Full Press Release Details
Nanox Announces its First Quarter of 2022 Financial
Provides Business Update
Reports progress towards global supply chain
Ended the first quarter of 2022 with cash and
marketable securities of $139.5 million
Management to host conference call and webcast
today, May 19, 2022 at 8:30 AM ET
NEVE ILAN, Israel-May 19, 2022 -- 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, 2022 and provided a business update.
First Quarter Highlights and Recent Developments:
"I am pleased with our team's performance
as we continued to make progress on multiple fronts during the first quarter of 2022," said Erez Meltzer, Nanox Chief Executive
Officer. "We saw accelerated growth in our first full quarter of revenue generation, Nanox.AI signed a new hospital system contract
and secured its tenth FDA clearance to complement its 11 CE mark designations. And finally, we are placing a high priority on our dialogue
with the FDA and subsequent formal 510(K) submission, while also initiating the process to secure the CE mark in the European Union, in
each case, for the multi-source Nanox.ARC."
results for three months ended March 31, 2022
For the three months ended March 31, 2022, the Company reported revenue
of $1.8 million, compared to none for the three months ended March 31, 2021. During the three months ended March 31, 2022, 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 March 31, 2022, totaled $1.9 million. The Company's revenue from teleradiology services for the three months ended
March 31, 2022 was $1.7 million with a gross profit of $0.1 million. The Company's revenue from its AI solutions for the three months
ended March 31, 2022 was $0.1 million with a gross loss of $2.0 million. Non-GAAP cost of revenue of the Company's teleradiology
services for the three months ended March 31, 2022 was $1.1 million, as compared to none for the three months ended March 31, 2021, resulting
in a non-GAAP gross profit of $ 0.7 million for the three months ended March 31, 2022, which represents a gross profit margin of approximately
39% on a non-GAAP basis. The Company's non-GAAP gross profit from its AI solutions for the three months ended March 31, 2022 was
For the three months ended March 31, 2022, the
Company reported a net loss of $21.7 million, compared to a net loss of $12.7 million for the three months ended March 31, 2021, largely
due to expenses related to the consolidation of Nanox.AI and USARAD with the Company, and the acquisition of 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 March 31, 2022 were $6.8 million, as compared to $2.7 million for the three months ended March 31, 2021. The increase of
$4.1 million was mainly due to the consolidation of Nanox.AI with the Company and the balance due to the development of 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
Sales and marketing expenses for the three months
ended March 31, 2022 were $1.1 million, as compared to $1.7 million for the three months ended March 31, 2021. The decrease of $0.6 million
was mainly due to a decrease of approximately of $0.3 million in share-based compensation.
General and administrative expenses for the three
months ended March 31, 2022 were $11.3 million, as compared to $8.2 million for the three months ended March 31, 2021. The increase of
$3.1 million was mainly due to the consolidation of Nanox.AI and USARAD with the Company and the acquisition of the assets of MDWEB, an
increase in the Company's head count in connection with the expansion of the Company's management team and the overall organization
infrastructure, an increase in the Company's legal fees due to the SEC inquiry and class-action litigation as described in the Company's
Form 20-F for the year ended December 31, 2021 filed on May 2, 2022.
Other expenses for the three months ended March
31, 2022 were $0.8 million, as compared to none for the three months ended March 31, 2021. The increase was mainly due to the relocation
of the Company's fabrication facility in Korea to its permanent location and change in the Company's contingent earnout liability.
Non-GAAP net loss applicable to ordinary shares for the three months ended
March 31, 2022 was $12.0 million, as compared to $7.1 million for the three months ended March 31, 2021, primarily due to expenses resulting
from the consolidation of Nanox.AI and USARAD with the Company and the acquisition of the assets of MDWEB, and an increase in the Company's
research and development expenses and its general and administrative expenses. Non-GAAP cost of revenue for the three months ended March
31, 2022 was $1.1 million, as compared to none for the three months ended March 31, 2021. Non-GAAP research and development expenses for
the three months ended March 31, 2022 were $5.3 million, as compared to $2.1 million for the three months ended March 31, 2021. Non-GAAP
sales and marketing expenses for the three months ended March 31, 2022 were $0.8 million, as compared to $1.2 million for the three months
ended March 31, 2021. Non-GAAP general and administrative expenses for the three months ended March 31, 2022 were $6.1 million, as compared
to $3.7 million for the three months ended March 31, 2021.
A reconciliation between GAAP and non-GAAP financial measures for the three-month
periods ended March 31, 2022 and 2021 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,
secondary offering expenses and legal fees in connection with class-action litigation and the SEC inquiry.
Liquidity and Capital Resources
As of March 31, 2022, the Company had $73.7 million of cash, cash equivalents
and short-term marketable securities and $65.7 million of long-term marketable securities. As of March 31, 2022, the Company had total
current assets of $78.1 million and total current liabilities of $51.0 million creating a working capital of $27.1 million.
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
The decrease in the Company's cash and cash
equivalents of $11.7 million and decrease in its short-term marketable securities of $3.3 million were primarily due to negative cash
flow from operations of $11.5 million and cash used in investing activities of $4.8 million during the three months ended March 31, 2022.
During the first quarter of 2022, the Company issued
192,927 ordinary shares due to the exercise of warrants and 6,746 ordinary shares due to the exercise of options. The Company also issued
89,286 ordinary shares to the former shareholders of Nanox AI due to the achievement of a milestone. The Company generated approximately
$0.4 million in gross proceeds from the exercise of options and warrants.
The Company ended the period with property and equipment,
net of $41.1 million. The increase of $3.7 million as of March 31, 2022, from December 31, 2021 is mainly attributed to the completion
of the construction of the Company's fabrication facility in South Korea.
As of March 31, 2022, the Company had intangible assets
of $157.5 million as compared to $160.1 million as of December 31, 2021. The decrease is attributable to the amortization for the periodic
amortization of intangible assets.
Net cash used in operating activities during the
three months ended March 31, 2022 was approximately $11.5 million compared with $4.4 million during the three months ended March 31, 2021.
As of March 31, 2022, the Company had approximately
52.1 million shares outstanding as compared to 51.8 million shares outstanding as of December 31, 2021. The increase was mainly due to
an exercise of 192,927 warrants and issuance of 89,286 shares to the former shareholders of Nanox AI due to the achievement of a milestone.
On May 16, 2022, the Company's Board of Directors
(the "Board") has approved the appointment to the Board of Ms. So Young Shin who was nominated for this position by SK Square
Co. Ltd ("SKTQ") under the Investor Rights Agreement between the Company and SKTQ. SKTQ is an entity that was spun off
from SK Telecom ("SKT") in November 2021. The appointment is until the 2023 annual shareholders meeting of the Company. Ms.
Shin has served as the CEO of SK Square Americas Inc. (formerly, SK Telecom TMT Investment Corp, the US investment arm of SKSQ) since
January 2020 and among other investments led the investment of SKT in the Company. Prior to that, Ms. Shin held various managerial
positions in SKT for over 15 years. Ms. Shin has an MBA degree from Oxford University UK and MA degree (Economics) from Seoul National
University Korea. The Board has determined that Ms. Shin qualifies as an independent director under NASDAQ rules.
Conference call and webcast details
Thursday, May 19, 2022 @ 8:30am ET
Investor US/Canada toll-free dial-in: (877) 550-3765
Investor US/Canada International dial-in: (409) 937-8962
Conference ID: 8476729
Webcast link: https://edge.media-server.com/mmc/p/7ueeg2mh