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</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>UNITED STATES<br/>
SECURITIES AND EXCHANGE COMMISSION<br/>
WASHINGTON, D.C. 20549</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>FORM <ix:nonNumeric contextRef="c0" name="dei:DocumentType">20-F</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>(Mark One)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentRegistrationStatement"><span style="font-family: Times New Roman, Times, Serif">&#9744;</span></ix:nonNumeric>
<b>REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>OR</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:DocumentAnnualReport"><span style="font-family: Times New Roman, Times, Serif">&#9746;</span></ix:nonNumeric>
<b>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>For the fiscal year ended <ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="dei:DocumentPeriodEndDate"><ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-en" name="dei:CurrentFiscalYearEndDate">December 31</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" name="dei:DocumentFiscalYearFocus">2022</ix:nonNumeric></ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>OR</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentTransitionReport"><span style="font-family: Times New Roman, Times, Serif">&#9744;</span></ix:nonNumeric>
<b>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>OR</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentShellCompanyReport"><span style="font-family: Times New Roman, Times, Serif">&#9744;</span></ix:nonNumeric>
<b>SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>Date of event requiring this shell company report</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>For the transition period from&#160; &#160;
&#160; &#160; &#160; to&#160; &#160; &#160; &#160; &#160; </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>Commission file number <ix:nonNumeric contextRef="c0" name="dei:EntityFileNumber">001-39461</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:EntityRegistrantName"><b>NANO-X IMAGING LTD</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>(Exact name of Registrant as specified in its
charter)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>N/A<br/>
(Translation of Registrant&#8217;s name into English)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>State of Israel<br/>
(Jurisdiction of incorporation or organization)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine1">Communication Center</ix:nonNumeric>,<br/>
<ix:nonNumeric contextRef="c0" name="dei:EntityAddressCityOrTown">Neve Ilan</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry"><ix:nonNumeric contextRef="c0" format="ixt-sec:edgarprovcountryen" name="dei:EntityIncorporationStateCountryCode">Israel</ix:nonNumeric></ix:nonNumeric> <ix:nonNumeric contextRef="c0" name="dei:EntityAddressPostalZipCode">9085000</ix:nonNumeric><br/>
(Address of principal executive offices)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b><ix:nonNumeric contextRef="c1" name="dei:ContactPersonnelName">Erez Meltzer</ix:nonNumeric>, Chief Executive Officer<br/>
Telephone: +972 02 5360360<br/>
Facsimile: <ix:nonNumeric contextRef="c1" name="dei:CityAreaCode">+972</ix:nonNumeric> <ix:nonNumeric contextRef="c1" name="dei:LocalPhoneNumber">02 544 5214</ix:nonNumeric><br/>
<ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine1">Communication Center</ix:nonNumeric>,<br/>
<ix:nonNumeric contextRef="c1" name="dei:EntityAddressCityOrTown">Neve Ilan</ix:nonNumeric>, <ix:nonNumeric contextRef="c1" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry">Israel</ix:nonNumeric> <ix:nonNumeric contextRef="c1" name="dei:EntityAddressPostalZipCode">9085000</ix:nonNumeric><br/>
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Securities registered or to be registered pursuant to Section 12(b)
of the Act.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-size: 10pt"><b>Title of each class</b></span></td> <td style="width: 2%">&#160;</td> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-size: 10pt"><b>Trading Symbol</b></span></td> <td style="width: 2%">&#160;</td> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-size: 10pt"><b>Name of each exchange on which registered</b></span></td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="text-align: center"><ix:nonNumeric contextRef="c0" name="dei:Security12bTitle"><span style="font-size: 10pt"><b>Ordinary Shares, par value NIS 0.01 per share</b></span></ix:nonNumeric></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><ix:nonNumeric contextRef="c0" name="dei:TradingSymbol"><span style="font-size: 10pt"><b>NNOX</b></span></ix:nonNumeric></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><span style="font-size: 10pt"><b>The <ix:nonNumeric contextRef="c0" name="dei:SecurityExchangeName">NASDAQ</ix:nonNumeric> Stock Market LLC</b></span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Securities registered or to be registered pursuant to Section 12(g)
of the Act: None</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Securities for which there is a reporting obligation pursuant to Section
15(d) of the Act: None</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="width: 100%">&#160;</td></tr></table></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate the number of outstanding shares of each of the issuer&#8217;s
classes of capital or common stock as of the close of the period covered by the annual report: <ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">55,094,237</ix:nonFraction> Ordinary Shares as of December
31, 2022</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes <span style="font-family: Times New Roman, Times, Serif">&#9744;</span> <ix:nonNumeric contextRef="c0" name="dei:EntityWellKnownSeasonedIssuer">No</ix:nonNumeric> <span style="font-family: Times New Roman, Times, Serif">&#9746;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If this report is an annual or transition report, indicate by check
mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes <span style="font-family: Times New Roman, Times, Serif">&#9744;</span>
<ix:nonNumeric contextRef="c0" name="dei:EntityVoluntaryFilers">No</ix:nonNumeric> <span style="font-family: Times New Roman, Times, Serif">&#9746;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Note&#8212;Checking the box above will not relieve any registrant required
to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those sections.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
<ix:nonNumeric contextRef="c0" name="dei:EntityCurrentReportingStatus">Yes</ix:nonNumeric> <span style="font-family: Times New Roman, Times, Serif">&#9746;</span> No <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (&#167;232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). <ix:nonNumeric contextRef="c0" name="dei:EntityInteractiveDataCurrent">Yes</ix:nonNumeric> <span style="font-family: Times New Roman, Times, Serif">&#9746;</span>
No <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of &#8220;large accelerated filer,&#8221;
&#8220;accelerated filer,&#8221; and &#8220;emerging growth company&#8221; in Rule 12b-2 of the Exchange Act.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 30%"><span style="font-size: 10pt">Large accelerated filer</span></td> <td style="text-align: justify; width: 20%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="text-align: justify; width: 30%"><ix:nonNumeric contextRef="c0" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory"><span style="font-size: 10pt">Accelerated filer</span></ix:nonNumeric></td> <td style="text-align: justify; width: 20%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><span style="font-size: 10pt">Non-accelerated filer</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="text-align: justify"><span style="font-size: 10pt">Emerging growth company</span></td> <td style="text-align: justify"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityEmergingGrowthCompany"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></ix:nonNumeric></td></tr> </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If an emerging growth company that prepares its financial statements
in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards&#8224; provided pursuant to Section 13(a) of the Exchange Act. <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#8224; The term &#8220;new or revised financial accounting standard&#8221;
refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark whether the registrant has filed a report on
and attestation to its management&#8217;s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
<ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:IcfrAuditorAttestationFlag"><span style="font-family: Times New Roman, Times, Serif">&#9746;</span></ix:nonNumeric></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant&#8217;s executive officers during
the relevant recovery period pursuant to &#167;240.10D-1(b). <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark which basis of accounting the registrant has
used to prepare the financial statements included in this annual report:</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 13%"><span style="font-size: 10pt"><ix:nonNumeric contextRef="c0" name="dei:DocumentAccountingStandard">U.S. GAAP</ix:nonNumeric> <span style="font-family: Times New Roman, Times, Serif">&#9746;</span></span></td> <td style="text-align: justify; width: 74%"><span style="font-size: 10pt">International Financial Reporting Standards as issued by the International Accounting Standards Board <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></span></td> <td style="width: 13%; text-align: right"><span style="font-size: 10pt">Other <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></span></td></tr> </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If &#8220;Other&#8221; has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 <span style="font-family: Times New Roman, Times, Serif">&#9744;</span>
Item 18 <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If this is an annual report, indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes <span style="font-family: Times New Roman, Times, Serif">&#9744;</span>
No <ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityShellCompany"><span style="font-family: Times New Roman, Times, Serif">&#9746;</span></ix:nonNumeric></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PAST FIVE YEARS)</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by checkmark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes <span style="font-family: Times New Roman, Times, Serif">&#9744;</span> No <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><!-- Field: Rule-Page --><div style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="text-align: justify; font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 2pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="width: 100%">&#160;</td></tr></table></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>TABLE OF CONTENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 120px">&#160;</td>
    <td>&#160;</td>
    <td style="width: 6%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-size: 10pt"><b>Page</b></span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><a href="#a_001"><span style="font-size: 10pt">PART I</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">1</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 1.</span></td>
    <td><a href="#a_002"><span style="font-size: 10pt">Identity of Directors, Senior Management and Advisors</span></a></td>
    <td style="text-align: center">1</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 2.</span></td>
    <td><a href="#a_003"><span style="font-size: 10pt">Offer Statistics and Expected Timetable</span></a></td>
    <td style="text-align: center">1</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 3.</span></td>
    <td><a href="#a_004"><span style="font-size: 10pt">Key Information</span></a></td>
    <td style="text-align: center">1</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 4.</span></td>
    <td><a href="#a_005"><span style="font-size: 10pt">Information on the Company</span></a></td>
    <td style="text-align: center">48</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 5.</span></td>
    <td><a href="#a_006"><span style="font-size: 10pt">Operating and Financial Review and Prospects</span></a></td>
    <td style="text-align: center">71</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 6.</span></td>
    <td><a href="#a_007"><span style="font-size: 10pt">Directors, Senior Management and Employees</span></a></td>
    <td style="text-align: center">86</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 7.</span></td>
    <td><a href="#a_008"><span style="font-size: 10pt">Major Shareholders and Related Party Transactions</span></a></td>
    <td style="text-align: center">99</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 8.</span></td>
    <td><a href="#a_009"><span style="font-size: 10pt">Financial Information</span></a></td>
    <td style="text-align: center">103</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 9.</span></td>
    <td><a href="#a_010"><span style="font-size: 10pt">Offer and Listing</span></a></td>
    <td style="text-align: center">103</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 10.</span></td>
    <td><a href="#a_011"><span style="font-size: 10pt">Additional Information</span></a></td>
    <td style="text-align: center">104</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 11.</span></td>
    <td><a href="#a_012"><span style="font-size: 10pt">Qualitative and Quantitative Disclosures About Market Risk</span></a></td>
    <td style="text-align: center">118</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 12.</span></td>
    <td><a href="#a_013"><span style="font-size: 10pt">Description of Securities Other than Equity Securities</span></a></td>
    <td style="text-align: center">118</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt">&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><a href="#a_014"><span style="font-size: 10pt">PART II</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">119</td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 13.</span></td>
    <td><a href="#a_015"><span style="font-size: 10pt">Defaults, Dividend Arrearages and Delinquencies</span></a></td>
    <td style="text-align: center">119</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 14.</span></td>
    <td><a href="#a_016"><span style="font-size: 10pt">Material Modifications to the Rights of Security Holders and Use of Proceeds</span></a></td>
    <td style="text-align: center">119</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 15.</span></td>
    <td><a href="#a_017"><span style="font-size: 10pt">Controls and Procedures</span></a></td>
    <td style="text-align: center">119</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 16.</span></td>
    <td><a href="#a_018"><span style="font-size: 10pt">[Reserved]</span></a></td>
    <td style="text-align: center">121</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 16A.</span></td>
    <td><a href="#B_001"><span style="font-size: 10pt">Audit Committee Financial Expert</span></a></td>
    <td style="text-align: center">121</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 16B.</span></td>
    <td><a href="#B_002"><span style="font-size: 10pt">Code of Ethics</span></a></td>
    <td style="text-align: center">121</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 16C.</span></td>
    <td><a href="#B_003"><span style="font-size: 10pt">Principal Accountant Fees and Services</span></a></td>
    <td style="text-align: center">122</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 16D.</span></td>
    <td><a href="#a_019"><span style="font-size: 10pt">Exemptions from the Listing Standards for Audit Committees</span></a></td>
    <td style="text-align: center">122</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 16E.</span></td>
    <td><a href="#a_020"><span style="font-size: 10pt">Purchases of Equity Securities by the Issuer and Affiliated Purchasers</span></a></td>
    <td style="text-align: center">122</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 16F.</span></td>
    <td><a href="#a_021"><span style="font-size: 10pt">Change in Registrant&#8217;s Certifying Accountant</span></a></td>
    <td style="text-align: center">122</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 16G.</span></td>
    <td><a href="#a_022"><span style="font-size: 10pt">Corporate Governance</span></a></td>
    <td style="text-align: center">123</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 16H.</span></td>
    <td><a href="#a_023"><span style="font-size: 10pt">Mine Safety Disclosure</span></a></td>
    <td style="text-align: center">123</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 16I.</span></td>
    <td><a href="#a_024"><span style="font-size: 10pt">Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.</span></a></td>
    <td style="text-align: center">123</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt">&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><a href="#a_025"><span style="font-size: 10pt">PART III</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">124</td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 17.</span></td>
    <td><a href="#a_026"><span style="font-size: 10pt">Financial Statements</span></a></td>
    <td style="text-align: center">124</td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 18.</span></td>
    <td><a href="#a_027"><span style="font-size: 10pt">Financial Statements</span></a></td>
    <td style="text-align: center">124</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 35pt"><span style="font-size: 10pt">Item 19.</span></td>
    <td><a href="#a_028"><span style="font-size: 10pt">Exhibits</span></a></td>
    <td style="text-align: center">124</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>


</div><!-- Field: Page; Sequence: 3; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="text-transform: uppercase"><b>INTRODUCTION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">NANO-X IMAGING LTD was incorporated under the laws
of the State of Israel on December&#160;20, 2018 and commenced operations on September&#160;3, 2019. Unless the context otherwise requires,
all references to &#8220;Nanox,&#8221; &#8220;we,&#8221; &#8220;us,&#8221; &#8220;our,&#8221; the &#8220;Company&#8221; and similar designations
refer to NANO-X IMAGING LTD, an Israeli company, and its consolidated subsidiaries. Unless derived from our financial statements or otherwise
noted, the terms &#8220;shekels&#8221; and &#8220;NIS&#8221; refer to New&#160;Israeli Shekels, the lawful currency of the State of Israel,
the terms &#8220;dollar&#8221; or &#8220;$&#8221; refer to U.S. dollars, the lawful currency of the United States, &#8220;and &#8220;KRW&#8221;
refers to Korean Won, the lawful currency of South Korea.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="text-transform: uppercase"><b>FORWARD-LOOKING
STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This annual report on Form 20-F contains forward-looking
statements that are based on our management&#8217;s belief and assumptions and on information currently available to our management. Although
we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events
or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or
achievements stated in or implied by these forward-looking statements.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">All statements that are not historical facts contained
in this annual report on Form 20-F are forward-looking statements. These forward-looking statements include information about possible
or assumed future results of our business, financial condition, results of operations, prospects, liquidity, plans and objectives. In
some cases, you can identify forward-looking statements by terminology such as &#8220;can,&#8221; &#8220;might,&#8221; &#8220;believe,&#8221;
&#8220;may,&#8221; &#8220;estimate,&#8221; &#8220;continue,&#8221; &#8220;anticipate,&#8221; &#8220;intend,&#8221; &#8220;should,&#8221;
&#8220;plan,&#8221; &#8220;should,&#8221; &#8220;could,&#8221; &#8220;expect,&#8221; &#8220;predict,&#8221; &#8220;potential,&#8221; or
the negative of these terms or other similar expressions. Forward-looking statements are based on information we have when those statements
are made or our management&#8217;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.
Forward-looking statements include, but are not limited to, statements concerning:</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the initiation, timing, progress
and results of our research and development, manufacturing and commercialization activities with respect to our X-ray source technology
or the Nanox.ARC and the Nanox.CLOUD, which comprise the Nanox System;</span></td>
</tr></table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our ability to successfully demonstrate the feasibility of our technology for commercial applications;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our expectations regarding the necessity of, timing of filing for, and receipt of, regulatory clearances or approvals regarding our technology, the Nanox.ARC and the Nanox.CLOUD;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our ability to secure and maintain required U.S. Food and Drug Administration (the &#8220;FDA&#8221;) clearance and similar approvals from regulatory agencies worldwide, or Notified Body (&#8220;CE&#8221;), and comply with applicable quality standards and regulatory requirements;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify">our ability to manufacture the Nanox.ARC, following receipt of
clearance from the FDA, and if cleared by the requisite regulatory authorities in other jurisdictions, at substantially lower costs compared
to medical imaging systems that use a legacy analog X-ray source;</td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our expectations regarding the deployment schedule to meet our target minimum installed base of our first Nanox Systems and final deployment of 15,000 Nanox Systems; </span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the pricing structure of our products and services, if such products and services receive regulatory clearance or approval;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"></p><div>

</div><!-- Field: Page; Sequence: 4; Value: 1 --><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; text-align: justify">
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to and the outcome of the securities class action litigation and U.S. Securities and Exchange Commission (&#8220;SEC&#8221;) inquiry
we are currently subject to and any similar or other claims and litigation we may be subject to in the future; and</span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Many important factors, in addition to the factors
described above and in other sections of this annual report on Form 20-F, could adversely impact our business and financial performance.
The forward-looking statements contained in this annual report on Form 20-F speak only as of the date of this annual report on Form 20-F
and are subject to a number of known and unknown risks, uncertainties and assumptions, including those described under the sections in
this annual report on Form 20-F entitled &#8220;Item 3. Key Information&#8212;D. Risk Factors&#8221; and &#8220;Item 5. Operating and
Financial Review and Prospects&#8221; and elsewhere in this annual report on Form 20-F. Because forward-looking statements are inherently
subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should
not rely on these forward-looking statements as predictions of future events. Moreover, we operate in an evolving environment. New risks
and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can
we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results
to differ materially from estimates or forward-looking statements. We qualify all of our forward-looking statements by these cautionary
statements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements after the date of
this annual report on Form 20-F to conform these statements to actual results or to changes in our expectations.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>


</div><!-- Field: Page; Sequence: 5; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->iii<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><div><a id="a_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>PART I</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><div><a id="a_002"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-size: 10pt"><b>Item 1.</b></span></td>
    <td><span style="font-size: 10pt"><b>Identity of Directors, Senior Management and Advisors</b></span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="a_003"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-size: 10pt"><b>Item 2.</b></span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="a_004"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-size: 10pt"><b>Item 3.</b></span></td>
    <td><span style="font-size: 10pt"><b>Key Information</b></span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>A. [Reserved]</b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>B. Capitalization and Indebtedness</b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>C. Reasons for the Offer and Use of Proceeds</b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>D. Risk Factors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risk Factors Summary</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Risks Related to Our Business </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks Related to Owning Our Ordinary Shares</b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks Related to Our Operations in Israel</b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">The termination or reduction of tax and other incentives that the Israeli government provides to Israeli companies may increase our costs and taxes.</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">It may be difficult to enforce a U.S. judgment against us, our officers and directors named in this annual report on Form 20-F in Israel or the United States, or to assert U.S. securities laws claims in Israel or serve process on our officers and directors.</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-size: 10pt">Your rights and responsibilities as our shareholder will be governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations.</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">Our amended and restated articles of association contains exclusive forum provisions for certain claims, which could limit our shareholders&#8217; ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">Provisions of our amended and restated articles of association and Israeli law and tax considerations may delay, prevent or make difficult an acquisition of us, which could prevent a change of control and negatively affect the price of our ordinary shares.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks Related to Our Business</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We are a development-stage company with limited operating history.
We expect to incur significant additional losses in the future and may never be able to effectuate our business plan or achieve significant
revenue or reach profitability. Therefore, at this stage of our business, potential investors have a high probability of losing their
entire investment.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are a development-stage
company, and are subject to all of the risks inherent in the establishment of a new business enterprise. While we began to generate revenue
in the year ended December 31, 2021 through the sale of teleradiology services and the sale of AI solutions, following the completion
of the acquisitions of Nano-X AI Ltd (&#8220;Nanox AI&#8221;) (formerly known as Zebra Medical Vision Ltd. (&#8220;Zebra&#8221;)), USARAD
Holdings, Inc., a Delaware corporation (&#8220;USARAD&#8221;) and the assets of MDWEB, LLC (&#8220;MDWEB&#8221;) in November 2021, we
have a limited operating history and an unproven business plan upon which investors may evaluate our prospects. We have not yet demonstrated
the feasibility of our digital X-ray source technology, including both the MEMs X-ray chips and tubes, for commercial applications. Although
we have produced several Nanox.ARC units (including the Nanox.CLOUD) for purposes of collecting clinical sample images, obtaining regulatory
approvals and demonstrations and training, we have not yet commercialized the Nanox System. We engaged Dagesh P.K. Ltd. (&#8220;Dagesh&#8221;)
to manufacture these first Nanox.ARC units in Israel on a purchase order basis, and we expect such Nanox.ARC units will be used for the
initial global deployment, among other purposes. Even if we are able to manufacture the Nanox.ARC, we may not be able to do so at the
low costs needed to support our business models, including the Subscription Model, which is our primary business model. We may not receive,
or may be delayed in receiving, the necessary approval or clearance for the Nanox.ARC or our future products. We also have not entered
into any commercial arrangement for the licensing of our X-ray source under the Licensing Model.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Furthermore, even if our technology becomes commercially
viable, our business models may not generate sufficient revenue necessary to support our business. We may never achieve any of these thresholds
for units deployed in the near-to-mid-term at any level or at all, which may cause our business to fail. The Subscription Model is based
on selling the Nanox System at low cost or no cost using a pay-per-scan pricing structure, which is pioneering for medical imaging companies
and is subject to numerous risks. The medical imaging industry is also highly competitive and our technology, products, services or business
models may not achieve widespread market acceptance. If we are unable to address any issues mentioned above, or encounter other problems,
expenses, difficulties, complications, and delays in connection with the starting and expansion of our business, our entire business may
fail, in which case you may lose your entire investment.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have a history of net losses and negative cash flow from operations
since inception and we expect such losses and negative cash flows from operations to continue in the foreseeable future. As of December
31, 2022 and 2021, we had working capital of approximately $57.4 million and $42.1 million, respectively, and shareholders&#8217; equity
of approximately $216.7 million and $292.1 million, respectively. For the years ended December&#160;31, 2022, 2021 and 2020, we incurred
net losses of approximately $113.2 million, $61.8&#160;million and $43.8 million, respectively. As of December 31, 2022 and 2021, we had
an accumulated deficit of approximately $259.5&#160;million and $146.2&#160;million, respectively, and negative cash flow from operations
of $43.4&#160;million, $38.1&#160;million and $21.6 million for the years ended December&#160;31, 2022, 2021 and 2020, respectively. We
anticipate our losses will continue to increase from current levels because we expect to incur additional costs related to developing
our business, including research and development costs, manufacturing costs, employee-related costs, costs related to acquisitions, costs
of complying with government regulations, intellectual property development and prosecution costs, marketing and promotion costs, capital
expenditures, general and administrative expenses (including litigation costs), and costs associated with operating as a public company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our ability to generate significant revenue from
our operations and, ultimately, achieve profitability will depend on, among others, whether we can complete the development and commercialization
of our technology, our future products and our services, including our X-ray source technology, the Nanox.ARC and the Nanox.CLOUD, whether
we can manufacture the Nanox.ARC on a commercial scale in such amounts and at such costs as we anticipate, and whether we can achieve
market acceptance of our products, services and business models. We may never generate significant revenue or operate on a profitable
basis. Even if we achieve profitability, we may not be able to sustain it.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our efforts may never demonstrate the feasibility of our digital
X-ray source technology, including both the MEMs X-ray chips and tubes, for commercial applications.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have developed our X-ray source technology,
including both the MEMs X-ray chips and tubes, and the Nanox System, which includes the Nanox.ARC and the Nanox.CLOUD. Even though we
believe our X-ray source, which we refer to as the Nanox.SOURCE, has achieved commercial applicability, our technology has not been tested
over extended periods of time and therefore no meaningful data exists regarding the durability, safety and effectiveness of our X-ray
source over extended periods. In addition, there is no precedent for commercialization of technology like ours. The commercial scale production
and deployment of the Nanox System will require significant additional sales and marketing efforts, and we may not be able to ensure the
effectiveness, accuracy, consistency and safety of the Nanox System in mass production and deployment. Any unanticipated technical or
other problems and the possible insufficiency of funds and other resources needed to continue the development and commercialization of
our X-ray source, the Nanox.ARC or the Nanox.CLOUD may result in delays and cause us to incur additional expenses that would increase
our losses. If our X-ray source is not commercially feasible now or in the long term, our business may fail.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Two of our business models depend on the successful commercial
application of the Nanox.CLOUD, which is subject to numerous risks and uncertainties.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="background-color: #FEFEFE">In addition
to the Nanox.ARC, we have also developed, and continue to improve, the Nanox.CLOUD, a companion cloud software designed to deliver MSaaS.
The continued development and commercialization of the Nanox.CLOUD has a number of risks, including:</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the Nanox.CLOUD requires a considerable investment of technical, financial, and legal resources, which may not be available to us;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">it may not be technically viable to integrate the Nanox.CLOUD with the businesses of our potential customers and collaborators, such as local operators, radiologists, cloud storage providers, medical artificial intelligence (&#8220;AI&#8221;)&#160;software providers and others;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

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    <td style="width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">market acceptance of the MSaaS model is affected by a variety of factors, including security, reliability, scalability, customization, performance, customer preference, patients&#8217; concerns with entrusting a third party to store and manage their health data, public concerns regarding privacy and compliance with restrictive laws or regulations;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">our cloud-based service may raise concerns among our customer base, including concerns regarding changes to pricing over time, service availability, information security of a cloud-based solution and access to medical images while offline;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">the Nanox.CLOUD may be subject to computer system failures, infrastructure failures, cyber-attacks or other security breaches;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">incorrect or improper implementation or use of the Nanox.CLOUD by third-party cloud-service providers under our Sales Model could result in customer dissatisfaction and harm our business and reputation;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">undetected software errors or flaws in the Nanox.CLOUD could harm our reputation or decrease market acceptance of the MSaaS model; and</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">we may incur higher costs than we expected as we expand our cloud-based services.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If we are unable to successfully commercialize
the Nanox.CLOUD, our business, financial condition, results of operations and prospects could be negatively impacted.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We are highly dependent on the successful manufacturing, marketing
and sale of our X-ray source technology and the related products and services.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our core digital X-ray source technology is the
basis of our Nanox System. As a result, the success of our business plan is highly dependent on our ability to manufacture and commercialize
our X-ray source technology and related products and services, and our failure to do so could cause our business to fail. Successful commercialization
of medical imaging devices is a complex and uncertain process, dependent on the efforts of management, manufacturers, local operators,
integrators, medical professionals, third-party payors, as well as general economic conditions, among other factors. Any factor that adversely
impacts the manufacture and commercialization of our X-ray source technology or related products and services will have a negative impact
on our business, financial condition, results of operations and prospects. Some potential factors include:</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">our ability to achieve sufficient market acceptance by hospitals and clinics, providers of medical imaging services, medical professionals such as radiologists, third-party payors and others in the medical community;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">our ability to establish, maintain and expand our sales, marketing and distribution networks;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">our ability to obtain and/or maintain necessary regulatory approvals; and</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">our ability to effectively protect our intellectual property.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our inability to successfully obtain clearance
or approval for and subsequently commercialize our X-ray source technology or related products and services, and/or successfully develop
and commercialize additional products or any enhancements to the products which we may develop would have a material adverse effect on
our business, financial condition, results of operations and prospects.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Products utilizing our technology may need to be approved or
cleared by the FDA and similar regulatory agencies worldwide. We may not receive, or may be delayed in receiving, the necessary approval
or clearance for our future products, which would adversely affect business, financial condition, results of operations and prospects.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; text-align: justify; margin: 0pt 0">We continue to implement a multi-step approach to the regulatory clearance
process. As a first step, we submitted a 510(k) premarket notification to an accredited Review Organization under the FDA&#8217;s 510(k)
Third Party Review Program (the &#8220;Third Party Review Program&#8221;) for a single-source version of the Nanox.ARC, known as the Nanox
Cart X-Ray System. On April 1, 2021, we received clearance from the FDA to market our Nanox Cart X-Ray System. On June 17, 2021, we submitted
a 510(k) premarket notification application to the FDA for the first version of our multi-source Nanox.ARC 3D digital tomosynthesis system.
On August 12, 2021, we received a request for additional information from the FDA concerning the first submission of our multi-source
system. On January 10, 2022, we withdrew our first submission of our multi-source system. On January 12, 2022, we submitted to&#160;the
FDA a Q-submission for the second&#160;version of&#160;our&#160;multi-source Nanox.ARC 3D digital tomosynthesis system. The Q-submission
program provides submitters an opportunity to have early collaboration and discussions about medical device submissions, through a request
for feedback from and/or a meeting with the FDA regarding a potential or planned medical device submission. On September 26, 2022, we
submitted a 510(k) premarket notification to the FDA as part of our 510(k) application process for the second version of our multi-source
Nanox.ARC 3D digital tomosynthesis system (including the Nanox.CLOUD). On April 28, 2023, we received a 510(k) clearance from the FDA
to market the Nanox.ARC (including the Nanox.CLOUD) as a stationary <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>X-ray
<span style="font-family: Times New Roman, Times, Serif">&#8206;</span>system <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>intended
to produce tomographic images of the human musculoskeletal system adjunctive to conventional radiography, on adult patients. This device
is <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>intended to be used in professional healthcare <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>facilities
or <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>radiological <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>environments,
such as <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>hospitals, clinics, imaging <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>centers
and <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>other medical practices<span style="font-family: Times New Roman, Times, Serif">&#8206;</span>
by trained radiographers, <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>radiologists and physicists.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We expect to
commercialize the second version of our multi-source Nanox.ARC and the Nanox.CLOUD as the Nanox System. We may need to seek approval
from foreign regulatory authorities. We believe the digital X-ray source falls within a category of radiology vacuum tubes
converting electrical input power into X-rays that utilize the same energy levels, radiation types and throughputs as already
existing and approved X-ray tubes applied in a wide range of radiology medical procedures. As a result, we expect that there will be
no novel claim or methodology related to the X-ray radiation produced by the digital X-ray source; however, regulatory agencies may
not agree. To date, we have not had any discussion with the FDA or other regulatory authorities regarding the regulatory pathways
for the novel digital X-ray source. Although we have received FDA clearance for the Nanox.ARC, efforts to achieve additional
governmental clearances and approvals could be costly and time consuming, and we may not be able to obtain any such required
clearances or approvals in accordance with our anticipated timeline or in a cost-efficient manner. Any delay or failure to obtain
necessary regulatory clearances or approvals could have a material negative impact on our ability to generate revenues. Even if the
products containing our technology receive the required regulatory clearance or approval, such products will remain subject to
extensive regulatory requirements. If we fail to comply with the regulatory requirements of the FDA and other applicable U.S. and
foreign regulatory authorities, or previously unknown problems with any approved commercial products, manufacturers or manufacturing
processes are discovered, we could be subject to administrative or judicially imposed sanctions.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, the cost of compliance with new laws
or regulations governing our technology or future products could adversely affect our business, financial condition, results of operations
and prospects. New laws or regulations may impose restrictions or obligations on us that could force us to redesign our technology or
other future products or services, and may impose restrictions that are not possible or practicable to comply with, which could cause
our business to fail. See &#8220;&#8212;Risks Related to Government Regulation.&#8221;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We may need to obtain additional financing to fund our future
operations. If we are unable to obtain such financing, we may be unable to complete the development and commercialization of our technology
and our products and services.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our operations have consumed substantial amounts
of cash since inception. Our net losses were $113.2&#160;million, $61.8&#160;million and $43.8 million for the years ended December&#160;31,
2022, 2021 and 2020, respectively. In addition, significant resources were invested in the development of our X-ray source technology
prior to us acquiring the technology. We anticipate that our future cash requirements will continue to be significant. While we began
to generate revenue in the year ended December 31, 2021 and continued to generate revenue in the year ended December 31, 2022, we expect
that we will need to obtain additional financing to implement our business plan as described in this annual report on Form 20-F. Specifically,
although we believe our cash on hand is sufficient to complete the manufacture, shipping, installation and deployment of a significant
number of Nanox System units, as well as to support the ongoing development of the Nanox.ARC and the Nanox.CLOUD, we may need to raise
additional funds for such purposes. Such financings could include equity financing, which may be dilutive to shareholders, or debt financing,
which would likely restrict our ability to borrow from other sources. In addition, such securities may contain rights, preferences or
privileges senior to those of the rights of our current shareholders. Further, inflation and rising interest rates across the global economy
have resulted in, and may continue to result in, significant disruption of global financial markets, which may reduce our ability to access
capital and may result in increased financing costs. Additional funds may not be available when we need them, on terms attractive to us,
or at all. If adequate funds are not available on a timely basis, we may be required to curtail the development of our technology, products
or services, or materially delay, curtail, reduce or terminate our research and development and commercialization activities. We could
be forced to sell or dispose of our rights or assets. Any inability to raise adequate funds on commercially reasonable terms could have
a material adverse effect on our business, financial condition, results of operation and prospects, including the possibility that a lack
of funds could cause our business to fail and liquidate with little or no return to investors.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We operate in a capital intensive, high-cost industry
that requires significant amounts of capital to fund operations. We incur capital expenditures to, among other things, manufacture and
commercially deploy our Nanox Systems. To the extent we are unable to generate sufficient cash from our operations or we are unable to
structure or obtain financing, we may be unable to meet our capital expenditure requirements to support the maintenance and continued
growth of our operations.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>The success of our primary business model, the Subscription Model,
is subject to numerous risks and uncertainties.</i></b></p><div>

</div><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We expect the Subscription Model to be our primary
business model and the key to achieving our vision of increasing early-detection of medical conditions that are discoverable by X-ray.
Even if we are able to successfully implement our Sales Model and/or our Licensing Model, the sustainability of our general business plan
depends substantially on the sustainability of our Subscription Model. The success of our Subscription Model will also depend on each
device, once deployed, performing a sufficient number of scans per day to be fully utilized. We may not be successful in achieving these
goals for various reasons, including:</p><div>

</div><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>


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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">the availability of insurance coverage and the level of reimbursement for the Nanox.ARC provided by third-party payors may not be sufficient for our customers;</span></td></tr>
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">we may be unsuccessful in maintaining our target price per scan because we do not control the price charged by local operators and higher prices may adversely affect market acceptance of the Nanox System; and</span></td></tr>
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">regulatory authorities may challenge our Subscription Model altogether, and impose significant civil, criminal, and administrative penalties, damages, fines, and/or exclusion from government funded healthcare programs, which could adversely affect our revenues and results of operations.</span></td></tr>
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</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Any of the above factors may negatively affect
the implementation of our Subscription Model, or cause our Subscription Model to fail.</p><div>

</div><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>We may not be successful in tailoring our X-ray source to the
specific systems of other medical imaging companies under our Licensing Model, and/or entering into licensing agreements on terms favorable
to us.</i></b></p><div>

</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Under our proposed Licensing Model, we expect to
be engaged to tailor our X-ray source to other medical imaging companies&#8217; or manufacturers&#8217; of other X-ray devices specific
systems to replace the legacy X-ray source or to license our X-ray source technology to them to develop new types of imaging systems,
and we expect to receive a one-time, non-recurring licensing fee upfront, as well as recurring royalty payments for each imaging system
sold by such companies. We expect customization to be a complex and multi-step process that varies for each project, which will require
significant research and testing activities. We may also not be able to demonstrate the feasibility, functionality or safety of our technology
in other medical imaging systems, meet the potential licensees&#8217; design and manufacturing requirements, or satisfy their marketing
and product needs. In addition, we may not be successful in entering into licensing agreements with favorable terms as a result of a numbers
of factors, many of which are outside of our control, including willingness of, and the resources available to, other medical imaging
companies to in-license our novel X-ray source technology, our ability to agree with a potential partner on the value of our technology,
or on the related terms, as well as the availability of other technologies at lower cost or other alternative technologies at the time.
We have not entered into any licensing agreements to date. Any of the above factors may negatively affect the implementation of our Licensing
Model, or cause our Licensing Model to fail.</p><div>

