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Nanox Announces Second Quarter of 2024 Financial Results and Provides Business Update

Accelerated the deployment of Nanox ARC in the US market,

Submitted a new 510k application to the FDA to expand Nanox.ARC indications to include general use, including chest 

Nanox.AI Receives FDA 510K Clearance for HealthCCSng V 2.0, upgraded version of its AI Cardiac Solution 

Management to host conference call and webcast Tuesday, August 20, 2024 at 8:30 AM ET

PETAH TIKVA, Israel, Aug. 20, 2024 (GLOBE NEWSWIRE) -- 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, 2024 and provided a business update.

Recent Highlights:

  • Generated $2.7 million in revenue in the second quarter of 2024, compared to $2.6 million in the second quarter of 2023.
  • Submitted a new 510k submission to the FDA to expand the intended use cases for the Nanox.ARC for general use, including chest.
  • Advanced the US deployment program for the Nanox.ARC technology, with systems installed in seven states, and a robust sales pipeline.
  • Installed initial Nanox.ARC systems as part of three chain medical imaging service providers in the US.
  • Announces the development of system to be called Nanox.ARC X, that will be introduced in our next investor relations’ event
  • Nanox.AI Receives FDA 510K Clearance for HealthCCSng V2.0, upgraded version of the cardiac solution, introduces additional ‘zero calcium’ categorization of coronary calcium (CAC) and generates an exact calcium score with corresponding CAC detection category output.
  • Nanox.AI Cardiac Solution, HealthCCSng, was highlighted in multiple scientific presentations at the 2024 SSCCT annual meeting.

“The second quarter of 2024 was one of commercial advances as the Nanox team pursues its vision of making medical imaging more accessible worldwide,” said Erez Meltzer, Nanox Chief Executive Officer and Acting Chairman. “Our vision is to extend Nanox technology within and beyond hospitals, targeting underserved segments like urgent care and orthopedic clinics. We deliver a seamless scan-to-diagnosis solution, leveraging AI for smarter, more efficient healthcare, with a focus on aligning innovation with clinical needs to enhance patient outcomes globally. Nanox is dedicated to accelerating the execution of our commercial infrastructure and future strategic collaborations in the U.S. Our mission is to provide healthcare practices with a transformative imaging advantage with the Nanox.ARC – an accessible, cost-effective solution that not only provides advanced diagnostic imaging capabilities but also elevates overall patient care”.

Financial results for three months ended June 30, 2024

For the three months ended June 30, 2024 (the “reported period”), the Company reported a net loss of $13.6 million, compared to a net loss of $17.4 million for the three months ended June 30, 2023 (which is referred as the “comparable period”), representing a decrease of $3.8 million. The decrease was largely due to a decrease of $2.1 million in the research and development expenses and a decrease of $1.7 million in the general and administrative expenses and increase of $0.5 million in the Company’s financial income which was mitigated by an increase of $1.2 in the Company’s gross loss.

The Company reported revenue of $2.7 million in the reported period, compared to $2.6 million in the comparable period. During the reported period, the Company generated revenue through teleradiology services, the sales of its Imaging devices and services and the sale of its AI solutions. 

The Company’s gross loss during the reported period totaled $2.9 million (gross loss margin of 106%) on a GAAP basis, as compared to $1.7 million (gross loss margin of (66%)) in the comparable period. Non-GAAP gross loss for the reported period was $0.2 million (gross loss margin of approximately 9%), as compared to Non-GAAP gross profit of $0.9 million (gross profit margin of approximately 34%) in the comparable period.

The Company’s revenue from teleradiology services for the reported and comparable periods was $2.5 million. The Company’s GAAP gross profit from teleradiology services for the reported and comparable periods was $0.4 million (gross profit margin of approximately 15%). A non-GAAP gross profit of the Company’s teleradiology services for the reported and comparable periods was $0.9 million (gross profit margin of approximately 37%).

