NANO-X IMAGING LTD (NASDAQ: NNOX) (“
Nanox” or the
“
Company”), an innovative medical imaging
technology company, today announced results for the second quarter
ended June 30, 2023 and provided a business update.
Second Quarter 2023 Highlights and
Recent Developments:
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On April 28, 2023, the Company received 510(k) clearance from the
U.S. Food and Drug Administration (the “FDA”) to market the
Nanox.ARC (including the Nanox.CLOUD) as a stationary X-ray
system intended to produce tomographic images of the human
musculoskeletal system adjunctive to conventional radiography, on
adult patients. This device is intended to be used in professional
healthcare facilities or radiological environments, such as
hospitals, clinics, imaging centers and other medical practices
by trained radiographers, radiologists and physicians. |
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Generated $2.6 million in revenue in the second quarter of 2023,
compared to $2.2 million in the second quarter of 2022. |
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Progress to secure future supplies of chips and tubes with multiple
partnership agreements. |
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Entered an Original Equipment Manufacturing Collaboration with a
U.S. government agency for development of security scanning and
testing applications. |
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Working to deploy the first Nanox.ARC in the U.S. in a clinical
setting in an East Coast facility. Nanox received an import license
during the second quarter of 2023 following the receipt of the
above-mentioned clearance. The system arrived in the U.S. during
the second quarter of 2023. |
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“The second quarter of 2023 was another successful quarter for
Nanox, as we received the 510(k) FDA clearance for the Nanox.ARC
system,” said Erez Meltzer, Nanox Chief Executive Officer. “Our
team also made progress across various fronts to help us move
toward the large-scale deployment of the Nanox systems in the U.S.
and across various other countries, subject to local regulatory
approvals. After obtaining the FDA clearance and taking multiple
steps to strengthen our supply and manufacturing capabilities,
including by working to secure additional sources of chips and
tubes from partners around the world, we are getting ready to
accelerate our commercial deployment in the U.S. and other
markets.” |
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Financial results for three months
ended June 30, 2023
For the three months ended June 30, 2023 (the
“reported period”), the Company reported a net loss of $17.4
million, compared to a net loss of $19.6 million for the three
months ended June 30, 2022 (which is referred as the “comparable
period”), representing a decrease of $2.2 million. In the
comparable period, the Company recorded an expense that resulted in
a goodwill impairment of $14.3 million, which was largely offset by
a decrease in the Company’s other income due to a decrease in the
Company’s earn-out liabilities in the amount of $12.8 million.
For the three months ended June 30, 2023, the
Company reported revenue of $2.6 million, compared to $2.2 million
in the comparable period. During the three months ended June 30,
2023, the Company continued to generate revenues largely through
the sales of teleradiology services and AI solutions.
The Company’s gross loss during the three months
ended June 30, 2023, totaled $1.7 million on a GAAP basis, as
compared to a gross loss of $1.8 million in the comparable period
on a GAAP basis, which represents a gross loss margin of
approximately (66)% on a GAAP basis, as compared to (80)% on a GAAP
basis in the comparable period.
Non-GAAP gross profit for the three months ended
June 30, 2023, was $0.9 million, as compared to $0.8 million in the
comparable period, which represents a gross profit margin of
approximately 34% on a non-GAAP basis for the three months ended
June 30, 2023, as compared to 37% on a non-GAAP basis in the
comparable period.
The Company’s revenue from teleradiology
services for the three months ended June 30, 2023 was $2.5 million
with a gross profit of $0.4 million on a GAAP basis, as compared to
revenue of $2.1 million with a gross profit of $0.3 million on a
GAAP basis in the comparable period, which represents a gross
profit margin of approximately 14% on a GAAP basis for the
three months ended June 30, 2023 as compared to 16% on a GAAP
basis in the comparable period.
Non-GAAP gross profit of the Company’s
teleradiology services for the three months ended June 30, 2023,
was $0.9 million, which was unchanged from the comparable period on
a non-GAAP basis, which represents a gross profit margin of
approximately 36% on a non-GAAP basis for the three months ended
June 30, 2023, as compared to 43% on a non-GAAP basis in the
comparable period. The increase in the Company’s revenue is mainly
due to the increase in the amount of radiologists that engaged in
reading during overnight and weekend shifts due to the Company’s
efforts to increase its revenue in those segments. The decrease in
the gross profit margin on a non-GAAP basis is attributable mainly
to an increase in the cost of the engaged radiologists due to
incentive payments which the Company paid to radiologists to engage
during overnight and weekend shifts.
The Company’s revenue from its AI solutions for
the three months ended June 30, 2023 was $0.1 million with a gross
loss of $2.1 million on a GAAP basis, which was unchanged from the
comparable period.
Non-GAAP gross loss of the Company’s AI
solutions for the three months ended June 30, 2023 was $0.0, as
compared to $0.1 on a non-GAAP basis in the comparable period.
During the second quarter of 2023, Nanox AI completed several pilot
programs with marketplaces, marketplace costumers and health
organizations.
Research and development expenses for the three
months ended June 30, 2023 were $6.9 million, as compared to $6.5
million in the comparable period. The increase of $0.4 million was
mainly due to an increase in the Company’s cost of labor in the
amount of $0.7 million, which was mainly due to increase of
headcount in connection with the development of the Nanox.ARC, and
an increase in depreciation expenses in the amount of $0.1 million
which was partially offset by a decrease in share based
compensation of $0.3 million and an increase in R&D grants that
the Company received in the amount of $0.1 million.
Sales and marketing expenses for the three
months ended June 30, 2023 were $0.8 million, as compared to $1.1
million in the comparable period. The decrease of $0.3 million was
mainly due to a decrease in share-based compensation in the amount
of $0.1 million and a decrease in marketing expenses of $0.1
million.
General and administrative expenses for the
three months ended June 30, 2023 were $7.6 million, as compared to
$11.2 million in the comparable period. The decrease of $3.6
million was mainly due to a decrease in the Company’s cost of labor
in the amount of $0.5 million as a result of a reduction in
headcount as part of the Company’s plan to increase efficiencies, a
decrease in share-based compensation in the amount of $2.8 million
and a decrease in the cost of the directors’ and officers’
liability insurance premium in the amount of $0.3 million.
During the second quarter of 2023, the Company
accrued $0.7 million for future settlement expenses in connection
with the SEC investigation. As previously disclosed, the Company
and Ran Poliakine, Chairman of the board of directors of the
Company, reached agreements in principle with the SEC staff to
settle the SEC investigation. The agreements are subject to
finalization, including any financial remedies, which the Company
estimates will be approximately $0.7 million in civil penalties
from the Company. Final resolution of this matter is subject to
preparation and negotiation of documentation satisfactory to all
the parties, including, with respect to the Company, approval by
the Company’s board of directors and, in the case of the SEC,
authorization by the Commission, as well as approval by a federal
district court.
Non-GAAP net loss attributable to ordinary
shares for the three months ended June 30, 2023 was $9.9 million,
as compared to $8.2 million in the comparable period. The increase
of $1.7 million was mainly due to income tax benefit of $2.1
million that the Company recorded in the comparable period as
compared to $0.1 million during the three months ended June 30,
2023. Non-GAAP gross profit for the three months ended June 30,
2023 was $0.9 million, as compared to $0.8 million in the
comparable period. Non-GAAP research and development expenses for
the three months ended June 30, 2023 were $6.0 million, as compared
to $5.3 million in the comparable period. Non-GAAP sales and
marketing expenses for the three months ended June 30, 2023 were
$0.6 million, as compared to $0.8 million in the comparable period.
Non-GAAP general and administrative expenses for the three months
ended June 30, 2023 were $4.7 million, as compared to $5.5 million
in the comparable period. The decrease of $0.8 million was mainly
due to a decrease in the Company’s cost of labor in the amount of
$0.5 million as a result of a reduction in headcount as part of the
Company’s plan to increase efficiencies and a decrease in the cost
of the directors’ and officers’ liability insurance premium in the
amount of $0.3 million.
A reconciliation between GAAP and non-GAAP
financial measures for the three- and six-month periods ended June
30, 2023 and 2022 is provided in the financial results that are
part of this press release. The difference between the GAAP and
non-GAAP financial measures above is mainly attributable to
amortization of intangible assets, share-based compensation, change
in contingent earnout liability, legal fees in connection with the
class-actions litigation and the SEC investigation, accrual in
connection with the settlement of the class-actions litigation and
accrual in connection with the estimated settlement of the SEC
investigation.
Liquidity and Capital Resources
As of June 30, 2023, the Company had total cash,
cash equivalents, restricted cash and marketable securities of
$80.3 million, composed of $74.4 million of cash, cash equivalents,
and short-term marketable securities and $5.9 million of long-term
marketable securities and restricted cash. As of June 30, 2023, the
Company had total current assets of $77.5 million and total current
liabilities of $23.4 million, creating a working capital of $54.1
million.
As of December 31, 2022, the Company had total
cash, cash equivalents, restricted cash and marketable securities
of $102.9 million. As of December 31, 2022, the Company had $77.6
million of cash, cash equivalents and short-term marketable
securities and $25.3 million of long-term marketable securities and
restricted cash. As of December 31, 2022, the Company had total
current assets of $82.5 million and total current liabilities of
$25.1 million, creating a working capital of $57.4 million.