</div><p style="font: 8pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>To the extent that we license our X-ray source technology to
other medical imaging companies, the products integrating our technology may need to be approved or cleared by the FDA or similar regulatory
agencies.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The FDA or similar regulatory agencies may require
products developed by other medical imaging companies under the Licensing Model to go through lengthier or more rigorous processes than
we expected. These products may also be subject to regulations by governmental agencies in other jurisdictions, or regulation by other
federal, state and local agencies. In addition, we may not have control with respect to any such further regulatory approval strategies
or process. If such products do not receive, or are delayed in receiving, the necessary clearances or approvals, or if the performance
of one or more clinical trials are required in connection with such clearances or approvals, the prospects of our Licensing Model may
be materially affected, which could have a material adverse impact on our business and our revenues.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We may experience operational and financial risks in connection
with acquisitions. </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In November 2021, we completed the acquisitions
of Nanox AI (formerly known as Zebra), a deep-learning machine analytics company, USARAD, a leading provider of teleradiology services,
and the assets of MDWEB, a decentralized marketplace connecting imaging facilities with radiologists. We integrated the operations of
these acquired businesses and began to generate revenue in the year ended December 31, 2021 through the sale of teleradiology services
and AI solutions, following the completion of these acquisitions. However, we may never realize the expected synergies, business opportunities
and growth prospects in connection with any future acquisitions and/or joint ventures. We may not be able to capitalize on the expected
business opportunities, assumptions underlying estimates of expected cost savings may be inaccurate or general industry and business conditions
may deteriorate. In addition, integrating operations may require significant efforts and expense on our part. Personnel may leave or be
terminated because of an acquisition. Our management may have its attention diverted while trying to integrate an acquisition. If these
factors limit our ability to integrate the operations of any future acquisition successfully or on a timely basis, our expectations of
future results of operations, including certain cost savings and synergies as a result of these or any future acquisition, may not be
met. The failure to successfully manage these risks in the implementation of any future acquisition and any new lines of business could
have a material, adverse effect on our business, financial condition and results of operations.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our industry is highly competitive and is subject to technological
change, which may result in new products or solutions that are superior to our technology or other future products we may bring to market
from time to time. If we are unable to anticipate or keep pace with changes in the marketplace and the direction of technological innovation
and customer demands, our technology may become less useful or obsolete and our operating results will suffer.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The medical imaging industry is rapidly evolving
and subject to intense and increasing competition. To compete successfully and to be able to establish and maintain a competitive position
in current and future technologies, we will need to demonstrate the advantages of our technology over well-established alternative solutions,
products and technologies, such as computed tomography (&#8220;CT&#8221;), as well as newer methods of medical imaging and early detection.
To achieve this, we will need to raise or develop financial resources, technical expertise, marketing, distribution or support capabilities
and we may not be successful in doing so.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Also, companies offering traditional medical imaging
systems, such as General Electric, Siemens, Philips, Hologic, Varian, Fuji, Toshiba and Hitachi, may be better established in the market
than we are, have greater corporate, financial, operational, sales and marketing resources than we do, or have more experience in research
and development than we have. In particular, the field emission technology has been used by a wide range of leading market players in
an attempt to create an alternative digital source of X-ray, the most well-known attempt being the use of carbon nano tubes as the base
materials for a potential field emission-based solution. In addition, early-detection technologies developed by other companies, such
as blood testing and DNA screening, may also reduce the attractiveness of our technology for early detection or render it obsolete. Successful
developments of these or other technologies by competitors resulting in new approaches for medical imaging, including technologies, products
or services that are more effective or commercially attractive, could make our technology less useful or obsolete. We may also face opposition
from certain industry leaders, who may have political influence and the ability to delay deployment of the Nanox System in certain geographical
areas.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Furthermore, as the market expands, we expect the
entry of additional competitors, such as cloud computing companies or leading IT companies, who may have longer operating histories, more
extensive international operations, greater name recognition, and/or substantially greater technical, marketing and financial resources.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our competitive position also depends on our ability
to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">generate widespread awareness, acceptance and adoption of our technology and future products or services;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">develop new or enhanced technologies or features that improve the convenience, efficiency, safety or perceived safety, and productivity of our technology and future products or services;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">limit the time required for development until commercial production; </span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">limit the timing and cost of regulatory approvals;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">attract and retain qualified personnel and collaborators;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">protect our inventions with patents or otherwise develop proprietary products and processes; and</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">secure sufficient capital resources to expand both our continued research and development, and sales and marketing efforts.</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">With respect to our AI imaging solutions, there
are a number of companies that currently offer AI radiology solutions, such as Aidoc and VIZ.AI, which, to our knowledge, focus on life
threatening and urgent cases. In addition, legacy healthcare technology companies are expected in the future to increase development efforts
in the field of AI imaging solutions. For example, Siemens Healthineers has developed AI-Rad Companion, which provides automatic post-processing
of imaging datasets through AI-powered algorithms for Siemens CTs. The AI medical imaging market is new and competition from new market
players may develop in the next few years.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">With respect to our teleradiology services, the
teleradiology market is highly competitive, rapidly evolving and fragmented, and is subject to changing technology and market dynamics.
The market has recently experienced and is expected to continue to experience competitive pricing pressure and radiologist compensation
pressure. We compete directly with both large and small-scale service providers who offer local, regional and national coverage operations.
We believe that our principal competitors are Envision Physician Services and Radiology Partners. We compete to attract and retain relationships
with customers and radiologists in different ways.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">If our technology is not, or our future products
or services are not, competitive based on these or other factors, our business would be harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>We expect to depend on third parties to manufacture the Nanox.ARC
and to supply certain component parts. Our reliance on third-party manufacturers and suppliers involves certain risks that may result
in, among others, increased costs, quality or compliance issues, or failure to timely manufacture the Nanox.ARC, any of which could materially
harm our business.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We plan to engage third-party
manufacturers and suppliers for the commercial production of our digital X-ray tubes for use in the Nanox.ARC, following receipt of clearance
from the FDA, and if cleared or approved by similar regulatory authorities in other jurisdictions, based on, among other things, cost
effectiveness. We are currently developing both ceramic and glass-based digital X-ray tubes for use in the Nanox.ARC. We are working with
third parties as well as producing digital ceramic tubes at our Korean facility, which is currently our primary manufacturer and supplier
for our digital ceramic tubes.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In May 2020, we entered into a three-year contract
manufacturing agreement with FoxSemicon Integrated Technology, Inc., a subsidiary of Foxconn (&#8220;FITI&#8221;) to manufacture the multi-source
Nanox.ARC. Under the contract manufacturing agreement with FITI, FITI will negotiate and contract with other parties for the supply of
the various other components of the Nanox.ARC in accordance with the pre-approved supplier list and on the terms to be agreed upon by
both parties.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">However, due, in part, to travel restrictions as
a result of the COVID-19 pandemic, we engaged Dagesh to manufacture Nanox.ARC units (including the Nanox.CLOUD) in Israel on a purchase
order basis that are being used for purposes of collecting clinical sample images, obtaining regulatory approvals and demonstrations and
training, and we expect such Nanox.ARC units will be used for the initial global deployment, among other purposes. We have not entered
into a formal agreement with Dagesh to date and we may not be able to enforce the obligations under such arrangements. As we further expand
our business in connection with the commercialization of our technology, we expect to seek to engage several manufacturers of the Nanox.ARC.
If any of our manufacturers or suppliers breach their agreements, are unable to meet their contractual or quality requirements, or become
unwilling to perform for any reason, we may be unable, or may be unable in a timely manner, to locate alternative acceptable manufacturers
or suppliers and enter into favorable agreements with them.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our dependence on third-party manufacturers
and suppliers involves a number of risks, including:</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We commenced the manufacture of the MEMs X-ray
chips at our fabrication facility in Korea, which is expected to meet our currently anticipated needs. However, we may not be successful
in mass production of the MEMs X-ray chips at the facility or have sufficient capacity to manufacture the MEMs X-ray chips as our business
expands. In addition, we rely on third parties to supply the raw materials and certain component parts. Disruptions of our relationships
with such suppliers could negatively impact our production for an extended period of time. Any inability to acquire sufficient quantities
of any raw materials or components in a timely manner from these third-party suppliers could have a material negative impact on our business.
We may need to enhance or redesign our MEMs X-ray chip to generate licensing revenue from it or for it to be functional for certain medical
imaging applications.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, if we change the manufacturer of a
critical component of our products, we will be required to verify that the new manufacturer maintains facilities, procedures and operations
that comply with our quality and applicable regulatory requirements, which could further impede our ability to manufacture our products
in a timely manner.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Transitioning to a new supplier could be time-consuming
and expensive, may result in interruptions in our operations and product delivery, could affect the performance specifications of our
products or could require that we modify the design of those systems. If the change in manufacturer results in a significant change to
any product, a new 510(k) clearance or approval from the FDA or similar international regulatory authorization may be necessary before
we implement the change, which could cause substantial delays. The occurrence of any of these events could harm our ability to meet the
demand for our products in a timely or cost-effective manner. See &#8220;&#8212;Risks Related to Government Regulation.&#8221;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We may experience development or manufacturing problems and higher
costs, or delays that could limit our revenue, if any, or increase our losses.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Developing manufacturing procedures for new products
requires developing specific production processes for those products. Developing such processes could be time consuming, and any unexpected
difficulty in doing so can delay the deployment of the Nanox System. Moreover, difficulties associated with adapting our technology and
product design to the proprietary process technology and design rules of outside manufacturers can lead to reduced yields. Since low yields
may result from either design or process technology failures, yield problems may not be effectively determined or resolved until an actual
product exists that can be analyzed and tested to identify process sensitivities relating to the design rules that are used. As a result,
yield problems may not be identified until well into the production process, and resolution of yield problems may require cooperation
between our manufacturers and us. This risk could be compounded by the offshore location of certain of our manufacturers, increasing the
effort and time required to identify, communicate and resolve manufacturing yield problems. Manufacturing defects that we do not discover
during the manufacturing or testing process may lead to costly product recalls. These risks may lead to increased costs or delayed product
delivery, which would harm our profitability and customer relationships. Furthermore, our, our manufacturers&#8217; or our suppliers&#8217;
production processes and assembly methods may have to change to accommodate any significant, future expansion of our manufacturing capacity,
which may increase the manufacturing costs, delay production of our products, reduce our product margin, require supplemental filings
with the FDA or other regulatory authorities, any of which may adversely impact our business. If we are unable to keep up with demand
for our products by successfully manufacturing and shipping our products in a timely manner, our revenue could be impaired, and market
acceptance for our products could be adversely affected.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We may not be able to successfully execute our business models.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are pursuing three simultaneous business models
to maximize the commercial potential of our X-ray source technology, each of which requires significant time and resources, in particular,
our primary business model, the Subscription Model. We are a company with limited operating history and we may not have the necessary
resources, expertise and experience to successfully execute any of our business models on a global scale, such as obtaining the necessary
approvals or clearances from the regulatory agencies of our target markets. Our ability to execute our models is dependent on a number
of factors, including the ability of our senior management team to execute our models, our ability to engage local operators and integrators
in different geographic regions, our ability to begin or maintain our pace of product development, manufacturing and commercialization,
our ability to meet the changing needs of the medical imaging market, and the ability of our employees to perform at a high-level. If
we are unable to execute our models, if our models do not drive the growth that we anticipate, or if our market opportunity is not as
large as we have estimated, it could adversely affect our business and our prospects.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We have a limited operating history. If we successfully commercially
launch the Nanox System, and it does not achieve widespread market acceptance, we will not be able to generate the revenue necessary to
support our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have a limited operating history and while we
began the marketing of our AI solutions and teleradiology services following the acquisitions in November 2021, we have limited history
of marketing our X-ray source technology and the Nanox System. We may fail to generate significant interest in our X-ray source technology
or the Nanox System or the imaging products using our technology, or any other product we may develop. These and other factors, including
the following, may affect the rate and level of market acceptance:</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; font-size: 10pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; font-size: 10pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If cleared or approved for marketing by the Notified
Body (CE) or other regulatory agencies, as the Nanox.ARC (including the Nanox.CLOUD) was cleared for marketing by the FDA, depending on
the approved clinical indication, the Nanox System will be competing with existing and future imaging products and similar offerings.
The technology underlying our X-ray source and the Nanox System may be perceived as inferior or inaccurate and patients may be unwilling
to undergo medical screening using the Nanox.ARC or other products using our technology. Moreover, patients and medical professionals
may be unwilling to depart from the current medical imaging technology. Medical professionals tend to be slow to change their medical
diagnostic practices because of perceived liability risks arising from the use of new technology or products, and they may not recommend
medical imaging using the Nanox.ARC or other products using our technology until there is long-term clinical evidence to convince them
to alter or modify their existing imaging methods. Our efforts to educate patients, radiologists and other members of the medical community
on the benefits of our products require significant resources and may not be successful. Our efforts to educate the marketplace may require
more resources than are required by conventional technologies marketed by our competitors. In particular, gaining market acceptance for
our products in nascent markets, such as Africa, China, India, and certain countries in Latin America, could be challenging. Moreover,
in the event that the Nanox System or other products using our technology are the subject of guidelines, clinical studies or scientific
publications that are unfavorable or damaging, or otherwise call into question their benefits, we may have difficulty in convincing market
participants to adopt our products. In addition, medical professionals, patients, providers of medical imaging services and third-party
payors may not adopt or reimburse the use of the Nanox System in the near term or at all. If we are unable to achieve or maintain an adequate
level of market acceptance, we may not generate significant revenue or become profitable and our business, financial condition, results
of operations and prospects would be significantly harmed.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We plan to do business globally, including in certain countries
where we might have limited resources and would be subject to additional regulatory burdens and other risks and uncertainties.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We expect to do business globally, including in
North America and certain countries in Asia, Europe, Africa, Latin America and Australia. Commercialization of our X-ray source technology,
the Nanox.ARC or the Nanox System in foreign markets, either directly or through third parties, is subject to additional risks and uncertainties,
including:</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Specifically, we are subject to the U.S. Foreign
Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. &#167; 201, the U.S. Travel Act, the
USA PATRIOT Act, the United Kingdom Bribery Act 2010, the Proceeds of Crime Act 2002, Chapter 9 (sub-chapter 5) of the Israeli Penal Law,
1977, the Israeli Prohibition on Money Laundering Law&#8211;2000 and possibly other anti-bribery and anti-money laundering laws in countries
outside of the United States in which we conduct our activities. As we engage finders to obtain MSaaS agreements in certain countries,
we and our finders may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated
entities. We may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries,
our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities. As we expand
our international business, our risks under these laws may increase.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We also may sell the Nanox System to government
entities, which are subject to a number of challenges and risks. Any actual or perceived privacy, data protection, or data security incident,
or even any perceived defect with regard to our practices or measures in these areas, may negatively impact public sector demand for our
products. Government entities may also have statutory, contractual or other legal rights to terminate contracts with us for convenience
or due to a default, and any such termination may adversely affect our future results of operations. Governments routinely investigate
and audit government contractors&#8217; administrative processes, and any unfavorable audit could result in the government refusing to
continue buying our subscriptions, a reduction of revenue, or fines or civil or criminal liability if the audit uncovers improper or illegal
activities. In addition, sales of the Nanox System in foreign markets could also be adversely affected by the imposition of governmental
controls, political and economic instability, war, conflicts, civil unrest and other hostilities, trade restrictions and changes in tariffs,
any of which may adversely affect our business, financial condition, results of operations and prospects.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Although we received clearance from the FDA to market the Nanox.ARC
(including the Nanox.CLOUD), the device is not yet approved for third-party payor coverage or reimbursement. If in the future we are approved
for and are otherwise able to commercialize it, but are unable to obtain adequate reimbursement or insurance coverage from third-party
payors, we may not be able to generate significant revenue, in which case we may need to obtain additional financing.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Although we received clearance from the FDA to
market the Nanox.ARC (including the Nanox.CLOUD), the device is not yet approved for third-party payor coverage or reimbursement. Coding
and coverage determinations as well as reimbursement levels and conditions are important to the commercial success of an imaging product
or offering. The future availability of insurance coverage and reimbursement for newly approved medical devices is highly uncertain, and
our future business will be greatly impacted by the level of reimbursement provided by third-party payors. In the United States, third-party
payors decide which imaging products and services they will cover, how much they will pay and whether they will continue reimbursement.
Third-party payors may not cover or provide adequate reimbursement for the Nanox System or the imaging services using the Nanox System,
assuming we are able to fully develop and obtain all regulatory approvals and clearances to market it in geographies in addition to the
United States. To date, we have not had any discussions with any third-party payors, including any regulatory agencies administering any
government funded healthcare programs, regarding the coding, coverage or reimbursement for imaging services using the Nanox System. Accordingly,
unless government and other third-party payors provide coverage and reimbursement for our services, patients and healthcare providers
may choose not to use them, which would cause investors to lose their entire investment. A primary trend in the United States healthcare
industry and elsewhere is cost containment. Government authorities and other third-party payors have attempted to control costs by limiting
coverage and the amount of reimbursement for particular products and services. Reimbursement may not be available, or continue to be available,
for the Nanox System or the imaging services using the Nanox System, other products or systems using our X-ray source technology, our
AI solutions, teleradiology services, the Nanox.MARKETPLACE or any other products or services we may develop or offer in the future, or
even if reimbursement is available, such reimbursement may not be adequate. We also will be subject to foreign reimbursement policies
in the international markets we expect to enter. Decisions by health insurers or other third-party payors in these markets not to cover,
or to discontinue reimbursing, our products could materially and adversely affect our business. If such decisions are made, they could
also have a negative impact on our ability to generate revenues, in which case we may need to obtain additional financing.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>A pandemic, epidemic or outbreak of an infectious disease, such
as COVID-19, may materially and adversely affect our business and our financial results and could cause a disruption to the development
or deployment of the Nanox System. </i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Public health crises such as pandemics or similar
outbreaks could adversely impact our business. Beginning in 2019, a novel strain of a virus named SARS-CoV-2 (severe acute respiratory
syndrome coronavirus 2), or coronavirus, which causes COVID-19, spread to most countries across the world, including Israel. The COVID-19
pandemic led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public
health safety measures. While we have not experienced any material adverse impact as a result of the COVID-19 pandemic to date, the extent
to which the COVID-19 pandemic may in the future impact our operations or those of our third-party partners will depend on future developments,
which are highly uncertain and cannot be predicted with confidence. The future spread of COVID-19 globally or the reinstatement of restrictions
or other actions that may be required to contain COVID-19 or treat its impact could adversely impact our development, manufacture or deployment
of the Nanox System, which could adversely affect our ability to commercialize the Nanox System, increase our operating expenses and have
a material adverse effect on our financial results. Further, uncertainty around the COVID-19 pandemic and related issues could lead to
adverse effects on the economy of the United States and other economies, which could impact our ability to raise the necessary capital
needed to develop and commercialize the Nanox System.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Recent changes in the United States related to payment policies
for imaging procedures could have a negative impact on the utilization of our imaging services.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In the United States, over the past several years,
the Centers for Medicare &amp; Medicaid Services (&#8220;CMS&#8221;), the federal agency responsible for administering the Medicare program,
has implemented numerous changes to payment policies for imaging procedures in both the hospital setting and non-hospital settings, which
include physician offices and freestanding imaging facilities. Some of these changes have had a negative impact on utilization of imaging
services. Examples of these changes include:</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">reducing payments for certain imaging procedures when performed together with other imaging procedures in the same family of procedures on the same patient on the same day in the physician office and free-standing imaging facility setting;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We also expect increased regulation and oversight
of advanced diagnostic testing. One provision in the Protecting Access to Medicare Act requires CMS to develop appropriate use criteria
(&#8220;AUC&#8221;) that professionals must consult when ordering advanced diagnostic imaging services (which include magnetic resonance
imaging (&#8220;MRI&#8221;), CT, nuclear medicine (including position emission tomography) and other advanced diagnostic imaging services
that the Secretary of the Department of Health and Human Services (&#8220;HHS&#8221;) may specify). Under this provision, payment is to
be made to the furnishing professional for an applicable advanced diagnostic imaging service only if the claim indicates that the ordering
professional consulted a qualified clinical decision support mechanism, as identified by HHS, as to whether the ordered service adheres
to the applicable AUC. To the extent that these types of changes have the effect of reducing the aggregate number of diagnostic medical
imaging procedures performed in the United States, our business, results of operations, financial condition and cash flows would be adversely
affected. In July 2022, CMS announced that the payment penalty phase for the AUC program would not begin on January 1, 2023 even if the
public health emergency for COVID-19 ended in 2022 and that it was unable to forecast when the payment penalty phase would begin.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Billing complexities associated with obtaining payment or reimbursement
may negatively affect our revenue, cash flow and profitability.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Payment for our imaging-based offerings is, and
is expected to be, provided by individual patients and from a variety of payors, such as commercial insurance carriers, managed care organizations
and governmental programs. Each payor typically has different billing requirements, and the billing requirements of many payors have become
increasingly stringent.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Among the factors complicating our customers&#8217;
ability to bill and receive reimbursement from third-party payors are:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">disparity in information and billing requirements among payors; and</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">incorrect or missing billing information, which is required to be provided by the ordering physician.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, we may be required to seek new billing
codes for imaging services using the Nanox System or any other imaging-based offering that we may provide, and regulatory authorities
may not approve the creation of separate codes. Additionally, even if we are successful, existing or future billing codes or the payment
amounts associated with such codes may change in the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These billing complexities, and the related uncertainty
in obtaining payment for our imaging-based offerings, could negatively affect our revenue, cash flow and profitability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Any collaborative and MSaaS arrangements that we have established
or may establish in the future may not be successful or we may otherwise not realize the anticipated benefits from these collaborations.
We do not control third parties with whom we have or may have collaborative or MSaaS arrangements, and we will rely on them to achieve
results which may be significant to us. In addition, any current or future collaborative and MSaaS arrangements may place the development
and commercialization of our technology outside our control, may require us to relinquish important rights or may otherwise be on terms
unfavorable to us.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have entered into certain, and expect to enter
into additional, collaborative arrangements and MSaaS agreements with respect to the research, development, manufacture and commercialization
of our technology with different relevant industry participants, including, among others, local operators, integrators, radiologists,
cloud storage providers and medical AI software providers and third-party payors. See &#8220;Item 4. Information on the Company&#8212;B.
Business Overview&#8212;MSaaS Agreements&#8221; and &#8220;Item 4. Information on the Company&#8212;B. Business Overview&#8212;Collaboration
Agreements.&#8221; Any future potential collaborative or MSaaS arrangements may require us to rely on external consultants, advisors and
experts for assistance in several key functions, including research and development, manufacturing, regulatory, intellectual property,
commercialization and distribution. We cannot and will not control these third parties, but we may rely on them to achieve results, which
may be significant to us. Relying upon these collaborative arrangements subjects us to a number of risks, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">we may not be able to control the amount and timing of resources that our collaborators may devote to our technology;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">should a collaborator fail to comply with applicable laws, rules or regulations when performing services for us, we could be held liable for such violations;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">collaborative arrangements are often terminated or allowed to expire or remain unformalized by a written agreement, which could delay the ability to commercialize our technology.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, if disputes arise between us and any
of our collaborators, it could result in the delay or termination of the development, manufacturing or commercialization of products containing
our technology, lead to protracted and costly legal proceedings, or cause collaborators to act in their own interest, which may not be
in our interest. As a result, the collaborative arrangements that we may enter into, may not achieve their intended goals.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If any of these scenarios materialize, they could
have a material adverse effect on our business, financial condition, results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We also may have other future products where it
is desirable or essential to enter into agreements with a collaborator who has greater financial resources or different expertise than
us, but for which we are unable to find an appropriate collaborator or are unable to do so on favorable terms. If we fail to enter into
such collaborative agreements on favorable terms, it could materially delay or impair our ability to develop and commercialize, and increase
the costs of development and commercialization of, our technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>We could become subject to product liability claims, product
recalls, warranty claims and professional malpractice liability claims that could be expensive, divert management&#8217;s attention and
harm our business reputation and financial results.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business exposes us to potential liability
risks that are inherent in the marketing and sale of products used in patient care. We may be held liable if the Nanox System or if any
other product that integrates our X-ray source technology causes injury or death or is found otherwise unsuitable during usage. The Nanox
System incorporates sophisticated components and computer software. Complex software can contain errors, particularly when first introduced.
In addition, new products or enhancements may contain undetected errors or performance problems that, despite testing, are discovered
only after installation. Patients and end-users of the Nanox System could allege or possibly prove defects of our products or other products
that integrate our technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A product liability claim, regardless of its merit
or eventual outcome, could result in significant legal defense costs and divert management&#8217;s attention. Regardless of merit or eventual
outcome, liability claims may result in:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, we may be subject to professional
liability claims, including, without limitation, for improper use or malfunction of our diagnostic imaging software.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Further, the radiologists that provide our teleradiology
services may occasionally subject us to malpractice claims. For example, a complaint was recently filed against several defendants, including
one of our radiologists and USARAD, alleging that such radiologist, in his capacity as an employee of USARAD, was negligent in the interpretation
of a PET/CT scan prior to our acquisition of USARAD. Additional claims, suits or complaints relating to services provided by these radiologists
may be asserted against us in the future.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Any of these outcomes may have an adverse effect
on our business, financial condition and results of operations, and may increase the volatility of our share price.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The coverage limits of our insurance policies we
may choose to purchase to cover related risks may not be sufficient to cover future claims. If sales of the Nanox System or other products
integrating our technology increase or we suffer future product liability claims or malpractice claims, we may be unable to maintain product
liability insurance or malpractice insurance at satisfactory rates or with adequate amounts or at all. A product liability claim, any
product recalls or excessive warranty claims, whether arising from defects in design or manufacture or otherwise, could negatively affect
our sales or require a change in the design or manufacturing process, any of which could harm our relationship with our customers and
partners, and have a material adverse impact on our reputation and business, financial condition, results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, if the Nanox System or other products
integrating our technology are defective, we, our future customers or partners may be required to notify regulatory authorities and/or
to recall the products. See &#8220;&#8212;Risks Related to Government Regulation&#8212;Our products may cause or contribute to adverse
medical events or be subject to failures or malfunctions that we are required to report to the FDA, and if we fail to do so, we would
be subject to sanctions that could harm our reputation, business, financial condition and results of operations. The discovery of serious
safety issues with our products, or a recall of our products either voluntarily or at the direction of the FDA or another governmental
authority, could have a negative impact on us.&#8221; Any recall would divert management&#8217;s attention and financial resources and
harm our reputation with customers, patients, medical professionals and third-party payors. A recall involving the Nanox System would
be particularly harmful to our business. The adverse publicity resulting from any of these actions could adversely affect the perception
of our customers or partners. These investigations or recalls, especially if accompanied by unfavorable publicity, could result in our
incurring substantial costs, losing revenues and damaging our reputation, each of which would harm our business, financial condition,
results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We are highly dependent on key members of our executive management
team. Our inability to retain these individuals could impede our business plan and growth strategies, which could have a negative impact
on our business and the value of your investment.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our ability to implement our business plan depends
on the continued services of key members of our senior management. In particular, and to a critical extent, we are dependent on the continued
efforts and services of the members of management named under &#8220;Item 6. Directors, Senior Management and Employees,&#8221; as well
as the senior management of our significant subsidiaries. If we lose the services of such key members of our management team, we would
likely be forced to expend significant time and money in the pursuit of replacement individuals, which may result in a delay in the implementation
of our business plan and plan of operations. We may not be able to find satisfactory replacements on terms that would not be unduly expensive
or burdensome to us. We do not currently carry a key-man life insurance policy that would assist us in recouping our costs in the event
of the death or disability of a member of our management team. The loss of members of our management team, or our inability to attract
or retain other qualified individuals, could have a material adverse effect on our business, results of operations and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>The mishandling or the perceived mishandling of sensitive information,
or the occurrence of data security breaches, could harm our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We expect that our business operations will enable
us to accumulate a significant amount of highly sensitive and/or confidential information, including medical images and other medical
and personal information. While employee contracts generally contain standard confidentiality provisions, our employees, customers or
collaborators may not properly handle or process sensitive or confidential data. The improper handling of sensitive or confidential data,
or even the perception of such mishandling (whether or not valid), or other security lapses by us, our customers or collaborators, could
reduce demand for our offerings or otherwise expose us to financial or reputational harm or legal liability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, any security breach, including personal
data breaches, or incident, including cybersecurity incidents, that we experience could result in unauthorized access to, misuse of or
unauthorized acquisition of the sensitive or confidential information and data (including medical information), the loss, corruption,
or alteration of this data, interruptions in our operations, or damage to our systems. Any such incidents, or any failure to make adequate
or timely disclosures to the public, regulators or law enforcement agencies following any such incident, could subject us or our service
providers to substantial system downtimes, operational delays, other detrimental impacts on our operations or ability to provide products
and services to our customers, the compromising of confidential or otherwise protected information, including personal data, the destruction
or corruption of data, other manipulation or improper use of our systems and networks, violations of applicable privacy, data collection
and protection and cybersecurity laws and regulations or notification obligations, legal claims, regulatory scrutiny or enforcement actions,
financial losses from remedial actions, loss of business or potential liability and/or damage to our reputation, any of which could have
a material adverse effect on our business operations, cash flows, competitive position, financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">An increasing number of digital platforms have
disclosed breaches of their security, some of which have involved sophisticated and highly targeted attacks on portions of their services.
Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often
are not foreseeable or recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate
preventative measures. If an actual or perceived breach of our security occurs, public perception of the effectiveness of our security
measures and brand could be harmed and our results of operations could be negatively affected. Data security breaches and other incidents
may also result from non-technical means (e.g., actions by employees or contractors). Any compromise of our security could result in a
violation of applicable security, privacy or data protection, consumer and other laws, regulatory or other governmental investigations,
enforcement actions, and legal and financial exposure, including potential contractual liability. Any such compromise could also result
in damage to our reputation and a loss of confidence in our security and privacy or data protection measures. Any of these effects could
materially and adversely affect our business, financial condition and results of operations.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our business and operations would suffer in the event of computer
system failures, cyber-attacks or deficiencies in our cyber-security.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our ability to execute our business strategy depends,
in part, on the continued and uninterrupted performance of our information technology systems, which support our operations. Despite the
implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage
from, among others, computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks
or cyber-intrusions over the internet, attachments to emails, persons inside our organization, or persons with access to systems inside
our organization or similar disruptive problems. The risk of a security breach or disruption, particularly through cyber-attacks or cyber
intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and
sophistication of attempted attacks and intrusions from around the world have increased. Our systems are also subject to compromise from
internal threats such as improper action by employees, including phishing attacks or malicious insiders, or by vendors, counterparties
and other third parties with otherwise legitimate access to our systems. Our policies, employee training, procedures and technical safeguards
may not prevent all improper access to our network or proprietary or confidential information by employees, vendors, counterparties or
other third parties. For example, in October 2022, we became aware that we were subject to what we believe was a phishing attack. Although
the phishing attack did not have a material adverse effect on our business, a similar event in the future could have a material adverse
effect on our business operations, cash flows and financial condition. If any other similar event were to occur and cause interruptions
in our operations, it could result in a material disruption of our product development programs. We may not be able to anticipate data
breaches, cyber-attacks or other similar incidents, detect or react to such incidents in a timely manner, implement effective preventive
measures against such incidents, or adequately remediate any such incident. In addition, we cannot be certain that our insurance coverage
will be adequate for cybersecurity liabilities actually incurred, that insurance will continue to be available to us on economically reasonable
terms, or at all, or that our insurer will not deny coverage as to any future claim.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Any such security breach may compromise information
stored on our networks and may result in significant data losses or theft of personally identifiable information. A cybersecurity breach
could also hurt our reputation by adversely affecting the patients&#8217; perception of the security of their information. A number of
proposed and enacted federal, state and international laws and regulations obligate companies to notify individuals of security breaches
involving particular personally identifiable information, which could result from breaches experienced by us or by third parties, including
collaborators, vendors, contractors or other organizations with which we expect to form strategic relationships. In addition, a cybersecurity
attack could result in other negative consequences, including disruption of our internal operations, increased cyber security protection
costs, lost revenue, regulatory actions or litigations.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our ability to generate revenue from our teleradiology services
and AI solutions, as well as the other imaging offerings that we are developing, will depend in large part on referrals from physicians.
</i></b></p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We will depend on referrals of patients from unaffiliated
physicians and other third parties who have no contractual obligations to refer patients to us for our teleradiology services and AI solutions,
as well as the other imaging offerings that we are developing. If these physicians and other third parties do not refer patients to us,
our ability to generate revenue from our teleradiology services and AI solutions, as well as the other imaging offerings that we are developing
would be adversely affected. Further, we&#160;currently derive substantially all of our revenue from our teleradiology services from fees
charged for the diagnostic imaging services performed by radiologists. If physicians and other third parties were to discontinue referring
patients to our radiologists, our revenue from our teleradiology services would decrease and our financial results could be adversely
affected.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>If we lose a significant number of our radiologists, our revenue
from our teleradiology services and financial results could be adversely affected.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">There is a shortage of qualified radiologists in
some of the regional markets that we serve. In addition, competition in recruiting radiologists may make it difficult for us to maintain
adequate levels of radiologists. If a significant number of radiologists terminate their relationships with us and we cannot recruit sufficient
qualified radiologists, our ability to generate revenue from teleradiology services and our financial results could be adversely affected.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We may not receive payment from some of our customers for our
AI solutions as a result of financial hardship.</i></b></p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We contract with hospitals, imaging centers, urgent
care and other facilities to provide reading services. Some of our customers for our AI solutions may not have significant financial resources,
liquidity or access to capital. If these customers experience financial difficulties, they may be unable to pay us for the services that
we provide. A significant deterioration in industry conditions could have a material adverse effect on the financial health of some of
our customers. If our customers suffer financial hardship, they could delay or default on their payment obligations to us, negatively
impacting our operations.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Exchange rate fluctuations between the U.S. dollar, the New Israeli
Shekel and the KRW and inflation may negatively affect our results of operations, and we may not be able to hedge our currency exchange
risks successfully.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The U.S. dollar is our functional and reporting
currency. However, a portion of our operating expenses, including personnel and facilities related expenses, are incurred in NIS or KRW.
As a result, we are exposed to the risks that the NIS and KRW may appreciate relative to the U.S. dollar, or, if the NIS and KRW instead
devalues relative to the U.S. dollar, that the inflation rate in Israel or Korea may exceed such rate of devaluation of the NIS or KRW,
or that the timing of such devaluation may lag behind inflation in Israel or Korea. In any such event, the dollar cost of our operations
in Israel or Korea would increase and our dollar-denominated results of operations would be adversely affected. Given our general lack
of currency hedging arrangements to protect us from fluctuations in the exchange rates of the NIS and KRW and other foreign currencies
in relation to the U.S. dollar (and/or from inflation of such foreign currencies), we may be exposed to adverse effects from such movements.
Our exchange rate exposure may change over time as our business evolves and could result in increased costs or reduced revenue and could
affect our actual cash flow. Changes in the relative values of currencies occur regularly and, in some instances, may have a significant
impact on our operating results. The rate of inflation in Israel or Korea or in currency exchange rates may materially change and we might
not be able to effectively mitigate these risks.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We have been subject to securities class action litigation and
are currently subject to an SEC inquiry and may be subject to similar or other claims, litigation and investigations in the future, all
of which will require significant management attention, could result in significant legal expenses and may result in unfavorable outcomes,
all or any of which could have a material adverse impact on our financial condition and results of operations, harm our reputation or
otherwise negatively impact our business.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are, and may in the future become, subject to
litigation or claims arising in or outside the ordinary course of business that could negatively affect our business operations and financial
condition, including securities class actions and shareholder derivative actions, both of which are typically expensive to defend. Such
claims and litigation proceedings may be brought by third parties, including our customers, competitors, advisors, service providers,
partners or collaborators, employees, and governmental or regulatory bodies. For example, we currently have two securities class action
complaints pending against us and certain former officers, asserting violations of federal securities laws and seeking unspecified damages.
In addition, the Division of Enforcement of the SEC is conducting an investigation to determine whether there had been any violations
of the federal securities laws, and the duration and outcome of this matter cannot be predicted at this time. A complaint was also recently
filed against several defendants, including one of our radiologists and USARAD, alleging that such radiologist, in his capacity as an
employee of USARAD, was negligent in the interpretation of a PET/CT scan prior to our acquisition of USARAD. See &#8220;Item 4. Information
on the Company&#8212;B. Business Overview&#8212;Legal Proceedings.&#8221;</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The outcome of any litigation and SEC inquiry,
regardless of its merits, is inherently uncertain and may differ substantially from our expectations. Any claims and lawsuits, and the
disposition of such claims and lawsuits, or SEC inquiry could be time-consuming and expensive to resolve, divert management attention
and resources, and lead to attempts on the part of other parties to pursue similar claims. We may not be able to determine the amount
of any potential losses and other costs we may incur due to the inherent uncertainties of litigation and settlement negotiations. In the
event we are required or decide to pay amounts in connection with any claims, lawsuits or SEC inquiry, such amounts could be significant
and could have a material adverse impact on our liquidity, business, financial condition and results of operations. In addition, depending
on the nature and timing of any such dispute, a resolution of a legal matter could materially affect our future operating results, our
cash flows or both.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>If significant tariffs or other restrictions related to &#8220;trade
wars&#8221; are placed on Chinese imports or any related counter-measures are taken by China, our revenue and results of operations may
be materially harmed.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Nanox.ARC production process is expected to
involve manufacturers and/or suppliers in China for the production of certain components of the Nanox.ARC. If significant tariffs or other
restrictions are placed by the United States government on Chinese imports or any related counter-measures are taken by China, our business,
financial condition and results of operations may be materially harmed. Throughout 2018 and 2019, former President Trump called for substantial
changes to foreign trade policy with China and raised, and proposed to further raise in the future, tariffs on several Chinese goods in
order to reverse what he perceived as unfair trade practices that have negatively impacted U.S. businesses. The announcement of such tariffs
has triggered retaliatory actions from foreign governments, including China, and may trigger retaliatory actions by other foreign governments,
resulting in a &#8220;trade war.&#8221; On January 15, 2020, the United States and China signed the Phase One Deal, which took effect
on February 14, 2020, agreeing to the rollback of tariffs, expansion of trade purchases and renewed commitments on intellectual property,
technology transfer and currency practices deescalating the trade war. U.S. President Biden has stated that there are no immediate plans
to cancel the Phase One Deal, but the administration is expected to make changes to the U.S.-China tariff policies. If any forms of duties
or tariffs are imposed on the Nanox.ARC or its components, we may be required to charge higher prices in the United States than we expect,
which may result in fewer customers and harm our operating performance. Alternatively, we or our contractors may seek manufacturers and/or
suppliers outside of China, resulting in significant costs and disruption to our operations and business. Our business could also be impacted
by retaliatory trade measures taken by China or other countries in response to existing or future tariffs, causing us to raise prices
or make changes to our operations, any of which could materially harm our business, financial condition and results of operations.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our business may be impacted by changes in general economic conditions.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our business is subject to risks arising from changes
in domestic and global economic conditions, including adverse economic conditions in markets in which we operate, which may harm our business.
For example, the existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital
costs, limited availability of credit, liquidity shortages and constrained capital spending, increased costs of labor, fluctuations in
foreign currency exchange rates, challenging and delayed sales cycles, slower adoption of new technologies, increased price competition
and other similar effects. A failure to adequately respond to these risks could have a material adverse impact on our financial condition,
results of operations or cash flows.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">If our future customers significantly reduce spending
in areas in which our technology and products are utilized, or prioritize other expenditures over our technology and products, our business,
financial condition, results of operations and prospects would be materially adversely affected.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Disruption to the global economy could also result
in a number of follow-on effects on our business, including a possible slow-down resulting from lower customer expenditures; inability
of customers to pay for products, solutions or services on time, if at all; an increase in the amount of accounts receivable we are required
to write off; more restrictive export regulations which could limit our potential customer base; negative impact on our liquidity, financial
condition and share price, which may impact our ability to raise capital in the market, obtain financing and secure other sources of funding
in the future on terms favorable to us.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, the occurrence of catastrophic events,
such as hurricanes, storms, earthquakes, tsunamis, floods, medical epidemics and other catastrophes that adversely affect the business
climate in any of our markets could have a material adverse effect on our business, financial condition and results of operations. Some
of our operations are located in areas that have been in the past, and may be in the future, susceptible to such occurrences.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business, financial condition and results of operations may
be materially adversely affected by adverse developments with respect to geopolitical disputes and financial institutions and associated
liquidity risk.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">U.S. and global markets are experiencing volatility
and disruption, in part, as a result of the military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military
invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing military conflict is highly unpredictable,
the ongoing conflict in Ukraine has led, and could lead, to market disruptions, including significant volatility in commodity prices,
credit and capital markets. As a result, sanctions and penalties have been levied by the United States, European Union and other countries
against Russia. Russian military actions and the resulting sanctions could have a negative impact on supply chains, our MSaaS agreements
relating to Russia and Belarus or the region and adversely affect the global economy and financial markets. Any of the abovementioned
factors could affect our business, prospects, financial condition and operating results. The extent and duration of the military action,
sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify
the impact of other risks described in this Annual Report on Form 20-F.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">More recently, the closures of Silicon Valley Bank
(&#8220;SVB&#8221;) and Signature Bank and their placement into receivership with the Federal Deposit Insurance Corporation (&#8220;FDIC&#8221;)