During the reported period the Company generated revenue through the sales and deployment of its imaging systems which amounted to $68 thousand for the reported period, with a gross loss of $1.3 million on a GAAP and non-GAAP basis. The revenue stems from the sale and deployment of our 2D systems in Africa and our Nanox.ARC systems in the U.S.

The Company’s revenue from its AI solutions for the reported period was $113 thousand with a gross loss of $2.0 million on a GAAP basis, as compared to revenue of $53 thousand with a gross loss of $2.1 million in the comparable period. Non-GAAP gross profit of the Company’s AI solutions for the reported period was $57 thousand, as compared to a loss of 42 thousand in the comparable period.

Research and development expenses, net for the reported period were $4.8 million, as compared to $6.9 million in the comparable period, reflecting a decrease of $2.1 million. The decrease was mainly due to decrease of $1.2 million in salaries and wages and a decrease of $0.2 million in share-based compensation and $0.7 million in the expenses related to our research and development activities.

Sales and marketing expenses for the reported and the comparable periods were $0.8 million.

General and administrative expenses for the reported period were $5.9 million, as compared to $7.6 million in the comparable period. The decrease of $1.7 million was mainly due to a decrease in our legal expenses in the amount of $1.6 million, largely as result of the finalization of the SEC investigation and the settlement of the class action and a decrease in the cost of the directors’ and officers’ liability insurance premium in the amount of $0.4 million.

Non-GAAP net loss attributable to ordinary shares for the reported period was $8.4 million, as compared to $9.9 million in the comparable period. The decrease of $1.5 million was mainly due to a decrease in non-GAAP operating expenses of $2.2 million and an increase of $0.5 million in our non-GAAP interest income which was offset by decrease of $1.1 million in our non-GAAP gross profit.

Non-GAAP gross loss for the reported period was $0.2 million, as compared to a Non-GAAP gross profit of $0.9 million in the comparable period. Non-GAAP research and development expenses, net for the reported period, were $4.1 million, as compared to $6.0 million in the comparable period. Non-GAAP sales and marketing expenses for the reported period were $0.5 million, as compared to $0.6 million in the comparable period. Non-GAAP general and administrative expenses for the reported period were $4.3 million as compared to $4.7 million in the comparable period.

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, expenses related to an offering and legal fee in connection with the class-action litigation and the SEC investigation. A reconciliation between GAAP and non-GAAP financial measures for the three and six months periods ended June 30, 2024, and 2023 is provided in the financial results that are part of this press release.

Liquidity and Capital Resources

As of Jume 30, 2024, the Company had total cash, cash equivalents, restricted deposits and marketable securities of $64.2 million, compared to $82.8 million as of December 31, 2023. The decrease of $18.6 million during the reported period was primarily due to negative cash flow from operations of $17.9 million.

Other Assets

As of June 30, 2024 the Company had property and equipment of $44.4 million, compared to $42.3 million as of December 31, 2023.

As of June 30, 2024, the Company had intangible assets of $75.3 million as compared to $80.6 million as of December 31, 2023. The decrease was attributable to the periodic amortization of intangible assets in the amount of $5.3 million.

Shareholders’ Equity

As of June 30, 2024 the Company had approximately 58.5 million shares outstanding. As of December 31, 2023, the Company had approximately 57.8 million shares outstanding.

Conference Call and Webcast Details

Tuesday, August 20, 2024 @ 8:30am ET

Individuals interested in listening to the conference call may do so by joining the live webcast on the Investors section of the Nanox website under Events and Presentations. Alternatively, individuals can register online to receive a dial-in number and personalized PIN to participate in the call. An archived webcast of the event will be available for replay following the event.