The decrease in the Company’s cash, cash
equivalents, restricted cash and marketable securities of $22.6
million during the six-month period ended June 30, 2023, was
primarily due to negative cash flow from operations of $20.8
million and the purchase of property and equipment of $1.8
million.
On July 26, 2023, the Company raised $30 million
in a registered direct offering by selling 2,142,858 of the
Company’s ordinary shares, par value NIS 0.01 per share (the
“ordinary shares”), together with warrants to purchase up to
2,142,858 ordinary shares at a combined purchase price of $14.00
per share. The net proceeds of the offering were expected to be
approximately $28.2 million, excluding any proceeds that may be
received upon the exercise of the warrants, after deducting
placement agent fees and other offering expenses payable by the
Company. The warrants have an exercise price of $19.00 per share,
are exercisable immediately upon issuance and will expire five
years from issuance. The warrants are exercisable for cash
only so long as the Company has an effective registration statement
covering the issuance of shares upon the exercise of the
warrants.
Other Assets
As of June 30, 2023, the Company had property
and equipment of $45.2 million as compared to $43.5 million as of
December 31, 2022. The increase is mainly attributed to the
purchase of equipment and parts for the assembly of Nanox.ARC
(including the Nanox.CLOUD) units.
As of June 30, 2023, the Company had intangible
assets and goodwill of $93.3 million as compared to $98.6 million
as of December 31, 2022. The decrease is attributable to the
periodic amortization of intangible assets in the amount of $5.3
million.
Shareholders’ Equity
As of June 30, 2023, the Company had
approximately 55.6 million shares outstanding as compared to 55.1
million shares outstanding as of December 31, 2022. The increase
was mainly due to the issuance of 210,138 shares upon the exercise
of options, which generated, in the aggregate, approximately $0.6
million in gross proceeds to the Company and the issuance of
255,392 ordinary shares to the former stockholders of USARAD, in
consideration for the achievement of certain milestones in
connection with the first earn out period, as defined in the USARAD
Stock Purchase Agreement and a global settlement of both parties’
performance obligations under the USARAD Stock Purchase
Agreement.
Conference Call and Webcast
Details
Thursday, August 17, 2023 @ 8:30am ET
Individuals interested in listening to the
conference call may do so by joining the live webcast on the
Investors section of the Nanox website under Events and
Presentations. Alternatively, individuals can register online to
receive a dial-in number and personalized PIN to participate in the
call. An archived webcast of the event will be available for replay
following the event.
About Nanox:
Nanox (NASDAQ: NNOX) is focused on applying its
proprietary medical imaging technology and solutions to make
diagnostic medicine more accessible and affordable across the
globe. Nanox’s vision is to increase access, reduce costs and
enhance the efficiency of routine medical imaging technology and
processes, in order to improve early detection and treatment, which
Nanox believes is key to helping people achieve better health
outcomes, and, ultimately, to save lives. The Nanox ecosystem
includes Nanox.ARC - a multi-source Digital Tomosynthesis system
that is cost-effective, and user-friendly; an AI-based suite of
algorithms that augment the readings of routine CT imaging to
highlight early signs often related to chronic disease, (Nanox.AI);
a cloud-based infrastructure (Nanox.CLOUD); and a proprietary
decentralized marketplace, through Nanox’s subsidiary, USARAD
Holdings Inc., that provides remote access to radiology and
cardiology experts; and a comprehensive teleradiology services
platform (Nanox.MARKETPLACE). Together, Nanox’s products and
services create a worldwide, innovative, and comprehensive solution
that connects medical imaging solutions, from scan to diagnosis.
For more information, please visit www.nanox.vision.
Forward-Looking Statements:
This press release may contain forward-looking
statements that are subject to risks and uncertainties. All
statements that are not historical facts contained in this press
release are forward-looking statements. Such statements include,
but are not limited to, those relating to the Company’s
expectations regarding the timing of the closing of the offering,
the expected amount of gross proceeds, the satisfaction of
customary closing conditions related to the offering and the
intended use of proceeds therefrom. In some cases, you can identify
forward-looking statements by terminology such as “can,” “might,”
“believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,”
“should,” “plan,” “should,” “could,” “expect,” “predict,”
“potential,” or the negative of these terms or other similar
expressions. Forward-looking statements are based on information
the Company has when those statements are made or management’s good
faith belief as of that time with respect to future events and are
subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. Factors that could
cause actual results to differ materially from those currently
anticipated include: risks related to (i) Nanox’s ability to
continue to develop of the Nanox imaging system; (ii) Nanox’s
ability to successfully demonstrate the feasibility of its
technology for commercial applications; (iii) Nanox’s expectations
regarding the necessity of, timing of filing for, and receipt and
maintenance of, regulatory clearances or approvals regarding its
technology, the Nanox.ARC and Nanox.CLOUD from regulatory agencies
worldwide and its ongoing compliance with applicable quality
standards and regulatory requirements; (iv) Nanox’s ability to
realize the anticipated benefits of acquisitions, which may be
affected by, among other things, competition, brand recognition,
the ability of the acquired companies to grow and manage growth
profitably and retain their key employees; (v) Nanox’s ability to
enter into and maintain commercially reasonable arrangements with
third-party manufacturers and suppliers to manufacture the
Nanox.ARC; (vi) the market acceptance of the Nanox imaging system
and the proposed pay-per-scan business model; (vii) Nanox’s
expectations regarding collaborations with third-parties and their
potential benefits; and (viii) Nanox’s ability to conduct business
globally; (ix) changes in global, political, economic, business,
competitive, market and regulatory forces; (x) the costs incurred
with respect to and the outcome of the securities class action
litigation and the SEC inquiry Nanox is currently subject to and
any similar or other claims and litigation it may be subject to in
the future; and (xi) risks related to business interruptions
resulting from the COVID-19 pandemic or similar public health
crises, among other things.
For a discussion of other risks and
uncertainties, and other important factors, any of which could
cause Nanox’s actual results to differ from those contained in the
Forward-Looking Statements, see the section titled “Risk Factors”
in Nanox’s Annual Report on Form 20-F for the year ended December
31, 2022, and subsequent filings with the U.S. Securities and
Exchange Commission. The reader should not place undue reliance on
any forward-looking statements included in this press release.
Except as required by law, Nanox undertakes no
obligation to update publicly any forward-looking statements after
the date of this press release to conform these statements to
actual results or to changes in the Company’s expectations.
Non-GAAP Financial Measures
This press release includes information about
certain financial measures that are not prepared in accordance with
generally accepted accounting principles in the United States
(“GAAP”), including non-GAAP net loss attributable to ordinary
shares, non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP
gross profit margin, non-GAAP research and development expenses,
non-GAAP sales and marketing expenses, non-GAAP general and
administrative expenses, non-GAAP other expenses and non-GAAP basic
and diluted loss per share. These non-GAAP measures are not based
on any standardized methodology prescribed by GAAP and are not
necessarily comparable to similar measures presented by other
companies. These non-GAAP measures are adjusted for (as applicable)
amortization of intangible assets, share-based compensation
expenses, change in contingent earnout liability, legal fees in
connection with class-action litigation and the SEC investigation,
accrual in connection with the settlement of the class-actions and
accrual in connection with the estimated settlement of the SEC
investigation. The Company’s management and board of directors
utilize these non-GAAP financial measures to evaluate the Company’s
performance. The Company provides these non-GAAP measures of the
Company’s performance to investors because management believes that
these non-GAAP financial measures, when viewed with the Company’s
results under GAAP and the accompanying reconciliations, are useful
in identifying underlying trends in ongoing operations. However,
these non-GAAP measures are not measures of financial performance
under GAAP and, accordingly, should not be considered as
alternatives to GAAP measures as indicators of operating
performance. Further, these non-GAAP measures should not be
considered measures of the Company’s liquidity. A reconciliation of
certain GAAP to non-GAAP financial measures has been provided in
the tables included in this press release.
