AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 4, 2005
REGISTRATION NO. 333-
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
iCAD, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 02-0377419
------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
4 Townsend West, Suite 17
Nashua, New Hampshire 03063
(603) 882-5200
--------------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
W. Scott Parr, Chief Executive Officer
iCAD, Inc.
4 Townsend West, Suite 17
Nashua, New Hampshire 03063
(603) 882-5200
--------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Ethan Seer, Esq.
Robert J. Mittman, Esq
Blank Rome LLP
405 Lexington Avenue
New York, New York 10174
Telephone (212 885-5000
Facsimile: (212) 885-5001
Approximate date of proposed commencement of sale to public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans please check the following box. |X|
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier registration
statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration for the same
offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
Calculation of Registration Fee
-----------------------------------------------------------------------------------------------------------------
Title of each class of Proposed Maximum Proposed Maximum
securities to Amount to be Aggregate Offering Aggregate Amount of Registration
be Registered Registered Price Per Unit Offering Price Fee(1)
-----------------------------------------------------------------------------------------------------------------
Common Stock $.01 2,897,333 $ 4.43(3) $12,835,185.19 $1510.70
par value (2)
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
(1) Includes 1,922,222 shares of common stock and 975,111 shares of common
stock issuable upon exercise of outstanding warrants. All of the shares of
common stock being registered hereby are being offered for the accounts of
selling shareholders who acquired such shares or warrants to acquire
shares in private transactions. Except as set forth in the footnotes
below, no other shares of the registrant's common stock are being
registered pursuant to this offering.
(2) Pursuant to Rule 416 of the Securities Act of 1933, there are also being
registered such additional shares as may be offered or issued to the
selling stockholders to prevent dilution resulting from stock dividends,
stock splits or similar transactions.
(3) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457 (c) of the Securities Act of 1933, as amended, the
registration fee for the shares has been calculated based upon the average
of the high and low prices, as reported by Nasdaq, for the registrant's
common stock as of December 27, 2004.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JANUARY 4, 2005
iCAD, INC.
2,897,333 SHARES OF COMMON STOCK
The selling stockholders listed on page 14 of this prospectus are offering
for resale up to 2,897,333 shares of common stock beneficially owned by them. We
will not receive any of the proceeds from the sale of the shares by the selling
stockholders. We will receive proceeds from any exercise for cash of warrants
made before any sale of any of the shares of common stock being offered under
this prospectus that are underlying warrants.
The common stock may be offered from time to time by the selling
stockholders through ordinary brokerage transactions in the over-the-counter
markets, in negotiated transactions or otherwise, at market prices prevailing at
the time of sale or at negotiated prices and in other ways as described in the
"Plan of Distribution".
Our common stock is listed on the Nasdaq SmallCap Market under the symbol
"ICAD". On December 29, 2004, the last sale price of our common stock as
reported by Nasdaq was $4.55 per share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. FOR MORE
INFORMATION, SEE "RISK FACTORS" BEGINNING ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is _______________, 2005
Table of Contents
Page
Forward-looking Statements.....................................................3
About iCAD, Inc................................................................3
Risk Factors...................................................................4
Use of Proceeds...............................................................13
Selling Stockholders..........................................................13
Plan of Distribution..........................................................15
Legal Matters.................................................................17
Experts.......................................................................17
Where You Can Find More Information...........................................17
Incorporation of Certain Documents By Reference...............................18
2
FORWARD-LOOKING STATEMENTS
Certain statements in this Registration Statement or the documents
incorporated by reference in this Registration Statement constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of iCAD, Inc. to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, those set
forth under the caption "Risk Factors." Forward-looking statements may be
indicated by the words "believe," "expect," "anticipate," "intend," and "plan"
and similar expressions, by context or otherwise. Readers are cautioned not to
place undue reliance on any of these forward-looking statements, which speak
only as of the date of the statement was made. iCAD, Inc. undertakes no
obligation to update any forward-looking statement.
ABOUT ICAD, INC.
Unless the context requires otherwise, reference in this prospectus to
"we", "us" ,"our", "iCAD", or "Company" refers to iCAD, Inc. and its
subsidiaries.
We design, develop and market computer-aided detection (CAD) imaging
technology and systems for the early detection of breast cancer and other
medical applications. Early detection of breast cancer can save lives and often
permits less costly, less invasive and less disfiguring cancer treatment options
than when the cancer is detected at a later stage.
iCAD, the only independent, integrated digitizer hardware and CAD Software
company offering CAD solutions for the early detection of breast cancer, also
manufactures medical film digitizers for a variety of medical imaging and other
applications.
iCAD was incorporated under the laws of the State of Delaware in 1984
under the name Howtek, Inc. and changed its name to iCAD, Inc. in June 2002. Its
principal executive offices are located at 4 Townsend West, Suite 17, Nashua,
New Hampshire 03603, and its telephone number is (603) 882-5200.
On December 31, 2003 we consummated our acquisition of Qualia Computing,
Inc., and its CADx Medical Systems, Inc. subsidiary.
On November 30, 2004 we announced the introduction of our Second Look
300(TM) System for the early detection of breast cancer, designed specifically
for clinics that perform less than 20 mammography procedures per day. We expect
shipments of this system to begin in the first quarter of 2005.
3
RISK FACTORS
We operate in a changing environment that involves numerous known and
unknown risks and uncertainties that could materially adversely affect our
operations. The following highlights some of the factors that have affected,
and/or in the future could affect, our operations.
OUR BUSINESS IS SUBJECT TO A NUMBER OF RISKS INCLUDING THE RISKS SET FORTH
BELOW.
WE HAVE INCURRED SIGNIFICANT LOSSES AND WE MAY NOT BE ABLE TO ACHIEVE AND
SUSTAIN FUTURE PROFITABILITY.
As of September 30, 2004, we have incurred losses in excess of $73 million
in the aggregate since our inception, including a net loss of approximately $8.5
million during the year ended December 31, 2003. We reported net income of
$366,049 in the three months ended September 30, 2004 and net losses of
$1,486,894 in the nine months ended September 30, 2004. There can be no
assurance that we will be able to achieve and sustain future profitability.
