm purchase obligations to suppliers for future product and service deliverables and $0.4 million for minimum royalty obligations.

As previously announced, the Company has engaged investment bankers to explore strategic options for its Therapy business line.

Recent Accounting Pronouncements

See Note 1 to the Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

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Item 4. Controls and Procedures

The Company’s management, with the participation of its principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, as of June 30, 2023, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective at a reasonable level of assurance.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. The Company conducts periodic evaluations to enhance, where necessary, its controls and procedures.

There were no changes to the Company's internal controls over financial reporting during the quarter ended June 30, 2023 that have materially affected or which are reasonably likely to materially affect internal control over financial reporting.

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PART II OTHER

INFORMATION

Item 1A. Risk Factors:

Our business is subject to various risks, including those described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which we strongly encourage you to review. Other than described below, there have been no material changes to the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023.

We have been informed that the FDA requires additional information to determine appropriate regulatory requirements of our ProFound AI® Risk product based on revised FDA guidance and have paused U.S. sales of the product.

We have been informed that under the FDA’s current position, as reflected in revised FDA guidance, ProFound AI® Risk meets the definition of device by section 520(o)(1)(E) of the Federal Food, Drug, and Cosmetic Act (“FD&C Act”). The FDA has requested additional information from us to determine the applicable regulatory requirements. Under the previous FDA guidance, we believed that ProFound AI® Risk met the definition of a device and at that time, based on the FDA’s then guidance, FDA did not intend to enforce compliance with the applicable requirements of the FD&C Act, including, but not limited to, premarket clearance and premarket approval requirements. While there have been no adverse safety issues reported in the U.S. by our customers which have deployed ProFound AI Risk, we have paused sales of ProFound AI® Risk in the U.S. and will inform customers of our need to provide the FDA with additional information under their revised guidance. However, we do not currently intend to recall any licenses previously sold and granted.

Sales of ProFound AI® Risk have not been significant to our aggregate sales and we have only made sales to a limited number of customers. Note that ProFound AI® Risk is, however, approved for use in countries outside of the U.S. including Canada and the European Union, and we have received no reports of safety issues from any users. We are presently determining the optimal regulatory strategy designed to satisfy applicable FDA requirements. The changes in FDA guidance applicable to ProFound AI® Risk do not affect sales of our other products which include our primary product ProFound AI® Detection as well as ProFound AI® Density.

We may not be able to complete all activities necessary to comply with FDA guidance on a timely basis or without expending significant resources. We will submit a 513(g) Request for Information regarding the requirements applicable to the product under the FD&C Act. We are unable to control the timing of FDA action and we may be required to make additional submissions within certain timeframes. We also do not know whether or not the FDA will change its current thinking regarding the regulatory requirements applicable to ProFound AI® Risk. If the FDA determines that we have not satisfied its requirements, any failure of ours to address such requirements or provide requested documentation could disrupt our business operations related to the ProFound AI® Risk product and the timing of our commercialization efforts and could have a material adverse effect on our financial condition and operating results. In addition, the FDA could take action against us for the period of time from the change in FDA guidance applicable to ProFound AI® Risk to the present time, in connection with our decision not to recall the licenses previously sold and granted and could require us to recall the product in the future . We may also be at risk from claims made by our customers who have commenced sales of ProFound AI® Risk to their customers.

Item 5. Other Information

On August 11, 2023, the Company entered into an at-the-market issuance sales agreement (the “Sales Agreement”) with Craig-Hallum Capital Group LLC (the “Agent”), whereby the Company, at its discretion, may issue and sell up to $25 million of shares (the “Shares”) of the Company’s common stock, par value $0.01 per share, from time to time, by any method deemed to be an “at-the-market” offering (the “ATM Offering”), as defined in Rule 415 of the Securities Act, or any other method specified in the Sales Agreement. Shortly after the filing of this Quarterly Report on Form 10-Q, the Company will be filing a prospectus supplement relating to the ATM Offering with the Commission under the Securities Act. The Shares will be issued pursuant to the Company’s previously filed and effective Registration Statement on Form S-3 (File No. 333-273459), which was initially filed with the SEC on July 26, 2023, and declared effective on August 9, 2023. The Company intends to use the net proceeds from the ATM Offering, if any, to continue to fund the ongoing clinical development of its product candidates and for other general corporate and working capital purposes.

The Company is not obligated to sell any Shares pursuant to the Sales Agreement. Subject to the terms and conditions of the Sales Agreement, Agent will use commercially reasonable efforts, consistent with its normal trading and sales practices and applicable state and federal law, rules and regulations and the rules of The Nasdaq Capital Market (“Nasdaq”), to sell Shares from time to time based upon the Company’s instructions, including any price, time or size limits or other customary parameters or conditions the Company may impose.

Under the Sales Agreement, Agent may sell Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act, and the rules and regulations thereunder, including, without limitation, sales made directly on or through Nasdaq, on or through any other existing trading market for the Shares or to or through a market maker. If expressly authorized by the Company, Agent may also sell Shares in negotiated transactions.

The Sales Agreement will terminate upon the earlier of (i) the issuance and sale of all of the Shares through Agent on the terms and subject to the conditions set forth in the Sales Agreement or (ii) termination of the Sales Agreement as otherwise permitted thereby. The Sales Agreement may be terminated at any time by the Company upon five days’ prior notice, or by Agent upon ten days’ prior written notice, or by Agent at any time in certain circumstances, including the occurrence of a material adverse effect on the Company.

The Company has agreed to pay Agent a commission equal to 3.0% of the gross proceeds from the sales of Shares pursuant to the Sales Agreement and has agreed to provide Agent with customary indemnification and contribution rights.

The foregoing summary of the Sales Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Sales Agreement, a copy of which is filed as Exhibit 1.1 hereto and incorporated herein by reference. The Sales Agreement contains representations and warranties that the parties made to, and solely for the benefit of, the other in the context of all of the terms and conditions of the Sales Agreement and in the context of the specific relationship between the parties. The provisions of the Sales Agreement, including the representations and warranties contained therein, are not for the benefit of any party other than the parties to the Sales Agreement and are not intended as a document for investors and the public to obtain factual information about the Company’s current state of affairs. Rather, investors and the public should look to other disclosures contained in the Company’s filings with the SEC.

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Item 6. Exhibits

Exhibit No.		Description

1.1*		At-The-Market Issuance Sales Agreement between iCAD, Inc. and Craig-Hallum Capital Group LLC dated August 11, 2023.

5.1*		Opinion of Dentons US LLP.

10.1		Employment agreement between iCAD, Inc. and Eric Lonnqvist dated April 13, 2023 (filed as exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on April 17, 2023).

23.1		Consent of Dentons US LLP (included in Exhibit 5.1).

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 Inline XBRL (eXtensible Business Reporting Language); (i) Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022 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

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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)

Date: August 11, 2023	By:	/s/ Dana Brown
	Name: Title:	Dana Brown Chief Executive Officer (Principal Executive Officer)

Date: August 11, 2023	By:	/s/ Eric Lonnqvist
	Name: Title:	Eric Lonnqvist Chief Financial Officer (Principal Financial Officer)

Exhibit 1.1

iCAD, Inc.

Common Stock

(par value $0.01 per share)

At-The-Market Issuance Sales Agreement

August 11, 2023

Craig-Hallum Capital Group LLC

222 South 9th Street, Suite 350

Minneapolis, MN 55402

Ladies and Gentlemen:

iCAD, Inc., a Delaware corporation (the “Company”), confirms its agreement (this “Agreement”) with Craig-Hallum Capital Group LLC (“Craig-Hallum”), as follows:

1. Issuance and Sale of Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue and sell through Craig-Hallum, shares (the “Placement Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”), up to an aggregate offering price of $25,000,000, provided however, that in no event shall the Company issue or sell through Craig-Hallum such number of Placement Shares that (a) would cause the Company to not satisfy the eligibility requirements for use of Form S-3 (including Instruction I.B.6. thereof, if applicable), (b) exceeds the number of shares of Common Stock registered on the effective Registration Statement (as defined below) pursuant to which the offering is being made or (c) exceeds the number of authorized but unissued shares of Common Stock (the lesser of (a), (b) and (c), the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth in this Section 1 on the amount of Placement Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that Craig-Hallum shall have no obligation in connection with such compliance if acting in accordance with any Placement Notice that has not been suspended or terminated by the Company. The issuance and sale of Placement Shares through Craig-Hallum will be effected pursuant to the Registration Statement (as defined below) filed by the Company and declared effective by the Securities and Exchange Commission (the “Commission”), although nothing in this Agreement shall be construed as requiring the Company to use the Registration Statement to issue any Placement Shares.

The Company has filed prior to the date hereof, in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations thereunder (the “Securities Act Regulations”), with the Commission a registration statement on Form S-3 (File No. 333-273459), including a base prospectus, relating to certain securities, including the Placement Shares to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder. The Company has also prepared a prospectus supplement specifically relating to the Placement Shares (the “Prospectus Supplement”) to the base prospectus included as part of such registration statement. The Company will furnish to Craig-Hallum, for use by Craig-Hallum, copies of the prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement, relating to the Placement Shares. Except where the context otherwise requires, such registration statement, including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act Regulations or deemed to be a part of such registration statement pursuant to Rule 430B of the Securities Act Regulations, is herein called the “Registration Statement.” The base prospectus, including all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented by the Prospectus Supplement, any Interim Prospectus Supplement (as defined below), or any Permitted Free Writing Prospectus (as defined below), as applicable, in the form in which such prospectus, Prospectus Supplement, Interim Prospectus Supplement, and/or Permitted Free Writing Prospectus have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act Regulations, is herein called the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein (the “Incorporated Documents”).

For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include the most recent copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval System, or if applicable, the Interactive Data Electronic Application system when used by the Commission (collectively, “EDGAR”).

2. Placements. Each time that the Company wishes to issue and sell Placement Shares hereunder (each, a “Placement”), it will notify Craig-Hallum by email notice (or other method mutually agreed to in writing by the parties) of the proposed terms of such Placement, which shall include at a minimum the number of Placement Shares or dollar amount of Placement Shares to be issued, the time period during which sales are requested to be made (which time period, for the avoidance of doubt, shall consist solely of Trading Day(s) (as defined below)), any limitation on the number of Placement Shares or dollar amount of Placement Shares that may be sold in any one day and any minimum price below which sales may not be made (a “Placement Notice”), the form of which is attached hereto as Schedule 1. The Placement Notice shall originate from any of the individuals from the Company set forth on Schedule 3 (with a copy to each of the other individuals from the Company listed on such schedule), and shall be addressed to each of the individuals from Craig-Hallum set forth on Schedule 3, as such Schedule 3 may be amended from time to time. The Placement Notice shall be effective unless and until (i) Craig-Hallum declines to accept the terms contained therein for any reason, in its sole discretion by email notice to the Company within one Business Day (as defined below) from the time the Placement Notice is received, (ii) the entire amount of the Placement Shares thereunder have been sold, (iii) the Company suspends or terminates the Placement Notice, (iv) the Company issues a subsequent Placement Notice and explicitly indicates that the parameters of the subsequent Placement Notice supersede those parameters contained in the earlier dated Placement Notice or (v) this Agreement has been terminated under the provisions of Section 13. The amount of any discount, commission or other compensation to be paid by the Company to Craig-Hallum in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set forth in Schedule 2. It is expressly acknowledged and agreed that neither the Company nor Craig-Hallum will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to Craig-Hallum and Craig-Hallum does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the terms specified therein and herein. In the event of a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control.

3. Sale of Placement Shares by Craig-Hallum.

(a) Subject to the terms and conditions of this Agreement, for the period specified in the Placement Notice, Craig-Hallum will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the NASDAQ Capital Market (the “Exchange”), to sell the Placement Shares up to the number or amount specified, and otherwise in accordance with the terms of such Placement Notice. Craig-Hallum will provide prompt written confirmation to the Company and in no event later than the opening of the Trading Day (as defined below) immediately following the Trading Day on which it has made sales of Placement Shares hereunder setting forth the number or amount of Placement Shares sold on such day, the compensation payable by the Company to Craig-Hallum pursuant to Section 2 with respect to such sales, and the Net Proceeds (as defined below) payable to the Company, with an itemization of the deductions made by Craig-Hallum (as set forth in Section 5(b)) from the gross proceeds that it receives from such sales. Subject to the terms of the Placement Notice, Craig-Hallum shall sell Placement Shares only by methods deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act Regulations, including without limitation sales made directly on the Exchange, on any other existing trading market for the Common Stock or to or through a market maker. Unless otherwise specified by the Company in a Placement Notice and only with the Company’s prior written consent, Craig-Hallum may also sell Placement Shares by any other method permitted by law, including but not limited to in negotiated transactions. “Trading Day” means any day on which shares of Common Stock are purchased and sold on the Exchange, other than a day on which the Exchange is scheduled to close prior to its regular weekday closing time.

(b) During the term of this Agreement, neither Craig-Hallum nor any of its affiliates or subsidiaries shall engage in (i) any short sale of any security of the Company, (ii) any sale of any security of the Company that Craig-Hallum does not own or any sale which is consummated by the delivery of a security of the Company borrowed by, or for the account of, Craig-Hallum or (iii) any market making bidding, stabilization or other trading activity with respect to the Common Stock or related derivative securities, or attempt to induce another person to engage in any of the foregoing, if such activity would be prohibited under Regulation M or other anti-manipulation rules under the Securities Act. Neither Craig-Hallum nor any of its affiliates or subsidiaries shall engage in any proprietary trading or trading for Craig-Hallum’s (or its affiliates’ or subsidiaries’) own account.

4. Suspension of Sales. The Company or Craig-Hallum may, upon notice to the other party in writing (including by email correspondence to each of the individuals of the other party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by email correspondence to each of the individuals of the other party set forth on Schedule 3), suspend any sale of Placement Shares; provided, however, that such suspension shall not affect or impair any party’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice. Each of the parties agrees that no such notice under this Section 4 shall be effective against any other party unless it is made to one of the individuals named on Schedule 3 hereto, as such Schedule may be amended from time to time.

5. Sale and Delivery to Craig-Hallum; Settlement.

(a) Sale of Placement Shares. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, unless Craig-Hallum declines to accept the terms of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, Craig-Hallum, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such Placement Shares up to the amount specified in, and otherwise in accordance with, the terms of such Placement Notice. The Company acknowledges and agrees that (i) there can be no assurance that Craig-Hallum will be successful in selling Placement Shares, (ii) Craig-Hallum will incur no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure by Craig-Hallum to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Placement Shares as required under this Agreement and (iii) Craig-Hallum shall be under no obligation to purchase Placement Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by Craig-Hallum and the Company.

(b) Settlement of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on the second (2nd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement Date”). The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the aggregate gross sales price received by Craig-Hallum, after deduction of (i) Craig-Hallum’s commission, discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof, and (ii) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales.

(c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by crediting Craig-Hallum’s or its designee’s account (provided Craig-Hallum shall have given the Company written notice of such designee a reasonable period of time prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered shares in good deliverable form. On each Settlement Date, Craig-Hallum will deliver the related Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date. If the Company, or its transfer agent (if applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date (other than solely as a result of a failure by Craig-Hallum to provide instructions for delivery), the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Section 11(a) hereto, it will (i) hold Craig-Hallum harmless against any loss, claim, damage, or expense (including reasonable and documented legal fees and expenses), as incurred, arising out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay to Craig-Hallum (without duplication) any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.

(d) Limitations on Offering Size. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, after giving effect to the sale of such Placement Shares, the aggregate gross sales proceeds of Placement Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Placement Shares under this Agreement, the Maximum Amount and (B) the amount authorized from time to time to be issued and sold under this Agreement by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to Craig-Hallum in writing. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement at a price lower than any minimum price authorized from time to time by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to Craig-Hallum in writing.

(e) Affirmation of Representations. At each Applicable Time and Settlement Date, the Company shall be deemed to have affirmed each representation and warranty contained in this Agreement. Any obligation of Craig-Hallum to use its commercially reasonable efforts to sell the Placement Shares on behalf of the Company as sales agent shall be subject to the continuing accuracy of the representations and warranties of the Company herein, to the performance by the Company of its obligations hereunder and to the continuing satisfaction of the additional conditions specified in Section 10 of this Agreement.

(f) Exceptions to Obligation to Sell. Notwithstanding any other provision of this Agreement, the Company and Craig-Hallum agree that no sales of Placement Shares shall take place, the Company shall not request the sales of any Placement Shares that would be sold and Craig-Hallum shall not be obligated to sell or offer to sell, during any period in which the Company is, or could reasonably be deemed to be, in possession of material non-public information; provided that, unless otherwise agreed between the Company and Craig-Hallum, any such period shall be deemed to end on the date on which the Company’s next subsequent annual report on Form 10-K or quarterly report on Form 10-Q, as the case may be, is filed with the Commission.