created bank-specific and broader financial institution liquidity risk and concerns. Although the U.S. Department of the Treasury, the
Federal Reserve and the FDIC jointly released a statement that depositors at SVB and Signature Bank would have access to their funds,
even those in excess of the standard FDIC insurance limits, under a systemic risk exception, future adverse developments with respect
to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the
ability of companies to access near-term working capital needs, and create additional market and economic uncertainty. There can be no
assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur.
Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment
or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, or if adverse developments
are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing
more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secure any necessary
financing in a timely manner and on favorable terms could have a material adverse effect on our strategy, our financial condition, results
of operations or cash flows and stock price and could require us to alter our plans. In addition, there is a risk that one or more of
our service providers, financial institutions, manufacturers, suppliers and other partners may be adversely affected by the foregoing
risks, which could directly affect our ability to attain our operating goals on schedule and on budget.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We do not expect to carry any business interruption insurance
or any other insurance (except for director and officer, property, product and professional liability, malpractice and clinical trials
insurance). As a result, we may incur uninsured losses, increasing the possibility that you would lose your entire investment in our company.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our products and services are in the medical imaging
field and so may be subject to claims. We are not immune from product liability or other product claim risks, and we may not be able to
maintain insurance on acceptable terms against such risks or that such insurance will be sufficient to protect us against potential claims
or that insurance will be available in the future in amounts sufficient to protect us. A product liability claim, malpractice or other
claim, as well as any claims for uninsured liabilities or in excess of insured liabilities, could have a material adverse effect on our
business, financial condition, results of operations and prospects.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Certain of our directors and/or officers may have interests that
compete with or may differ from ours.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Certain of our directors currently own, operate
and manage other entities, which may have similar or different objectives than ours. Such activities could detract from the time these
people have to allocate to our affairs. We lease office space to an entity in which Ran Poliakine (the chairman of our board of directors)
serves as a member of senior management and is a significant shareholder. See &#8220;Item 7. Major Shareholders and Related Party Transactions&#8212;B.
Related Party Transactions&#8212;Agreements with Directors and Officers&#8212;Relationship with Illumigyn Ltd.&#8221; Additionally, we
lease office space to an entity of which Ran Poliakine is a shareholder of its parent company. See &#8220;Item 7. Major Shareholders and
Related Party Transactions&#8212;B. Related Party Transactions&#8212;Agreements With Directors and Officers&#8212;Relationship with Wellsense
Technologies, Ltd.&#8221; The terms of such agreements may not be as favorable to us as those that could be obtained from a third party.
Moreover, certain of our directors and officers are affiliated with our current shareholders, and may have different interests than other
shareholders. For additional information regarding related party transactions and potential conflicts of interest, see &#8220;Item 7.
Major Shareholders and Related Party Transactions&#8212;B. Related Party Transactions.&#8221; Under the Israeli Companies Law, 5759-1999
(the&#160;&#8220;Companies Law&#8221;), office holders must promptly disclose to us any direct or indirect personal interest (within the
meaning of the Companies Law) that he or she may have and all related material information or documents known to him or her relating to
any existing or proposed transaction by us. In addition, we have adopted a code of ethics and conduct that requires our employees, officers
and directors to disclose any situation that reasonably would be expected to give rise to a conflict of interest.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our management team has limited experience managing a public
company.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Most members of our management team have limited
experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws
pertaining to public companies in the United States. Our management team may not successfully or efficiently manage our operations a public
company subject to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous
scrutiny of securities analysts and investors. These obligations and constituents require significant attention from our senior management
and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial
condition, results of operations and prospects.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Environmental, social and corporate governance (&#8220;ESG&#8221;)
issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition
and results of operations and damage our reputation.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">There is an increasing focus from certain investors,
customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, public interest and legislative pressure
related to public companies&#8217; ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,
employee or other stakeholders&#8217; evolving expectations and standards for responsible corporate citizenship in areas including environmental
stewardship, support for local communities, Board of Directors and employee diversity, human capital management, employee health and safety
practices, product quality, supply chain management, corporate governance and transparency, our reputation and employee retention may
be negatively impacted, and our suppliers may be unwilling to continue to do business with us.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Investors and other stakeholders are increasingly
focusing on environmental issues, including climate change, energy and water use, plastic waste and other sustainability concerns. Concern
over climate change may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment.
Increased regulatory requirements may result in increased demands or requirements regarding components of our products and their environmental
impact on sustainability. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or
product development costs.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, new sustainability rules and regulations
have been adopted and may continue to be introduced in various states and other jurisdictions. For example, the SEC has published proposed
rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which may
require us to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">If we do not adapt to or comply with new regulations,
or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their
capital investment in our Company, which could have a material adverse effect on our business or financial condition.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks Related to Our Intellectual Property</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>It is difficult and costly to protect our intellectual property
and our proprietary technologies, and we may not be able to ensure their protection.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We rely upon a combination of patents and trade
secrets to protect the intellectual property related to our proprietary technologies. Our success depends significantly on our ability
to obtain and maintain intellectual property protection with respect to our technology and products. Patents and other proprietary rights
provide uncertain protections, and we may be unable to protect our intellectual property for reasons including those that result from
complex factual and legal issues such as those that create uncertainty as to the validity, scope and enforceability of any particular
patent that we hold or for which we have applied. As a result, we may be unsuccessful in defending our patents and other proprietary rights
against third-party challenges, which could have a material adverse effect on our business.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Although we are attempting to obtain patent coverage
for our technology where available and where we believe appropriate, there are aspects of the technology for which patent coverage may
never be sought or received. Additionally, we have obtained, and may in the future obtain, certain intellectual property related to our
technology from third parties, and we cannot be certain that such third parties took the necessary actions to maintain such rights or
that the transfer of such rights to us was proper and effective. We may, as a result, be subject to claims challenging the ownership or
enforceability of such rights. Furthermore, we may not possess the resources to, or for other reasons may not choose to, pursue patent
protection on every invention or in any or every country where we may eventually decide to sell our future products. Our ability to prevent
others from making or selling duplicate or similar technologies will be impaired for those technologies with respect to which, and in
those countries where, we have no patent protection. In addition, there is no assurance that all potentially relevant prior art relating
to our patents and patent applications has been found, which can prevent a patent from issuing from a pending patent application or later
invalidate or narrow the scope of an issued patent. Even if patents do successfully issue and even if such patents cover our technology,
third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, invalidated, or
held unenforceable. Any successful challenge to these patents or any other patents owned by or licensed to us could deprive us of rights
necessary for the successful commercialization of our technology.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, for patents that we do issue based
on our applications or future applications, any issued patents may not provide us with any competitive advantages. Competitors may be
able to design around our patents and develop products that provide outcomes comparable or superior to ours. Any changes we make to our
product or any future products, including designs that may be required for commercialization or that cause them to have what we view as
more advantageous properties, may not be covered by patents and patent applications we have licensed or own, and we may be required to
file new applications and/or seek other forms of protection for any such altered products if any such protection is available. In addition,
the patent prosecution process is expensive, time-consuming and complicated, and we and our current or future licensors, licensees or
collaborators may not be able to prepare, file, prosecute and maintain all necessary or desirable patents or patent applications at a
reasonable cost or in a timely manner. It is also possible that we or our current or future licensors, licensees or collaborators will
fail to identify patentable aspects of inventions before it is too late to obtain patent protection for them. In addition, if we choose
to and are able to secure patent protection in countries outside the U.S., the laws of some foreign countries may not protect our intellectual
property rights to the same extent as do the laws of the United States. For instance, the legal systems of some countries, including India,
China and other developing countries, do not favor the enforcement of patents and other intellectual property rights. This could make
it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Some countries also have compulsory licensing laws
under which a patent owner may be compelled to grant licenses to third parties. In addition, some countries limit the enforceability of
patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could
materially diminish the value of such patent. If we or any of our licensors is forced to grant a license to third parties with respect
to any patents relevant to our business, our competitive position may be impaired.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Changes in either the patent laws or their interpretation
in the United States and other countries may diminish our ability to protect our inventions and enforce our intellectual property rights,
and more generally could affect the value of our intellectual property. Our efforts to seek patent protection for our technology could
be negatively impacted by any such changes, which could have a material adverse effect on our existing patent rights and our ability to
protect and enforce our intellectual property in the future. In particular, our ability to stop third parties from making, using, selling,
offering to sell or importing products that infringe our intellectual property will depend in part on our success in obtaining and enforcing
patent claims that cover our technology, inventions and improvements.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We may come to believe that third parties are infringing
on, or otherwise violating, our patents or other proprietary rights. To prevent infringement or unauthorized use, we may need to file
infringement and/or misappropriation suits, which are very expensive and time-consuming, could result in meritorious counterclaims against
us and would distract management&#8217;s attention. Also, in an infringement or misappropriation proceeding, a court may decide that one
or more of our patents is invalid, unenforceable, or both, in which case third parties may be able to use our technology without paying
license fees or royalties. Even if the validity of our patents is upheld, a court may refuse to stop the other party from using the technology
at issue on the grounds that the other party&#8217;s activities are not covered by our patents.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition to patents, we rely on trade secrets
to protect our technology; however, the policies we use to protect our trade secrets may not be effective in preventing misappropriation
of our trade secrets by others. In addition, confidentiality agreements executed by our employees, consultants and advisors may not be
enforceable or may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized
use or disclosure. Litigating a trade secret claim is expensive and time consuming, and the outcome may be unexpected. In addition, courts
outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop knowledge,
methods and know-how that allow them to create substantially similar products or services without misappropriating our trade secrets.
If we are unable to protect our trade secrets, we may be unable to prevent competitors from using our own inventions and intellectual
property to compete against us, and our business may be harmed.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Patent terms may be inadequate to protect our competitive position
on our future products for an adequate amount of time.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Patents have a limited lifespan. In the United
States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20&#160;years from its earliest U.S.
non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited.
Even if patents covering our future products are obtained, once the patent life has expired, we may be open to competition from competitive
products.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Given the amount of time required for the development,
testing and regulatory review of new products, patents protecting our future products might expire before or shortly after we or our future
partners commercialize those products. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights
to exclude others from commercializing products similar or identical to ours for a sufficient amount of time, and, as a result, we may
not be able to obtain adequate protection from our patent portfolio against competition, in spite of the time and effort invested in the
commercialization of our future products.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Claims that our technology or our future products or the sale
or use of our future products infringe the patents or other intellectual property rights of third parties could result in costly litigation
or could require substantial time and money to resolve, even if litigation is avoided.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Because our industry is characterized by competing
intellectual property, we may be subject to legal actions for violating the intellectual property rights of others, including claims that
former employees, collaborators or third parties have an interest in our patents, trade secrets or other intellectual property. For example,
we may have inventorship or ownership disputes arising from conflicting obligations of employees, consultants or others who are involved
in developing our technology or our products.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We also may be required to participate in interference,
derivation or opposition proceedings that concern disputes regarding priority of inventions disclosed in our patents. Determining whether
a product infringes a patent, as well as priority of inventions and other patent-related disputes, involves complex legal and factual
issues and the outcome is often uncertain. We have not conducted any significant search of patents issued to third parties, and third-party
patents containing claims covering our technology or methods that predate our patents may exist. Because of the number of patents issued
and patent applications filed in our technical areas or fields (including some pertaining specifically to medical imaging technologies),
our competitors or other third parties may assert that our technology and the methods we employ in the use of products incorporating our
technology are covered by United States or foreign patents held by them. In addition, because patent applications can take many years
to issue and because publication schedules for pending applications vary by jurisdiction, there may be applications now pending of which
we are unaware, and which may result in issued patents that our technology or other future products would infringe. Also, because the
claims of published patent applications can change between publication and patent grant, there may be published patent applications that
may ultimately issue with claims that we infringe.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As the number of competitors in the market for
medical imaging technologies increases, and as the number of patents issued in this area grows, the possibility of patent infringement
claims against us increases. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than
we can, including if they have substantially greater resources. Defending against such litigation is costly and time consuming, and would
distract our management from our business. In addition, any uncertainties resulting from the initiation and continuation of any litigation
could have a material adverse effect on our ability to raise the funds necessary to continue our operations.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In the event that we become subject to a patent
infringement or other intellectual property lawsuit and if the relevant patents or other intellectual property were upheld as valid and
enforceable and we were found to infringe or violate those rights or the terms of a license to which we are a party, we could be prevented
from selling any infringing products of ours unless we could obtain a license or were able to redesign the product to avoid infringement.
If we were unable to obtain a license or successfully redesign, we might be prevented from selling our technology or other future products.
If we are able to redesign, we may need to invest substantial resources in the redesign process. If there is an allegation or determination
that we have infringed the intellectual property rights of a competitor or other person, we may be required to pay damages, or a settlement
or ongoing royalties, or we may be required to enter into cross-licenses with our competitors. In any of these circumstances, we may be
unable to sell our products at competitive prices or at all, and our business, financial condition, results of operations and prospects
could be harmed.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, we may be required to indemnify our
customers and distributors against claims relating to the infringement of intellectual property rights of third parties related to our
products. Third parties may assert infringement claims against our customers or distributors. These claims may require us to initiate
or defend protracted and costly litigation on behalf of our customers or distributors, regardless of the merits of these claims. If any
of these claims succeed, we may be forced to pay damages on behalf of our customers or distributors, or may be required to obtain licenses
for the products or services they use. If we cannot obtain all necessary licenses on commercially reasonable terms, our distributors may
be forced to stop distributing our products or services, and our customers may be forced to stop using our products or services.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Furthermore, because of the substantial amount
of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could
be compromised by disclosure during discovery. There could also be public announcements of the results of hearings, motions or other interim
proceedings or developments, which could have a material adverse effect on the price of our ordinary shares. If securities analysts or
investors perceive these results to be negative, it could have a material adverse effect on the price of our ordinary shares.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Obtaining and maintaining patent protection depends on compliance
with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent
protection could be reduced or eliminated if we or our future licensors do not comply with these requirements.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Periodic maintenance fees, renewal fees, annuity
fees and various other government fees on a patent and patent application are due to be paid to the patent offices and agencies in several
stages over the lifetime of the patent and patent application. The U.S. Patent and Trademark Office and various foreign governmental patent
agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application
process. In certain circumstances, we may be required to rely on our licensing partners to take the necessary action to comply with these
requirements with respect to patents or other intellectual property they have licensed to us. While an inadvertent lapse can in many cases
be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance,
which could include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly
legalize and submit formal documents, can result in abandonment or lapse of the patent or patent application, resulting in partial or
complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors may be able to enter the market and compete
with our products, which would have a material adverse effect on our business.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We may be subject to claims that our employees, consultants or
advisers have wrongfully used or disclosed alleged trade secrets of their former employers or claims asserting ownership of what we regard
as our own intellectual property</i></b><i>.</i></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Many of our employees, consultants and advisers,
including our senior management, were previously employed at other companies that may have proprietary rights related to our business.
Some of these employees, consultants and advisers, including members of our senior management, executed proprietary rights, non-disclosure
and non-competition agreements in connection with such previous employment. Although we try to ensure that such individuals do not use
the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used
or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual&#8217;s former employer.
We are not aware of any such disclosures, or threatened or pending claims related to these matters, but in the future, litigation may
be necessary to defend against such claims. If we fail in defending any such claims, we may lose valuable intellectual property rights
or personnel, in addition to possibly paying monetary damages and being enjoined from conducting our business as contemplated. Even if
we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Additionally, a licensor, collaborator, employee,
consultant, adviser or other third party may dispute our or our licensor&#8217;s ownership of certain intellectual property rights. We
seek to address these concerns in our contractual agreements; however, we may not have contractual arrangements with the party in question
and/or such provisions may not be effective. If these provisions prove to be ineffective, we may not be able to achieve our business objectives.
If we or our licensors fail in defending any such claims, we may have to pay monetary damages and may lose valuable intellectual property
rights, such as exclusive ownership of, or right to use, intellectual property, which could adversely impact our business, financial condition
and results of operations.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>If our trademarks and trade names are not adequately protected,
then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our unregistered trademarks or trade names are
valuable assets and may be challenged, infringed, circumvented or declared generic or determined to infringe third party&#8217;s marks.
We may not be able to protect our rights to these trademarks and trade names, which may be necessary to build name recognition among potential
collaborators or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby
impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name
or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our unregistered trademarks
or trade names. We have not conducted any registrability studies for possible future trademarks to assess whether such marks would be
successfully registered. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then
we may not be able to compete effectively and our business may be adversely affected. In addition, we may license our trademarks and trade
names to third parties, such as distributors. Though these license agreements may provide guidelines for how our trademarks and trade
names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights
in or diminish the goodwill associated with our trademarks and trade names. Our efforts to enforce or protect our proprietary rights related
to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result
in substantial costs and diversion of resources and adversely affect our competitive position, business, financial condition, results
of operations and prospects.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our rights to develop and commercialize our products may be subject
to the terms and conditions of licenses and sublicenses granted to us by third parties.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We rely on licenses and sublicenses to certain
patent rights and other intellectual property from third parties that are important or necessary to the development of our products, including
the software modules that we expect to integrate into the Nanox.CLOUD. These and other licenses may not provide exclusive rights to use
such intellectual property in all relevant fields of use and in all territories in which we may wish to develop or commercialize our products
and the underlying patents may fail to provide the intended exclusivity. As a result, we may not be able to prevent competitors from developing
and commercializing competitive products in the markets that we hope to address. Moreover, we would not own at least some of the underlying
intellectual property rights related to these products, and as a result our rights would be subject to the continuation and compliance
with the terms of those agreements. If such in-licenses were terminated, competitors would have the freedom to develop, seek regulatory
approval of, and to market, products similar or identical to ours.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, these license agreements may not grant
us the right to control the preparation, filing, prosecution or maintenance of patents and patent applications covering our products.
Therefore, we cannot be certain that these patents and patent applications will be prepared, filed, prosecuted or maintained in a manner
consistent with the best interests of our business. If our current or future licensing partners fail to file, prosecute or maintain such
patents, including the payment of applicable fees, or otherwise lose rights to those patents or patent applications, the intellectual
property we have licensed or exclusivity we have been granted may be reduced or eliminated, and our right to develop and commercialize
any of our future products that are subject of such licensed rights, and our ability to prevent competitors from developing or commercializing
such products, could be adversely affected. In addition, even where we have the right to control patent prosecution and maintenance of
patents and patent applications we have licensed from third parties, we may still be adversely affected or prejudiced by actions or inactions
of our licensees, our licensors and their counsel that took place prior to the date upon which we assumed control over patent prosecution.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to the terms of such license agreements,
the licensors may also have the right to control enforcement of our licensed patents or defense of any claims asserting the invalidity
or unenforceability of these patents. Even if we are permitted to pursue the enforcement or defense of our licensed patents, we may require
the cooperation of our future licensors or collaboration partners and any other applicable patent owners and we cannot be certain that
such cooperation will be provided to us. We also cannot be certain that our licensors will allocate sufficient resources or prioritize
their or our enforcement of such patents or defense of such claims to protect our interests in the licensed patents. Even if we are not
a party to these legal actions, an adverse outcome could harm our business because it might prevent us from continuing to license intellectual
property that we may need to operate our business. If we lose any of our licensed intellectual property, our right to develop and commercialize
any of our products that are subject of such licensed rights could be adversely affected.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, our future licensors may rely on third-party
consultants or collaborators or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents
we in-license. If other third parties have ownership rights to our in-licensed patents, they may be able to license such patents to our
competitors, and our competitors could market competing products and technologies. In addition, if our licensors have not obtained adequate
rights from these third parties, we may need to obtain additional rights from these third parties or we could be prevented from developing
and commercializing the related products. This could have a material adverse effect on our competitive position, business, financial conditions,
results of operations and prospects.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In spite of our best efforts, our licensors might
conclude that we have materially breached our license agreements and might therefore terminate the license agreements, in which event
we may have to cease developing, manufacturing or marketing any product covered by these agreements and we may face other additional penalties
or be required to grant our licensors additional rights. In addition, we may seek to obtain additional licenses from our licensors and,
in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the
licensors, including by agreeing to terms that could enable third parties (potentially including our competitors) to receive licenses
to a portion of the intellectual property that is subject to our existing licenses. Any of these events could have a material adverse
effect on our competitive position, business, financial conditions, results of operations and prospects.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>We may be required to pay certain milestones and royalties and
fulfill other obligations under our license agreements with third-party licensors.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We may be required to pay milestones and royalties
related to our development or commercialization activities of our products utilizing the technologies licensed or sublicensed from third
parties under license agreements we may enter into with them. These payments could adversely affect our overall profitability related
to any future products that we may seek to develop or commercialize. In order to maintain our license rights under our license agreements,
we may need to meet certain specified milestones or fulfill certain obligations, including to devote a certain amount of resources, in
the development of our products. Failure to satisfy such obligations could result in the termination of our rights under such agreements.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>If we choose to license our technology to third parties, this
could result in disputes or otherwise limit our future operations.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We may also in the future, as one of our strategies,
deploy our technology into the market and license patents and other intellectual proprietary rights to third parties. Disputes with our
licensees may arise, including regarding the scope and content of these licenses. Additionally, a licensee may use our intellectual property
without our permission, dispute our ownership of certain intellectual property rights or argue that our intellectual property does not
cover our product. Regardless of whether we pursue legal action to enforce any such dispute, a dispute with a licensee or customer over
intellectual property rights may damage our relationship with that licensee or customer and may also harm our reputation in the industry.
Our ability to expand into additional fields with our technologies also may be restricted by licenses or other rights we may grant to
third parties in the future, including if the licenses are exclusive, the licensee is assigned ownership of intellectual property that
we develop or rights of first negotiation or refusal are granted.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks Related to Government Regulation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Our product candidates and operations are subject to extensive
government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could
harm our business.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We expect the Nanox.ARC (including the Nanox.CLOUD)
and other future products we develop to be regulated by the FDA as medical devices. Our product candidate is subject to extensive regulation
in the United States and elsewhere, including by the FDA and its foreign counterparts, the U.S. Department of Justice (the &#8220;DOJ&#8221;)
and the U.S. Department of Health and Human Services-Office of the Inspector General. The FDA and foreign regulatory agencies regulate,
among other things, with respect to medical devices: design, development and manufacturing; testing, labeling, content and language of
instructions for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and
distribution; pre-market clearance and approval; conformity assessment procedures; record keeping procedures; advertising and promotion;
recalls and field safety corrective actions; post-market surveillance, including reporting of deaths or serious injuries and malfunctions
that, if they were to occur, could lead to death or serious injury; post-market approval studies; and product import and export.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The regulations our product
candidate is subject to are complex and have tended to become more stringent over time. Regulatory changes could result in restrictions
on or additional requirements affecting our ability to develop our products, carry on or expand our operations, higher than anticipated
costs or lower than anticipated sales for any approved product. Failure to comply with applicable regulations could jeopardize our ability
to sell our future products, following receipt of clearance from the FDA, and if cleared or approved in other jurisdictions, and result
in enforcement actions such as: warning or untitled letters; fines; injunctions; consent decrees; civil penalties; customer notifications;
termination of distribution; recalls or seizures of products; administrative detention of medical devices believed to be adulterated or
misbranded; delays in the introduction of products into the market; operating restrictions; total or partial suspension of production;
refusal to grant future clearances or approvals for new products, new intended uses or modifications to our products; withdrawals or suspensions
of current approvals, resulting in prohibitions on sales of our products; and in the most serious cases, criminal prosecution or penalties.
The occurrence of any of these events would have a material adverse effect on our business, financial condition and results of operations
and could result in shareholders losing their entire investment.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We may not receive, or may be delayed in receiving, the necessary
clearances or approvals for our future products, and failure to timely obtain necessary clearances or approvals for our future products
would adversely affect our ability to grow our business.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In the United States, before we can market a new
medical device, or a new use of, new claim for or significant modification to an existing product, we must first receive either clearance
under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (the &#8220;FDCA&#8221;) or approval of a pre-market approval application
(a &#8220;PMA&#8221;) from the FDA, unless an exemption applies. In the 510(k) clearance process, before a device may be marketed, the
FDA must determine that a proposed device is &#8220;substantially equivalent&#8221; to a legally-marketed &#8220;predicate&#8221; device,
which includes a device that has been previously cleared through the 510(k) process, a device that was legally marketed prior to May&#160;28,
1976 (pre-amendments device), a device that was originally on the U.S. market pursuant to an approved PMA and later down-classified, or
a 510(k)-exempt device. To be &#8220;substantially equivalent,&#8221; the proposed device must have the same intended use as the predicate
device, and either have the same technological characteristics as the predicate device or have different technological characteristics
and not raise different questions of safety or effectiveness than the predicate device. Clinical data are sometimes required to support
substantial equivalence. In the process of obtaining PMA approval, the FDA must determine that a proposed device is safe and effective
for its intended use based, in part, on extensive data, including, but not limited to, technical, pre-clinical, clinical trial, manufacturing
and labeling data. The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining,
life-supporting or implantable devices.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Modifications to products that are approved through
a PMA application generally require FDA approval. Similarly, certain modifications made to products cleared through a 510(k) may require
a new 510(k) clearance. Both the PMA approval and the 510(k) clearance process can be expensive, lengthy and uncertain. The FDA&#8217;s
510(k) clearance process usually takes from three to 12 months, but can last longer. The process of obtaining a PMA is generally much
more costly and uncertain than the 510(k) clearance process and generally takes from one to three&#160;years, or even longer, from the
time the application is submitted to the FDA. In addition, a PMA generally requires the performance of one or more clinical trials. Despite
the time, effort and cost, a device may not be approved or cleared by the FDA. Any delay or failure to obtain necessary regulatory clearances
or approvals could harm our business. Furthermore, even if we are granted regulatory clearances or approvals, they may include significant
limitations on the indicated uses for the device or other restrictions or requirements, which may limit the market for the device.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In the United States, we continue to implement
a multi-step approach to the regulatory clearance process. As a first step, we submitted a 510(k) premarket notification for the Nanox
Cart X-Ray System, a single-source version of the Nanox.ARC, to an accredited Review Organization under the Third Party Review Program
in January 2020. On April 1, 2021, we received clearance from the FDA to market our Nanox Cart X-Ray System. On June 17, 2021, we submitted
a 510(k) premarket notification application to the FDA for the first version of our multi-source Nanox.ARC 3D digital tomosynthesis system.
On August 12, 2021, we received a request for additional information from the FDA concerning the first submission of our multi-source
system. On January 10, 2022, we withdrew our first submission of our multi-source system. On January 12, 2022, we submitted a Q-submission
for the second&#160;version of&#160;our&#160;multi-source Nanox.ARC 3D digital tomosynthesis system to the FDA. The Q-submission program
provides submitters an opportunity to have early collaboration and discussions about medical device submissions, through a request for
feedback from and/or a meeting with the FDA regarding a potential or planned medical device submission. On September 26, 2022, we submitted
a 510(k) premarket notification to the FDA as part of our 510(k) application process for the second version of our multi-source Nanox.ARC
3D digital tomosynthesis system (including the Nanox.CLOUD). On April 28, 2023, we received a 510(k) clearance from the FDA to market
the Nanox.ARC (including the Nanox.CLOUD) as a stationary <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>X-ray <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>system
<span style="font-family: Times New Roman, Times, Serif">&#8206;</span>intended to produce tomographic images of the human musculoskeletal
system adjunctive to conventional radiography, on adult patients. This device is <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>intended
to be used in professional healthcare <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>facilities or <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>radiological
<span style="font-family: Times New Roman, Times, Serif">&#8206;</span>environments, such as <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>hospitals,
clinics, imaging <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>centers and <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>other
medical practices<span style="font-family: Times New Roman, Times, Serif">&#8206;</span> by trained radiographers, <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>radiologists
and physicists.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We expect to commercialize the second version of
our multi-source Nanox.ARC and the Nanox.CLOUD as the Nanox System. Any modification to these systems that has not been previously cleared
may require us to submit a new 510(k) premarket notification and obtain clearance, or submit a PMA and obtain FDA approval prior to implementing
the change. Specifically, any modification to a 510(k)-cleared device that could significantly affect its safety or effectiveness, or
that would constitute a major change in its intended use, design or manufacture, requires a new 510(k) clearance or, possibly, approval
of a PMA. The FDA requires every manufacturer to make this determination in the first instance, but the FDA may review any manufacturer&#8217;s
decision. The FDA may not agree with our decisions regarding whether new clearances or approvals are necessary. We may make modifications
or add additional features in the future that we believe do not require a new 510(k) clearance or approval of a PMA. If the FDA disagrees
with our determination and requires us to submit new 510(k) notifications or PMA applications for modifications to our previously cleared
products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall
the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties. If the
FDA requires us to go through a lengthier, more rigorous examination for future products or modifications to existing products than we
had expected, including new or additional clinical trial requirements, product introductions or modifications could be delayed or canceled,
which could adversely affect our ability to grow our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The FDA can delay, limit or deny clearance or approval
of a medical device for many reasons, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our product candidates are safe or effective for their intended uses or are substantially equivalent to a predicate device;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">the disagreement of the FDA or the applicable foreign regulatory body with the design or implementation of our clinical trials or the interpretation of data from pre-clinical studies or clinical trials;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">serious and unexpected adverse effects experienced by participants in our clinical trials;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In order to sell our products in member countries
of the European Economic Area (&#8220;EEA&#8221;), our products must comply with the essential requirements of the EU Medical Devices
Regulation (EU) 2017/745. Compliance with these requirements is a prerequisite to be able to affix the Conformit&#233; Europ&#233;ene
(&#8220;CE&#8221;) mark to our products, without which they cannot be sold or marketed in the EEA. To demonstrate compliance with the
essential requirements we must undergo a conformity assessment procedure, which varies according to the type of medical device and its
classification. Except for low-risk medical devices (Class&#160;I non-sterile, non-measuring devices), where the manufacturer can issue
a European Community (&#8220;EC&#8221;) Declaration of Conformity based on a self-assessment of the conformity of its products with the
essential requirements of the EU Medical Devices Directive, a conformity assessment procedure requires the intervention of an organization
accredited by a member state of the EEA to conduct conformity assessments, or a Notified Body. Depending on the relevant conformity assessment
procedure, the Notified Body would typically audit and examine the technical file and audit the quality system of the manufacturer and
manufacturing sites of our devices. The Notified Body issues a certificate of conformity following successful completion of a conformity
assessment procedure conducted in relation to the medical device and its manufacturer and their conformity with the essential requirements.
This certificate entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EC Declaration
of Conformity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">As a general rule, demonstration of conformity
of medical devices and their manufacturers with the essential requirements must be based, among other things, on the evaluation of clinical
data supporting the safety and performance of the products during normal conditions of use. Specifically, a manufacturer must demonstrate
that the device achieves its intended performance during normal conditions of use, that the known and foreseeable risks, and any adverse
events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the
performance and safety of the device are supported by suitable evidence. If we fail to remain in compliance with applicable European laws
and directives, we would be unable to continue to affix the CE mark to our products, which would prevent us from selling them within the
EEA.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Failure to comply with post-marketing regulatory requirements
could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the
market.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Even though we received clearance from the FDA
to market the Nanox.ARC (including the Nanox.CLOUD), and if we receive regulatory clearance or approval of other future products, we remain
subject to ongoing and pervasive regulatory requirements governing, among other things, the manufacture, marketing, advertising, medical
device reporting, sale, promotion, import, export, registration, and listing of devices. For example, we are required to submit periodic
reports to the FDA as a condition of 510(k) clearance. These reports include information about failures and certain adverse events associated
with the device after its clearance. Failure to submit such reports, or failure to submit the reports in a timely manner, could result
in enforcement action by the FDA. Following its review of the periodic reports, the FDA might ask for additional information or initiate
further investigation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The regulations to which we are subject are complex
and have become more stringent over time. Regulatory changes could result in restrictions on our ability to continue or expand our operations,
higher than anticipated costs, or lower than anticipated sales. Even after we have obtained the proper regulatory clearance or approval
to market a device, we have ongoing responsibilities under FDA regulations and applicable foreign laws and regulations. The FDA, state
and foreign regulatory authorities have broad surveillance and enforcement powers. Our failure to comply with applicable regulatory requirements
could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">withdrawals or suspensions of product clearances or approvals, resulting in prohibitions on sales of our products;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">criminal prosecution.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Any of these sanctions could result in higher than
anticipated costs or lower than anticipated sales and have a material adverse effect on our reputation, business, financial condition
and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, the FDA or state or foreign authorities
may change their clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions,
which may prevent or delay clearance or approval of our future products under development on a timely basis. Such policy or regulatory
changes could impose additional requirements upon us that could delay our ability to obtain new clearances or approvals, increase the
costs of compliance or restrict our ability to maintain any approvals we are able to obtain. For example, the FDA has announced steps
that the FDA intends to take to modernize the premarket notification pathway under Section 510(k) of the FDCA. For more information, see
&#8220;&#8212;Legislative or regulatory reforms in the United States or the EU may make it more difficult and costly for us to obtain
regulatory clearances or approvals for our products or to manufacture, market or distribute our products after clearance or approval is
obtained.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our products must be manufactured in accordance with federal,
state and foreign regulations, and we could be forced to recall our devices or terminate production if we fail to comply with these regulations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The methods used in, and the facilities used for,
the manufacture of our products must comply with the Quality System Regulation (&#8220;QSR&#8221;), which is a complex regulatory scheme
that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging,
handling, storage, distribution, installation, servicing and shipping of medical devices. As manufacturers of electron radiation-emitting
products, we are also responsible for compliance with the radiological health regulations and certain radiation safety performance standards.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Furthermore, we are required to verify that our
suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements.
The FDA enforces the QSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include
the facilities of subcontractors. Our products are also subject to similar state regulations and various laws and regulations of foreign
countries governing manufacturing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our third-party manufacturers may not take the
necessary steps to comply with applicable regulations, which could cause delays in the delivery of our products. In addition, failure
to comply with applicable FDA or state or foreign requirements or later discovery of previously unknown problems with our products or
manufacturing processes could result in, among other things: warning letters or untitled letters; fines, injunctions or civil penalties;
suspension or withdrawal of approvals; seizures or recalls of our products; total or partial suspension of production or distribution;
administrative or judicially imposed sanctions; the FDA&#8217;s refusal to grant pending or future clearances or approvals for our products;
clinical holds; refusal to permit the import or export of our products; and criminal prosecution of us, our suppliers or our employees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Any of these actions could significantly and negatively
affect supply of our products. If any of these events occurs, our reputation could be harmed, we could be exposed to product liability
claims and we could lose customers and experience reduced sales and increased costs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>The misuse or off-label use of our products may harm our reputation
in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by
regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Advertising and promotion of our future products
that obtains approval in the United States may be heavily scrutinized by the FDA, the DOJ, HHS, state attorneys general, members of Congress,
and the public. In addition, advertising and promotion of any future product that obtains approval outside of the United States will be
heavily scrutinized by comparable foreign regulatory authorities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We expect that, if cleared or approved, our products,
including the multi-source Nanox.ARC (including the Nanox.CLOUD), will be cleared by the requisite regulatory authorities for specific
indications. For example, on April 28, 2023, we received a 510(k) clearance from the FDA to market the Nanox.ARC (including the Nanox.CLOUD)
as a stationary &#8206;X-ray &#8206;system &#8206;intended to produce tomographic images of the human musculoskeletal system adjunctive to conventional
radiography, on adult patients. This device is &#8206;intended to be used in professional healthcare &#8206;facilities or &#8206;radiological
&#8206;environments, such as &#8206;hospitals, clinics, imaging &#8206;centers, and &#8206;other medical practices&#8206; by trained radiographers,
&#8206;radiologists, and physicists. We expect to train our marketing personnel and direct sales force to not promote our devices for uses
outside of the FDA-approved indications for use, known as &#8220;off-label uses.&#8221; We cannot, however, prevent a physician from using
our devices off-label, when in the physician&#8217;s independent professional medical judgment he or she deems it appropriate. There may
be increased risk of injury to patients if physicians attempt to use our devices off-label. Furthermore, the use of our devices for indications
other than those approved by the FDA or approved by any foreign regulatory body may not effectively treat such conditions, which could
harm our reputation in the marketplace among healthcare providers and patients.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">If the FDA or any state or foreign regulatory body
determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training
or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter,
which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine or criminal penalties. It is also
possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false
claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties,
including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation
in government healthcare programs and the curtailment of our operations. We may become subject to such actions and, if we are not successful
in defending against such actions, those actions may have a material adverse effect on our business, financial condition and results of
operations. Equivalent laws and potential consequences exist in foreign jurisdictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, if our products are cleared or approved,
healthcare providers may misuse our products or use improper techniques if they are not adequately trained, potentially leading to injury
and an increased risk of product liability. If our devices are misused or used with improper technique, we may become subject to costly
litigation by our customers or their patients. As described above, product liability claims could divert management&#8217;s attention
from our core business, be expensive to defend and result in sizeable damage awards against us that may not be covered by insurance.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our products may cause or contribute to adverse medical events
or be subject to failures or malfunctions that we are required to report to the FDA, and if we fail to do so, we would be subject to sanctions
that could harm our reputation, business, financial condition and results of operations. The discovery of serious safety issues with our
products, or a recall of our products either voluntarily or at the direction of the FDA or another governmental authority, could have
a negative impact on us.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Because the Nanox.ARC (including the Nanox.CLOUD)
received clearance from the FDA, we are subject to the FDA&#8217;s medical device reporting regulations and similar foreign regulations,
which require us to report to the FDA when we receive or become aware of information that reasonably suggests that one or more of our
products may have caused or contributed to a death or serious injury or malfunctioned in a way that, if the malfunction were to recur,
could cause or contribute to a death or serious injury. The timing of our obligation to report is triggered by the date we become aware
of the adverse event as well as the nature of the event. We may fail to report adverse events of which we become aware within the prescribed
timeframe. We may also fail to recognize that we have become aware of a reportable adverse event, especially if it is not reported to
us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of the product. If we fail to comply
with our reporting obligations, the FDA or other regulatory bodies could take action, including warning letters, untitled letters, administrative
actions, criminal prosecution, imposition of civil monetary penalties, revocation of our device clearance or approval, seizure of our
products or delay in clearance or approval of future products.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The FDA and foreign regulatory bodies have the
authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of
a product or in the event that a product poses an unacceptable risk to health. The FDA&#8217;s authority to require a recall must be based
on a finding that there is reasonable probability that the device could cause serious injury or death. We may also choose to voluntarily
recall a product if any material deficiency is found. A government-mandated or voluntary recall by us could occur as a result of an unacceptable
risk to health, component failures, malfunctions, manufacturing defects, labeling or design deficiencies, packaging defects or other deficiencies
or failures to comply with applicable regulations. Product defects or other errors may occur in the future.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Depending on the corrective action we take to redress
a product&#8217;s deficiencies or defects, the FDA may require, or we may decide, that we will need to obtain new clearances or approvals
for the device before we may market or distribute the corrected device. Seeking such clearances or approvals may delay our ability to
replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with our devices, we may
face additional regulatory enforcement action, including FDA warning letters, product seizure, injunctions, administrative penalties or
civil or criminal fines.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Companies are required to maintain certain records
of recalls and corrections, even if they are not reportable to the FDA. We may initiate voluntary withdrawals or corrections for our products
in the future that we determine do not require notification of the FDA. If the FDA disagrees with our determinations, it could require
us to report those actions as recalls and we may be subject to enforcement action. A future recall announcement could harm our reputation
with customers, potentially lead to product liability claims against us and negatively affect our sales. Any corrective action, whether
voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management
from operating our business and may harm our reputation and financial results.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our relationships with customers and third-party payors will
be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions,
civil penalties, contractual damages, reputational harm and diminished profits and future earnings.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Physicians, other healthcare providers, and third-party
payors will play a primary role with respect to any future products for which we obtain marketing approval. Our arrangements with third-party
payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain
the business or financial arrangements and relationships through which we market, sell and distribute our product. Restrictions under
applicable federal and state healthcare laws and regulations include the following:</p><div>