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NANO-X IMAGING LTD.UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS(U.S. dollars in thousands
except share and per share data) |
|
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June 30,2023 |
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December 31, 2022 |
|
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U.S. Dollars in thousands |
|
Assets |
|
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|
CURRENT
ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
41,998 |
|
|
|
38,463 |
|
Marketable securities - short term |
|
|
32,466 |
|
|
|
39,161 |
|
Accounts receivables net of allowance for credit losses of $42 and
$34 as of June 30, 2023 and December 31, 2022, respectively. |
|
|
1,431 |
|
|
|
977 |
|
Prepaid expenses |
|
|
901 |
|
|
|
2,414 |
|
Other current assets |
|
|
723 |
|
|
|
1,446 |
|
TOTAL CURRENT
ASSETS |
|
|
77,519 |
|
|
|
82,461 |
|
|
|
|
|
|
|
|
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NON-CURRENT
ASSETS: |
|
|
|
|
|
|
|
|
Restricted cash |
|
|
63 |
|
|
|
66 |
|
Property and equipment, net |
|
|
45,193 |
|
|
|
43,545 |
|
Operating lease right-of-use asset |
|
|
1,260 |
|
|
|
1,157 |
|
Marketable securities - long term |
|
|
5,820 |
|
|
|
25,198 |
|
Intangible assets |
|
|
85,913 |
|
|
|
91,219 |
|
Goodwill |
|
|
7,420 |
|
|
|
7,420 |
|
Other non-current assets |
|
|
1,697 |
|
|
|
2,867 |
|
TOTAL NON-CURRENT
ASSETS |
|
|
147,366 |
|
|
|
171,472 |
|
TOTAL
ASSETS |
|
|
224,885 |
|
|
|
253,933 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
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CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
3,967 |
|
|
|
3,619 |
|
Accrued expenses |
|
|
12,757 |
|
|
|
12,240 |
|
Deferred revenue |
|
|
578 |
|
|
|
182 |
|
Contingent short term earnout liability |
|
|
1,465 |
|
|
|
4,250 |
|
Current maturities of operating lease liabilities |
|
|
448 |
|
|
|
740 |
|
Other current liabilities |
|
|
4,218 |
|
|
|
4,043 |
|
TOTAL CURRENT
LIABILITIES |
|
|
23,433 |
|
|
|
25,074 |
|
|
|
|
|
|
|
|
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|
NON-CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
Non-current operating lease liabilities |
|
|
783 |
|
|
|
398 |
|
Long term loan |
|
|
3,428 |
|
|
|
3,481 |
|
Non-current deferred revenue |
|
|
6 |
|
|
|
398 |
|
Contingent long-term earnout liability |
|
|
- |
|
|
|
4,089 |
|
Deferred tax liability |
|
|
3,142 |
|
|
|
3,330 |
|
Other long-term liabilities |
|
|
558 |
|
|
|
483 |
|
TOTAL NON-CURRENT
LIABILITIES |
|
|
7,917 |
|
|
|
12,179 |
|
TOTAL
LIABILITIES |
|
|
31,350 |
|
|
|
37,253 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
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|
|
|
|
|
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|
|
|
|
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SHAREHOLDERS’
EQUITY: |
|
|
|
|
|
|
|
|
Ordinary Shares, par value NIS 0.01 per share 100,000,000
authorized at June 30, 2023 and December 31 2022, 55,559,767 and
55,094,237 issued and outstanding at June 30, 2023 and December 31
2022, respectively |
|
|
159 |
|
|
|
158 |
|
Additional paid-in capital |
|
|
482,971 |
|
|
|
477,953 |
|
Accumulated other comprehensive loss |
|
|
(1,013 |
) |
|
|
(1,974 |
) |
Accumulated deficit |
|
|
(288,582 |
) |
|
|
(259,457 |
) |
TOTAL SHAREHOLDERS’
EQUITY |
|
|
193,535 |
|
|
|
216,680 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
224,885 |
|
|
|
253,933 |
|
|
The accompanying
notes are an integral part of the unaudited condensed consolidated
financial statements |
|
NANO-X IMAGING LTD.UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
ANDCOMPREHENSIVE LOSS(U.S. dollars in
thousands except share and per share data) |
|
|
|
Six Months Ended June 30, |
|
|
Three Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
REVENUE |
|
|
5,029 |
|
|
|
4,008 |
|
|
|
2,582 |
|
|
|
2,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE |
|
|
8,243 |
|
|
|
7,682 |
|
|
|
4,273 |
|
|
|
3,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
LOSS |
|
|
(3,214 |
) |
|
|
(3,674 |
) |
|
|
(1,691 |
) |
|
|
(1,755 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
13,199 |
|
|
|
13,323 |
|
|
|
6,913 |
|
|
|
6,493 |
|
Sales and marketing |
|
|
1,988 |
|
|
|
2,184 |
|
|
|
835 |
|
|
|
1,078 |
|
General and administrative |
|
|
15,434 |
|
|
|
22,439 |
|
|
|
7,626 |
|
|
|
11,150 |
|
Goodwill impairment |
|
|
- |
|
|
|
14,338 |
|
|
|
- |
|
|
|
14,338 |
|
Change in contingent earnout liability |
|
|
(4,523 |
) |
|
|
(12,256 |
) |
|
|
137 |
|
|
|
(12,631 |
) |
Other expenses, net |
|
|
597 |
|
|
|
423 |
|
|
|
629 |
|
|
|
- |
|
TOTAL OPERATING
EXPENSES |
|
|
26,695 |
|
|
|
40,451 |
|
|
|
16,140 |
|
|
|
20,428 |
|
OPERATING
LOSS |
|
|
(29,909 |
) |
|
|
(44,125 |
) |
|
|
(17,831 |
) |
|
|
(22,183 |
) |
REALIZED LOSS FROM
SALE OF MARKETABLE SECURITIES |
|
|
(178 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
FINANCIAL INCOME,
net |
|
|
781 |
|
|
|
597 |
|
|
|
380 |
|
|
|
471 |
|
OPERATING LOSS BEFORE
INCOME TAXES |
|
|
(29,306 |
) |
|
|
(43,528 |
) |
|
|
(17,451 |
) |
|
|
(21,712 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX
BENEFIT |
|
|
181 |
|
|
|
2,248 |
|
|
|
87 |
|
|
|
2,098 |
|
NET LOSS |
|
|
(29,125 |
) |
|
|
(41,280 |
) |
|
|
(17,364 |
) |
|
|
(19,614 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC AND DILUTED LOSS
PER SHARE |
|
|
(0.53 |
) |
|
|
(0.79 |
) |
|
|
(0.31 |
) |
|
|
(0.38 |
) |
Weighted average
number of basic and diluted ordinary shares outstanding (in
thousands) |
|
|
55,267 |
|
|
|
52,137 |
|
|
|
55,375 |
|
|
|
52,192 |
|
Comprehensive
Loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
(29,125 |
) |
|
|
(41,280 |
) |
|
|
(17,364 |
) |
|
|
(19,614 |
) |
Other comprehensive gain
(loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) from
available for-sale securities |
|
|
961 |
|
|
|
(1,598 |
) |
|
|
369 |
|
|
|
(237 |
) |
Total comprehensive
loss |
|
|
(28,164 |
) |
|
|
(42,878 |
) |
|
|
(16,995 |
) |
|
|
(19,851 |
) |
|
The accompanying
notes are an integral part of the unaudited condensed consolidated
financial statements |
|
NANO-X IMAGING LTD.UNAUDITED CONDENSED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY(U.S. dollars
in thousands, except share and per share data) |
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
Ordinary shares |
|
Additional |
|
other |
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
paid-in |
|
comprehensive |
|
|
Accumulated |
|
|
|
|
|
|
shares |
|
Amount |
|
capital |
|
deficit |
|
|
deficit |
|
|
Total |
|
|
|
U.S. Dollars in thousands |
|
BALANCE AT JANUARY 1, 2023 |
|
55,094,237 |
|
158 |
|
477,953 |
|
(1,974 |
) |
|
(259,457 |
) |
|
216,680 |
|
Changes during the
period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of ordinary shares upon exercise of options |
|
210,138 |
|
* |
|
595 |
|
- |
|
|
- |
|
|
595 |
|
Issuance of ordinary shares under settlement agreement with former
shareholders of USARAD Holding Inc. |
|
255,392 |
|
1 |
|
1,560 |
|
- |
|
|
- |
|
|
1,561 |
|
Other comprehensive gain |
|
- |
|
- |
|
- |
|
961 |
|
|
- |
|
|
961 |
|
Share-based compensation |
|
- |
|
- |
|
2,863 |
|
- |
|
|
- |
|
|
2,863 |
|
Net loss for the period |
|
- |
|
- |
|
- |
|
- |
|
|
(29,125 |
) |
|
(29,125 |
) |
BALANCE AT JUNE 30,
2023 |
|
55,559,767 |
|
159 |
|
482,971 |
|
(1,013 |
) |
|
(288,582 |
) |
|
193,535 |
|
|
* Less than
$1. |
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
Ordinary shares |
|
Additional |
|
other |
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
paid-in |
|
comprehensive |
|
|
Accumulated |
|
|
|
|
|
|
shares |
|
Amount |
|
capital |
|
deficit |
|
|
deficit |
|
|
Total |
|
|
|
U.S. Dollars in thousands |
|
BALANCE AT APRIL 1,
2023 |
|
55,150,345 |
|
158 |
|
479,172 |
|
(1,382 |
) |
|
(271,218 |
) |
|
206,730 |
|
Changes during the
period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of ordinary shares upon exercise of options |
|
154,030 |
|
* |
|
419 |
|
- |
|
|
- |
|
|
419 |
|
Issuance of ordinary shares under settlement agreement with former
shareholders of USARAD Holding Inc. |
|
255,392 |
|
1 |
|
1,560 |
|
- |
|
|
- |
|
|
1,561 |
|
Other comprehensive gain |
|
- |
|
- |
|
- |
|
369 |
|
|
- |
|
|
369 |
|
Share-based compensation |
|
- |
|
- |
|
1,820 |
|
- |
|
|
- |
|
|
1,820 |
|
Net loss for the period |
|
- |
|
- |
|
- |
|
- |
|
|
(17,364 |
) |
|
(17,364 |
) |
BALANCE AT JUNE 30,
2023 |
|
55,559,767 |
|
159 |
|
482,971 |
|
(1,013 |
) |
|
(288,582 |
) |
|
193,535 |
|
|
*
Less than $1. |
|
The accompanying
notes are an integral part of the unaudited condensed consolidated
financial statements |
NANO-X IMAGING LTD.UNAUDITED CONDENSED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY(U.S. dollars
in thousands, except share and per share data) |
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
Ordinary shares |
|
Additional |
|
other |
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
paid-in |
|
comprehensive |
|
|
Accumulated |
|
|
|
|
|
|
shares |
|
Amount |
|
capital |
|
deficit |
|
|
deficit |
|
|
Total |
|
|
|
U.S. Dollars in thousands |
|
BALANCE AT JANUARY 1,
2022 |
|
51,791,441 |
|
149 |
|
438,820 |
|
(607 |
) |
|
(146,214 |
) |
|
292,148 |
|
Changes during the
period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of ordinary shares upon exercise of options |
|
141,067 |
|
* |
|
155 |
|
- |
|
|
- |
|
|
155 |
|
Other comprehensive loss |
|
- |
|
- |
|
- |
|
(1,598 |
) |
|
- |
|
|
(1,598 |
) |
Issuance of ordinary shares upon achievement of a milestone |
|
89,286 |
|
* |
|
953 |
|
- |
|
|
- |
|
|
953 |
|
Issuance of ordinary shares upon exercise of warrants |
|
192,927 |
|
1 |
|
369 |
|
- |
|
|
- |
|
|
370 |
|
Share-based compensation |
|
- |
|
- |
|
11,528 |
|
- |
|
|
- |
|
|
11,528 |
|
Net loss for the period |
|
- |
|
- |
|
- |
|
- |
|
|
(41,280 |
) |
|
(41,280 |
) |
BALANCE AT JUNE 30,
2022 |
|
52,214,721 |
|
150 |
|
451,825 |
|
(2,205 |
) |
|
(187,494 |
) |
|
262,276 |
|
|
* Less than
$1. |
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
Ordinary shares |
|
Additional |
|
other |
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
paid-in |
|
comprehensive |
|
|
Accumulated |
|
|
|
|
|
|
shares |
|
Amount |
|
capital |
|
deficit |
|
|
deficit |
|
|
Total |
|
|
|
U.S. Dollars in thousands |
|
BALANCE AT APRIL 1,
2022 |
|
52,080,400 |
|
150 |
|
446,696 |
|
(1,968 |
) |
|
(167,880 |
) |
|
276,998 |
|
Changes during the
period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of ordinary shares upon exercise of options |
|
134,321 |
|
* |
|
138 |
|
- |
|
|
- |
|
|
138 |
|
Other comprehensive loss |
|
- |
|
- |
|
- |
|
(237 |
) |
|
- |
|
|
(237 |
) |
Share-based compensation |
|
- |
|
- |
|
4,991 |
|
- |
|
|
- |
|
|
4,991 |
|
Net loss for the period |
|
- |
|
- |
|
- |
|
- |
|
|
(19,614 |
) |
|
(19,614 |
) |
BALANCE AT JUNE 30,
2022 |
|
52,214,721 |
|
150 |
|
451,825 |
|
(2,205 |
) |
|
(187,494 |
) |
|
262,276 |
|
|
*
Less than $1. |
|
The accompanying
notes are an integral part of the unaudited condensed consolidated
financial statements |
NANO-X IMAGING LTD. UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(U.S.