6. Representations and Warranties of the Company. Except as disclosed in the Registration Statement or the Prospectus (including Incorporated Documents), the Company represents and warrants to, and agrees with Craig-Hallum that as of the date of this Agreement and as of each Applicable Time (as defined below), unless such representation, warranty or agreement specifies a different date or time (in which case as of such date or time):

(a) Registration Statement and Prospectus. The Company and, assuming no act or omission on the part of Craig-Hallum that would make such statement untrue, the transactions contemplated by this Agreement meet the requirements for and comply with the conditions for the use of Form S-3 under the Securities Act. The Registration Statement has been filed with the Commission and has been declared effective under the Securities Act. The Prospectus Supplement will name Craig-Hallum as an agent in the section entitled “Plan of Distribution.” The Company has not received, and has no notice of, any order of the Commission preventing or suspending the use of the Registration Statement, or threatening or instituting proceedings for that purpose, and any request on the part of the Commission for additional information has been complied with. No post-effective amendment to the Registration Statement has been filed. The Registration Statement and the offer and sale of Placement Shares as contemplated hereby meet the requirements of Rule 415 under the Securities Act and comply in all material respects with said Rule. Any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been so described or filed. Copies of the Registration Statement, the Prospectus, and any such amendments or supplements and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement have been delivered, or are available through EDGAR, to Craig-Hallum and its counsel. The Company has not distributed and, prior to the later to occur of each Settlement Date and completion of the distribution of the Placement Shares, will not distribute any offering material in connection with the offering or sale of the Placement Shares other than the Registration Statement and the Prospectus and any Issuer Free Writing Prospectus (as defined below). The Common Stock is currently quoted on the Exchange under the trading symbol “ICAD”.

(b) No Misstatement or Omission. (i) As of the date hereof, at the respective times that the Registration Statement and each amendment thereto became effective and at each Deemed Effective Time (as defined below), the Registration Statement did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) as of each Applicable Time, the Prospectus (as amended and supplemented at such Applicable Time) did not contain and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (iii) as of its date, the Prospectus did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (iv) at any Settlement Date, the Prospectus (as amended and supplemented at such Settlement Date) did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties set forth in clauses (i)-(iv) above shall not apply to any statement or omission made in reliance upon and in conformity with information furnished in writing to the Company by Craig-Hallum expressly for use in the Prospectus.

(c) Conformity with Securities Act and Exchange Act. (i) (A) At the respective times the Registration Statement and each amendment thereto became effective, (B) at each deemed effective date with respect to Craig-Hallum pursuant to Rule 430B(f)(2) under the Securities Act (each, a “Deemed Effective Time”), (C) as of each Applicable Time, (D) at each Settlement Date, and (E) at all times during the Prospectus Delivery Period (as defined below), the Registration Statement complied and will comply in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable; (ii) the base prospectus complied at the time it was filed with the Commission, complies as of the date hereof and, as of each Applicable Time and at all times during the Prospectus Delivery Period, will comply in all material respects with the rules and regulations under the Securities Act and the Exchange Act, as applicable; and (iii) each of the Prospectus, or any amendment or supplement thereto will comply, as of the date that such document is filed with the Commission, as of each Applicable Time, as of each Settlement Date and at all times during the Prospectus Delivery Period, in all material respects with the rules and regulations under the Securities Act and the Exchange Act, as applicable.

(d) Accuracy of Incorporated Documents. The Incorporated Documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act, and none of such documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement or the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(e) Financial Information. The consolidated financial statements of the Company included or incorporated by reference in the Registration Statement and the Prospectus, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of the Company and the Subsidiaries (as defined below) as of the dates indicated and the consolidated results of operations, cash flows and changes in stockholders’ equity of the Company for the periods specified (subject, in the case of unaudited statements, to normal year-end audit adjustments) and have been prepared in compliance with the requirements of the Securities Act and Exchange Act, as applicable, and in conformity with GAAP (as defined below) applied on a consistent basis (except for such adjustments to accounting standards and practices as are noted therein and except in the case of unaudited financial statements to the extent they may exclude footnotes or may be condensed or summary statements) during the periods involved; the other financial and statistical data with respect to the Company and the Subsidiaries contained or incorporated by reference in the Registration Statement and the Prospectus are accurately and fairly presented in all material respects and prepared on a basis materially consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Registration Statement or the Prospectus that are not included or incorporated by reference as required; the Company and the Subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Registration Statement (including the exhibits thereto and Incorporated Documents) and the Prospectus which are required to be described in the Registration Statement or the Prospectus (including exhibits thereto and Incorporated Documents); all disclosures contained or incorporated by reference in the Registration Statement and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable; and the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement or the Prospectus fairly presents the information called for in all material respects and has been prepared in all material respects in accordance with the Commission’s rules and guidelines applicable thereto.

(f) Conformity with EDGAR Filing. The Prospectus delivered to Craig-Hallum for use in connection with the sale of the Placement Shares pursuant to this Agreement will be identical to the versions of the Prospectus created to be transmitted to the Commission for filing via EDGAR, except to the extent permitted by Regulation S-T.

(g) Organization. The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing as a corporation and in good standing under the laws of their respective jurisdictions of organization. The Company and each of its Subsidiaries is duly licensed or qualified as a foreign corporation for transaction of business and in good standing under the laws of each other jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such license or qualification, and have all corporate power and authority necessary to own or hold their respective properties and to conduct their respective businesses as described in the Registration Statement and the Prospectus, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect on the assets, business, operations, earnings, properties, condition (financial or otherwise), prospects, stockholders’ equity (as set forth on the Company’s most recent balance sheet included in the Incorporated Documents) or results of operations of the Company and the Subsidiaries (as defined below) taken as a whole, whether or not arising in the ordinary course of business, as a result of the ongoing COVID-19 pandemic or the ability of the Company to perform its obligations under this Agreement (a “Material Adverse Effect”).

(h) Subsidiaries. Exhibit 21.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Commission on March 31, 2023, sets forth each of the Company’s Subsidiaries. Except as set forth in the Registration Statement and in the Prospectus, the Company owns, directly or indirectly, all of the equity interests of the Subsidiaries free and clear of any lien, charge, security interest, encumbrance, right of first refusal or other restriction, and all the equity interests of the Subsidiaries are validly issued and are fully paid, non-assessable and free of preemptive and similar rights. “Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

(i) Dividend Restrictions. Except as disclosed in the Registration Statement or Prospectus, and subject to the existence of legally available funds, no Subsidiary of the Company is currently prohibited or restricted, directly or indirectly, from paying dividends to the Company, or from making any other distribution with respect to such Subsidiary’s equity securities or from repaying to the Company or any other Subsidiary of the Company any amounts that may from time to time become due under any loans or advances to such Subsidiary from the Company or from transferring any property or assets to the Company or to any other Subsidiary.

(j) No Violation or Default. Neither the Company nor any of its Subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries are subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority applicable to the Company, except, in the case of each of clauses (ii) and (iii) above, for any such violation or default that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the Company’s knowledge, no other party under any material contract or other agreement to which it or any of its Subsidiaries is a party is in default in any respect thereunder where such default would reasonably be expected to have a Material Adverse Effect.

(k) No Material Adverse Change. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, since the date of the latest audited financial statements included in the Registration Statement and in the Prospectus (including Incorporated Documents), and other than the Company’s execution of this Agreement and the sale of any Placement Shares hereunder, there has not been (i) any Material Adverse Effect, (ii) any transaction which is material to the Company and the Subsidiaries taken as a whole, (iii) any obligation or liability, direct or contingent (including any off-balance sheet obligations), incurred by the Company or any Subsidiary, which is material to the Company and the Subsidiaries taken as a whole, (iv) any material change in the capital stock or outstanding long-term indebtedness of the Company or any of its Subsidiaries, (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any Subsidiary, (vi) material change in the outstanding indebtedness of the Company or (vii) alteration in the Company’s method of accounting, other than in each case above as otherwise disclosed in the Registration Statement or Prospectus (including any document deemed incorporated by reference therein).

(l) Capitalization. The issued and outstanding shares of capital stock of the Company have been validly issued, are fully paid and non-assessable and, other than as disclosed in or contemplated by the Registration Statement or the Prospectus, are not subject to any preemptive rights, rights of first refusal or similar rights. The Company has an authorized, issued and outstanding capitalization as set forth in the Registration Statement and the Prospectus as of the dates referred to therein (other than the grant of additional options or other equity awards under the Company’s existing stock option plans, or changes in the number of outstanding shares of Common Stock of the Company due to the issuance of shares upon the exercise or conversion of securities exercisable for, or convertible into, shares of Common Stock outstanding on the date hereof or described in the Registration Statement and the Prospectus (including any document deemed incorporated by reference therein) or as a result of the issuance of Placement Shares) and such authorized capital stock conforms in all material respects to the description thereof set forth in the Registration Statement and the Prospectus. Other than as set forth or described in the Registration Statement, the Prospectus and the Incorporated Documents, as of the dates referred to therein, the Company did not have outstanding any options to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible into, or exchangeable for, or any contracts or commitments to issue or sell, any shares of capital stock or other securities.

(m) Authorization; Enforceability. The Company has full legal right, power and authority to enter into this Agreement and perform the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles and (ii) the indemnification and contribution provisions of Section 11 hereof may be limited by federal or state securities laws and public policy considerations in respect thereof.

(n) Authorization of Placement Shares. The Placement Shares, when issued and delivered pursuant to the terms approved by the board of directors of the Company or a duly authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided herein, will be duly and validly authorized and issued and fully paid and non-assessable, free and clear of any pledge, lien, encumbrance, security interest or other claim (other than any pledge, lien, encumbrance, security interest or other claim arising from an act or omission of Craig-Hallum or a purchaser), including any statutory or contractual preemptive rights, resale rights, rights of first refusal or other similar rights, and will be registered pursuant to Section 12 of the Exchange Act. The Placement Shares, when issued, will conform in all material respects to the description thereof set forth in or incorporated into the Prospectus.

(o) Stock Exchange Listing. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act and is listed on the Exchange, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the Exchange nor has the Company received any notification that the Commission or the Exchange is contemplating terminating such registration or listing. To the Company’s knowledge it has complied in all material respects with the applicable requirements of the Exchange for maintenance of inclusion of the Common Stock on the Exchange.

(p) Descriptions and Exhibits. There are no statutes, regulations, documents or contracts of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which are not described or filed as required.

(q) No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or any governmental or regulatory authority is required for the execution, delivery and performance by the Company of this Agreement, and the issuance and sale by the Company of the Placement Shares as contemplated hereby, except for the registration of the Placement Shares under the Securities Act and such consents, approvals, authorizations, orders and registrations or qualifications as may be required under applicable state securities laws or by the by-laws and rules of the Financial Industry Regulatory Authority (“FINRA”) or the Exchange in connection with the sale of the Placement Shares by Craig-Hallum.

(r) No Preferential Rights. Except as set forth in the Registration Statement and the Prospectus, (i) no person, as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a “Person”), has the right, contractual or otherwise, to cause the Company to issue or sell to such Person any shares of Common Stock or shares of any other capital stock or other securities of the Company (other than upon the exercise of options or warrants to purchase Common Stock or upon the exercise of options or stock awards that may be granted from time to time under the Company’s stock option plans), (ii) no Person has any preemptive rights, rights of first refusal, or any other rights (whether pursuant to a “poison pill” provision or otherwise) to purchase any shares of Common Stock or shares of any other capital stock or other securities of the Company from the Company which have not been duly waived with respect to the offering contemplated hereby, (iii) except as may be disclosed to Craig-Hallum in writing, no Person has the right to act as an underwriter or as a financial advisor to the Company in connection with the offer and sale of the Common Stock, and (iv) no Person has the right, contractual or otherwise, to require the Company to register under the Securities Act any shares of Common Stock or shares of any other capital stock or other securities of the Company, or to include any such shares or other securities in the Registration Statement or the offering contemplated thereby, whether as a result of the filing or effectiveness of the Registration Statement or the sale of the Placement Shares as contemplated thereby or otherwise.

(s) Independent Public Accountant. BDO USA LLP (“Company Auditor”), whose report on the consolidated financial statements of the Company is filed with the Commission as part of the Company’s most recent Annual Report on Form 10-K filed with the Commission and incorporated into the Registration Statement, is and, during the periods covered by its reports, was, to the Company’s knowledge, an independent public accounting firm within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States). To the Company’s knowledge, Company Auditor is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with respect to the Company.

(t) Enforceability of Agreements. To the Company’s knowledge, all agreements between the Company and third parties expressly referenced in the Prospectus, other than such agreements that have expired by their terms or whose termination is disclosed in documents filed by the Company on EDGAR, are legal, valid and binding obligations of the Company enforceable in accordance with their respective terms, except to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles and (ii) the indemnification provisions of certain agreements may be limited by federal or state securities laws or public policy considerations in respect thereof, except for any unenforceability that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

(u) No Litigation. Except as set forth in the Registration Statement and the Prospectus, there are no legal, governmental or regulatory actions, suits or proceedings pending, nor, to the Company’s knowledge, any legal, governmental or regulatory investigations, to which the Company or a Subsidiary is a party or to which any property of the Company or any of its Subsidiaries is the subject, nor, to the Company’s knowledge, are any such actions, suits or proceedings threatened or contemplated by any governmental or regulatory authority or threatened by others, that, individually or in the aggregate, if determined adversely to the Company or any of its Subsidiaries, would reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under this Agreement; and there are no current or pending legal, governmental or regulatory actions, suits or proceedings or, to the Company’s knowledge, investigations that are required under the Securities Act to be described in the Prospectus that are not described in the Prospectus including any Incorporated Document.

(v) Licenses and Permits. The Company and each of its Subsidiaries possess or have obtained, and is in compliance with the terms and conditions of, all licenses, certificates, consents, orders, approvals, permits and other authorizations issued by, and, to the Company’s knowledge, have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Registration Statement and the Prospectus (the “Permits”), and all of the Permits are valid and in full force and effect, except where the failure to possess, obtain or make the same, or where the failure to comply or where the invalidity of such Permits or the failure of such Permits to be in full force and effect, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries have received written notice of any proceeding relating to revocation or modification of any such Permit or has any reason to believe that such Permit will not be renewed in the ordinary course.

(w) Market Capitalization. As of the close of trading on the Exchange on the Trading Day immediately prior to the date of this Agreement, the aggregate market value of the outstanding voting and non-voting common equity (as defined in Securities Act Rule 405) of the Company held by persons other than affiliates (as defined in Securities Act Rule 405) was $75 million or more (calculated in accordance with Instruction 1.B.1 of Form S-3). The Company is not a shell company (as defined in Rule 405 under the Securities Act) and has not been a shell company for at least 12 calendar months previously and if it has been a shell company at any time previously, has filed current Form 10 information (as defined in Instruction I.B.6 of Form S-3) with the Commission at least 12 calendar months previously reflecting its status as an entity that is not a shell company.

(x) No Material Defaults. Neither the Company nor any of the Subsidiaries has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. The Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on Form 10-K, indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred stock or (ii) has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

(y) Certain Market Activities. Neither the Company, nor any of the Subsidiaries, nor, to the Company’s knowledge, any of their respective directors, officers or controlling persons has taken, directly or indirectly, any action designed, or that has constituted or might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the Common Stock or any other “reference security” (as defined in Rule 100 of Regulation M under the Exchange Act (“Regulation M”)) of the Company whether to facilitate the sale or resale of the Placement Shares or otherwise, and has taken no action which would directly or indirectly violate Regulation M. The Company acknowledges that Craig-Hallum may engage in passive market making transactions in the Placement Shares on the Exchange in accordance with Regulation M.

(z) Broker/Dealer Relationships. Neither the Company nor any of the Subsidiaries or any related entities (i) is required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a “person associated with a member” or “associated person of a member” (within the meaning set forth in the FINRA Manual).

(aa) No Reliance. The Company has not relied upon Craig-Hallum or legal counsel for Craig-Hallum for any legal, tax or accounting advice in connection with the offering and sale of the Placement Shares.

(bb) Taxes. The Company and each of its Subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed and paid all taxes shown thereon through the date hereof, to the extent that such taxes have become due and are not being contested in good faith and as to which adequate reserves have been provided, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect. Except as otherwise disclosed in or contemplated by the Registration Statement or the Prospectus, no tax deficiency has been determined adversely to the Company or any of its Subsidiaries which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company has no knowledge of any federal, state or other governmental tax deficiency, penalty or assessment which has been asserted or threatened against it which would have a Material Adverse Effect.

(cc) Title to Real and Personal Property. The Company and its Subsidiaries have good and marketable title in fee simple to all items of real property and good and valid title to all personal property (excluding Intellectual Property) reflected as owned in the financial statements referred to in Section 6(e) or described in the Registration Statement or Prospectus as being owned by them that are material to the businesses of the Company or such Subsidiary, in each case free and clear of all liens, encumbrances and claims, except those that (i) do not materially interfere with the use made of such property by the Company and any of its Subsidiaries or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No real property owned, leased, licensed, or used by the Company lies in an area which is, or will be, subject to restrictions which would prohibit, and no statements of facts relating to the actions or inaction of another person or entity or his or its ownership, leasing, licensing, or use of any real or personal property exists or will exist which would prevent, the continued effective ownership, leasing, licensing, exploration, development or production or use of such real property in the business of the Company as presently conducted or as the Registration Statement or the Prospectus indicates the Company contemplates conducting, except as may be properly described in the Registration Statement or the Prospectus or such as in the aggregate do not now cause and will not in the future cause a Material Adverse Effect. Any real property described in the Registration Statement or Prospectus as being leased by the Company and any of its Subsidiaries is held by them under valid, existing and enforceable leases, except those that (A) do not materially interfere with the use made or proposed to be made of such property by the Company or any of its Subsidiaries or (B) would not be reasonably expected, individually or in the aggregate, to have a Material Adverse Effect.

