Full Press Release Details
Nanox Announces First Quarter of 2023 Financial
Provides Business Update
Reports progress towards global supply chain
Ended the first quarter of 2023 with cash, cash
equivalents, restricted cash and marketable securities of $91.0 million
Management to host conference call and webcast
Monday, May 22, 2023 at 8:30 AM ET
NEVE ILAN, Israel- May 22, 2023 -- NANO-X
IMAGING LTD (NASDAQ: NNOX) ("Nanox" or the "Company"), an innovative medical imaging technology
company, today announced results for the first quarter ended March 31, 2023 and provided a business update.
First Quarter 2023 Highlights and Recent Developments:
| On April 28, 2023, the Company received 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 . | ||
| Generated $2.4 million in revenue in the first quarter of 2023 compared to $1.8 million in the first quarter of 2022. | ||
| Received ISO 13485 certification for Medical Devices Quality Management Systems for the Company's Korean fabrication facility, which covers Design, Development, Manufacturing, and Sales of X-Ray Tube for Medical Use, and is valid for a period of three years. | ||
| Working to establish a demo center in Fort Lauderdale, Florida for the Nanox.ARC system. We expect to receive an import license during the second quarter of 2023. | ||
| On May 19, 2023, we entered into a three-year distribution pre-sale agreement with Vital Tech SARL to deploy 270 Nanox.ARC units in the Kingdom of Morocco. We obtained an import license. | ||
| "The first quarter of 2023 was another successful quarter for Nanox, as we continued to advance our commercialization efforts on multiple fronts, culminating with the FDA clearance of the Nanox.ARC system in April. The entire Nanox organization was focused on securing FDA clearance for our cloud-connected imaging technology, and I am proud of our work" said Erez Meltzer, Chief Executive Officer of Nanox. "In addition, we have enhanced our presence in Africa by entering into a distribution agreement with Vital Tech SARL to deploy 270 Nanox.ARC units in the Kingdom of Morocco over three years and advancing our deployment activities in Ghana and Nigeria which we expect to be the first markets with large scale deployments of the Nanox.ARC. With FDA clearance now secured, we are working to expand our U.S. presence by establishing a demo center in Florida, and we expect to receive an import license to ship a Nanox.ARC unit to that facility this quarter. We have also strengthened our supply chain and manufacturing capabilities and established new distribution and component partnerships. We have made much progress thus far in 2023 and look forward to capitalizing on our momentum throughout the coming months". |
results for three months ended March 31, 2023
For the three months ended March 31, 2023, the
Company reported a net loss of $11.8 million, compared to a net loss of $21.7 million for the three months ended March 31, 2022 (which
is referred to as the "comparable period"), which decrease was largely due to a decrease in the Company's earn-out liabilities
in the amount of $5.1 million and a decrease in its general and administrative expenses in the amount of $3.5 million.
For the three months ended March 31, 2023,
the Company reported revenue of $2.4 million, compared to $1.8 million in the comparable period. During the three months ended March
31, 2023, the Company generated revenues through the sales of teleradiology services and AI solutions. The Company's gross
loss during the three months ended March 31, 2023 totaled $1.5 million on a GAAP basis, as compared to a gross loss of $1.9 million
in the comparable period, which represents a gross loss margin of approximately (62%) on a GAAP basis, as compared to (106%) on a
GAAP basis in the comparable period. Non-GAAP gross profit for the three months ended March 31, 2023 was $1.0 million for the three
months ended March 31, 2023, as compared to $0.7 million in the comparable period, which represents a gross profit margin of
approximately 43% on a non-GAAP basis, 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 March 31, 2023 was $2.4 million with a gross profit of $0.5 million on a GAAP basis, as compared to
revenue of $1.7 million with a gross profit of $0.1 million on a GAAP basis in the comparable period which represents a gross profit margin
of approximately 21% on a GAAP basis for the three months ended March 31, 2023 as compared to 6% on a GAAP basis in the comparable period.
Non-GAAP gross profit of the Company's teleradiology services for the three months ended March 31, 2023 was $1.1 million, as compared
to $0.7 million in the comparable period on a non-GAAP basis, which represents a gross profit margin of approximately 44% on a non-GAAP
basis for the three months ended March 31, 2023 as compared to 39% on a non-GAAP basis in the comparable period. The increase in gross
profit margin on a non-GAAP basis is attributable mainly to the increase in the amount of the radiologic interpretations or reads and
the Company's rates for teleradiology services during the three months ended March 31, 2023, as compared to the comparable period.