dollars in thousands) |
|
|
Six Months EndedJune 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net loss for the period |
|
(29,125 |
) |
|
(41,280 |
) |
Adjustments required to reconcile net loss to net cash used
in operating activities: |
|
|
|
|
|
|
Share-based compensation |
|
2,863 |
|
|
11,528 |
|
Amortization of intangible assets |
|
5,306 |
|
|
5,305 |
|
Impairment of Goodwill |
|
- |
|
|
14,338 |
|
Exchange rate differentials |
|
(78 |
) |
|
(193 |
) |
Change in contingent earnout liability |
|
(4,523 |
) |
|
(12,256 |
) |
Depreciation |
|
509 |
|
|
404 |
|
Deferred tax liability, net |
|
(188 |
) |
|
(2,296 |
) |
Realized loss from sale of marketable securities |
|
178 |
|
|
- |
|
Amortization of premium, discount and accrued interest on
marketable securities |
|
527 |
|
|
788 |
|
Impairment of property and equipment |
|
145 |
|
|
133 |
|
Changes in Operating Assets and Liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(454 |
) |
|
(152 |
) |
Prepaid expenses and other current assets |
|
2,236 |
|
|
3,166 |
|
Other non-current assets |
|
98 |
|
|
(763 |
) |
Accounts payable |
|
957 |
|
|
(1,517 |
) |
Operating lease assets and liabilities |
|
(10 |
) |
|
(125 |
) |
Accrued expenses and other liabilities |
|
692 |
|
|
1,798 |
|
Deferred Revenue |
|
4 |
|
|
(14 |
) |
Other long-term liabilities |
|
75 |
|
|
31 |
|
Net cash used in operating activities |
|
(20,788 |
) |
|
(21,105 |
) |
|
|
|
|
|
|
|
CASH FLOWS PROVIDED BY
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchase of property and equipment |
|
(1,839 |
) |
|
(5,760 |
) |
Purchase of marketable securities |
|
- |
|
|
(1,002 |
) |
Proceeds from maturity of marketable securities |
|
25,507 |
|
|
13,502 |
|
Proceeds from sale of marketable securities |
|
822 |
|
|
- |
|
Investment in equity securities |
|
- |
|
|
(1,010 |
) |
Net cash provided by investing activities |
|
24,490 |
|
|
5,730 |
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment due to settlement of contingent earnout liabilities |
|
(790 |
) |
|
- |
|
|
|
|
|
|
|
|
Proceeds from issuance of ordinary shares upon exercise of
warrants |
|
- |
|
|
370 |
|
Proceeds from issuance of ordinary shares upon exercise of
options |
|
595 |
|
|
155 |
|
Net cash provided by/(used in) financing activities |
|
(195 |
) |
|
525 |
|
EFFECT OF CHANGES IN EXCHANGES RATE ON CASH BALANCES IN
FOREIGN CURRENCIES |
|
25 |
|
|
(122 |
) |
NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH |
|
3,532 |
|
|
(14,972 |
) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING
OF THE PERIOD |
|
38,529 |
|
|
66,772 |
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE
PERIOD |
|
42,061 |
|
|
51,800 |
|
|
|
|
|
|
|
|
SUPPLEMENTARY
INFORMATION ON ACTIVITIES INVOLVING CASH FLOWS |
|
|
|
|
|
|
Cash paid for interest |
|
74 |
|
|
35 |
|
Cash paid for income
taxes |
|
7 |
|
|
116 |
|
SUPPLEMENTARY
INFORMATION ON ACTIVITIES NOT INVOLVING CASH FLOWS - |
|
|
|
|
|
|
Purchase of property and
equipment, not yet paid |
|
- |
|
|
241 |
|
Ordinary shares issued in
connection with earnout liability |
|
1,561 |
|
|
953 |
|
Operating lease liabilities
arising from obtaining operating right-of use assets |
|
601 |
|
|
- |
|
|
|
|
|
|
|
|
RECONCILIATION OF
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: |
|
|
|
|
|
|
Cash and cash equivalents |
|
41,998 |
|
|
51,676 |
|
Restricted cash |
|
63 |
|
|
124 |
|
Total cash, cash equivalents
and restricted cash |
|
42,061 |
|
|
51,800 |
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of the unaudited condensed consolidated
financial statements |
|
NANO-X IMAGING LTD.NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS(U.S. dollars in thousands, except
share and per share data) |
|
NOTE 1 – ORGANIZATION AND DESCRIPTION OF
BUSINESS |
|
|
a. |
|
The Company, together with its subsidiaries, develops a
commercial-grade tomographic imaging device with a digital X-ray
source, provides teleradiology services and develops artificial
intelligence applications designed to be used in real-world medical
imaging applications. The Company’s solution, referred to as the
Nanox Multi Source System, has two integrated components –
“Nanox.ARC” and “Nanox.CLOUD”. Nanox.ARC is a medical tomographic
imaging system incorporating the Company’s novel digital X-ray
source. Nanox.CLOUD is a platform which employs a matching engine
to match medical images to radiologists, provides image repository,
connectivity to diagnostic assistive AI systems, billing and
reporting. On April 1, 2021, the Company received clearance from
the FDA to market the Company’s Nanox Cart X-Ray System. On April
28, 2023, the Company received clearance from the FDA to market the
Company’s multi-source Nanox.ARC system. |
|
|
|
|
|
|
|
The Company has experienced net losses and negative cash flows from
operations since its inception. The Company anticipates such losses
will continue until its product candidates reach commercial
profitability. |
|
|
|
|
|
|
|
Based on the Company’s activities during the period ended June 30,
2023, the Company has sufficient funds for its plans for the next
twelve months from the issuance of these financial statements. |
|
|
|
|
|
b. |
|
Current Impact of geopolitical tensions and the start of the
military conflict between Russia and Ukraine |
|
|
|
|
|
|
|
U.S. and global economies are experiencing volatility and
disruption following the escalation of geopolitical tensions and
the start of the military conflict between Russia and Ukraine. On
February 24, 2022, a full-scale military invasion of Ukraine by
Russian troops was reported. Although the length and impact of the
ongoing military conflict is highly unpredictable, the ongoing
conflict in Ukraine could lead to market disruptions, including
significant volatility in commodity prices, credit and capital
markets. As a result, sanctions and penalties have been levied by
the United States, European Union and other countries against
Russia. Russian military actions and the resulting sanctions could
have a negative impact on supply chains, the Company’s MSaaS
agreements relating to Russia and Belarus or the region and
adversely affect the global economy and financial markets. Any of
the abovementioned factors could affect the Company’s business,
prospects, financial condition, and operating results. The extent
and duration of the military action, sanctions and resulting market
disruptions are impossible to predict, but could be
substantial. |
|
|
|
|
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES AND BASIS OF PRESENTATION
The unaudited consolidated financial statements
include the accounts of the Company and its subsidiaries, prepared
in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) and pursuant to the rules and
regulations of the Securities and Exchange Commission (“SEC”) for
interim financial statements. Accordingly, they
do not contain all information and notes required by
U.S. GAAP for annual financial statements. In the opinion of
management, these unaudited condensed consolidated financial
statements reflect all adjustments, which include normal recurring
adjustments, necessary for a fair statement of the Company’s
condensed consolidated financial position as of June 30,
2023, the condensed consolidated statements of operations and
comprehensive loss for the three and six months
ended June 30, 2023 and 2022 and the condensed
consolidated statements of cash flows and the condensed
consolidated statements of equity for the six months
ended June 30, 2023 and 2022. The preparation of
financial statements in conformity with GAAP requires the Company
to make certain estimates and assumptions for the reporting periods
covered by the financial statements. These estimates and
assumptions affect the reported amounts of assets, liabilities,
revenues, and expenses. Actual amounts could differ from these
estimates.