(dd) Intellectual Property. To its knowledge, the Company and its Subsidiaries own or possess adequate rights to use all patents, patent applications, trademarks (both registered and unregistered), service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) (collectively, the “Intellectual Property” and any such Intellectual Property owned by the Company and Subsidiaries, the “Owned Intellectual Property”), necessary for the conduct of their respective businesses as conducted and as described in the Registration Statement and the Prospectus as of the date hereof, except in each case to the extent that the failure to own or possess adequate rights to use such Intellectual Property would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; the Company and any of its Subsidiaries have not received any written notice of any claim of infringement or conflict which asserted Owned Intellectual Property rights of others; there are no pending, or to the Company’s knowledge, threatened judicial proceedings or interference proceedings against the Company or its Subsidiaries challenging the Company’s or its Subsidiaries’ rights in or to or the validity of the scope of any of the Company’s or its Subsidiaries’ owned material patents, patent applications or proprietary information; no other entity or individual has any right or claim in any of the Company’s or its Subsidiaries’ owned material patents, patent applications or any patent to be issued therefrom by virtue of any contract, license or other agreement entered into between such entity or individual and the Company or a Subsidiary or, to the Company’s knowledge, by any non-contractual obligation of the Company or a Subsidiary, other than by written licenses granted by the Company or a Subsidiary; the Company and its Subsidiaries have not received any written notice of any claim challenging the rights of the Company or a Subsidiary in or to any Intellectual Property owned, licensed or optioned by the Company or such Subsidiary. The Company and its Subsidiaries have complied with the terms of each agreement pursuant to which Intellectual Property has been licensed to the Company or any Subsidiary, and all such agreements are in full force and effect. To the Company’s knowledge, there are no material defects in any of the patents or patent applications included in the Intellectual Property. The Company and its Subsidiaries have taken commercially reasonable steps to protect, maintain and safeguard their Owned Intellectual Property, including the execution of nondisclosure and confidentiality agreements. The Intellectual Property described in the Registration Statement or the Prospectus as under development by the Company or any Subsidiary fall within the scope of the claims of one or more patents owned by, or exclusively licensed to, the Company or any Subsidiary.

(ee) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, decisions and orders relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses as described in the Registration Statement and the Prospectus; and (iii) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except, in the case of any of clauses (i), (ii) or (iii) above, for any such failure to comply or failure to receive required permits, licenses, other approvals or liability as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(ff) Disclosure Controls. Except as described in the Registration Statement and Prospectus, the Company and each of its Subsidiaries maintain systems of internal accounting controls designed to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement or the Prospectus fairly presents the information called for in all material respects and has been prepared in all material respects in accordance with the Commission’s rules and guidelines applicable thereto. The Company’s system of “internal control over financial reporting” (as defined in Rule 13a‑15(f) of the Exchange Act) complies with the requirements of the Exchange Act and has been designed by, or under the supervision of, its principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Except as described in the Registration Statement or the Prospectus, since the date of the latest audited financial statements included in or incorporated by reference into the Registration Statement or the Prospectus, (a) the Company has not been advised of (1) any significant deficiencies in the design or operation of internal controls over financial reporting that are reasonably likely to materially affect the ability of the Company to record, process, summarize and report financial information or data, or any material weaknesses in internal controls over financial reporting and (2) any fraud, whether or not material, that involves management or other employees who have a significant role in the internal controls over financial reporting of the Company, and (b) since that date, there has been no change in the Company’s internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company and each of its Subsidiaries is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of a date within 90 days prior to the filing date of the Form 10-K for the fiscal year most recently ended (such date, the “Evaluation Date”). The Company presented in its Form 10-K for the fiscal year most recently ended the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Securities Act) or, to the Company’s knowledge, in other factors that could significantly adversely affect the Company’s internal controls. To the knowledge of the Company, the Company’s “internal controls over financial reporting” and “disclosure controls and procedures” are effective.

(gg) Open Source Software. (i) The Company uses and has used any and all software and other materials distributed under a “free,” “open source,” or similar licensing model (including but not limited to the MIT License, Apache License, GNU General Public License, GNU Lesser General Public License and GNU Affero General Public License) (“Open Source Software”) in compliance with all license terms applicable to such Open Source Software; and (ii) the Company has not used or distributed and does not use or distribute any Open Source Software in any manner that requires or has required (A) the Company to permit reverse engineering of any software code or other technology owned by the Company or (B) any software code or other technology owned by the Company to be (1) disclosed or distributed in source code form, (2) licensed for the purpose of making derivative works or (3) redistributed at no charge.

(hh) Data Security. Except for issues or matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, (i)(x) there has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”) and (y) the Company and the Subsidiaries have not been notified of, and have no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices, and (v) there is no action, suit or proceeding by or before any court or governmental agency, authority or body pending or threatened alleging non-compliance with respect to any data security matters nor are there any incidents under internal review or investigations relating to the same.

(ii) Sarbanes-Oxley. There is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s directors or officers, in their capacities as such, to comply with any applicable provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder. Each of the principal executive officer and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company as applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms, statements and other documents required to be filed by it or furnished by it to the Commission. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.

(jj) Finder’s Fees. Neither the Company nor any of the Subsidiaries has incurred any liability for any finder’s fees, brokerage commissions or similar payments in connection with the transactions herein contemplated, except as may otherwise exist with respect to Craig-Hallum pursuant to this Agreement.

(kk) No Registration Rights. Except as disclosed in the Registration Statement or the Prospectus and as have been validly complied with or waived, there are no persons with registration rights or other similar rights to have any securities of the Company registered pursuant to the Registration Statement or sold in the offering contemplated by this Agreement.

(ll) Margin Rules. Neither the issuance, sale and delivery of the Placement Shares nor the application of the proceeds thereof by the Company as described in the Registration Statement and the Prospectus will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

(mm) Labor Disputes. No labor disturbance by or dispute with employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is threatened which would reasonably be expected to result in a Material Adverse Effect.

(nn) Investment Company Act. Neither the Company nor any of the Subsidiaries is or, after giving effect to the offering and sale of the Placement Shares, will be an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).

(oo) Operations. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions to which the Company or its Subsidiaries are subject, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency having jurisdiction over the Company or its Subsidiaries (collectively, the “Money Laundering Laws”), except as would not reasonably be expected to result in a Material Adverse Effect; and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

(pp) Off-Balance Sheet Arrangements. There are no transactions, arrangements and other relationships to which the Company is a party, and/or, to the knowledge of the Company, there are no transactions, arrangements and other relationships to which any of the Company’s affiliates and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity, is a party (each, an “Off Balance Sheet Transaction”) that would reasonably be expected to affect materially the Company’s liquidity or the availability of or requirements for its capital resources, including those Off Balance Sheet Transactions described in the Commission’s Statement about Management’s Discussion and Analysis of Financial Conditions and Results of Operations (Release Nos. 33-8056; 34-45321; FR-61), in each case that are required to be described in the Prospectus which have not been described as required.

(qq) ERISA. (i) Each material employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and any of its Subsidiaries has been maintained in material compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and (iii) for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived; and (iv) the Company could not reasonably be expected to have any liability (whether actual, contingent or otherwise) with respect to any plan or other contract, agreement, arrangement or policy that provides for retiree or post-employment welfare benefits other than as required by Section 4980B of the Code or similar state laws, other than, in the case of (i), (ii), (iii), and (iv) above, as would not reasonably be expected to have a Material Adverse Effect. No other event set forth in Section 4043(b) of ERISA (excluding events with respect to which the 30-day notice requirement under Section 4043 of ERISA has been waived) has occurred with respect to any plan and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) equals or exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.

(rr) Forward Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) (a “Forward Looking Statement”) contained in the Registration Statement and the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

(ss) Statistical and Market Data. The statistical and market and industry-related data included in the Registration Statement and the Prospectus are based on or derived from sources which the Company believes to be reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources, and the Company has obtained the written consent to the use of such data from sources to the extent required.

(tt) [Reserved].

(uu) Insurance. The Company and each of its Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as are adequate for the use of their properties and as is customary for companies of similar size engaged in similar businesses in similar industries. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect on the Company.

(vv) No Improper Practices. None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of either (A) the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA, (B) the U.K. Bribery Act 2010 (the “Bribery Act”), (C) any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the “OECD Anti-Bribery Convention Laws”), or (D) any other applicable anti-bribery or anti corruption law, and the Company, its subsidiaries and, to the knowledge of the Company, its other affiliates have conducted their businesses in compliance with the FCPA, the Bribery Act, the OECD Anti-Bribery Convention Laws and any other applicable anti-bribery or anti corruption law, and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any employee or agent of the Company or any Subsidiary has made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.

(ww) Other Underwriting Agreements. Except for this Agreement the Company is not a party to any agreement with an agent or underwriter for any other “at the market” or continuous equity transaction.

(xx) Status Under the Securities Act. (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Placement Shares and (ii) as of the Applicable Time and on each such time this representation is repeated or deemed to be made (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405 under the Securities Act), without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.

(yy) No Misstatement or Omission in an Issuer Free Writing Prospectus. Any free writing prospectus that the Company was or is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations thereunder. Each Issuer Free Writing Prospectus, as of its issue date and as of each Applicable Time (as defined in Section 27 below), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any incorporated document deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by Craig-Hallum specifically for use therein. Each broadly available road show, if any, when considered together with the Prospectus, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statement or omission made in reliance upon and in conformity with information furnished in writing to the Company by Craig-Hallum expressly for use in a broadly available road show and the Prospectus. Except for electronic road shows, if any, furnished to and approved by Craig-Hallum, the Company has not prepared, used or referred to, and will not, prepare, use or refer to, any free writing prospectus.

(zz) No Conflicts. Neither the execution of this Agreement by the Company, nor the issuance, offering or sale of the Placement Shares, nor the consummation by the Company of any of the transactions contemplated herein and therein, nor the compliance by the Company with the terms and provisions hereof and thereof will conflict with, or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any contract or other agreement to which the Company may be bound or to which any of the property or assets of the Company is subject, except such conflicts, breaches, defaults, liens, charges or encumbrances that would not reasonably be expected to have a Material Adverse Effect; nor will such action result (x) in any violation of the provisions of the certificate of incorporation or bylaws of the Company, or (y) in any material violation of the provisions of any statute or any order, rule or regulation applicable to the Company or of any court or of any federal, state or other regulatory authority or other government body having jurisdiction over the Company, except, in the case of clause (y), where such violation would not reasonably be expected to have a Material Adverse Effect.

(aaa) OFAC. (i) Neither the Company nor any of its Subsidiaries (collectively, the “Entity”) or, to the Company’s knowledge, any director, officer, employee, agent, affiliate or representative of the Entity, is a government, individual, or entity (in this paragraph (tt), “Person”) that is, or is owned or controlled by a Person that is:

(A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor

(B) located, organized or resident in a country or territory that is the subject of Sanctions (each, a “Sanctioned Country”).

(ii) The Company represents and covenants that the Entity will not, directly or indirectly, knowingly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:

(A) to fund or facilitate any activities or business of or with any Person that is the subject of Sanctions or in a Sanctioned Country; or

(B) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).

(iii) The Company represents and covenants that, except as detailed in the Prospectus, for the past five years, the Entity has not knowingly engaged in, is not now knowingly engaged in, and will not knowingly engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

(bbb) Stock Transfer Taxes. On each Settlement Date, all stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Placement Shares to be sold hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with in all material respects.

(ccc) [Reserved].

Any certificate signed by an officer of the Company and delivered to Craig-Hallum or to counsel for Craig-Hallum pursuant to or in connection with this Agreement shall be deemed to be a representation and warranty by the Company, as applicable, to Craig-Hallum as to the matters set forth therein.

The Company acknowledges that Craig-Hallum and, for purposes of the opinions to be delivered pursuant to Section 7 hereof, counsel to the Company and counsel to Craig-Hallum, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

7. Covenants of the Company. The Company covenants and agrees with Craig-Hallum that:

(a) Registration Statement Amendments. After the date of this Agreement and during any period in which a prospectus relating to any Placement Shares is required to be delivered by Craig-Hallum under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act) (the “Prospectus Delivery Period”) (i) the Company will notify Craig-Hallum promptly of the time when any subsequent amendment to the Registration Statement, other than documents incorporated by reference or amendments not related to any Placement, has been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus, other than documents incorporated by reference, has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus related to the Placement or for additional information related to the Placement, (ii) the Company will not file any amendment or supplement to the Registration Statement or Prospectus relating to the Placement Shares or a security convertible into the Placement Shares (other than an Incorporated Document) unless a copy thereof has been submitted to Craig-Hallum within a reasonable period of time before the filing and Craig-Hallum has not reasonably and in good faith objected thereto within two Business Days of receiving such copy (provided, however, that (A) the failure of Craig-Hallum to make such objection shall not relieve the Company of any obligation or liability hereunder, or affect Craig-Hallum’s right to rely on the representations and warranties made by the Company in this Agreement and (B) the Company has no obligation to provide Craig-Hallum any advance copy of such filing or to provide Craig-Hallum an opportunity to object to such filing if the filing does not name Craig-Hallum or does not relate to the transaction herein provided; and provided, further, that the only remedy Craig-Hallum shall have with respect to the failure by the Company to obtain such consent shall be to cease making sales under this Agreement) and the Company will furnish to Craig-Hallum at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into the Registration Statement or Prospectus, except for those documents available via EDGAR; and (iii) the Company will cause each amendment or supplement to the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any document to be incorporated therein by reference, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed (the determination to file or not file any amendment or supplement with the Commission under this Section 7(a), based on the Company’s reasonable opinion or reasonable objections, shall be made exclusively by the Company).

(b) Notice of Commission Stop Orders. During the Prospectus Delivery Period, the Company will advise Craig-Hallum, promptly after it receives notice or obtains knowledge thereof, of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and it will use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. The Company will advise Craig-Hallum promptly after it receives any request by the Commission for any amendments to the Registration Statement or any amendment or supplements to the Prospectus or any Issuer Free Writing Prospectus or for additional information related to the offering of the Placement Shares or for additional information related to the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus.

(c) Delivery of Prospectus; Subsequent Changes. During the Prospectus Delivery Period, the Company will use its commercially reasonable efforts to comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and to file on or before their respective due dates all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If the Company has omitted any information from the Registration Statement pursuant to Rule 430A under the Securities Act, it will use its commercially reasonable efforts to comply with the provisions of and make all requisite filings with the Commission pursuant to said Rule 430A and to notify Craig-Hallum promptly of all such filings. If during the Prospectus Delivery Period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such Prospectus Delivery Period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify Craig-Hallum to suspend the offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance; provided, however, that the Company may delay the filing of any amendment or supplement, if in the judgment of the Company, it is in the best interest of the Company. For the duration of the Delivery Period, the Company will include in its quarterly reports on Form 10-Q, and in its annual reports on Form 10-K, a summary detailing, for the relevant reporting period, (i) the number of Placement Shares sold through Craig-Hallum pursuant to this Agreement, (ii) the Net Proceeds received by the Company from such sales and (iii) the compensation paid by the Company to Craig-Hallum with respect to such sales (or alternatively, to prepare a prospectus supplement (each, an “Interim Prospectus Supplement”) with such summary information and, at least once a quarter and subject to Section 7(b) above, file such Interim Prospectus Supplement pursuant to Rule 424(b) under the Securities Act (and within the time periods required by Rule 424(b) and Rules 430A, 430B or 430C under the Securities Act)).

(d) Permitted Free Writing Prospectus. To file any Permitted Free Writing Prospectus (as defined below) to the extent required by Rule 433 under the Securities Act and to provide copies of the Prospectus and such Prospectus Supplement and each Permitted Free Writing Prospectus (to the extent not previously delivered or filed on EDGAR or any successor system thereto) to Craig-Hallum via electronic mail in “.pdf” format on such filing date to an electronic mail account designated by Craig-Hallum and, at Craig-Hallum’s request, to also furnish copies of the Prospectus and such Prospectus Supplement to the Exchange and each other exchange or market on which sales of the Placement Shares were effected, in each case, as may be required by the rules or regulations of the Exchange or such other exchange or market.

(e) Listing of Placement Shares. During the Prospectus Delivery Period, the Company will use its commercially reasonable efforts to cause the Placement Shares to be listed on the Exchange and to qualify the Placement Shares for sale under the securities laws of such jurisdictions as Craig-Hallum reasonably designates and to continue such qualifications in effect so long as required for the distribution of the Placement Shares; provided, however, that the Company shall not be required in connection therewith to qualify as a foreign corporation or dealer in securities or file a general consent to service of process in any jurisdiction.

(f) Delivery of Registration Statement and Prospectus. The Company will furnish to Craig-Hallum and its counsel (at the expense of the Company) copies of the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements to the Registration Statement or Prospectus that are filed with the Commission during the Prospectus Delivery Period (including all documents filed with the Commission during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as Craig-Hallum may from time to time reasonably request and, at Craig-Hallum’s request, will also furnish copies of the Prospectus to each exchange or market on which sales of the Placement Shares may be made; provided, however, that the Company shall not be required to furnish any document (other than the Prospectus, which it may provide electronically) to Craig-Hallum to the extent such document is available on EDGAR. In case Craig-Hallum is required to deliver, under the Securities Act (whether physically or through compliance with Rule 172 under the Securities Act or any similar rule), a prospectus relating to the Placement Shares after the nine-month period referred to in Section 10(a)(3) of the Securities Act, or after the time a post-effective amendment to the Registration Statement is required pursuant to Item 512(a) of Regulation S-K under the Securities Act, upon the request of Craig-Hallum, and at its own expense, the Company shall prepare and deliver to Craig-Hallum as many copies as Craig-Hallum may reasonably request of an amended Registration Statement or amended or supplemented prospectus complying with Item 512(a) of Regulation S-K or Section 10(a)(3) of the Securities Act, as the case may be.

