EX-99.1 2 ea022063801ex99-1_nanox.htm PRESS RELEASE, DATED NOVEMBER 21 2024

Exhibit 99.1

 

 

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

 

Made progress deploying all components of the Nanox solution including Nanox.ARC and Nanox.AI

 

Expanded US sales and support staff a key component of global strategic growth plan

 

Management to host conference call and webcast Thursday, November 21, 2024 at 8:30 AM ET

 

PETACH TIKVA, Israel — November 21, 2024 — NANO-X IMAGING LTD (NASDAQ: NNOX) (“Nanox” or the “Company”), an innovative medical imaging technology company, today announced results for the third quarter ended September 30, 2024 and provided a business update.

 

Recent Highlights:

 

  ● Generated $3.0 million in revenue in the third quarter of 2024, compared to $2.5 million in the third quarter of 2023.

 

  ● Continued to expand the US sales and support teams, and made progress in deployment, with dozens of units  deployed globally.

 

  ● Growth of the Nanox.AI business continued apace, signing new distribution agreements with SpinexMedical, and extending our agreements with users such as: Corewell Health, Dandelion health and Oxford University Hospitals extending the use of the Nanox.AI solutions.

 

  ● Multi-site clinical trial aimed at generating data supporting the clinical value of the Nanox.ARC is in progress at Beilinson hospital in Israel and in Ghana.

 

“I am more confident than ever in the future of Nanox as we accelerate the deployment of our Nanox.ARC and Nanox.AI technologies across the U.S. and international markets.” said Erez Meltzer, Nanox Chief Executive Officer and Acting Chairman. “The positive feedback from healthcare providers and patients underscores the transformative potential of our solutions across the healthcare continuum. On the regulatory front, we are working closely with the FDA on our application for full body scanning, and the European Union regulatory bodies to complete the CE Mark designation process. We believe securing these approvals will further solidify our position in the market, while significantly expanding our total addressable market. Coupled with our growing sales and support infrastructure we have established this past year, we are well-positioned to maintain our strong commercial momentum into 2025 and beyond.”

 

 

 

 

 

Financial results for three months ended September 30, 2024

 

For the three months ended September 30, 2024 (the “reported period”), the Company reported a net loss of $13.6 million, compared to a net loss of $21.4 million for the three months ended September 30, 2023 (which is referred as the “comparable period”), representing a decrease of $7.8 million. The decrease was largely due to a decrease of $7.4 million in expenses related to the impairment of Goodwill which were recorded in the comparable period.

 

The Company reported revenue of $3.0 million in the reported period, compared to $2.5 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 $2.8 million (gross loss margin of 93%) on a GAAP basis, as compared to $1.7 million (gross loss margin of 67%) in the comparable period. Non-GAAP gross loss for the reported period was $0.2 million (gross loss margin of approximately 6%), as compared to Non-GAAP gross profit of $0.9 million (gross profit margin of approximately 37%) in the comparable period.

 

The Company’s revenue from teleradiology services for the reported period was $2.6 million, compared to revenue of $2.2 million in the comparable period. The increase in the Company’s revenue from teleradiology services was mainly attributable to customer retention and increased volume of the Company’s reading services during the weekdays shifts.

 

The Company’s GAAP gross profit from teleradiology services for the reported period was $0.3 million (gross profit margin of approximately 13%), compared to $0.2 million (gross profit margin of approximately 11%) 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 35%) compared to gross profit of $0.8 million (gross profit margin of approximately 36%) in the comparable period.

 

During the reported period the Company generated revenue through the sales and deployment of its imaging systems which amounted to $29 thousand for the reported period, with a gross loss of $1.5 million on a GAAP and non-GAAP basis compared to revenue of $99 thousand with a gross profit of $36 thousand (gross profit margin of approximately 37%) on a GAAP and Non-GAAP basis in the comparable period. 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 $0.4 million with a gross loss of $1.6 million on a GAAP basis, compared to revenue of $141 thousand with a gross loss of $1.9 million in the comparable period. Non-GAAP gross profit of the Company’s AI solutions for the reported period was $0.4 million, compared to $0.1 million in the comparable period.