About Nanox:

Nanox (NASDAQ: NNOX) is focused on applying its proprietary medical imaging technology and solutions to make diagnostic medicine more accessible and affordable across the globe. Nanox’s vision is to increase access, reduce costs and enhance the efficiency of routine medical imaging technology and processes, in order to improve early detection and treatment, which Nanox believes is key to helping people achieve better health outcomes, and, ultimately, to save lives. The Nanox ecosystem includes Nanox.ARC— a multi-source Digital Tomosynthesis system that is cost-effective and user-friendly; an AI-based suite of algorithms that augment the readings of routine CT imaging to highlight early signs often related to chronic disease (Nanox.AI); a cloud-based infrastructure (Nanox.CLOUD); and a proprietary decentralized marketplace, through Nanox’s subsidiary, USARAD Holdings Inc., that provides remote access to radiology and cardiology experts; and a comprehensive teleradiology services platform (Nanox.MARKETPLACE). Together, Nanox’s products and services create a worldwide, innovative, and comprehensive solution that connects medical imaging solutions, from scan to diagnosis. For more information, please visit www.nanox.vision.

Forward-Looking Statements:

This press release may contain forward-looking statements that are subject to risks and uncertainties. All statements that are not historical facts contained in this press release are forward-looking statements. Such statements include, but are not limited to, those relating to the initiation, timing, progress and results of the Company’s research and development, manufacturing, and commercialization activities with respect to its X-ray source technology and the Nanox.ARC, the ability to realize the expected benefits of its recent acquisitions and the projected business prospects of the Company and the acquired companies. In some cases, you can identify forward-looking statements by terminology such as “can,” “might,�� “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “should,” “could,” “expect,” “predict,” “potential,” or the negative of these terms or other similar expressions. Forward-looking statements are based on information the Company has when those statements are made or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Factors that could cause actual results to differ materially from those currently anticipated include: risks related to (i) Nanox’s ability to continue to develop of the Nanox imaging system; (ii) Nanox’s ability to successfully demonstrate the feasibility of its technology for commercial applications; (iii) Nanox’s expectations regarding the necessity of, timing of filing for, and receipt and maintenance of, regulatory clearances or approvals regarding its technology, the Nanox.ARC and Nanox.CLOUD from regulatory agencies worldwide and its ongoing compliance with applicable quality standards and regulatory requirements; (iv) Nanox’s ability to realize the anticipated benefits of acquisitions, which may be affected by, among other things, competition, brand recognition, the ability of the acquired companies to grow and manage growth profitably and retain their key employees; (v) Nanox’s ability to enter into and maintain commercially reasonable arrangements with third-party manufacturers and suppliers to manufacture the Nanox.ARC; (vi) the market acceptance of the Nanox imaging system and the proposed pay-per-scan business model; (vii) Nanox’s expectations regarding collaborations with third-parties and their potential benefits; and (viii) Nanox’s ability to conduct business globally; (ix) changes in global, political, economic, business, competitive, market and regulatory forces, including the continuation and escalation of the military conflicts in Israel and current war between Israel and Hamas; (x) the costs incurred with respect to and the outcome of litigation Nanox is currently subject to and any similar or other claims and potential litigation it may be subject to in the future; and (xi) risks related to business interruptions resulting from the COVID-19 pandemic or similar public health crises, among other things.

For a discussion of other risks and uncertainties, and other important factors, any of which could cause Nanox’s actual results to differ from those contained in the Forward-Looking Statements, see the section titled “Risk Factors” in Nanox’s Annual Report on Form 20-F for the year ended December 31, 2023, and subsequent filings with the U.S. Securities and Exchange Commission. The reader should not place undue reliance on any forward-looking statements included in this press release.

Except as required by law, Nanox undertakes no obligation to update publicly any forward-looking statements after the date of this press release to conform these statements to actual results or to changes in the Company’s expectations.

Non-GAAP Financial Measures

This press release includes information about certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), including non-GAAP net loss attributable to ordinary shares, non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses and non-GAAP basic and diluted loss per share. These non-GAAP measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. These non-GAAP measures are adjusted for (as applicable) amortization of intangible assets, share-based compensation expenses, change in contingent earnout liability and legal fees in connection with class-action litigation and the SEC investigation. The Company’s management and board of directors utilize these non-GAAP financial measures to evaluate the Company’s performance. The Company provides these non-GAAP measures of the Company’s performance to investors because management believes that these non-GAAP financial measures, when viewed with the Company’s results under GAAP and the accompanying reconciliations, are useful in identifying underlying trends in ongoing operations. However, these non-GAAP measures are not measures of financial performance under GAAP and, accordingly, should not be considered as alternatives to GAAP measures as indicators of operating performance. Further, these non-GAAP measures should not be considered measures of the Company’s liquidity. A reconciliation of certain GAAP to non-GAAP financial measures has been provided in the tables included in this press release.