OUR MEDICAL DIGITIZER BUSINESS HAS BEEN ADVERSELY AFFECTED BY OUR ACQUISITION
AND COMMERCIALIZATION OF A CAD PRODUCT LINE.
Prior to acquisition of a CAD product line, we promoted our medical
digitizer line to a variety of current and prospective customers offering or
seeking to offer their own CAD products. With the acquisition of a CAD product
line, we have entered into a competitive or potentially competitive position
with respect to such prospective customers, which has, in some cases, led
prospective customers to seek alternative suppliers of medical digitizers.
Moreover, since June 2002 our sales and marketing efforts have concentrated on
CAD products and we have limited development and support of our medical
digitizer product channels during this time. There can be no assurance that our
sales and marketing efforts will result in increased sales of CAD products or
that sales of our medical digitizer products will not continue to decline.
WE MAY NEED ADDITIONAL FINANCING TO IMPLEMENT OUR STRATEGY AND EXPAND OR FINANCE
OUR BUSINESS.
We may need additional debt or equity financing beyond any amounts
generally available to us to pursue our strategy and increase sales in the
medical markets or to finance our business. Any additional financing that we
need may not be available at all and, if available, may not be available on
terms that are acceptable to us. Our failure to obtain any additional financing
on a timely basis, or on economically favorable terms, could prevent us from
continuing our strategy or from responding to changing business or economic
conditions, and could cause us to experience difficulty in withstanding adverse
operating results or competing effectively.
BECAUSE A PORTION OF OUR SALES ARE OUTSIDE THE UNITED STATES, WE ARE SUBJECT TO
ADDITIONAL RISKS, INCLUDING DEVALUATIONS OF FOREIGN CURRENCIES, INSTABILITY IN
KEY GEOGRAPHIC MARKETS, TARIFFS AND OTHER TRADE BARRIERS WHICH ARE NOT WITHIN
OUR CONTROL.
4
Our international sales subject us to the risk of loss in the event of
devaluation of foreign currencies in which sales are made between the time of
contract and payment. We do not enter into currency hedging transactions. In
addition, our international sales would be adversely affected by political,
social or economic instability or the imposition of tariffs and other trade
barriers in the geographic markets in which we sell our products.
BECAUSE WE FACE INTENSE COMPETITION FOR OUR PRODUCTS, PRICE DISCOUNTING OFTEN
OCCURS AND MAY ADVERSELY AFFECT OUR OPERATING RESULTS.
We compete with a variety of companies for sales of our medical imaging
products. As a result, discounting among manufacturers and distributors of our
products is intense. Increased price discounting could adversely affect our
gross margins and operating results. We may not be able to effectively compete
in the future and we may be required to discount our products to increase sales.
OUR PRODUCTS MAY BECOME OBSOLETE.
Our ability to compete effectively will depend, in large part, on our
ability to offer state of the art products. Our competitors might develop and
sell new products that are technically superior to our current product line that
could result in our inability to sell existing products or our inability to sell
our products without offering a significant discount. We cannot give any
assurance that our products will not become obsolete in the future or that we
will be able to upgrade our product line or introduce new products if required.
WE DEPEND UPON A LIMITED NUMBER OF SUPPLIERS AND MANUFACTURERS FOR OUR PRODUCTS,
AND CERTAIN COMPONENTS IN OUR PRODUCTS MAY BE AVAILABLE FROM A SOLE OR LIMITED
NUMBER OF SUPPLIERS.
Our products are generally either manufactured and assembled for us by a
sole manufacturer, by a limited number of manufacturers or assembled by us from
supplies we obtain from a limited number of suppliers. Critical components
required to manufacture these products, whether by outside manufacturers or
directly, may be available from a sole or limited number of component suppliers.
We generally do not have long-term arrangements with any of our manufacturers or
suppliers. The loss of a sole or key manufacturer or supplier would impair our
ability to deliver products to customers in a timely manner and would adversely
affect our sales and operating results. Our business would be harmed if any of
our manufacturers or suppliers could not meet our quality and performance
specifications and quantity and timing requirements.
PROVISIONS OF OUR CORPORATE CHARTER DOCUMENTS AND DELAWARE LAW COULD DELAY OR
PREVENT A CHANGE OF CONTROL.
Our certificate of incorporation authorizes our board of directors to
issue up to 1,000,000 shares of preferred stock. The preferred stock may be
issued in one or more series, the terms of which may be determined at the time
of issuance by our board of directors, without further action by stockholders,
and may include, among other things, voting rights (including the right to vote
as a series on particular matters), preferences as to dividends and liquidation,
conversion and redemption rights, and sinking fund provisions. There are two
series of preferred stock currently outstanding which have dividend and
liquidation preferences over our common stock. In addition, specific rights
granted to future holders of preferred stock could be used to restrict our
ability to merge with, or sell our assets to a third party. In addition, our
certificate of incorporation provides for the classification of our board of
directors into three classes, as nearly equal in number as possible. One class
of directors is elected at each annual meeting to serve a term of three years.
At least two annual meetings of stockholders, instead of one, will be required
to effect a change in a majority of our board of directors. The ability of our
board of directors to issue preferred stock and the classification of our board
into three separate classes, could discourage, delay, or prevent a takeover of
us thereby preserving control by the current stockholders.
5
As a Delaware corporation, we are subject to the General Corporation Law
of the State of Delaware, including Section 203, an anti-takeover law enacted in
1988. In general, Section 203 restricts the ability of a public Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder. Subject to exceptions, an
interested stockholder is a person who, together with affiliates and associates,
owns, or within three years did own, 15% or more of a corporation's voting
stock. As a result of the application of Section 203, potential acquirers may be
discouraged from attempting to acquire us, thereby possibly depriving our
stockholders of acquisition opportunities to sell or otherwise dispose of our
stock at above-market prices typical of acquisitions.
THE PRICE OF OUR COMMON STOCK COULD BE VOLATILE.
