NASHUA, New Hampshire and BEAVERCREEK, Ohio - December 1, 2003 - iCAD, Inc. (Nasdaq: ICAD), CADx Systems, Inc. and CADx' parent company, Qualia Computing, Inc., today announced that they have entered into definitive and binding agreements under which iCAD will merge with privately held CADx and Qualia (together, "CADx"). The companies are now working on a joint and coordinated basis, and the merger should be completed within two weeks. iCAD's common stock will continue to trade on NASDAQ under the symbol "ICAD" before and after completion of the merger.

The combination of iCAD and CADx represents a merger of two leading and growing Computer Aided Detection (CAD) companies with complementary strengths and minimal duplication of activities. Together, iCAD and CADx will offer a unique continuum of CAD products, including industry leading clinical performance, upgradeability to digital platforms, and CAD solutions that are accessible to all health care providers. With distribution already established in major markets throughout the world, the combined companies have installed over 300 computer aided detection systems for the early detection of breast cancer. On a stand-alone basis, CADx' sales for 2003 and 2004 are currently projected to exceed iCAD's sales, with profitable operations anticipated for CADx in the fourth quarter of 2003 and in 2004. iCAD has projected profitable operations for 2004.

To complete the merger, iCAD will issue 4.3 million shares of its common stock in exchange for all outstanding shares of Qualia Computing Inc. and CADx Systems, Inc. This will represent approximately 16% of the combined companies' outstanding shares on a post-merger basis. Additionally, iCAD will pay $1.55 million in cash, and execute a 36-month secured promissory note in the amount of $4.5 million, to purchase Qualia shares that are owned by two institutional investors.

Duff & Phelps, LLC acted as financial advisor to the Board of Directors of CADx Systems, Inc.