NANO-X IMAGING LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands except share and per share data)
 
 June 30,
2024
  December 31,
2023
 
 U.S. Dollars in thousands 
Assets     
CURRENT ASSETS:     
Cash and cash equivalents 38,982   56,377 
Restricted deposit 45   46 
Marketable securities 24,884   26,006 
Accounts receivables net of allowance for credit losses of $55 as of June 30, 2024 and December 31, 2023, respectively. 1,508   1,484 
Inventories 957   2,356 
Prepaid expenses 552   1,274 
Other current assets 2,698   1,092 
TOTAL CURRENT ASSETS 69,626   88,635 
        
NON-CURRENT ASSETS:       
Restricted deposit 323   327 
Property and equipment, net 44,397   42,343 
Operating lease right-of-use asset 4,169   4,573 
Intangible assets 75,301   80,607 
Other non-current assets 1,905   2,163 
TOTAL NON-CURRENT ASSETS 126,095   130,013 
TOTAL ASSETS 195,721   218,648 
        
Liabilities and Shareholders’ Equity       
CURRENT LIABILITIES:       
Current maturities of long-term loan 3,233   3,490 
Accounts payable 1,570   3,303 
Accrued expenses 3,638   3,920 
Deferred revenue 539   543 
Current maturities of operating lease liabilities 804   861 
Other current liabilities 3,714   3,407 
TOTAL CURRENT LIABILITIES 13,498   15,524 
        
NON-CURRENT LIABILITIES:       
Non-current operating lease liabilities 3,681   4,045 
Deferred tax liability 2,765   2,953 
Other long-term liabilities 642   612 
TOTAL NON-CURRENT LIABILITIES 7,088   7,610 
TOTAL LIABILITIES 20,586   23,134 
        
COMMITMENTS AND CONTINGENCIES (Note 3)       
        
SHAREHOLDERS’ EQUITY:       
Ordinary Shares, par value NIS 0.01 per share 100,000,000 authorized at June 30, 2024 and December 31 2023,58,497,123 and 57,778,628 issued and outstanding at June 30, 2024 and December 31, 2023, respectively 167   165 
Additional paid-in capital 521,069   515,887 
Accumulated other comprehensive loss (52)  (305)
Accumulated deficit (346,049)  (320,233)
TOTAL SHAREHOLDERS’ EQUITY 175,135   195,514 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 195,721   218,648 



NANO-X IMAGING LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(U.S. dollars in thousands except share and per share data)
 
 Six Months Ended
June 30,
  Three Months Ended
June 30,
 
 2024  2023  2024  2023 
REVENUE 5,252   5,029   2,699   2,582 
                
COST OF REVENUE 10,159   8,243   5,552   4,273 
                
GROSS LOSS (4,907)  (3,214)  (2,853)  (1,691)
                
OPERATING EXPENSES:               
Research and development, net 10,032   13,199   4,812   6,913 
Sales and marketing 1,634   1,988   834   835 
General and administrative 10,958   15,434   5,916   7,626 
Change in contingent earnout liability -   (4,523)  -   137 
Other expenses, net 101   597   92   629 
TOTAL OPERATING EXPENSES 22,725   26,695   11,654   16,140 
OPERATING LOSS (27,632)  (29,909)  (14,507)  (17,831)
REALIZED LOSS FROM SALE OF MARKETABLE SECURITIES -   (178)  -   - 
FINANCIAL INCOME, net 1,646   781   856   380 
OPERATING LOSS BEFORE INCOME TAXES (25,986)  (29,306)  (13,651)  (17,451)
                
