iCAD, Deerfield Agree to Terminate Revenue-Sharing Component of Debt Facility, Deerfield Exercises Warrants
iCAD, Inc. (Nasdaq: ICAD), an industry-leading provider of advanced image analysis, workflow solutions and radiation therapy for the early identification and treatment of cancer, today reported that the Company has entered into an agreement effective April 28, 2014 that terminates the revenue-sharing component of iCAD's debt facility agreement with Deerfield Management Company LP, dated December 29, 2011, in exchange for a cash payment of $4.1 million to Deerfield. Under this portion of the debt facility, iCAD historically paid Deerfield an average of 4.0% of revenues, which had an annual cash cost to iCAD of approximately $1.3 million in fiscal year 2013. Additionally, the Company has amended the facility agreement to eliminate the Company's ability to extend the final payment date for a year.
“We are pleased to execute this agreement with Deerfield, as we believe it is in our shareholders' best interest to remove the most costly component of our debt facility in order to significantly reduce our interest expense moving forward,” stated Ken Ferry, President and Chief Executive Officer of iCAD.
Separately, iCAD announced that Deerfield has exercised 450,000 warrants to purchase shares of iCAD common stock, which were issued as part of the debt facility, generating proceeds to iCAD of approximately $1.6 million. The net cash impact to iCAD from these two transactions is approximately $2.5 million.
About iCAD, Inc. iCAD is an industry-leading provider of advanced image analysis, workflow solutions and radiation therapies for the early identification and treatment of common cancers. iCAD offers a comprehensive range of high-performance, upgradeable CAD solutions for mammography and advanced image analysis and workflow solutions for Magnetic Resonance Imaging, for breast and prostate cancers and Computed Tomography for colorectal cancer. iCAD's Xoft® Axxent® Electronic Brachytherapy (eBx®) System®, offers radiation treatment for early-stage breast cancer that can be administered in the form of intraoperative radiation therapy or accelerated partial breast irradiation. The Xoft System is also cleared for the treatment of non-melanoma skin cancer and gynecological cancers.
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