 

Research and development expenses, net, for the reported period were $4.7 million, compared to $6.0 million in the comparable period, reflecting a decrease of $1.3 million. The decrease was mainly due to a decrease of $0.3 million in salaries and wages and a decrease of $0.4 million in share-based compensation and $0.6 million in expenses related to our research and development activities.

 

Sales and marketing expenses for the reported period were $0.9 million compared to $1.1 in the comparable period.

 

General and administrative expenses for the reported period were $5.7 million, compared to $5.0 million in the comparable period. The increase of $0.7 million was mainly due to an increase of $0.5 million in share-based compensation, increase in our legal expenses in the amount of $0.5 million which was offset by a decrease in the cost of the directors’ and officers’ liability insurance premium in the amount of $0.3 million.

 

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Non-GAAP net loss attributable to ordinary shares for the reported period was $8.7 million, compared to $9.4 million in the comparable period. The decrease of $0.7 million was mainly due to a decrease in non-GAAP operating expenses of $1.8 which was offset by a decrease of $1.1 million in our non-GAAP gross profit.

 

Non-GAAP gross loss for the reported period was $0.2 million, 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 $4.0 million, compared to $4.9 million in the comparable period. Non-GAAP sales and marketing expenses for the reported period were $0.6 million, compared to $0.9 million in the comparable period. Non-GAAP general and administrative expenses for the reported and comparable periods were $4.5 million.

 

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

 

Liquidity and Capital Resources

 

As of September, 30, 2024, the Company had total cash, cash equivalents, restricted deposits and marketable securities of $57.1 million, compared to $82.8 million as of December 31, 2023. The decrease of $25.7 million during the reported period was primarily due to negative cash flow from operations of $26.1 million.

 

Other Assets

 

As of September 30, 2024 the Company had property and equipment of $44.7 million, compared to $42.3 million as of December 31, 2023.

 

As of September, 30, 2024, the Company had intangible assets of $72.6 million 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 $8.0 million.

 

Shareholders’ Equity

 

As of September 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, November 21, 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.

 

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About Nanox:

 

Nanox (NASDAQ: NNOX) is focused on driving the world’s transition to preventive health care by bringing a full solution of affordable medical imaging technologies based on advanced AI and novel digital source. Nanox’s vision encompasses expanding the reach of Nanox technology both within and beyond hospital settings, providing a seamless end-to-end solution from scan to diagnosis, leveraging AI for smarter diagnostics and maintaining a clinically-driven approach. The Nanox ecosystem includes Nanox.ARC – a multi-source Digital Tomosynthesis system that is cost-effective and user-friendly; Nanox.AI – an AI-based suite of algorithms that augment the readings of routine CT imaging to highlight early signs often related to chronic diseases; Nanox.CLOUD – a cloud-based software platform that manages and stores data collected by Nanox devices, and provides users with tools for in-depth imaging analysis; Nanox.MARKETPLACE – 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. By improving early detection and treatment, Nanox aims to enhance its better health outcomes worldwide. 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.

 

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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,impairment of Goodwill, 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.

 

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NANO-X IMAGING LTD.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands except share and per share data)

 

   September 30,
2024		   December 31,
2023		 
   U.S. Dollars in thousands 
Assets        
CURRENT ASSETS:        
Cash and cash equivalents   38,193    56,377 
Restricted deposit   46    46 
Marketable securities   18,517    26,006 
Accounts receivables net of allowance for credit losses of $55 as of September 30, 2024 and December 31, 2023, respectively.   1,492    1,484 
Inventories   1,032    2,356 
Prepaid expenses   230    1,274 
Other current assets   930    1,092 
TOTAL CURRENT ASSETS   60,440    88,635 
           
NON-CURRENT ASSETS:          
Restricted deposit   330    327 
Property and equipment, net   44,657    42,343 
Operating lease right-of-use asset   3,961    4,573 
Intangible assets   72,648    80,607 
Other non-current assets   1,905    2,163 
TOTAL NON-CURRENT ASSETS   123,501    130,013 
TOTAL ASSETS   183,941    218,648 
           