NANO-X IMAGING LTD.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (continued)(U.S. dollars in thousands, except share and
per share data)
The accompanying unaudited condensed
consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto
included in the Company’s Annual Report on Form 20-F for the fiscal
year ended December 31, 2022, filed with the SEC on May 1, 2023
(the “Annual Report”). For further information, reference is made
to the consolidated financial statements and footnotes thereto
included in the Annual Report.
Fair Value of Financial Instruments
Fair value is based on the price that would be
received from the sale of an asset or that would be paid to
transfer a liability in an orderly transaction between market
participants at the measurement date. In order to increase
consistency and comparability in fair value measurements, the
guidance establishes a fair value hierarchy that prioritizes
observable and unobservable inputs used to measure fair value into
three broad levels, which are described as follows:
|
Level 1: |
|
Quoted prices (unadjusted) in active markets that are accessible at
the measurement date for assets or liabilities. The fair value
hierarchy gives the highest priority to Level 1 inputs. |
|
|
|
|
|
Level 2: |
|
Observable prices that are based on inputs not quoted on active
markets, but corroborated by market data. |
|
|
|
|
|
Level 3: |
|
Unobservable inputs are used when little or no market data is
available. The fair value hierarchy gives the lowest priority to
Level 3 inputs. |
|
|
|
|
In determining fair value, the Company utilizes
valuation techniques that maximize the use of observable inputs and
minimize the use of unobservable inputs to the extent possible and
considers counterparty credit risk in its assessment of fair
value.
The Company’s financial instruments consist
mainly of cash and cash equivalents, restricted cash, accounts
receivable, accounts payable, accrued expenses and other
liabilities. The fair value of these financial instruments
approximates their carrying value.
|
|
Balance as of June 30, 2023 |
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
Assets: |
|
|
|
|
|
|
|
|
|
Money market funds (*) |
|
- |
|
31,582 |
|
|
|
31,582 |
|
Marketable securities |
|
- |
|
38,286 |
|
- |
|
38,286 |
|
Total assets |
|
- |
|
69,868 |
|
- |
|
69,868 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Long term loan |
|
- |
|
- |
|
3,241 |
|
3,241 |
|
Contingent short term earnout
liability (**) |
|
- |
|
- |
|
1,465 |
|
1,465 |
|
Total liabilities |
|
- |
|
- |
|
4,706 |
|
4,706 |
|
|
NANO-X IMAGING LTD.NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)(U.S. dollars in
thousands, except share and per share data) |
|
The Company
classifies AFS securities within Level 2 because it uses
alternative pricing sources and models utilizing market observable
inputs to determine their fair value. |
|
|
|
Balance as of December 31, 2022 |
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
Assets: |
|
|
|
|
|
|
|
|
|
Money market funds (*) |
|
- |
|
31,841 |
|
|
|
31,841 |
|
Marketable securities |
|
- |
|
64,359 |
|
- |
|
64,359 |
|
Total assets |
|
- |
|
96,200 |
|
- |
|
96,200 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Long term loan |
|
- |
|
- |
|
3,228 |
|
3,228 |
|
Contingent short term earnout
liability (**) |
|
- |
|
- |
|
4,250 |
|
4,250 |
|
Contingent long-term earnout
liability (**) |
|
- |
|
- |
|
4,089 |
|
4,089 |
|
Total liabilities |
|
- |
|
- |
|
11,567 |
|
11,567 |
|
The Company classifies AFS securities within Level 2 because it
uses alternative pricing sources and models utilizing market
observable inputs to determine their fair value. |
|
(*) |
|
As of June 30, 2023, approximately $31,582 thousand of
debt securities were classified under “Cash and Cash equivalents”
in the unaudited condensed consolidated balance sheets as such
securities met all applicable classification criteria. As
of December 31, 2022, approximately $31,841 thousand of
debt securities were classified under “Cash and Cash equivalents”
in the consolidated balance sheets as such securities met all
applicable classification criteria. |
(**) |
|
The income valuation approach is applied, and the valuation inputs
include the contingent payment arrangement terms, discount rate and
probability assessments. |
Contingent earnout
liability:
The Company determines the fair value of the
liabilities for the earn-out contingent consideration based on a
probability-weighted discounted cash flow analysis with regards to
probability assessments of achievement of certain milestones and
discount rate. A probability of success factor ranging from 0%
to 100% was used in the calculation of the probability of the
achievement of each milestone. This fair value measurement is based
on significant unobservable inputs and thus represents a Level 3
measurement within the fair value hierarchy. The fair value of the
contingent consideration liabilities is based on several factors,
such as: the cash flows projected from operations; the probability
of success of achievement of regulatory clearances, CPT codes, and
other industry certification, development of applications and
systems deployment and several other milestone events; and the time
and resources needed to complete each milestone and the risk
adjusted discount rate for fair value measurement. The weighted
average discount rate ranged from 9.2% to 28.1%. The
contingent earnout liability consideration is evaluated quarterly.
Changes in the fair value of contingent consideration liabilities
are recorded in the consolidated statements of operations.
Significant changes in unobservable inputs, mainly the probability
of success and cash flows projected, could result in material
changes in the contingent earnout liabilities.
|
NANO-X IMAGING LTD.NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)(U.S. dollars in
thousands, except share and per share data) |
|
The following table summarizes the activity for those financial
liabilities where fair value measurements are estimated utilizing
Level 3 inputs: |
|
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
|
|
(U.S. $ in thousands) |
|
Fair value at the beginning of the period |
|
$ |
8,339 |
|
|
$ |
48,285 |
|
|
|
|
|
|
|
|
|
|
Change in fair value of earn
out liabilities |
|
|
(4,523 |
) |
|
|
(20,376 |
) |
Payment due to settlement of
earnout liabilities (*) |
|
|
(790 |
) |
|
|
|
|
Issuance of ordinary shares
due to achievement of milestones and settlement of contingent
consideration (*) |
|
|
(1,561 |
) |
|
|
(19,570 |
) |
Fair value at the end of the
period |
|
$ |
1,465 |
|
|
$ |
8,339 |
|
(*) |
|
Settlement of
contingent earn-out liabilities with the former stockholders of
USARAD Holding inc. (‘USARAD”). |
|
|
|
|
|
On April
28, 2023, the Company agreed to pay an aggregate amount of $290,063
in cash and 45,392 ordinary shares to the former stockholders of
USARAD, in consideration for the achievement of certain milestones
in connection with the first earn out period, as defined in the
USARAD Stock Purchase Agreement. In addition, the Company and the
former shareholders of USARAD entered into a settlement agreement
with respect to any additional amount that could be granted to the
shareholders of USARAD as consideration for the remainder of the
milestones and applicable earn-outs under the USARAD Stock Purchase
Agreement, according to which the Company agreed to pay an
aggregate of $500,000 in cash and 210,000 ordinary shares to the
former stockholders of USARAD. As a result of the settlement, both
parties’ performance obligations under the USARAD Stock Purchase
Agreement have been satisfied in full. |
|
|
|
The Quantitative Information about Level 3 Fair
Value Measurements of the Company’s short-term and long-term
contingent consideration liabilities designated as Level 3 are as
follows:
|
Fair Value at
June 30,2023 |
|
Valuation Technique |
|
SignificantUnobservable
Input |
Contingent short term earnout liability — (MDW Inc.) |
$ |
1,465 |
|
Discounted cash flow |
|
contingent payment arrangement terms, and probability of
achievement |
|
|
|
|
|
|
|
Fair Value at December 31,2022 |
|
ValuationTechnique |
|
SignificantUnobservableInput |
|
|
|
|
|
|
Contingent short term earnout
liability — (MDW Inc. and USARAD Holding Inc.) |
$ |
4,250 |
|
Discounted cash flow |
|
contingent payment arrangement terms, and probability of
achievement |
|
|
|
|
|
|
|
Contingent long term earnout
liability — (USARAD Holding Inc.) |
$ |
4,089 |
|
Discounted cash flow |
|
contingent payment arrangement terms, and probability of
achievement |
|
|
|
|
|
|
|
NANO-X IMAGING LTD.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (continued)(U.S. dollars in thousands, except share and
per share data)
NOTE 3 - COMMITMENTS AND CONTINGENCIES:
From time to time, the Company may become
involved in various lawsuits and legal proceedings which arise in
the ordinary course of business. However, litigation is subject to
inherent uncertainties, and an adverse result in these or other
matters may arise from time to time that may harm the Company’s
business.