Our common stock is quoted on the Nasdaq SmallCap Market and has
experienced, and is likely to experience in the future, significant price and
volume fluctuations which could adversely affect the market price of our common
stock without regard to our operating performance. In addition, the trading
price of our common stock could be subject to significant fluctuations in
response to actual or anticipated variations in our quarterly operating results,
announcements by us or our competitors, factors affecting the medical imaging
industry generally, changes in national or regional economic conditions, changes
in securities analysts' estimates for our competitors' or industry's future
performance or general market conditions. The market price of our common stock
could also be affected by general market price declines or market volatility in
the future or future declines or volatility in the prices of stocks for
companies in our industry.
WE ARE SUBJECT TO EXTENSIVE REGULATION WITH POTENTIALLY SIGNIFICANT COSTS FOR
COMPLIANCE.
The iCAD system for computer aided detection of breast cancer is a
software-based medical device subject to extensive regulation by the FDA under
the Federal Food, Drug, and Cosmetic Act. The FDA's regulations govern, among
other things, product development, product testing, product labeling, product
storage, pre-market clearance or approval, advertising and promotion, and sales
and distribution. Unanticipated changes in existing regulatory requirements or
adoption of new requirements could adversely affect our business, financial
condition and results of operations.
The FDA's Quality System Regulation requires that our manufacturing
operations follow elaborate design, testing, control, documentation and other
quality assurance procedures during the manufacturing process. We are subject to
FDA regulations covering labeling regulations, adverse event reporting, and the
FDA's general prohibition against promoting products for unapproved or off-label
uses.
6
Our manufacturing facilities are subject to periodic unannounced
inspections by the FDA and corresponding state agencies and international
regulatory authorities for compliance with extensive regulatory requirements.
Although we believe our manufacturing facilities are currently in compliance
with applicable requirements, there can be no assurance that the FDA, following
an inspection of these manufacturing facilities, would determine that they are
in full compliance. Our failure to fully comply with applicable regulations
could result in the issuance of warning letters, non-approvals, suspensions of
existing approvals, civil penalties and criminal fines, product seizures and
recalls, operating restrictions, injunctions, and criminal prosecution.
In order to market and sell our CAD products in certain countries outside
of the United States we must obtain and maintain regulatory approvals and comply
with the regulations of those countries. These regulations, including the
requirements for approvals, and the time required for regulatory review, vary
from country to country. Obtaining and maintaining foreign regulatory approvals
is an expensive and time consuming process. We cannot be certain that we will be
able to obtain the necessary regulatory approvals timely or at all in any
foreign country in which we plans to market our CAD products, and if we fail to
receive such approvals, our ability to generate revenue may be significantly
diminished.
WE MAY NOT BE ABLE TO OBTAIN REGULATORY APPROVAL FOR ANY OF THE OTHER PRODUCTS
THAT WE MAY CONSIDER DEVELOPING.
We have received FDA approvals only for our currently offered CAD
products. Before we are able to commercialize any other product, we must obtain
regulatory approvals for each indicated use for that product. The process for
satisfying these regulatory requirements is lengthy and will require us to
comply with complex standards for research and development, testing,
manufacturing, quality control, labeling, and promotion of products.
OUR PRODUCTS MAY BE RECALLED EVEN AFTER THEY HAVE RECEIVED FDA APPROVAL OR
CLEARANCE.
If the safety or efficacy of our products are called into question, the
FDA and similar governmental authorities in other countries may require us to
recall our products. This is true even if our products have previously received
approval or clearance by the FDA or a similar governmental body. Such a recall
could be the result of component failures, manufacturing errors or design
defects, including defects in labeling. Such a recall would divert the focus of
our management and our financial resources and could materially and adversely
affect our reputation with customers.
CHANGES IN REIMBURSEMENT PROCEDURES BY MEDICARE OR OTHER THIRD-PARTIES MAY
ADVERSELY AFFECT OUR BUSINESS.
In the United States, Medicare and a number of commercial third-party
payers provide reimbursements for the use of CAD in connection with mammography
screening and diagnostics. In the future, however, these reimbursements may be
unavailable or inadequate due to changes in applicable legislation or
regulations, changes in attitudes toward the use of mammograms for broad
screening to detect breast cancer or due to changes in the reimbursement
policies of third-party payers. As a result, healthcare providers may be
unwilling to purchase our CAD products or any of our future products, which
could significantly harm our business, financial condition and operating
results.
7
Reimbursements and health insurance systems in markets outside of the
United States vary from country to country. If we are unable to qualify our
products for reimbursement outside of the United States, we may not be able to
gain international market acceptance for our products, even if we promote such
products at reduced margins in an effort to achieve sales.
There is no guaranty that any of the products which we contemplate
developing will become eligible for reimbursements or health insurance coverage
in the United States or abroad at favorable rates or even at all or maintain
eligibility.
THE SALES CYCLE FOR OUR PRODUCTS IS LENGTHY AND UNPREDICTABLE AND OUR QUARTERLY
RESULTS WILL BE UNPREDICTABLE.
Many of the customers of our medical imaging products are institutional
organizations, such as hospitals, with significant purchasing power and cyclical
ordering practices. Although our CAD systems are in many cases less expensive
than the devices of our competitors, the purchase of the iCAD CAD system
requires a material capital expenditure that will likely require approval of our
customers' senior management and result in a lengthy sales and purchase order
cycle. Consequently, we may be unable to accurately estimate our manufacturing
and support requirements. Our larger institutional customers may also demand
discounted prices on our products. As a result, our actual sales may differ
significantly from our estimated sales and we may incorrectly allocate our
resources. If we are unable to accurately project sales and allocate
corresponding resources, we may incur substantial fluctuations in our operating
results for any given quarter.
Even if we are able to achieve profitability in future fiscal periods, it
may occur in a quarter with concentrated revenue. In that case, we would expect
reduced revenue in the following quarter or quarters, and possibly a quarterly
loss or quarterly losses. As a result, stockholders may not be able to rely upon
our operating results in any particular period as an indication of future
performance.