INCOME TAX BENEFIT 170   181   76   87 
NET LOSS (25,816)  (29,125)  (13,575)  (17,364)
                
BASIC AND DILUTED LOSS PER SHARE (0.45)  (0.53)  (0.23)  (0.31)
Weighted average number of basic and diluted ordinary shares outstanding (in thousands) 57,953   55,267   58,005   55,375 
Comprehensive Loss:               
Net Loss (25,816)  (29,125)  (13,575)  (17,364)
Other comprehensive loss:               
                
Reclassification of net losses realized in income statement -   178   -   - 
Unrealized gain from available for-sale securities 253   783   66   369 
Total comprehensive loss (25,563)  (28,164)  (13,509)  (16,995)



NANO-X IMAGING LTD.
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(U.S. dollars in thousands, except share and per share data)
 
 Ordinary shares  Additional  Accumulated
other
       
 Number of
shares
  Amount  paid-in
capital
  comprehensive
loss
  Accumulated
deficit
  Total 
BALANCE AT JANUARY 1, 2024 57,778,628   165   515,887   (305)  (320,233)  195,514 
                        
Changes during the period:                       
                        
Issuance of ordinary shares upon exercise of options 718,495   2   1,604   -   -   1,606 
Share-based compensation -   -   3,578   -   -   3,578 
Unrealized gain from marketable securities -   -   -   253   -   253 
Net loss for the period -   -   -   -   (25,816)  (25,816)
BALANCE AT JUNE 30, 2024 58,497,123   167   521,069   (52)  (346,049)  175,135 


       Accumulated       
 Ordinary shares  Additional  other       
 Number of     paid-in  comprehensive  Accumulated    
 shares  Amount  capital  deficit  deficit  Total 
 U.S. Dollars in thousands 
BALANCE AT JANUARY 1, 2023 55,094,237   158   477,953   (1,974)  (259,457)  216,680 
Changes during the period:                       
Issuance of ordinary shares upon exercise of options 210,138   *   595   -   -   595 
Issuance of ordinary shares under settlement agreement with former shareholders of USARAD Holding Inc. 255,392   1   1,560   -   -   1,561 
Other comprehensive gain -   -   -   961   -   961 
Share-based compensation -   -   2,863   -   -   2,863 
Net loss for the period -   -   -   -   (29,125)  (29,125)
BALANCE AT JUNE 30, 2023 55,559,767   159   482,971   (1,013)  (288,582)  193,535 
 
* Less than $1.


       Accumulated       
 Ordinary shares  Additional  other       
 Number of     paid-in  comprehensive  Accumulated    
 shares  Amount  capital  deficit  deficit  Total 
 U.S. Dollars in thousands 
BALANCE AT APRIL 1, 2024 57,779,033   165   517,388   (118)  (332,474)  184,961 
Changes during the period:                       
Issuance of ordinary shares upon exercise of options 718,090   2   1,580   -   -   1,582 
Other comprehensive gain -   -       66   -   66 
Share-based compensation -   -   2,101   -   -   2,101 
Net loss for the period -   -       -   (13,575)  (13,575)
BALANCE AT JUNE 30, 2024 58,497,123   167   521,069   (52)  (346,049)  175,135 


       Accumulated       
 Ordinary shares  Additional  other       
 Number of     paid-in  comprehensive  Accumulated    
 shares  Amount  capital  deficit  deficit  Total 
 U.S. Dollars in thousands 
BALANCE AT APRIL 1, 2023 55,150,345   158   479,172   (1,382)  (271,218)  206,730 
Changes during the period:                       
Issuance of ordinary shares upon exercise of options 154,030   *   419   -   -   419 
Issuance of ordinary shares under settlement agreement with former shareholders of USARAD Holding Inc. 255,392   1   1,560   -   -   1,561 
Other comprehensive gain -   -   -   369   -   369 
Share-based compensation -   -   1,820   -   -   1,820 
Net loss for the period -   -   -   -   (17,364)  (17,364)
BALANCE AT JUNE 30, 2023 55,559,767   159   482,971   (1,013)  (288,582)  193,535 
 
* Less than $1.