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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">The U.S. federal healthcare program Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid. Although there are a number of statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly and practices that involve remuneration to those who prescribe, purchase, or recommend medical devices, including certain discounts, or engaging consultants as speakers or consultants, may be subject to scrutiny if they do not fit squarely within the exemption or safe harbor. Our practices may not in all cases meet all of the criteria for safe harbor protection from anti-kickback liability. Moreover, there are no safe harbors for many common practices, such as educational and research grants. Liability may be established without a person or entity having actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act. Due to the breadth of these laws, the narrowness of statutory exceptions and regulatory safe harbors available, and the range of interpretations to which they are subject, it is possible that some of our current or future practices might be challenged under one or more of these laws, including, without limitation, our proposed Subscription Model, and our advisory, consulting and royalty agreements with certain physicians who receive compensation, in part, in the form of stock or stock options.</span></td></tr>
  </table><div>
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">The federal civil False Claims Act prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds, or knowingly making, using, or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government. In recent years, several healthcare companies have faced enforcement actions under the federal False Claims Act for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product or causing false claims to be submitted because of the company&#8217;s marketing the product for unapproved, and thus non-reimbursable, uses. False Claims Act liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties of tens of thousands of dollars per false claim or statement. Healthcare companies also are subject to other federal false claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs.</span></td></tr>
  </table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">The Health Insurance Portability and Accountability Act of 1996 (&#8220;HIPAA&#8221;), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (&#8220;HITECH&#8221;), imposes criminal and civil liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services. In addition, HIPAA, as amended by HITECH, and their respective implementing regulations impose obligations, including mandatory contractual terms, on covered healthcare providers, health plans, as well as their business associates, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.</span></td></tr>
  </table><div>
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">The Physician Payment Sunshine Act, implemented as the Open Payments program, requires manufacturers of certain products reimbursed by Medicare, Medicaid, or the Children&#8217;s Health Insurance Program to track and report to the federal government payments and transfers of value that they make to physicians and teaching hospitals, certain other healthcare professionals, group purchasing organizations, and ownership interests held by physicians and their families, and provides for public disclosures of these data. Manufacturers are required to submit annual reports to the government and failure to do so may result in civil monetary penalties for all payments, transfers of value and ownership or investment interests not reported in an annual submission, and may result in liability under other federal laws and regulations.</span></td></tr>
  </table><div>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">Federal law prohibiting certain physician self-referrals, known as the Stark Law, prohibits a physician from referring Medicare or Medicaid patients to an entity for certain &#8220;designated health services&#8221; if the physician has a prohibited financial relationship with that entity, unless an exception applies. Certain radiology services are considered &#8220;designated health services&#8221; under the Stark Law.&#160;&#160;</span></td></tr>
  </table><div>
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    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">Many states have adopted laws and regulations analogous to the federal laws cited above, including state anti-kickback and false claims laws, which may apply to items or services reimbursed under Medicaid and other state programs or, in several states, regardless of the payer. Several states have enacted legislation requiring medical device companies to, among other things, establish marketing compliance programs; file periodic reports with the state, including reports on gifts and payments to individual health care providers; make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities; and/or register their sales representatives. Some states prohibit specified sales and marketing practices, including the provision of gifts, meals, or other items to certain health care providers.</span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Efforts to ensure that our business arrangements
with third parties will comply with applicable healthcare laws and regulations involve substantial costs. Additionally, it is possible
that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or
case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation
of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and
administrative penalties, damages, fines, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the
curtailment or restructuring of our operations. Exclusion, suspension and debarment from government funded healthcare programs would significantly
impact our ability to commercialize, sell or distribute any product. If any of the physicians or other providers or entities with whom
we expect to do business are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative
sanctions, including exclusions from government funded healthcare programs.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Changes in laws or regulations relating to data protection, or
any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could materially and adversely
affect our business or could lead to government enforcement actions and significant penalties against us, and adversely impact our operating
results.</i></b></p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We expect to receive health information and other
highly sensitive or confidential information and data of patients and other third parties (e.g., healthcare providers who refer patients
for scans), which we expect to compile and analyze. While we have adopted measures to ensure that any such data will be transferred to
us, to the extent possible, in a de-identified manner, collection and use of this data may still raise privacy and data protection concerns,
which could negatively impact our business. There are numerous federal, state and international laws and regulations regarding privacy,
data protection, information security, and the collection, storing, sharing, use, processing, transfer, disclosure, and protection of
personal information and other data. These laws and regulations are becoming more complex and/or prevalent in the United States, Europe,
Israel, and elsewhere. The regulatory framework for privacy and data protection worldwide is, and is likely to remain for the foreseeable
future, uncertain and complex, and this or other actual or alleged obligations may be interpreted and applied in a manner that we may
not anticipate or that is inconsistent from one jurisdiction to another and may conflict with other rules or practices including ours.
Further, any significant change to applicable laws, regulations, or industry practices regarding the collection, use, retention, security,
or disclosure of data, or their interpretation, or any changes regarding the manner in which the consent of relevant users for the collection,
use, retention, or disclosure of such data must be obtained, could increase our costs and require us to modify our services and candidate
products, possibly in a material manner, which we may be unable to complete, and may limit our ability to store and process patients&#8217;
data or develop new services and features.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In particular, there have been laws and regulations
adopted throughout the United States and in Israel that impose new obligations in areas such as privacy. In the United States, privacy
and data security laws are also complex and changing rapidly, these laws are not consistent, and compliance with them in the event of
a widespread data breach is complex and costly. Both federal and state legislation, U.S. Congress and individual states also govern the
collection, use and other processing of personal data. For example, the California Consumer Privacy Act (&#8220;CCPA&#8221;), provides
data privacy rights for California residents and operational requirements for covered companies. Among other things, companies covered
by the CCPA must provide new disclosures to California residents and afford such residents the ability to opt-out of certain sales of
personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that
is expected to increase data breach litigation. In addition, the California Privacy Rights Act (&#8220;CPRA&#8221;), which took effect
in January 2023, has expanded the rights granted under the CCPA and imposes additional requirements. Additional U.S. states have implemented,
or are in the process of implementing, similar new laws or regulations (for example, the Virginia Consumer Data Protection Act (&#8220;VCDPA&#8221;),
which took effect on January 1, 2023, and the Colorado Privacy Act (&#8220;CPA&#8221;), which will go into effect on July 1, 2023) that
impose new privacy rights and obligations that resemble the CCPA and CPRA. Further, laws in all 50 states require businesses to provide
notice to consumers whose personal information has been disclosed as a result of a data breach. More generally, some observers have noted
that the CCPA, CPRA, VCDPA and CPA could mark the beginning of a trend toward more stringent United States federal privacy legislation,
which could increase our potential liability and adversely affect our business.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Most of the new regulations exempt personal information
which is subject to the HIPAA and HITECH regulations. Nonetheless, new legislation may affect our operations and business conduct, as
it applies to our general conduct, marketing efforts and where we process data that is not health-related by nature (and, therefore, not
subject to HIPAA), and may increase our compliance costs and potential liability.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, we expect to obtain health information
that is subject to privacy and security requirements under HIPAA and HITECH and its implementing regulations. The Privacy Standards and
Security Standards under HIPAA establish a set of standards for the protection of individually identifiable health information by health
plans, health care clearinghouses and certain health care providers, referred to as Covered Entities, and the business associates with
whom Covered Entities enter into service relationships pursuant to which individually identifiable health information may be exchanged.
As part of our normal operations, we expect to collect, process and retain personal identifying information regarding patients, including
as a Business Associate of Covered Entities under HIPAA. Therefore, we expect to be subject to HIPAA, including changes implemented through
HITECH, and we could be subject to criminal penalties if we knowingly obtain or disclose individually identifiable health information
in a manner that is not authorized or permitted by HIPAA. A data breach affecting sensitive personal information, including health information,
also could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on
our business.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">HIPAA requires Covered Entities (like many of our
potential customers) and Business Associates, like us, to develop and maintain policies and procedures with respect to protected health
information that is used or disclosed, including the adoption of administrative, physical and technical safeguards to protect such information.
HITECH expands the notification requirement for breaches of patient-identifiable health information, restricts certain disclosures and
sales of patient-identifiable health information and provides for civil monetary penalties for HIPAA violations. HITECH also increased
the civil and criminal penalties that may be imposed against Covered Entities and business associates and gave state attorneys general
new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and its implementing regulations and
seek attorney&#8217;s fees and costs associated with pursuing federal civil actions. Additionally, certain states have adopted comparable
privacy and security laws and regulations, some of which may be more stringent or broader in scope than HIPAA.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Another example of recent U.S. data security requirements
is the Food and Drug Omnibus Reform Act (&#8220;FDORA&#8221;), enacted in December 2022, which, among other provisions, requires developers
of certain &#8220;cyber devices&#8221; to design and implement plans to monitor, identify and address cybersecurity vulnerabilities of
those devices and to submit those plans to the FDA as part of every new product application for a cyber device. &#8220;Cyber devices&#8221;
are defined as devices that include software, connect to the internet, and contain any technological features that could be vulnerable
to cybersecurity threats. This provision entered into effect on March 29, 2023, and FDA has indicated that it expects sponsors of cyber
devices to begin to comply with these requirements as of October 1, 2023.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Internationally, many jurisdictions have or are
considering enacting privacy or data protection laws or regulations relating to the collection, use, storage, transfer, disclosure and/or
other processing of personal data, as well as certification requirements for the hosting of health data specifically. For example, the
European Union&#8217;s General Data Protection Regulation (2016/679) (&#8220;GDPR&#8221;) governs certain collection and other processing
activities involving personal data about data subjects in the European Economic Area (&#8220;EEA&#8221;). The GDPR, supplemented by national
laws and further implemented through binding guidance from the European Data Protection Board, imposes stringent European Union data protection
requirements and provides for significant penalties for noncompliance, ranging from &#8364;10 million to &#8364;20 million or 2% to 4% of
our annual global revenue, whichever is higher. In the UK, we are subject to the UK General Data Protection Regulation and the United
Kingdom&#8217;s Data Protection Act 2018 (the &#8220;UK GDPR&#8221;), under which penalties for noncompliance range from &#163;8.7 million
to &#163;17.5 million or 2% to 4% of our annual global revenue, whichever is higher. Our UK and EEA operations are exposed to two parallel
regimes, each of which may subject us to increased compliance risk based on differing, and potentially inconsistent or conflicting, interpretation
and enforcement by regulators and authorities (particularly given that the UK GDPR is likely to be subject to divergence from the GDPR
over time).</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Under the GDPR and the UK GDPR, our processing
of health data and other highly sensitive data (referred to as &#8220;special category data&#8221; in those regulations) exposes us to
further compliance risk. We carry out data protection impact assessments (&#8220;DPIAs&#8221;) in connection with our high-risk processing
activities and implement appropriate safeguards and mechanisms to ensure adequate protection of the personal data, in order to comply
with GDPR/UK GDPR.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Additionally, legal developments in Europe in recent
years, have created complexity and uncertainty regarding transfers of personal data from the EEA to the United States. On July 16, 2020,
in its Schrems II judgment, the Court of Justice of the European Union (&#8220;CJEU&#8221;) invalidated the EU-US Privacy Shield Framework
(&#8220;Privacy Shield&#8221;), under which personal data could be transferred from the EEA to U.S. entities which had self-certified
under the Privacy Shield scheme. On October 7, 2022, President Biden signed an Executive Order on &#8216;Enhancing Safeguards for United
States Intelligence Activities&#8217; which introduced new binding safeguards to address the concerns raised by the CJEU in its Schrems
II judgement. Although this Executive Order is intended to form the basis of a new EU-US Data Privacy Framework (the &#8220;Framework&#8221;),
the Framework is still in development and its route to implementation remains uncertain. Until the Framework is in place, our agreements
and engagements with customers may be affected by the need to sign and implement additional agreements and security measures and this
could lead to additional costs and increase our overall risk exposure. On June 27, 2021, the European Commission published a new set of
modular standard contractual clauses (the &#8220;New SCCs&#8221;). The New SCCs must be used for all relevant transfers of personal data
outside the EEA (since December 27, 2022) and organizations must ensure that all new and existing contracts involving the transfer of
personal data outside the EEA contain New SCCs and, for transfers out of the UK, the International Data Transfer Agreement (&#8220;IDTA&#8221;)
or the UK Addendum to the New SCCs. In addition to the use of a valid data transfer mechanism, transfer impact assessments must be carried
out in respect of planned transfers of personal data from the EEA/UK to third countries including the U.S., and failure to do so may expose
us to further compliance risk.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Further, the European Commission regularly re-examines
its adequacy decisions, including its Decision 2011/61/EU regarding the adequacy of Israeli law. If, in light of the GDPR and developments
in Israeli privacy legislation, Israel&#8217;s adequacy status for purposes of transfers of personal data from the EEA to Israel was revoked,
this would affect our activities as an Israeli-based organization. The outcome of this examination may also affect the UK&#8217;s approach
on the adequacy of Israeli law with respect to the UK GDPR, which could require us to further review and amend the lawful mechanisms by
which we make and/or receive personal data transfers from the UK. In addition, while the European Commission adopted an adequacy decision
for the UK on June 28, 2021, allowing the continued flow of personal data from the EEA to the UK, this decision will automatically expire
in June 2025 unless the European Commission re-assesses and renews or extends that decision. The decision will be regularly reviewed by
the European Commission going forward and may be revoked if the UK diverges from its current data protection laws and the European Commission
deems the UK to no longer provide adequate protection of personal data.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Virtually every jurisdiction in which we expect
to operate has established its own data security and privacy legal framework with which we must, and our target customers will need to,
comply, including the rules and regulation mentioned above. We may also need to comply with varying and possibly conflicting privacy laws
and regulations in other jurisdictions. As a result, we could face regulatory actions, including significant fines or penalties, adverse
publicity and possible loss of business.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">While we are preparing to implement various measures
intended to enable us to comply with applicable privacy or data protection laws, regulations and contractual obligations, these measures
may not always be effective and do not guarantee compliance. Any failure or perceived failure by us to comply with our contractual or
legal obligations or regulatory requirements relating to privacy, data protection, or information security may result in governmental
investigations or enforcement actions, litigation, claims, or public statements against us by consumer advocacy groups or others and could
result in significant liability, cause our customers, partners or patients to lose trust in us, and otherwise materially and adversely
affect our reputation and business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and
policies that are applicable to the businesses of our customers or partners may limit the adoption and use of, and reduce the overall
demand for, our products and services. Additionally, if third parties we work with violate applicable laws, regulations, or agreements,
such violations may put the data we have received at risk, could result in governmental investigations or enforcement actions, fines,
litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability, cause
our customers, partners or patients to lose trust in us, and otherwise materially and adversely affect our reputation and business. Further,
public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to
our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies
to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs
and risks.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Risks associated with regulation of new
and emerging technologies such as artificial intelligence. </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a company that utilizes
AI in our products and services, we are subject to regulatory and legal risks related to the use of AI. The development, deployment and
use of AI technologies are subject to a variety of evolving laws and regulations, which may differ across jurisdictions and may evolve
over time. Our failure to comply with these laws and regulations could result in legal liability, regulatory enforcement actions, negative
publicity and damage to our reputation. For example, the EU Artificial Intelligence Act was proposed on April 21, 2021 by the European
Commission and aims to introduce a common regulatory and legal framework for artificial intelligence. The proposal does not confer rights
on individuals, but regulates the providers of AI systems, and entities making use of them in a professional capacity. Among other things,
the proposal may require us to implement additional quality assurance controls and measures to be reviewed and approved by regulatory
submissions of our products. The European Council adopted a common position on the proposal on December 6, 2022 and the proposal continues
to progress through the EU legislative process. The UK also published a white paper on AI Regulation on March 29, 2023, setting out proposals
for an AI governance framework which existing regulators would apply within their existing remits. Further, the EU Artificial Intelligence
Act may impose certain limitations regarding the utilization of AI and machine learning technologies. Any additional costs and penalties
associated with increased compliance, enforcement and risk reduction could make certain offerings less profitable or increase the difficulty
of bringing certain offerings to market or maintaining certain offerings.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>If we do not obtain and maintain international regulatory registrations,
clearances or approvals for our products, we will be unable to market and sell our products outside of the United States.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Sales of our products outside of the United States
are subject to foreign regulatory requirements that vary widely from country to country. Approval procedures vary among countries and
can involve additional testing. The time required to obtain approval outside of the United States may differ substantially from that required
to obtain FDA approval. In addition, the FDA regulates exports of medical devices from the United States. While the regulations of some
countries may not impose barriers to marketing and selling our products or only require notification, others require that we obtain the
clearance or approval of a specified regulatory body. Complying with foreign regulatory requirements, including obtaining registrations,
clearances or approvals, can be expensive and time-consuming, and we may not receive regulatory clearances or approvals in each country
in which we plan to market our products or we may be unable to do so on a timely basis. The time required to obtain registrations, clearances
or approvals, if required by other countries, may be longer than that required for FDA clearance or approval, and requirements for such
registrations, clearances or approvals may significantly differ from FDA requirements. If we modify our products, we may need to apply
for additional regulatory clearances or approvals before we are permitted to sell the modified product. In addition, we may not continue
to meet the quality and safety standards required to maintain the authorizations that we have received. If we are unable to maintain our
authorizations in a particular country, we will no longer be able to sell the applicable product in that country.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Regulatory clearance or approval by the FDA does
not ensure registration, clearance or approval by regulatory authorities in other countries, and registration, clearance or approval by
one or more foreign regulatory authorities does not ensure registration, clearance or approval by regulatory authorities in other foreign
countries or by the FDA. However, a failure or delay in obtaining registration or regulatory clearance or approval in one country may
have a negative effect on the regulatory process in others.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Legislative or regulatory reforms in the United States or the
EU may make it more difficult and costly for us to obtain regulatory clearances or approvals for our products or to manufacture, market
or distribute our products after clearance or approval is obtained.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">From time to time, legislation is drafted and introduced
in Congress that could significantly change the statutory provisions governing the regulation of medical devices. In addition, the FDA
may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions, which
may prevent or delay approval or clearance of our future products under development or impact our ability to modify our currently cleared
products on a timely basis. Over the last several years, the FDA has proposed reforms to its 510(k) clearance process, and such proposals
could include increased requirements for clinical data and a longer review period, or could make it more difficult for manufacturers to
utilize the 510(k) clearance process for their products. For example, in November 2018, FDA officials announced forthcoming steps that
the FDA intends to take to modernize the premarket notification pathway under Section 510(k) of the FDCA. Among other things, the FDA
announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates.
These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k) clearance pathway,
and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate
devices that are more than 10&#160;years old. In May 2019, the FDA solicited public feedback on these proposals. The FDA requested public
feedback on whether it should consider certain actions that might require new authority, such as whether to sunset certain older devices
that were used as predicates under the 510(k) clearance pathway. These proposals have not yet been finalized or adopted, and the FDA may
work with Congress to implement such proposals through legislation. Accordingly, it is unclear the extent to which any proposals, if adopted,
could impose additional regulatory requirements on us that could delay our ability to obtain new 510(k) clearances, increase the costs
of compliance, or restrict our ability to maintain our current clearances, or otherwise create competition that may negatively affect
our business.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In September 2019, the FDA finalized guidance describing
an optional &#8220;safety and performance based&#8221; premarket review pathway for manufacturers of &#8220;certain, well-understood device
types&#8221; to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety
and performance criteria established by the FDA, thereby obviating the need, in the case of applicable products, for manufacturers to
compare the safety and performance of their medical devices to specific predicate devices in the clearance process. The FDA maintains
a list of device types appropriate for the &#8220;safety and performance based&#8221; pathway and will continue to develop product-specific
guidance documents that identify the performance criteria for each such device type, as well as the testing methods recommended in the
guidance documents, where feasible. The FDA may establish performance criteria for classes of devices for which we or our competitors
seek or currently have received clearance, and it is unclear the extent to which such performance standards, if established, could impact
our ability to obtain new 510(k) clearances or otherwise create competition that may negatively affect our business.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, FDA regulations and guidance are often
revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. Any new statutes, regulations
or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of any future products
or make it more difficult to obtain clearance or approval for, manufacture, market or distribute our products. We cannot determine what
effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our
business in the future. Such changes could, among other things, require: additional testing prior to obtaining clearance or approval;
changes to manufacturing methods; recall, replacement or discontinuance of our products; or additional record keeping.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The FDA&#8217;s and other regulatory authorities&#8217;
policies may change and additional government regulations may be promulgated that could prevent, limit or delay regulatory clearance or
approval of our future products. We cannot predict the likelihood, nature or extent of government regulation that may arise from future
legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing
requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any
marketing approval or clearance that we may have obtained and we may not achieve or sustain profitability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On April&#160;5, 2017, the European Parliament
passed the Medical Devices Regulation (Regulation 2017/745), which repeals and replaces the EU Medical Devices Directive. Unlike directives,
which must be implemented into the national laws of the EEA member states, the regulations would be directly applicable, i.e., without
the need for adoption of EEA member state laws implementing them, in all EEA member states and are intended to eliminate current differences
in the regulation of medical devices among EEA member States. The Medical Devices Regulation, among other things, is intended to establish
a uniform, transparent, predictable and sustainable regulatory framework across the EEA for medical devices and ensure a high level of
safety and health while supporting innovation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Medical Devices Regulation will, however, only
become applicable three years after publication (in 2020). Once applicable, the new regulations will, among other things:</p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">These modifications may have an effect on the way
we conduct our business in the EEA.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Healthcare reform laws and regulatory changes could adversely
affect our products and financial condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">During the past several years, the U.S. healthcare
industry has been subject to an increase in governmental regulation, as well as judicial challenges, at both the federal and state levels.
Efforts to control healthcare costs, including limiting access to care, alternative delivery models and changes in the methods used to
determine reimbursement scenarios and rates, are ongoing at the federal and state government levels. From time to time, changes designed
to contain healthcare costs have been implemented, some of which have resulted in decreased reimbursement rates for diagnostic imaging
services that may impact our business or may otherwise affect our ability to commercialize or profitably sell any product candidates for
which we obtain regulatory approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In March 2010, former President Obama signed into
law the Patient Protection and Affordable Care Act, and the Health Care and Education Reconciliation Act of 2010 (collectively, the &#8220;ACA&#8221;),
which included measures that significantly changed the way healthcare is financed by both governmental and private insurers. While a primary
goal of these healthcare reform efforts was to expand coverage to more individuals, it also involved additional regulatory mandates and
other measures designed to constrain medical costs. The ACA significantly impacts the medical device industry. Among other things, the
ACA:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">Imposes an annual excise tax of 2.3% on any entity that manufactures or imports medical devices offered for sale in the United States, which, through a series of legislative amendments, was suspended, effective January&#160;1, 2016 and subsequently repealed altogether on December&#160;20, 2019;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">Establishes a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research; and</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">Implements Medicare payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, the ACA and related healthcare reform
laws, regulations and initiatives have significantly increased regulation of managed care plans and decreased reimbursement under Medicare
managed care. Moreover, to alleviate budget shortfalls, states have at times reduced or frozen payments to Medicaid managed care plans.
We cannot accurately predict the complete impact of these healthcare reform initiatives, but they could lead to a decreased demand for
medical devices and other outcomes that could adversely impact our business and financial results.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Some of the provisions of the ACA have yet to be
fully implemented, and certain provisions have been subject to judicial and Congressional challenges. For example, the Tax Cuts and Jobs
Act enacted on December&#160;22, 2017, or TCJA, eliminated the shared responsibility payment for individuals who fail to maintain minimum
essential coverage under section 5000A of the Internal Revenue Code of 1986, commonly referred to as the &#8220;individual mandate,&#8221;
effective January&#160;1, 2019. On December&#160;14, 2018, a U.S.&#160;District Court Judge in the Northern District of Texas, or the
Texas District Court Judge, ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because
it was repealed as part of the Tax Cuts and Jobs Act, the remaining provisions of the ACA were invalid as well. On June 17, 2021, the
Supreme Court held that state and individual plaintiffs did not have standing to challenge the individual mandate provision of the ACA;
in so holding, the Supreme Court did not consider larger constitutional questions about the validity of this provision or the validity
of the ACA in its entirety. Another case challenging the ACA&#8217;s requirement that private insurers cover certain preventative services
is currently pending before the Texas District Court Judge. The Texas District Court Judge struck down this requirement with immediate
nationwide effect on March 30, 2023, and the U.S. government has appealed the decision to the U.S. Court of Appeals for the Fifth Circuit.
It is unclear how this decision and appeal, subsequent decisions and appeals, and other efforts to challenge, repeal or replace the ACA,
or portions thereof, will affect our future products or our business. It is possible that the ACA, as currently enacted or as it may be
amended in the future, and other healthcare reform measures that may be adopted in the future, could have an adverse effect on our industry
generally and on our ability to commercialize our future products and achieve profitability.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Disruptions at the FDA and other government agencies caused by
funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or
otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which
could negatively impact our business.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The ability of the FDA to review and clear or approve
new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy
changes, the FDA&#8217;s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise
affect the FDA&#8217;s ability to perform routine functions. Average review times at the FDA have fluctuated in recent years as a result.
In addition, government funding of other government agencies that fund research and development activities is subject to the political
process, which is inherently fluid and unpredictable.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Disruptions at the FDA and other agencies may also
slow the time necessary for new medical devices or modifications to cleared or approved medical devices to be reviewed and/or approved
by necessary government agencies, which would adversely affect our business. For example, over the last several years, including for 35
days beginning on December&#160;22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the
FDA, have had to furlough critical FDA employees and stop critical activities.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Separately, in response to the COVID-19 pandemic,
beginning in March 2020, the FDA postponed certain inspections of domestic and foreign manufacturing facilities. Since that time, the
FDA has resumed on-site inspections of domestic and foreign manufacturing facilities; however, regulatory authorities within or outside
the United States may adopt or resume similar restrictions or other policy measures in response to the COVID-19 pandemic. If a prolonged
government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their
regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory
authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks Related to Employee Matters</b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Under applicable employment laws, we may not be able to enforce
covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former
employees.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>&#160;&#160;</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our employment agreements generally include covenants
not to compete. These agreements prohibit our employees, if they cease working for us, from competing directly with us or working for
our competitors for a limited period. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees
work at all or for a sufficient duration of time to prevent members of our management team from competing with us. For example, Israeli
courts have required employers seeking to enforce covenants not to compete to demonstrate that the competitive activities of a former
employee will harm one of a limited number of material interests of the employer, such as the secrecy of a company&#8217;s confidential
commercial information or the protection of its intellectual property. In Israel, if we cannot demonstrate that such an interest will
be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our
competitiveness may be diminished.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We may not be able to attract and retain the highly skilled employees
we need to support our planned growth.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">To continue to execute our business and our growth
plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense. We may not be successful in attracting
and retaining qualified personnel. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business,
financial condition, results of operations and future growth prospects could be severely harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Risks Related to Owning Our Ordinary Shares</b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Our share price may be volatile, and you may lose all or part
of your investment.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The market price for our shares may be volatile
and subject to wide fluctuations in response to factors including the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">actual or anticipated fluctuations in results of operations;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">actual or anticipated changes in our growth rate relative to our competitors, as well as announcements by us or our competitors of significant business developments, changes in relationships with our target customers, manufacturers or suppliers, acquisitions or expansion plans;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public, as well as variance in our financial performance from the expectations of market analysts;</span></td></tr>
  </table><div>
</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">issuance of new or updated research reports or short reports by securities analysts or other market participants;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">additions or departures of key management or other personnel;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in; font-size: 10pt">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technology;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">sales of our ordinary shares or other securities by us, our insiders or our other shareholders, or the perception that these sales may occur in the future;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">the trading volume of our ordinary shares;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In particular, the market prices of pre-commercial-stage
companies like ours have been highly volatile due to factors, including, but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">our or our competitors&#8217; technological innovations;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">fluctuations in the valuation of companies perceived by investors to be comparable to us;</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">failure to complete significant transactions or collaborate with vendors in manufacturing our product; and</span></td></tr>
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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">These and other market and industry factors may
cause the market price and demand for our ordinary shares to fluctuate substantially, regardless of our actual operating performance,
which may limit or prevent investors from readily selling their ordinary shares and may otherwise negatively affect the liquidity of our
ordinary shares. In addition, the stock market in general, and Nasdaq Global Market and emerging growth companies in particular, have
experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these
companies. Such broad market fluctuations, and other factors (such as variations in quarterly and yearly operating results, general trends
in the medical imaging industry, and changes in state, federal or other applicable regulations affecting us and our industry) may adversely
affect the market price of our ordinary shares, if a market for them develops.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In the past, when the market price of shares has
been volatile, holders of those shares have instituted securities class action litigation against the company that issued the shares.
If any of our shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could
also divert resources and the time and attention of our management.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>As a foreign private issuer, we are exempt from certain requirements
that apply to domestic issuers and we are permitted to follow certain home country corporate governance practices instead of applicable
SEC and Nasdaq requirements, which may result in less protection than is accorded to shareholders under rules applicable to domestic issuers.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We report under the Exchange Act as a non-U.S.
company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from
certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (1) the sections of the Exchange
Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (2)
the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability
for insiders who profit from trades made in a short period of time and (3) the rules under the Exchange Act requiring the filing with
the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, although we intend to furnish
comparable quarterly information on Form 6-K. In addition, foreign private issuers are not required to file their annual report on Form
20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their
annual report on Form 10-K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large accelerated filers
are required to file their annual report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also
exempt from Regulation FD, which is intended to prevent issuers from making selective disclosures of material information.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, as a foreign private issuer, we are
permitted to follow certain home country corporate governance practices instead of those otherwise required under the listing rules of
the Nasdaq Stock Market for domestic issuers. For instance, we follow home country practice in Israel with regard to, among other things,
the director nomination procedure, approval of compensation of officers, and quorum at shareholder meetings. In addition, we follow our
home country law, instead of the listing rules of the Nasdaq Stock Market, which require that we obtain shareholder approval for certain
dilutive events, such as for the establishment or amendment of certain equity based compensation plans, an issuance that will result in
a change of control of the company, certain transactions other than a public offering involving issuances of a 20% or more interest in
the company and certain acquisitions of the stock or assets of another company. As foreign private issuer we are also permitted to follow
home country practice in Israel with regard to composition of the board of directors.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As a result of all of the above, you may not have
the same protections afforded to shareholders of a company that is not a foreign private issuer.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>We may lose our foreign private issuer status which would then
require us to comply with the Exchange Act&#8217;s domestic reporting regime and cause us to incur significant legal, accounting and other
expenses.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As discussed above, we are a foreign private issuer
and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act
applicable to U.S. domestic issuers. We will remain a foreign private issuer until our board determines that we no longer meet the qualification
set forth in Securities Act Rule 405 and Exchange Act Rule 3b-4, with such determinations to be made on an annual basis as of the end
of our second fiscal quarter. In order to maintain our current status as a foreign private issuer, either (a) a majority of our ordinary
shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i)&#160;a majority of our executive
officers or directors must not be U.S. citizens or residents, (ii)&#160;more than 50 percent of our assets cannot be located in the United
States and (iii)&#160;our business must be administered principally outside the United States. If we lose this status, we would be required
to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive
than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance
with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with
the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we would incur as a foreign
private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance
costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules
and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer
liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules
and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We have not paid dividends in the past and have no immediate
plans to pay dividends.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We plan to reinvest all of our future earnings,
to the extent we have earnings, in order to develop and commercialize our technology and products and to cover operating costs, finance
operations and to otherwise become and remain competitive. We have never declared or paid any dividends on our ordinary shares and we
do not plan to pay any cash dividends with respect to our securities in the foreseeable future. As we are a development-stage company
with limited operating history, we may not be able to generate, at any time, sufficient surplus cash that would be available for distribution
to the holders of our ordinary shares as a dividend. Therefore, you should not expect to receive cash dividends on the ordinary shares
we are offering. Consequently, investors may need to rely on sales of their ordinary shares after price appreciation, which may never
occur, as the only way to realize any future gains on their investment. In addition, the Companies Law imposes restrictions on our ability
to declare and pay dividends. See &#8220;Item 8. Financial Information&#8212;A. Consolidated Statements and Other Financial Information&#8212;Dividend
Policy&#8221; for additional information. Payment of dividends may also be subject to Israeli withholding taxes. See &#8220;Item &#8220;10.
Additional Information&#8212;E. Taxation&#8212;<i>Taxation of Our Shareholders&#8212;Dividends&#8221; </i>for additional information.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We incur significant increased costs as a result of operating
as a public company that reports to the SEC and our management is required to devote substantial time to meet compliance obligations.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As a public company reporting to the SEC, we incur
significant legal, insurance, director compensation, accounting and other expenses that we did not incur as a private company. We are
subject to reporting requirements of the Exchange Act and the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC
that impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and
financial controls and changes in corporate governance practices. In addition, the Dodd-Frank Wall Street Reform and Consumer Protection
Act (the &#8220;Dodd-Frank Act&#8221;) imposes various other requirements on public companies. There are significant corporate governance
and executive compensation-related provisions in the Dodd-Frank Act that may increase our legal and financial compliance costs, make some
activities more difficult, time-consuming or costly and may also place undue strain on our personnel, systems and resources. Our management
and other personnel may need to devote a substantial amount of time to these compliance initiatives. In addition, we expect these rules
and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be
required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a
result, it may be more difficult and expensive for us to attract and retain qualified people to serve on our board of directors, our board
committees or as executive officers.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We also incur costs associated with corporate governance
requirements, including requirements under rules implemented by the SEC and the Nasdaq Global Market, and provisions of Israeli corporate
law applicable to public companies. These rules and regulations have and will continue to increase our legal and financial compliance
costs, introduce costs such as investor relations and stock exchange listing fees, and make some activities more time-consuming and costly.
Our board and other personnel continue to devote a substantial amount of time to these initiatives. To the extent we are not in compliance
with the Companies Law or Nasdaq Global Market rules, we may be subject to additional costs or delisting. We are continuously evaluating
and monitoring developments with respect to these rules, and we cannot estimate the amount of additional costs we may incur or the timing
of such costs.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We have incurred and expect to continue to incur
additional expenses and devote increased management effort toward ensuring compliance with the auditor attestation requirements of Section
404 of the Sarbanes Oxley Act (and the rules and regulations of the SEC thereunder) because we no longer qualify as an &#8220;emerging
growth company.&#8221; We cannot estimate the amount of additional costs we may incur as a result of being a public company or the timing
of such costs.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to Section 404 of the Sarbanes-Oxley Act
and the related rules adopted by the SEC and the Public Company Accounting Oversight Board, our management is required to report on the
effectiveness of our internal control over financial reporting. To maintain the effectiveness of our disclosure controls and procedures
and our internal control over financial reporting, we expect that we will need to continue enhancing existing, and implement new, financial
reporting and management systems, procedures and controls to manage our business effectively and support our growth in the future. The
process of evaluating our internal control over financial reporting requires an investment of substantial time and resources, including
by our Chief Financial Officer and other members of our senior management. As a result, this process may divert internal resources and
take a significant amount of time and effort to complete. In addition, as we no longer qualify as an &#8220;emerging growth company&#8221;
under the JOBS Act, our independent registered public accounting firm must attest to the effectiveness of our internal control over financial
reporting under Section 404. Irrespective of compliance with Section 404, any failure of our internal controls could have a material adverse
effect on our stated results of operations and harm our reputation. As a result, we may experience higher than anticipated operating expenses,
as well as higher independent auditor fees during and after the implementation of these changes. If we are unable to implement any of
the required changes to our internal control over financial reporting effectively or efficiently or are required to do so earlier than
anticipated, it could adversely affect our operations, financial reporting and/or results of operations and could result in an adverse
opinion on internal controls from our independent auditors.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Shares eligible for future sale may adversely affect the market
for our ordinary shares and the issuance of additional ordinary shares as a result of the exercise of our outstanding warrants and options
will dilute the percentage ownership of our other shareholders.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">From time to time, certain of our shareholders are eligible to sell
all or some of their ordinary shares by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated
under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate shareholders may sell freely
after six&#160;months subject only to the current public information requirement (which disappears after one year). Of the 55,150,345
ordinary shares outstanding as of March 31, 2023, approximately 48,104,948 ordinary shares have been registered under the Securities Act
and are freely transferable by persons other than our &#8220;affiliates&#8221; without restriction or additional registration; the remaining
shares outstanding have not been registered under the Securities Act and may be offered or sold only pursuant to an effective registration
statement or pursuant to an available exemption from the registration requirements. As of March 31, 2023, approximately 49,894,460 of
our ordinary&#160;shares are held by &#8220;non-affiliates&#8221; and are freely tradable without restriction pursuant to Rule 144. In
addition, a certain shareholder has the ability to cause us to register the resale of its shares issuable upon exercise of certain warrants
under the Registration Rights Agreement (as defined below). See &#8220;Item 10. Additional Information&#8212;C. Material Contracts&#8221;
for a description of the registration rights. Any substantial sale of our ordinary shares pursuant to Rule 144 or pursuant to any resale
prospectus may have a material adverse effect on the market price of our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, as of March 31, 2023, there were two
outstanding warrants to purchase a total of 2,312,443 ordinary shares, with exercise prices ranging from $18.00 per share to $20.87 per
share. As of March 31, 2023, there were 4,993,803 ordinary shares issuable upon the exercise of options to purchase ordinary shares outstanding
under our 2019 Equity Incentive Plan (as defined below), at a weighted average exercise price of $13.18 per share, and 1,523,424 additional
ordinary shares reserved for future issuance under our 2019 Equity Incentive Plan. The warrants are exercisable immediately and expire
on various dates. More convertible securities may be granted in the future to the Company&#8217;s officers, directors, employees or consultants
or as part of future financings. The exercise of outstanding options and warrants will dilute the percentage ownership of the Company&#8217;s
other shareholders.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>The purchase price of the ordinary shares may not reflect our
actual value.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The price of our ordinary shares may not be indicative
of our actual value or any future market price for our securities. This price may not accurately reflect the value of the ordinary shares
or the value that potential investors will realize upon their disposition of ordinary shares. The price does not necessarily bear any
relationship to our assets, earnings, book value per share or other generally accepted criteria of value.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">If equity research analysts discontinue research
or reports about us or our business or if they issue unfavorable commentary or downgrade our ordinary shares, or if other market participants
such as short sellers issue unfavorable reports about us, the price of our ordinary shares could decline.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The trading market for our ordinary shares relies
in part on the research and reports that equity research analysts publish about us and our business. The analysts&#8217; estimates are
based upon their own opinions and are often different from our estimates or expectations. If our results of operations are below the estimates
or expectations of public market analysts and investors, the price of our ordinary shares could decline. Moreover, the price of our ordinary
shares could decline if one or more securities analysts downgrade our ordinary shares or if those analysts issue other unfavorable commentary
or cease publishing reports about us or our business.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Our management conducted an evaluation of the effectiveness of
our internal control over financial reporting and concluded that our internal control over financial reporting was not effective as of
December 31, 2022. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately
report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting,
which would harm our business and the trading price of our ordinary shares. </i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Effective internal controls over financial reporting
are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures are designed
to prevent fraud. Our management is required to assess the effectiveness of our internal controls and procedures and disclose changes
in these controls on an annual basis and our independent registered public accounting firm is required to attest to the effectiveness
of our internal controls over financial reporting pursuant to Section 404.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Any failure to implement required new or improved
controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any
testing by us conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm,
may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require
prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior
internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect
on the trading price of our ordinary shares.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our management conducted an evaluation of the effectiveness
of our internal control over financial reporting and concluded that our internal control over financial reporting was not effective as
of December 31, 2022 due to a lack of sufficient number of financial reporting personnel with an appropriate level of knowledge, experience
and training commensurate with our financial reporting requirements, as described in Item 15, &#8220;Controls and Procedures&#8221; of
this annual report. As defined in Regulation&#160;12b-2 under the Exchange Act, a &#8220;material weakness&#8221; is a deficiency, or
combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of our annual financial statements will not be prevented, or detected on a timely basis.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">While management has continued the process of remediating
the material weaknesses, as described in Item 15, &#8220;Controls and Procedures,&#8221; if significant deficiencies or other material
weaknesses are identified in our internal control over financial reporting that we cannot remediate in a timely manner, investors and
others may lose confidence in the reliability of our financial statements and the trading price of our shares and ability to obtain any
necessary equity or debt financing could suffer. The material weaknesses will not be considered remediated until we have completed implementing
the necessary controls.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have made, and will continue to make, changes
in these and other areas. In any event, the process of determining whether our existing internal controls are compliant with Section 404
and sufficiently effective will require the investment of substantial time and resources, including by our chief financial officer and
other members of our senior management. As a result, this process may divert internal resources and take a significant amount of time
and effort to complete. In addition, we cannot predict the outcome of this process and whether we will need to implement remedial actions
in order to implement effective controls over financial reporting. The determination of whether or not our internal controls are sufficient
and any remedial actions required could result in us incurring additional costs that we did not anticipate, including the hiring of outside
consultants. We may also fail to complete our evaluation, testing and any required remediation needed to comply with Section 404 in a
timely fashion. Irrespective of compliance with Section 404, any additional failure of our internal controls could have a material adverse
effect on our stated results of operations and harm our reputation. As a result, we may experience higher than anticipated operating expenses,
as well as higher independent auditor fees during and after the implementation of these changes. If we are unable to implement any of
the required changes to our internal control over financial reporting effectively or efficiently or are required to do so earlier than
anticipated, it could adversely affect our operations, financial reporting or results of operations and could result in an adverse opinion
on internal controls from our independent auditors.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Furthermore, if we are unable to certify that our
internal control over financial reporting is effective and in compliance with Section 404, we may be subject to sanctions or investigations
by regulatory authorities, such as the SEC or stock exchanges, and we could lose investor confidence in the accuracy and completeness
of our financial reports, which could hurt our business, the price of our ordinary shares and our ability to access the capital markets.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>It is likely that we will be classified as a passive foreign
investment company (&#8220;PFIC&#8221;) for U.S. federal income tax purposes for our taxable year ended December 31, 2022, and possibly
for the current taxable year and future taxable years, which could result in adverse U.S. federal income tax consequences to U.S. Holders
of our ordinary shares.</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">A non-U.S. corporation will be a PFIC for any taxable
year if either (1) at least 75% of its gross income for such year consists of certain types of passive income; or (2) at least 50% of
the value of its assets (generally determined based on an average of the quarterly values of the assets) during such year is attributable
to assets that produce passive income or are held for the production of passive income. For this purpose, cash and assets readily convertible
into cash are categorized as passive assets and our goodwill and other unbooked intangibles will generally be taken into account in determining
our asset value.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">A non-U.S. corporation&#8217;s PFIC status is a
factual determination made annually after the close of each taxable year. Because the PFIC income test described above is based on a non-U.S.
corporation&#8217;s gross income and not its net income, a non-U.S. corporation in the early stages of its business, such as our company,
can be treated as a PFIC in those taxable years before it has sufficient operating revenue as a result of earning any amount of interest
or other passive income. As a result, we believe that we will technically be classified as a PFIC for the taxable year ended December
31, 2022. Depending upon the composition of our income and assets and the market price of our ordinary shares during 2023 and subsequent
taxable years and whether we start generating a substantial amount of active revenue, we could continue to be classified as a PFIC for
2023 and subsequent taxable years if we are classified as a PFIC for 2022. In addition, it is possible that any subsidiary that we own
would also be classified as a PFIC for such taxable years.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">If we were classified as a PFIC for any taxable
year during which a U.S. Holder (as defined below) holds our ordinary shares, certain adverse U.S. federal income tax consequences could
apply to such U.S. Holder. See &#8220;Item 10. Additional Information&#8212;E. Taxation&#8212;U.S. Federal Income Tax Considerations.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Risks Related to Our Operations in Israel</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Conditions in Israel could materially and adversely affect our
business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our executive offices are located in Neve Ilan,
Israel. In addition, a number of our officers and directors are residents of Israel. Accordingly, political, economic and military conditions
in Israel and the surrounding region may directly affect our business and operations. Since the establishment of the State of Israel in
1948, a number of armed conflicts have taken place between Israel and its neighboring countries, as well as terrorist acts committed within
Israel by hostile elements. In recent years, Israel has been engaged in sporadic armed conflicts with Hamas, an Islamist terrorist group
that controls the Gaza Strip, with Hezbollah, an Islamist terrorist group that controls large portions of southern Lebanon, and with Iranian-backed
military forces in Syria. Some of these hostilities were accompanied by missiles being fired from the Gaza Strip against civilian targets
in various parts of Israel, and negatively affected business conditions in Israel. In addition, Iran has threatened to attack Israel,
may be developing nuclear weapons and has targeted cyber-attacks against Israeli entities. Iran also has a strong influence among extremist
groups in the region, including Hamas in Gaza, Hezbollah in Lebanon and various rebel militia groups in neighboring countries. Any hostilities
involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations
and results of operations. Any armed conflicts, terrorist activities or political instability in the region could adversely affect business
conditions and could harm our results of operations and could make it more difficult for us to raise capital. In addition, the political
and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they
are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We currently do not, and we do not expect to, carry
any commercial insurance that covers losses resulting from events associated with war and terrorism. Although the Israeli government currently
covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot be assured that this government
coverage will be maintained or, if maintained, that it will be sufficient to compensate us fully for damages incurred and the government
may cease providing such coverage or the coverage might not suffice to cover potential damages. Any losses or damages incurred by us could
have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect
business conditions and could harm our results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Further, in the past, the State of Israel and Israeli
companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli
companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or the expansion
of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely impact
our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Furthermore, the Israeli government has recently
been pursuing legislation, which if adopted, would result in changes to Israel&#8217;s judicial system. This has prompted protests in
Israel and triggered a considerable political debate. In response to the foregoing developments, individuals, organizations and institutions,
both within and outside of Israel, have voiced concerns that the proposed changes and the public response and political debate may negatively
impact the business environment in Israel, including due to reluctance of foreign investors to invest or conduct business in Israel, as
well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in securities
markets and other changes in macroeconomic conditions. Such proposed changes may also adversely affect the labor market in Israel or lead
to political instability or civil unrest. To the extent that any of these negative developments occur, they may have an adverse effect
on our business, our results of operations and our ability to raise additional funds.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, many Israeli citizens are obligated
to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older for
certain reservists) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity,
there have been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups
in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption
could materially adversely affect our business, prospects, financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>The termination or reduction of tax and other incentives that
the Israeli government provides to Israeli companies may increase our costs and taxes.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Israeli government currently provides tax and
capital investment incentives to Israeli companies, as well as grant and loan programs relating to research and development and marketing
and export activities (see &#8220;Item 10. Additional Information&#8212;E. Taxation&#8212;Israeli Tax Considerations and Government Programs&#8221;).
In recent years, the Israeli government has reduced the benefits available under these programs and the Israeli governmental authorities
may in the future further reduce or eliminate the benefits of these programs. We may take advantage of these benefits and programs in
the future; however, there can be no assurance that such benefits and programs will be available to us. If we qualify for such benefits
and programs and fail to meet the conditions thereof, the benefits could be canceled and we could be required to refund any benefits we
might already have enjoyed and become subject to penalties. Additionally, if we qualify for such benefits and programs and they are subsequently
terminated or reduced, it could have an adverse effect on our financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>It may be difficult to enforce a U.S. judgment against us, our
officers and directors named in this annual report on Form 20-F in Israel or the United States, or to assert U.S. securities laws claims
in Israel or serve process on our officers and directors.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We are incorporated in Israel. Many of our directors
and officers are not residents of the United States and a significant portion of their and our assets are located outside the United States.
Service of process upon us or our non-U.S. resident directors and officers may be difficult to obtain within the United States. We have
been informed by our legal counsel in Israel that it may be difficult to assert claims under U.S. securities laws in original actions
instituted in Israel or obtain a judgment based on the civil liability provisions of U.S. federal securities laws. Israeli courts may
refuse to hear a claim based on a violation of U.S. securities laws against us or our directors and officers because Israel may not be
the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that
Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must
be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law.
There is little binding case law in Israel addressing the matters described above. Additionally, Israeli courts might not enforce judgments
obtained in the United States against us or our directors and officers, which may make it difficult to collect on judgments rendered against
us or our directors and officers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Moreover, an Israeli court will not enforce a non-Israeli
judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional
cases), if its enforcement is likely to prejudice the sovereignty or security of the State of Israel, if it was obtained by fraud or in
the absence of due process, if it is at variance with another valid judgment that was given in the same matter between the same parties,
or if a suit in the same matter between the same parties was pending before a court or tribunal in Israel at the time the foreign action
was brought.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Your rights and responsibilities as our shareholder will be governed
by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We are incorporated under Israeli law. The rights
and responsibilities of holders of our ordinary shares are governed by our amended and restated articles of association and the Companies
Law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations.
In particular, pursuant to the Companies Law, each shareholder of an Israeli company has to act in good faith and in a customary manner
in exercising his or her rights and fulfilling his or her obligations toward the company and other shareholders and to refrain from abusing
his or her power in the company, including, among other things, in voting at the general meeting of shareholders on amendments to a company&#8217;s
articles of association, increases in a company&#8217;s authorized share capital, mergers and certain transactions requiring shareholders&#8217;
approval under the Companies Law. In addition, under Israeli law, a controlling shareholder of an Israeli company or a shareholder who
knows that it possesses the power to determine the outcome of a shareholder vote or who has the power to appoint or prevent the appointment
of a director or officer in the company or has other powers toward the company has a duty of fairness toward the company. However, Israeli
law does not define the substance of this duty of fairness. There is little case law available in Israel to assist in understanding the
implications of these provisions that govern shareholder behavior.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Our amended and restated articles of association contains exclusive
forum provisions for certain claims, which could limit our shareholders&#8217; ability to obtain a favorable judicial forum for disputes
with us or our directors, officers or employees.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our amended and restated articles of association
provides that the federal district courts of the United States of America will, to the fullest extent permitted by law, be the exclusive
forum for resolving any complaint asserting a cause of action arising under the Securities Act (the &#8220;Federal Forum Provision&#8221;).
Our decision to adopt a Federal Forum Provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions
are facially valid under Delaware law. While there can be no assurance that U.S. federal or state courts or Israeli courts will follow
the holding of the Delaware Supreme Court or determine that the Federal Forum Provision should be enforced in a particular case, application
of the Federal Forum Provision means that suits brought by our shareholders to enforce any duty or liability created by the Securities
Act must be brought in federal court and cannot be brought in state court. Section 27 of the Exchange Act creates exclusive federal jurisdiction
over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder and the Federal
Forum Provision does not apply to suits brought to enforce any duty or liability created by the Exchange Act. Accordingly, actions by
our shareholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must also be brought
in federal court. Our shareholders will not be deemed to have waived our compliance with the federal securities laws and the regulations
promulgated thereunder.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Any person or entity purchasing or otherwise acquiring
or holding any interest in any of our securities shall be deemed to have notice of and consented to the Federal Forum Provision. This
provision may limit our shareholders&#8217; ability to bring a claim in a judicial forum they find favorable for disputes with us or our
directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. Alternatively,
if a court were to find the Federal Forum Provision contained in our amended and restated articles of association to be inapplicable or
unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm
our business, operating results and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Provisions of our amended and restated articles of association
and Israeli law and tax considerations may delay, prevent or make difficult an acquisition of us, which could prevent a change of control
and negatively affect the price of our ordinary shares.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Israeli corporate law regulates mergers, requires
tender offers for acquisitions of shares if such acquisitions cause the acquirer to hold more than specified thresholds, requires special
approvals for certain transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant
to these types of transactions. For example, under Israeli law, a merger may not be consummated unless at least 50 days have passed from
the date that a merger proposal was filed by each merging company with the Israel Registrar of Companies and at least 30 days have passed
from the date that the shareholders of both merging companies approved the merger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Furthermore, Israeli tax considerations may make
potential transactions unappealing to us or to our shareholders, such as for those shareholders whose country of residence for tax purposes
does not have a tax treaty with Israel which exempts such shareholders from Israeli tax. For example, Israeli tax law does not recognize
tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in certain
circumstances but makes the deferral contingent on the fulfillment of a number of conditions, including, in some cases, a holding period
of two years from the date of the transaction during which sales and dispositions of shares of the participating companies are subject
to certain restrictions. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such
time expires, the tax becomes payable even if no disposition of the shares has occurred. In order to benefit from the tax deferral, a
pre-ruling from the Israel Tax Authority may be required.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">These provisions of Israeli law and Israeli tax
laws may delay, prevent or make difficult a merger with, or an acquisition of us, or all or a significant portion of our assets, which
could prevent a change of control and may make it more difficult for a third party to acquire us, even if doing so would be beneficial
to our shareholders. These provisions may limit the price that investors may be willing to pay in the future for our ordinary shares and
therefore depress the price of our shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our amended and restated articles of association
provide that our directors (other than external directors) are elected on a staggered basis, such that a potential acquirer cannot readily
replace our entire board of directors at a single annual general shareholder meeting.</p><div>