Historically, a very high percentage of our quarterly sales are made
during the final month of each quarter, and often during the final weeks or days
of the quarter. If any weather, natural disaster or other event interfered with,
impeded or delayed completion of sales and shipments at the end of a quarter, we
would be materially and adversely affected. For these reasons, among others, we
are unable to determine quarterly performance, or to anticipate shortfalls or
overachievement of quarterly plans and projections with any assurance in advance
of completion of each quarter.
8
OUR CAD PRODUCTS ARE DISTRIBUTED THROUGH MANUFACTURERS AND DEVELOPERS OF MEDICAL
IMAGING HARDWARE AND SOFTWARE, WHOSE DECISION TO OFFER A PRODUCT OTHER THAN OURS
WOULD ADVERSELY EFFECT OUR BUSINESS.
Our CAD products for use in digital mammography are distributed and sold
through manufacturers of digital mammography equipment, and we anticipate our
CAD solutions for other cancers may be sold through manufacturers or developers
of medical imaging hardware and software. In the event these resellers elect to
offer a competitor's CAD solution, to develop and offer a CAD solution
internally or to acquire our competitor or another CAD solutions developer and
offer those products in lieu of our products, our financial results and growth
opportunities would be adversely effected.
THE MEDICAL EQUIPMENT INDUSTRY IS LITIGIOUS. WE HAVE IN THE PAST BEEN AND MAY IN
THE FUTURE BE SUED FOR ALLEGEDLY VIOLATING THE INTELLECTUAL PROPERTY RIGHTS OF
OTHERS.
The medical technology industry is characterized by a substantial amount
of litigation and related administrative proceedings regarding patents and
intellectual property rights. In addition, major medical software and device
companies have used litigation against emerging growth companies as a means of
gaining a competitive advantage.
Should third parties file patent applications or be issued patents
claiming technology also claimed by us in pending applications, we may be
required to participate in interference proceedings in the U.S. Patent and
Trademark Office to determine the relative priorities of our inventions and the
third parties' inventions. We could also be required to participate in
interference proceedings involving any patents which may be issued to us and
pending applications of another entity. An adverse outcome in an interference
proceeding could require us to cease using the technology or to license rights
from prevailing third parties.
We are also aware of third parties whose business involves the use of CAD
systems. Certain of these parties have issued patents or pending patent
applications on technology that they may assert against us. There may be other
patent rights of which we are presently unaware. Third parties may claim we are
using their patented inventions and may go to court to stop us from engaging in
our normal operations and activities. These lawsuits are expensive to defend and
conduct and would also consume and divert the time and attention of our
management. A court may decide that we are infringing a third party's patents
and may order us to cease the infringing activity. The court could also order us
to pay damages for the infringement. These damages could be substantial and
could harm our business, financial condition and operating results.
If we are unable to obtain any necessary license following a determination
of infringement or an adverse determination in litigation or in interference or
other administrative proceedings, we would have to redesign our products to
avoid infringing a third party's patent and could temporarily or permanently
have to discontinue manufacturing and selling some of our products. If this were
to occur, it would negatively impact future revenue and would have a material
adverse effect on our business, financial condition and results of operations.
9
WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS AND, CONSEQUENTLY,
OUR COMPETITORS MAY BENEFIT FROM OUR EFFORTS AND COMPETE DIRECTLY AGAINST US.
Presently, patent applications have been filed for aspects of the
proprietary technology employed by us in our CAD and medical digitizer products.
Our patent applications, or any patents which may be issued to us, may be
challenged, invalidated or circumvented by third parties. Any patent ultimately
issued to us may not be in a form that will be beneficial to us. To the extent
that we are unable to adequately protect any of the intellectual property used
in connection with our current or any future products, competitors may take
advantage of the situation and produce competing products, which could harm our
competitive position and ultimately harm its operating results.
We also rely on a combination of copyright, trade secret and trademark
laws, and nondisclosure, confidentiality agreements and other contractual
restrictions to protect our proprietary technology. However, these legal means
afford only limited protection and may not adequately protect our rights or
permit us to gain or keep any competitive advantage. We may not be able to
prevent the unauthorized disclosure or misappropriation of our technical
knowledge or other trade secrets by employees. If that were to occur, our
proprietary technologies and software applications would lose value and our
business, results or operations and financial condition could be materially
adversely affected.
Adverse events could undermine our efforts to protect our intellectual
property. Our competitors may be able to develop competing technologies or
products that do not infringe any of our intellectual property rights. Even if a
competitor infringes our intellectual property rights, we may be unable to
bring, or prevail in, a suit to protect our rights.
Furthermore, the laws of some foreign countries may not adequately protect
our intellectual property rights. As a result of all of these factors, our
efforts to protect our intellectual property may not be adequate, and our
competitors may independently develop similar competing technologies or
products, duplicate our products, or design around our intellectual property
rights. This would harm our competitive position, decrease our market share, or
otherwise harm our business.
WE MAY BE UNABLE TO SECURE LICENSES FOR ANY TECHNOLOGY WHICH MAY BE NECESSARY TO
IMPROVE CURRENT OR FUTURE PRODUCTS.
It is likely that the technology underlying our existing and planned
products may be fundamentally improved and that the resulting technology may be
owned by third parties. As a result, we may be required to obtain licenses to
this new technology to improve our current or future products. The cost of
licensing such technology may significantly increase the unit cost of our
products.
We may be unable to obtain favorable terms for licenses for this new
technology or, alternatively, the owners of the technology may refuse to license
it to us in order to maintain their own competitive advantage. In either case,
our products may not be competitive with the products manufactured by others.
Even if we were able to obtain rights to a third party's patented intellectual
property, these rights may be non-exclusive, thereby giving our competitors
access to the same intellectual property.
10
SOME STUDIES HAVE QUESTIONED THE EFFICACY OF USING MAMMOGRAPHY AS A METHOD TO
REDUCE MORTALITY. IF MAMMOGRAPHY PROVES TO BE LESS EFFECTIVE, OUR BUSINESS WOULD
BE SERIOUSLY HARMED. IN ADDITION, COMPETING TECHNOLOGIES COULD REPLACE
MAMMOGRAPHY AS THE PREFERRED METHOD FOR SCREENING FOR BREAST CANCER.