(g) Earnings Statement. The Company will make generally available to its security holders as soon as practicable an earnings statement covering a period of at least 12 months beginning with the first fiscal quarter of the Company occurring after the date of this Agreement that satisfies the provisions of Section 11(a) and Rule 158 of the Securities Act.

(h) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

(i) New Registration Statement. If the third anniversary of the initial effective date of the Registration Statement occurs before all the Placement Shares have been sold, prior to such third anniversary, to file a new shelf registration statement and to take any other action necessary to permit the public offering of the Placement Shares to continue without interruption (references herein to the Registration Statement shall include the new registration statement that is declared effective by, or becomes effective upon filing with, the Commission).

(j) Notice of Other Sales. Without the prior written consent of Craig-Hallum, the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock during the period beginning on the date on which any Placement Notice is delivered to Craig-Hallum hereunder and ending on the second (2nd) Trading Day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement Shares covered by a Placement Notice, the date of such suspension or termination); and, at any time during which a Placement Notice is pending and for two (2) Trading Days after the last sale of Placement Shares under such Placement Notice, will not directly or indirectly in any other “at the market” or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any shares of Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock prior to the termination of this Agreement with respect to Placement Shares sold pursuant to such Placement Notice; provided, however, that such restrictions will not be required in connection with the Company’s issuance or sale of (i) Common Stock, options to purchase Common Stock or stock awards or Common Stock issuable upon the exercise of options or vesting of stock awards, pursuant to any employee or director stock option or benefits plan, stock ownership plan or dividend reinvestment plan (but not Common Stock subject to a waiver to exceed plan limits in its dividend reinvestment plan) of the Company whether now in effect or hereafter implemented; (ii) Common Stock issuable upon conversion of securities or the exercise of warrants, options or other rights in effect or outstanding, and disclosed in filings by the Company available on EDGAR or otherwise in writing to Craig-Hallum and (iii) Common Stock, or securities convertible into or exercisable for Common Stock, offered and sold in a privately negotiated transaction to vendors, customers, investors, strategic partners or potential strategic partners (including but not limited to as consideration for mergers, acquisitions or other business combinations) and conducted in a manner so as not to be integrated with the offering of Common Stock hereby.

(k) Change of Circumstances. The Company will, at any time during the pendency of a Placement Notice, advise Craig-Hallum promptly after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document required to be provided to Craig-Hallum pursuant to this Agreement.

(l) Due Diligence Cooperation. The Company will cooperate with any reasonable due diligence review conducted by Craig-Hallum or its representatives in connection with the transactions contemplated hereby, including, without limitation, providing information and making available documents and senior corporate officers, during regular business hours and at the Company’s principal offices or such other location mutually agreeable by the parties, as Craig-Hallum may reasonably request.

(m) [Reserved].

(n) Required Filings Relating to Placement of Placement Shares. The Company agrees that on such dates as the Securities Act shall require, the Company will (i) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act (the date of each and every such filing under Rule 424(b), a “Filing Date”), which prospectus supplement will set forth, within the relevant period, the amount of Placement Shares sold through Craig-Hallum, the Net Proceeds to the Company and the maximum compensation payable by the Company to Craig-Hallum with respect to such Placement Shares, and (ii) deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rules or regulations of such exchange or market.

(o) Representation Dates; Certificate. On or prior to the date on which the Company first delivers a Placement Notice pursuant to this agreement (the “First Placement Notice Date”) and each time during the term of this Agreement the Company:

(i) files the Prospectus relating to the Placement Shares or amends or supplements (other than a prospectus supplement relating solely to an offering of securities other than the Placement Shares) the Registration Statement or the Prospectus relating to the Placement Shares by means of a post-effective amendment, sticker, or supplement but not by means of incorporation of documents by reference into the Registration Statement or the Prospectus relating to the Placement Shares;

(ii) files an annual report on Form 10-K under the Exchange Act (including any Form 10-K/A containing restated financial statements or a material amendment to the previously filed Form 10-K);

(iii) files its quarterly reports on Form 10-Q under the Exchange Act; or

(iv) files a current report on Form 8-K containing amended audited financial information (other than information “furnished” pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassification of certain properties as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144) under the Exchange Act;

(Each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a “Representation Date”)

the Company shall furnish Craig-Hallum (but in the case of clause (iv) above only if Craig-Hallum reasonably determines that the information contained in such Form 8-K is material) with a certificate, in the form attached hereto as Exhibit 7(o). The requirement to provide a certificate under this Section 7(o) shall be automatically waived for any Representation Date occurring at a time at which no Placement Notice is pending, which waiver shall continue until the date the Company delivers a Placement Notice hereunder (which for such calendar quarter shall be considered a Representation Date); provided, however, that such waiver shall not apply for any Representation Date on which the Company files its annual report on Form 10-K. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement Shares following a Representation Date when the Company relied on such waiver and did not provide Craig-Hallum with a certificate under this Section 7(o), then before the Company delivers the Placement Notice or Craig-Hallum sells any Placement Shares, the Company shall provide Craig-Hallum with a certificate, in the form attached hereto as Exhibit 7(o), dated the date of the Placement Notice.

(p) Secretary’s Certificate. On the date of this Agreement and on any date which the Company is obligated to deliver a certificate pursuant to Section 7(o), the Company shall furnish to Craig-Hallum with a certificate, in form and substance reasonably satisfactory to Craig-Hallum, executed by the Secretary of the Company, signing in such capacity, dated the date of delivery (i) certifying that attached thereto are true and complete copies of the resolutions duly adopted by the board of directors of the Company authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, which authorization shall be in full force and effect on and as of the date of such certificate, (ii) certifying and attesting to the office, incumbency, due authority and specimen signature of each person who executed this Agreement for or on behalf of the Company, and (iii) contain any other certification that Craig-Hallum shall reasonably request.

(q) Legal Opinion. On or prior to the First Placement Notice Date, and on any date which the Company is obligated to deliver a certificate pursuant to Section 7(o) for which no waiver is applicable, the Company shall cause to be furnished to Craig-Hallum, dated as of such date, in form and substance satisfactory to Craig-Hallum, the written opinion and negative assurance letter of each of Dentons US LLP, or such other counsel to the Company reasonably satisfactory to Craig-Hallum (“Company Counsel”) and Loginov & Associates, PLLC, or other intellectual property counsel to the Company reasonably satisfactory to Craig-Hallum (“IP Counsel”), modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the time of delivery of such opinion and negative assurance letter. In lieu of delivering such an opinion for dates subsequent to the commencement of the offering of the Placement Shares under this Agreement such counsel may furnish Craig-Hallum with a letter (a “Reliance Letter”) to the effect that Craig-Hallum may rely on a prior opinion delivered under this Section, to the same extent as if it were dated the date of such letter (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented as of such subsequent date).

(r) Comfort Letter. On or prior to the First Placement Notice Date and on any date which the Company is obligated to deliver a certificate pursuant to Section 7(o) for which no waiver is applicable, the Company shall cause its independent registered public accounting firm (and any other independent accountants whose report is included in the Registration Statement or the Prospectus) to furnish Craig-Hallum letters (the “Comfort Letters”), dated the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section 7(r); provided, that if requested by Craig-Hallum, the Company shall cause a Comfort Letter to be furnished to Craig-Hallum within ten (5) Trading Days of the occurrence of any material transaction or event that necessitates the filing of additional, pro forma, amended or revised financial statements (including any restatement of previously issued financial statements). Each Comfort Letter shall be in form and substance satisfactory to Craig-Hallum and each Comfort Letter from the Company’s independent registered public accounting firm shall (i) confirm that they are an independent registered public accounting firm within the meaning of the Securities Act and the PCAOB, (ii) state, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters or agents in connection with registered public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) update the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter.

(s) Reserves. The Company will reserve and keep available at all times, free of preemptive rights, Shares for the purpose of enabling the Company to satisfy its obligations hereunder. For the avoidance of doubt, the Company may reserve with the transfer agent Shares concurrent with the delivery of any Placement Notice, in an amount specified as the maximum number of shares contemplated for issuance under such Placement Notice, provided that in no event will the Company deliver any Placement Notice without having sufficient shares available.

(t) Consent to Trade. The Company acknowledges and agrees that Craig-Hallum has informed the Company that Craig-Hallum may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell shares of Common Stock for Craig-Hallum’s own account while this Agreement is in effect; provided, that (i) no such purchase or sales shall take place while a Placement Notice is in effect (except to the extent Craig-Hallum may engage in sales of Placement Shares purchased or deemed purchased from the Company as a “riskless principal” or in a similar capacity) and (ii) the Company shall not be deemed to have authorized or consented to any such purchases or sales by Craig-Hallum, except as may be otherwise agreed by the Company and Craig-Hallum. The Company consents to Craig-Hallum trading in the Common Stock for the account of its clients at the same time while this Agreement is in effect.

(u) Affirmation of Representations. That each acceptance by the Company of an offer to purchase the Placement Shares hereunder shall be deemed to be an affirmation to Craig-Hallum that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such acceptance as though made at and as of such date, and an undertaking that such representations and warranties will be true and correct as of the Applicable Time and the Settlement Date for the Placement Shares relating to such acceptance as though made at and as of each of such dates (except that such representations and warranties shall be deemed to relate to the Registration Statement and the Prospectus, as amended and supplemented, relating to such Placement Shares).

(v) Regulation M. The Company will not, and will not publicly disclose an intention to, sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to sell or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of the Common Stock or securities convertible into or exchangeable or exercisable for the Common Stock or warrants or other rights to purchase the Common Stock or any other securities of the Company that are substantially similar to the Common Stock or permit the registration under the Securities Act of any shares of the Common Stock, except for (i) the registration of the Placement Shares and the sales through Craig-Hallum pursuant to this Agreement, (ii) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and referred to in the Prospectus, (iii) any shares of Common Stock issued or options to purchase Common Stock granted pursuant to existing employee benefit plans or long term incentive plan of the Company or (iv) any shares of Common Stock issued pursuant to any stock repurchase plan of the Company, during the Prospectus Delivery Period, without (A) giving Craig-Hallum at least three business days’ prior written notice specifying the nature of the proposed sale and the date of such proposed sale and (B) Craig-Hallum suspending activity under this program for such period of time as requested by the Company.

(w) Market Activities. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Common Stock or (ii) sell, bid for, or purchase Common Stock in violation of Regulation M, or pay anyone any compensation for soliciting purchases of the Placement Shares other than Craig-Hallum, or (iii) take any action which would directly or indirectly violate Regulation M.

(x) Investment Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor any of its Subsidiaries will be or become, at any time prior to the termination of this Agreement, an “investment company,” as such term is defined in the Investment Company Act.

(y) Sarbanes-Oxley Act. The Company will maintain and keep accurate books and records reflecting their assets and maintain internal accounting controls in a manner designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and including those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles, (iii) that receipts and expenditures of the Company are being made only in accordance with management’s and the Company’s directors’ authorization, and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial statements. The Company will maintain such controls and other procedures, including, without limitation, those required by Sections 302 and 906 of the Sarbanes-Oxley Act, and the applicable regulations thereunder that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and to ensure that material information relating to the Company is made known to them by others within the Company, particularly during the period in which such periodic reports are being prepared.

8. Representations and Covenants of Craig-Hallum. Craig-Hallum represents and warrants that it is duly registered as a broker-dealer under FINRA, the Exchange Act and the applicable statutes and regulations of each state in which the Placement Shares will be offered and sold, except such states in which Craig-Hallum is exempt from registration or such registration is not otherwise required. Craig-Hallum shall continue, for the term of this Agreement, to be duly registered as a broker-dealer under FINRA, the Exchange Act and the applicable statutes and regulations of each state in which the Placement Shares will be offered and sold, except such states in which Craig-Hallum is exempt from registration or such registration is not otherwise required, during the term of this Agreement. Craig-Hallum will comply with all applicable laws and regulations (including, without limitation, Regulation M) in connection with performing its obligations under this Agreement.

9. Payment of Expenses. The Company will pay or cause to be paid, from time to time, all expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel and the Company’s accountants in connection with the registration and delivery of the Placement Shares under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any Prospectus Supplement, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing, including the filing fees payable to the Commission relating to the Placement Shares (within the time required by Rule 456(b)(1), if applicable), all printing costs associated therewith, and the mailing and delivering of copies thereof to Craig-Hallum, (ii) all costs and expenses related to the transfer and delivery of the Placement Shares, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal Investment memorandum in connection with the offer and sale of the Placement Shares under state securities laws and all expenses in connection with the qualification of the Placement Shares for offer and sale under state securities laws as provided herein, including filing fees and the reasonable fees and disbursements of counsel for Craig-Hallum in connection with such qualification and in connection with the Blue Sky or Legal Investment memorandum (if required), (iv) all costs and expenses incident to listing the Placement Shares on the Exchange, (v) the costs and charges of any transfer agent, registrar or depositary, (vi) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors in an amount not to exceed $1,000 per individual, (vii) the reasonable fees and disbursements of counsel to Craig-Hallum incurred in connection with the offering contemplated by this Agreement other than as set forth in this Section, provided that reimbursement pursuant to this clause (vii) shall be actual fees incurred up to $50,000 in upfront reasonable legal expenses plus actual reasonable fees incurred up to $5,000 quarterly during the term for ongoing legal diligence requirements, and (viii) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. As such, total reimbursable expenses shall not exceed $75,000, in aggregate, excluding quarterly diligence reimbursement. Should the Company receive more than $10,000,000 in gross proceeds from the sale of Placement Shares on or before November 11, 2023, the Company shall not reimburse Craig-Hallum for its expenses.

10. Conditions to Craig-Hallum’s Obligations. The obligations of Craig-Hallum hereunder with respect to a Placement will be subject to the continuing accuracy and completeness of the representations and warranties made by the Company herein, to the due performance by the Company of its obligations hereunder, to the completion by Craig-Hallum of a due diligence review satisfactory to it in its reasonable judgment, and to the continuing satisfaction (or waiver by Craig-Hallum in its sole discretion) of the following additional conditions:

(a) Registration Statement Effective. The Registration Statement shall have become effective and shall be available for the sale of all Placement Shares contemplated to be issued by any Placement Notice.

(b) [Reserved].

(c) No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information from the Commission or any other federal or state governmental authority during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (iv) any downgrading in or withdrawal of the rating assigned to any of the Company’s securities (other than asset backed securities) by any rating organization or a public announcement by any rating organization that it has under surveillance or review its rating of any of the Company’s securities (other than asset backed securities), the effect of which, in the case of any such action by a rating organization described above, in the reasonable judgment of Craig-Hallum (without relieving the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner contemplated in the Prospectus; or (v) any event that makes any material statement made in the Registration Statement or the Prospectus or any material document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, the Prospectus or documents so that, in the case of the Registration Statement, it will not contain any materially untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, that in the case of the Prospectus, it will not contain any materially untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(d) No Misstatement or Material Omission. Craig-Hallum shall not have advised the Company that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact that in Craig-Hallum’s reasonable opinion is material, or omits to state a fact that in Craig-Hallum’s opinion is material and is required to be stated therein or is necessary to make the statements therein not misleading.

(e) Material Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shall not have been any material adverse change, on a consolidated basis, in the authorized capital stock of the Company or any Material Adverse Effect, or any development in the business or affairs of the Company that could reasonably be expected to cause a Material Adverse Effect.

(f) Legal Opinion. Craig-Hallum shall have received the opinions and negative assurance letters of Company Counsel and IP Counsel required to be delivered pursuant Section 7(o) on or before the date on which such delivery of such opinions is required pursuant to Section 7(o).

(g) Comfort Letter. Craig-Hallum shall have received at each Applicable Time, including at such time there is furnished to the Commission by the Company any document which contains additional or amended financial information, including any earnings release, letters dated such date in form and substance satisfactory to Craig-Hallum, from Company Auditor, current independent registered public accountant for the Company, (A) confirming that as of the date of its respective audit report(s), it was an independent registered public accounting firm within the meaning of the Securities Act, the Exchange Act and the Public Company Accounting Oversight Board, (B) stating, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered public offerings (the first such letters from Company Auditor, the “Initial Comfort Letter”) and (C) updating the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement, the Prospectus or any issuer free writing prospectus, as amended and supplemented to the date of such letter.

(h) Representation Certificate. Craig-Hallum shall have received the certificate required to be delivered pursuant to Section 7(o) on or before the date on which delivery of such certificate is required pursuant to Section 7(o).

(i) No Suspension. Trading in the Common Stock shall not have been suspended on the Exchange and the Common Stock shall not have been delisted from the Exchange.

(j) Other Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(o), the Company shall have furnished to Craig-Hallum such appropriate further information, certificates and documents of the Company as Craig-Hallum may have reasonably requested in writing prior to such date and which are usually and customarily furnished by an issuer of securities in connection with the underwritten public offering thereof. All such certificates and documents will be in compliance with the provisions hereof. The Company will furnish Craig-Hallum with such conformed copies of such certificates and documents as Craig-Hallum shall reasonably request.

(k) Board Approval. Prior to instructing Craig-Hallum pursuant to this Agreement to make sales on any given day (or as otherwise agreed between the Company and Craig-Hallum), the Company’s board of directors or a committee thereof authorized by either such board of directors or any authorized committee thereof (the “Board”) (i) shall have approved the minimum price and maximum number of Placement Shares to be sold on such day and (ii) shall have provided to the Company an authorizing resolution approving such price and number. The instructions provided to Craig-Hallum by the Company, pursuant to this Agreement, on such day shall reflect the terms of such authorizing resolution.