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  <tr style="vertical-align: top">
    <td style="width: 72px; font-size: 10pt"><span style="font-size: 10pt"><b>Item 4.</b></span></td>
    <td style="font-size: 10pt"><span style="font-size: 10pt"><b>Information on the Company</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

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  <tr style="vertical-align: top">
    <td style="width: 27px">&#160;</td>
    <td style="width: 27px; font-size: 10pt"><span style="font-size: 10pt"><b>A.</b></span></td>
    <td style="font-size: 10pt; text-align: justify"><span style="font-size: 10pt"><b>History and Development of the Company</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">NANO-X IMAGING LTD was incorporated under the laws
of the State of Israel on December&#160;20, 2018 and commenced operations on September&#160;3, 2019.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Substantially all of our assets at the time of
commencement of our operations were acquired or assigned (the &#8220;Asset Purchase&#8221;) from our predecessor company, Nanox Imaging
PLC (&#8220;Nanox Gibraltar&#8221;), a Gibraltar public company, under an Asset Purchase Agreement, dated as of September 3, 2019 and
as amended on December&#160;3, 2019 and December&#160;31, 2019, between Nanox Gibraltar and us. Pursuant to the Asset Purchase Agreement,
substantially all of the assets of Nanox Gibraltar, including all patents, patent applications and all other intellectual property rights,
but not including the shares of Nanox Japan, Inc., a wholly owned subsidiary of Nanox Gibraltar (&#8220;Nanox Japan (predecessor)&#8221;),
were sold to the Company for an aggregate consideration of $13.3 million, reflecting the fair market value of the transferred assets,
which was estimated to be $6.1 million (excluding cash) based on an independent valuation report, plus the cash balance less $200,000,
which cash amount totaled $7.2 million as of the date of the Asset Purchase Agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In January 2020, the board of directors of the
Company and the board of directors and shareholders of Nanox Gibraltar approved the issuance of shares in accordance with the terms of
the Asset Purchase Agreement described above. As a result, 1,109,245 of the Company&#8217;s ordinary shares were issued to Nanox Gibraltar,
representing an aggregate consideration of approximately $17.8 million, and the Company has no further obligations to Nanox Gibraltar
under the Asset Purchase Agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On November 2, 2021, the Company completed the
acquisition of 100% of the shares of USARAD Holdings, Inc., a Delaware corporation (&#8220;USARAD&#8221;), pursuant to the terms of the
Stock Purchase Agreement, dated October 25, 2021 (the &#8220;USARAD SPA&#8221;), among the Company, USARAD, Dr. Michael Yuz, other holders
of capital stock of USARAD and holders of USARAD options. USARAD <span>is a U.S.-based teleradiology company
with over 116  U.S. certified radiologists in its network</span>. At closing, the Company (through a wholly-owned subsidiary) purchased
100% of the shares of USARAD on a fully diluted basis for $7,300,000 in cash and 496,545 ordinary shares. In addition, upon the successful
achievement of certain milestones related to profitability, EBITDA and other operational performance metrics, the Company undertook to
pay additional cash consideration in the amount of up to $2,000,000 and stock consideration in the amount of up to $6,500,000 at a per
share value determined by the average of: (i) the volume weighted average closing share price of the 30 trading days prior to the relevant
milestone completion, and (ii) the volume weighted average closing share price of the 30 trading days ending on August 6, 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On April 28, 2023, the Company and Dr. Michael
Yuz, as the representative of the former stockholders of USARAD, entered into the first amendment to the USARAD SPA, according to which
the parties to the USARAD SPA agreed that (i) the Company shall pay to the former stockholders of USARAD an aggregate amount of $290,063
in cash and 45,392 ordinary shares, in consideration for the achievement of certain milestones in connection with the first earn out period,
as defined in and in accordance with the USARAD SPA; and (ii) the rights and obligations under the USARAD SPA regarding the remaining
earn out periods were amended such that the parties agreed that the Company shall pay to the former stockholders of USARAD an aggregate
amount of $500,000 in cash and 210,000 ordinary shares as consideration for the remainder of the milestones and applicable earn-outs under
the USARAD SPA. As a result of the amendment to the USARAD SPA, obligations of the Company and the rights of the former stockholders of
USARAD relating to the purchase price (including the earn-outs) under the USARAD SPA have been satisfied in full.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On November 3, 2021, the Company completed the
acquisition of the platform and other assets of MDWEB, pursuant to the terms of the Asset Purchase Agreement, dated October 21, 2021,
between the Company and MDWEB, a USARAD-related company. Pursuant to the acquisition, we acquired the MDW platform, now known as the Nanox.MARKETPLACE,
a decentralized marketplace connecting imaging facilities with radiologists. At closing, the Company issued 64,715 ordinary shares to
MDWEB. In addition, upon the successful achievement of certain milestones related to technical integration of the Nanox.MARKETPLACE with
the Nanox.CLOUD and achieving certain other operational targets, the Company undertook to pay additional stock consideration in the amount
of up to $1,500,000 at a per share value determined by the average of: (i) closing price of the 30 trading days ending on the applicable
milestone&#8217;s achievement date: and (ii) the volume weighted average closing share price of the 30 trading days prior to the closing
date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On November 4, 2021, the Company consummated its
purchase of 100% of the equity of Zebra Medical Vision Ltd., an Israeli company (&#8220;Zebra&#8221;) pursuant to the terms of the Agreement
and Plan of Merger, dated August 9, 2021, as amended (the &#8220;Zebra Merger Agreement&#8221;), among the Company, Zebra and Perryllion
Ltd., as representative of Zebra&#8217;s equity holders. Zebra, now known as Nanox AI, is a leading medical AI developer, with eight FDA-cleared
and 11 CE-marked AI solutions for medical imaging. At closing, the Company issued 3,249,142 ordinary shares of the Company and committed
to issue 70,211 employee options to the equity holders of Zebra, which represented (a) the basic purchase price of $100,000,000; minus
(b) certain transaction costs; plus (c) deferred closing consideration in the amount of $3,333,333 as a result of Zebra entering into
a designated commercial agreement prior to closing; plus (d) $6,300,000 as a result of Zebra achieving a designated milestone of obtaining
a new FDA clearance for its population health product. All shares, except for the shares issued for the designated milestone, were issued
at a deemed per share value of $33.18 and the shares issued for the designated milestone were issued at a per share value of $25.01. In
addition, according to the terms of the Zebra Merger Agreement, under certain circumstances, the Company was obligated to issue additional
ordinary shares as deferred closing consideration and certain milestone consideration (should such be achieved) representing an aggregate
amount of up to $100,000,000 within three years following the closing. An aggregate of $9,633,333 of such consideration was paid at closing
as described above. In addition, on January 19, 2022, we issued 89,286 additional ordinary shares to the former shareholders of Nanox
AI due to partial achievement of a milestone that occurred post-closing. On December 29, 2022, the parties entered into a settlement with
respect to any additional amount that could be granted under the Zebra Merger Agreement, according to which the Company issued Nanox AI&#8217;s
former shareholders an additional 2,648,424 ordinary shares. As a result of the settlement, both parties&#8217; performance obligations
under the agreement have been satisfied in full.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our principal executive offices are located at
Communications Center, Neve Ilan, Israel 9085000, and our telephone number is +972 02 5360360. Our website address is <span style="text-decoration:underline">http://www.nanox.vision</span>.
The information contained therein or connected thereto shall not be deemed to be incorporated into this annual report on Form 20-F. Our
agent for service of process in the United States is CT Corporation System.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Public Offerings</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In August 2020, we completed our initial public
offering of 10,555,556 ordinary shares at a public offering price of $18 per share, including 1,376,812 additional ordinary shares purchased
by the underwriters at the public offering price, less the underwriting discount, pursuant to the exercise in full of their option to
purchase additional ordinary shares. Our ordinary shares are listed on the NASDAQ Global Market under the symbol &#8220;NNOX.&#8221;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On February 10, 2021, certain of our shareholders
sold an aggregate of 3,091,635 ordinary shares in a public offering pursuant to an Underwriting Agreement by and among us, Cantor Fitzgerald
&amp; Co., acting as representative of the underwriters, and the selling shareholders named therein (the &#8220;Selling Shareholders&#8221;).
We did not receive any of the proceeds from the sale of ordinary shares offered by the Selling Shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>B. Business Overview</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Overview</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Early detection saves lives&#8212;and we at Nanox
are focused on applying our proprietary medical imaging technology and solutions to make diagnostic medicine more accessible and affordable
across the globe. We are developing an end-to-end imaging service solution, which includes the Nanox System, comprised of the Nanox.ARC
using our novel MEMs X-ray source technology, and the Nanox.CLOUD, a companion cloud software, integrated with AI solutions and teleradiology
services. Our vision is to increase early detection of medical conditions that are discoverable by X-ray by improving access to imaging,
reducing imaging costs and enhancing imaging efficiency, which we believe is key to increasing early prevention and treatment, improving
health outcomes and, ultimately, saving lives.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our imaging solution is designed as a modular open
system, and we intend in the future to explore the expansion of the solution to include additional components, which may be developed
by us or third parties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our holistic imaging solution is currently comprised
of the following four principal components:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b><i>The Nanox System</i></b>. As a first step
to producing a new class of accessible and affordable medical imaging systems, we focused on identifying and developing a novel digital
X-ray source, which we refer to as the Nanox.SOURCE. Our X-ray source is based on a novel digital MEMs semiconductor cathode that we believe
can achieve the same functionalities as legacy X-ray analog cathodes, while allowing for lower-cost production than existing medical imaging
systems. We have been developing this technology over ten years towards the goal of commercial applicability. This novel digital X-ray
source is the basis of core technology in the imaging system we are developing, and we believe it also has the potential to replace the
legacy X-ray source in other existing imaging systems. Our technology aims to disrupt medical imaging by providing accessibility and affordability
on a global scale. Our goal is to enable medical institutions and other significant medical players to either employ our solutions as
a closed end-to-end system or to adopt a modular approach to our technologies, by acquiring or licensing our different components and
integrating our technologies into their specific product.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Nanox System includes two integrated components&#8212;hardware
(Nanox.ARC), a medical imaging system incorporating our novel digital X-ray source, and software (Nanox.CLOUD). We developed, and continue
to improve, the multi-source Nanox.ARC, a 3D tomosynthesis imaging system, which received a 510(k) clearance from the FDA and remains
subject to regulatory clearance and approval in other jurisdictions. Tomosynthesis is an imaging technique used for early detection, that
is designed to produce a high-resolution, 3D, X-ray image reconstruction of the scanned human body part for review by a professional diagnostics
expert. In parallel, we have developed, and continue to improve, the Nanox.CLOUD, a companion cloud-based software to which scanned images
may be securely uploaded to the cloud system. By integrating the Nanox.CLOUD with the Nanox.ARC, we believe the Nanox System could provide
a streamlined process and end-to-end medical imaging service, including services such as image repository, radiologist matching, online
and offline diagnostics review and annotation, connectivity to diagnostic assistive AI systems, billing, monitoring and reporting.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Following receipt of clearance from the FDA, and
if cleared by similar regulatory agencies in other jurisdictions, we plan to market and deploy the Nanox System globally at a substantially
lower cost than currently available medical imaging systems, such as legacy X-ray and Computerized Tomography (&#8220;CT&#8221;) systems,
because our digital X-ray source will allow the Nanox.ARC to have a simpler structure without the costly cooling equipment used in legacy
X-ray systems or the complex rotating mechanism used in CT devices. See &#8220;&#8212;Our Technology&#8212;The Nanox System.&#8221; We
believe that the Nanox System could increase the accessibility and affordability of early-detection medical imaging systems worldwide,
substantially reduce wait-times for imaging results and increase early detection rates compared to currently employed imaging process
protocol.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We continue to implement a multi-step approach
to the regulatory clearance process for the Nanox System. On April 1, 2021, we received clearance from the FDA to market our Nanox Cart
X-Ray System, a single-source version of the Nanox.ARC. On June 17, 2021, we submitted a 510(k) premarket notification application to
the FDA for the first version of our multi-source Nanox.ARC 3D digital tomosynthesis system. On August 12, 2021, we received a request
for additional information from the FDA concerning the first submission of our multi-source system. On January 10, 2022, we withdrew our
first submission of our multi-source system. On January 12, 2022, we submitted to the FDA a Q-submission for the second version of our
multi-source Nanox.ARC 3D digital tomosynthesis system. The second version of&#160;the Nanox.ARC is an improved and enhanced version that
was designed, among other things, to address certain deficiencies raised by the FDA during their review of the first submission from June
2021. On September 26, 2022, we submitted a 510(k) premarket notification to the FDA as part of our 510(k) application process for the
second version of our multi-source Nanox.ARC 3D digital tomosynthesis system (including the Nanox.CLOUD). On April 28, 2023, we received
a 510(k) clearance from the FDA to market the Nanox.ARC (including the Nanox.CLOUD) as a stationary <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>X-ray
<span style="font-family: Times New Roman, Times, Serif">&#8206;</span>system <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>intended
to produce tomographic images of the human musculoskeletal system adjunctive to conventional radiography, on adult patients. This device
is <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>intended to be used in professional healthcare <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>facilities
or <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>radiological <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>environments,
such as <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>hospitals, clinics, imaging <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>centers
and <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>other medical practices<span style="font-family: Times New Roman, Times, Serif">&#8206;</span>
by trained radiographers, <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>radiologists and physicists.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Following receipt of clearance from the FDA, and
if authorized by similar regulatory agencies in other jurisdictions, our goal is to finalize deployment of the initial 15,000 Nanox System
units within three years following receipt of FDA clearance for our multi-source Nanox.ARC (including the Nanox.CLOUD). We have started
to ship several units of the Nanox System for purposes of collecting clinical sample images, obtaining regulatory approvals and demonstrations
and training. See &#8220;Item 3. Key Information&#8212;D. Risk Factors&#8212;Products utilizing our technology may need to be approved
or cleared by the FDA and similar regulatory agencies worldwide. We may not receive, or may be delayed in receiving, the necessary approval
or clearance for our future products, which would adversely affect business, financial condition, results of operations and prospects.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We have also initiated the process to obtain CE
marking for the marketing and sale of our Nanox.ARC (including the Nanox.CLOUD) in the European Union. We have engaged with a Notified
Body and intend to submit requisite technical and other documentation during the coming months.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We expect that the Nanox System will enable us
to accumulate a significant number of medical images, which have the potential to be used by collaborators, such as medical AI-analytics
companies, through machine learning algorithms to increase the probability of early disease detection.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b><i>Nanox.MARKETPLACE. </i></b>Nanox.MARKETPLACE
(formerly known as the MDW platform), which we acquired from MDWEB in November 2021, is our proprietary decentralized marketplace that
connects imaging facilities with radiologists and enables radiologists to provide, and customers to obtain, remote interpretations of
imaging data. The platform was designed by radiologists for the imaging industry. The radiologists connecting to Nanox.MARKETPLACE include
those radiologists who are part of our network and provide teleradiology services through USARAD, as well as other radiologists, all of
whom undergo an accreditation process that we perform and are required to be certified by the American Board of Radiology. Based primarily
on customer location and area of specialization, radiologists will be matched to conduct the imaging interpretation. The radiologist receives
payment through the platform from the customer upon the delivery of the imaging interpretation. The Nanox.MARKETPLACE service is currently
offered on a standalone basis. In the future, we plan to incorporate the Nanox.MARKETPLACE into the Nanox System, such that images that
were generated by the Nanox.ARC and uploaded to the Nanox.CLOUD, can be streamlined and referred through the Nanox.MARKETPLACE to radiologists
for remote reading.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b><i>AI Imaging Solutions</i></b>. Following our
acquisition of Zebra, renamed Nanox AI, in November 2021, we offer FDA cleared AI-based software imaging solutions to hospitals, health
maintenance organizations (&#8220;HMOs&#8221;), integrated delivery networks (&#8220;IDNs&#8221;), pharmaceutical companies, marketplaces
and insurers, that are designed to identify or predict undiagnosed or underdiagnosed medical conditions, through the mining of data of
existing CT scans. We currently offer AI imaging population health solutions aimed at identifying underlying findings, which are correlated
to osteoporosis and cardiovascular disease. In addition, we are currently in advanced stages of developing a product for fatty liver to
help detect patients at risk for more advanced liver disease, such as non-alcoholic liver steatosis (&#8220;NASH&#8221;). With our AI
imaging population health solutions, we aim to further our mission to enable preventative healthcare through early detection. We also
continue to maintain certain legacy contracts for AI imaging triage solutions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, since the acquisition and completion
of integration with Nanox AI, we have begun to develop AI-based features to enhance the images generated by the Nanox.ARC, with the goal
of improving diagnostic capabilities for the Nanox.ARC in chest and musculoskeletal imaging. Ultimately, we expect to integrate these
AI imaging capabilities, which we refer to as Robodiology, into the Nanox System. Subject to completion of the development and receipt
of requisite regulatory approvals, we plan to offer these AI imaging solutions as an optional service to our MSaaS partners.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Teleradiology Services</i></b>.
Following our acquisition of USARAD in November 2021, we offer teleradiology&#160;services to customers in the U.S. market and an additional
seven countries by U.S.-based radiologists, certified by the American Board of Radiology. We offer imaging interpretation services for
radiology practices, hospitals, medical clinics, diagnostic imaging centers, urgent care facilities and multi-specialty physician groups
and USARAD contracts directly with these customers. In addition, we provide second opinion radiology readings, primarily to imaging centers.
We have a network of over 116 independent radiologists in our marketplace, all of whom have undergone an accreditation process by us,
and we provide our teleradiology services to approximately 187 customers representing approximately 241 facilities. We allocate images
that we receive from our customers, through our picture archiving and documentation system, to radiologists in our network based on the
radiologist&#8217;s area of specialization. Payment is made by the customer directly to us monthly based on the number of monthly readings
and we pay the radiologist a predetermined fixed fee per reading.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Currently, our teleradiology services are offered
as a standalone product through USARAD. In the future, we plan to incorporate our teleradiology services as part of our Nanox System offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Limitation of Current Medical Imaging Solutions and Our Market Opportunity</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The main categories of current medical imaging
systems that use X-ray sources include legacy X-ray systems, CT, mammography, fluoroscopy and angiogram. The analog X-ray source used
by these systems produces X-rays by accelerating electrons to high energies, causing them to hit a metal target from which the X-rays
are emitted. This requires a significant amount of electrical energy to be transferred to the X-ray tube. Due to the heat generated by
this process, one of the most complex mechanical challenges is cooling the analog X-ray source. In addition, for CTs, the mechanical structure
is even more complex because the analog X-ray source needs to rotate in a heavy gantry at high speed. We believe these are key factors
leading to the high cost and complexity of existing medical imaging systems, which in turn significantly limits the availability of medical
imaging for early detection globally.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">According to a report from the Pan American Health
Organization and World Health Organization (&#8220;WHO&#8221;) in 2012, approximately two-thirds of the world population did not have
access to medical imaging. Further, many people with access to medical imaging face substantial wait times for scanning. For example,
in Canada, access to medical imaging procedures is a growing problem with months of reported wait times for MRI and CT screening. Long
wait times not only negatively impact patient outcomes but also add significant costs to the Canadian healthcare system each year due
to delays in detection and treatment. Wait times for a CT scan can be longer than six weeks in Scotland, over 12 months in Ireland, and
in the UK, tens of thousands of suspected cancer patients face month-long wait times to discover whether they have a particular illness
due to delays in analyzing scans and X-rays.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, most market participants, including
medical imaging manufacturing companies, medical imaging providers and radiologists, among others, have not provided the same level of
end-to-end medical imaging services. One of the reasons is that the scanning process is currently not integrated with the diagnostics
process, which contributes to extended wait times for image diagnostics by experts.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">According to a report of Fortune Business Insights
from January 2022, the global medical imaging market size was $36.19 billion in 2020, and the market is expected to grow from $37.97 billion
in 2021 to $56.53 billion in 2028 at a CAGR of 5.8% in the 2021-2028 period. The X-ray equipment segment held a dominant market share
in 2020, accounting for 33.9% of the global medical imaging market share in such period. Further, according to such report, increasing
use of advanced AI-enabled diagnostic equipment for the rapid diagnosis and predictive analysis in developed countries is one of the major
factors anticipated to contribute to the rising product demand during the forecast period. Currently, only a handful of players operating
in the market are providing AI-enabled imaging technologies to the healthcare industry.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>The Nanox Ecosystem</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>The Nanox System</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We have developed, and continue to improve, the
Nanox System, which has two integrated components &#8212; hardware (Nanox.ARC) and software (Nanox.CLOUD). The Nanox.ARC, a 3D tomosynthesis
imaging system, is designed to integrate our proprietary and novel digital X-ray source, known as Nanox.SOURCE. Our X-ray source is based
on a novel digital MEMs semiconductor cathode that we believe can achieve the same functionalities as legacy X-ray analog cathodes, while
allowing for lower-cost production than existing medical imaging systems. We have been developing this technology over ten years towards
the goal of commercial applicability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our technology aims to disrupt the medical imaging
market by providing accessibility and affordability on a global scale. Our goal is to enable medical institutions and other significant
medical players to either employ our solutions as a closed end-to-end system or to adopt a modular approach to our technologies, by acquiring
or licensing our different components and integrating our technologies into their specific product.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Legacy Analog X-ray Source and Limitations of Existing Medical
Imaging Systems</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The X-ray tube technology has essentially remained
unchanged since its inception in 1895. For any type of imaging system to generate X-rays, the system must use X-ray tubes as a source
for the X-rays. The X-ray tube converts electrical power into X-rays by accelerating electrons to high energies, causing them to hit a
metal target from which the X-rays are emitted. X-rays can only be produced if the X-ray tube is energized, which has historically required
a significant amount of electrical energy to be transferred to the X-ray tube. However, only a small amount of the energy deposited into
the X-ray tube is actually converted into X-rays; the majority of the energy turns into heat. This is called a thermionic (heat-based)
mode of operation where a metal filament needs to be heated up to approximately 2,000&#176;C to generate the electron stream (a &#8220;cathode&#8221;)
that will hit a metal target (an &#8220;anode&#8221;) to generate the photon-based X-ray stream resulting from that high-energy impact.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Heating the filament to approximately 2,000&#176;C
requires the mechanical cathode support systems to withstand high temperatures within a high vacuum, high voltage environment. Tungsten
was introduced into the X-ray tube in 1903 for its properties of a high melting point and ductility. The tungsten filaments still used
today are critical components of X-ray tubes, but they limit the lifetime of the X-ray tube due to the progressive evaporation of filament
material under these high temperatures. At temperatures of up to 2,000&#176;C, the filament evaporates in hot spots close to the peak temperature
locations which over time can cause a catastrophic failure of the filament.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that the use of
the legacy analog X-ray source is one of the key factors for the high cost of existing medical imaging systems. The main categories of
medical imaging systems that use X-ray sources include legacy X-ray systems, CT (3D&#160;cross-sectional 360&#176; &#8220;slicing&#8221;
X-ray imaging), mammography (2D and 3D breast X-ray imaging), fluoroscopy (real-time X-ray video imaging) and angiogram (blood vessels,
contrast X-ray imaging). CT scanners, for example, are complex diagnostic imaging systems that use X-rays to take images of a patient&#8217;s
internal structures and organs. Due to the limitations of the analog X-ray source described above, general radiographic X-ray tubes are
not well suited for use in a CT scanner. CT scanners instead use a specialized X-ray tube designed to withstand the excessive amount of
heat produced by continuous energization. This X-ray tube is located in the gantry, which is the largest part of a CT scanner and consists
of the X-ray detectors, the mechanical supports and the scanner housing. Due to the heat generated by this process, one of the most complex
mechanical challenges is cooling the analog X-ray source while rotating it in a heavy gantry at high-speed. One solution used is the rotating
anode, where a tungsten metal disk rotates at high revolutions per minute so the electron beam hits a different spot on the disk on a
continuous basis to prevent the concentration of heat in one spot on the disk and reduce the likelihood of overheating or burning. In
addition, CT scanners require a long continuous exposure time to create 3D images of the patient&#8217;s body using multiple X-ray images,
which means that the X-ray tube must be continually energized and that patients are continuously exposed to radiation throughout that
period. As a result of these complexities, most high-quality X-ray tubes for a CT scanner weigh between approximately 50 and 100 kilograms
with the cooling mechanism.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i><span style="text-decoration:underline">Our Novel Digital X-ray Source</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Realizing that the X-ray tube technology has essentially
not changed in more than 100&#160;years and remains a significant source of complexity and cost-driver of existing X-ray-based medical
imaging systems, we developed a novel digital X-ray source that we believe addresses these drawbacks and will enable a new class of medical
imaging systems that can be produced at a significantly lower cost than the existing systems.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our technology has its roots in field emission
display (&#8220;FED&#8221;) technology. FED technology was originally developed by Sony with other technology partners, for television
screens and monitors, offering a novel way of lighting screen pixels compared to traditional cathode-ray tubes that were based on a one-source
electron gun beam. The field emission display innovation used multiple nano-scale electron guns to achieve a much higher quality image
with significantly reduced motion blur effects. In 2009, after having invested substantial resources in the development of this technology
for over a decade including through a joint venture called Field Emission Technologies, Inc. (&#8220;FET&#8221;), Sony ceased development
of the project.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In 2009, FET dissolved and transferred certain
assets to FET Japan Inc. (&#8220;FETJ&#8221;). Scientists on our team, who worked at FETJ, applied their expertise to develop non-display
related applications, including our X-ray source technology. In 2011, our predecessor company acquired certain non-display related know-how
from FETJ and certain members of the FETJ technical team joined us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">After acquiring the technology, we spent over eight
years developing a digital X-ray source for the medical imaging industry that could be produced on a commercial scale. Our X-ray source
is a MEMs-based semiconductor cathode that achieves electron emission by a non-thermionic low-voltage trigger to approximately 100&#160;million
nano-scale molybdenum cones that act as multiple electron &#8220;guns,&#8221; instead of a single heated filament. The cathode is housed
in a customized X-ray tube.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We believe our X-ray source has the following technological
advantages over the analog X-ray source:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><i>Reduced duration of radiation exposure</i>.
Our X-ray source uses a digital chip that is designed to provide better control and enables near-instantaneous on/off toggling of the
electron beam. This source control also enables a precise &#8220;stop and start&#8221; operation, which we believe can potentially result
in significantly reduced duration of radiation exposure compared to an analog X-ray source.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><i>X-ray source KvP / mA decoupling. </i>Our X-ray
source is designed to create imaging using one X-ray source chip because there is complete independence and separation between the strength
of X-ray penetration and the amount of photons for illumination (referred to as &#8220;KvP / mA&#8221;). KvP represents the speed of electrons
that gives the X-ray its penetrating power, and higher KvP means the X-rays can penetrate higher density materials such as bones. mA represents
the amount of photons or brightness levels of the X-ray image. For legacy X-ray sources, KvP / mA ratios were codependent in a linear
relationship and each X-ray source could only produce one set of KvP / mA combinations dedicated for a particular use (for example, either
tissue images or bone images, but not both simultaneously). We believe our X-ray source technology can produce multi-spectral imaging
from one X-ray source, which allows for variable energy levels to be controlled during one scan. Therefore, one source chip can be used
for multiple types of scans, such as head-scans, abdomen, mammography and angiograms, involving both soft and hard tissues at variable
densities, simultaneously. We believe this multi-spectral imaging could also be applied to real-time video imaging. Our latest working
prototype uses up to 160 KvP / mA under lab conditions, and we intend to commercialize the multi-source Nanox.ARC with a range of 40 &#8211;
110 KvP / mA.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><i>Longer lifetime</i>. Our X-ray source is based
on a field of multiple electron guns on our MEMs-based cathode that spread the load of electron generation among many &#8220;producers&#8221;
compared to a single filament that heats to a high temperature in the analog X-ray tube. As a result, our digital X-ray source is designed
to produce an electron beam from different locations on the chip towards the anode during each duty cycle without the need for the complex,
high precision rotating mechanism. In addition, the near instant on/off toggling feature of our digital X-ray source is designed to allow
us to reduce the duration of each operation. As a result, we believe our medical imaging system will have higher stability and a longer
lifetime, with a longer mean time between failures.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><i>Simplified hardware structure</i>. Because our
chip-based X-ray source and tube are designed to be quickly triggered electronically, we are able to have multiple stationary-anode tubes
arranged around the patient as opposed to one larger tube that rotates around the patient. We believe this could reduce the complexity
and cost of the Nanox.ARC compared to legacy imaging devices. This current approach to increase durability of the tungsten anode in imaging
devices, the rotating anode mechanism requires both a significant increase in tube size and mechanical component cost to allow for the
complex movements of the tube. In contrast, we believe by using our X-ray source we will be able to significantly reduce the size of X-ray
tubes and simplify the structure of our medical imaging system.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We believe our X-ray source has the potential to
replace the legacy X-ray source in other existing imaging systems, as well as the X-ray source in systems used in other industries, such
as security scanners.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i><span style="text-decoration:underline">Nanox System</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We have developed, and continue to improve, the
multi-source Nanox.ARC, a medical device that integrates our proprietary and novel X-ray source. Subject to receiving requisite regulatory
clearance and approval, the version of the multi-source Nanox.ARC that we expect to introduce to the market is expected to be a 3D tomosynthesis
imaging system that produces a 3D reconstruction of the scanned human body part. The Nanox.ARC, using our X-ray source, is designed to
produce partial-body scans of various body parts, with remote operation capability, and to have a full kVp / mA energy throughout range
as per industry standards, multi-spectral imaging range, as well as cloud connectivity and standard compliance safety mechanisms. It is
designed for easy setup and operation with multiple stationary X-ray tubes arranged around the patient. We anticipate that part of the
software will be used to run the Nanox.ARC will be cloud-computing based and integrated with the Nanox.CLOUD, as further explained below.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition to the Nanox.ARC, we have developed,
and continue to improve, the Nanox.CLOUD, a companion cloud software that will allow for the delivery of medical screening as a service.
With the Nanox.CLOUD, we anticipate that the high-cost components of existing medical imaging systems, such as analytics and computing
software that are traditionally installed via multiple licenses on-premise and on a per-system basis, will become centralized through
the cloud.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We believe this will significantly reduce on-going
software and IT licensing costs and enable a wide range of functionalities, such as multiple AI diagnostics and remote support. By integrating
the Nanox.CLOUD with the Nanox.ARC, we believe the Nanox System could provide a streamlined process and end-to-end medical imaging service,
including services such as image repository, radiologist matching, online and offline diagnostics review and annotation, connectivity
to diagnostic assistive AI systems, billing, monitoring and reporting.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe the Nanox System,
following receipt of clearance from the FDA, and if cleared and approved by the requisite regulatory authorities in other jurisdictions,
if successfully deployed, will streamline the entire medical screening process ranging from scanning to support diagnostics, and solve
the bottleneck of imaging-to-diagnostics.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We also expect to be able to offer the Nanox System
for a substantially lower cost than existing medical imaging systems, which we believe is key to achieving our goal of making early-detection
medical imaging systems more accessible globally. We believe our novel X-ray source is crucial to our ability to substantially reduce
the manufacturing cost of the Nanox.ARC. Our digital X-ray source generates X-ray radiation that is measurably identical in all key metrics
to the X-ray radiation generated by existing analog X-ray sources, but without creating the high temperature that results from the filament
used in the analog X-ray tube, thereby eliminating the need for the costly cooling equipment. In addition, our digital X-ray source is
designed to enable the Nanox.ARC to have multiple stationary tubes arranged around the patient, which allows for a more simplified structure,
as opposed to requiring the heavy, complex, high-precision rotating mechanisms used in legacy CT devices. As a result, we expect that
if we achieve the expected scale, we will be able to offer the Nanox System at a substantially lower cost than the cost of existing medical
imaging systems based on analog X-ray sources.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">As we continue to develop the Nanox System, we
continue to implement a multi-step approach to the regulatory clearance process. On June 17, 2021, we submitted a 510(k) premarket notification
application to the FDA for the first version of our multi-source Nanox.ARC 3D digital tomosynthesis system. On August 12, 2021, we received
a request for additional information from the FDA concerning the first submission of our multi-source system. On January 10, 2022, we
withdrew our first submission of our multi-source system. On January 12, 2022, we submitted to&#160;the FDA a Q-submission for the second&#160;version
of&#160;our&#160;multi-source Nanox.ARC 3D digital tomosynthesis system. The second version of&#160;the Nanox.ARC is an improved and enhanced
version that was designed, among other things,&#160;to address certain deficiencies raised by the FDA during their review of the first
submission from June 2021. On September 26, 2022, we submitted a 510(k) premarket notification to the FDA as part of our 510(k) application
process for the second version of our multi-source Nanox.ARC 3D digital tomosynthesis system (including the Nanox.CLOUD). On April 28,
2023, we received a 510(k) clearance from the FDA to market the Nanox.ARC (including the Nanox.CLOUD) as a stationary <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>X-ray
<span style="font-family: Times New Roman, Times, Serif">&#8206;</span>system <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>intended
to produce tomographic images of the human musculoskeletal system adjunctive to conventional radiography, on adult patients. This device
is <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>intended to be used in professional healthcare <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>facilities
or <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>radiological <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>environments,
such as <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>hospitals, clinics, imaging <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>centers
and <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>other medical practices<span style="font-family: Times New Roman, Times, Serif">&#8206;</span>
by trained radiographers, <span style="font-family: Times New Roman, Times, Serif">&#8206;</span>radiologists and physicists.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Following receipt of clearance from the FDA, and
if authorized by similar regulatory agencies in other jurisdictions, our goal is to finalize deployment of the initial 15,000 Nanox System
units within three years following receipt of FDA clearance for our multi-source Nanox.ARC (including the Nanox.CLOUD). We have started
to ship several units of the Nanox System for clinical image samples, regulatory approvals and demonstration and training purposes. To
date, we have not obtained feedback from the FDA regarding the regulatory pathways for the novel digital X-ray source.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We expect to commercialize the second version of
the multi-source Nanox.ARC and the Nanox.CLOUD as the Nanox System.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We expect that the Nanox System will enable us
to accumulate a significant number of medical images, which have the potential to be used by collaborators, such as medical AI-analytics
companies, through machine learning algorithms to increase the probability of early disease detection.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i><span style="text-decoration:underline">Business Model</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We plan to commercialize our X-ray source technology
through three simultaneous business models: (i)&#160;the Subscription Model, (ii)&#160;the Sales Model and (iii)&#160;the Licensing Model.
We expect the Subscription Model to be our primary business model for the X-ray source technology and the key vehicle to achieving our
vision of increasing early detection of medical conditions that are discoverable by X-ray.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>The Subscription Model (MSaaS Model)</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foundation of the Subscription
Model is our integrated offering of the Nanox.ARC and the Nanox.CLOUD, which we refer to as the Nanox System. Under the Subscription Model,
which we also refer to as the MSaaS model (Medical Software as a Service), we expect to sell the Nanox System, following receipt of clearance
from the FDA, and if cleared or approved by the requisite regulatory authorities in other jurisdictions, at low cost or to provide the
system at no cost, and to receive a portion of the proceeds from each scan as the right-to-use licensing fee, and potentially additional
fees for usage of the Nanox.MARKETPLACE, AI capability and teleradiology services, with the remaining amount allocated among our partners,
including the local operators, radiologists, cloud storage providers, medical AI software providers and others, on a case by case basis.
While the actual pricing charged by local operators may be greater than our suggested retail price, the retail price per scan in all markets
other than the United States is still expected to be substantially less than the global average. In the United States, we expect the retail
price to represent a significant reduction compared to the average cost of a CT scan. We expect the Nanox System will be operated by local
operators independent from us, but we would contract with third parties to provide the day-to-day maintenance of the Nanox System.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">While we believe our novel X-ray source could provide
existing market participants with the paradigm shift needed for preventive healthcare disruption, we also believe existing market participants
are not likely to undertake the change-leadership route and will be slow to adopt the MSaaS model. Accordingly, following receipt of clearance
from the FDA, and if authorized by similar regulatory agencies in other jurisdictions, our goal is to finalize deployment of the initial
15,000 Nanox System units within three years following receipt of FDA clearance for our multi-source Nanox.ARC (including the Nanox.CLOUD)
to jumpstart the MSaaS-based medical imaging market, including in the United States and certain countries in Asia, Europe, Africa, Latin
America and Australia.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>The Sales Model</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In certain countries, we intend
to commercialize our X-ray source technology using the Sales Model to accommodate specific local regulatory requirements. Under this model,
we expect to sell the Nanox System, following receipt of clearance from the FDA, and if cleared or approved by the requisite regulatory
authorities in other jurisdictions, for a one-time charge. We expect this retail price to be higher than the upfront sales price under
the Subscription Model but still substantially lower than the cost of existing medical imaging systems. If required by applicable regulatory
requirements in any jurisdiction, we may enter into arrangements with third-party cloud vendors, on a case-by-case basis, which will be
responsible for providing the cloud services (instead of the Nanox.CLOUD) and will be paid separately by the owner-operators of the Nanox
Systems. In addition, we expect to contract with third-party service providers to provide maintenance services for the Nanox Systems at
the owner-operators&#8217; own costs.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>The Licensing Model (OEM Model)</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">While we believe the medical imaging industry will
eventually migrate towards the recurring revenue-based MSaaS model, we expect certain leading market participants will be slower to adopt
this model. For these market participants, we expect to provide an intermediate solution through which they will adopt our X-ray source
technology for their existing systems. Under the Licensing Model, which we also refer to as the OEM (Original Equipment Manufacturer)
model, we would be engaged to tailor our X-ray source to the specific systems of medical imaging device manufacturers or other X-ray device
manufacturers or to license our X-ray source technology to them to develop new types of imaging systems for a one-time licensing fee upfront
for the X-ray source, as well as recurring royalty payments for each system sold that incorporates our X-ray source. The licensees would
be responsible for the operation of the medical imaging systems integrating our X-ray source. Although we expect to initially rely on
the Licensing Model, in part, we view the Licensing Model as a transitional phase, aimed at maximizing the commercial value of our technology
and strategic buy-in from market participants to our vision through partnership and commercial relationships.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Nanox.MARKETPLACE</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Nanox.MARKETPLACE (formerly known as the MDW platform),
which we acquired from MDWEB in November 2021, is our proprietary decentralized marketplace that connects imaging facilities with radiologists
and enables radiologists to provide, and customers to obtain, remote interpretations of imaging data. The platform was designed by radiologists
for the imaging industry. The radiologists connecting to Nanox.MARKETPLACE include those radiologists who are part of our network and
provide teleradiology services through USARAD, as well as other radiologists, all of whom undergo an accreditation process that we perform
and are required to be certified by the American Board of Radiology. Based primarily on customer location and area of specialization,
radiologists will be matched to conduct the imaging interpretation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Nanox.MARKETPLACE has created a payments system
through which the radiologist receives on demand payment from the customer, via the platform, upon the delivery of the imaging interpretation.
The customer can order an image interpretation on an as-need basis, through the web-based platform, without any special hardware or technical
knowledge.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Nanox.MARKETPLACE service is currently offered
on a standalone basis. In the future, we plan to incorporate the Nanox.MARKETPLACE into the Nanox System, such that images that were generated
by the Nanox.ARC and uploaded to the Nanox.CLOUD, can be streamlined and referred through the Nanox.MARKETPLACE to radiologists for remote
reading.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>AI Imaging Solutions </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Nanox AI (previously known
as Zebra) that we acquired in November 2021, has developed machine learning platforms, based on its database of over 500 million imaging
scans, which facilitate the development of AI medical imaging solutions. Nanox AI has FDA clearance for eight radiology AI solutions,
CE mark in Europe for five radiology AI solutions and regulatory approvals in other countries for its radiology AI solutions. Nanox AI
has been granted over one dozen patents in the field of radiology AI. Nanox AI gathers underutilized image data from CT scans and helps
medical service providers focus on patients that, upon findings generated by use of our AI solutions, require additional medical attention.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Following our acquisition of Nanox AI, we offer
FDA cleared AI-based software imaging solutions to hospitals, HMOs, IDNs, marketplaces, pharmaceutical companies and insurers that are
designed to identify or predict undiagnosed or underdiagnosed medical conditions, through the mining of data of existing CT scans. We
are party to collaboration agreements with marketplaces for access and distribution of our Nanox AI solutions, and agreements with IDNs
and hospitals with respect to our AI imaging solutions. We currently offer AI imaging population health solutions aimed at identifying
underlying findings, which are correlated to osteoporosis and cardiovascular disease. In addition, we are currently in advanced stages
of developing a product for fatty liver to help detect patients at risk for more advanced liver disease such as NASH. With our AI imaging
population health solutions, we aim to further our mission to enable preventative healthcare through early detection. We also continue
to maintain certain legacy contracts for AI imaging triage solutions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, since the acquisition and completion
of the integration with Nanox AI, we have begun to develop AI-based features to enhance the images generated by the Nanox.ARC, with the
goal of improving diagnostic capabilities for the Nanox.ARC in chest and musculoskeletal imaging. Ultimately, we expect to integrate these
AI imaging capabilities, which we refer to as Robodiology, into the Nanox System. Subject to completion of the development and receipt
of requisite regulatory approvals, we plan to offer these AI imaging solutions as an optional service to our MSaaS partners.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Teleradiology Services</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Following our acquisition of USARAD in November
2021, we offer teleradiology services to customers in the U.S market as well as five additional countries. We provide radiologic interpretations
or reads for emergency, routine, and subspecialty care cases through the utilization of our scalable communications network, incorporating
encrypted servers and broadband Internet connections with workflow management and clinical applications software. Our radiologists&#8217;
network is comprised of U.S.-based radiologists, certified by the American Board of Radiology. We have a network of over 110 independent
radiologists, all of whom have undergone an accreditation process by us, and we provide our services to approximately 187 customers representing
approximately 241 facilities. We allocate images that we receive from our customers, through our picture archiving and documentation system,
to radiologists in our network based on the radiologist&#8217;s area of specialization. Payment is made by the customer directly to us
monthly based on the number of monthly readings and we pay the radiologist a predetermined fixed fee per reading.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We offer imaging interpretation services for radiology
practices, hospitals, medical clinics, diagnostic imaging centers, urgent care facilities and multi-specialty physician groups and USARAD
contracts directly with these customers. In addition, we provide second opinion radiology readings. We believe this service offers our
customers a solution to improve service levels, streamline underlying practice economics and enhance physician efficiency without sacrificing
the quality of patient care.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Currently, our teleradiology services are offered
as a standalone product through USARAD. In the future, we plan to incorporate our teleradiology services as part of our Nanox System offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Sales and Marketing</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b><i>X-Ray Technology</i>.</b> We plan to commercialize
our X-ray technology using the three simultaneous business models described above broadly across the globe in the next few years, including
in the United States and certain countries in Asia, Europe, Africa, Latin America, and Australia. Our sales and marketing strategy varies
depending on specific geographical regions, as different regions generally require different marketing approaches.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In most countries, other than the United States,
we expect to primarily market through local partnerships with strong national branding and operational market participants in the target
region. These local partners would be engaged in deploying and operating our medical imaging systems, training and recruiting a local
medical professional workforce to operate the systems and providing medical imaging diagnostics for the systems&#8217; scan results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In the United States, we expect to deploy the Nanox
System primarily through our local subsidiaries. In countries other than United States, we also expect to engage local value-added resellers
or integrators in different geographic regions to facilitate the local integration of our systems with health maintenance organizations,
electronic health record systems, payment methods and insurance coverage companies. We estimate that it will take approximately three
to six months of integration and localization efforts before we can generate sales in a given region.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b><i>AI Solutions</i>. </b>We currently focus
our sales and marketing efforts for our AI solutions in the U.S., EU and UK markets and target large hospitals, HMOs, IDNs, marketplaces,
pharmaceutical companies and insurers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b><i>Teleradiology Services and Nanox.MARKETPLACE</i></b>.
We currently focus our sales and marketing efforts for our teleradiology services and the Nanox.MARKETPLACE in the U.S. market and target
daytime costumers, which include urgent care facilities, stand-alone imaging facilities and outpatient imaging centers, as well as night-time
and weekend customers, comprised of hospitals and community hospitals (state and local government).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Following the completion of our acquisitions, we
are continuing to explore the potential synergies and the expansion of our offerings. We aim to integrate the Nanox.ARC and the Nanox.CLOUD
with the Nanox.MARKETPLACE, creating a 3D imaging system that enables remote readings of scans with AI-powered imaging analysis and a
global teleradiology solution.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Manufacturing and Supply of the Nanox.ARC</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We have optimized the MEMs proprietary manufacturing
process and initially used our own equipment in the clean rooms located at the University of Tokyo to manufacture the MEMs X-ray chip.
We commenced manufacture of the MEMs X-ray chips at our fabrication facility in Korea, which is expected to meet our currently anticipated
manufacturing needs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We plan to engage with third-party
manufacturers and suppliers for the commercial production of our digital X-ray tubes for use in the Nanox.ARC, following receipt of clearance
from the FDA, and if cleared or approved by the requisite regulatory authorities in other jurisdictions, based on, among other things,
cost effectiveness. We are currently developing both ceramic and glass-based digital X-ray tubes for use in the Nanox.ARC. We are working
with third parties as well as producing digital ceramic tubes at our Korean facility, which is currently our primary manufacturer and
supplier for our digital ceramic tubes. In April 2023, Nanox Korea received ISO 13485 certification for Medical Devices Quality Management
Systems, covering Design, Development, Manufacturing, and Sales of X-Ray Tube for Medical Use, which is valid for a period of three years.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In May 2020, we entered into a three-year contract
manufacturing agreement with FITI for mass production of the multi-source Nanox.ARC. Under the contract manufacturing agreement, FITI
will negotiate and subcontract with other third parties for the commercial supply of the components of the Nanox.ARC in accordance with
the pre-approved supplier list and on the terms to be agreed upon by both parties, except for the MEMs X-ray chip and X-ray tube. As we
further expand our business in connection with the commercialization of our X-ray technology, we also expect to seek to engage alternative
manufacturers of the Nanox.ARC. The agreement will be in effect for three years from the date of the agreement and is renewed for successive
terms of one year unless or until either party notifies the other in writing of its intention not to renew with 90 days&#8217; prior notice.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">However, due, in part, to travel restrictions as
a result of the COVID-19 pandemic, we decided to manufacture the first Nanox.ARC units in Israel and we engaged with Dagesh to manufacture
Nanox.ARC units in Israel on a purchase order basis. These units are being used for purposes of collecting clinical sample images, obtaining
regulatory approvals and demonstrations and training, and we expect they will be used for the initial global deployment, among other purposes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>MSaaS Agreements for the Nanox System</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We have entered into 12 MSaaS agreements to deploy
a total of 6,850 Nanox Systems in 17 regions, including in Europe, South and Central America, Asia, Australia, New Zealand, Russia and
Africa. Under the terms of each agreement, we grant the other party a limited, non-transferable, sub-licensable right to access and operate
the Nanox System in the region applicable for such party. We undertake to provide a specified number of Nanox Systems to each entity based
on agreed shipment schedules, subject to local regulatory approval and material compliance with acceptance test protocol (the &#8220;Conditions
Precedent&#8221;). The other party undertakes to deploy the Nanox Systems to provide a minimum number of scans per year (generally based
on 7 scans per day and 23 days per month) on a pay-per-scan basis, and to pay a minimum annual fee (including payments to our partners)
ranging from approximately $2 million to $58 million, or approximately $155 million in total, excluding the payments to our partners.
The MSaaS agreements, subject to certain conditions, require each of our counterparties to deliver to us a standby letter of credit or
financial guarantee in the amount equal to the minimum annual fee in favor of us after receipt of the Conditions Precedent. However, there
can be no guaranty that our counterparties will be able to obtain such letters of credit or financial guarantees. In addition, a majority
of our MSaaS agreements are exclusive; however, under several agreements, we may seek alternative partners in the applicable region while
maintaining the possibility to eventually resume the agreement, if the requisite regulatory authorizations are received.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Nanox Systems provided under each agreement
will remain our property, and the other party will only have a limited license to use the Nanox Systems. In addition, we must approve
in writing any sublicense granted under the applicable agreement. We undertake to provide billing services and training for a local medical
professional workforce to operate the Nanox System and typically also undertake to provide radiology and maintenance services to operate
the Nanox System.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Each agreement will be in effect for multiple years,
ranging from three to seven years from the date of the applicable agreement or the date of fulfilment of the Conditions Precedent, as
applicable, and is renewable for an additional multi-year term with both parties&#8217; mutual consent. Each agreement may be terminated
by, among other things, notice of the non-breaching party in case of a material breach of a party&#8217;s material obligations, or by
either party in case of the bankruptcy or insolvency of the other party.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Most of the MSaaS agreements are in initial phases
as the deployment of the Nanox System remains subject to regulatory clearance or approval (including, in certain cases, FDA clearance).
We are collaborating with our partners to obtain the applicable regulatory authorizations and other requisite Conditions Precedent in
the applicable region. In parallel, we have entered into several memorandums of understanding and/or preliminary agreements with existing
and potential partners for evaluation of market penetration and deployment in various regions. Within the scope of these engagements,
we have shipped several Nanox System units for purposes of collecting clinical sample images, obtaining regulatory approvals and demonstrations
and training.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We believe our MSaaS business model has the potential
to expand the total size of the X-ray-based medical imaging market. We plan to measure the success of our MSaaS business model by annual
capacity for Above-the-Line (&#8220;ATL&#8221;) scans which represent the increased capacity of imaging care we can provide to people
that originally had no meaningful access to medical imaging. As we expand our operations and deploy more units of the Nanox System in
an increasing number of countries using the MSaaS model, we expect our ATL scans metric to increase accordingly.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Collaboration Agreements</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We enter into collaboration agreements in the ordinary
course of business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">For example, we previously entered into a collaboration
agreement, dated September&#160;8, 2019, with Hadasit Medical Research Services and Development Ltd., a wholly owned subsidiary of the
Hadassah Medical Organization, to collaborate with respect to our medical imaging technology and resulting medical images devices, by
way of (among other things) joint research and development projects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, on June&#160;4, 2020, we entered into
a collaboration agreement with SK Telecom, pursuant to which we and SK&#160;Telecom continue to explore and engage in good faith to develop
a definitive agreement for the deployment of 2,500 Nanox Systems in South Korea and Vietnam, and we have established a wholly-owned subsidiary
in South Korea with the support of SK Telecom for the purpose of manufacturing MEMs X-ray chips for the Nanox.ARC. Although the agreement
expired according to its terms, we continue to explore business opportunities and assess potential collaborations with SK Telecom in various
business areas and opportunities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We also entered into several non-exclusive collaboration
agreements with certain AI partners and image transfer partners, which we may utilize to complement our in-house AI capabilities, including
those developed by the companies we acquired in November 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Given that the Nanox.CLOUD and the Nanox.MARKETPLACE
are designed with the capability to receive scans from different imaging sources, in addition to the Nanox.ARC, we intend to explore additional
collaboration opportunities in the near future. For example, in 2022, we invested $1.0 million for approximately 1% of the shares of Remedi
co Ltd. (&#8220;Remedi&#8221;), a Korean radiation specialist company in radiography and therapy based on X-ray components. Remedi is
a privately owned company, and we have an ongoing collaboration in the development of the high voltage power supply for Nanox.ARC. In
August 2022, we entered into a supply agreement with Remedi in order to integrate Remedi&#8217;s two-dimensional (&#8220;2D&#8221;) imaging
systems (using traditional X-ray tubes) to the Nanox.CLOUD and the Nanox.MARKETPLACE, creating a mobile 2D X-ray system that enables remote
readings of scans with AI-powered imaging analysis and a global teleradiology solution, which we refer to as the &#8220;Nanox.CONNECT.&#8221;
The Nanox.CONNECT is currently deployed in a several beta sites in order to receive local regulatory approvals and explore and evaluate
the business model and the potential service.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Competition</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Several large companies, such as General Electric,
Siemens, Philips, Hologic, Varian, Fuji, Toshiba and Hitachi currently dominate the medical imaging market. High regulatory, distribution,
manufacturing and service-related long-term contractual costs represent significant barriers to entry for any new player. We expect that
the existing market participants will remain key players in the future and we aim to form alliances with several of these leading market
participants, including through licensing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Over time, we anticipate that the evolution in
the industry will bring new players into the market. Digital healthcare disruptors such as cloud computing companies or leading IT companies
may enter the industry and we believe that they may become partners over time through our Subscription Model.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">As a general matter, we view competition on two
levels:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">Competing digital X-ray sources with same or better attributes; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">Competing enterprises operating an MSaaS business model.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In terms of digital X-ray sources, the field emission
display technology is known and a wide range of industry leaders have used it to attempt to create an alternative, digital source of X-ray.
To our knowledge, the most well-known attempt to achieve a commercial grade, stable digital X-ray source was the use of carbon nano tubes
(&#8220;CNT&#8221;) as the base material for a potential field emission-based solution, and at least one company has recently commercialized
an X-ray system based on a CNT solution and there are several other companies currently in the process of developing this technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In terms of the MSaaS business model, we currently
seek a first-mover advantage by introducing the Subscription Model, as the main pre-requisite for this model is the low cost of the X-ray
source (when manufactured at scale). However, the primary competition comes from established market participants. While in developing
countries we are experiencing keen interest, the United States and other Western regions already have major market participants that are
well entrenched in the market with strong political influence and the ability to delay deployment of our systems.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">With respect to our AI imaging solutions, there
are a number of companies that currently offer AI radiology solutions, such as Aidoc and VIZ.AI, which, to our knowledge, are focused
on life threatening and urgent cases. In addition, legacy healthcare technology companies are expected in the future to increase development
efforts in the field of AI imaging solutions. For example, Siemens Healthineers has developed AI-Rad Companion, which provides automatic
post-processing of imaging datasets through AI-powered algorithms for Siemens CTs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">With respect to our teleradiology services, the
teleradiology market is highly competitive, rapidly evolving, and fragmented, and is subject to changing technology and market dynamics.
The market has recently experienced and is expected to continue to experience competitive pricing pressure and radiologist compensation
pressure. We compete directly with both large and small-scale service providers who offer local, regional and national coverage operations.
We believe that our principal competitors are Envision Physician Services and Radiology Partners. We compete to attract and retain relationships
with customers and radiologists in different ways.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Security and Data Privacy</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Nanox System is being designed and developed
with personal privacy, data security and protection in mind as a top priority for all development parties. Medical imaging information
and other health information is highly personal and sensitive and thus regarded as a prime target for hacks and malicious theft. As part
of our normal operations, we expect to collect, process and retain personal identifying information regarding patients.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We believe we will likely be subject to U.S. rules
and regulations governing data protection, including HIPAA, HITECH and other privacy and data security regulations. See&#8220;&#8212;Government
Regulation&#8212;Healthcare Regulatory Laws&#8212;Data Privacy and Security.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Separate from, and in addition to, the GDPR/UK
GDPR requirements, certification requirements for the hosting of health data will vary by jurisdiction (and may or may not apply to hosts
of health data). As the Nanox System is projected to operate in various EEA countries, we may be required to comply with other national
healthcare regulations or regulatory requirements. For example, in France, there is a procedure as of April&#160;1, 2018, for hosts of
health data to obtain a prior certification with the competent certification body. Similarly, in Israel, any provision of cloud-based
systems to public health sector entities requires certain certifications, such as ISO 27001 and ISO 27799 pertaining to the secured processing
of health-related data. Such certifications require further compliance investments and maintenance costs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We are dedicated to making our systems and software
both HIPAA and GDPR/UK GDPR compliant. We intend to submit our systems to an independent external audit on a regular basis as required
by HHS. We also intend to develop our privacy protocols to comply with the GDPR/UK GDPR. In addition, we are undertaking intendant measures
to ensure a high-level of imaging data encryption, complete separation between the imaging data and personal information (anonymization)
as well as three-factor authentication procedures during on-boarding and usage of the Nanox System. We also intend to undertake to perform
periodic Pen-Tests by external cyber security professionals and publish the results of such audits publicly and without delay on our website
and via public relations channels.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Government Regulation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Nanox System and our operations will be subject
to extensive regulation by the FDA, and other federal and state authorities in the United States, as well as comparable authorities in
foreign jurisdictions. The Nanox.ARC will be subject to regulation as medical devices and radiation-emitting devices in the United States
under the FDCA, as implemented and enforced by the FDA, and under comparable regulatory schemes in foreign jurisdictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>FDA Regulation of Medical Devices</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The FDA regulates the development, design, non-clinical
and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket
clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices
to ensure that medical devices distributed within the United States are safe and effective for their intended uses or are substantially
equivalent to a predicate device and otherwise meet the requirements of the FDCA.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>FDA Premarket Clearance and Approval Requirements</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Subject to certain exceptions, each medical device
commercially distributed in the United States requires either FDA clearance of a 510(k) premarket notification, or approval of a PMA application.
Under the FDCA, medical devices are classified into one of three classes&#8212;Class&#160;I, Class&#160;II or Class&#160;III&#8212;depending
on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to ensure its safety
and effectiveness. Class&#160;I includes devices with the lowest risk to the patient and are those for which safety and effectiveness
can be assured by adherence to the FDA&#8217;s General Controls for medical devices, which include compliance with the applicable portions
of QSR, facility registration and product listing, reporting of adverse medical events and truthful and non-misleading labeling, advertising
and promotional materials. Class&#160;II devices are subject to the FDA&#8217;s General Controls, and special controls as deemed necessary
by the FDA to ensure the safety and effectiveness of the device. These special controls can include performance standards, post-market
surveillance, patient registries and FDA guidance documents.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">While most Class&#160;I devices are exempt from
the 510(k) premarket notification requirement, manufacturers of most Class&#160;II devices are required to submit to the FDA a premarket
notification under Section 510(k) of the FDCA requesting permission to commercially distribute the device. The FDA&#8217;s permission
to commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance. Devices deemed
by the FDA to pose the greatest risks, such as life sustaining, life supporting or some implantable devices, or devices that have a new
intended use, or use advanced technology that is not substantially equivalent to that of a legally marketed device, are placed in Class&#160;III,
requiring approval of a PMA. Some pre-amendment devices are unclassified, but are subject to the FDA&#8217;s premarket notification and
clearance process in order to be commercially distributed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>510(k) Clearance Marketing Pathway</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Nanox.ARC is a Class&#160;II device that was
subject to premarket notification and clearance under section 510(k) of the FDCA. To obtain 510(k) clearance, we submitted to the FDA
a premarket notification submission demonstrating that the proposed device is &#8220;substantially equivalent&#8221; to a predicate device
already on the market. A predicate device is a legally marketed device that is not subject to premarket approval, i.e., a device that
was legally marketed prior to May&#160;28, 1976 (pre-amendments device), and for which a PMA is not required, a device that has been reclassified
from Class&#160;III to Class&#160;II or I, or a device that was found substantially equivalent through the 510(k) process. The FDA&#8217;s
510(k) clearance process usually takes from three to twelve months, but often takes longer. In certain cases, the FDA may require additional
information, including clinical data, to make a determination regarding substantial equivalence. In addition, the FDA collects user fees
for certain medical device submissions and annual fees and for medical device establishments. For fiscal year 2023, the standard user
fee for a 510(k) premarket notification application is $<span>19,870</span>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">If the FDA agrees that the device is substantially
equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially market the device. If the FDA
determines that the device is &#8220;not substantially equivalent&#8221; to a previously cleared device, the device is automatically designated
as a Class&#160;III device. The device sponsor must then fulfill more rigorous PMA requirements, or can request a risk-based classification
determination for the device in accordance with the &#8220;<i>de novo</i>&#8221; process, which is a route to market for novel medical
devices that are low to moderate risk and are not substantially equivalent to a predicate device.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">After a device receives 510(k) marketing clearance,
any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification
in its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval or <i>de novo</i> reclassification.
The FDA requires each manufacturer to determine whether the proposed change requires submission of a 510(k), a <i>de novo</i> request
or a PMA in the first instance, but the FDA can review any such decision and disagree with a manufacturer&#8217;s determination. If the
FDA disagrees with a manufacturer&#8217;s determination, the FDA can require the manufacturer to cease marketing and/or request the recall
of the modified device until 510(k) marketing clearance or until PMA approval is obtained or a <i>de novo</i> request is granted. Also,
in these circumstances, the manufacturer may be subject to significant regulatory fines or penalties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Over the last several years, the FDA has proposed
reforms to its 510(k) clearance process, and such proposals could include increased requirements for clinical data and a longer review
period, or could make it more difficult for manufacturers to utilize the 510(k) clearance process for their products. For example, in
November 2018, the FDA officials announced forthcoming steps that the FDA intends to take to modernize the premarket notification pathway
under Section 510(k) of the FDCA. Among other things, the FDA announced that it planned to develop proposals to drive manufacturers utilizing
the 510(k) pathway toward the use of newer predicates. These proposals included plans to potentially sunset certain older devices that
were used as predicates under the 510(k) clearance pathway, and to potentially publish a list of devices that have been cleared on the
basis of demonstrated substantial equivalence to predicate devices that are more than 10&#160;years old. In May 2019, the FDA solicited
public feedback on these proposals. The FDA requested public feedback on whether it should consider certain actions that might require
new authority, such as whether to sunset certain older devices that were used as predicates under the 510(k) clearance pathway. These
proposals have not yet been finalized or adopted, and the FDA may work with Congress to implement such proposals through legislation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In September 2019, the FDA finalized guidance describing
an optional &#8220;safety and performance based&#8221; premarket review pathway for manufacturers of &#8220;certain, well-understood device
types&#8221; to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety
and performance criteria established by the FDA, thereby obviating the need, in the case of applicable products, for manufacturers to
compare the safety and performance of their medical devices to specific predicate devices in the clearance process. The FDA maintains
a list of device types appropriate for the &#8220;safety and performance based&#8221; pathway and will continue to develop product-specific
guidance documents that identify the performance criteria for each such device type, as well as the testing methods recommended in the
guidance documents, where feasible. Also in September 2019, the FDA finalized guidance describing its current approach to the &#8220;Special
510(k)&#8221; program, which provides an optional pathway for certain well-defined device modifications where a manufacturer modifies
its own legally marketed device, and design control procedures produce reliable results that can form, in addition to other 510(k) content
requirements, the basis for substantial equivalence.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>PMA Approval Pathway</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Class&#160;III devices require PMA approval before
they can be marketed, although some pre-amendment Class&#160;III devices for which the FDA has not yet required a PMA are cleared through
the 510(k) process. The PMA process is more demanding than the 510(k) premarket notification process. In a PMA, the manufacturer must
demonstrate that the device is safe and effective, and the PMA must be supported by extensive data, including data from preclinical studies
and human clinical trials. The PMA must also contain a full description of the device and its components, a full description of the methods,
facilities and controls used for manufacturing and proposed labeling. Following receipt of a PMA, the FDA determines whether the application
is sufficiently complete to permit a substantive review. If the FDA accepts the application for review, it has 180 days under the FDCA
to complete its review of a PMA, although in practice, the FDA&#8217;s review often takes significantly longer, and can take up to several
years. An advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations
to the FDA as to the approvability of the device. The FDA may or may not accept the panel&#8217;s recommendation. In addition, the FDA
will generally conduct a pre-approval inspection of the applicant or its third-party manufacturers&#8217; or suppliers&#8217; manufacturing
facility or facilities to ensure compliance with the QSR. PMA devices are also subject to the payment of user fees, which for fiscal year
2023 includes a standard application fee of $<span>441,547</span> and an annual establishment registration
fee of $6,493.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The FDA will approve the new device for commercial
distribution if it determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable
assurance that the device is safe and effective for its intended use(s). The FDA may approve a PMA with post-approval conditions intended
to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution
and collection of long-term follow-up data from patients in the clinical study that supported PMA approval or requirements to conduct
additional clinical studies post-approval. The FDA may condition PMA approval on some form of post-market surveillance when deemed necessary
to protect the public health or to provide additional safety and efficacy data for the device in a larger population or for a longer period
of use. In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to make periodic
reports to the FDA on the clinical status of those patients. Failure to comply with the conditions of approval can result in material
adverse enforcement action, including withdrawal of the approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Certain changes to an approved device, such as
changes in manufacturing facilities, methods or quality control procedures, or changes in the design performance specifications, which
affect the safety or effectiveness of the device, require submission of a PMA supplement. PMA supplements often require submission of
the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device
covered by the original PMA and may not require as extensive clinical data or the convening of an advisory panel. Certain other changes
to an approved device require the submission of a new PMA, such as when the design change causes a different intended use, mode of operation,
and technical basis of operation, or when the design change is so significant that a new generation of the device will be developed, and
the data that were submitted with the original PMA are not applicable for the change in demonstrating a reasonable assurance of safety
and effectiveness. We do not expect any of our products to be marketed pursuant to a PMA.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Clinical Trials</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Clinical trials are almost always required to support
a PMA and are sometimes required to support a 510(k) submission. All clinical investigations of devices to determine safety and effectiveness
must be conducted in accordance with FDA and other regulatory requirements, including the FDA&#8217;s investigational device exemption
(&#8220;IDE&#8221;) regulations which govern investigational device labeling, prohibit promotion of the investigational device and specify
an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents
a &#8220;significant risk&#8221; to human health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application
to the FDA, which must become effective prior to commencing human clinical trials. If the device under evaluation does not present a significant
risk to human health, then the device sponsor is not required to submit an IDE application to the FDA before initiating human clinical
trials, but must still comply with abbreviated IDE requirements when conducting such trials. A significant risk device is one that presents
a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human
life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health,
or otherwise presents a potential for serious risk to a subject. An IDE application must be supported by appropriate data, such as animal
and laboratory test results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound.
The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies the company that the investigation
may not begin. If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires modification, the
FDA may permit a clinical trial to proceed under a conditional approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Regardless of the degree of risk presented by the
medical device, clinical studies must be approved by, and conducted under the oversight of, an Institutional Review Board (&#8220;IRB&#8221;)
for each clinical site. The IRB is responsible for the initial and continuing review of the IDE, and may pose additional requirements
for the conduct of the study. If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a
specific number of investigational sites with a specific number of patients, as approved by the FDA. If the device presents a non-significant
risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate
approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators
obtain informed consent and labeling and record-keeping requirements. Acceptance of an IDE application for review does not guarantee that
the FDA will allow the IDE to become effective and, if it does become effective, the FDA may or may not determine that the data derived
from the trials support the safety and effectiveness of the device or warrant the continuation of clinical trials. An IDE supplement must
be submitted to, and approved by, the FDA before a sponsor or investigator may make a change to the investigational plan that may affect
its scientific soundness, study plan or the rights, safety or welfare of human subjects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">During a study, the sponsor is required to comply
with the applicable FDA requirements, including, for example, trial monitoring, selecting clinical investigators and providing them with
the investigational plan, ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of investigational
devices or on making safety or effectiveness claims for them. The clinical investigators in the clinical study are also subject to FDA
regulations and must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition
of the investigational device and comply with all reporting and recordkeeping requirements. Additionally, after a trial begins, we, the
FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to study
subjects outweigh the anticipated benefits.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Post-market Regulation</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">After a device is cleared or approved for marketing,
numerous and pervasive regulatory requirements continue to apply. These include:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">establishment registration and device listing with the FDA;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">labeling regulations and FDA prohibitions against the promotion of investigational products, or the promotion of &#8220;off-label&#8221; uses of cleared or approved products;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">requirements related to promotional activities;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of certain modifications to PMA-approved devices;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">the FDA&#8217;s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our manufacturing processes are required to comply
with the applicable portions of the QSR, which cover the methods and the facilities and controls for the design, manufacture, testing,
production, processes, controls, quality assurance, labeling, packaging, distribution, installation and servicing of finished devices
intended for human use. The QSR also requires, among other things, maintenance of a device master file, device history file and complaint
files. As a manufacturer, we will be subject to periodic scheduled or unscheduled inspections by the FDA. Our failure to maintain compliance
with the QSR requirements could result in the shut-down of, or restrictions on, our manufacturing operations and the recall or seizure
of our products, which would have a material adverse effect on our business. The discovery of previously unknown problems with any of
our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the
use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions
on the device, including the removal of the product from the market or voluntary or mandatory device recalls.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The FDA has broad regulatory compliance and enforcement
powers. If the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or
enforcement actions, which may result in any of the following sanctions:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="font-size: 10pt"><span style="font-size: 10pt">warning letters, untitled letters, fines, injunctions, consent decrees and civil penalties;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="font-size: 10pt"><span style="font-size: 10pt">recalls, withdrawals or administrative detention or seizure of our products;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