We are aware that the efficacy of screening mammography to reduce
mortality has been questioned in several publications. Even if unproven, this
could lead to a reduction in the use of mammography as a tool to detect breast
cancer in the United States and abroad. If mammography is ultimately proven to
be ineffective, or if recommendations for regular mammograms were eliminated or
reduced, our business would certainly be seriously harmed.
We are also aware of companies that are developing alternatives to
traditional breast cancer detection, including refractive light, thermal
technologies, breast ultrasound, magnetic resonance imaging and non-imaging
tests.
WE MAY BE EXPOSED TO SIGNIFICANT PRODUCT LIABILITY FOR WHICH WE MAY NOT BE ABLE
TO PROCURE SUFFICIENT INSURANCE COVERAGE.
Our business exposes us to potential product liability risks which are
inherent in the testing, manufacturing, marketing and sale of medical imaging
software and devices. If available at all, product liability insurance for the
medical software and device industry generally is expensive. Currently, we have
liability insurance coverage which we deem appropriate for our current stage of
development. No assurance can be given that this level of coverage will be
adequate or that adequate insurance coverage will be available in sufficient
amounts or at a reasonable cost in the future, or that a product liability claim
would not have a material adverse effect on us.
WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR CURRENT BUSINESS MODEL OR
EFFECTIVELY MANAGE OUR GROWTH.
We only commenced generating revenue from the sale of MammoReaderTM, our
first CAD product, in 2002. Sales of our products may not generate sufficient
cash to support our future operations. There can be no assurance that adequate
funds for our operations, whether from our revenues, financial markets,
collaborative or other arrangements with corporate partners, if any, or from
other sources, will be available when needed or on terms attractive to us. The
inability to obtain sufficient funds may require us to delay, scale back or
eliminate some or all of our development activities, clinical studies and/or
regulatory activities or to license third parties to commercialize products or
technologies that we would otherwise seek to internally develop. No assurance
can be given that any future technologies or products that may be developed by
us will be successfully developed, commercialized or accepted by the marketplace
or that sufficient revenues will be realized to support our operations or future
research and development programs.
To address these risks, we must, among other things, establish, maintain
and increase our relationships with radiologists and other members of the health
care industry, implement and successfully execute our business and marketing
strategies, respond to competitive developments, and attract, retain and
motivate qualified personnel. There can be no assurance that we will be
successful in addressing such risks, and the failure to do so could have a
material adverse effect on our business, financial condition and results of
operations.
11
OUR FUTURE PROSPECTS DEPEND ON OUR ABILITY TO RETAIN CURRENT KEY EMPLOYEES AND
ATTRACT ADDITIONAL QUALIFIED PERSONNEL.
Our success depends in large part on the abilities and continued service
of our executive officers and other key employees. We may not be able to retain
the services of our executive officers and other key employees. The loss of
executive officers or other key personnel could have a material adverse effect
on us.
In addition, in order to support our continued growth, we will be required
to effectively recruit, develop and retain additional qualified personnel. If we
are unable to attract and retain additional necessary personnel, it could delay
or hinder our plans for growth. Competition for such personnel is intense, and
there can be no assurance that we will be able to successfully attract,
assimilate or retain sufficiently qualified personnel. The failure to retain and
attract necessary personnel could have a material adverse effect on our
business, financial condition and results of operations.
SOME OF OUR COMPETITORS HAVE SIGNIFICANTLY GREATER RESOURCES AND MAY PREVENT US
FROM ACHIEVING OR MAINTAINING SIGNIFICANT MARKET SHARE. AS THE MARKET FOR CAD
GROWS, COMPETITION FOR MAMMOGRAPHY PRODUCTS WILL LIKELY INCREASE.
The medical equipment market is highly competitive and changes rapidly.
Competitors in this market are highly sensitive to the introduction of new
products and competitors. Other well known medical imaging equipment
manufacturers have explored the possibility of introducing their own versions of
CAD products into the market. Because many of these companies have significantly
greater resources than we have, they may be able to respond more quickly to the
evolving and emerging technologies in the market and they may be better suited
to respond the changing needs of their customers. The financial strength of many
of these companies may enable them to develop their own proprietary CAD products
or acquire our competitors to bring competing products to market more quickly.
Additionally, some of these companies benefit from name recognition, established
relationships with healthcare professionals, diversified product lines,
established distribution channels, and greater product development,
manufacturing, and sales and marketing resources.
We currently face direct competition from R2 Technology, Inc. which has
received FDA approval to market its CAD systems for use in mammography screening
and diagnostics and in lung cancer detection. Kodak, Inc. has recently received
FDA approval for it to market a mammography CAD solution. Other vendors and
competitors may market this competing Kodak product now that it has received FDA
approval. We also expect that other potential manufacturers will receive FDA
approval to market competing CAD products in the future. We expect that as the
market for CAD grows, other competitors may seek to introduce CAD products
priced even lower than ours. Customers seeking a low-cost CAD solution may
prefer a competitor's lower-priced product to our own and may result in pricing
cutting by us which will reduce our profit margin.
12
FUTURE SALES OF SHARES OF OUR COMMON STOCK COULD AFFECT THE MARKET PRICE OF OUR
COMMON STOCK AND OUR ABILITY TO RAISE ADDITIONAL CAPITAL.