(l) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.

(m) Approval for Listing. The Placement Shares shall either have been approved for listing on the Exchange, subject only to notice of issuance, or the Company shall have filed an application for listing of the Placement Shares on the Exchange at, or prior to, the issuance of any Placement Notice.

(n) No Termination Event. There shall not have occurred any event that would permit Craig-Hallum to terminate this Agreement pursuant to Section 13(a).

(o) [Reserved].

11. Indemnification and Contribution.

(a) Company Indemnification. The Company agrees to indemnify and hold harmless Craig-Hallum, its affiliates, directors, officers, employees and selling agents and each person, if any, who controls Craig-Hallum within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each affiliate of Craig-Hallum within the meaning of Rule 405 under the Securities Act, as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact included in the any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that any such settlement is effected with the written consent of the Company, which consent shall not unreasonably be delayed or withheld; and

(iii) against any and all expense whatsoever, as incurred (including the reasonable fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above, provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made solely in reliance upon and in conformity with written information furnished to the Company by Craig-Hallum expressly for use in the Registration Statement (or any amendment thereto) or in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto).

(b) Craig-Hallum Indemnification. Craig-Hallum agrees to indemnify and hold harmless the Company and its directors and each officer of the Company who signed the Registration Statement, and each person, if any, who (i) controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the Company against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 11(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with information furnished to the Company in writing by Craig-Hallum expressly for use therein.

(c) Procedure. Any party that proposes to assert the right to be indemnified under this Section 11 will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 11, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that it might have to any indemnified party otherwise than under this Section 11 and (ii) any liability that it may have to any indemnified party under the foregoing provision of this Section 11 unless, and only to the extent that, such omission results in the forfeiture or material impairment of rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party (Company Counsel shall be deemed reasonably satisfactory to the indemnified party if the indemnifying party is the Company), and shall pay the fees and disbursements of such counsel related to such proceedings, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are materially different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. Such firm shall be designated in writing by Craig-Hallum, in the case of parties indemnified pursuant to Section 11(a), and by the Company, in the case of parties indemnified pursuant to Section 11(b). All such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly after the indemnifying party receives a written invoice relating to fees, disbursements and other charges in reasonable detail. An indemnifying party will not, in any event, be liable for any settlement of any action or claim effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the third and fourth sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 11 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (2) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d) Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 11 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or Craig-Hallum, the Company and Craig-Hallum will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than Craig-Hallum, such as persons who control the Company within the meaning of the Securities Act, officers of the Company who signed the Registration Statement and directors of the Company, who also may be liable for contribution) to which the Company and Craig-Hallum may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and Craig-Hallum on the other hand. The relative benefits received by the Company on the one hand and Craig-Hallum on the other hand shall be deemed to be in the same proportion as the total net proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by Craig-Hallum (before deducting expenses) from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and Craig-Hallum, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or Craig-Hallum, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and Craig-Hallum agree that it would not be just and equitable if contributions pursuant to this Section 11(d) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section 11(d) shall be deemed to include, for the purpose of this Section 11(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section 11(c) hereof. Notwithstanding the foregoing provisions of this Section 11(d), Craig-Hallum shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 11(d), any person who controls a party to this Agreement within the meaning of the Securities Act or the Exchange Act, and any officers, directors, partners, employees or agents of Craig-Hallum, will have the same rights to contribution as that party, and each officer and director of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 11(d), will notify any such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 11(d) except to the extent that the failure to so notify such other party materially prejudiced the rights or defenses of the party from whom contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 11(c) hereof, no party will be liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 11(c) hereof.

(e) Non-Exclusive Remedies. The obligations of the parties to this Agreement contained in this Section 11 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

(f) Information Provided by Craig-Hallum. It is understood and agreed that no information has been furnished by Craig-Hallum to the Company pursuant to Section 11(a) or Section 11(b) that is included in the Registration Statement, the Prospectus or any road show other material.

12. Representations and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 11 of this Agreement and all representations and warranties of the Company and Craig-Hallum herein or in certificates delivered pursuant hereto shall survive, as of their respective dates, regardless of (i) any investigation made by or on behalf of Craig-Hallum, any controlling persons, or the Company (or any of their respective officers, directors or controlling persons), (ii) delivery and acceptance of the Placement Shares and payment therefor or (iii) any termination of this Agreement.

13. Termination.

(a) Craig-Hallum may terminate this Agreement, by notice to the Company, as hereinafter specified at any time (1) if there has been, since the time of execution of this Agreement or since the date as of which information is given in the Prospectus, any Material Adverse Effect, or any development that has occurred that is reasonably likely to have a Material Adverse Effect has occurred or in the reasonable judgment of Craig-Hallum makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (2) if trading in the Common Stock has been suspended or limited by the Commission or the Exchange, or if trading generally on the Exchange has been suspended or limited, or minimum prices for trading have been fixed on the Exchange, (3) if any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market shall have occurred and be continuing for at least ten (10) Trading Days, (4) if a major disruption of securities settlements or clearance services in the United States shall have occurred and be continuing, or (5) if a banking moratorium has been declared by either U.S. Federal or New York authorities. Any such termination shall be without liability of any party to any other party except that the provisions of Section 5(b) (Settlement of Placement Shares), Section 5(c) (Delivery of Placement Shares), Section 9 (Payment of Expenses), Section 11 (Indemnification and Contribution), Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial), and Section 19 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination. If Craig-Hallum elects to terminate this Agreement as provided in this Section 13(a), Craig-Hallum shall provide the required notice as specified in Section 14 (Notices).

(b) The Company shall have the right, by giving five (5) days notice as hereinafter specified to terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 5(b), Section 5(c), Section 9, Section 11, Section 12, Section 18, and Section 19 hereof shall remain in full force and effect notwithstanding such termination.

(c) Craig-Hallum shall have the right, by giving ten (10) days notice as hereinafter specified to terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 5(b), Section 5(c), Section 9, Section 11, Section 12, Section 18, and Section 19 hereof shall remain in full force and effect notwithstanding such termination.

(d) Unless earlier terminated pursuant to this Section 13, this Agreement shall automatically terminate upon the issuance and sale of all of the Placement Shares through Craig-Hallum on the terms and subject to the conditions set forth herein except that the provisions of Section 9, Section 11, Section 12, Section 18, and Section 19 hereof shall remain in full force and effect notwithstanding such termination.

(e) This Agreement shall remain in full force and effect unless terminated pursuant to Sections 13(a), (b), (c), or (d) above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement shall in all cases be deemed to provide that Section 9, Section 11, Section 12, Section 18, and Section 19 shall remain in full force and effect. Upon termination of this Agreement and subject to the sections of this Agreement that will remain in full force and effect pursuant to this Section 13(e), the Company shall not have any liability to Craig-Hallum for any discount, commission or other compensation with respect to any Placement Shares not otherwise sold by Craig-Hallum under this Agreement.

(f) Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination shall not be effective until the close of business on the date of receipt of such notice by Craig-Hallum or the Company, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such Placement Shares shall settle in accordance with the provisions of this Agreement.

14. Notices. All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing, unless otherwise specified, and if sent to Craig-Hallum, shall be delivered to:

Craig-Hallum Capital Group LLC

222 South 9th Street, Suite 350

Minneapolis, MN 55402

Attention: Rick Hartfiel

Telephone: (612) 334-6381

Facsimile: (612) 334-6399

with a copy to:

Faegre Drinker Biddle & Reath LLP
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402-3901
Attn: Jonathan R. Zimmerman
Email: Jon.Zimmerman@FaegreDrinker.com

and if to the Company, shall be delivered to:

iCAD, Inc.

98 Spit Brook Road

Suite 100 Nashua, NH 03062 USA

Attention: Dana Brown, President & CEO

Telephone: 972.489.8393

Email: dbrown@icadmed.com

with a copy to:

Dentons US LLP

1221 Avenue of the Americas

New York, New York 10020

Attention: Jeffrey A. Baumel

Telephone: 973.912.7189

Email: jeffrey.baumel@dentons.com

Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose. Each such notice or other communication shall be deemed given (i) when delivered personally or by verifiable facsimile transmission (with an original to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid). For purposes of this Agreement, “Business Day” shall mean any day on which the Exchange and commercial banks in the City of New York are open for business.

An electronic communication (“Electronic Notice”) shall be deemed written notice for purposes of this Section 14 if sent to the electronic mail address specified by the receiving party under separate cover. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives confirmation of receipt by the receiving party. Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a non-electronic form (“Non-electronic Notice”) which shall be sent to the requesting party within ten (10) days of receipt of the written request for Non-electronic Notice.

15. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and Craig-Hallum and their respective successors and the affiliates, controlling persons, officers and directors referred to in Section 11 hereof. References to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of such party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party.

16. Adjustments for Stock Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted to take into account any share consolidation, stock split, stock dividend, corporate domestication or similar event effected with respect to the Placement Shares.

17. Entire Agreement; Amendment; Severability. This Agreement (including all schedules and exhibits attached hereto and Placement Notices issued pursuant hereto), together with that certain engagement letter dated July 30, 2023, between the Company and Craig-Hallum, constitute the entire agreement of the parties with respect to the subject matter hereof and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof. Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company and Craig-Hallum, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

18. GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

19. CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

20. Use of Information. Craig-Hallum may not use any information gained in connection with this Agreement and the transactions contemplated by this Agreement, including due diligence, to advise any party with respect to transactions not expressly approved by the Company.

21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile transmission.

22. Effect of Headings. The section and Exhibit headings herein are for convenience only and shall not affect the construction hereof.

23. Permitted Free Writing Prospectuses. The Company represents, warrants and agrees that, unless it obtains the prior consent of Craig-Hallum (such consent not to be unreasonably withheld, conditioned or delayed), and Craig-Hallum represents, warrants and agrees that, unless it obtains the prior consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed), it has not made and will not make any offer relating to the Placement Shares that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by Craig-Hallum or by the Company, as the case may be, is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents and warrants that it has treated and agrees that it will treat any Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping. For the purposes of clarity, the parties hereto agree that all free writing prospectuses, if any, listed in Exhibit 23 hereto are Permitted Free Writing Prospectuses.

24. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:

(a) Craig-Hallum is acting solely as agent in connection with the public offering of the Placement Shares and in connection with each transaction contemplated by this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between the Company or any of its respective affiliates, stockholders (or other equity holders), creditors or employees or any other party, on the one hand, and Craig-Hallum, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Agreement, irrespective of whether or not Craig-Hallum has advised or is advising the Company on other matters, and Craig-Hallum has no obligation to the Company with respect to the transactions contemplated by this Agreement except the obligations expressly set forth in this Agreement;

(b) it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement;

(c) Craig-Hallum has not provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement and it has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;

(d) it is aware that Craig-Hallum and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and Craig-Hallum has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship or otherwise; and

(e) it waives, to the fullest extent permitted by law, any claims it may have against Craig-Hallum for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the sale of Placement Shares under this Agreement and agrees that Craig-Hallum shall not have any liability (whether direct or indirect, in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on its behalf or in right of it or the Company, employees or creditors of Company, other than in respect of Craig-Hallum’s obligations under this Agreement and to keep information provided by the Company to Craig-Hallum and Craig-Hallum's counsel confidential to the extent not otherwise publicly-available.

25. Press Releases and Disclosure. The Company may issue a press release describing the material terms of the transactions contemplated hereby as soon as practicable following the date of this Agreement, and may file with the Commission a Current Report on Form 8-K, with this Agreement attached as an exhibit thereto, describing the material terms of the transactions contemplated hereby, and the Company shall consult with Craig-Hallum prior to making such disclosures, and the parties hereto shall use all commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosures that is reasonably satisfactory to all parties hereto. No party hereto shall issue thereafter any press release or like public statement (including, without limitation, any disclosure required in reports filed with the Commission pursuant to the Exchange Act) related to this Agreement or any of the transactions contemplated hereby without the prior written approval of the other party hereto, except as may be necessary or appropriate in the reasonable opinion of the party seeking to make disclosure to comply with the requirements of applicable law or stock exchange rules and except for the disclosure required pursuant to Section 7(c) of this Agreement in the Company’s quarterly reports on Form 10-Q or annual reports on Form 10-K. If any such press release or like public statement is so required, the party making such disclosure shall consult with the other party prior to making such disclosure, and the parties shall use all commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosure that is reasonably satisfactory to all parties hereto.

26.

Recognition of the U.S. Special Resolution Regimes.

(a) In the event that Craig-Hallum is a Covered Entity (as defined in this Section) and becomes subject to a proceeding under a U.S. Special Resolution Regime (as defined in this Section), the transfer from Craig-Hallum of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

(b) In the event that Craig-Hallum is a Covered Entity or a BHC Act Affiliate (as defined in this Section) of Craig-Hallum becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights (as defined in this Section) under this Agreement that may be exercised against Craig-Hallum are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

(c) For purposes of this Section 26: (i) a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); (ii) a “Covered Entity” means any of the following: (A) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (B) “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (C) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); (iii) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and (iv) “U.S. Special Resolution Regime” means each of (A) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (B) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

27. Definitions. As used in this Agreement, the following terms have the respective meanings set forth below:

“Applicable Time” means (i) each Representation Date (other than a Representation Date occurring at a time at which no Placement Notice is pending) and (ii) the time of each sale of any Placement Shares pursuant to this Agreement.

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Placement Shares that (1) is required to be filed with the Commission by the Company, (2) is a “road show” that is a “written communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission, or (3) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Placement Shares or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities Act Regulations.

“Rule 164,” “Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,” and “Rule 433” refer to such rules under the Securities Act Regulations.

All references in this Agreement to financial statements and schedules and other information that is “contained,” “included” or “stated” in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that is incorporated by reference in the Registration Statement or the Prospectus, as the case may be.

All references in this Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free Writing Prospectuses that, pursuant to Rule 433, are not required to be filed with the Commission) shall be deemed to include the copy thereof filed with the Commission pursuant to EDGAR; and all references in this Agreement to “supplements” to the Prospectus shall include, without limitation, any supplements, “wrappers” or similar materials prepared in connection with any offering, sale or private placement of any Placement Shares by Craig-Hallum outside of the United States.

[Remainder of page intentionally left blank]

If the foregoing correctly sets forth the understanding between the Company and Craig-Hallum, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and Craig-Hallum.

Very truly yours,

iCAD, INC.

By: /s/ Dana Brown

Name: Dana Brown

Title: Chief Executive Officer

ACCEPTED as of the date first-above written:

CRAIG-HALLUM CAPITAL GROUP LLC

By: /s/ Rick Hartfiel

Name: Rick Hartfiel

Title: Head of Investment Banking

SCHEDULE 1

_________________________________

FORM OF PLACEMENT NOTICE

_________________________________

From: iCAD Inc.

To:

Craig-Hallum Capital Group LLC

Attention:

[●]

Subject: At-The-Market Issuance--Placement Notice

Gentlemen:

Pursuant to the terms and subject to the conditions contained in the At-The-Market Issuance Sales Agreement between iCAD, Inc., a Delaware corporation (the “Company”), and Craig-Hallum Capital Group LLC (“Craig-Hallum”), dated August 11, 2023, the Company hereby requests that Craig-Hallum sell up to ____________ of the Company’s Common Stock, par value $0.01 per share, at a minimum market price of $[●] per share, during the time period beginning [month, day, time] and ending [month, day, time]. [The Company may include such other sales parameters as it deems appropriate.]

SCHEDULE 2

__________________________

Compensation

__________________________

The compensation to Craig-Hallum for sales of the Placement Shares with respect to which Craig-Hallum acts as sales agent hereunder shall be 3.0% of the gross offering proceeds of the Placement Shares sold pursuant to this Agreement (the “Selling Commission”). For each sale of Placement Shares, the amount of sale proceeds remaining after payment of the Selling Commission shall constitute the net proceeds to the Company for such sale of Placement Shares (the “Net Proceeds”). The Company shall pay to Craig-Hallum, on the applicable Settlement Date, the Selling Commission for the applicable Placement Shares sold by Craig-Hallum (which amount may be withheld by Craig-Hallum from the gross proceeds from the sale of such Placement Shares). For the avoidance of doubt, any expense payment and reimbursement obligations of the Company set forth in Section 9 of the Agreement shall be separate and independent obligations of the Company and shall not be deemed a credit or otherwise act to offset the compensation to Craig-Hallum pursuant to the Agreement or amount provided to the Company in connection with the sale of Placement Shares.

SCHEDULE 3

__________________________

Notice Parties

__________________________

The Company:

[●]

The above-mentioned individuals from the Company can be reached at [PHONE] and by email at [EMAIL];

Craig-Hallum:

Chris Jensen

chris.jensen@craig-hallum.com

612-334-6305

Joe Geelan

jgeelan@craig-hallum.com

612-334-6392

EXHIBIT 7(o)

Form of Representation Date Certificate

[DATE]

This Officer’s Certificate (this “Certificate”) is executed and delivered pursuant to Section 7(o) of the At-The-Market Issuance Sales Agreement (the “Agreement”), dated August 11, 2023, between iCAD, Inc. (the “Company”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”). All capitalized terms used but not defined herein shall have the meanings given to such terms in the Agreement.