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    <td style="font-size: 10pt"><span style="font-size: 10pt">criminal prosecution.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Teleradiology</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The healthcare industry is highly regulated. Our
ability to operate profitably will depend in part upon the ability of us, our affiliated radiologists, and our customers to obtain and
maintain all necessary licenses and other approvals to comply with applicable healthcare regulations. We believe healthcare regulations
will continue to change. Therefore, we monitor developments in healthcare law and we are likely to be required to modify our operations
from time to time as the business and regulatory environment changes. Although we believe that we are operating in compliance with applicable
federal and state laws, we cannot assure you that review of our business by courts or regulatory authorities will not result in determination
that could adversely affect our operations or that the healthcare regulatory environment will not change in way that restricts our operations.
Future changes in healthcare regulation are difficult to predict and may constrain or require us to restructure our operations, which
could negatively impact our business and operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Radiological Devices</i></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We and our products will also be regulated by the
FDA under the Electronic Product Radiation Control provisions of the FDCA because the Nanox.ARC contains radiation emitting components,
and because we assemble these components during manufacturing and service activities. The Electronic Product Radiation Control provisions
require radiation-producing products to comply with certain regulations and applicable performance standards. Manufacturers are required
to certify in product labeling and reports to the FDA that their products comply with all necessary standards as well as maintain manufacturing,
testing and sales records for their products. The Electronic Product Radiation Control provisions also require manufacturers to report
product defects and affix appropriate labeling to covered products. Failure to comply with these requirements could result in enforcement
action by the FDA, which can include any of the sanctions described above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Healthcare Regulatory Laws</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Within the United States, our products and our
customers will be subject to extensive regulation by a wide range of federal and state agencies that govern business practices in the
medical device industry. These laws include federal and state anti-kickback, fraud and abuse, false claims, transparency and anti-corruption
statutes and regulations. Internationally, other governments also impose regulations in connection with their healthcare reimbursement
programs and the delivery of healthcare items and services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">U.S. federal healthcare fraud and abuse laws will
generally apply to our activities, among other reasons because we expect that our products will be covered under federal healthcare programs
such as Medicare and Medicaid. The Anti-Kickback Statute is particularly relevant because of its broad applicability. Specifically, the
Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly
or indirectly, in exchange for, or to induce, either the referral of an individual, or the furnishing, arranging for or recommending a
good or service for which payment may be made in whole or part under federal healthcare programs, such as the Medicare and Medicaid programs.
A broad range of financial interactions with a healthcare provider, patient or customer may implicate the Anti-Kickback Statute. Statutory
exceptions and regulatory safe harbors protect certain interactions if specific requirements are met. However, only those interactions
that represent fair market value exchanges generally are protected by a safe harbor or exception. The government can exercise enforcement
discretion in taking action against unprotected activities. Further, a person or entity does not need to have actual knowledge of the
Anti-Kickback Statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert
that a claim involving items or services resulting from a violation of the federal Anti-Kickback Statute also constitutes a false or fraudulent
claim for purposes of the federal False Claims Act or federal civil money penalties statute. Penalties for Anti-Kickback Statute violations
may include both criminal penalties such as imprisonment and fines and civil sanctions such as civil penalties and possible exclusion
from Medicare, Medicaid and other federal healthcare programs. Exclusion would mean that diagnostic tests using our products would no
longer be eligible for reimbursement under federal healthcare programs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Many states have adopted laws similar to the Anti-Kickback
Statute. Some of these state prohibitions apply to referral of patients for healthcare items or services reimbursed by any payor, not
only federal healthcare programs. Insurance companies may also bring a private cause of action for treble damages against a manufacturer
for a pattern of causing false claims to be filed under the federal Racketeer Influenced and Corrupt Organizations Act. We believe that
we are operating in compliance with applicable federal and state anti-kickback laws and that our contractual arrangements with our customers
are structured in manner that complies with such laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Another development affecting the healthcare industry
is the increased use of the federal civil False Claims Act and, in particular, actions brought pursuant to the False Claims Act&#8217;s
&#8220;whistleblower&#8221; or &#8220;qui tam&#8221; provisions. The False Claims Act imposes liability on any person or entity that,
among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a federal healthcare program.
The qui tam provisions of the False Claims Act allow a private individual to bring actions on behalf of the federal government alleging
that the defendant has submitted a false claim to the federal government, and to share in any monetary recovery. In recent years, the
number of suits brought against healthcare providers by private individuals has increased dramatically. In addition, various states have
enacted false claim laws analogous to the Civil False Claims Act, although many of these state laws apply where a claim is submitted to
any third-party payor and not merely a federal healthcare program.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Under the Federal False Claims Act, we may be liable
if we or one of our customers submitted a false claim. If we were found to have violated these laws and regulations and as result submitted
or caused our customers to submit a false claim, any sanctions imposed under the Federal False Claims Act could result in substantial
fines and penalties or exclusion from participation in federal and state healthcare programs which could have a material adverse effect
on our business and financial condition. If we are excluded from participation in federal or state healthcare programs, our customers
who participate in those programs could not do business with us. Federal regulatory and law enforcement authorities regularly review and
enforce activities with respect to Medicare and Medicaid fraud and abuse regulations and other reimbursement laws and regulations, including
laws and regulations that govern our activities and the activities of teleradiologists. These increased enforcement activities may have
a direct or indirect adverse effect on our business, financial condition and results of operations. We believe that we are operating in
compliance with these laws. However, if we are found to have violated such laws, our business, results of operations and financial condition
would be harmed.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The federal physician self-referral statute, known
as the Stark Law, prohibits physicians from making referrals for certain designated health services, including radiology services, to
any entity with which the physician has a financial relationship unless there is an exception in the statute that allows the referral.
The entity that receives a prohibited referral from a physician may not submit the bill to Medicare for that service. Federal courts have
ruled that violations of the Stark Law, as well as violations of the federal anti-kickback laws described above, can serve as the basis
for Federal False Claims Act suits. Many state laws prohibit physician referrals to entities with which the physician has a financial
interest or require that the physician provide the patient with notice of the physician&#8217;s financial relationship before making the
referral. Violation of the Stark Law can result in substantial civil penalties for both the referring physician and any entity that submits
a claim for healthcare service made pursuant to a prohibited referral. We believe that all our customer arrangements are in compliance
with the Stark Law. However, these laws could be interpreted in a manner inconsistent with our operations. Federal or state self-referral
regulation could impact our arrangements with certain customers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The federal Health Insurance Portability and Accountability
Act of 1996, or HIPAA, among other things, created two new federal crimes: healthcare fraud and false statements relating to healthcare
matters. The HIPAA healthcare fraud statute prohibits, among other things, knowingly and willfully executing, or attempting to execute,
a scheme to defraud any healthcare benefit program, including private payors. A violation of this statute is a felony and may result in
fines, imprisonment and/or exclusion from government-sponsored programs. The HIPAA false statements statute prohibits, among other things,
knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent
statement or representation in connection with the delivery of or payment for healthcare benefits, items or services. A violation of this
statute is a felony and may result in fines and/or imprisonment. Similar to the federal Anti-Kickback Statute, a person or entity does
not need to have actual knowledge of the statutes or specific intent to violate them in order to have committed a violation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, HIPAA authorizes the imposition of
civil money penalties against entities that employ or enter into contracts with individuals or entities who have been excluded from participation
in the Medicare or Medicaid programs. We perform background checks on our affiliated radiologists, and we do not believe that we engage
or contract with any excluded individuals or entities. However, a finding that we have violated this provision of HIPAA could have a material
adverse effect on our business and financial condition. We believe that our services have not historically been provided in a way that
would place either our clients or ourselves at risk of violating HIPAA anti-fraud statutes, including those in which we may be considered
to receive an indirect reimbursement, because of the reassignment by us to our customers of the right to collect for final reads. We have
entered into agreements, and may in the future enter into agreements, with hospitals that are subject to an integrity order by the U.S.
Department of Health and Human Services Office of the Inspector General (the &#8220;HHS-OIG&#8221;) that requires the hospital to ensure
that each subcontractor to the hospital fully complies with HIPAA and the terms of the integrity order, including written policies and
procedures assuring compliance, and subjects each subcontractor to audit at the determination of the HHS-OIG. We could be vulnerable to
prosecution under these statutes if any of our customers deliberately or recklessly submits claims that contain false, misleading or incomplete
information. In addition, the administrative simplification provisions of HIPAA require the promulgation of regulations establishing national
standards for, among other things, certain electronic healthcare transactions, the use and disclosure of certain individually identifiable
patient health information and the security of the electronic systems maintaining this information. These are commonly known as the HIPAA
transaction and code set standards, privacy rule and security rule, respectively. The administrative simplification provisions of HIPAA
direct the federal government to adopt national electronic standards for automated transfer of certain healthcare data among healthcare
payers plans and providers, intended to enable healthcare industry participants to communicate electronic data using a single set of standards.
We are a covered entity under HIPAA and as such we must operate in compliance with the electronic transaction and code set standards,
privacy rule and security rule. We are also a business associate under HIPAA because we perform services for or on behalf of other covered
entities. We have developed policies, procedures and systems for handling patient health information that we believe comply with the requirements
of HIPAA.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Laws and regulations have also been enacted by
the federal government and various states to regulate the sales and marketing practices of medical device and pharmaceutical manufacturers.
The laws and regulations generally limit financial interactions between manufacturers and healthcare providers, require pharmaceutical
and medical device companies to comply with voluntary compliance standards issued by industry associations and the relevant compliance
guidance promulgated by the U.S. federal government and/or require disclosure to the government and/or public of financial interactions
(so-called &#8220;sunshine laws&#8221;). Many of these laws and regulations contain ambiguous requirements or require administrative guidance
for implementation. Manufacturers must adopt reasonable interpretations of requirements if there is ambiguity and those interpretations
could be challenged. Given the lack of clarity in laws and their implementation, our activities could be subject to the penalty provisions
of the pertinent federal and state laws and regulations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, the practice of medicine, including
the practice of radiology and teleradiology, is subject to state licensure laws, regulations and approvals. Physicians located in one
state who provide professional medical services to patients located in another state via a telemedicine system must ordinarily hold a
valid license to practice medicine in both the state where the physician is located and the state in which the patient is located. We
have established a system for ensuring that our affiliated radiologists are appropriately licensed under applicable state law. If we are
unable to obtain proper physician licenses or hospital credentials on behalf of our affiliated radiologists, or if our affiliated radiologists
lose those licenses or credentials, our business financial condition and results of operations may be negatively impacted.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Generally, corporate practice of medicine laws
prohibit anyone but duly licensed physicians from exercising control over the medical judgments or decisions rendered by another physician.
Given that general prohibition, some states permit business corporations to hold directly or indirectly customer contracts for the provision
of medical services, including radiology and teleradiology, and to own a medical practice that provides such services, provided that only
physicians exercise control over the medical judgments or decisions of other physicians. Moreover, the laws of such states may prohibit
anyone but a physician who is duly licensed in such state from owning any interest in a medical practice that is incorporated or doing
business in such state or the state of incorporation. Failure to comply with these laws could have material and adverse consequences including
the judicially sanctioned refusal of third-party payers to pay for services rendered, the absolute right of customers to immediately repudiate
the contract for services, malpractice claims or license revocation or suspension proceedings against the provider and possibly the hospital
based upon the alleged violation of statute designed to protect the public, as well as civil or criminal penalties. We believe that we
are following the corporate practice of medicine laws in each state in which our affiliated radiologists provide medical services. Each
of these are duly licensed or qualified as a medical practice in the states where such license or qualification is required. We do not
exercise control over the medical judgments or decisions of our affiliated radiologists. While we believe we follow the requirements of
the corporate practice of medicine laws in each state where our affiliated radiologists provide services, these laws and their interpretations
are continually evolving and may change in the future. Moreover, these laws and their interpretations are generally enforced by state
courts and regulatory agencies that have broad discretion in their enforcement. If our arrangements with our affiliated radiologists or
our customers are found to violate state laws prohibiting the practice of medicine by general business corporations or fee splitting,
our business financial condition and ability to operate in those states could be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Many states have enacted laws prohibiting physicians
from splitting fees derived from the practice of medicine with anyone else. We believe that the management administrative technical and
other nonmedical services we provide to each of our affiliated radiologists for service fee does not constitute fee splitting. Our belief
notwithstanding, these laws and their interpretations also vary from state to state and are also enforced by state courts and regulatory
authorities that have broad discretion in their enforcement. If our arrangements with our affiliated radiologists or our customers are
found to violate state laws prohibiting the practice of medicine by general business corporations or fee splitting our business financial
condition and ability to operate in those states could be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">CMS has certain anti-markup rules relating to diagnostic
tests paid for by the Medicare program. The anti-markup rules are generally applicable where a physician or other supplier bills for the
technical component or professional component of a diagnostic test that was ordered by the physician or other supplier or ordered by a
party related to such physician or other supplier through common ownership or control, and the diagnostic test is performed by a physician
that does not share a practice with the billing physician or other supplier. If the anti-markup rule applies to a diagnostic test, then
the reimbursement provided by Medicare to the billing physician or other supplier for that transaction may be limited. Because our affiliated
radiologists do not order diagnostic tests and no party under common control with either us or our affiliated radiologists orders diagnostic
tests, we believe that the anti-markup rule does not apply to the professional services our affiliated radiologists perform. However,
this rule could be subject to an interpretation that affects the amounts either we or our customers may be reimbursed by Medicare for
professional diagnostic interpretations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Coverage and Reimbursement</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Over the past few years, the growth rate of advanced
imaging volumes has slowed in part due to additional patient-related cost-sharing programs and an increasing trend of third-party payors
intensifying their utilization management efforts, for example, through benefit managers who require prior authorizations to control the
growth rate of imaging services generally. We expect that these trends will continue.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">By way of example, in the United States, the Protecting
Access to Medicare Act of 2014 required CMS, in conjunction with medical specialty societies, to adopt AUC for certain advanced diagnostic
imaging services, including MRI, CT, nuclear medicine (including position emission tomography). Under this provision, payment is to be
made to the furnishing professional for an applicable advanced diagnostic imaging service only if the claim indicates that the ordering
professional consulted a qualified clinical decision support mechanism, as identified by HHS, as to whether the ordered service adheres
to the applicable AUC. Applicable settings include physician offices, hospital outpatient departments, including emergency departments,
ambulatory surgical centers and independent diagnostic testing facilities. Advanced imaging services ordered by certain physicians identified
as having outlier-ordering partners will be subject to prior authorization for applicable imaging services provided to Medicare beneficiaries.
In July 2022, CMS announced that the payment penalty phase for the AUC program would not begin on January 1, 2023 even if the public health
emergency for COVID-19 ended in 2022 and that it was unable to forecast when the payment penalty phase would begin. The outlier methodology
used by CMS will be subject to future notice and comment rulemaking before the prior authorization component is implemented. We cannot
predict the full impact of this project.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Third-party payors may impose limits on coverage
or reimbursement for diagnostic imaging services, including denying reimbursement for tests that do not follow recommended diagnostic
procedures or can only be billed using an unlisted or miscellaneous code. To the extent our customers will depend on third-party payors,
unfavorable coding, coverage and reimbursement policies may constrict the profit margins of our provider customers, which may force us
to lower our fees to attract and retain customers. If we are required to request new billing codes that more precisely identify and describe
our imaging services, coverage is limited or reimbursement rates are inadequate, a healthcare provider might find it financially unattractive
to own our diagnostic imaging systems. It is possible that third-party payor coding, coverage and reimbursement policies will affect the
need or prices for our products in the future, which could significantly affect our financial performance and our ability to conduct our
business.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, as of December
31, 2022, all of our affiliated radiologists were located within the United States and are eligible to submit to Medicare and state Medicaid
programs for reimbursement for services performed. Where our affiliated radiologists provide final reads that are reimbursable under these
programs, our business model generally provides that we are still paid service fees by our customers who accept reassignment and bear
the risk of loss of reimbursement when collecting from payers. As a result, our service fees do not fluctuate or change based solely on
changes in Medicare or Medicaid reimbursement levels. Medicare reimbursement rules generally provide that the proper Medicare carrier
to pay physicians&#8217; claims is the Medicare carrier for the region in which the physician or practice providing the service is located
rather than the Medicare carrier for the region in which the patient receiving the services is located. Many of our affiliated radiologists
are located in a Medicare region that is different from the Medicare region in which the patients and treating hospitals are located.
It may be necessary for our customers to enroll with additional Medicare carriers to properly submit claims for reimbursement. CMS has
stated that for certain interpretation services provided to certain customers, reimbursement will be based upon the location of the interpreting
physician, yet that reimbursement will be made by the Medicare carrier for the region in which the patient and facility are located. Whether
this policy will be expanded to other types of interpretation services and facilities is unclear.</p><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Healthcare Reform</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In the United States and certain foreign jurisdictions,
there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system. In
March 2010, the ACA was signed into law and substantially changed the way healthcare is financed by both governmental and private insurers
in the United States. The ACA contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement
adjustments and fraud and abuse changes. Additionally, the ACA imposed, among other things, a new federal excise tax on the sale of certain
medical devices, which, through a series of legislative amendments, was suspended, effective January&#160;1, 2016, and subsequently repealed
altogether on December&#160;20, 2019, provided incentives to programs that increase the federal government&#8217;s comparative effectiveness
research and implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians
and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Since its enactment, there have been judicial and
Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in
the future. By way of example, in 2017, Congress enacted the TCJA, which eliminated the tax-based shared responsibility payment imposed
by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred
to as the &#8220;individual mandate.&#8221; On December&#160;14, 2018, a Texas U.S. District Court Judge (the &#8220;Texas District Court
Judge&#8221;) ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed
as part of the TCJA, the remaining provisions of the ACA are invalid as well. On June 17, 2021, the U.S. Supreme Court held that state
and individual plaintiffs did not have standing to challenge the individual mandate provision of the ACA; in so holding, the Supreme Court
did not consider larger constitutional questions about the validity of this provision or the validity of the ACA in its entirety. Another
case challenging the ACA&#8217;s requirement that private insurers cover certain preventative services is currently pending before the
Texas District Court Judge. The Texas District Court Judge struck down this requirement with immediate nationwide effect on March 30,
2023, and the U.S. government has appealed the decision to the U.S. Court of Appeals for the Fifth Circuit. It is unclear how these decisions
and appeals, future decisions, subsequent appeals, and other efforts to repeal and replace the ACA will impact the ACA.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Other legislative changes have been proposed and
adopted in the United States since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal
year, which was temporarily suspended from May 1, 2020 through March 31, 2022, followed by a 1% reduction in effect from April 2022 through
June 2022 with the full 2% reduction resuming thereafter, and reduced payments to several types of Medicare providers. We believe the
overall escalating cost of medical products and services being paid for by the government and private health insurance has led to, and
will continue to lead to, increased pressures on the healthcare and medical device industry to reduce the costs of products and services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Data Privacy and Security</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Medical device companies may be subject to U.S.
federal and state and foreign health information privacy, security and data breach notification laws, which may govern the collection,
use, disclosure and protection of health-related and other personal information. In the United States, HIPAA imposes privacy, security
and breach reporting obligations with respect to individually identifiable health information upon &#8220;covered entities&#8221; (health
plans, health care clearinghouses and certain health care providers), and their respective business associates, individuals or entities
that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered
entity. HIPAA and its respective implementing regulations, including the final omnibus rule published on January&#160;25, 2013, impose
specified requirements relating to the privacy, security and transmission of individually identifiable health information. HIPAA mandates
the reporting of certain breaches of health information to HHS, affected individuals, and if the breach is large enough, the media. Entities
that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information (&#8220;PHI&#8221;), a
complaint about privacy practices or an audit by HHS, may be subject to significant civil, criminal and administrative fines and penalties
and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with
HHS to settle allegations of HIPAA non-compliance. The Health Information Technology For Economic and Clinical Health Act also increased
the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave
state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA
laws and seek attorney&#8217;s fees and costs associated with pursuing federal civil actions.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Even when HIPAA does not apply, according to the
Federal Trade Commission or the FTC, failing to take appropriate steps to keep consumers&#8217; personal information secure constitutes
unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C &#167; 45(a).
The FTC expects a company&#8217;s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer
information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
Individually identifiable health information is considered sensitive data that merits stronger safeguards. The FTC&#8217;s guidance for
appropriately securing consumers&#8217; personal information is similar to what is required by the HIPAA Security Rule.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Another example of recent U.S. data security requirements
is FDORA, which, among other provisions, requires developers of certain &#8220;cyber devices&#8221; to design and implement plans to monitor,
identify and address cybersecurity vulnerabilities of those devices and to submit those plans to the FDA as part of every new product
application for a cyber device. &#8220;Cyber devices&#8221; are defined as devices that include software, connect to the internet, and
contain any technological features that could be vulnerable to cybersecurity threats. This provision entered into effect on March 29,
2023, and FDA has indicated that it expects sponsors of cyber devices to begin to comply with these requirements as of October 1, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, certain state and non-U.S. laws, such
as the GDPR/UK GDPR, govern the privacy and security of health information in certain circumstances, some of which are more stringent
or broader in scope than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating
compliance efforts. Further, &#8220;business associates,&#8221; defined as independent contractors or agents of covered entities that
create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered
entity, are also subject to certain HIPAA privacy and security standards. Failure to comply with these laws, where applicable, can result
in the imposition of significant civil and/or criminal penalties and private litigation. For example, California enacted the CCPA, which
went into effect January&#160;1, 2020. The CCPA, among other things, creates new data privacy obligations for covered companies and provides
new privacy rights to California residents, including the right to opt out of certain disclosures of their information. The CCPA also
creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with
a data breach. Although the law includes limited exceptions, including for PHI maintained by a covered entity or business associate, it
may regulate or impact our expected processing of personal information depending on the context. Further, the California Privacy Rights
Act (CPRA) imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations
on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It also created a new California
data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.
The majority of the provisions went into effect on January 1, 2023, and additional compliance investment and potential business process
changes may be required. In Europe, the GDPR went into effect in May 2018 and introduces strict requirements for processing the personal
data of individuals within the EEA. Companies that must comply with the GDPR face increased compliance obligations and risk, including
more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to &#8364;20&#160;million
or 4% of the annual global revenues of the noncompliant company, whichever is greater. Relatedly, following the United Kingdom&#8217;s
withdrawal from the European Economic Area and the European Union, and the expiry of the transition period, companies have to comply with
both the UK GDPR and the GDPR, the latter regime having the ability to separately fine up to the greater of &#163;17.5 million or 4%
of global turnover. The State of Israel has also implemented data protection laws and regulations, including the Israeli Protection of
Privacy Law of 1981.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Foreign Regulation</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">As we plan to market and deploy our Nanox System
broadly across the globe, we will be subject to regulations applicable to medical and radiation-emitting devices in the jurisdictions
in which we operate, which regulations vary among countries. While some countries&#8217; regulations may not impose barriers to marketing
and selling our products or only require certain notification, others may require that we obtain the clearance, registration or approval
of a specified regulatory body. Process for obtaining such clearance, registration or approvals may involve additional testing and time.
Furthermore, complying with foreign regulatory requirements can be expensive and time-consuming, and we will need to seek for regulatory
clearances or approvals in each country in which we plan to market our products.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, depending on the country, if we modify
our products, we may need to apply for additional regulatory clearances or approvals before we are permitted to sell the modified product.
Also, for maintaining our authorizations in a particular country, we will need to continue meeting quality and safety standards required
in such country.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Finally, while regulatory clearance or approval
by the FDA does not ensure registration, clearance or approval by regulatory authorities in other countries, registration or regulatory
clearance or approval in one country, or denial thereof, may have effects on the regulatory process in others.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Legal Proceedings </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">From time to time, we may become involved in various
lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties,
and an adverse result in these or other matters may arise from time to time that may harm our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In September 2020, two securities class action
complaints were filed in the United States District Court for the Eastern District of New York against the Company and certain then-current
officers and a director, which were subsequently consolidated and captioned as <i>White v. Nano-X Imaging Ltd. et al</i>, Case No. 1:20-cv-04355,
alleging violations of securities laws on behalf of all persons and entities that purchased or otherwise acquired the Company&#8217;s
publicly traded securities between August 21, 2020 and September 15, 2020, and seeking unspecified damages. On December 7, 2020, proposed
lead plaintiffs submissions were fully briefed, on August 10, 2022, Magistrate Judge Marcia M. Henry issued a Report and Recommendation,
recommending that the Court approve Derson O. Jolteus and Edward Ko as lead plaintiffs, and on August 30, 2022, Judge William Kuntz adopted
the Report and Recommendation. On June 24, 2022, the Company moved to consolidate this action with the action captioned <i>McLaughlin
v. Nano-X Imaging Ltd. et al</i>, Case No: 1:21-cv-05517, discussed further below. The Company&#8217;s motion to consolidate remains outstanding.
On October 31, 2022, Lead Plaintiffs filed an amended complaint, which alleges that defendants violated the federal securities laws in
connection with certain disclosures regarding the Company&#8217;s FDA submission and customer contracts. Lead Plaintiffs seek to represent
a class of investors who purchased the Company&#8217;s publicly traded securities between August 21, 2020 and September 15, 2020. On February
3, 2023, the Company moved to stay this action in favor of the McLaughlin action, or, in the alternative, until the Company&#8217;s pending
motion to consolidate was decided. The Company has not yet responded to the amended complaint.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On October 5, 2021, a class action complaint was
filed in the United States District Court for the Eastern District of New York against the Company and certain of its officers, captioned
<i>McLaughlin v. Nano-X Imaging Ltd. et al</i>, Case No. 1:21-cv-05517. On January 25, 2022, Magistrate Judge Peggy Kuo appointed Davian
Holdings Limited as Lead Plaintiff in the <i>McLaughlin v. Nano-X Imaging Ltd. et al</i>, Case No. 1:21-cv-05517. On April 12, 2022 and
in the same case, the Lead Plaintiff filed an amended complaint, which alleges that defendants violated the federal securities laws in
connection with certain disclosures concerning the cost of the Nanox.ARC system as well as the comparison of the Nanox.ARC to CT scanners.
Lead Plaintiff seeks to represent a class of investors who purchased the Company&#8217;s publicly-traded securities between August 21,
2020 and November 17, 2021. The Company moved to dismiss the amended complaint, and briefing on that motion was completed on September
9, 2022, and it remains outstanding. On April 28, 2023, the Company signed a term sheet with Lead Plaintiffs in both this action and the
above-referenced consolidated White action to settle all claims in both actions. The settlement is subject to finalization of a formal
settlement agreement and court approval of the settlement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Division of Enforcement of the SEC notified
the Company that it is conducting an investigation to determine whether there had been any violations of the federal securities laws.
The Company has been providing documents and information to the SEC and has received a subpoena from the SEC requesting that the Company
provide documents and other information relating to the development cost of the Company&#8217;s Nanox.ARC prototypes, as well as the Company&#8217;s
estimate for the cost of assembling the final Nanox.ARC product at scale, among other things. The Company is cooperating with the SEC
in responding to its requests. The duration and outcome of this matter cannot be predicted at this time and the Company is unable to estimate
a loss or range of loss of this investigation.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On October 28, 2021, a complaint was filed in the
United States District Court for the Central District of California against the Company, the Company&#8217;s recently-formed Delaware
subsidiary and Nanox Gibraltar PLC (&#8220;Gibraltar&#8221;) from which the Company received certain assets, as well as Mr. Ran Poliakine
and certain other unidentified parties, alleging several causes of action including breach of a consulting agreement between the plaintiff
and Gibraltar that was entered into in 2015. The plaintiff demanded payment of unpaid consulting fees from Gibraltar in the amount of
approximately $1 million and approximately $29.5 million from the Company relating to his claimed entitlement to warrants in Gibraltar.
On February 15, 2022, the Company moved to dismiss the complaint on the grounds, among others, that it was not a party to the agreement
with the plaintiff, and it is not Gibraltar&#8217;s legal successor for any liabilities that Gibraltar may owe to the plaintiff. On June
4, 2022, the Court granted the motion to dismiss with leave to amend. The plaintiff did not amend the complaint, and on July 20, 2022,
the Court entered judgment in the Company&#8217;s favor.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On October 5, 2022, a complaint was filed in the
Court of Common Pleas of Washington County, Pennsylvania against several defendants, including Dr. Michael Yuz and USARAD, alleging medical
negligence due to the failure to properly diagnose metastatic breast cancer. Dr Yuz&#8217;s only involvement in the case was on July 18,
2017, prior to our acquisition of USARAD, when he reviewed and interpreted an imaging study, identified a lesion and referred for an additional
imaging. The only claim against USARAD is for vicarious liability based on Dr. Yuz&#8217;s involvement, as an employee of USARAD. We intend
to vigorously defend this matter.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">As of December 31, 2022, we accrued $8 million
for future settlement expenses in connection with the two pending class action lawsuits against the Company. We are unable to estimate
a range of loss, if any, that could result were there to be&#160;an adverse final outcome in the SEC investigation or civil liability
complaint. If an unfavorable outcome were to occur, it is possible that the impact could be material to our results of operations in the
period in which any such outcome becomes probable and estimable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>C. Organizational Structure</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">NANO-X IMAGING LTD, an Israeli Company (&#8220;Nanox
IL&#8221;), was incorporated on December&#160;20, 2018 and commenced its operations on September&#160;3, 2019.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On September&#160;19, 2019, Nanox IL established
Nanox Imaging Inc. (&#8220;Nanox Japan&#8221;), a wholly owned subsidiary in Japan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On September&#160;25, 2020, Nanox IL established
Nano-X Korea Inc. (&#8220;Nanox Korea&#8221;), a wholly owned subsidiary in Korea.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On September 13, 2021, Nanox IL established Nano-X
Imaging Inc (&#8220;Nanox Inc.&#8221;), a wholly owned Delaware subsidiary. On November 2, 2021, Nanox Inc. completed the acquisition
of 100% of the shares of USARAD Holdings, Inc. (&#8220;USARAD&#8221;), a Delaware corporation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On September 30, 2021, Nanox Inc. established a
new wholly-owned Delaware subsidiary, Nano-X MDW Inc, which owns the platform and other assets purchased by us from MDWEB, LLC on November
3, 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On November 4, 2021, Nanox IL purchased all the
shares of Nano-X AI Ltd. (&#8220;Nanox AI&#8221;), an Israeli company formerly named Zebra Medical Vision Ltd. Nanox AI has a wholly owned
Delaware subsidiary named Nanox-X AI Inc.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On November 23, 2021, USARAD established another
wholly-owned Delaware subsidiary Nanox RAD Inc.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>D. Property, Plants and Equipment</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our principal executive offices are located in
a leased facility in Neve Ilan, Israel.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We lease approximately 550&#160;square
meters (approximately 5,920 square feet) of office space and warehouses. The original lease expired in December&#160;2021, and the Company
exercised the option to extend its lease for an additional 24 months until December 31, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We lease approximately 620 square meters (approximately
6,670 square feet) of office space in Neve Ilan, Israel, that may be used for offices and technical development. The lease expires in
June 2023. In November 2020, we leased an additional approximately 370 square meters (approximately 3,980 square feet) of office space
in Neve Ilan, Israel. This lease also expires in June 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In March 2022, we signed a new agreement to lease
105 square meters (approximately 1,130 square feet) of office space in Neve Ilan, Israel, until February 2025. In September 2022, we leased
an additional approximately 60 square meters (approximately 645 square feet) of office space in Neve Ilan, Israel, that may be used for
technical development. This lease expires in August 2028.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Nanox Japan (predecessor) leases additional facilities
of approximately 740 square feet of lab space and approximately 190 square feet of space in a clean room at the premises of the University
of Tokyo for research and development activities. The lease automatically renews on a semi-annual basis.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Nanox Inc. leases office space of approximately
2,300 square feet in Fort Lee, New Jersey. The monthly rent payment for this agreement is approximately $6,000.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In December 2020, we purchased approximately 11,889
square meters of land in Yongin, Geonggi province, Korea, on which we built our fabrication facility for approximately $6.2 million, which
is operational.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Nanox AI leases approximately 841 square meters
of office space under an operating lease agreement that expires on November 30, 2024. The monthly rent payment for this agreement is approximately
$19,000.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">USARAD leases approximately 6,000 square feet in
Oakland Park, Broward County, Florida, under a lease agreement that expires on December 31, 2027. The monthly rent payment for this agreement
is approximately $12,000.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px; font-size: 10pt"><span style="font-size: 10pt"><b>Item 4A</b></span></td>
    <td style="font-size: 10pt; text-align: justify"><span style="font-size: 10pt"><b>Unresolved Staff Comments</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in">&#160;</p><div>