In September 2020, two securities class action
complaints were filed in the United States District Court for the
Eastern District of New York against the Company and certain
then-current officers and a director, which were subsequently
consolidated and captioned as White v. Nano-X Imaging Ltd. et al,
Case No. 1:20-cv-04355, alleging violations of securities laws on
behalf of all persons and entities that purchased or otherwise
acquired the Company’s publicly traded securities between August
21, 2020 and September 15, 2020, and seeking unspecified damages.
On December 7, 2020, proposed lead plaintiffs submissions were
fully briefed, on August 10, 2022, Magistrate Judge Marcia M. Henry
issued a Report and Recommendation, recommending that the Court
approve Derson O. Jolteus and Edward Ko as lead plaintiffs, and on
August 30, 2022, Judge William Kuntz adopted the Report and
Recommendation. On June 24, 2022, the Company moved to consolidate
this action with the action captioned McLaughlin v. Nano-X Imaging
Ltd. et al, Case No: 1:21-cv-05517, discussed further below. The
Company’s motion to consolidate remains outstanding. On October 31,
2022, Lead Plaintiffs filed an amended complaint, which alleges
that defendants violated the federal securities laws in connection
with certain disclosures regarding the Company’s FDA submission and
customer contracts, among other allegations. Lead Plaintiffs seek
to represent a class of investors who purchased the Company’s
publicly traded securities between August 21, 2020 and September
15, 2020. On February 3, 2023, the Company moved to stay this
action in favor of the McLaughlin action, or, in the alternative,
until the Company’s pending motion to consolidate was decided. The
Company has not yet responded to the amended complaint.
On October 5, 2021, a class action complaint was
filed in the United States District Court for the Eastern District
of New York against the Company and certain of its officers,
captioned McLaughlin v. Nano-X Imaging Ltd. et al, Case No.
1:21-cv-05517. On January 25, 2022, Magistrate Judge Peggy Kuo
appointed Davian Holdings Limited as Lead Plaintiff in the
McLaughlin v. Nano-X Imaging Ltd. et al, Case No. 1:21-cv-05517. On
April 12, 2022 and in the same case, the Lead Plaintiff filed an
amended complaint, which alleges that defendants violated the
federal securities laws in connection with certain disclosures
concerning the cost of the Nanox.ARC system as well as the
comparison of the Nanox.ARC to CT scanners, among other
allegations. Lead Plaintiff seeks to represent a class of investors
who purchased the Company’s publicly-traded securities between
August 21, 2020 and November 17, 2021. The Company moved to dismiss
the amended complaint, and briefing on that motion was completed on
September 9, 2022, and it remains outstanding. On April 28, 2023,
the Company signed a term sheet with Lead Plaintiffs in both the
McLaughlin action and the consolidated White action to settle all
claims in both actions. On June 2, 2023, the Company entered into a
formal settlement agreement to settle those actions for $8 million
.The settlement agreement was filed for a court approval. As of
June 30, 2023, the Company accrued $8 million for future settlement
expenses in connection with the two pending class action lawsuits
against the Company.
The Division of Enforcement of the U.S.
Securities & Exchange Commission (the “SEC”) notified the
Company that it is conducting an investigation to determine whether
there had been any violations of the federal securities laws. The
Company has received a subpoena from the SEC requesting that the
Company provide documents and other information relating to the
development cost of the Company’s Nanox.ARC prototypes, as well as
the Company’s estimate for the cost of assembling the final
Nanox.ARC product at scale, among other things, and the Company has
provided documents and information to the SEC. The Company has
cooperated with the SEC in responding to its requests. The Company
and Ran Poliakine, the Chairman of the Board of Directors of the
Company, have reached agreements in principle with the SEC staff to
settle this matter. The agreements are subject to finalization,
including any financial remedies, which the Company estimates will
be approximately $650 in civil penalties from the Company and less
than $500 in penalties, disgorgement and prejudgment interest from
Mr. Poliakine. Final resolution of this matter is subject to
preparation and negotiation of documentation satisfactory to all
the parties, including, with respect to the Company, approval by
the Company’s board of directors and, in the case of the SEC,
authorization by the Commission, as well as approval by a federal
district court. As of June 30, 2023, the Company accrued $650 for
future settlement of this investigation.
On May 1, 2023, the Company received a notice
alleging several causes of action, including breach of a consulting
agreement between the claimant and Nanox Gibraltar PLC (the
“Gibraltar Entity”) that was entered into in 2015. The claimant’s
demand from the Company is for the payment of approximately $1.26
million for unpaid consulting fees from the Gibraltar Entity and
approximately $25 million connection with his claimed entitlement
to securities in the Gibraltar Entity. The Company believes the
allegations against the Company have no merit and intends to defend
its position vigorously.
NANO-X IMAGING LTD.NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)(U.S. dollars in
thousands, except share and per share data) |
|
NOTE 4 - RELATED PARTIES: |
|
Related party balances at June 30, 2023 and December 31, 2022
consisted of the following: |
|
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
|
(U.S. Dollars in thousands) |
(a) Due from Illumigyn |
|
$ |
17 |
|
|
$ |
48 |
(b) Due from (to) Wellsense
Technologies Ltd. |
|
|
(15 |
) |
|
|
10 |
(c) Due from Six-Eye
Interactive |
|
|
21 |
|
|
|
21 |
(d) Due from Six AI ltd. |
|
|
10 |
|
|
|
8 |
(e) Due from Musashi |
|
|
2 |
|
|
|
2 |
Total from related
parties |
|
$ |
35 |
|
|
$ |
89 |
|
b. Related parties
transactions: |
|
|
|
|
|
|
|
Six Months ended June 30, |
|
|
2023 |
|
2022 |
|
|
(U.S. Dollars in thousands) |
|
|
|
|
|
|
General and
administrative |
|
|
- |
|
124 |
|
|
|
|
|
|
|
|
Three Months ended June 30, |
|
|
2023 |
|
2022 |
|
|
(U.S. Dollars in thousands) |
|
|
|
|
|
|
General and
administrative |
|
|
- |
|
47 |
|
|
|
|
|
|
NOTE 5 – DEFERRED REVENUE
The following table represents the changes in
deferred revenue for six months ended June 30, 2023:
|
|
Deferred |
|
|
|
Revenue |
|
|
|
(U.S. Dollars |
|
|
|
in thousands) |
|
Balance at December 31, 2022 (*) |
|
$ |
580 |
|
Additions |
|
|
162 |
|
Revenue recognized in the
reported period - |
|
|
(158 |
) |
Balance at June 30, 2023
(**) |
|
$ |
584 |
|
* |
|
Includes $398 thousand under long term deferred revenue in the
Company’s consolidated balance sheets as of December 31, 2022 |
** |
|
Includes $6 thousand under long
term deferred revenue in the Company’s consolidated balance sheets
as of June 30, 2023 |
|
|
|
NANO-X IMAGING LTD.NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)(U.S. dollars in
thousands, except share and per share data) |
|
NOTE 6 - SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
Share capital |
|
|
|
|
|
|
|
|
|
The following
table presents the number of authorized and issued and outstanding
shares as of each reporting date for each class of shares: |
|
|
|
|
|
|
|
June 30, 2023 |
|
December 31, 2022 |
|
|
Authorized |
|
Issued and Outstanding |
|
Authorized |
|
Issued and Outstanding |
Ordinary shares |
|
100,000,000 |
|
55,559,767 |
|
100,000,000 |
|
55,094,237 |
Total |
|
100,000,000 |
|
55,559,767 |
|
100,000,000 |
|
55,094,237 |
|
|
For ordinary shares issued on April 28, 2023, see note 1.c. |
|
|
|
|
|
As of June 30, 2023, there were 1,301,409 ordinary shares reserved
for the equity incentive plan. The Company’s board of directors
also approved the Plan for the purpose of selecting the capital
gains tax track, under Section 102 of the Israeli Income Tax
Ordinance, for options granted to the Company’s Israeli
employees. |
|
|
|
|
|
Share-based compensation |
|
|
|
|
|
During the six months ended June 30, 2023, the Company granted
385,000 options to employees, non-employees and officers of the
Company, as the following: |
|
|
|
|
a. |
On March 19, 2023, the Company granted a total of 16,500 options to
purchase ordinary shares at an exercise price of $17.63 per share.
The options shall equally vest over a period of 4 years; one
quarter of the options vest on the first anniversary of the vesting
commencement date and the rest vest quarterly over the following
three years. The options expire on the tenth anniversary of their
grant date. The fair value of options granted was $56 and the
underlying data used for computing the fair value of the options
are as follows: |
|
|
March 19, 2023 |
|
Stock price of one ordinary share |
|
$ |
6.69 |
|
Dividend yield |
|
|
0 |
|
Expected volatility |
|
|
74.76 |
% |
Risk-free interest rate |
|
|
3.45 |
% |
Expected term (years) |
|
|
6.25 |
|
|
b. |
On April 28, 2023, the Company granted an officer of the Company a
total of 10,000 options to purchase ordinary shares of the Company
at an exercise price of $17.63 per share. The options shall equally
vest over a period of 4 years; one quarter of the options vest on
the first anniversary of the vesting commencement date and the rest
vest quarterly over the following three years. The options expire
on the tenth anniversary of their grant date. The fair value of
options granted was $30 and the underlying data used for computing
the fair value of the options are as follows: |
|
|
April 28, 2023 |
|
Stock price of one ordinary share |
|
$ |
6.13 |
|
Dividend yield |
|
|
0 |
|
Expected volatility |
|
|
74.26 |
% |
Risk-free interest rate |
|
|
3.58 |
% |
Expected term (years) |
|
|
6.25 |
|
|
|
|
|
|
NANO-X IMAGING LTD.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (continued)(U.S. dollars in thousands, except share and
per share data)
|
c. |
On May 21 2023, the Company granted a total of 52,000 options to
purchase ordinary shares at an exercise price of $11.06 per share.
