Full Press Release Details
Nanox Announces Fourth Quarter 2021 Financial
Provides Business Update
Management to host conference call and webcast
today, March 31, at 8:30 AM ET
NEVE ILAN, Israel-March 31, 2022 -- NANO-X
IMAGING LTD (NASDAQ: NNOX) ("Nanox" or the "Company"), an innovative medical imaging technology
company, today announced results for the fourth quarter ended December 31, 2021 and provided a business update.
Fourth Quarter Highlights and Recent Developments:
| Our subsidiary, USARAD, was recertified with the Joint Commission's Gold Seal of Approval | ||
| Operationally, our technology transfer to Nanox Korea to enable production of our source MEMs chip has been completed. With the launch of production at the facility now underway, we anticipate being in full production of our MEMs chip by mid-year 2022. | ||
| Establishing an operational assembly line to enable the expected ramp up in production and preparation for shipments of the Nanox.ARC system later this year. | ||
| Continuing the ongoing integration of the Nanox AI, USARAD and MDW implementing cost reduction measurements in order to streamline operations and benefit from synergies. |
fourth quarter and fiscal year 2021 was pivotal for Nanox," said Erez Meltzer, Chief Executive Officer. "We have made considerable
headway towards commercialization over the past year and are pleased that our previously announced strategic transactions have begun
generating revenue."
results for three months ended December 31, 2021
For the three months ended December 31, 2021,
the Company reported revenue of $1.3 million, compared to none for the three-month period ended December 31, 2020. During the three months
ended December 31, 2021, the Company generated revenues through the sales of radiology services and the sales of AI solutions. The Company's
gross loss during the three months ended December 31, 2021, totaled $1.5 million. Our revenue stemmed from the merger with NANO-X AI Ltd.
("Nanox.AI") and the acquisitions of USARAD Holdings, Inc. ("USARAD") and the assets of MDWEB, LLC ("MDWEB").
The Company's revenue from radiology services for the three months ended December 31, 2021 were $1.0 million with a gross profit
of $0.0 million. Our revenue from our AI solutions for the three months ended December 31, 2021 were $0.3 million with a gross loss of
$1.5 million. Non-GAAP cost of revenue for the three months ended December 31, 2021 were $1.1 million, as compared to none for the three
months ended December 31, 2020, resulting with a non-GAAP gross profit of $0.2 million. The Company's non-GAAP gross profit from
radiology services for the three months ended December 31, 2021 was $0.4 million, which represents a gross profit margin of 40% on a non-GAAP
basis. The Company's non-GAAP gross loss from our AI solutions for the three months ended December 31, 2021 was $0.2 million.
For the three months ended December 31, 2021,
the Company reported a net loss of $22.0 million, compared to a net loss of $19.0 million for the three-month period ended December 31,
2020, largely due to expenses related to the merger with Nanox.AI and the acquisitions of USARAD, and the assets of MDWEB, an increase
in our research and development expenses and an increase in our general and administrative expenses, which was mitigated by a decrease
in our sales and marketing expenses.
Research and development expenses for the three
months ended December 31, 2021 were $6.4 million, as compared to $3.0 million for the three months ended December 31, 2020. The increase
was mainly due to an increase of $1.7 million due to the merger with Nanox.AIand the balance due to the multi-source Nanox.ARC and the
Nanox.Cloud, including increased R&D headcount, costs related to the ongoing regulatory approval process and share-based compensation.
Sales and marketing expenses for the three months
ended December 31, 2021 were $1.9 million, as compared to $8.0 million for the three months ended December 31, 2020. The decrease was
mainly due to a decrease of approximately of $5.8 million in share-based compensation.
General and administrative expenses for the three
months ended December 31, 2021 were $10.9 million, as compared to $8.1 million for the three months ended December 31, 2020. The increase
of $2.8 million was mainly due to an increase of $0.8 million due to the merger with Nanox.AI and the acquisitions of USARAD and the assets
of MDWEB, an increase of $0.2 million due to an increase in our head count in connection with the expansion of the Company's management
team and the overall organization infrastructure, an increase of approximately $0.4 million in our legal fees due to the SEC inquiry and
class-action litigation as described in our Form 6-K filed on November 17, 2021 and transaction expenses in connection with the merger
with Nanox.AI and the acquisitions of USARAD and the assets of MDWEB.
Non-GAAP net loss applicable to ordinary shares
for the three months ended December 31, 2021 was $15.0 million, as compared to $8.4 million for the three months ended December 31, 2020,
primarily due to expenses resulting from the merger with Nanox.AI and the acquisitions of USARAD and the assets of MDWEB, an increase
in our research and development expenses and our general and administrative expenses. Non- GAAP cost of revenue for the three months
ended December 31, 2021 were $1.1 million, as compared to none for the three months ended December 31, 2020. Non-GAAP research and development
expenses for the three months ended December 31, 2021 were $5.4 million, as compared to $2.1 million for the three months ended December
31, 2020. Non-GAAP marketing expenses for the three months ended December 31, 2021 were $1.4 million, as compared to $1.6 million for
the three months ended December 31, 2020. Non-GAAP general and administrative expenses for the three months ended December 31, 2021 were
$7.2 million, as compared to $4.8 million for the three months ended December 31, 2020.