</div><div><a id="a_006"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px; font-size: 10pt"><span style="font-size: 10pt"><b>Item 5.</b></span></td>
    <td style="font-size: 10pt"><span style="font-size: 10pt"><b>Operating and Financial Review and Prospects</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes
included elsewhere in this annual report on Form 20-F. This discussion contains forward-looking statements based upon current expectations
that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements
as a result of various factors, including those discussed in the section titled &#8220;Item 3. Key Information&#8212;D. Risk Factors&#8221;
and in other parts of this annual report on Form 20-F. Our consolidated financial statements have been prepared in accordance with U.S.
GAAP. The functional currency of NANO-X IMAGING LTD is the U.S. dollar.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>A. Operating Results</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Overview</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Early detection saves lives&#8212;and we at Nanox
are focused on applying our proprietary medical imaging technology and solutions to make diagnostic medicine more accessible and affordable
across the globe. We are developing an end-to-end imaging service solution, which includes the Nanox System, comprised of the Nanox.ARC
using our novel MEMs X-ray source technology, and the Nanox.CLOUD, a companion cloud software, integrated with AI solutions and teleradiology
services. Our vision is to increase early detection of medical conditions that are discoverable by X-ray by improving access to imaging,
reducing imaging costs and enhancing imaging efficiency, which we believe is key to increasing early prevention and treatment, improving
health outcomes and, ultimately, saving lives.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our imaging solution is designed
as a modular open system, and we intend in the future to explore the expansion of the solution to include additional components, which
may be developed by us or third parties. Following receipt of clearance from the FDA, and if cleared by the requisite regulatory authorities
in other jurisdictions, we plan to market and deploy the Nanox System broadly across the globe at a substantially lower cost compared
to currently available medical imaging systems, such as CT. We believe that, if cleared by the requisite regulatory authorities, as the
Nanox.ARC (including the Nanox.CLOUD) was cleared for marketing by the FDA, our technology&#8217;s relatively low cost will enable us
to increase accessibility and affordability of early-detection medical imaging systems globally, substantially reduce wait-times for imaging
results and increase early detection rates compared to currently employed imaging process protocol.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We have devoted substantially all of our financial resources to acquiring
the base technology for our X-ray source and related know-how, our AI solutions and our teleradiology services, conducting research and
development activities, organizing and staffing our company, developing our business plan, securing related intellectual property rights
and raising capital. Historically, we have funded our operations primarily with proceeds from the sale of our ordinary shares and warrants
(after September&#160;3, 2019) and those of our predecessor company (prior to September&#160;3, 2019). During the years ended December
31, 2022, 2021 and 2020, we received net cash proceeds of $0.8 million, $7.4&#160;million and $241.0 million, respectively, from the sales
of our and our predecessor&#8217;s ordinary shares. &#160;In the year ended December 31, 2021, we began to generate revenues through the
sale of teleradiology services and the sale of AI solutions, following the completion of the merger with Zebra, renamed Nanox AI Ltd.,
and the acquisitions of USARAD and the assets of MDWEB in November 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We have incurred significant operating losses since
our inception. Our ability to achieve profitability depends on the successful development and commercialization of our technology and
our products. We incurred net losses of $113.2 million, $61.8&#160;million, and $43.8 million for the years ended December&#160;31, 2022,
2021 and 2020, respectively. As of December 31, 2022 and 2021, we had an accumulated deficit of $259.5 million and $146.2&#160;million,
respectively. We expect to continue to incur significant expenses for at least the next several years as we advance the Nanox System through
further development, regulatory approval and commercial deployment. Following obtaining marketing clearance for the multi-source Nanox.ARC,
we expect to incur significant capital expenditures and commercialization expenses related to product manufacturing, marketing, sales,
regulation, distribution and support. In addition, we continue to incur additional costs associated with operating as a public company,
including significant legal, accounting, investor relations and other expenses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our goal is to jumpstart the MSaaS-based medical
imaging market by producing and deploying an initial wave of approximately 15,000 Nanox System units within three years following receipt
of clearance from the FDA for our multi-source Nanox.ARC (including the Nanox.CLOUD). We expect to incur significant expenses for the
manufacturing, installation, deployment, repairs, and maintenance of the Nanox System. As&#160;a result, we may need substantial funding
to support our continuing operations and pursue our business strategy before we can generate significant revenues. Until such time as
we can generate significant revenue from sales of services, we expect to finance our operations through the sale of equity, debt financings
or other capital sources, including collaborations, strategic partnerships or marketing, distribution or licensing arrangements with third
parties. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms,
or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back
or discontinue the development and commercialization of one or more of our systems and products or delay our pursuit of potential in-licenses
or acquisitions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">As of December 31, 2022, we had marketable securities,
cash and cash equivalents of $102.9&#160;million. We believe that our cash on hand and cash equivalents will enable us to fund our operating
expenses and capital expenditure requirements for at least the next twelve months from the date of issuance of the financial statements.
We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect.
See &#8220;Item 5. Operating and Financial Review and Prospects&#8212;B. Liquidity and Capital Resources.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Recent Developments</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During 2022, we issued (i)
89,286 of our ordinary shares to the former shareholders of Nanox AI due to the partial achievement of a milestone that occurred following
the closing of the acquisition of Nanox AI pursuant to the terms of the Zebra Merger Agreement and (ii) an additional 2,648,424 ordinary
shares to the former shareholders of Nanox AI with respect to any additional amount that could be granted under the Zebra Merger Agreement
pursuant to a settlement agreement between us and the former shareholders of Nanox AI.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 28, 2023, the Company
and Dr. Michael Yuz, as the representative of the former stockholders of USARAD, entered into the first amendment to the USARAD SPA, according
to which the parties to the USARAD SPA agreed that (i) the Company shall pay to the former stockholders of USARAD an aggregate amount
of $290,063 in cash and 45,392 ordinary shares, in consideration for the achievement of certain milestones in connection with the first
earn out period, as defined and in accordance with in the USARAD SPA; and (ii) the rights and obligations under the USARAD SPA regarding
the remaining earn out periods were amended such that the parties agreed that the Company shall pay to the former stockholders of USARAD
an aggregate amount of $500,000 in cash and 210,000 ordinary shares as consideration for the remainder of the milestones and applicable
earn-outs under the USARAD SPA. As a result of the amendment to the USARAD SPA, obligations of the Company and the rights of the former
stockholders of USARAD relating to the purchase price (including the earn-outs) under the USARAD SPA have been satisfied in full.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">For additional information regarding these acquisitions,
including the consideration that we paid and is payable in connection with these acquisitions, see &#8220;Item 4. Information on the Company&#8212;A.
History and Development of the Company.&#8221; Beginning in the year ended December 31, 2021 and continuing in the year ended December
31, 2022, we began to generate revenues through the sale of teleradiology services and the sale of AI solutions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Components of Our Results of Operations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Revenue</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We began to generate revenues in year ended December
31, 2021, through the sale of teleradiology services and the sale of AI solutions, following the completion of the merger with Nanox AI,
and the acquisitions of USARAD and the assets of MDWEB in November 2021. The majority of our revenues are derived from our teleradiology
services, which consist primarily of fees received from various payors based on established billing rates, and also of fees from hospitals
and healthcare providers. We recognize revenue in the period in which performance obligations are satisfied by providing services to our
customers, and record the amount of revenue that reflects the consideration that we expect to receive in exchange for those services.
We have not generated any revenue to date from sales of the Nanox System.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Cost of Revenue</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Cost of the sale of teleradiology services mainly
consists of the cost of radiologists and the cost of picture archiving and communication software (a medical imaging technology used to
securely store and digitally transmit electronic images and clinical reports). The cost of the sale of AI solutions mainly consists of
the cost of labor and amortization of intangible assets. In 2022, the cost of revenue through the sale of AI solutions consisted mainly
of salaries and wages expense in the amount of $0.5 million, and amortization of intangible assets of $8.0 million. In 2021, the cost
of revenue through the sale of AI solutions consisted mainly of salaries and wages expense in the amount of $0.4 million and amortization
of intangible assets of $1.3 million. The amortization of intangible assets is the periodic amortization expense with regards to the acquisition
of the shares of Nanox AI since the date of acquisition through the year end.<b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Operating Expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Research and Development Expenses</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Research and development expenses consist primarily
of costs incurred in connection with the research and development of our products. These expenses include:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">expenses incurred in connection with the development of our systems and solutions, including payments made pursuant to agreements with third parties, such as outside consultants related to process development and manufacturing activities, as well as patent registrations;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-size: 10pt">costs of components and materials that are used to develop our systems, including payments made pursuant to agreements with third parties;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We recognize external development costs based on
an evaluation of the progress to completion of specific tasks using information provided to us by our suppliers and service providers.
Upfront payments, milestone payments (other than those deemed contingent consideration in a business combination) and annual maintenance
fees under license agreements are expensed in the period in which they are incurred.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Research and development activities are central
to our business. We expect that our research and development expenses will increase substantially over the next several years as we continue
the development and improvement of the Nanox System. We expect to continue to devote a substantial portion of our resources to the Nanox.ARC
multi-source system, the Nanox.CLOUD, the Nanox.MARKETPLACE, our AI solutions and our future systems and solutions for the foreseeable
future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The successful development and commercialization
of our systems are highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that
will be necessary to complete the development for commercialization of any of our products. This uncertainty is due to the numerous risks
and uncertainties associated with product development and commercialization, including the uncertainty of:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 48px">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 48px">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; width: 48px">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px; font-size: 10pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px; font-size: 10pt"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Any changes in the outcome of any of these variables
with respect to the development or improvement of our products could result in a significant change in the costs and timing associated
with the deployment of these products. For example, if the FDA or another regulatory authority were to require us to conduct clinical
trials or other testing beyond what we currently expect, we could be required to expend significant time, personnel and additional financial
resources to complete development of our products. We may never obtain regulatory approval for any of our products and third parties may
never obtain regulatory approvals for any products containing our technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->73<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Marketing and Selling Expenses </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Marketing and selling expenses consist of cost
of labor, public relations, participation in conferences and other general marketing and selling expenses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We anticipate that our selling and marketing expenses
will increase as we begin the commercial deployment of our systems.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>General and Administrative Expenses</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">General and administrative expenses consist primarily
of salaries, related benefits and share-based compensation expense for personnel in executive, finance and administrative functions. General
and administrative expenses also include facilities, depreciation and other expenses, which include direct or allocated expenses for rent
and maintenance of facilities and insurance, as well as professional fees for legal, patent, consulting, investor and public relations,
accounting and audit services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We anticipate that our general and administrative
expenses will increase as we increase our headcount to support our continued research and development activities and commercialization
of our products. We also incur accounting, audit, legal, regulatory, compliance, directors&#8217; and officers&#8217; liability insurance
and investor and public relations costs associated with being a public company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Results of Operations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Comparison of the years ended December 31, 2022 and 2021</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The table below summarizes the results of operations
for the years ended December 31, 2022 and 2021, respectively:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Revenue</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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during the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td>&#160;</td><td>&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">8,235</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">270</td><td style="text-align: left">&#160;</td></tr>
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    <td>Total</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">For the year ended December 31, 2022, we reported
revenue of $8.6 million, compared to $1.3 million for the year ended December 31, 2021. During the year ended December 31, 2022, we generated
revenue through the sale of teleradiology services in the amount of $8.2 million and the sale of AI solutions in the amount of $0.3 million.
During the year ended December 31, 2021, we generated revenue through the sale of teleradiology services in the amount of $1.0 million
and the sale of AI solutions in the amount of $0.3 million. The increase in revenue was mainly due to the consolidation of both the teleradiology
services and AI solutions divisions for the full year ended December 31, 2022 as compared to only two months during the year ended December
31, 2021 following the acquisitions in November 2021, as well as an increase of approximately 33% in the sales of our teleradiology business
segment on an annualized basis.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Cost of Revenue</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The table below summarizes
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">For the year ended December 31, 2022, we reported
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we incurred cost of revenue through the sale of teleradiology services in the amount of $6.9 million and the sale of AI solutions in the
amount of $8.5 million. The cost of revenue through the sale of AI solutions consisted mainly of salaries and wages and share based compensation
expenses in the amount of $0.5 million and amortization of intangible assets of $8.0 million. The amortization of the intangible assets
of developed technology and image big data is the periodic amortization expense with regard to the acquisition of the shares of Nanox
AI since the date of acquisition through the year end. As a result, the cost of revenue recognized for the AI Solutions segment significantly
exceeds the amount of revenue recognized. The cost of revenue through the sale of teleradiology services consisted mainly of cost of radiologists&#8217;
expenses in the amount of $4.0 million and amortization of intangible assets of $2.2 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">During the year ended December 31, 2021, we incurred
cost of revenue through the sale of teleradiology services in the amount of $1.0 million and the sale of AI solutions in the amount of
$1.8 million. During 2021, the cost of revenue through the sale of AI solutions consisted mainly of salaries and wages expense in the
amount of $0.4 million and amortization of intangible assets of $1.4 million. During 2021, the cost of revenue through the sale of teleradiology
services consisted mainly of cost of the radiologists&#8217; expenses in the amount of $0.5 million and amortization of intangible assets
of $0.4 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Gross Loss </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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from each segment during the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">For the year ended December 31, 2022, we reported
a gross loss of $6.9 million, compared to a gross loss of $1.5 million for the year ended December 31, 2021. Our gross profit from teleradiology
services for the year ended December 31, 2022 was $1.3 million. Our gross loss from our AI solutions for the year ended December 31, 2022,
was $8.2 million. Our gross profit from teleradiology services for the year ended December 31, 2021, was $0.0 million. Our gross loss
from our AI solutions for the year ended December 31, 2021 was $1.5 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;<i>&#160;</i></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The table below summarizes our research and development
expenses incurred during the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Research and development expenses
increased by $9.4 million to $26.5 million for the year ended December&#160;31, 2022, from $17.1 million for the year ended December 31,
2021. The increase in research and development expenses was primarily attributable to the increase of $4.8 million due to the merger with
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Sales and</i>&#160;<i>Marketing Expenses</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The table below summarizes our sales and marketing
expenses incurred during the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Sales and marketing expenses
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2021. The decrease in sales and marketing expenses was primarily attributable to a decrease in salaries in the amount of $0.6 million
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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$41.3 million for the year ended December&#160;31, 2022, from $34.7 million for the year ended December 31, 2021. The increase in general
and administrative expenses was primarily attributable to an increase of approximately $1.1 million due to the merger with Nanox AI, and
the acquisitions of USARAD and the assets of MDWEB, and an increase of approximately $4.5 million in legal fees primarily due to the SEC
inquiry and class-actions, which was mitigated by a decrease of $0.3 million in our directors&#8217; and officers&#8217; liability insurance
premium and a decrease of $0.5 million in our professional services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Change in obligation in connection of acquisitions</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Change in obligation in connection of acquisitions
was $20.4 million for the year ended December&#160;31, 2022, as compared to none for the year ended December&#160;31, 2021, due to the
decrease in our contingent earnout liabilities in connection of acquisitions in the same amount, mainly due to the issuance of 89,286
of our ordinary shares to the former equity holders of Nanox AI due to the achievement of a milestone pursuant to the terms of the Zebra
Merger Agreement and the issuance of additional 2,648,424 ordinary shares under a settlement with respect to any additional amount that
could be granted under the Zebra Merger Agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On April 28, 2023, the Company and Dr. Michael
Yuz, as the representative of the former stockholders of USARAD, entered into the first amendment to the USARAD SPA, according to which
the parties to the USARAD SPA agreed that (i) the Company shall pay to the former stockholders of USARAD an aggregate amount of $290,063
in cash and 45,392 ordinary shares, in consideration for the achievement of certain milestones in connection with the first earn out period,
as defined in and in accordance with the USARAD SPA; and (ii) the rights and obligations under the USARAD SPA regarding the remaining
earn out periods were amended such that the parties agreed that the Company shall pay to the former stockholders of USARAD an aggregate
amount of $500,000 in cash and 210,000 ordinary shares as consideration for the remainder of the milestones and applicable earn-outs under
the USARAD SPA. As a result of the amendment to the USARAD SPA, obligations of the Company and the rights of the former stockholders of
USARAD relating to the purchase price (including the earn-outs) under the USARAD SPA have been satisfied in full.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->76<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Goodwill impairment</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Goodwill impairment for the year ended December&#160;31,
2022 was $50.9 million due to the goodwill impairment related to the Nanox AI reporting unit. There was no goodwill impairment for the
year ended December&#160;31, 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">During the second quarter of 2022, in light of
triggering events arising from the increase of the discount rate and changes in our estimates as a result of business specific considerations,
we performed a quantitative interim assessment for goodwill impairment for our AI solutions reporting unit. The amount of goodwill assigned
to the AI solutions reporting unit on the interim testing date, which had not changed from the amount assigned to such unit on the acquisition
date, was $51.2 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">When evaluating the fair value of the AI solutions
reporting unit under the income approach, we used a <span>discounted cash flow</span> model which utilized
Level 3 measures that represent unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal
cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs to sales and operating expenses;
(b) an estimated terminal value using a terminal year long-term future growth rate of 3.0% determined based on the growth prospects of
the reporting unit; and (c) a discount rate of 22.0% which reflects the weighted-average cost of capital adjusted for the relevant risk
associated with the AI solutions reporting unit&#8217;s operations and the uncertainty inherent in our internally developed forecasts.
<span>Specifically, as part of our interim impairment test, in making the assumptions mentioned in clauses
(a) and (b) above, we considered (1) the efforts and time required for the AI solutions reporting unit to achieve financial stability,
(2) our estimate that it would take approximately one year for such unit to generate any material revenue and two years to achieve profitability;
and (3) our estimate that it would take longer than we originally expected for such unit to generate material revenues, gross profit,
and positive operating cash flows, especially from its population health applications. As a result of the impairment assessment, we concluded
that the fair value of the AI solutions reporting unit decreased&#160;below&#160;its&#160;carrying&#160;value by 11.61%, and therefore
we recorded a goodwill impairment charge of $14.3 million in the second quarter of 2022.</span> As a result, the remaining amount of goodwill
assigned to the AI solutions reporting unit at June 30, 2022 was $36.9 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">During the fourth quarter of 2022, <span>we
performed a qualitative and quantitative annual assessment for goodwill impairment. Based on our qualitative analysis, which considered
the </span>AI solutions reporting unit <span>results, projections </span>and additional business and industry
specific considerations, we performed a further revision of the estimates of the fair value of&#160;the&#160;AI solutions reporting unit.
As part of this analysis, we also considered the potential impacts of the sensitivity of estimates and assumptions. When evaluating the
fair value of the AI solutions reporting unit under the income approach, we used <span>the same discounted
cash flow model discussed above; however, in clause (c) the resulting cash flow amounts were discounted using a discount rate of&#160;22.50%.
As a result of the impairment assessment, we concluded that the fair value of the AI solutions reporting unit decreased&#160;below&#160;its&#160;carrying&#160;value
by 34.44%, and therefore, we recorded an additional goodwill impairment charge of $36.6 million in the fourth quarter of 2022.</span>
As a result, the amount of goodwill assigned to the AI solutions reporting unit at December 31, 2022 was $0.4 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Other Expenses</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Other expenses were $8.2 million for the year ended
December&#160;31, 2022, and $1.2 million for the year ended December 31, 2021. The increase in other expenses was primarily attributable
to the accrual for future settlement in connection with the pending class action lawsuits against the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Comparison of the years ended December 31, 2021 and 2020</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The table below summarizes the results of operations
for the years ended December 31, 2021 and 2020, respectively:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Revenue</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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during the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">For the year ended December 31, 2021, we reported
revenue of $ 1.3 million, compared to none for the year ended December 31, 2020. During the year ended December 31, 2021, we generated
revenues through the sale of teleradiology services in the amount of $1.0 million and the sale of AI solutions in the amount of $0.3 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Cost of Revenue</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The table below summarizes our cost of revenue
incurred during the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">For the year ended December 31, 2021, we reported
cost of revenue of $2.8 million, compared to none for the year ended December 31, 2020. During the year ended December 31, 2021, we incurred
cost of revenue through the sale of teleradiology services in the amount of $1.0 million and the sale of AI solutions in the amount of
$1.8 million. The cost of revenue through the sale of AI solutions consisted mainly of salaries and wages expense in the amount of $0.4
million and amortization of intangible assets of $1.4 million. The amortization of intangible assets is the periodic amortization expense
with regards to the acquisition of the shares of Nanox AI since the date of acquisition through the year end. As a result, the cost of
revenue recognized for the AI Solutions segment significantly exceeds the amount of revenue recognized. &#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Gross Loss </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The table below summarizes our gross loss incurred
from each segment during the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">For the year ended December 31, 2021, we reported
a gross loss of $1.5 million, compared to no profit or loss for the year ended December 31, 2020. Our gross profit from teleradiology
services for the year ended December 31, 2021 was $0.0 million. Our gross loss from our AI solutions for the year ended December 31, 2021
was $1.5 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Research and Development Expenses</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The table below summarizes our research and development
expenses incurred during the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Research and development expenses increased by
$7.9 million to $17.1 million for the year ended December&#160;31, 2021 from $9.2 million for the year ended December 31, 2020. The increase
in research and development expenses was primarily attributable to the increase of $1.7 million due to the merger with Nanox AI, and increases
in salaries and wages and professional services of $5.1 million as we continued to expand our research and development activities relating
to the Nanox System.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->78<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Sales and</i>&#160;<i>Marketing Expenses</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The table below summarizes our sales and marketing
expenses incurred during the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Sales and marketing expenses decreased to $7.0&#160;million
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expenses was primarily attributable to a decrease in share-based compensation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>General and Administrative Expenses</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The table below summarizes our general and administrative
expenses incurred during the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">3,128</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right">34,709</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">General and administrative expenses increased to
$34.7 million for the year ended December&#160;31, 2021, from $22.3 million for the year ended December 31, 2020. The increase in general
and administrative expenses was primarily attributable to an increase of approximately $3.9 million due to the merger with Nanox AI, and
the acquisitions of USARAD and the assets of MDWEB, an increase in the amount of approximately $1.9 million due to the increase in our
head count in connection with the expansion of our management team and the overall organization infrastructure, an increase of approximately
$1.9 million in legal fees primarily due to the SEC inquiry and class-actions, an increase of $2.6 million in our directors&#8217; and
officers&#8217; liability insurance premium and an increase of approximately $0.5 due to transaction expenses in connection with the merger
with Nanox AI, and the acquisitions of USARAD and the assets of MDWEB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Change in obligation in connection of acquisitions</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We did not record a change in obligation in connection
of acquisitions for the years ended December&#160;31, 2021 or 2020.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Goodwill impairment</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We did not record a goodwill impairment for the
years ended December&#160;31, 2021 or 2020.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 84; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->79<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Other Expenses</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Other expenses were $1.2 million for the year ended
December&#160;31, 2021, and none for the year ended December 31, 2020. The increase in other expenses was primarily attributable to the
relocation of our fabrication facility from its temporary location to its permanent location in South Korea.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Recently Issued Accounting Pronouncements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">A description of recently issued accounting pronouncements
that may potentially impact our financial position and results of operations is disclosed in Note 2 to our audited consolidated financial
statements, included elsewhere in this annual report on Form 20-F.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>B. Liquidity and Capital Resources</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">From our inception and prior to November 2021,
we did not generate any revenue from product sales or otherwise and have incurred significant operating losses and negative cash flows
from our operations. Beginning in the year ended December 31, 2021 and continuing in the year ended December 31, 2022, we generated revenue
through the sale of teleradiology services and the sale of AI solutions following the completion of the merger with Nanox AI, and the
acquisitions of USARAD in November 2021. We have not generated any revenue to date from sales of imaging services from the Nanox System.
Historically, we have funded our operations primarily with proceeds from the sale of our and our predecessor company&#8217;s ordinary
shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Cash Flows</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table provides information regarding
our cash flows for the periods presented:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(21,609</td><td style="width: 1%; text-align: left">)</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(10</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">122</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Net change in cash and cash equivalents and restricted cash</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(28,243</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(147,012</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">205,567</td><td style="text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Net Cash used in Operating Activities</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the years ended December&#160;31,
2022, 2021 and 2020, net cash used in operating activities was $43.4 million, $38.1&#160;million and $21.6 million, respectively, resulting
from our net loss of $113.2 million, $61.8&#160;million and $43.8 million, respectively, adjusted for stock-based compensation changes
of $18.6 million, $18.8&#160;million and $24.8&#160;million, respectively, amortization of intangible assets of $10.6 million, $1.8 million
and none, respectively, goodwill impairment of $50.9 million, none and none, respectively, change in contingent earnout liability of $20.4
million, none and none, respectively, non-cash charges of ($1.3) million, $0.4 million and $0.1 million, respectively, and changes in
components of working capital of $11.4 million, 2.7&#160;million and ($2.7)&#160;million, respectively. In 2022, the&#160;increase in
cash used in operating activities was primarily due to the development of our products and AI solutions. In 2021, the&#160;increase in
cash used in operating activities was primarily due to activities related to our business expansion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Net Cash provided by (used) in Investing Activities</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">During the years ended December&#160;31, 2022,
2021 and 2020, net cash provided by (used in) investment activities was $14.6&#160;million, $(116.3)&#160;million and $(13.9) million,
respectively. The increase in cash provided by investing activities during the year ended December 31, 2022, was primarily due to proceeds
from the sale of marketable securities in the amount of $22.8 million which was offset in part by the purchase of property and equipment
in the amount of $7.2 million and an investment of $1.0 million in an unconsolidated entity. The increase in cash used in investing activities
during the year ended December 31, 2021, was primarily due to purchase of marketable securities, the acquisition of USARAD and the completion
of our fabrication facility in Korea, as part of the preparation for the commencement of full manufacturing activity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Net Cash provided by Financing Activities</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">During the years ended December&#160;31, 2022,
2021 and 2020, net cash provided by financing activities was $0.8 million, $7.4&#160;million and $241.0 million, respectively, primarily
due to proceeds from the issuance of ordinary shares and warrants, net of issuance costs, and from the issuance of ordinary shares upon
exercise of options and warrants.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->80<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Contractual Obligations</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our long-term contractual obligations mainly consist
of our lease agreements for our offices and other facilities in Israel, Japan, Korea and the United States. For details regarding these
lease agreements, see &#8220;Item 4. Information on the Company&#8212;D. Property, Plants and Equipment.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, we have lease agreements for the lease
of vehicles for certain of our employees in Israel and Korea, which are effective through July 2025.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">As of December 31, 2022, we had non-current operating
leases liabilities of $0.4 million. For additional details regarding our operating lease agreements, see Note 7 to our audited consolidated
financial statements, which are included elsewhere in this annual report on Form 20-F.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Funding Requirements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We expect our expenses to increase in connection
with our ongoing activities, particularly as we continue the research and development and improvement of the Nanox System and seek marketing
approval for this product. In addition, we incur additional costs associated with operating as a public company. Our expenses will also
increase if, and as, we:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">seek regulatory approvals for any additional products;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">seek to discover and develop additional products;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">establish a manufacturing, sales, marketing, medical affairs and distribution infrastructure to commercialize the Nanox System for which we may obtain marketing approval and intend to commercialize on our own or jointly;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">hire additional quality control and scientific personnel;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">operate our manufacturing facility in South Korea for the purpose of manufacturing MEMs X-ray chips;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We believe that our cash on hand and cash equivalents
will enable us to fund our operating expenses and capital expenditure requirements for at least the next twelve months from the date of
issuance of the financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our
available capital resources sooner than we expect.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Because of the numerous risks and uncertainties
associated with manufacture, research, development and commercialization of products, we are unable to estimate the exact amount of our
working capital requirements. Our&#160;future funding requirements will depend on, and could increase significantly as a result of, many
factors, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the costs, timing and outcome of regulatory review of the Nanox.ARC (including the Nanox.CLOUD);</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for the Nanox System for which we receive marketing approval;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"></p><div>