The options shall equally vest over a period of 4 years; one
quarter of the options vest on the first anniversary of the vesting
commencement date and the rest vest quarterly over the following
three years. The options expire on the tenth anniversary of their
grant date. The fair value of options granted was $736 and the
underlying data used for computing the fair value of the options
are as follows: |
|
|
May 21, 2023 |
|
Stock price of one ordinary share |
|
$ |
17.87 |
|
Dividend yield |
|
|
0 |
|
Expected volatility |
|
|
81.80 |
% |
Risk-free interest rate |
|
|
3.75 |
% |
Expected term (years) |
|
|
6.25 |
|
|
d. |
On May 23 2023, the Company granted a total of 306,500 options to
several officers of the Company to purchase ordinary shares at an
exercise price of $11.52 per share. Options shall equally vest in
quarterly installments over a period of 4 years. The options expire
on the tenth anniversary of their grant date. The fair value of
options granted was $4,824 and the underlying data used for
computing the fair value of the options are as follows: |
|
|
May 23, 2023 |
|
Stock price of
one ordinary share |
|
$ |
19.71 |
|
Dividend yield |
|
|
0 |
|
Expected volatility |
|
|
81.61 |
% |
Risk-free interest rate |
|
|
3.75 |
% |
Expected term (years) |
|
|
6.25 |
|
|
e. |
On May 23, 2023, the Company granted a total of 35,500 RSUs to
several officers, employees and non-employees of the Company. The
RSUs shall equally vest over a period of 6 months. The RSUs expire
on the tenth anniversary of their grant date. The fair value of
RSUs granted was $653. |
|
|
|
The expected volatility is based on the
historical volatility of comparable companies. The risk-free
interest rate assumption is based on observed interest rates
appropriate for the expected term of the awards granted in dollar
terms. The Company does not have sufficient historical exercise
data to provide a reasonable basis upon which to estimate expected
term. Accordingly, as to ordinary course options granted, the
expected term was determined using the simplified method, which
takes into consideration the option’s contractual life and the
vesting periods.
|
NANO-X IMAGING LTD.NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)(U.S. dollars in
thousands, except share and per share data) |
|
NOTE 7 - SEGMENTS OF OPERATIONS |
|
The Company reports segment information based on the “management”
approach. The management approach designates the internal reporting
used by management for making decisions and assessing performance
as the source of the Company’s reportable operating segments. The
Company manages its business primarily on a service basis. The
Company’s reportable segments consist of the Nanox.ARC division,
the radiology services division and the AI solutions division. Each
one is managed separately to better align with the Company’s
customers and distribution partners and the unique market dynamics
of each segment. Operating income for each segment includes net
sales to third parties, related cost of sales and operating
expenses directly attributable to the segment. Costs excluded from
segment operating income include various corporate expenses such as
income taxes. The Company does not include intercompany transfers
between segments for management reporting. From 2022, total assets
for each of the Company’s reportable segments have been separately
presented to, and reviewed by, the Chief Operating Decision Maker
of the Company to assess the performance of the Company’s
segments. |
|
The accounting policies of the various segments are the same as
those described in Note 2, “Summary of Significant Accounting
Policies” in the Annual Report. The Company evaluates the
performance of its reportable operating segments based on net sales
and operating loss. |
|
|
|
Six months ended June 30,
2023(U.S. dollars in thousands) |
|
|
|
Nanox.ARC |
|
|
RadiologyServices |
|
|
AI Solutions |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
- |
|
|
$ |
4,927 |
|
|
$ |
102 |
|
|
$ |
5,029 |
|
Segment operating profit
(loss) |
|
|
(24,877 |
) |
|
|
3,964 |
|
|
|
(8,996 |
) |
|
|
(29,909 |
) |
Realized loss from sale of
marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(178 |
) |
Financial income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
781 |
|
Profit (Loss) before taxes on
income |
|
|
(23,989 |
) |
|
|
3,935 |
|
|
|
(9,252 |
) |
|
$ |
(29,306 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
expenses |
|
$ |
418 |
|
|
$ |
1,321 |
|
|
$ |
4,076 |
|
|
$ |
5,815 |
|
Change in obligation in
earn-out liabilities (*) |
|
$ |
- |
|
|
$ |
(4,523 |
) |
|
$ |
- |
|
|
$ |
(4,523 |
) |
Stock based compensation |
|
$ |
2,270 |
|
|
$ |
113 |
|
|
$ |
480 |
|
|
$ |
2,863 |
|
Total Assets |
|
$ |
123,279 |
|
|
$ |
29,734 |
|
|
$ |
71,872 |
|
|
$ |
224,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for segment’s
assets |
|
$ |
1,727 |
|
|
$ |
80 |
|
|
$ |
32 |
|
|
$ |
1,839 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) See note 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months endedJune 30,
2022(U.S. dollars in thousands) |
|
|
|
Nanox.ARC |
|
|
RadiologyServices |
|
|
AISolutions |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
- |
|
|
$ |
3,815 |
|
|
$ |
193 |
|
|
$ |
4,008 |
|
Segment operating loss |
|
|
(31,616 |
) |
|
|
(1,233 |
) |
|
|
(11,276 |
) |
|
|
(44,125 |
) |
Financial income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
597 |
|
Loss before taxes on income |
|
|
(30,917 |
) |
|
|
(1,237 |
) |
|
|
(11,374 |
) |
|
$ |
(43,528 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expenses |
|
$ |
342 |
|
|
$ |
1,321 |
|
|
$ |
4,162 |
|
|
$ |
5,825 |
|
Change in obligation in earn-out liabilities |
|
$ |
- |
|
|
$ |
131 |
|
|
$ |
(12,387 |
) |
|
$ |
(12,256 |
) |
Goodwill impairment |
|
$ |
- |
|
|
$ |
|
|
|
$ |
14,338 |
|
|
$ |
14,338 |
|
Stock based compensation |
|
$ |
10,736 |
|
|
$ |
103 |
|
|
$ |
689 |
|
|
$ |
11,528 |
|
Total Assets |
|
$ |
171,340 |
|
|
$ |
31,059 |
|
|
$ |
115,325 |
|
|
$ |
317,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for segment’s assets |
|
$ |
6,761 |
|
|
$ |
- |
|
|
$ |
9 |
|
|
$ |
6,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NANO-X IMAGING LTD.NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)(U.S. dollars in
thousands, except share and per share data) |
|
|
|
Three months endedJune 30,
2023(U.S. dollars in thousands) |
|
|
|
Nanox.ARC |
|
|
RadiologyServices |
|
|
AI Solutions |
|
|
Total |
|
Revenues |
|
|
- |
|
|
|
2,529 |
|
|
|
53 |
|
|
|
2,582 |
|
Segment operating loss |
|
$ |
(13,211 |
) |
|
$ |
(483 |
) |
|
$ |
(4,137 |
) |
|
$ |
(17,831 |
) |
Financial income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxes on
income |
|
|
(12,668 |
) |
|
|
(497 |
) |
|
|
(4,286 |
) |
|
$ |
(17,451 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
expenses |
|
$ |
211 |
|
|
$ |
659 |
|
|
$ |
2,037 |
|
|
$ |
2,907 |
|
Change in obligation in
earn-out liabilities (*) |
|
$ |
- |
|
|
$ |
137 |
|
|
$ |
- |
|
|
$ |
137 |
|
Stock based compensation |
|
$ |
1,515 |
|
|
$ |
57 |
|
|
$ |
248 |
|
|
$ |
1,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
123,279 |
|
|
$ |
29,734 |
|
|
$ |
71,872 |
|
|
$ |
224,885 |
|
Expenditures for segment’s
assets |
|
$ |
342 |
|
|
$ |
- |
|
|
$ |
2 |
|
|
$ |
344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) See note 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months endedJune 30,
2022(U.S. dollars in thousands) |
|
|
|
Nanox.ARC |
|
|
RadiologyServices |
|
|
AISolutions |
|
|
Total |
|
Revenues |
|
|
- |
|
|
|
2,113 |
|
|
|
87 |
|
|
|
2,200 |
|
Segment operating loss |
|
$ |
(15,588 |
) |
|
$ |
(382 |
) |
|
$ |
(6,213 |
) |
|
$ |
(22,183 |
) |
Financial income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxes on
income |
|
|
(15,054 |
) |
|
|
(384 |
) |
|
|
(6,274 |
) |
|
$ |
(21,712 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
expenses |
|
$ |
228 |
|
|
$ |
660 |
|
|
$ |
2,082 |
|
|
$ |
2,970 |
|
Change in obligation in
earn-out liabilities |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(12,631 |
) |
|
$ |
(12,631 |
) |
Goodwill impairment |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
14,338 |
|
|
$ |
14,338 |
|
Stock based compensation |
|
$ |
4,626 |
|
|
$ |
46 |
|
|
$ |
319 |
|
|
$ |
4,991 |
|
Total Assets |
|
$ |
171,340 |
|
|
$ |
31,059 |
|
|
$ |
115,325 |
|
|
$ |
317,724 |
|
Expenditures for segment’s
assets |
|
$ |
1,945 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six month periods ended June 30, 2023 and
June 30, 2022, the Company’s revenues in the United States
constituted approximately 99% and 97% of the Company’s total
revenue, respectively. For the three month periods ended
June 30, 2023 and June 30, 2022, the Company’s revenues
in the United States constituted approximately 99% and 98% of the
Company’s total revenue, respectively. |
|
NANO-X IMAGING LTD.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (continued)(U.S. dollars in thousands, except share and
per share data)
NOTE 8 - LOSS PER SHARE:
|
As of June 30, 2023 and 2022, the Company had outstanding 2,312,443
warrants. As of June 30, 2023 and 2022, the Company had 5,165,492
and 5,053,998 outstanding options awards and 53,826 and 15,105
outstanding RSUs awards, respectively. These warrants and awards
were not considered when calculating diluted loss per share since
their effect is anti-dilutive. In addition, contingently issuable
ordinary shares that are issuable based on certain conditions are
not included in the potential dilutive shares in calculating the
diluted loss per share. |
|
|
NOTE 9 - SUBSEQUENT EVENTS:
On July 26, 2023, the Company issued 2,142,858
of the Company’s ordinary shares, par value NIS 0.01 per share,
together with warrants to purchase up to 2,142,858 ordinary shares
at a combined purchase price of $14.00 per share, in a registered
direct offering. The gross proceeds of the offering were $30
million and of the net proceeds of the offering were expected to be
approximately $28.2 million, excluding any proceeds that may be
received upon the exercise of the warrants, after deducting
placement agent fees and other offering expenses payable by the
Company. The warrants have an exercise price of $19.00 per share,
are exercisable immediately upon issuance and will expire five
years from issuance.
