Full Press Release Details
Nanox Announces Second Quarter of 2023 Financial
Provides Business Update
Reports progress towards global supply chain
Ended the second quarter of 2023 with cash,
cash equivalents, restricted cash and marketable securities of $80.3 million
Management to host conference call and webcast
Thursday, August 17, 2023 at 8:30 AM ET
NEVE ILAN, Israel- August 17, 2023 -- 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:
| 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 . | ||
| Generated $2.6 million in revenue in the second quarter of 2023, compared to $2.2 million in the second quarter of 2022. | ||
| Progress to secure future supplies of chips and tubes with multiple partnership agreements. | ||
| Entered an Original Equipment Manufacturing Collaboration with a U.S. government agency for development of security scanning and testing applications. | ||
| 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. | ||
| "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." |
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.
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
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
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