We have previously issued a substantial number of shares of common stock,
which are eligible for resale under Rule 144 of the Securities Act, and may
become freely tradable. In addition, shares of our common stock issuable upon
exercise of our outstanding convertible preferred stock and a substantial
portion of the shares of common stock issuable upon conversion of our
convertible debt are also eligible for sale under Rule 144. We have also
registered a substantial number of shares of common stock that are issuable upon
the exercise of options. If holders of options choose to exercise their purchase
rights and sell shares of common stock in the public market, or if holders of
currently restricted common stock or common stock issuable upon conversion of
our preferred stock or convertible debt choose to sell such shares of common
stock in the public market under Rule 144 or otherwise, or if the selling
stockholders whose shares are being offered pursuant to this prospectus sell or
attempt to publicly sell such shares all at once or in a short time period, the
prevailing market price for our common stock may decline. Future public sales of
shares of common stock may adversely affect the market price of our common stock
or our future ability to raise capital by offering equity securities.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares of our common
stock by the selling stockholders named in this prospectus. Any proceeds we
receive from any exercise for cash by the selling stockholders of warrants held
by them will be used for working capital.
We have agreed to pay certain expenses in connection with the registration
of the shares being offered by the selling stockholders.
SELLING STOCKHOLDERS
Based on information provided by the selling stockholders, the following
table sets forth certain information regarding the selling stockholders.
The table below assumes for calculating each selling stockholder's
beneficial and percentage ownership that options, warrants or convertible
securities that are held by such stockholder (but not held by any other person)
and are exercisable within 60 days from the date of this prospectus have been
exercised and converted. The table also assumes the sale of all of the shares
being offered.
13
Common Stock Beneficially
Owned After the Offering(1)
Number of Shares of -------------------------------
Common Stock
Beneficially Owned Shares Number Percent of
Selling Security Holder Prior to the Offering Being Offered of Shares Outstanding Shares
----------------------- --------------------- ------------- --------- ------------------
John Maclean Arnott 333,333 333,333 0 0
Iroquois Capital, LP (2) 666,666 666,666 0 0
Omicron Master Trust (3) 666,666 666,666 0 0
Caledonian Bank and Trust as Trustee for 975,000 975,000 0 0
Sofaer Global Hedge Fund (4)
Robert Kassel 83,334 83,334 0 0
Horst J. Pudwill 83,334 83,334 0 0
Cirtronics Corporation (5) 50,000 50,000 0 0
ColorByte, Inc. (6) 7,000 7,000 0 0
R. Jerry Falkner 53,000 32,000 21,000 *
---------------
* Less than one percent
(1) We do not know when or in what amounts the selling stockholders may offer
for sale the shares of common stock pursuant to this offering. The selling
stockholders may choose not to sell any of the shares offered by this
prospectus. Because the selling stockholders may offer all or some of the
shares of common stock pursuant to this offering we cannot estimate the
number of shares of common stock that the selling stockholders will hold
after completion of the offering. For purposes of this table, we have
assumed that the selling stockholders will have sold all of the shares
covered by this prospectus upon the completion of the offering and that
the selling stockholders will not have entered into any other transactions
with respect to our securities.
(2) Joshua Silverman, a partner of Iroquois Capital, LP has voting control and
investment discretion over securities held by Iroquois Capital, LP. Mr.
Silverman disclaims beneficial ownership of the shares held by Iroquois
Capital, LP.
(3) Omicron Capital, L.P., a Delaware limited partnership ("Omicron Capital"),
serves as investment management to Omicron Master Trust, a trust formed
under the laws of Bermuda ("Omicron"); Omicron Capital, Inc., a Delaware
corporation, ("OCI"), serves as general, partner of Omicron Capital, and
Winchester Global Trust Company Limited ("Winchester") serves as the
trustee of Omicron. By reason of such relationships, Omicron Capital and
OCI may be deemed to share dispositive power over the shares of our common
stock owned by Omicron, and Winchester may be deemed to share voting and
dispositive power over the shares of our common stock owned by Omicron.
Omicron Capital, OCI and Winchester disclaim beneficial ownership of such
shares of our common stock. Omicron Capital has delegated authority from
the board of directors of Winchester regarding the portfolio management
decisions with respect to the shares of common stock owned by Omicron and,
as of April 21, 2003, Mr. Olivier H. Morali and Mr. Bruce T. Bernstein,
officers of OCI, have delegated authority from the board of directors of
OCI regarding the portfolio management decisions of Omicron Capital with
respect to the shares of common stock owned by Omicron. By reason of such
delegated authority, Messrs. Morali and Bernstein may be deemed to share
dispositive power over the shares of our common stock owned by Omicron.
Messrs. Morali and Bernstein disclaim beneficial ownership of such shares
of our common stock and neither of such persons has any legal right to
maintain such delegated authority. No other person has sole or shared
voting or dispositive power with respect to the shares of our common stock
being offered by Omicron, as those terms are used for purposes under
Regulation 13D-G of the Securities Exchange Act of 1934, as amended.
Omicron and Winchester are not "affiliates" of one another, as that term
is used for purposes of the Securities Exchange Act of 1934, as amended,
or of any other person named in this prospectus as a selling stockholder.
No person, or "group" (as that term, is used in Section 13(d) of the
Securities Exchange Act of 1934, as amended, or the SEC's Regulation,
13D-G) controls Omicron, and Winchester.
14
(4) Voting and/or investment power over these shares are held by Michael
Sofaer and Tim Whyte in their capacities as investment advisers.
(5) Each of Gerardine Gerlins, the President of Cirtronics Corporation, Kevin
Longley, its Vice President and George Mandragouras, its Chief Financial
Officer, have voting and investment power over these shares.
(6) Each of Mark Dale, the Chief Executive Officer of ColorByte, Inc. and John
Pannozzo, its President, have voting and investment powers over these
shares.
PLAN OF DISTRIBUTION
All costs, expenses and fees in connection with the registration of the
shares offered by this prospectus shall be borne by us. Brokerage costs, if any,
attributable to the sale of shares will be borne by the selling stockholder.
Subject to certain contractual restrictions noted above, the shares may be
sold by the selling stockholder by one or more of the following methods:
o under a 10b5-1 trading plan;
o block trades in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and
resell a portion of the shares as principal to facilitate the
transaction;
o purchases by a broker or dealer as principal and resale by
such broker dealer for its account pursuant to this
prospectus;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o through put and call options relating to the shares;
o negotiated transactions;
o a combination of any such methods of sale at market prices
prevailing at the time of the sale or at negotiated prices;
and
o any other method permitted pursuant to applicable law.
