Full Press Release Details
Nanox Announces Fourth Quarter of 2023 Financial
Provides Business Update
Nanox Launches Nanox.ARC in United States with
Installations Across Five States, Marking a Major Advancement in Medical Imaging
to host conference call and webcast Monday, April 1, 2024 at 8:30 AM ET
PETAH TIKVA, Israel- April 1, 2024 - 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, 2023 and provided a business update.
Quarter 2023 Highlights and Recent Developments:
"I am incredibly proud to announce another
strong quarter and year for Nanox," said Erez Meltzer, Nanox Chief Executive Officer. "First and foremost, we achieved a pivotal
milestone in fiscal year 2023, getting FDA clearance for the Nanox ARC systems and deploying them in the key US market. With significant
regulatory successes in hand, Nanox is committed to accelerating the execution of our commercial infrastructure and strategic plans in
the US. Our mission is to provide healthcare practices with a transformative advantage through the Nanox.ARC - an accessible, end-to-end,
and cost-effective solution that not only provides advanced diagnostic imaging capabilities but also elevates overall patient care. Additionally,
we are constantly advancing our AI solutions as we truly believe early detection, precise diagnoses, effective treatments and ongoing
medical monitoring can be life-changing."
results for three months ended December 31, 2023
For the three months ended December 31, 2023
(the "reported period"), the Company reported a net loss of $10.2 million, compared to a net loss of $52.8 million for
the three months ended December 31, 2022 (which is referred as the "comparable period"), representing a decrease of
$42.6 million. The decrease was largely due to a goodwill impairment of $36.5 million, an accrual of $8 million in connection with
the settlement of the class action which were recorded in the comparable period, other income of $3.0 million recorded from the
D&O insurance carrier under the settlement agreement in connection with the class action lawsuits and a decrease of $4.4 million
in general and administrative expenses offset by a decrease in the change in contingent earnout liability of $9.1 million.
The Company reported revenue of $2.4 million in the reported period,
compared to $2.1 million in the comparable period. During the reported period, the Company generated revenue through teleradiology services,
the sales and deployment of its imaging systems and AI solutions.
The Company's gross loss during the reported
period totaled $1.7 million (gross loss margin of (72%)) on a GAAP basis, as compared to a gross loss of $1.7 million (gross loss margin
of (82%)) in the comparable period. non-GAAP gross profit for the reported period was $0.9 million (gross profit margin of approximately
36%), as compared to $0.8 million (gross profit margin of approximately 39%) in the comparable period.
The Company's revenue from teleradiology
services for the reported period was $2.3 million, as compared to revenue of $2.1 million in the comparable period. The increase in the
Company's revenue from teleradiology services was mainly attributable to increase in the facilities in the reported period as compared
to comparable period. The Company's GAAP gross profit from teleradiology services for the reported period was $0.3 million (gross
profit margin of approximately 14%), as compared to $0.3 million (gross profit margin of approximately 13%) in the comparable period. Non-GAAP
gross profit of the Company's teleradiology services for the reported period was $0.9 million (gross profit margin of approximately
38%) as compared to $0.8 million (gross profit margin of approximately 40%) in the comparable period. The decreases in the gross profit
margins on a non-GAAP basis was attributable mainly to an increase in the cost of the engaged radiologists due to increases in reading
rates and incentive payments which the Company paid to radiologists to engage during overnight and weekend shifts.
As mentioned above, during the reported period
the Company generated revenue through the sales and deployment of its imaging systems which amounted to $17 thousand for the reported
period, with a gross loss of $44 thousand on a GAAP and non-GAAP basis. The revenue stems from the sale and deployment of our 2D systems
revenue from its AI solutions for the reported period was $84 thousand with a gross loss of $2.0 million on a GAAP basis, as compared
to revenue of $63 thousand with a gross loss of $2.0 million in the comparable period. Non-GAAP gross profit of the Company's AI
solutions for the reported period was $21 thousand, as compared to a profit of $4 thousand on a non-GAAP basis in the comparable period.