The Company's revenue from its AI
solutions for the three months ended March 31, 2023 was less than $0.1 million with a gross loss of $2.0 million on a GAAP basis, as
compared to revenue of $0.1 million with a gross loss of $2.0 million on a GAAP basis in the comparable period. Non-GAAP gross
profit (loss) of the Company's AI solutions for the three months ended March 31, 2023 was $0.0, unchanged from the comparable
period on a non-GAAP basis.
Research and development expenses for the three
months ended March 31, 2023, were $6.3 million, as compared to $6.8 million in the comparable period. The decrease of $0.5 million was
mainly due to a decrease in the Company's cost of labor in the amount of $0.5 million, and a decrease in share-based compensation
in the amount of $0.8 million which was mitigated by an increase of $0.2 million in development expenses.
Sales and marketing expenses for the three months
ended March 31, 2023 were $1.2 million, as compared to $1.1 million in the comparable period.
General and administrative expenses for the three months ended March
31, 2023 were $7.8 million, as compared to $11.3 million in the comparable period. The decrease of $3.5 million was mainly due to a decrease
in the Company's cost of labor in the amount of $0.8 million, a decrease in share-based compensation in the amount of $4.5 million
and a decrease in the cost of the directors' and officers' liability insurance premium in the amount of $0.3 million which
was offset by an increase in professional services in the amount of $0.7 million and an increase in the Company's legal fees in
the amount of $1.4 million due to an increase in the Company's legal fees in connection with the U.S. Securities and Exchange Commission
("SEC") investigation and class-action litigation as described in this Company's Form 6-K filed on May 22, 2023. During
the fourth quarter of 2022, the Company recorded $8 million under other expenses for future settlement expenses in connection with the
two pending class action lawsuits against the Company.
Change in contingent earnout liability was $(4.7)
million in the three months ended March 31, 2023, as compared to $0.4 million in the comparable period, due to the decrease in the Company's
contingent earnout liability as result of the settlement with the former stockholders of USARAD, which was entered on April 28, 2023.
The Company agreed to pay an aggregate amount of $0.3 million 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 $0.5 million 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.
GAAP net loss attributable to ordinary shares
for the three months ended March 31, 2023 was $11.8 million, as compared to $21.7 million in the comparable period. Non-GAAP net loss
attributable to ordinary shares for the three months ended March 31, 2023 was $10.5 million, as compared to $11.6 million in the comparable
period. Non-GAAP gross profit for the three months ended March 31, 2023 was $1.0 million, as compared to $0.7 million in the comparable
period. Non-GAAP research and development expenses for the three months ended March 31, 2023 were $5.5 million, as compared to $5.3 million
in the comparable period. Non-GAAP sales and marketing expenses for the three months ended March 31, 2023 were $1.0 million, as compared
to $0.8 million in the comparable period. Non-GAAP general and administrative expenses for the three months ended March 31, 2023 were
$5.4 million, as compared to $6.1 million in the comparable period.
A reconciliation between GAAP and non-GAAP financial measures for the
three-month periods ended March 31, 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 and legal fees in connection with class-action litigation and the SEC investigation.
Liquidity and Capital Resources
As of March 31, 2023, the Company had total cash,
cash equivalents, restricted cash and marketable securities of $91.0 million. As of March 31, 2023, the Company had $78.1 million of cash,
cash equivalents and short-term marketable securities and $12.9 million of long-term marketable securities and restricted cash. As of
March 31, 2023, the Company had total current assets of $81.9 million and total current liabilities of $24.2 million, creating a working
capital of $57.7 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
The decrease in the Company's cash, cash equivalents,
restricted cash and marketable securities of $11.9 million during the three-month period ended March 31, 2023 was primarily due to negative
cash flow from operations of $10.7 million and purchase of property and equipment of $1.5 million.
As of March 31, 2023, the Company had property
and equipment, net of $45.1 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 the Nanox.ARC (including the Nanox.CLOUD).
As of March 31, 2023, the Company had intangible
assets and goodwill of $96.0 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 $2.6 million.
Shareholders' Equity
As of March 31, 2023, the Company had approximately
55.2 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 56,108 shares upon the exercise of options, which generated, in the aggregate, approximately $0.2 million in gross proceeds
On April 28, 2023, the Company received clearance from the FDA to market