icad inc.

Greetings. Welcome to the ICAD Inc. Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Jessica Burns. You may begin.

Thank you, operator. Good afternoon, everyone. Thank you for joining us today for ICAD's second quarter 2023 earnings call. On the call today, we have Dana Brown, our president and chief executive officer, and Eric Lundquist, our chief financial officer. Before turning the call over to Dana, I would like to remind everyone that we will be making forward-looking statements on the call today. These forward-looking statements are based on ICAD's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations. For a list of factors that could cause actual results to differ, please see today's press release and our filings with the U.S. Securities and Exchange Commission. ICAD undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. I would also like to note that management will refer to certain non-GAAP financial measures. Management believes that these measures provide meaningful information for investors and reflect the way that they view the operating performance of the company. you can find a reconciliation of our gap to non-gap measures at the end of the earnings release. With that, I'll turn the call over to Dana.

Thank you, Jessica, and good afternoon, everyone. Let's begin with our business update. On the therapy side of the business, revenue for Q2 was $1.7 million compared to $2.3 million for Q2 2022. We're continuing to make progress with parties interested in acquiring the therapy business. While we move forward with these discussions, we continue to operate the business and customers worldwide continue to treat patients with its targeted therapy. On the detection side of the business, we're continuing to make significant progress in positioning the company for growth. While revenue is similar to last quarter at 5.9 million, as noted on previous calls, we implemented several strategic changes earlier this year. including cost reductions to align and streamline our cost base, reducing annualized expenses by 4.3 to 4.6 million, and annualized cash burn by 4.9 to 5.2 million. We're pleased to report significant progress last quarter with game-changing partnerships, exemplifying our company's commitment to creating the world's most pervasive and personalized suite of AI cancer detection solutions for our shareholders and stakeholders. As announced earlier today, we executed an amendment to our development and commercialization agreement with Google Health, which number one, enables us to integrate Google's AI technology with our profound detection for 2D mammography for use upon regulatory approval worldwide as an independent reader for breast cancer screening. And number two, extends our partnership for 20 years. On a global basis, over 250 million mammograms are performed annually, with roughly 40 million of those performed here in the U.S. and another 40 million in the EU. Outside of the U.S., the conventional double reading workflow utilized by most countries, where mammograms are assessed by two separate radiologists, has become increasingly challenging due to the scarcity of radiologists worldwide. As the global radiologist shortage continues to impact patient care, healthcare organizations are seeking clinically proven solutions to help their radiology departments run more efficiently and adeptly handle the workload in front of them. Clinical studies are already underway to evaluate our technology as a second reader, and we look forward to sharing more about this research in the months ahead. You may have seen the recent surge of media coverage on the use of AI in mammography as a potential second reader, which has heightened awareness of this pressing need, underscoring the importance of a solution like ours among clinicians and consumers alike. Through this unique long-term partnership, ICAD will be leveraging differentiating combination of Google Health's intellectual property and AI algorithms with ICAD capabilities of profound detection to commercialize and bring to market a best-in-class second reader and first reader solution. Turning now to the recent announcement of finalizing our strategic multi-year commercial agreement with Radiology Partners. Securing this partnership represents another achievement for ICAD. Radiology Partners is a leading provider of mammography services to millions of women across more than 3,200 facilities including 17 of the 20 largest health systems in the country. We are honored that Radiology Partners has selected ICAD as its provider of breast AI technologies. We are working closely with Radiology Partners and actively deploying ICAD's advanced technology through their cloud to their network of facilities, significantly increasing the potential for adoption and driving improvements in mammography screening for countless women across the country. The initial order from Radiology Partners, which was recognized in first quarter 2023, represents less than 5% of the total potential from this partnership. It's a long-term relationship and will take time to adopt and roll out across their large enterprise. In addition, in second quarter, one of the largest outpatient imaging providers in the U.S., SimonMed, implemented the latest version of Profound AI across its enterprise of 170 locations in 11 states. With this cutting edge solution now available across SimonMed's entire network, we're pleased that it is assisting hundreds of SimonMed clinicians each day and millions of patients who are screened for breast cancer at SimonMed facilities each year. Our Salesforce continues to secure opportunities with some of the most esteemed and prestigious health care facilities worldwide. With new licenses sold last quarter to the Cleveland Clinic, TriHealth, Shutter Health, and St. Joseph's Health in Canada, we continue to expand use of our technologies by more clinicians and providers in the U.S. and worldwide. And while you've heard us