15
The transactions described above may or may not involve brokers or
dealers.
The selling stockholders will not be restricted as to the price or prices
at which the selling stockholders may sell their shares. Sales of shares by the
selling stockholders may depress the market price of our common stock since the
number of shares which may be sold by the selling stockholders is relatively
large compared to the historical average weekly trading of our common stock.
Accordingly, if the selling stockholders were to sell, or attempt to sell, all
of such shares at once or during a short time period, we believe such a
transaction could adversely affect the market price of our common stock.
From time to time a selling stockholder may pledge its shares under margin
provisions of customer agreements with its brokers or under loans with third
parties. Upon a default by the selling stockholder, the broker or such third
party may offer and sell any pledged shares from time to time.
In effecting sales, brokers and dealers engaged by a selling stockholder
may arrange for other brokers or dealers to participate in the sales as agents
or principals. Brokers or dealers may receive commissions or discounts from the
selling stockholder or, if the broker-dealer acts as agent for the purchaser of
such shares, from the purchaser in amounts to be negotiated, which compensation
as to a particular broker dealer might be in excess of customary commissions
which are not expected to exceed those customary in the types of transactions
involved. Broker-dealers may agree with the selling stockholder to sell a
specified number of such shares at a stipulated price per share, and to the
extent the broker-dealer is unable to do so acting as agent for a selling
stockholder, to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer commitment to the selling stockholder. Broker-dealers
who acquire shares as principal may then resell those shares from time to time
in transactions
o in the over-the counter market or otherwise;
o at prices and on terms prevailing at the time of sale;
o at prices related to the then-current market price; or
o in negotiated transactions.
These resales may involve block transactions or sales to and through other
broker-dealers, including any of the transactions described above. In connection
with these sales, these broker-dealers may pay to or receive from the purchasers
of those shares commissions as described above. The selling stockholders may
also sell the shares in open market transactions under Rule 144 under the
Securities Act, rather than under this prospectus.
The selling stockholders and any broker-dealers or agents that participate
with the selling stockholders in sales of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with these
sales. In this event, any commissions received by these broker-dealers or agents
and any profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
16
The selling stockholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the shares
against certain liabilities, including liabilities arising under the Securities
Act.
The selling stockholders are subject to applicable provisions of the
Securities Exchange Act of 1934 and the SEC's rules and regulations, including
Regulation M, which provisions may limit the timing of purchases and sales of
the shares by the selling stockholders.
o In order to comply with certain states' securities laws, if applicable,
the shares may be sold in those jurisdictions only through registered or
licensed brokers or dealers. In certain states the shares may not be sold
unless the shares have been registered or qualified for sale in such
state, or unless an exemption from registration or qualification is
available and is obtained.
LEGAL MATTERS
Blank Rome LLP of New York, New York will pass upon the validity of the
shares of common stock being offered by this prospectus.
EXPERTS
The financial statements and schedule of iCAD, Inc. incorporated by
reference in this prospectus have been audited by BDO Seidman, LLP, independent
certified public accountants, to the extent, and for the periods set forth in
their reports incorporated herein by reference, and are incorporated herein in
reliance upon such reports given upon the authority of such firm as experts in
auditing and accounting.
The Financial statements of Qualia Computing, Inc., incorporated by
reference to iCAD's Current Report on Form 8-K/A for the event dated December
31, 2003 have been audited by Brady Ware & Schoenfeld, Inc., independent
certified public accountants and have been so incorporated by reference herein
upon the reporting of such firm given upon its authority as experts in
accounting and auditing.
The financial statements of Intelligent System Software, Inc.,
incorporated by reference to iCAD's Current Report on Form 8-K for the event
dated June 28, 2002 have been audited by Grant Thornton LLP, independent
certified public accountants and have been so incorporated by reference herein
upon the report of such firm given upon its authority as experts in accounting
and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and we file reports and other information with the SEC.
17
You may read and copy any of the reports, statements, or other information
we file with the SEC at the SEC's Public Reference Section at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. Information on the operation
of the Public Reference Room may be obtained by calling the SEC at
1-800-SEC-0330. The SEC maintains a Web site at http://www.sec.gov that contains
reports, proxy statements and other information regarding issuers that file
electronically with the SEC. The Nasdaq Stock Market maintains a Web site at
http://www.nasdaq.com that contains reports, proxy statements and other
information filed by us.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We have filed with the SEC, Washington, D.C., a registration statement on
Form S-3 under the Securities Act of 1933, covering the securities offered by
this prospectus. This prospectus does not contain all of the information that
you can find in our registration statement and the exhibits to the registration
statement. Statements contained in this prospectus as to the contents of any
contract or other document referred to are not necessarily complete and in each
instance such statement is qualified by reference to each such contract or
document filed or incorporated by reference as an exhibit to the registration
statement.
The SEC allows us to "incorporate by reference" the information we file
with them. This means that we can disclose important information to you by
referring you to other documents that are legally considered to be part of this
prospectus, and later information that we file with the SEC will automatically
update and supersede the information in this prospectus and the documents listed
below. We incorporate by reference the documents listed below, and any future
filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until the selling stockholders sell all the
shares.
1. Our Annual Report on Form 10-K for the fiscal year ended December 31,
2003;
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2004;
3. Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2004;
4. Our Quarterly Report on Form 10-Q for the quarter ended September 30,
2004;
5. Our Current Report on Form 8-K filed with the SEC on December 20, 2004;
6. Our Current Report on Form 8-K filed with the SEC on October 10, 2004;
7. Our Current Report on Form 8-K/A filed with the SEC on March 15, 2004;
8. Our Current Report on Form 8-K filed with the SEC on January 15, 2004;
9. Our Current Report on Form 8-K filed with the SEC on July 15, 2002;
10. The description of our common stock contained in our registration
statements on Form 8-A filed with the SEC and any amendments thereto;
18
11. All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 subsequent to the date of this
prospectus and prior to the termination of this offering, except the
Compensation Committee Report on Executive Compensation and the
performance graph included in any Proxy Statement filed by us pursuant to
Section 14 of the Exchange Act; and
12. All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 subsequent to the date of the initial
filing of this registration statement and prior to the effectiveness of
this registration statement, except the Compensation Committee Report on
Executive Compensation and the performance graph included in any Proxy
Statement filed by us pursuant to Section 14 of the Exchange Act.