Liabilities and Shareholders’ Equity          
CURRENT LIABILITIES:          
Current maturities of long-term loan   3,410    3,490 
Accounts payable   1,331    3,303 
Accrued expenses   3,300    3,920 
Deferred revenue   297    543 
Current maturities of operating lease liabilities   737    861 
Other current liabilities   3,953    3,407 
TOTAL CURRENT LIABILITIES   13,028    15,524 
           
NON-CURRENT LIABILITIES:          
Non-current operating lease liabilities   3,661    4,045 
Deferred tax liability   2,670    2,953 
Other long-term liabilities   695    612 
TOTAL NON-CURRENT LIABILITIES   7,026    7,610 
TOTAL LIABILITIES   20,054    23,134 
           
COMMITMENTS AND CONTINGENCIES (Note 3)          
           
SHAREHOLDERS’ EQUITY:          
Ordinary Shares, par value NIS 0.01 per share 100,000,000 authorized at September 30, 2024 and December 31 2023,58,521,934 and 57,778,628 issued and outstanding at September 30, 2024 and December 31, 2023, respectively   167    165 
Additional paid-in capital   523,396    515,887 
Accumulated other comprehensive loss   12    (305)
Accumulated deficit   (359,688)   (320,233)
TOTAL SHAREHOLDERS’ EQUITY   163,887    195,514 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   183,941    218,648 

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

 

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NANO-X IMAGING LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE LOSS

(U.S. dollars in thousands except share and per share data)

 

   Nine Months Ended
September 30,		   Three Months Ended
September 30,		 
   2024   2023   2024   2023 
REVENUE   8,283    7,508    3,031    2,479 
                     
COST OF REVENUE   16,002    12,384    5,843    4,141 
                     
GROSS LOSS   (7,719)   (4,876)   (2,812)   (1,662)
                     
OPERATING EXPENSES:                    
Research and development, net   14,781    19,237    4,749    6,038 
Sales and marketing   2,521    3,134    887    1,146 
General and administrative   16,669    20,481    5,711    5,047 
Goodwill impairment   -    7,420    -    7,420 
Change in contingent earnout liability   -    (4,506)   -    17 
Other expenses (income), net   81    1,260    (20)   663 
TOTAL OPERATING EXPENSES   34,052    47,026    11,327    20,331 
OPERATING LOSS   (41,771)   (51,902)   (14,139)   (21,993)
REALIZED INCOME (LOSS) FROM SALE OF MARKETABLE SECURITIES   2    (178)   2    - 
FINANCIAL INCOME, net   2,050    1,292    404    511 
OPERATING LOSS BEFORE INCOME TAXES   (39,719)   (50,788)   (13,733)   (21,482)
                     
INCOME TAX BENEFIT   264    260    94    79 
NET LOSS   (39,455)   (50,528)   (13,639)   (21,403)
                     
BASIC AND DILUTED LOSS PER SHARE   (0.68)   (0.90)   (0.23)   (0.37)
Weighted average number of basic and diluted ordinary shares outstanding (in thousands)   58,182    55,900    58,624    57,148 
Comprehensive Loss:                    
Net Loss   (39,455)   (50,528)   (13,639)   (21,403)
Other comprehensive loss:                    
                     
Reclassification of net income (losses) realized in income statement   2    (178)   2    (178)
Unrealized gain from available for-sale securities   315    1,506    62    545 
Total comprehensive loss   (39,138)   (49,200)   (13,575)   (21,036)

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

 

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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   743,306    2    1,664    -    -    1,666 
Share-based compensation   -    -    5,845    -    -    5,845 
Unrealized gain from marketable securities   -    -    -    317    -    317 
Net loss for the period   -    -    -    -    (39,455)   (39,455)
BALANCE AT SEPTEMBER 30, 2024   58,521,934    167    523,396    12    (359,688)   163,887 