NANO-X IMAGING LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
 
 Six Months Ended
June 30,
 
 2024  2023 
CASH FLOWS FROM OPERATING ACTIVITIES:     
Net loss for the period (25,816)  (29,125)
Adjustments required to reconcile net loss to net cash used in operating activities:       
Share-based compensation 3,578   2,863 
Amortization of intangible assets 5,306   5,306 
Exchange rate differentials (295)  (78)
Change in contingent earnout liability -   (4,523)
Depreciation 561   509 
Deferred tax liability, net (188)  (188)
Realized loss from sale of marketable securities -   178 
Amortization of premium, discount and accrued interest on marketable securities (76)  527 
Impairment of property and equipment 171   145 
Changes in Operating Assets and Liabilities:       
Accounts receivable (24)  (454)
Inventories (316)  - 
Prepaid expenses and other current assets 677   2,236 
Other non-current assets 183   98 
Accounts payable (1,733)  957 
Operating lease assets and liabilities (17)  (10)
Accrued expenses and other liabilities 25   692 
Deferred Revenue (4)  4 
Other long-term liabilities 30   75 
Net cash used in operating activities (17,938)  (20,788)
        
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:       
Purchase of property and equipment (996)  (1,839)
Purchase of marketable securities (19,794)  - 
Proceeds from maturity of marketable securities 21,245   25,507 
Proceeds from sale of marketable securities -   822 
Net cash provided by investing activities 455   24,490 
        
CASH FLOWS FROM FINANCING ACTIVITIES:       
        
Payment due to settlement of contingent earnout liabilities -   (790)
Proceeds from issuance of ordinary shares upon exercise of options 45   595 
Net cash provided by/(used in) financing activities 45   (195)
EFFECT OF CHANGES IN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS 43   25 
NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS (17,395)  3,532 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 56,377   38,529 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS AT END OF THE PERIOD 38,982   42,061 
        
SUPPLEMENTARY INFORMATION ON ACTIVITIES INVOLVING CASH FLOWS       
Cash paid for interest 71   74 
Cash paid for income taxes 51   7 
SUPPLEMENTARY INFORMATION ON ACTIVITIES NOT INVOLVING CASH FLOWS -       
Issuance of ordinary shares upon exercise of options 1,561   - 
Ordinary shares issued in connection with earnout liability -   1,561 
Operating lease liabilities arising from obtaining operating right-of use assets -   601 
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS:       
Cash and cash equivalents 38,982   41,998 
Restricted cash equivalents -   63 
Total cash, cash equivalents and restricted cash equivalents 38,982   42,061 


UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(U.S. dollars in thousands (except per share data))

Use of Non-GAAP Financial Measures

The unaudited condensed consolidated financial information is prepared in conformity with GAAP. The Company uses information about certain financial measures that are not prepared in accordance with GAAP, including non-GAAP net loss attributable to ordinary shares, non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP research and development expenses non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, Non-GAAP other expenses (income) and non-GAAP basic and diluted loss per share. These non-GAAP measures are adjusted for (as applicable) amortization of intangible assets, share-based compensation expenses, change in contingent earnout liability, expenses related to an offering and legal fees in connection with the class-action litigation and the SEC investigation. The Company believes that separate analysis and exclusion of the one-off or non-cash impact of the above reconciling items (as applicable) adds clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measures for planning, forecasting, and measuring results against the forecast. The Company believes that the non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance. However, these non-GAAP measures are not measures of financial performance under GAAP and, accordingly, should not be considered as alternatives to GAAP measures as indicators of operating performance.