A reconciliation between GAAP and non-GAAP financial
measures for the three-month periods and the years ended December 31, 2021 and 2020 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 intangible
assets, share-based compensation, secondary offering expenses and legal fees in connection with class-action litigation and the SEC inquiry.
Liquidity and Capital Resources
As of December 31, 2021, the Company had $88.7
million of cash, cash equivalents and short-term marketable securities and $67.8 million of long-term marketable securities. As of December
31, 2021, the Company had total current assets of $94.9 million and total current liabilities of $52.8 million creating a working capital
As of December 31, 2020, the Company had $213.5
million of cash and cash equivalents. As of December 31, 2020, the Company had total current assets of $219.8 million and total current
liabilities of $4.5 million creating a working capital of $215.3 million. The decrease in our working capital was mainly attributable
to the decrease in cash and short-term marketable securities in the amount of $124.8 million and reclassification of an amount of $67.8
million to long-term marketable securities.
During the fourth quarter of 2021, we issued 3,249,142
shares of common stock due to the merger with Nanox.AI, 496,545 shares of common stock due to acquisition of USARAD and 64,715 shares
of common stock due to acquisition of the assets of MDWEB. We also issued 76,787 shares of common stock due to exercise of warrants and
26,534 shares of common stock due to exercise of options. We generated approximately $0.2 million in gross proceeds from the exercise
of options and warrants.
The Company ended the year with property and equipment,
net of $37.4 million. The increase of $23.4 million as of December 31, 2021 from December 31, 2020 is mainly attributed to the completion
of the construction of our FAB in South Korea.
As of December 31, 2021, the Company had intangible
assets of $160.1 million as opposed to none as of December 31, 2020. The increase is attributable to the merger with Nanox.AI and the
acquisitions of USARAD and the assets of MDWEB. The amount and the allocation of the purchase price to net assets and the liability of
the acquired businesses are preliminary and are based on management's estimates and assumptions and may be subject to change as
additional information is received. We expect to finalize the valuation as soon as practicable, but not later than one year from the acquisition
For the years ended December 31, 2021, December
31, 2020 and December 31, 2019, the net cash flow of the Company was as follows:
| Year ended December 31, | ||||||||||||
| 2021 | 2020 | 2019 | ||||||||||
| U.S. Dollars in thousands (unaudited) | ||||||||||||
| Net loss for the year | (61,798 | ) | (43,815 | ) | (22,563 | ) | ||||||
| Net cash used in operating activities | (38,071 | ) | (21,487 | ) | (5,524 | ) | ||||||
| Net cash used in investing activities * | (116,320 | ) | (13,937 | ) | (125 | ) | ||||||
| Net cash provided by financing activities | 7,379 | 240,991 | 13,861 | |||||||||
| Net change in cash and cash equivalents and restricted cash | (147,012 | ) | 205,567 | 8,212 |
Net cash used in operating activities during the
three months ended December 31, 2021 was approximately $19.3 million compared with $13.3 million during the three months ended December
As of December 31, 2021, the Company had approximately
51.8 million shares outstanding.
On March 28, 2022 our Board of Directors elected,
in accordance with Israeli regulations, to comply with SEC and Nasdaq requirements for independent directors on the Board and audit and
compensation committees, effective as of March 31, 2022, in lieu of the Israeli requirements for statutory external directors and audit
committee and compensation committee composition. Following such election, effective as of March 31, 2022, we will no longer designate
any of our directors as statutory external directors under Israeli law. In accordance with Israeli law, our directors who
were previously designated as statutory external directors, Noga Kainan and Dan Suesskind, will continue to serve as members of our Board
of Directors. Noga Kainan shall continue to serve as a Class II director until our annual general meeting of shareholders to be
held by the December 31, 2022 and Dan Suesskind shall continue to serve as a Class III director until our annual general meeting of shareholders
to be held in by the December 31, 2023.
On the same date, our Board of Directors nominated
Mr. Erez Alroy as a member of the Board of the Company. Mr. Alroy replaces Mr. Fenig who retires from his membership at the Board of the
Company. We wish Mr. Alroy good luck at his new role and thank Mr. Fenig for his dedicated service and his contribution for the development
of our Company. Erez Alroy has vast experience in managing and running local and international companies including Co- CEO of SHL Telemedicine
( SIX SHLTN ), Shahal Israel, where he managed overall activities including financial, marketing and operational activities worldwide.
SHL Telemedicine is engaged in developing and marketing personal telemedicine systems and the provision of medical call center services,