During the fourth quarter of 2023, Nanox AI continued to complete pilot programs with marketplaces, marketplace costumers and health
organizations in anticipation of full deployment of its products. During the first quarter of 2024, Nanox AI sold its HealthCCS cardiac
solution to a second IDN in the U.S for an annual fee of $ 8.5 thousand during the first year of engagement and annual fee of $75 thousand
from the first anniversary of the engagement and after.
development expenses, net for the reported period were $6.8 million, as compared to $7.1 million in the comparable period. The
decrease of $0.3 million was mainly due to a decrease in the cost of the Company's development expenses of the Nanox.ARC
system in the amount of $0.4 million.
Sales and marketing expenses for the
reported period were $1.0 million, as compared to $1.5 million in the comparable period. The decrease of $0.5 million was mainly due
to a decrease in the Company's marketing expenses and a decrease in share-based compensation expense.
General and administrative expenses for the reported
period were $3.8 million, as compared to $8.2 million in the comparable period. The decrease of $4.4 million was mainly due to a decrease
in legal expenses in the amount of $4.2 million, largely as a result of the finalization of the SEC investigation and reaching a settlement
of the class action litigation and the receipt of $2 million from the Company's directors' and officers' liability insurance
carrier during the reported period under the Company's policy and the settlement agreement.
There was no Goodwill impairment for the reported
period as compared to $36.5 million in the comperable period, which was resulted from the goodwill impairment related to the Nanox.AI reporting
Other income was $2.7 million for the reported
period, as compared to other expenses that was $7.8 million for the comparable period. Other expenses in the comparable period included
an accrual for settlement in connection with the class action lawsuit against the Company in the amount of $8 million, which was reversed
by the amount of $3 million in the reported period since the Company received that amount from its D&O insurance carrier under the
settlement agreement in connection with the class action lawsuits against the Company.
Non-GAAP net loss attributable to ordinary shares
for the reported period was $10.4 million, as compared to $9.9 million in the comparable period. The increase of $0.5 million was mainly
due to a decrease in our tax income of $1.0 million and increase in the non-GAAP other expenses of $0.5 million which was mitigated by
an increase of $0.5 million in our interest income, a decrease of $0.3 million in our non-GAAP research and development expenses and a
decrease of $0.3 million in our non-GAAP sales and marketing expenses.
Non-GAAP gross profit for the reported period
was $0.9 million, as compared to $0.8 million in the comparable period. Non-GAAP research and development expenses for the reported period
were $5.9 million, as compared to $6.2 million in the comparable period. Non-GAAP sales and marketing expenses for the reported period
were $0.8 million, as compared to $1.1 million in the comparable period. Non-GAAP general and administrative expenses for the reported
period and the comparable period were $4.7 million.
The difference between the GAAP and non-GAAP financial
measures above is mainly attributable to amortization of intangible assets, goodwill impairment, share-based compensation, change in contingent
earnout liability, legal fees in connection with the class-action litigation and the SEC investigation, accrual in connection with the
settlement of the SEC investigation and class action. A reconciliation between GAAP and non-GAAP financial measures for the three and
twelve-month periods ended December 31, 2023, and 2022 is provided in the financial results that are part of this press release.
Liquidity and Capital Resources
As of December 31, 2023, the Company had total
cash, cash equivalents, restricted deposits and marketable securities of $82.8 million, compared to $102.9 million as of December 31,
The decrease in the Company's cash, cash
equivalents, restricted deposits and marketable securities of $20.1 million during the twelve-month period ended December 31, 2023, was
primarily due to negative cash flow from operations of $44.8 million and the purchase of property and equipment of $3.3 million, which
was offset by cash flow from financing of $27.3 million largely from the capital raise that the Company consummated during the third quarter
As of December 31, 2023, the Company had property
and equipment of $42.3 million as compared to $43.5 million as of December 31, 2022. The decrease was mainly attributed to period depreciation.
of December 31, 2023, the Company had intangible assets and goodwill of $80.6 million as compared to $98.6 million as of December 31,
2022. The decrease was attributable to the periodic amortization of intangible assets in the amount of $10.6 million and goodwill impairment
of December 31, 2023, the Company had approximately 57.8 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 2,142,858 of the Company's ordinary shares in
consideration of net proceeds of $27.1 million, the issuance of 286,141 shares upon the exercise of options and RSUs, which generated,
in the aggregate, approximately $0.9 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