The undersigned, a duly appointed and authorized officer of the Company, having made reasonable inquiries to establish the accuracy of the statements below and having been authorized by the Company to execute this certificate on behalf of the Company, hereby certifies, on behalf of the Company and not in the undersigned’s individual capacity, as follows:

1. As of the date of this Certificate and as of each Applicable Time, if any, subsequent to the immediately preceding Representation Date, (i) the Registration Statement does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, (ii) neither the Registration Statement nor the Prospectus contains any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (iii) no event has occurred as a result of which it is necessary to amend or supplement the Prospectus, as amended or supplemented as of the date hereof, in order to make the statements therein not untrue or misleading, or for (i) and (ii) to be true; provided, however, that the foregoing shall not apply to statements in, or omissions from, any such document made in reliance upon, and in conformity with, information furnished to the Company by Craig-Hallum specifically for use in the preparation thereof.

2. Each of the representations and warranties of the Company contained in the Agreement was true and correct in all material respects when originally made, and, except for those representations and warranties that speak solely as of a specific date, is true and correct as of the date of this Certificate.

3. Except as waived by Craig-Hallum in writing, (i) each of the covenants required to be performed by the Company in the Agreement on or prior to the date of the Agreement, this Representation Date, and each such other date prior to the date hereof as set forth in the Agreement, has been duly, timely and fully performed in all material respects and (ii) each condition required to be complied with by the Company on or prior to the date of the Agreement, this Representation Date, and each such other date prior to the date hereof as set forth in the Agreement has been duly, timely and fully complied with in all material respects.

4. No stop order suspending the effectiveness of the Registration Statement or of any part thereof has been issued, and, to the Company’s knowledge, no proceedings for that purpose have been instituted or are pending under the Securities Act.

5. The Prospectus and any Permitted Free Writing Prospectus have been timely filed with the Commission under the Securities Act, and all requests for additional information on the part of the Commission have been complied with or otherwise satisfied.

The undersigned has executed this Certificate on behalf of the Company as of the date first written above.

iCAD, INC.

By: __/s/ Dana Brown_________________

Name: ___Dana Brown___________________

Title: ___President and CEO_____________

Exhibit 23

Permitted Free Writing Prospectus

None.

Exhibit 5.1

August 11, 2023

iCAD, Inc.

98 Spit Brook Road, Suite 100

Nashua, New Hampshire 03062

Re: iCAD, Inc.- Registration Statement on Form S-3 (File No. 333-273459)

Ladies and Gentlemen:

In our capacity as counsel to iCAD, Inc., a corporation organized under the laws of the State of Delaware (the “Company”), we have been asked to render this opinion in connection with a registration statement on Form S-3 (File No. 333-273459) (the “Registration Statement”), which Registration Statement the Company initially filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), and the prospectus supplement filed pursuant to Rule 424(b) under the Act, dated August 11, 2023 (the “Prospectus Supplement”), under which up to $25,000,000 of shares (the “Shares”) of Company common stock, par value $0.01 per share, have been registered, to be sold from time to time by the Company pursuant to the Sales Agreement, dated August 11, 2023, between the Company and Craig-Hallum Capital Group LLC.

We are delivering this opinion to you at your request in accordance with the requirements of Item 16 of Form S-3 and Item 601(b)(5) of Regulation S-K under the Act.

In connection with rendering this opinion, we have examined originals, certified copies or copies otherwise identified as being true copies of the following: (i) the Company’s certificate of incorporation, as amended and in effect on the date hereof, (ii) the Company’s bylaws, as amended and in effect on the date hereof, (iii) the Registration Statement, including the prospectus contained therein (the “Base Prospectus”), (iv) the Prospectus Supplement (the Base Prospectus and the Prospectus Supplement are collectively referred to herein as the “Prospectus”), (v) corporate proceedings of the Company relating to the Shares and (vi) such other instruments and documents as we have deemed relevant under the circumstances.

In making the aforesaid examinations, we have assumed the genuineness and authenticity of all documents examined by us and all signatures thereon, and the conformity to originals of all copies of all documents examined by us.

Based on the foregoing, and in reliance thereon, and subject to the qualifications, limitations and exceptions stated herein, we are of the opinion, having due regard for such legal considerations as we deem relevant, that the Shares have been duly authorized and, when issued and delivered by the Company against due payment therefor in accordance with the terms set forth in the Registration Statement and the Prospectus, will be validly issued, fully paid and non-assessable.

The foregoing opinion is limited to the corporate laws of the State of Delaware and the federal laws of the United States of America.

We hereby consent to the use of this opinion as an exhibit to the Company’s Quarterly Report on Form 10-Q, dated August 11, 2023, and to the reference to our firm contained in the Registration Statement and in the Prospectus under the heading “Legal Matters.” In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Dentons US LLP

Dentons US LLP

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Dana Brown, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 of iCAD, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2023

	/s/ Dana Brown
	Name:	Dana Brown
	Title:	Chief Executive Officer
		(Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Eric Lonnqvist, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 of iCAD, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2023

	/s/ Eric Lonnqvist
	Name:	Eric Lonnqvist
	Title:	Chief Financial Officer
		(Principal Financial Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of iCAD, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023 (the “Report”), I, Dana Brown, the Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Dana Brown
	Name:	Dana Brown
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: August 11, 2023

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of iCAD, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023 (the “Report”), I, Eric Lonnqvist, the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Eric Lonnqvist
	Name:	Eric Lonnqvist
	Title:	Chief Financial Officer
		(Principal Financial Officer)

Date: August 11, 2023

Document And Entity Information - shares	6 Months Ended
Document And Entity Information - shares	Jun. 30, 2023	Aug. 10, 2023
Document Information [Line Items]
Entity Central Index Key	0000749660
Entity Registrant Name	iCAD INC
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-09341
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	02-0377419
Entity Address, Address Line One	98 Spit Brook Road, Suite 100
Entity Address, City or Town	Nashua
Entity Address, State or Province	NH
Entity Address, Postal Zip Code	03062
City Area Code	603
Local Phone Number	882-5200
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	ICAD
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		25,446,407

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 19,037	$ 21,313
Trade accounts receivable, net of allowance for credit losses of $984 and $922 as of June 30, 2023 and December 31, 2022, respectively	5,747	8,898
Inventory, net	4,248	5,389
Prepaid expenses and other current assets	2,304	2,641
Total current assets	31,336	38,241
Property and equipment, net of accumulated depreciation of $2,273 and $2,135 as of June 30, 2023 and December 31, 2022, respectively	1,471	1,074
Operating lease assets	3,113	3,361
Other assets	54	69
Intangible assets, net of accumulated amortization of $8,490 and $8,932 as of June 30, 2023 and December 31, 2022, respectively	388	482
Goodwill	8,362	8,362
Deferred tax assets	108	116
Total assets	44,832	51,705
Current liabilities:
Accounts payable	857	1,973
Accrued and other expenses	4,363	4,681
Less: current portion of lease liabilities	644	582
Deferred revenue—current portion	6,027	6,216
Total current liabilities	11,891	13,452
Long-term lease liabilities	2,478	2,803
Deferred revenue, net of current	283	542
Deferred tax	6	6
Total liabilities	14,658	16,803
Commitments and Contingencies (Note 12)
Stockholders’ equity:
Preferred stock, $0.01 par value: authorized 1,000,000 shares; none issued.	0	0
Common stock, $0.01 par value: authorized 60,000,000 shares; issued 25,446,407 as of both June 30, 2023 and December 31, 2022; outstanding 25,260,576 as of both June 30, 2023 and December 31, 2022.	254	254
Additional paid-in capital	303,699	302,899
Accumulated deficit	(272,364)	(266,836)
Treasury stock at cost, 185,831 shares as of both June 30, 2023 and December 31, 2022	(1,415)	(1,415)
Total stockholders’ equity	30,174	34,902
Total liabilities and stockholders’ equity	$ 44,832	$ 51,705

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Allowance for doubtful accounts on trade accounts receivable	$ 984	$ 922
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	2,273	2,135
Intangible assets, accumulated amortization	$ 8,490	$ 8,932
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	60,000,000	60,000,000
Common stock, shares issued (in shares)	25,446,407	25,446,407
Common stock, shares outstanding (in shares)	25,260,576	25,260,576
Treasury Stock, Common, Shares (in shares)	185,831	185,831

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenue:
Revenue	$ 5,865,000	$ 7,575,000	$ 11,643,000	$ 15,098,000
Cost of revenue:
Cost of revenue	1,516,000	2,084,000	3,165,000	4,295,000
Gross profit	4,349,000	5,491,000	8,478,000	10,803,000
Operating expenses:
Engineering and product development	1,263,000	2,367,000	3,544,000	4,642,000
Marketing and sales	2,112,000	3,435,000	4,967,000	7,000,000
General and administrative	2,832,000	2,742,000	5,695,000	5,673,000
Amortization and depreciation	65,000	61,000	120,000	124,000
Total operating expenses	6,272,000	8,605,000	14,326,000	17,439,000
Loss from operations	(1,923,000)	(3,114,000)	(5,848,000)	(6,636,000)
Other income/ (expense):
Interest expense	0	0	0	(1,000)
Interest income	182,000	14,000	332,000	16,000
Other income (expense), net	(5,000)	(18,000)	(3,000)	(41,000)
Other income (expense), net	177,000	(4,000)	329,000	(26,000)
Loss before provision for income taxes	(1,746,000)	(3,118,000)	(5,519,000)	(6,662,000)
Provision for tax expense	(4,000)	0	(9,000)	(1,000)
Net loss and comprehensive loss	$ (1,750,000)	$ (3,118,000)	$ (5,528,000)	$ (6,663,000)
Net loss per share:
Basic and diluted (in dollars per share)	$ (0.07)	$ (0.12)	$ (0.22)	$ (0.26)
Weighted average number of shares used in computing loss per share:
Basic and diluted (in shares)	25,261	25,185	25,261	25,172
Product [Member]
Revenue:
Revenue	$ 2,644,000	$ 4,475,000	$ 5,387,000	$ 9,035,000
Cost of revenue:
Cost of revenue	461,000	1,008,000	1,047,000	2,095,000
Service and Supplies [Member]
Revenue:
Revenue	3,221,000	3,100,000	6,256,000	6,063,000
Cost of revenue:
Cost of revenue	1,000,000	1,001,000	1,993,000	2,050,000
Amortization and Depreciation [Member]
Cost of revenue:
Cost of revenue	$ 55,000	$ 75,000	$ 125,000	$ 150,000

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock, Common [Member]	Total
Balance (in shares) at Dec. 31, 2021	25,326,086
Balance at Dec. 31, 2021	$ 253	$ 300,859	$ (253,180)	$ (1,415)	$ 46,517
Stock-based compensation	0	964	0	0	964
Net loss	$ 0	0	(6,663)	0	(6,663)
Issuance of common stock pursuant to stock option plans (in shares)	28,833
Issuance of common stock pursuant to stock option plans	$ 1	78	0	0	79
Issuance of common stock pursuant Employee Stock Purchase Plans (in shares)	18,064
Issuance of common stock pursuant Employee Stock Purchase Plans	$ 0	93	0	0	93
Issuance of common stock relative to vesting of restricted stock (in shares)	875
Issuance of common stock relative to vesting of restricted stock	$ 0	0	0	0	0
Balance (in shares) at Jun. 30, 2022	25,373,858
Balance at Jun. 30, 2022	$ 254	301,994	(259,843)	(1,415)	40,990
Balance (in shares) at Mar. 31, 2022	25,359,175
Balance at Mar. 31, 2022	$ 253	301,640	(256,725)	(1,415)	43,753
Stock-based compensation	0	309	0	0	309
Net loss	$ 0	0	(3,118)	0	(3,118)
Issuance of common stock pursuant to stock option plans (in shares)	6,000
Issuance of common stock pursuant to stock option plans	$ 1	12	0	0	13
Issuance of common stock pursuant Employee Stock Purchase Plans (in shares)	8,683
Issuance of common stock pursuant Employee Stock Purchase Plans	$ 0	33	0	0	33
Balance (in shares) at Jun. 30, 2022	25,373,858
Balance at Jun. 30, 2022	$ 254	301,994	(259,843)	(1,415)	40,990
Balance (in shares) at Dec. 31, 2022	25,446,407
Balance at Dec. 31, 2022	$ 254	302,899	(266,836)	(1,415)	34,902
Stock-based compensation	0	800	0	0	800
Net loss	$ 0	0	(5,528)	0	$ (5,528)
Issuance of common stock pursuant to stock option plans (in shares)					(0)
Balance (in shares) at Jun. 30, 2023	25,446,407
Balance at Jun. 30, 2023	$ 254	303,699	(272,364)	(1,415)	$ 30,174
Balance (in shares) at Mar. 31, 2023	25,446,407
Balance at Mar. 31, 2023	$ 254	303,485	(270,614)	(1,415)	31,710
Stock-based compensation	0	214	0	0	214
Net loss	$ 0	0	(1,750)	0	$ (1,750)
Issuance of common stock pursuant to stock option plans (in shares)					0
Balance (in shares) at Jun. 30, 2023	25,446,407
Balance at Jun. 30, 2023	$ 254	$ 303,699	$ (272,364)	$ (1,415)	$ 30,174

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flow from operating activities:
Net loss	$ (5,528)	$ (6,663)
Adjustments to reconcile net loss to net cash used for operating activities:
Amortization	94	105
Depreciation	138	169
Non-cash lease expense	248	391
Bad debt provision	62	510
Stock-based compensation	800	964
Deferred tax	8	0
Changes in operating assets and liabilities:
Accounts receivable	3,089	(1,790)
Inventory	1,141	(830)
Prepaid and other assets	352	853
Accounts payable	(1,116)	(581)
Accrued and other expenses	(510)	(371)
Lease liabilities	(263)	(425)
Deferred revenue	(448)	659
Total adjustments	3,595	(346)
Net cash used for operating activities	(1,933)	(7,009)
Cash flow from investing activities:
Additions to patents, technology and other	0	(10)
Additions to property and equipment	(307)	(255)
Capitalization of internal-use software development costs	(36)	0
Net cash used for investing activities	(343)	(265)
Cash flow from financing activities:
Proceeds from option exercises pursuant to stock option plans	0	79
Proceeds from issuance of common stock pursuant to Employee Stock Purchase Plans	0	93
Net cash provided by financing activities	0	172
Decrease in cash and cash equivalents	(2,276)	(7,102)
Cash and cash equivalents, beginning of period	21,313	34,282
Cash and cash equivalents, end of period	19,037	27,180
Supplemental disclosure of cash flow information:
Interest paid	0	9
Amendment to right-of-use assets obtained in exchange for operating lease liabilities	$ 0	$ 2,434

Note 1 - Basis of Presentation and Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Significant Accounting Policies [Text Block]

Notes to Condensed Consolidated Financial Statements:

Note 1 – Basis of Presentation and Significant Accounting Policies

Basis of Presentation

Principles of Consolidation and Business Segments

Risk and Uncertainty

Recently Adopted Accounting Pronouncements

Note 2 - Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 2 – Fair Value Measurements

•

Level 1 - Quoted prices in active markets for identical assets or liabilities.

•

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value

The following table sets forth the Company’s assets which are measured at fair value on a recurring basis by level within the fair value hierarchy:

Fair Value Measurements as of June 30, 2023

	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets
Money market accounts	$	15,811	$	—	$	—	$	15,811
Total Assets	$	15,811	$	—	$	—	$	15,811

Fair Value Measurements as of December 31, 2022

	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets
Money market accounts	$	15,067	$	—	$	—	$	15,067
Total Assets	$	15,067	$	—	$	—	$	15,067

There were no Level 2 or 3 instruments measured at fair value as of June 30, 2023 or December 31, 2022.

Note 3 - Revenue

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Note 3 - Revenue

Revenue Recognition

Disaggregation of Revenue

The following tables presents the Company’s revenues disaggregated by major good or service line, timing of revenue recognition, and sales channel, reconciled to its reportable segments.

	*Three months ended June 30, 2023*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	2,301	$	343	$	2,644
Service contracts		1,870		396		2,266
Supply and source usage agreements		—		460		460
Disposable applicators		—		459		459
Other		—		36		36
	$	4,171	$	1,694	$	5,865
Timing of Revenue Recognition
Goods transferred at a point in time	$	1,876	$	867	$	2,743
Services transferred over time		2,295		827		3,122
	$	4,171	$	1,694	$	5,865
Sales Channels
Direct sales force		2,743	$	1,124	$	3,867
OEM partners		1,428		570		1,998
Channel partners		—		—		—
	$	4,171	$	1,694	$	5,865

	*Six months ended June 30, 2023*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	4,762	$	626	$	5,388
Service contracts		3,744		799		4,543
Supply and source usage agreements		—		952		952
Disposable applicators		—		685		685
Other		—		75		75
	$	8,506	$	3,137	$	11,643
Timing of Revenue Recognition
Goods transferred at a point in time	$	3,945	$	1,484	$	5,429
Services transferred over time		4,561		1,653		6,214
	$	8,506	$	3,137	$	11,643
Sales Channels
Direct sales force	$	5,461	$	2,179	$	7,640
OEM partners		3,045		—		3,045
Channel partners		—		958		958
	$	8,506	$	3,137	$	11,643

	*Three months ended June 30, 2022*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	3,467	$	1,008	$	4,475
Service contracts		1,822		361		2,183
Supply and source usage agreements		—		367		367
Disposable applicators		—		463		463
Other		—		87		87
	$	5,289	$	2,286	$	7,575
Timing of Revenue Recognition
Goods transferred at a point in time	$	3,455	$	1,547	$	5,002
Services transferred over time		1,834		739		2,573
	$	5,289	$	2,286	$	7,575
Sales Channels
Direct sales force	$	3,505	$	703	$	4,208
OEM partners		1,784		—		1,784
Channel partners		—		1,583		1,583
	$	5,289	$	2,286	$	7,575

	*Six months ended June 30, 2022*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	7,330	$	1,705	$	9,035
Service contracts		3,479		747		4,226
Supply and source usage agreements		—		780		780
Disposable applicators		—		878		878
Other		—		179		179
	$	10,809	$	4,289	$	15,098
Timing of Revenue Recognition
Goods transferred at a point in time	$	7,335	$	2,812	$	10,147
Services transferred over time		3,474		1,477		4,951
	$	10,809	$	4,289	$	15,098
Sales Channels
Direct sales force	$	6,399	$	1,519	$	7,918
OEM partners		4,410		—		4,410
Channel partners		—		2,770		2,770
	$	10,809	$	4,289	$	15,098

Disposable applicators. Revenue for the sale of disposable applicators is recognized upon the transfer of control to the customer.