|
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP
RESULTS(U.S. dollars in thousands (except per
share data)) |
|
Use of Non-GAAP Financial Measures |
|
The unaudited condensed consolidated financial information is
prepared in conformity with GAAP. The Company uses information
about certain financial measures that are not prepared in
accordance with GAAP, including non-GAAP net loss attributable to
ordinary shares, non-GAAP cost of revenue, non-GAAP gross profit,
non-GAAP gross profit margin, non-GAAP research and development
expenses, non-GAAP sales and marketing expenses, non-GAAP general
and administrative expenses, non-GAAP other expenses and non-GAAP
basic and diluted loss per share. These non-GAAP measures are
adjusted for (as applicable) amortization of intangible assets,
share-based compensation expenses, change in contingent earnout
liability ,legal fees in connection with the class-actions
litigation and the SEC investigation and accrual in connection with
the settlement of the class-actions and accrual in connection with
the estimated settlement of the SEC investigation. The Company
believes that separate analysis and exclusion of the one-off or
non-cash impact of the above reconciling items (as applicable) adds
clarity to the constituent parts of its performance. The Company
reviews these non-GAAP financial measures together with GAAP
financial measures to obtain a better understanding of its
operating performance. It uses the non-GAAP financial measures for
planning, forecasting, and measuring results against the forecast.
The Company believes that the non-GAAP financial measures are
useful supplemental information for investors and analysts to
assess its operating performance. However, these non-GAAP measures
are not measures of financial performance under GAAP and,
accordingly, should not be considered as alternatives to GAAP
measures as indicators of operating performance. |
|
Reconciliation of GAAP net loss attributable to ordinary
shares to Non-GAAP net loss attributable to ordinary shares and
Non-GAAP basic and diluted loss per share (U.S. dollars in
thousands) |
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
attributable to ordinary shares |
|
29,125 |
|
|
41,280 |
|
|
17,364 |
|
19,614 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Less: Class-action litigation and SEC investigation |
|
4,417 |
|
|
2,583 |
|
|
2,181 |
|
2,066 |
|
Less: Amortization of intangible assets |
|
5,306 |
|
|
5,305 |
|
|
2,653 |
|
2,652 |
|
Less: Impairment of goodwill |
|
- |
|
|
14,338 |
|
|
- |
|
14,338 |
|
Less (Add): Change in the fair value of earn out liabilities’
obligation |
|
(4,523 |
) |
|
(12,256 |
) |
|
137 |
|
(12,631 |
) |
Less: accrual in connection with the estimated settlement of the
SEC investigation |
|
650 |
|
|
- |
|
|
650 |
|
- |
|
Less: Share-based compensation |
|
2,863 |
|
|
11,528 |
|
|
1,820 |
|
4,991 |
|
Non-GAAP net loss
attributable to ordinary shares |
|
20,412 |
|
|
19,782 |
|
|
9,923 |
|
8,198 |
|
BASIC AND DILUTED LOSS
PER SHARE |
|
0.37 |
|
|
0.38 |
|
|
0.18 |
|
0.16 |
|
WEIGHTED AVERAGE
NUMBER OF ORDINARY SHARES (in thousands) |
|
55,267 |
|
|
52,137 |
|
|
55,375 |
|
52,192 |
|
|
Reconciliation of GAAP cost of revenue
to Non-GAAP cost of revenue (U.S. dollars in
thousands)
GAAP cost of revenue |
|
8,243 |
|
|
7,682 |
|
|
4,273 |
|
|
3,955 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
5,112 |
|
|
5,111 |
|
|
2,556 |
|
|
2,555 |
|
Share-based compensation |
|
28 |
|
|
56 |
|
|
14 |
|
|
21 |
|
Non-GAAP cost of
revenue |
|
3,103 |
|
|
2,515 |
|
|
1,703 |
|
|
1,379 |
|
|
Reconciliation of GAAP gross loss to
Non-GAAP gross profit (U.S. dollars in thousands)
GAAP gross loss |
|
(3,214 |
) |
|
(3,674 |
) |
|
(1,691 |
) |
|
(1,755 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
5,112 |
|
|
5,111 |
|
|
2,556 |
|
|
2,555 |
|
Share-based compensation |
|
28 |
|
|
56 |
|
|
14 |
|
|
21 |
|
Non-GAAP gross
profit |
|
1,926 |
|
|
1,493 |
|
|
879 |
|
|
821 |
|
|
Reconciliation of GAAP gross loss margin
to Non-GAAP gross profit margin (in percentage of
revenue)
GAAP gross loss margin |
|
(63.91 |
)% |
|
(91.67 |
)% |
|
(65.49 |
)% |
|
(79.77 |
)% |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
101.65 |
% |
|
127.52 |
% |
|
98.99 |
% |
|
116.14 |
% |
Share-based compensation |
|
0.56 |
% |
|
1.40 |
% |
|
0.54 |
% |
|
0.95 |
% |
Non-GAAP gross profit
margin |
|
38.3 |
% |
|
37.25 |
% |
|
34.04 |
% |
|
37.32 |
% |
|
Reconciliation of GAAP research and
development expenses to Non-GAAP research and development expenses
(U.S. dollars in thousands)
GAAP research and development expenses |
|
13,199 |
|
|
13,323 |
|
|
6,913 |
|
|
6,493 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
1,735 |
|
|
2,786 |
|
|
947 |
|
|
1,237 |
|
Non-GAAP research and
development expenses |
|
11,464 |
|
|
10,537 |
|
|
5,966 |
|
|
5,256 |
|
|
Reconciliation of GAAP sales and
marketing expenses to Non-GAAP sales and marketing expenses (U.S.
dollars in thousands)
GAAP sales and marketing expenses |
|
1,988 |
|
|
2,184 |
|
|
835 |
|
|
1,078 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible
assets |
|
194 |
|
|
194 |
|
|
97 |
|
|
97 |
|
Share-based compensation |
|
185 |
|
|
434 |
|
|
107 |
|
|
180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP sales and
marketing expenses |
|
1,609 |
|
|
1,556 |
|
|
631 |
|
|
801 |
|
|
Reconciliation of GAAP general and
administrative expenses to Non-GAAP general and administrative
expenses (U.S. dollars in thousands)
GAAP general and administrative expenses |
|
15,434 |
|
|
22,439 |
|
|
7,626 |
|
|
11,150 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Class-action litigation and
SEC investigation |
|
4,417 |
|
|
2,583 |
|
|
2,181 |
|
|
2,066 |
|
Share-based compensation |
|
915 |
|
|
8,252 |
|
|
752 |
|
|
3,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP general and
administrative expenses |
|
10,102 |
|
|
11,604 |
|
|
4,693 |
|
|
5,531 |
|
|
Reconciliation of GAAP other expenses to
Non-GAAP other expenses (income) (U.S. dollars in
thousands)
GAAP other expenses |
|
597 |
|
|
423 |
|
|
629 |
|
|
- |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Accrual in connection with the
estimated settlement of the SEC investigation |
|
650 |
|
|
- |
|
|
650 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP other
expenses |
|
(53 |
) |
|
423 |
|
|
(21 |
) |
|
- |
|
|
CONTACTS:
Media Contact:
Rachael RoselliICR WestwickeNanoxPR@icrinc.com
Investor Contact:
Mike CavanaughICR
Westwickemike.cavanaugh@westwicke.com
Nano X Imaging (NASDAQ:NNOX)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Nano X Imaging (NASDAQ:NNOX)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024