announce in past quarters winning deals with large enterprise customers like Solus, Radiology Partners, SimonMed, Extension, and Cleveland Clinic, who collectively serve about 15% of the U.S. mammography screening market, great potential lies ahead for ICAD, as many of these customers are in the early stages of rolling out our technology and are continuing to expand into more sites and markets each month. We continue to see demand for our subscription model. As hospitals are continuing to recover from a financially distressing 2022, Amid several post-pandemic headwinds, including inflation, high labor expenses, and supply chain issues, our subscription model helps to eliminate barriers to adoption and provides a viable path for customers to purchase our technology without a significant capital outlay. We're pleased to report that we closed six subscription deals in Q2, bringing us to 15 year to date and offering long-term potential for reoccurring revenue in the years ahead. Of note, our agreement with the Cleveland Clinic represents the largest subscription deal for our company to date. As a prestigious multi-specialty academic medical center that is renowned for its exceptional healthcare services and ranked as one of the nation's top hospitals, this partnership not only reinforces ICAD's position as a trusted leader of mammography AI solutions, but also demonstrates the widespread recognition of the value we bring to facilities, clinicians, and patients. Last quarter, we were also incredibly honored to have received the U.S. General Services Administration's prestigious AI Healthcare Challenge Award for our Breast AI Suite. Our solution, profound detection, is already trusted by our government and military. As last year, the U.S. Department of Defense, the DOD, determined it met its stringent cybersecurity prevention threshold and granted the technology and authorization to operate, allowing its use in DOD healthcare facilities, which care for military service members, retirees, and family members. This recognition validates the hard work and dedication of our team in developing innovative solutions that positively impact patient care and healthcare providers around the world. Turning now to research progress, the body of evidence supporting our Breast AI Suite continues to grow. Research supporting our technology, presented in the first quarter this year at the European Congress of Radiology, or ECR, meeting in Vienna, continued to generate media attention throughout second quarter in nationally syndicated FOX and CBS segments. Dr. Cathy Schilling, the medical director of the Christine E. Lin Women's Health and Wellness Institute, at Boca Raton Regional Hospital discussed findings from her study that found profound AI helped nine dedicated breast radiologists at the facility find 23% more cancers without increasing the rate of recalls. Similarly, the Henry Ford Health System in Michigan recently reported their own real-world evidence, revealing an astonishing 23 to 27% increasing cancer detection rates using our technology. And our latest Profound Impact, Profound Insights webinar featured an esteemed breast imaging radiology from the Cleveland Clinic, Dr. Laura Dean. In our exclusive event, Dr. Dean shared how she and the other breast imaging radiologists at the Cleveland Clinic are using our Breast AI Suite to significantly increase cancer detection at the facility. She also shared incredibly compelling clinical case studies demonstrating how our technology empowers their team to find even small, subtle cancers, which tend to be the types of tumors radiologists fear most. During the past quarter, we also achieved several key milestones with our OUS sales channel, or outside of the United States, further expanding the global reach of ICADS technology. Our distribution channel achieved a major breakthrough in Luxembourg by securing the first countrywide implementation of profound AI for 2D mammography and 3D mammography. Although it's a small country, this is a remarkable achievement as each of the eight breast imaging sites across the country will now use ICAD's products in their diagnostic workflow, and they plan to integrate into their screening program. In addition, via expansion of our distributor territories, we secured our first sales in Turkey and the Czech Republic. Furthermore, our direct sales channel in France achieved success in a fiercely competitive market by securing a partnership with one of the largest radiology groups in the country, Oradonaze. The partnership with Oradonaze already has resulted in the sale of six Profound AI 2D and 3D licenses, and we anticipate further expansion to multiple sites nationwide. Through our OEM sales channel, we joined forces with GE to secure a significant Italian tender for 26 new mammography units, all to be equipped with PowerLook density assessment. The installation of these units is scheduled for later this year and will further extend the accessibility of our cutting-edge technology to women in Italy. On the clinical side, Dr. Dow from Paris, France, who's collaborating with ICAD on our breast arterial calcification, or BAC product, recently presented her findings at CISIM, a French breast imaging congress in May. And lastly, before we move to the financial update, I just want to remind you that we're actively assessing and modeling revenue growth and footprint expansion scenarios. As communicated on prior calls, we plan to update you on our strategic plan and relevant metrics and milestones on our third quarter earnings call. In summary, we're taking decisive actions to drive rapid transformation within the company, prioritizing stability, cash preservation, and the development of a strong competitive long-term strategy. Our goal is to diversify our revenue steam and reduce customer concentration, ensuring a more sustainable and resilient future. I'll now turn the call over to Eric for a detailed review of our Q2 2023 financials.