Reconciliation of GAAP net loss attributable to ordinary shares to Non-GAAP net loss attributable to ordinary shares and Non-GAAP basic and diluted loss per share (U.S. dollars in thousands)

 Six Months Ended  Three Months Ended 
 June 30,  June 30, 
 2024  2023  2024  2023 
GAAP net loss attributable to ordinary shares 25,816   29,125   13,575   17,364 
Non-GAAP adjustments:               
Less: Class-action litigation and SEC investigation 76   4,417   44   2,181 
Less: Amortization of intangible assets 5,306   5,306   2,653   2,653 
Less: Offering expenses 420   -   420   - 
Less (Add): Change in the fair value of earn out liabilities’ obligation -   (4,523)  -   137 
Less: accrual in connection with the estimated settlement of the SEC investigation -   650   -   650 
Less: Share-based compensation 3,578   2,863   2,101   1,820 
Non-GAAP net loss attributable to ordinary shares 16,436   20,412   8,357   9,923 
BASIC AND DILUTED LOSS PER SHARE 0.28   0.37   0.14   0.18 
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES (in thousands) 57,953   55,267   58,005   55,375 
 

Reconciliation of GAAP cost of revenue to Non-GAAP cost of revenue (U.S. dollars in thousands)

GAAP cost of revenue 10,159   8,243   5,552   4,273 
Non-GAAP adjustments:               
Amortization of intangible assets 5,112   5,112   2,556   2,556 
Share-based compensation 112   28   59   14 
Non-GAAP cost of revenue 4,935   3,103   2,937   1,703 
 

Reconciliation of GAAP gross loss to Non-GAAP gross profit (U.S. dollars in thousands)

GAAP gross loss (4,907)  (3,214)  (2,853)  (1,691)
Non-GAAP adjustments:               
Amortization of intangible assets 5,112   5,112   2,556   2,556 
Share-based compensation 112   28   59   14 
Non-GAAP gross profit (loss) 317   1,926   (238)  879 
 

Reconciliation of GAAP gross loss margin to Non-GAAP gross profit margin (in percentage of revenue)

GAAP gross loss margin (93.43)%  (63.91)%  (105.71)%  (65.49)%
Non-GAAP adjustments:               
Amortization of intangible assets 97.33%  101.65%  94.7%  98.99%
Share-based compensation 2.13%  0.56%  2.19%  0.54%
Non-GAAP gross profit (loss) margin 6.03%  38.3%  (8.82)%  34.04%
 

Reconciliation of GAAP research and development, expenses to Non-GAAP research and development expenses, net (U.S. dollars in thousands)

GAAP research and development expenses, net 10,032   13,199   4,812   6,913 
Non-GAAP adjustments:               
Share-based compensation 1,316   1,735   727   947 
Non-GAAP research and development expenses, net 8,716   11,464   4,085   5,966 
 

Reconciliation of GAAP sales and marketing expenses to Non-GAAP sales and marketing expenses (U.S. dollars in thousands)

GAAP sales and marketing expenses 1,634   1,988   834   835 
Non-GAAP adjustments:               
Amortization of intangible assets 194   194   97   97 
Share-based compensation 350   185   204   107 
                
Non-GAAP sales and marketing expenses 1,090   1,609   533   631 
 

Reconciliation of GAAP general and administrative expenses to Non-GAAP general and administrative expenses (U.S. dollars in thousands)

GAAP general and administrative expenses 10,958   15,434   5,916   7,626 
Non-GAAP adjustments:               
Class-action litigation and SEC investigation 76   4,417   44   2,181 
Offering expenses 420   -   420   - 
Share-based compensation 1,800   915   1,111   752 
                
Non-GAAP general and administrative expenses 8,662   10,102   4,341   4,693 
 

Reconciliation of GAAP other expenses to Non-GAAP other expenses (income) (U.S. dollars in thousands)

GAAP other  expenses 101   597   92   629 
Non-GAAP adjustments:               
Accrual in connection with the estimated settlement of the SEC investigation -   650   -   650 
                
Non-GAAP other expenses (income) 101   (53)  92   (21)


Contacts

Media Contact:
Ben Shannon
ICR Westwicke
NanoxPR@icrinc.com

Investor Contact:
Mike Cavanaugh
ICR Westwicke
mike.cavanaugh@westwicke.com


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