Contract Balances

Contract balances

	*Balance at*		*Balance at*
	*June 30, 2023*		*December 31, 2022*
Receivables, which are included in ‘Trade accounts receivable’	$	5,747	$	8,898
Current contract assets, which are included in “Prepaid and other assets”	$	843	$	759
Non-current contract assets, which are included in “other assets”	$	—	$	15
Contract liabilities, which are included in “Deferred revenue”	$	6,310	$	6,758

Changes in deferred revenue from contracts with customers were as follows:

	*Six Months*
	*Ended June 30,*
	*2023*
Balance at beginning of period	$	6,758
Deferral of revenue		4,909
Recognition of deferred revenue		(5,357	)
Balance at end of period	$	6,310

Note 4 - Net Loss Per Common Share

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 4 – Net Loss per Common Share

The Company’s basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period.

A summary of the Company’s calculation of net loss per share is as follows (in 000s, except for Net loss per share):

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Net loss	$	(1,750	)	$	(3,118	)	$	(5,528	)	$	(6,663	)
Shares used in the calculation of basic and diluted net loss per share		25,261			25,185			25,261			25,172
Net loss per share - basic and diluted	$	(0.07	)	$	(0.12	)	$	(0.22	)	$	(0.26	)

	*June 30,*
	*2023*		*2022*
Stock options		3,265,920		1,819,897
Total		3,265,920		1,819,897

Note 5 - Inventories

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note 5 – Inventories

	*June 30, 2023*			*December 31, 2022*
Raw materials	$	1,679		$	2,658
Work in process		20			101
Finished goods		2,811			2,892
Inventory gross		4,510			5,651
Inventory reserve		(262	)		(262	)
Inventory net	$	4,248		$	5,389

Note 6 - Goodwill

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Goodwill Disclosure [Text Block]

Note 6 – Goodwill

• 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.

Note 7 - Long-lived Assets

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

Note 7 – Long-lived Assets

The Company assesses long-lived assets for impairment if events and circumstances indicate it is more likely than not that the fair value of the asset group is less than its carrying 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;

• 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

The Company determined there were no such triggering events in the period ended June 30, 2023.

Note 8 - Lease Commitments

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 8 – Lease Commitments

Components of Leases:

The Company has leases for office space and office equipment. The leases expire at various dates through 2028.

		*Three Months Ended*		*Six Months Ended*
Lease Cost	*Classification*	*June 30, 2023*		*June 30, 2023*
Operating lease cost - Right of Use Asset	Operating expenses	$	116	$	332

Other information related to leases was as follows:

	*Three Months*		*Six Months*
	*Ended June 30, 2023*		*Ended June 30, 2023*
Cash paid from operating cash flows for operating leases	$	161	$	248

	*As of June 30,*
	*2023*
Weighted-average remaining lease term of operating leases (years)		3.5
Weighted-average discount rate for operating leases		7.0	%

Maturity of the Company’s lease liabilities as of June 30, 2023 was as follows:

2023	$	434
2024		846
2025		848
2026		749
2027		685
2028		172
Total lease payments		3,734
Less: effects of discounting		(612	)
Total lease liabilities		3,122
Less: current portion of lease liabilities		644
Long-term lease liabilities	$	2,478

Note 9 - Stockholders Equity

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Equity [Text Block]

Note 9– Stockholders Equity

Stock-Based Compensation

The Company’s stock-based compensation expense, including options and restricted stock by category is as follows:

	*Three Months Ended*				*Six Months Ended*
	*June 30,*				*June 30,*
	*2023*		*2022*		*2023*		*2022*
Cost of revenue	$	1	$	1	$	2	$	1
Engineering and product development		59		70		132		138
Marketing and sales		62		109		193		308
General and administrative		92		129		473		517
	$	214	$	309	$	800	$	964

Options granted under the Company’s stock incentive plans were valued utilizing the Black-Scholes model using the following assumptions and had the following fair values:

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Average risk-free interest rate		4.10	%		2.56	%		4.14	%		1.90	%
Expected dividend yield	None			None			None			None
Expected life (in years)		3.1			3.5			3.0			3.5
Expected volatility		77.7% - 96.3%			69.7% - 70.5%			72.7% to 96.3%			66.3% to 70.5%
Weighted average exercise price	$	1.38		$	5.19		$	1.76		$	5.22
Weighted average fair value	$	0.76		$	1.72		$	0.95		$	2.46

A summary of stock option activity for all stock option plans for the period ended June 30, 2023 is as follows:

	Number of			Weighted Average		Intrinsic
	Options			Exercise Price		Value
Outstanding as of December 31, 2022		2,610,992		$	7.54	$	—
Granted		1,103,916		$	1.76	$	969
Exercised		—		$	—	$	—
Cancelled		(448,988	)	$	7.80	$	—
Outstanding as of June 30, 2023		3,265,920		$	5.61	$	969
Options Exercisable as of December 31, 2022		1,619,855		$	6.47	$	—
Options Exercisable as of June 30, 2023		2,042,460		$	7.13	$	47

There were no exercises of outstanding stock options in the three and six months ended June 30, 2023.

Employee Stock Purchase Plan

Note 10 - Income Taxes

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 10– Income Taxes

Note 11 - Segment Reporting

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 11 – Segment Reporting

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Segment revenues:
Detection	$	4,171		$	5,289		$	8,506		$	10,809
Therapy		1,694			2,286			3,137			4,289
Total revenue	$	5,865		$	7,575		$	11,643		$	15,098
Segment gross profit:
Detection	$	3,398		$	4,554		$	6,942		$	9,215
Therapy		951			937			1,536			1,588
Segment gross profit	$	4,349		$	5,491		$	8,478		$	10,803
Segment operating income (loss):
Detection	$	391		$	446		$	267		$	1,068
Therapy		593			(797	)		(290	)		(2,006	)
Segment operating income (loss):	$	984		$	(351	)	$	(23	)	$	(938	)
General, administrative, depreciation and amortization expense	$	(2,907	)	$	(2,763	)	$	(5,825	)	$	(5,698	)
Interest expense		—			—			—			(1	)
Interest income		182			14			332			16
Other expense		(5	)		(18	)		(3	)		(41	)
Loss before income tax	$	(1,746	)	$	(3,118	)	$	(5,519	)	$	(6,662	)

Note 12 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 12 – Commitments and Contingencies

Other Commitments

The Company is obligated to pay approximately $5.5 million for firm purchase obligations to suppliers for future product and service deliverables and $0.4 million for minimum royalty obligations.

Litigation

Note 13 - Restructuring

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

Note 13 – Restructuring

The Company's accrual for restructuring charges for the six months ended June 30, 2023 was follows (in thousands):

Balance as of January 1, 2023	$	—
Charges		178
Cash payments		(110)
Balance as of June 30, 2023	$	68

Note 14 - Subsequent Events

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Subsequent Events [Text Block]

Note 14 – Subsequent Events

Table of Contents

Significant Accounting Policies (Policies)	6 Months Ended
Significant Accounting Policies (Policies)	Jun. 30, 2023
Accounting Policies [Abstract]
Basis of Accounting, Policy [Policy Text Block]	*Basis of Presentation* The accompanying condensed consolidated financial statements of iCAD, Inc. and its subsidiaries (together “iCAD” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. It is reasonably possible that changes may occur in the near term that would affect management’s estimates with respect to assets and liabilities. In the opinion of the Company’s management, these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position of the Company at June 30, 2023, the results of operations of the Company for the three and six months ended June 30, 2023 and 2022, cash flows of the Company for the six months ended June 30, 2023 and 2022, and stockholders’ equity of the Company for the three and six months ended June 30, 2023 and 2022. Although the Company believes that the disclosures made in these interim financial statements are adequate to make the information presented not misleading, certain information normally included in the footnotes prepared in accordance with US GAAP has been omitted as permitted by the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 31, 2023. The results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for fiscal year ending December 31, 2023, or any interim or any future period.
Principles of Consolidation and Business Segments [Policy Text Block]	*Principles of Consolidation and Business Segments* The condensed consolidated financial statements include the accounts of iCAD, Inc. and its wholly owned subsidiaries: Xoft, Inc., Xoft Solutions, LLC, iCAD France, LLC and iCAD Italy, LLC. All material inter-company transactions and balances have been eliminated in consolidation. The Company reports the results of two segments: Cancer Detection (“Detection”) and Cancer Therapy (“Therapy”). The Detection segment consists of advanced image analysis and workflow products for the detection of cancer. The Therapy segment consists of radiation therapy (“Xoft”, “Axxent”) products for the treatment of certain cancers.
Concentration Risk, Credit Risk, Policy [Policy Text Block]	*Risk and Uncertainty* On March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of COVID-19, the United States and most countries of the world imposed some level of unprecedented restrictions such as travel bans and business closures which caused substantial reductions in economic activity. As a provider of devices and services to the health care industry, the Company believes its operations have been materially affected in all periods presented. While the worst of the disruptions appear to have subsided as of June 30, 2023, the Company continues to be impacted by slowness in the overall economic recovery. The Company’s expected results for future periods could reflect a continuing negative impact from the COVID-19 pandemic for similar or additional reasons. In late February 2022, Russian military forces launched significant military action against Ukraine. Sustained conflict and disruption in the region has continued through June 30, 2023 and beyond. Economic, civil, military and political uncertainty may arise or increase in regions where the Company operates or derives revenue. Further, countries from which the Company derives revenue may experience military action and/or civil and political unrest; may be subject to government export controls, economic sanctions, embargoes, or trade restrictions; and experience currency, inflation, and interest rate uncertainties. While the impact to the Company has been limited to date, it is not possible to predict the potential outcome should the conflict expand and/or additional sanctions be imposed. For the three and six months ended June 30, 2023, approximately 20% and 17%, respectively, of the Company's revenue was derived from customers located outside the United States.
New Accounting Pronouncements, Policy [Policy Text Block]	*Recently Adopted Accounting Pronouncements* In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)” (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaced the then-existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. These changes will result in earlier recognition of credit losses. In November 2019, the FASB elected to defer the adoption date of ASU 2016-13 for public business entities that meet the definition of a smaller reporting company to fiscal years beginning after December 15, 2022. Early adoption of the guidance in ASU 2016-13 was permitted. The Company adopted ASU 2016-13 effective January 1, 2023. Adoption caused the Company to modify its approach to estimating its allowance for potentially uncollectable accounts receivable. Specifically, the Company began applying an expected credit loss model that uses historical loss rates of its accounts receivable for the previous twelve months as well as expectations about the future where the Company has been able to develop forecasts to support its estimates. Adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements.

Note 2 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets
Money market accounts	$	15,811	$	—	$	—	$	15,811
Total Assets	$	15,811	$	—	$	—	$	15,811

	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets
Money market accounts	$	15,067	$	—	$	—	$	15,067
Total Assets	$	15,067	$	—	$	—	$	15,067

Note 3 - Revenue (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Disaggregation of Revenue [Table Text Block]

	*Three months ended June 30, 2023*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	2,301	$	343	$	2,644
Service contracts		1,870		396		2,266
Supply and source usage agreements		—		460		460
Disposable applicators		—		459		459
Other		—		36		36
	$	4,171	$	1,694	$	5,865
Timing of Revenue Recognition
Goods transferred at a point in time	$	1,876	$	867	$	2,743
Services transferred over time		2,295		827		3,122
	$	4,171	$	1,694	$	5,865
Sales Channels
Direct sales force		2,743	$	1,124	$	3,867
OEM partners		1,428		570		1,998
Channel partners		—		—		—
	$	4,171	$	1,694	$	5,865

	*Six months ended June 30, 2023*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	4,762	$	626	$	5,388
Service contracts		3,744		799		4,543
Supply and source usage agreements		—		952		952
Disposable applicators		—		685		685
Other		—		75		75
	$	8,506	$	3,137	$	11,643
Timing of Revenue Recognition
Goods transferred at a point in time	$	3,945	$	1,484	$	5,429
Services transferred over time		4,561		1,653		6,214
	$	8,506	$	3,137	$	11,643
Sales Channels
Direct sales force	$	5,461	$	2,179	$	7,640
OEM partners		3,045		—		3,045
Channel partners		—		958		958
	$	8,506	$	3,137	$	11,643

	*Three months ended June 30, 2022*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	3,467	$	1,008	$	4,475
Service contracts		1,822		361		2,183
Supply and source usage agreements		—		367		367
Disposable applicators		—		463		463
Other		—		87		87
	$	5,289	$	2,286	$	7,575
Timing of Revenue Recognition
Goods transferred at a point in time	$	3,455	$	1,547	$	5,002
Services transferred over time		1,834		739		2,573
	$	5,289	$	2,286	$	7,575
Sales Channels
Direct sales force	$	3,505	$	703	$	4,208
OEM partners		1,784		—		1,784
Channel partners		—		1,583		1,583
	$	5,289	$	2,286	$	7,575

	*Six months ended June 30, 2022*
	*Reportable Segments*
	*Detection*		*Therapy*		*Total*
Major Goods/Service Lines
Products	$	7,330	$	1,705	$	9,035
Service contracts		3,479		747		4,226
Supply and source usage agreements		—		780		780
Disposable applicators		—		878		878
Other		—		179		179
	$	10,809	$	4,289	$	15,098
Timing of Revenue Recognition
Goods transferred at a point in time	$	7,335	$	2,812	$	10,147
Services transferred over time		3,474		1,477		4,951
	$	10,809	$	4,289	$	15,098
Sales Channels
Direct sales force	$	6,399	$	1,519	$	7,918
OEM partners		4,410		—		4,410
Channel partners		—		2,770		2,770
	$	10,809	$	4,289	$	15,098

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]

	*Balance at*		*Balance at*
	*June 30, 2023*		*December 31, 2022*
Receivables, which are included in ‘Trade accounts receivable’	$	5,747	$	8,898
Current contract assets, which are included in “Prepaid and other assets”	$	843	$	759
Non-current contract assets, which are included in “other assets”	$	—	$	15
Contract liabilities, which are included in “Deferred revenue”	$	6,310	$	6,758

Deferred Revenue, by Arrangement, Disclosure [Table Text Block]

	*Six Months*
	*Ended June 30,*
	*2023*
Balance at beginning of period	$	6,758
Deferral of revenue		4,909
Recognition of deferred revenue		(5,357	)
Balance at end of period	$	6,310

Note 4 - Net Loss Per Common Share (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Net loss	$	(1,750	)	$	(3,118	)	$	(5,528	)	$	(6,663	)
Shares used in the calculation of basic and diluted net loss per share		25,261			25,185			25,261			25,172
Net loss per share - basic and diluted	$	(0.07	)	$	(0.12	)	$	(0.22	)	$	(0.26	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	*June 30,*
	*2023*		*2022*
Stock options		3,265,920		1,819,897
Total		3,265,920		1,819,897

Note 5 - Inventories (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	*June 30, 2023*			*December 31, 2022*
Raw materials	$	1,679		$	2,658
Work in process		20			101
Finished goods		2,811			2,892
Inventory gross		4,510			5,651
Inventory reserve		(262	)		(262	)
Inventory net	$	4,248		$	5,389

Note 8 - Lease Commitments (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Lease, Cost [Table Text Block]

		*Three Months Ended*		*Six Months Ended*
Lease Cost	*Classification*	*June 30, 2023*		*June 30, 2023*
Operating lease cost - Right of Use Asset	Operating expenses	$	116	$	332

	*Three Months*		*Six Months*
	*Ended June 30, 2023*		*Ended June 30, 2023*
Cash paid from operating cash flows for operating leases	$	161	$	248

	*As of June 30,*
	*2023*
Weighted-average remaining lease term of operating leases (years)		3.5
Weighted-average discount rate for operating leases		7.0	%

Financing Lease and Lessee Operating Lease Liability Maturity [Table Text Block]

2023	$	434
2024		846
2025		848
2026		749
2027		685
2028		172
Total lease payments		3,734
Less: effects of discounting		(612	)
Total lease liabilities		3,122
Less: current portion of lease liabilities		644
Long-term lease liabilities	$	2,478

Note 9 - Stockholders Equity (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	*Three Months Ended*				*Six Months Ended*
	*June 30,*				*June 30,*
	*2023*		*2022*		*2023*		*2022*
Cost of revenue	$	1	$	1	$	2	$	1
Engineering and product development		59		70		132		138
Marketing and sales		62		109		193		308
General and administrative		92		129		473		517
	$	214	$	309	$	800	$	964

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Average risk-free interest rate		4.10	%		2.56	%		4.14	%		1.90	%
Expected dividend yield	None			None			None			None
Expected life (in years)		3.1			3.5			3.0			3.5
Expected volatility		77.7% - 96.3%			69.7% - 70.5%			72.7% to 96.3%			66.3% to 70.5%
Weighted average exercise price	$	1.38		$	5.19		$	1.76		$	5.22
Weighted average fair value	$	0.76		$	1.72		$	0.95		$	2.46