 

           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 and warrants, net of issuance expenses **   2,142,858    6    27,133    -    -    27,139 
Issuance of ordinary shares upon exercise of options   224,938    *    870    -    -    870 
Issuance of ordinary shares under settlement agreement with former shareholders of USARAD Holding Inc.   255,392    1    1,560    -    -    1,561 
Other comprehensive gain   -    -    -    1,328    -    1,328 
Share-based compensation   -    -    4,981    -    -    4,981 
Net loss for the period   -    -    -    -    (50,528)   (50,528)
BALANCE AT SEPTEMBER 30, 2023   57,717,425    165    512,497    (646)   (309,985)   202,031 

 

* Less than $1.
   
** Issuance expenses totaled to $2,861

 

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           Accumulated         
   Ordinary shares   Additional   other         
   Number of       paid-in   comprehensive   Accumulated     
   shares   Amount   capital   deficit   deficit   Total 
   U.S. Dollars in thousands 
BALANCE AT JULY 1, 2024   58,497,123    167    521,069    (52)   (346,049)   175,135 
Changes during the period:                              
Issuance of ordinary shares upon exercise of options   24,811    *    60    -    -    60 
Other comprehensive gain   -    -    -    64    -    64 
Share-based compensation   -    -    2,267    -    -    2,267 
Net loss for the period   -    -    -    -    (13,639)   (13,639)
BALANCE AT SEPTEMBER 30, 2024   58,521,934    167    523,396    12    (359,688)   163,887 

 

*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 JULY 1, 2023   55,559,767    159    482,971    (1,013)   (288,582)   193,535 
Changes during the period:                              
Issuance of ordinary shares and warrants, net of issuance expenses **   2,142,858    6    27,133    -    -    27,139 
Issuance of ordinary shares upon exercise of options   14,800    *    275    -    -    275 
Other comprehensive gain   -    -    -    367    -    367 
Share-based compensation   -    -    2,118    -    -    2,118 
Net loss for the period   -    -    -    -    (21,403)   (21,403)
BALANCE AT SEPTEMBER 30, 2023   57,717,425    165    512,497    (646)   (309,985)   202,031 

 

* Less than $1.
   
** Issuance expenses totaled to $2,861

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

 

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NANO-X IMAGING LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

 

   Nine Months Ended
September 30,		 
   2024   2023 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss for the period   (39,455)   (50,528)
Adjustments required to reconcile net loss to net cash used in operating activities:          
Share-based compensation   5,845    4,981 
Amortization of intangible assets   7,959    7,959 
Impairment of Goodwill   -    7,420 
Exchange rate differentials   (108)   (228)
Change in contingent earnout liability   -    (4,506)
Depreciation   839    753 
Deferred tax liability, net   (283)   (283)
Realized loss (income) from sale of marketable securities   (2)   178 
Amortization of premium, discount and accrued interest on marketable securities   (113)   717 
Impairment of property and equipment   116    883 
Changes in Operating Assets and Liabilities:          
Accounts receivable   (8)   (186)
Inventories   (140)   - 
Prepaid expenses and other current assets   1,206    2,395 
Other non-current assets   183    38 
Accounts payable   (1,972)   (1,378)
Operating lease assets and liabilities   104    (15)
Accrued expenses and other liabilities   (74)   (477)
Deferred Revenue   (246)   (63)
Other long-term liabilities   83    77 
Net cash used in operating activities   (26,066)   (32,263)
           
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:          
Purchase of property and equipment   (1,730)   (2,775)
Purchase of marketable securities   (33,017)   - 
Proceeds from maturity of marketable securities   40,938    35,112 
Proceeds from sale of marketable securities   -    822 
Net cash provided by investing activities   6,191    33,159 
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
           
Payment due to settlement of contingent earnout liabilities   -    (790)
Proceeds from issuance of ordinary shares and warrants, net of issuance expenses   -    27,139 
Proceeds from issuance of ordinary shares upon exercise of options   1,666    870 
Net cash provided by/(used in) financing activities   1,666    27,219 
EFFECT OF CHANGES IN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS   25    93 
NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS   (18,184)   28,208 
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   38,193    66,737 
           