You may request and we will provide a copy of these filings to you at no
cost, other than the exhibits, by writing or telephoning us at iCAD, Inc., 4
Townsend West, Suite 17, Nashua, New Hampshire 03063, telephone number (603)
882-5200.
We have not authorized anyone else to provide you with information
different from that contained or incorporated by reference in this prospectus.
This prospectus is not an offer to sell nor is it a solicitation of an offer to
buy any security in any jurisdiction where the offer or sale is not permitted.
Neither the delivery of this prospectus nor any sale made under this prospectus
shall, under any circumstances, imply that there has been no change in our
affairs since the date of this prospectus or that the information contained in
this prospectus or incorporated by reference herein is correct as of any time
subsequent to its date.
19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses payable by the Registrant in connection with the issuance and
distribution of the securities being registered (estimated except for the SEC
Registration fee)are as follows:
SEC Registration Fee $ 1,510.70
Accounting Fees and Expenses $10,000.00
Legal Fees and Expenses $10,000.00
Miscellaneous Expenses $ 3,489.30
Total $25,000.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
("GCL") provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
Section 102(b) of the GCL permits a corporation, by so providing in its
certificate of incorporation, to eliminate or limit director's liability to the
corporation and its shareholders for monetary damages arising out of certain
alleged breaches of their fiduciary duty. Section 102(b)(7) of the GCL provides
that no such limitation of liability may affect a director's liability with
respect to any of the following: (i) breaches of the director's duty of loyalty
to the corporation or its shareholders; (ii) acts or omissions not made in good
faith or which involve intentional misconduct of knowing violations of law;
(iii) liability for dividends paid or stock repurchased or redeemed in violation
of the GCL; or (iv) any transaction from which the director derived an improper
personal benefit. Section 102(b)(7) does not authorize any limitation on the
ability of the corporation or its shareholders to obtain injunctive relief,
specific performance or other equitable relief against directors.
Article Tenth of the registrant's Certificate of Incorporation and the
registrant's By-laws provide for indemnification to the fullest extent permitted
or authorized by the GCL or judicial or administrative decisions of each person
who was or is a party or threatened to be made a party, or was, or is a witness,
to any threatened pending or completed action, suit, or proceeding against any
liability or cost or expense asserted against him or incurred by him by reason
of the fact that he is or was shall a director, officer or employee of the
registrant or is or was an agent of the registrant to whom the registrant has
agreed to grant such indemnity or is serving or was serving, at the registrant's
request, as an officer , director or employee of another entity or is serving as
an agent of another entity to whom the Corporation has agreed to grant
indemnity. The foregoing right of indemnification shall not be deemed to be
exclusive of any other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote of shareholders or disinterested
directors, or otherwise.
II-1
Article Ninth of the registrant's Certificate of Incorporation provides
that no director of the registrant shall be personally liable to the registrant
or its stockholders for any monetary damages for breaches of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the registrant or its stockholders; (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law; (iii) under Section 174 of the GCL; or (iv) for any transaction from which
the director derived an improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
ITEM 16. EXHIBITS.
5 Opinion of Blank Rome LLP
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Brady Ware & Schoenfeld, Inc.
23.3 Consent of Grant Thornton LLP
23.4 Consent of Blank Rome LLP (included in Exhibit 5)
24 Power of Attorney (included on the signature page of the
Registration Statement)
---------
ITEM 17. UNDERTAKINGS
Undertaking Required by Regulation S-K, Item 512(a).
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
i. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
ii. To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
II-2
iii. To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that clauses (i) and (ii) do not apply if the Registration
Statement is on Form S-3, Form S-8 or Form F-3, and the information required to
be included in a post-effective amendment by such clauses is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Undertaking Required by Regulation S-K, Item 512(b).
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be initial bona fide offering thereof.
Undertaking required by Regulation S-K, Item 512(h).
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons pursuant to
the foregoing provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Nashua, State of New Hampshire, on the 29th day of
December, 2004.
iCAD, INC.
By: /s/ W. Scott Parr
-------------------------------------
W. Scott Parr
Chief Executive Officer and President
Each person whose signature appears below authorizes each of W. Scott Parr and
Annette Heroux, or either of them acting individually, as his true and lawful
attorney-in-fact, each with full power of substitution, to sign the Registration
Statement on Form S-3 of iCAD, Inc., including any and all pre-effective and
post-effective amendments, in the name and on behalf of each such person,
individually and in each capacity stated below, and to file the same, with
exhibits thereto and other documents in connection therewith with the Securities
and Exchange Commission.
In accordance with the requirements of the Securities Act of 1933, this
amendment to this Registration Statement was signed by the following person in
the capacities and on the dates stated.
Signature Title Date
--------- ----- ----
/s/ Robert Howard Chairman of the Board and Director December 29, 2004
---------------------------
Robert Howard
/s/ W. Scott Parr Chief Executive Officer, President and December 29, 2004
--------------------------- Director (Principal Executive Officer)
W. Scott Parr
/s/ Annette Heroux Vice President Finance, Chief Financial December 29, 2004
--------------------------- Officer (Principal Financial and
Annette Heroux Accounting Officer)
/s/ Rachel Brem Director December 29, 2004
---------------------------
Rachel Brem
/s/ George Farley Director December 29, 2004
---------------------------
George Farley
II-4
Signature Title Date
--------- ----- ----
Director
---------------------------
James Harlan
/s/ Maha Sallam Director December 29, 2004
---------------------------
Maha Sallam
/s/ Steven Rogers Director December 29, 2004
---------------------------
Steven Rogers
Director
---------------------------
Herschel Sklaroff
/s/ Elliott Sussman Director December 29, 2004
---------------------------
Elliott Sussman
II-5