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

	Number of			Weighted Average		Intrinsic
	Options			Exercise Price		Value
Outstanding as of December 31, 2022		2,610,992		$	7.54	$	—
Granted		1,103,916		$	1.76	$	969
Exercised		—		$	—	$	—
Cancelled		(448,988	)	$	7.80	$	—
Outstanding as of June 30, 2023		3,265,920		$	5.61	$	969
Options Exercisable as of December 31, 2022		1,619,855		$	6.47	$	—
Options Exercisable as of June 30, 2023		2,042,460		$	7.13	$	47

Note 11 - Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Segment revenues:
Detection	$	4,171		$	5,289		$	8,506		$	10,809
Therapy		1,694			2,286			3,137			4,289
Total revenue	$	5,865		$	7,575		$	11,643		$	15,098
Segment gross profit:
Detection	$	3,398		$	4,554		$	6,942		$	9,215
Therapy		951			937			1,536			1,588
Segment gross profit	$	4,349		$	5,491		$	8,478		$	10,803
Segment operating income (loss):
Detection	$	391		$	446		$	267		$	1,068
Therapy		593			(797	)		(290	)		(2,006	)
Segment operating income (loss):	$	984		$	(351	)	$	(23	)	$	(938	)
General, administrative, depreciation and amortization expense	$	(2,907	)	$	(2,763	)	$	(5,825	)	$	(5,698	)
Interest expense		—			—			—			(1	)
Interest income		182			14			332			16
Other expense		(5	)		(18	)		(3	)		(41	)
Loss before income tax	$	(1,746	)	$	(3,118	)	$	(5,519	)	$	(6,662	)

Note 13 - Restructuring (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Restructuring and Related Costs [Table Text Block]

Balance as of January 1, 2023	$	—
Charges		178
Cash payments		(110)
Balance as of June 30, 2023	$	68

Note 1 - Basis of Presentation and Significant Accounting Policies (Details Textual)	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Number of Operating Segments		2
Revenue Benchmark [Member] \| Geographic Concentration Risk [Member] \| Non-US [Member]
Concentration Risk, Percentage	20.00%	17.00%

Note 2 - Fair Value Measurements (Details Textual) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Inputs, Level 2 [Member]
Assets, Fair Value Disclosure, Total	$ 0	$ 0
Fair Value, Inputs, Level 3 [Member]
Assets, Fair Value Disclosure, Total	$ 0	$ 0

Note 2 - Fair Value Measurements - Assets and Liabilities which are Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Inputs, Level 2 [Member]
Assets, fair value	$ 0	$ 0
Fair Value, Inputs, Level 3 [Member]
Assets, fair value	0	0
Fair Value, Recurring [Member]
Assets, fair value	15,811	15,067
Fair Value, Recurring [Member] \| Money Market Funds [Member]
Assets, fair value	15,811	15,067
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member]
Assets, fair value	15,811	15,067
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member] \| Money Market Funds [Member]
Assets, fair value	15,811	15,067
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 2 [Member]
Assets, fair value	0	0
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 2 [Member] \| Money Market Funds [Member]
Assets, fair value	0	0
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member]
Assets, fair value	0	0
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member] \| Money Market Funds [Member]
Assets, fair value	$ 0	$ 0

Note 3 - Revenue 1 (Details Textual) $ in Millions	6 Months Ended
Note 3 - Revenue 1 (Details Textual) $ in Millions	Jun. 30, 2023 USD ($)
Revenue, Remaining Performance Obligation, Amount	$ 6.3
Minimum [Member]
Service Contracts, Term (Month)	12 months
Maximum [Member]
Service Contracts, Term (Month)	48 months

Note 3 - Revenue 2 (Details Textual) $ in Millions	Jun. 30, 2023 USD ($)
Revenue, Remaining Performance Obligation, Amount	$ 6.3
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Revenue, Remaining Performance Obligation, Amount	$ 6.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Month)	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 \| Minimum [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Month)	2 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 \| Maximum [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Month)	3 years

Note 3 - Revenue - Revenues Disaggregated by Major Good or Service Line, Timing of Revenue Recognition, and Sales Channel, Reconciled to Our Reportable Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenue from contracts with customers	$ 5,865	$ 7,575	$ 11,643	$ 15,098
Direct Sales Force [Member]
Revenue from contracts with customers	3,867	4,208	7,640	7,918
OEM Partners [Member]
Revenue from contracts with customers	1,998	1,784	3,045	4,410
Channel Partners [Member]
Revenue from contracts with customers	0	1,583	958	2,770
Transferred at Point in Time [Member]
Revenue from contracts with customers	2,743	5,002	5,429	10,147
Transferred over Time [Member]
Revenue from contracts with customers	3,122	2,573	6,214	4,951
Product [Member]
Revenue from contracts with customers	2,644	4,475	5,388	9,035
Service Contracts [Member]
Revenue from contracts with customers	2,266	2,183	4,543	4,226
Supply and Source Usage Agreements [Member]
Revenue from contracts with customers	460	367	952	780
Disposable Applicators [Member]
Revenue from contracts with customers	459	463	685	878
Other [Member]
Revenue from contracts with customers	36	87	75	179
Detection [Member]
Revenue from contracts with customers	4,171	5,289	8,506	10,809
Detection [Member] \| Direct Sales Force [Member]
Revenue from contracts with customers	2,743	3,505	5,461	6,399
Detection [Member] \| OEM Partners [Member]
Revenue from contracts with customers	1,428	1,784	3,045	4,410
Detection [Member] \| Channel Partners [Member]
Revenue from contracts with customers	0	0	0	0
Detection [Member] \| Transferred at Point in Time [Member]
Revenue from contracts with customers	1,876	3,455	3,945	7,335
Detection [Member] \| Transferred over Time [Member]
Revenue from contracts with customers	2,295	1,834	4,561	3,474
Detection [Member] \| Product [Member]
Revenue from contracts with customers	2,301	3,467	4,762	7,330
Detection [Member] \| Service Contracts [Member]
Revenue from contracts with customers	1,870	1,822	3,744	3,479
Detection [Member] \| Supply and Source Usage Agreements [Member]
Revenue from contracts with customers	0	0	0	0
Detection [Member] \| Disposable Applicators [Member]
Revenue from contracts with customers	0	0	0	0
Detection [Member] \| Other [Member]
Revenue from contracts with customers	0	0	0	0
Therapy [Member]
Revenue from contracts with customers	1,694	2,286	3,137	4,289
Therapy [Member] \| Direct Sales Force [Member]
Revenue from contracts with customers	1,124	703	2,179	1,519
Therapy [Member] \| OEM Partners [Member]
Revenue from contracts with customers	570	0	0	0
Therapy [Member] \| Channel Partners [Member]
Revenue from contracts with customers	0	1,583	958	2,770
Therapy [Member] \| Transferred at Point in Time [Member]
Revenue from contracts with customers	867	1,547	1,484	2,812
Therapy [Member] \| Transferred over Time [Member]
Revenue from contracts with customers	827	739	1,653	1,477
Therapy [Member] \| Product [Member]
Revenue from contracts with customers	343	1,008	626	1,705
Therapy [Member] \| Service Contracts [Member]
Revenue from contracts with customers	396	361	799	747
Therapy [Member] \| Supply and Source Usage Agreements [Member]
Revenue from contracts with customers	460	367	952	780
Therapy [Member] \| Disposable Applicators [Member]
Revenue from contracts with customers	459	463	685	878
Therapy [Member] \| Other [Member]
Revenue from contracts with customers	$ 36	$ 87	$ 75	$ 179

Note 3 - Revenue - Summary of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Receivables, which are included in ‘Trade accounts receivable’	$ 5,747	$ 8,898
Current contract assets, which are included in “Prepaid and other assets”	843	759
Non-current contract assets, which are included in “other assets”	0	15
Contract liabilities, which are included in “Deferred revenue”	$ 6,310	$ 6,758

Note 3 - Revenue - Summary of Changes in Deferred Revenue from Contracts with Customers (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Balance at beginning of period	$ 6,758
Deferral of revenue	4,909
Recognition of deferred revenue	(5,357)
Balance at end of period	$ 6,310

Note 4 - Net Loss Per Common Share - Calculation of Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Net loss	$ (1,750)	$ (3,118)	$ (5,528)	$ (6,663)
Shares used in the calculation of basic and diluted net loss per share (in shares)	25,261	25,185	25,261	25,172
Basic and diluted (in dollars per share)	$ (0.07)	$ (0.12)	$ (0.22)	$ (0.26)

Note 4 - Net Loss Per Common Share - Schedule of Anti-dilutive Shares Excluded From Computation of Diluted Net Loss Per Share (Details) - shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Antidilutive securities (in shares)	3,265,920	1,819,897
Share-Based Payment Arrangement, Option [Member]
Antidilutive securities (in shares)	3,265,920	1,819,897

Note 5 - Inventories (Details Textual) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Inventory Valuation Reserves	$ 262	$ 262

Note 5 - Inventory - Schedule of Current Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Raw materials	$ 1,679	$ 2,658
Work in process	20	101
Finished goods	2,811	2,892
Inventory gross	4,510	5,651
Inventory reserve	(262)	(262)
Inventory net	$ 4,248	$ 5,389

Note 6 - Goodwill (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Goodwill, Impairment Loss	$ 0	$ 0

Note 8 - Lease Commitments (Details Textual) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Operating Lease, Impairment Loss	$ 0	$ 0

Note 8 - Lease Commitments - Schedule of Components of Lease Expense (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)
Operating lease cost - Right of Use Asset	$ 116	$ 332
Cash paid from operating cash flows for operating leases	$ 161	$ 248
Weighted-average remaining lease term of operating leases (years) (Year)	3 years 6 months	3 years 6 months
Weighted-average discount rate for operating leases	7.00%	7.00%

Note 8 - Lease Commitments - Summary of Detained Information of Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
2023	$ 434
2024	846
2025	848
2026	749
2027	685
2028	172
Total lease payments	3,734
Less: effects of discounting	(612)
Total lease liabilities	3,122
Less: current portion of lease liabilities	644	$ 582
Long-term lease liabilities	$ 2,478	$ 2,803

Note 9 - Stockholders Equity (Details Textual)	3 Months Ended			6 Months Ended		12 Months Ended
Note 9 - Stockholders Equity (Details Textual)	Jun. 30, 2023 USD ($) shares	Mar. 31, 2023 USD ($)	Jun. 30, 2022 USD ($) shares	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($) shares	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) \| shares	562,774		1,103,916	1,103,916
Share-Based Payment Arrangement, Expense	$ 214,000		$ 309,000	$ 800,000	$ 964,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 1,400,000			$ 1,400,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)				1 year 8 months 1 day
Dividends, Common Stock				$ 0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares) \| shares	0			(0)
ESPP [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares) \| shares	950,000			950,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Maximum Employee Subscription Rate	15.00%			15.00%
Share-Based Compensation Arrangement by Share-Based Payment Award, Discount from Market Price, Offering Date				85.00%
Share Based Compensation Arrangement By Share Based Payment Award, Maximum Amount of Shares Per Employee				$ 25,000,000
Stock Issued During Period, Shares, Employee Stock Purchase Plans (in shares) \| shares			8,683		18,064
Employee Benefits and Share-Based Compensation			$ 12,000		$ 22,000
Four Grantees [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term (Year)		5 years
Modified Stock Options [Member]
Share-Based Payment Arrangement, Expense		$ 230,000
Modified Stock Options [Member] \| One Grantee [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Day)		24 months				90 days
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) \| shares	0		0
Restricted Stock [Member] \| Share-Based Payment Arrangement, Tranche One [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Day)				1 year
Restricted Stock [Member] \| Share-Based Payment Arrangement, Tranche Two [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Day)				1 year
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting, Number of Installments	3			3

Note 9 - Stockholders Equity - Stock-Based Compensation Expense Including Options and Restricted Stock by Category (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Allocated share-based compensation expense	$ 214	$ 309	$ 800	$ 964
Cost of Sales [Member]
Allocated share-based compensation expense	1	1	2	1
Engineering and Product Development [Member]
Allocated share-based compensation expense	59	70	132	138
Selling and Marketing Expense [Member]
Allocated share-based compensation expense	62	109	193	308
General and Administrative Expense [Member]
Allocated share-based compensation expense	$ 92	$ 129	$ 473	$ 517

Note 9 - Stockholders Equity - Options Granted under Company's Stock Incentive Plans, Valuation Assumptions and Fair Values (Details) - $ / shares	3 Months Ended	6 Months Ended		15 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023
Average risk-free interest rate	4.10%	4.14%	1.90%	2.56%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Expected life (in years) (Year)	3 years 1 month 6 days	3 years	3 years 6 months	3 years 6 months
Weighted average exercise price (in dollars per share)	$ 1.38	$ 1.76	$ 5.22	$ 5.19
Weighted average fair value (in dollars per share)	$ 0.76	$ 0.95	$ 2.46	$ 1.72
Minimum [Member]
Expected volatility	77.70%	72.70%	66.30%	69.70%
Maximum [Member]
Expected volatility	96.30%	96.30%	70.50%	70.50%

Note 9 - Stockholders Equity - Summary of Stock Option Activity for Stock Option Plan (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		15 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Dec. 31, 2022
Outstanding, shares (in shares)			2,610,992
Outstanding, weighted average exercise price (in dollars per share)			$ 7.54
Outstanding, aggregate intrinsic value	$ 969		$ 969		$ 969	$ 0
Granted, shares (in shares)	562,774	1,103,916	1,103,916
Weighted average exercise price (in dollars per share)	$ 1.38		$ 1.76	$ 5.22	$ 5.19
Granted, aggregate intrinsic value			$ 969
Exercised, shares (in shares)	0		0
Exercised, weighted average exercise price (in dollars per share)			$ 0
Exercised, aggregate intrinsic value			$ 0
Cancelled, shares (in shares)			(448,988)
Cancelled, weighted average exercise price (in dollars per share)			$ 7.80
Outstanding, shares (in shares)	3,265,920		3,265,920		3,265,920
Outstanding, weighted average exercise price (in dollars per share)	$ 5.61		$ 5.61		$ 5.61
Options Exercisable, shares (in shares)	2,042,460		2,042,460		2,042,460	1,619,855
Options Exercisable, weighted average exercise price (in dollars per share)	$ 7.13		$ 7.13		$ 7.13	$ 6.47
Options Exercisable, aggregate intrinsic value	$ 47		$ 47		$ 47	$ 0

Note 10 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
Note 10 - Income Taxes (Details Textual) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Expense (Benefit)	$ 4,000	$ (0)	$ 9,000	$ 1,000
Effective Income Tax Rate Reconciliation, Percent	1.00%	1.00%	1.00%	1.00%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent			21.00%	21.00%

Note 11 - Segment Reporting (Details Textual)	6 Months Ended
Note 11 - Segment Reporting (Details Textual)	Jun. 30, 2023
Number of Reportable Segments	2

Note 11 - Segment Reporting - Summary of Segment Revenues, Gross Profit, Segment Operating Income or Loss and Reconciliation of Segment Operating Income or Loss to GAAP Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Total Revenue	$ 5,865	$ 7,575	$ 11,643	$ 15,098
Total gross profit	4,349	5,491	8,478	10,803
Interest expense	0	0	0	(1)
Interest income	182	14	332	16
Other income (expense), net	(5)	(18)	(3)	(41)
Loss before income tax	(1,746)	(3,118)	(5,519)	(6,662)
Operating Segments [Member]
Total Revenue	5,865	7,575	11,643	15,098
Total gross profit	4,349	5,491	8,478	10,803
Segment operating income (loss)	984	(351)	(23)	(938)
General, administrative, depreciation and amortization expense	(2,907)	(2,763)	(5,825)	(5,698)
Interest expense	0	0	0	(1)
Interest income	182	14	332	16
Other income (expense), net	(5)	(18)	(3)	(41)
Loss before income tax	(1,746)	(3,118)	(5,519)	(6,662)
Detection [Member] \| Operating Segments [Member]
Total Revenue	4,171	5,289	8,506	10,809
Total gross profit	3,398	4,554	6,942	9,215
Segment operating income (loss)	391	446	267	1,068
Therapy [Member] \| Operating Segments [Member]
Total Revenue	1,694	2,286	3,137	4,289
Total gross profit	951	937	1,536	1,588
Segment operating income (loss)	$ 593	$ (797)	$ (290)	$ (2,006)

Note 12 - Commitments and Contingencies (Details Textual) $ in Millions	Jun. 30, 2023 USD ($)
Purchase Obligation	$ 5.5
Royalty Obligations [Member]
Other Commitment	$ 0.4

Note 13 - Restructuring (Details Textual) - USD ($) $ in Thousands		6 Months Ended
	Mar. 20, 2023	Jun. 30, 2023
Restructuring and Related Cost, Number of Positions Eliminated, Period Percent	28.00%
Restructuring and Related Cost, Number of Positions Eliminated	23
Restructuring and Related Cost, Expected Cost Remaining		$ 0
Employee Severance [Member]
Restructuring Costs		$ 200
Xoft Inc [Member]
Restructuring and Related Cost, Number of Positions Eliminated, Period Percent	50.00%
Restructuring and Related Cost, Number of Positions Eliminated	12

Note 13 - Restructuring - Accrual for Restructuring Charges (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Beginning Balance	$ 0
Charges	178
Cash payments	(110)
Ending Balance	$ 68

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