SUPPLEMENTARY INFORMATION ON ACTIVITIES INVOLVING CASH FLOWS          
Cash paid for interest   106    99 
Cash paid for income taxes   51    22 
SUPPLEMENTARY INFORMATION ON ACTIVITIES NOT INVOLVING CASH FLOWS -          
Ordinary shares issued in connection with earnout liability   -    1,561 
Operating lease liabilities arising from obtaining operating right-of use assets   -    2,495 
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS:          
Cash and cash equivalents   38,193    66,384 
Restricted cash equivalents   -    353 
Total cash, cash equivalents and restricted cash equivalents   38,193    66,737 

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

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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, impairment of Goodwill, 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)

 

   Nine Months Ended   Three Months Ended 
   September 30,   September 30, 
   2024   2023   2024   2023 
GAAP net loss attributable to ordinary shares   39,455    50,528    13,639    21,403 
Non-GAAP adjustments:                    
Less (Add): Class-action litigation and SEC investigation   76    4,203    -    (214)
Less: Amortization of intangible assets   7,959    7,959    2,653    2,653 
Less: Impairment of goodwill   -    7,420         7,420 
Less: Offering expenses   420    -    -    - 
Less (Add): Change in the fair value of earn out liabilities’ obligation   -    (4,506)   -    17 
Less: accrual in connection with the estimated settlement of the SEC investigation   -    650    -    - 
Less: Share-based compensation   5,845    4,981    2,267    2,118 
Non-GAAP net loss attributable to ordinary shares   25,155    29,821    8,719    9,409 
BASIC AND DILUTED LOSS PER SHARE   0.43    0.53    0.15    0.16 
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES (in thousands)   58,182    55,900    58,624    57,148 

 

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

 

GAAP cost of revenue   16,002    12,384    5,843    4,141 
Non-GAAP adjustments:                    
Amortization of intangible assets   7,668    7,668    2,556    2,556 
Share-based compensation   173    41    61    13 
Non-GAAP cost of revenue   8,161    4,675    3,226    1,572 

 

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

 

GAAP gross loss   (7,719)   (4,876)   (2,812)   (1,662)
Non-GAAP adjustments:                    
Amortization of intangible assets   7,668    7,668    2,556    2,556 
Share-based compensation   173    41    61    13 
Non-GAAP gross profit (loss)   122    2,833    (195)   907 

 

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

 

GAAP gross loss margin   (93)%   (65)%   (93)%   (67)%
Non-GAAP adjustments:                    
Amortization of intangible assets   92%   102%   85%   103%
Share-based compensation   2%   1%   2%   1%
Non-GAAP gross profit (loss) margin   1%   38%   (6)%   37%

 

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   14,781    19,237    4,749    6,038 
Non-GAAP adjustments:                    
Share-based compensation   2,039    2,893    723    1,158 
Non-GAAP research and development expenses, net   12,742    16,344    4,026    4,880 

 

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

 

GAAP sales and marketing expenses   2,521    3,134    887    1,146 
Non-GAAP adjustments:                    
Amortization of intangible assets   291    291    97    97 
Share-based compensation   572    334    222    149 
                     
Non-GAAP sales and marketing expenses   1,658    2,509    568    900 

 

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

 

GAAP general and administrative expenses   16,669    20,481    5,711    5,047 
Non-GAAP adjustments:                    
Class-action litigation and SEC investigation   76    4,203    -    (214)
Offering expenses   420    -    -    - 
Share-based compensation   3,061    1,713    1,261    798 
                     
Non-GAAP general and administrative expenses   13,112    14,565    4,450    4,463 

 

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

 

GAAP other expenses (income)   81    1,260    (20)   663 
Non-GAAP adjustments:                    
Accrual in connection with the estimated settlement of the SEC investigation   -    650    -    - 
                     
Non-GAAP other expenses (income)   81    610    (20)   663 

 

 

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