</div><!-- Field: Page; Sequence: 86; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td><span style="font-size: 10pt">the ability to establish and maintain collaborations on favorable terms, if at all;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the costs incurred with respect to and the outcome of the securities litigations and SEC investigation we are currently subject to and any similar or other claims, litigation and investigations we may be subject to in the future; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the timing, receipt and amount of sales of the Nanox System, if any.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">A change in any of these or other variables with
respect to the development of any of our products could significantly change the costs and timing associated with the development of that
product. Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital
requirements associated with such operating plans.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Until such time, if ever, as we can generate substantial
product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, collaborations,
strategic partnerships or marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional
capital through the sale of equity or convertible debt securities, your ownership interest may be materially diluted, and the terms of
such securities could include liquidation or other preferences that adversely affect your rights as an ordinary shareholder. Debt financing
and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take
specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. In addition, debt financing
would result in increased fixed payment obligations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">If we raise funds through collaborations, strategic
partnerships or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our
technologies, future revenue streams, research programs or products or grant licenses on terms that may not be favorable to us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">If we are unable to raise additional funds when
needed, we may be required to delay, reduce or eliminate our product development or future commercialization efforts, or grant rights
to develop and market products that we would otherwise prefer to develop and market ourselves.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>C. Research and Development, Patents and Licenses, etc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Research and Development Expenses</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Research and development expenses are charged to
the statement of operations as incurred and consist primarily of personnel, materials and supplies for research and development activities.
See &#8220;Item 5. Operating and Financial Review and Prospects&#8212;A. Operating Results&#8212;Critical Accounting Policies and Significant
Judgments and Estimates&#8212;Research and Development Expenses.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Intellectual Property</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">As of April 17, 2023, we
and our subsidiaries had 26 issued patents and 11 pending patent applications in the United States. We also had three issued patents
and one pending patent application in Israel, one issued patent and nine pending patent applications in the European Patent Office,
and one issued patent and three pending patent applications in Hong Kong. We also have one international patent application pending.
Our issued patents generally expire between the years 2032 and 2041, and some are directed to various features and combinations of
features of the Nanox.ARC and the others for AI and teleradiology. We also have five trademarks registered in the United States, one
trademark pending in the United States and eight trademarks registered in Israel.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We intend to continue filing for patents on new
technologies as they are developed and to actively pursue any infringement upon our patents. We believe that our know-how and trade secrets
represent de facto barriers to potential competition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>D. Trend Information</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We are a development-stage company and cannot predict
with any degree of accuracy the outcome of our research and development efforts. As such, we cannot predict with any degree of accuracy
any significant trends, uncertainties or events that are reasonably likely to have a material effect on our net loss, liquidity or capital
resources, or cause financial information to not be indicative of future operating results or financial condition. However, to the extent
possible, certain trends, uncertainties, demands, commitments and events are described in this &#8220;Item 5. Operating and Financial
Review and Prospects.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>E. Critical Accounting Estimates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We have provided a summary of our significant accounting
policies, estimates and judgments in Note 2 to our consolidated financial statements. The following critical accounting estimates discussion
pertain to accounting policies management believes are most critical to the portrayal of our historical financial condition and results
of operations and that require significant, difficult, subjective or complex judgments.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Company regularly reviews its accounting estimates
and assumptions to determine whether any should be disclosed as critical accounting estimates or whether sensitivities should be updated
for those critical accounting estimates already disclosed. The preparation of financial statements in accordance with GAAP requires management
to make certain estimates and assumptions based on our historical experience and on various other assumptions which we believe to be reasonable
under the circumstances. Because of the uncertainty inherent in these matters, actual results could differ materially from the estimates
we use in applying these policies.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Goodwill</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span>We determine
the fair value of our reporting units using a discounted cash flow model, which utilizes key assumptions such as projected revenues, cost
of revenues and operating expenses. These assumptions were determined by management utilizing our internal operating plan, growth rates
for revenues and operating expenses and margin assumptions.&#160;An additional key assumption under this approach is the discount rate,
based on the weighted average cost of capital, which is adjusted for current risk-free rates of capital, current market interest rates,
and the evaluation of a risk premium relevant to the business segment.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span>If our assumptions
relative to revenue growth rates, cost of revenues and operating expenses were to change, our fair value calculation may change, which
could result in impairment. If our assumptions relative to the discount rate and the evaluation of risk premium growth rates were to change,
our fair value calculation may change, which could result in impairment. Management uses the income approach to determine the fair value
of the reporting units because it considers the anticipated future financial performance of the reporting units. Accordingly, changes
in the assumptions described above could have a material impact on our consolidated results of operations.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span>Our goodwill
is tested for impairment at least on an annual basis, on the last day of the fourth quarter of the fiscal year and whenever events or
changes in circumstances indicate the carrying value of a reporting unit may not be recoverable. When necessary, we record charges for
impairments of goodwill for the amount by which the carrying amount of the respective reporting unit exceeds its fair value.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b><i>Goodwill impairment assessments for
the year ended December 31, 2022</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt; "><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-indent: 0.25in; "><i>AI solutions reporting
unit </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">During the second quarter of 2022, in light of
triggering events arising from the increase of the discount rate and changes in our estimates as a result of business specific considerations,
we performed a quantitative interim assessment for goodwill impairment for our AI solutions reporting unit. The amount of goodwill assigned
to the AI solutions reporting unit on the interim testing date, which had not changed from the amount assigned to such unit on the acquisition
date, was $51.2 million. When evaluating the fair value of the AI solutions reporting unit under the income approach, we used a <span>discounted
cash flow</span> model which utilized Level 3 measures that represent unobservable inputs. Key assumptions used to determine the estimated
fair value include: (a) internal cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs
to sales and operating expenses; (b) an estimated terminal value using a terminal year long-term future growth rate of 3.0% determined
based on the growth prospects of the reporting unit; and (c) a discount rate of 22.0% which reflects the weighted-average cost of capital
adjusted for the relevant risk associated with the AI solutions reporting unit&#8217;s operations and the uncertainty inherent in our
internally developed forecasts. <span>Specifically, as part of our interim impairment test, in making
the assumptions mentioned in clauses (a) and (b) above, we considered (1) the efforts and time required for the AI solutions reporting
unit to achieve financial stability, (2) our estimate that it would take approximately one year for such unit to generate any material
revenue and two years to achieve profitability; and (3) our estimate that it would take longer than we originally expected for such unit
to generate material revenues, gross profit, and positive operating cash flows, especially from its population health applications. As
a result of the impairment assessment, we concluded that the fair value of the AI solutions reporting unit decreased&#160;below&#160;its&#160;carrying&#160;value
by 11.61%, and therefore we recorded a goodwill impairment charge of $14.3 million in the second quarter of 2022.</span> As a result,
the remaining amount of goodwill assigned to the AI solutions reporting unit at June 30, 2022 was $36.9 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; ">During the fourth quarter
of 2022, <span>we performed a qualitative and quantitative annual assessment for goodwill impairment.
Based on our qualitative analysis, which considered the </span>AI solutions reporting unit <span>results,
projections </span>and additional business and industry specific considerations, we performed a further revision of the estimates of the
fair value of&#160;the&#160;AI solutions reporting unit. As part of this analysis, we also considered the potential impacts of the sensitivity
of estimates and assumptions. When evaluating the fair value of the AI solutions reporting unit under the income approach, we used <span>the
same discounted cash flow model discussed above; however, in clause (c) the resulting cash flow amounts were discounted using a discount
rate of&#160;22.50%. As a result of the impairment assessment, we concluded that the fair value of the AI solutions reporting unit decreased&#160;below&#160;its&#160;carrying&#160;value
by 34.44%, and therefore we recorded an additional goodwill impairment charge of $36.6 million in the fourth quarter of 2022.</span> As
a result, the amount of goodwill assigned to the AI solutions reporting unit on December 31, 2022 was $0.4 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">When
evaluating the fair value of the AI solutions reporting unit under the income approach, we used a discounted cash flow model which utilized
Level 3 measures that represent unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal
cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs of sales and operating expenses;
(b) an estimated terminal value using a terminal year long-term future growth rate determined based on the growth prospects of the reporting
unit; and (c) assumed discount rate which reflects the weighted-average cost of capital adjusted for the relevant risk associated with
the AI solutions reporting unit&#8217;s operations and the uncertainty inherent in our internally developed forecasts.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; ">Specifically, as part
of our interim impairment test, in making the assumptions mentioned in clauses (a) and (b) above, we considered (1) the efforts and time
required for the AI solutions reporting unit to achieve financial stability, (2) our estimate that it would take approximately one year
for such unit to generate any material revenue and three years to achieve profitability; and (3) our estimate that it would take longer
than we originally expected for such unit to generate material revenues, gross profit, and positive operating cash flows, especially from
its population health applications. For the assumption mentioned in clause (b) above, we assumed a terminal year long-term future growth
rate of 3.0% as of June 30, 2022 and December 31,2022. For the assumption mentioned in clause (c) above, we assumed a discount rate of
22.0% as of June 30, 2022, and 22.5% as of December 31, 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; ">Actual results may differ
from those assumed in our valuation method. It is reasonably possible that our assumptions described above could change in future periods.
If any of these were to vary materially from our plans, we may record impairment of goodwill allocated to this reporting unit in the future.
A hypothetical decrease in the growth rate of 0.5% or an increase of 0.5% to the discount rate would have reduced the fair value of the
AI solutions reporting unit by approximately $1.0 million and $2.9 million, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt; text-indent: 0.25in; "><i>Radiology services reporting
unit </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; "><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; ">During the fourth quarter
of 2022, we performed a quantitative assessment for goodwill impairment for our teleradiology reporting unit and concluded that the fair
value of the radiology services reporting unit exceeded its carrying amount by approximately 5.3%, with a carrying amount of goodwill
assigned to this reporting unit in an amount of $7.1 million.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; ">When evaluating the fair
value of the radiology services reporting unit under the income approach, we used a discounted cash flow model which utilized Level 3
measures that represent unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal cash flows
forecasts for 5 years following the assessment date, including expected revenue growth, costs to sales and operating expenses; (b) an
estimated terminal value using a terminal year long-term future growth rate of 3% determined based on the growth prospects of the reporting
unit; and (c) a discount rate of 27.5% which reflects the weighted-average cost of capital adjusted for the relevant risk associated with
the radiology services reporting unit&#8217;s operations and the uncertainty inherent in our internally developed forecasts.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Actual
results may differ from those assumed in our valuation method. It is reasonably possible that our assumptions described above could change
in future periods. If any of these were to vary materially from our plans, we may record impairment of goodwill allocated to this reporting
unit in the future. A hypothetical decrease in the growth rate of 0.5% or an increase of 0.5% to the discount rate would have reduced
the fair value of the radiology services reporting unit by approximately $0.3 million and $0.6 million, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">As of December 31, 2022, the percentage by which
the estimated fair value of our reporting units exceeded the carrying value was as the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.2in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt; "></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-indent: 0in; padding-bottom: 1.5pt; text-align: center">&#160;</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Goodwill<br/>
 from<br/>
 acquisition&#160;of <br/>
Nanox AI<br/>
 Unit&#160;#1</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Goodwill<br/>
 from<br/>
 acquisition&#160;of<br/>
 USARAD Unit&#160;#2</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: 0in; width: 76%; font-weight: bold; text-align: left"><span style="font-size: 10pt"><b>Goodwill Assigned&#160;</b>(<i>in millions</i>)</span></td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.4</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7.1</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: 0in; font-weight: bold; text-align: left">Fair Value/Carrying Amount</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">100.00</td><td style="text-align: left">%</td><td style="font-style: italic">&#160;</td>
    <td style="font-style: italic; text-align: left">&#160;</td><td style="font-style: italic; text-align: right">105.3</td><td style="font-style: italic; text-align: left">%</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt; "></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b><i>Goodwill impairment assessment for the
year ended December 31, 2021</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">As of December 31, 2021, we evaluated that there
was no notable change in qualitative factors due to the short period of time that had lapsed from the acquisition date through December
31, 2021. Therefore, we did not determine that it was more likely that not that the fair value of each reporting unit was less than its
carrying amount. As such, we concluded that no further <span>impairment testing was required for either
reporting unit as of December 31, 2021</span>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Impairment of Long-Lived Assets</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our long-lived assets<span>,
such as property, plant and equipment and&#160;</span>identifiable intangible assets, are reviewed for potential impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators&#160;<span>which
could trigger an impairment&#160;</span>may include, among others, any significant changes in the manner of our use of the assets or the
strategy of our overall business, certain reorganization initiatives, significant negative industry or economic trends&#160;<span>or
when we conclude that it is more likely than not that an asset will be disposed of or sold.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The recoverability of assets
to be held and used is measured by a comparison of the carrying amount of an asset with the future undiscounted cash flows expected to
be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by
which the carrying amount of the assets exceeds the fair value of the assets. Our identifiable intangible assets were recognized as part
of the business combinations we executed in 2021. Our identifiable intangible assets are comprised of developed technology, image big
data, market platform, radiologists&#8217; relationships, trade names and customer relationships.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This measurement includes
significant estimates and assumptions inherent in the estimate of the fair value of identifiable intangible assets such as&#160;<span>assumptions
associated with forecasting profitability, including&#160;</span>operational margins and capital expenditures.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Newly acquired and recently
impaired long-lived assets are more vulnerable to impairment as the assets are recorded at fair value and are then subsequently measured
at the lower of fair value or carrying value annually or when triggering events are present. As such, immediately after acquisition or
impairment, even small declines in the outlook for these assets can negatively impact our ability to recover the carrying value and can
result in an impairment charge. Accordingly, changes in the assumptions described above could have a material impact on our consolidated
results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the year ended December
31, 2022, we recorded an impairment charge in the amount of $50.9 million related to our definite-life intangible assets. During the year
ended December 31, 2021, we did not record any impairment charges related to our definite-life intangible assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">An impairment charge in the
amount of $0.2 million was recorded for each of the years ended December 31, 2022 and 2021 in relation to our property, plant and equipment.
During the year ended December 31, 2020, we did not record any impairment charges related to our property, plant and equipment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Legal and Other Contingencies</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We are involved in claims and other legal proceedings
that arise from time to time in the ordinary course of business. We record accruals for these types of contingencies to the extent that
we conclude their occurrence is probable and that the related liabilities are estimable. When accruing these costs, we recognize an accrual
in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate
than any other amount, we accrue the minimum amount within the range. We record anticipated recoveries under existing insurance contracts
that are virtually certain of occurring at the gross amount that is expected to be collected. Management applies the guidance in ASC 450-20-25
when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss
would be incurred and the amount of the liability can be estimated, then the Company records an accrued expense in the Company&#8217;s
consolidated financial statements based on its best estimate. Loss contingencies considered by management to be remote are generally not
disclosed unless material.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We review the adequacy of the accruals on a periodic
basis and may determine to alter our reserves at any time in the future if we believe it would be appropriate to do so. As such accruals
are based on management&#8217;s judgment as to the probability of losses and, where applicable, actuarially determined estimates, accruals
may materially differ from actual verdicts, settlements or other agreements made with regards to such contingencies. Litigation outcomes
and contingencies are unpredictable and excessive verdicts can occur. Accordingly, management&#8217;s assessments involve complex judgments
concerning future events and often rely heavily on estimates and assumptions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2022, we
had accrued $8 million for future settlement expenses in connection with the two pending class action lawsuits against the Company. On
April 28, 2023, the Company signed a term sheet with Lead Plaintiffs in both the McLaughlin action and the consolidated White action to
settle all claims in both actions in consideration for $8 million. The settlement is subject to finalization of a formal settlement agreement
and court approval of the settlement. We had not accrued any losses other than legal fees in connection with the SEC investigation and
given the status of the SEC investigation as of such date, we could not reasonably estimate the possible loss or a range of possible loss
from the SEC investigation due to the unpredictable nature of future events. We did not accrue any liability in connection with the dismissed
complaint brought against the Company, its recently formed Delaware subsidiary and Nanox Gibraltar PLC.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2021, we
had not accrued any losses other than legal fees in connection with our legal proceedings, including two securities class action lawsuits
and the SEC investigation. At that time, given the status of the two securities class action cases and the SEC investigation as of such
date, we could not reasonably estimate the possible loss or a range of possible loss from such cases or the SEC investigation due to the
lack of specific damages claimed and the unpredictable nature of future events.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Income Tax </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Valuation allowances are provided unless it is
more likely than not that the deferred tax asset will be realized. In the determination of the appropriate valuation allowances, we consider
future reversals of existing taxable temporary differences and the most recent projections of future business results that may enhance
the likelihood of realization of a deferred tax asset. Assessments for the realization of deferred tax assets made at a given balance
sheet date are subject to change in the future, particularly if earnings of a subsidiary are significantly higher or lower than expected,
or if we take operational or tax positions that could impact the future taxable earnings of a subsidiary. Accordingly, changes in the
assumptions described above could have a material impact on our consolidated results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="a_007"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-size: 10pt"><b>Item 6.</b></span></td>
    <td><span style="font-size: 10pt"><b>Directors, Senior Management and Employees</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>A. Directors and Senior Management</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The following table sets forth information concerning
our executive officers and directors, including their ages, as of May 1, 2023:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: black 1.5pt solid; width: 24%"><span style="font-size: 10pt"><b>Name</b></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 8%; text-align: center"><span style="font-size: 10pt"><b>Age</b></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 66%; text-align: center"><span style="font-size: 10pt"><b>Position</b></span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-size: 10pt"><b>Executive Officers</b></span></td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Erez Meltzer</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">65</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief Executive Officer, Director</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-size: 10pt">Ran Daniel</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">55</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief Financial Officer</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">James Dara </span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">53</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">General Manager Source &amp; Services Division</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-size: 10pt">Ofir Koren </span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">53</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">General Manager Nanox.ARC Division</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Pini Ben Elazar</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">53</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">General Manager Nanox AI</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-size: 10pt">Tamar Aharon Cohen </span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">46</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Executive Vice President and Chief Marketing Officer</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Guy Yoskovitz</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">44</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief Clinical Officer</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">44</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief of Staff and Vice President Corporate Resources </span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Marina Gofman Feler</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">34</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief Legal Officer </span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-size: 10pt">Orit Wimpfheimer</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">52</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief Medical Officer and Vice President Product Nanox AI</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-size: 10pt"><b>Non-Employee Directors</b></span></td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Ran Poliakine </span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">55</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Founder, Chairman of the Board</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-size: 10pt">Noga Kainan </span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">68</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Director</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Dan Suesskind </span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">79</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Director</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-size: 10pt">Erez Alroy </span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">60</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Director </span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">So Young Shin</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">44</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Director</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Executive Officers</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Erez Meltzer</b> has served as a member of our
board of directors since December 2019 and in January 2022, assumed the role of our Chief Executive Officer. Mr.&#160;Meltzer served as
the Executive Chairman of the board of directors of Hadassah Medical and University Center from 2014 to 2020. Since 2008, Mr. Meltzer
has served as a teaching professor at the Tel Aviv Faculty of Medicine in the area of crisis management. Mr. Meltzer served as Executive
Vice Chairman and Chief Executive Officer of Gadot Chemicals &amp; Shipping Group from 2009 to 2014. Prior to that, Mr. Meltzer served
as Chief Executive Officer of Africa-Israel Ltd. from 2006 to 2007 and President and Chief Executive Officer of Netafim Ltd. from 2001
to 2006. Mr.&#160;Meltzer also served as Chief Executive Officer of Creo Scitex from 1996 to 2001. Mr. Meltzer serves as a director of
Turpaz Industries Ltd. (TASE), Eltek Ltd. (NASDAQ) and Hadasit Bio Holdings Ltd. (TASE) as well as of a number of private companies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Ran Daniel</b> has served as our Chief Financial
Officer since August 2021. Mr.&#160;Daniel has extensive experience working as a chief financial officer in both rapidly growing companies
and publicly traded companies. Mr.&#160;Daniel served as the chief financial officer of the IDH Group from 2012 until 2014, the chief
financial officer of Elie Tahari family office from 2014 to 2016, the chief financial officer of Blue Sphere Corporation from 2016 to
2018 and Chief Financial Officer at Cuentas from 2018 to the present. Mr. Daniel is licensed as a Certified Public Accountant in the United
States and Israel, Chartered Financial Analyst (CFA) and is admitted to practice law in the State of New York. Mr. Daniel holds a Bachelor
of Economics, a Bachelor of Accounting and an MBA in Finance from the Hebrew University of Jerusalem, as well as a Graduate Degree in
Law from Bar Ilan University.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>James Dara</b> has served as our General Manager
Source &amp; Services Division since January 2022, after having served as our Chief Operating Officer beginning in January 2021. Prior
to joining us, Mr.&#160;Dara served as President of myCharge from 2012 to 2020. Prior to myCharge, Mr.&#160;Dara served as Vice President
of Business Development for Powermat Technologies Ltd. from 2009 to 2014 and as Interim CEO and Vice President of Business Development
of Wellsense Technologies Ltd. from 2009 to 2015. From 2003 to 2009, Mr.&#160;Dara served as Chief Sales Officer, Senior Vice President
and General Manager of North America for Braintech Inc. In addition, from 1998 to 2002, Mr.&#160;Dara served as a Sales Manager and Sales
Engineer for ITW Shakeproof Group. Mr.&#160;Dara received his Bachelor of Science degree in Mechanical Engineering from Michigan State
University, and his Master&#8217;s degree in Finance from Walsh University.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Ofir Koren </b>has served as our General Manager
Nanox.ARC Division since January 2022, after having served as our Chief Technology Officer beginning in January 2021. Prior to joining
us, Mr.&#160;Koren served as General Manager Israel and Vice President of Research &amp; Development and Regulatory at ReWalk Robotics
from 2013 to 2021. From 2012 to 2013, Mr.&#160;Koren served as Research &amp; Development Manager for ReWalk Robotics. Prior to ReWalk
Robotics, Mr.&#160;Koren served as General Manager at RuggedCOM from 2009 to 2012. From 2007 to 2009, Mr.&#160;Koren served as Vice President
of Research &amp; Development at Alvarion. Mr.&#160;Koren served as Research &amp; Development Director at Alvarion from 2004 to 2007.
Mr.&#160;Koren received his Bachelor of Science degree in Electrical Engineering from Tel Aviv University, and he holds an M.B.A. degree
from Heriot-Watt University.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Tamar Aharon Cohen</b> has served as our Executive
Vice President and Chief Marketing Officer since June 2022, after having served as our Chief Marketing Officer from January 2021. Prior
to joining us, Ms.&#160;Aharon Cohen served as the Chief Executive Officer of Tempo Beverages Cyprus Ltd. from 2017 to 2021. Ms.&#160;Aharon
Cohen served as a Marketing Manager and a Division Manager at Tempo Beverages Ltd. from 2010 to 2017. From 2006 to 2010, Ms.&#160;Aharon
Cohen served as a Marketing Manager for L&#8217;Or&#233;al Israel. Ms.&#160;Aharon Cohen holds a LLB degree, a B.A. degree in Management
and an executive M.B.A. degree, all from Tel Aviv University.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Guy Yoskovitz</b> has served as our Chief Clinical
Officer since January 2022. Prior to that, Dr. Yoskovitz served as our VP Clinical Innovation, reporting to the Chief Product Officer,
beginning in November 2019. Prior to joining the company and from 2014, Dr. Yoskovitz served as Head of International Ventures &amp; Deputy
Director of Research, Innovation and International Affairs Authority, and as a lecturer, at Holon Institute of Technology, Israel. Dr.
Yoskovitz holds a PhD in Human Genetics from the Faculty of Biology, University of Barcelona; an MSc degree in Medical Sciences from the
School of Graduate Studies, The Faculty of Medicine, Tel Aviv University, Israel; and a BSc degree in Computational Biology from Bar Ilan
University, Israel.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Pini Ben Elazar</b> has served as General Manager
Nanox AI since March 2022. Mr. Ben Elazar brings 25 years of strategic and commercial expertise in the healthcare industry. Mr. Ben Elazar
previously served on the board of Zebra Medical. From 2003 to March 2022, Mr. Ben Elazar has served as Chief Executive Officer of Mor
Research Applications, a technology transfer organization of Clalit Health Services, the largest health maintenance organization in Israel
and the second-largest&#160;HMO&#160;in the world. Mr. Ben Elazar holds an MBA degree from Johnson &amp; Wales University, Providence,
RI.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Gali Yahav Attias</b> has served as our Chief
of Staff since December 2021 and commencing May 2022, as Vice President Corporate Resources. Ms. Yahav Attias first joined our company
as project manager in August 2021. From 2007 to 2021, Ms. Yahav Attias served as the Executive Administrator as well as Secretary of the
Board and the external audit committee and compliance officer of the Hadassah Medical and University Center. From 2014 to 2017, Ms. Yahav
Attias also served as the executive liaison of the government recovery agreement implementation in Hadassah Medical Center. Ms. Yahav
Attias holds a B.A. degree in Social Sciences and Humanities from the Open University of Ra&#8217;anana, Israel.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Marina Gofman Feler</b> has served as our Chief
Legal Officer since November 2022. Prior to that, Ms. Gofman Feler served as the General Counsel of CollPlant Biotechnologies Ltd. (NASDAQ),
a publicly traded biotech company, from 2021 to 2022. Prior to that, Ms. Gofman Feler served as the Legal Counsel of CollPlant Biotechnologies
Ltd. from 2018 to 2021. Prior to that, Ms. Gofman Feler served as an associate at Yaron-Eldar, Paller, Schwartz &amp; Co., law offices,
from 2015 to 2018. Ms. Gofman Feler holds a L.LB degree in Law and a B.A degree in Economics from Tel Aviv University.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Dr. Orit Wimpfheimer</b> has served as our Chief
Medical Officer and Vice President Product Nanox AI since January 2022. Dr. Wimpfheimer previously held the position of Chief Medical
Officer and Head of Product Strategy at Zebra Medical Vision, until its acquisition by the Company. Dr. Wimpfheimer is the co-founder
of Remote Radiology International, with over 20 years of experience in the radiology field. Dr Wimpfheimer received her MD degree from
Albert Einstein College of Medicine and completed her diagnostic radiology residency at New York Presbyterian Hospital in New York.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Non-Employee Directors</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Ran Poliakine</b>, our founder, has served as
a member of our board of directors since our inception and has served as the Chairman of the Board of Directors since the closing of our
initial public offering. Mr.&#160;Poliakine served as our Chief Executive Officer from September 2019 until January 2022, and served as
Chief Executive Officer of Nanox Gibraltar from August 2018 until November 2019. Prior to that, Mr.&#160;Poliakine served as Chief Strategy
Officer of Nanox Gibraltar from June 2015 to August 2018. Mr.&#160;Poliakine is a serial entrepreneur and has founded numerous companies
over the past two decades, including SixAI Ltd. (&#8220;SixAI&#8221;) and its two controlled subsidiaries 634 Ai Ltd. (&#8220;634 Ai&#8221;)
and Musashi Ai Ltd., Powermat Technologies Ltd., Wellsense, Inc., and Illumigyn Ltd. (&#8220;Illumigyn&#8221;). Mr.&#160;Poliakine is
the chief executive officer and a member of the board of directors of SixAI, the chairman of the board of directors and a senior advisor
to Illumigyn, and a member of the board of directors of Powermat Technologies Ltd.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Noga Kainan</b> has served as a member of our
board of directors since February 2021. Ms. Kainan established in 2008 the forum for owners, chairpersons and CEOs of the leading companies
in the Israeli economy. Ms. Kainan also serves as chairperson of the CFO Forum, which brings together the CFOs of the leading companies
in the economy, since she established it in 1997. Ms. Kainan&#8217;s public activities include membership in committees in the Israeli
Prime Minister&#8217;s Office, member in the Board of Trustees of Bar Ilan University, the College of Management in Israel, and the council
of an NGO for IDF soldiers&#8217; welfare. Ms. Kainan heads an association that she founded to promote the integration of autistic students
in academia. Ms. Kainan serves as a director of Illumigyn and previously served as a director of the following companies traded on the
Tel Aviv Stock Exchange: Bizportal Ltd., Poalim I.B.I &#8211; Managing &amp; Underwriting Ltd. and Analyst Provident Funds Ltd. Ms. Kainan
also served as director at Oil Refineries Ltd. before the company was listed on the Tel Aviv Stock Exchange. Ms. Kainan served as a representative
at the International Association of Financial Executives Institutes (IAFEI). Ms.&#160; Kainan, co-authored &#8220;Israel&#8211;- Success
Story,&#8221; translated to English under the name: &#8220;Israel&#8211;- Island of Success.&#8221; Ms. Kainan has a bachelor&#8217;s
degree in art and literature from Haifa University and an M.B.A. degree from Tel Aviv University.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Dan Suesskind</b> has served as a member of
our board of directors since February 2021. Mr. Suesskind served as the Chief Financial Officer of Teva Pharmaceutical Industries Ltd.
(&#8220;Teva&#8221;) from 1977 to 2008 and as a director of Teva for several periods of time until 2018. Mr. Suesskind is currently a
director of Nextar Chempharma Solutions Ltd., Sanotize Research and Development Corp., Imed Infinity Medical Limited partnership (TASE)
and The Jerusalem Foundation. Mr. Suesskind previously served as a director of the following companies: Israel Corporation Ltd., Redhill
Biopharma Ltd., Syneron Medical Ltd., Migdal Ltd., Ness Technologies Inc., the First International Bank of Israel, First International
Selective Investment &#8211; Portfolio Management Company Ltd., LanOptics Ltd., ESC Medical Systems and the Hadassah Medical Center in
Jerusalem. Mr. Suesskind&#8217;s public activities include membership in the Investment Committee of the Israeli Academy of Sciences and
Humanities, Ben Gurion University and the Jerusalem Foundation. Mr. Suesskind is a member of the Board of Trustees of the Hebrew University
of Jerusalem and of the Board of Trustees of the Ben Gurion University. Mr. Suesskind has a bachelor&#8217;s degree in economics and political
science from the Hebrew University of Jerusalem and an M.B.A. degree from the University of Massachusetts.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>So Young Shin </b>has served as a member of
our board of directors since May 2022. Ms. Shin has served as Chief Executive Officer of SK Square Americas, Inc., a U.S. investment entity
of the SK Telecom group, based in New York, since November 2021 and prior to that, served as Chief Executive Officer of SK Telecom TMT
Investment Corp. from January 2020, a U.S. investment entity of the SK Telecom group, based in New York. Prior to that, Ms. Shin served
in the SK Telecom group as Managing Director, Head of SK Telecom EU office (May 2017-January 2020) and Team Leader, Smart Learning TF
(January 2010- May 2017). Ms. Shin has a BA degree in Computer Science from Ewha Womans University, an MA degree in Economics from Seoul
National University and an MBA degree from Oxford Sa&#239;d Business School, Oxford University.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><b>Erez Alroy</b> has served
as a member of our board of directors since June 2022. Mr. Alroy was part of the founders of SHL Telemedicine (SIX: SHLTN) and for more
than 20 years served in various positions in the SHL Telemedicine group, including 15 years as its Chief Executive Officer. From 2014
and until 2020, Mr. Alroy was a major shareholder and the chairman of Migvan Engineering and Technology. Currently Mr. Alroy is a private
investor and consultant and holds several board positions, including SHL Telemedicine Ltd. and Merhavia Holdings and Investments Ltd.
(TASE), an investment firm that invests mainly in life science and healthcare companies. Mr. Alroy holds an MBA degree from the Hebrew
University of Jerusalem.<span style="font-family: Times New Roman, Times, Serif"><sup>2</sup></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>B. Compensation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Compensation of Executive Officers and Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The aggregate compensation, including share-based
compensation, paid or expensed by us to our executive officers and directors for the year ended December&#160;31, 2022 was approximately
$9.7 million. This amount does not include approximately $0.5 million set aside or accrued to provide pension, severance, retirement or
similar benefits or expenses, and does not include business travel, relocation, professional and business association dues, meals and
expenses reimbursed to officers, and other benefits commonly reimbursed or paid by companies in Israel, on the same basis for all full-time
employees generally.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The table below sets forth the salary expenses
and social benefit costs of our five most highly compensated office holders (as defined in the Companies Law) during or with respect to
the year ended December&#160;31, 2022. We refer to the five individuals for whom disclosure is provided herein as our &#8220;Covered Executives.&#8221;
For purposes of the table and the summary below, &#8220;compensation&#8221; includes base salary, bonuses, equity-based compensation,
retirement or termination payments, and any benefits or perquisites such as car, phone and social benefits, as well as any undertaking
to provide such compensation in the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; white-space: nowrap">&#160;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; width: 40%; text-align: left"><span style="font-size: 10pt">Ran Poliakine, Chairman of the Board and Former Chief Executive Officer<sup>(6)</sup></span></td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Erez Meltzer, Chief Executive Officer</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">903,577</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">258,040</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">700,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,256,732</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,118,349</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">IU Kim, Head of Nanox Korea</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">240,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">60,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,264,595</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,564,595</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Ofir Koren, Head of the Nanox.ARC Division</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">228,725</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">70,708</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">36,374</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">941,718</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,277,525</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">James Dara, Head of Source and Services Division</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">270,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">31,843</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">75,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">941,718</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,318,561</td><td style="text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 25%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-size: 10pt">(1)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">In accordance with Israeli law, all amounts reported in the table are in terms of cost to our Company, as recorded in our financial statements for the year ended December&#160;31, 2022.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">(2)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Cash compensation amounts denominated in currencies other than the U.S. dollar were converted into U.S. dollars at the average conversion rate for the year ended December&#160;31, 2022.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">(3)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Amounts reported in this column include benefits and perquisites, including those mandated by applicable law. Such benefits and perquisites may include, to the extent applicable to each executive, payments, contributions and/or allocations for pension, severance, vacation, car or car allowance, convalescence pay, payments for social security, tax gross-up payments and other benefits and perquisites consistent with our guidelines, regardless of whether such amounts have actually been paid to the executive. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">(4)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Amounts reported in this column refer to Variable Compensation such as incentives and earned or paid bonuses as recorded in our financial statements for the year ended December&#160;31, 2022. &#160;With respect to Mr. Meltzer, the reported amount represents an advance paid to him on account of his 2022 annual bonus, subject to recourse (clawback) for any amount of the 2022 annual bonus that is not earned in excess of $450,000 (the guaranteed portion of Mr. Meltzer&#8217;s 2022 annual bonus).</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">(5)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Amounts reported in this column represent the expense recorded in our financial statements for the year ended December&#160;31, 2022 with respect to equity-based compensation, reflecting also equity awards made in previous years which have vested during the current year. Assumptions and key variables used in the calculation of such amounts are described in Note 12 to our audited consolidated financial statements, which are included elsewhere in this annual report on Form 20-F. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">(6)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Ran Poliakine ceased to serve as our Chief Executive Officer on December 31, 2021 and his employment formally terminated effective as of September 30, 2022. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We pay each of our non-employee
directors (other than Mr. Ran Poliakine, the non-executive Chairman of our Board of Directors) a cash fee of $36,000 per year plus an
additional annual fee for service on a board committee of $7,500 per each committee (or $15,000 for the chairperson of a committee).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 94; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->89<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Mr. Ran Poliakine, who served as our Chief Executive
Officer until December 31, 2021 and as Executive Chairman of our Board of Directors until September 30, 2022, began to serve as a non-executive
Chairman of our Board of Directors effective as of October 1, 2022. In lieu of cash compensation for his services as non-executive Chairman
of the Board of Directors, Mr. Poliakine was granted options to purchase 85,000 ordinary shares, at an exercise price of $17.63 per share,
pursuant to the approval of our shareholders at the annual general meeting held on December 28, 2022. The options shall vest in 16 equal
installments over a period of four years, such that 6.25% of the options shall vest on each of the three-month anniversaries of the effective
vesting commencement date, which is October 1, 2022 (the date of the commencement of his service as non-executive Chairman of the Board
of Directors), subject to Mr. Poliakine&#8217;s continuing service as Chairman of the Board of Directors on each applicable vesting date,
and will be exercisable for a period of 24 months following termination of service. The vesting of any outstanding options shall fully
accelerate upon an M&amp;A Transaction, as defined in the 2019 Equity Incentive Plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Directorship Agreements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We previously entered into
directorship agreements with certain of our directors in connection with their initial nomination to our board of directors. There are
currently no arrangements or understandings between us, on the one hand, and any of our directors, on the other hand, providing for benefits
upon termination of their service as directors of our Company; however, our agreement with Mr. Erez Meltzer, our Chief Executive Officer
and a director, provides for benefits upon termination of his service as Chief Executive Officer, as described below.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Employment Agreements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We have entered into written agreements with all
of our current executive officers. These agreements provide for notice periods of varying duration for termination of the agreement by
us or by the relevant executive officer, during which time the executive officer will continue to receive base salary and benefits. These
agreements also contain customary provisions regarding non-competition, confidentiality of information and assignment of inventions. However,
the enforceability of the non-competition provisions may be limited under applicable law. See &#8220;Item 3. Key Information&#8212;D.
Risk Factors&#8212;Risks Related to Employee Matters&#8212;Under applicable employment laws, we may not be able to enforce covenants not
to compete and therefore may be unable to prevent our competitors from benefitting from the expertise of some of our former employees&#8221;
for a further description of the enforceability of non-competition clauses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We entered into an employment agreement with Mr.
Meltzer, who has served as a director since December 2019, in connection with his appointment as our Chief Executive Officer, effective
as of January 1, 2022. Under the agreement, Mr. Meltzer is entitled to a gross annual salary of $900,000. In addition, Mr. Meltzer is
entitled to an annual bonus (discretionary and based on measurable criteria) of $900,000, with a guaranteed bonus of at least $450,000
for the 2022 fiscal year if his employment is continued through the entire fiscal year, with the possibility to withdraw an advance payment
on account of the 2022 annual bonus, subject to recourse (clawback) for any amount of the 2022 annual bonus that is not earned in excess
of the guaranteed portion of the 2022 annual bonus. Accordingly, in 2022, Mr. Meltzer withdrew an advance payment in the amount of $700,000
on account of his 2022 annual bonus, subject to resource (clawback) as described. Under the agreement, we and Mr. Meltzer are required
to provide six months&#8217; prior notice of employment termination (except for &#8220;Cause&#8221; as defined in his employment agreement,
in which case no prior notice will be required). If we terminate Mr. Meltzer&#8217;s employment and waive his obligation to perform services
during the notice period, Mr. Meltzer will be entitled to receive payments of his base salary, social benefits and a company car in lieu
of notice for the waived period, up to the full notice period for an immediate termination. In connection with his appointment as our
Chief Executive Officer, we granted Mr. Meltzer options to purchase 300,000 ordinary shares at an exercise price of US$23.84 (which may
be by way of a cashless exercise mechanism) under our 2019 Equity Incentive Plan. The options vest over a period of four years, such that
25% of the options vested on the first anniversary of the date of grant and thereafter, the options vest equally on a quarterly basis,
subject to the continuous engagement by us at each vesting date. These options will have full acceleration in case of consummation of
an M&amp;A Transaction (as such term is defined under our 2019 Equity Incentive Plan). The above equity compensation is in addition to
Mr. Meltzer&#8217;s equity compensation as a director. Mr. Meltzer does not receive additional cash compensation as a director.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Equity Incentive Plan</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On September 3, 2019, we adopted the 2019 Equity
Incentive Plan and its U.S. sub-Plan (the &#8220;2019 Equity Incentive Plan&#8221;). The 2019 Equity Incentive Plan is intended to afford
an incentive to any of our and our affiliates&#8217; employees, directors, officers, consultants, advisors and any other person or entity
who provides services to us, to continue as service providers, to increase their efforts on our and our affiliates&#8217; behalf and to
promote our success, by providing such persons with opportunities to acquire a proprietary interest in us. The U.S. sub-Plan applies to
our and any of our affiliates&#8217; employees, directors, officers, consultants, advisors and any other person or entity who provides
services to us who are subject to United States federal income tax.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">We may issue under the 2019 Equity Incentive Plan
and its U.S. sub-Plan up to 8,041,936 of our ordinary shares, subject to adjustment if particular capital changes affect our share capital
or such other number as our board of directors may determine from time to time. Ordinary shares subject to outstanding awards under the
2019 Equity Incentive Plan and its U.S. sub-Plan that subsequently expire, or are cancelled, forfeited or terminated for any reason before
being exercised will be automatically, and without any further action, returned to the share reserve under the 2019 Equity Incentive Plan
and will again be available for grant.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span>During the
year ended December 31, 2022, our directors and officers were granted</span> a total of options to purchase an aggregate of 699,500 ordinary
shares, with a weighted average exercise price of $20.29 per share. <span>As of December 31, 2022, options
to purchase 1,890,561 ordinary shares granted to our executive officers and directors under our 2019 Equity Incentive Plan, at a weighted
average exercise price of $16.78, granted under the 2019 Equity Incentive Plan, were outstanding. </span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">For a description of our compensation policy, see
&#8220;Item 6. Directors, Senior Management and Employees&#8212;C. Board Practices&#8212;Compensation Committee.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>C. Board Practices</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Board of Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our board of directors currently consists of&#8201;six
directors. Four of our directors qualify as independent directors under the corporate governance standards of the Nasdaq corporate governance
rules and the independence requirements of Rule&#160;10A-3 of the Exchange Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Under our amended and restated articles of association,
the number of directors on our board of directors will be no less than five and no more than ten. The minimum and maximum number of directors
may be changed, at any time and from time to time, by vote of our shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our directors are divided into three classes with
staggered three-year terms. Each class of directors consists, as nearly as possible, of one-third of the total number of directors constituting
the entire board of directors. At each annual general meeting of our shareholders, the election or re-election of directors following
the expiration of the term of office of the directors of that class of directors will be for a term of office that expires on the third
annual general meeting following such election or re-election. Each director holds office until the third annual general meeting of our
shareholders and until his or her successor is duly appointed, unless the tenure of such director expires earlier pursuant to the Companies
Law or unless removed from office as described below.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our directors are divided among three classes as
follows: the Class&#160;I directors, consisting of Erez Meltzer, will hold office until our annual general meeting of shareholders to
be held in 2024; the Class&#160;II directors, consisting of Erez Alroy and Noga Kainan, will hold office until our annual general meeting
of shareholders to be held in 2025; and the Class&#160;III directors, consisting of Ran Poliakine, Dan Suesskind and So Young Shin, will
hold office until our annual general meeting of shareholders to be held in 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Each of the directors shall be elected by a vote
of the holders of a majority of the voting power present and voting at that meeting (excluding abstentions). Each director will hold office
until the annual general meeting of our shareholders for the year in which his or her term expires, unless the tenure of such director
expires earlier pursuant to the Companies Law or unless he or she is removed from office. Under our amended and restated articles of association,
the approval of the holders of at least sixty-six and two-thirds percent or more of the votes cast by those shareholders voting in person
or by proxy (including by voting deed) is required to remove any of our directors from office (excluding abstentions).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Under our amended and restated articles of association,
our board of directors may appoint directors to fill vacancies on our board of directors, including if the number of directors is below
the maximum number of directors who may serve as provided in our amended and restated articles, for a term of office equal to the remaining
period of the term of office of the director(s) whose office(s) has been vacated, or in case of a vacancy due to the number of directors
serving being less than the maximum number stated in our amended and restated articles, the board of directors shall determine at the
time of appointment the class to which the additional director shall be assigned.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Under Israeli law, the chief executive officer
or a relative of the chief executive officer of a public company may not serve as the chairman of the board of directors of the company
and the chairman or a relative of the chairman may not be vested with the authority of the chief executive officer, in each case, unless
approved by our shareholders by a special majority vote as discussed below with respect to the approval of director compensation, as required
under the Companies Law. The shareholders&#8217; approval can be provided for a period of five years following an initial public offering,
and subsequently, for additional periods of up to three years. In addition, a person who is subordinated, directly or indirectly, to the
chief executive officer may not serve as the chairman of the board of directors; the chairman of the board of directors may not be vested
with authorities that are granted to persons who are subordinated to the chief executive officer; and the chairman of the board of directors
may not serve in any other position in the company or in a controlled subsidiary, but he or she may serve as a director or chairman of
a controlled subsidiary. Prior to our initial public offering, we obtained our shareholders&#8217; approval that Mr.&#160;Ran Poliakine
may serve as both our chairman of the board of directors and chief executive officer for a period of up to five years from the closing
of our initial public offering. Mr. Poliakine retired from the position of Chief Executive Officer effective as of December 31, 2021 and
continues to serve as non-executive chairman of our board of directors.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In addition, under the Companies Law, our board
of directors must determine the minimum number of directors who are required to have financial and accounting expertise. Under applicable
regulations, a director with financial and accounting expertise is a director who, by reason of his or her education, professional experience
and skill, has a high level of proficiency in and understanding of business accounting matters and financial statements. He or she must
be able to thoroughly comprehend the financial statements of the company and initiate debate regarding the manner in which financial information
is presented. In determining the number of directors required to have such expertise, the board of directors must consider, among other
things, the type and size of the company and the scope and complexity of its operations. Our board of directors has determined that we
require at least one director with the requisite financial and accounting expertise and that Noga Kainan has such expertise.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">There are no family relationships among any of
our officers and directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>External Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Under the Companies Law, companies incorporated
under the laws of the State of Israel, whose shares are publicly traded, including companies with shares listed on the Nasdaq, are required
to appoint at least two external directors within three months of the closing of the initial public offering. While we exceeded the three-month
period, our shareholders approved the appointment of two external directors, Noga Kainan and Dan Suesskind as external directors in February
2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">However, pursuant to regulations promulgated under
the Companies Law, companies <span style="font-family: Times New Roman, Times, Serif">that do not have a controlling shareholder</span>
(within the meaning of the Companies Law) with shares traded on certain U.S. stock exchanges, including the Nasdaq Global Market, may,
subject to certain conditions, &#8220;opt out&#8221; from the Companies Law requirements to appoint external directors and related Companies
Law rules concerning the composition of the audit committee and compensation committee of the board of directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">On March 28, 2022, in accordance with these regulations,
our board of directors elected to &#8220;opt out&#8221; from the Companies Law requirement to appoint external directors and related Companies
Law rules concerning the composition of the audit committee and compensation committee of the board of directors, effective as of March
31, 2022. Under these regulations, the exemptions from such Companies Law requirements will continue to be available to us so long as:
(i) we do not have a &#8220;controlling shareholder&#8221; (as such term is defined under the Companies Law), (ii) our shares are traded
on certain U.S. stock exchanges, including the Nasdaq Global Market, and (iii) we comply with the director independence requirements and
the audit committee and compensation committee composition requirements under U.S. laws (including applicable Nasdaq rules) applicable
to U.S. domestic issuers. Our directors who were previously designated as external directors, Noga Kainan and Dan Suesskind, continue
to serve to serve as &#8220;ordinary&#8221; (non-external) directors, as Class II and Class III directors, respectively, until the end
of the term of their respective class.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Audit Committee</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Companies Law Requirements</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In accordance with regulations promulgated under
the Companies Law described above, on March 28, 2022, our board of directors elected to &#8220;opt out&#8221; from the Companies Law requirement
to appoint external directors and related rules concerning the composition of the audit committee and compensation committee, effective
as of March 31, 2022. Under such exemption, among other things, the composition of our audit committee must comply with the requirements
of SEC and Nasdaq rules.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Nasdaq Listing Requirements</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Under the Nasdaq corporate governance rules, we
are required to maintain an audit committee consisting of at least three independent directors, all of whom are financially literate,
none of whom has participated in the preparation of our or any of our subsidiary&#8217;s financial statements at any time during the prior
three years and one of whom has accounting or related financial management expertise.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In accordance with U.S. law and Nasdaq requirements,
our audit committee is responsible for the appointment, compensation and oversight of the work of our independent auditors and for assisting
our board of directors in monitoring our financial statements, the effectiveness of our internal controls and our compliance with legal
and regulatory requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our audit committee currently consists of Noga
Kainan, Dan Suesskind and Erez Alroy. Noga Kainan serves as chairperson of the audit committee. Our board of directors has determined,
in its business judgment, that each of Noga Kainan and Dan Suesskind is an audit committee financial expert as defined by the SEC rules
and has the requisite financial experience as defined by the Nasdaq corporate governance rules.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Each of the members of the audit committee is required
to be &#8220;independent&#8221; as such term is defined in Rule&#160;10A-3(b)(1) under the Exchange Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Audit Committee Role</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our board of directors has adopted an audit committee
charter setting forth the responsibilities of the audit committee consistent with the rules of the SEC and the Nasdaq corporate governance
rules, as well as the requirements for such committee under the Companies Law, which include:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">recommending the retention and termination of our independent registered public accounting firm to the board of directors in accordance with Israeli law;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">recommending to the board of directors in accordance with Israeli law the appointment, compensation, retention and oversight of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit services;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">recommending the terms of audit and non-audit services to be provided by the independent registered public accounting firm for pre-approval by our board of directors;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">recommending the engagement or termination of the person filling the office of our internal auditor;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">reviewing with management and our independent directors our financial statements prior to their submission to the SEC; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">approval of certain transactions with office holders and controlling shareholders, as described below, and other related party transactions.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Additionally, under the Companies Law, the role
of the audit committee includes the identification of irregularities in our business management, among other things, by consulting with
the internal auditor or our independent auditors and suggesting an appropriate course of action to the board of directors. The audit committee
is also required to adopt procedures with respect to processing of employees&#8217; complaints in connection with deficiencies in the
management of the company, and the appropriate means of protection afforded to such employees. In addition, the audit committee or the
board of directors, as set forth in the articles of association of the company, is required to approve the yearly or periodic work plan
proposed by the internal auditor, and where the board of directors approves such work plan, to examine such work plan before its submission
to the board of directors and propose amendments thereto. The audit committee is required to assess the company&#8217;s internal audit
system and the performance of its internal auditor. The Companies Law also requires that the audit committee assess the scope of the work
and compensation of the company&#8217;s external auditor. In addition, the audit committee is required to determine whether certain related
party actions and transactions are &#8220;material&#8221; or &#8220;extraordinary&#8221; for the purpose of the requisite approval procedures
under the Companies Law and whether certain transactions with a controlling shareholder will be subject to a competitive procedure.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The audit committee charter states that in fulfilling
its role the committee is empowered to conduct or authorize investigations into any matters within its scope of responsibilities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Approval of Transactions with Related Parties</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The approval of the audit committee is required
to effect specified actions and transactions with office holders and controlling shareholders and their relatives, or in which they have
a personal interest. The audit committee may not approve an action or a transaction with a controlling shareholder or with an office holder
unless, among other things, at the time of approval the audit committee meets the composition requirements under the Companies Law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The Companies Law requires that an office holder
promptly disclose to the <span style="font-family: Times New Roman, Times, Serif">company and, in any event, not later than the board
meeting at which the transaction is first discussed, </span>any personal interest that he or she may have, and all related material information
known to him or her concerning any existing or proposed transaction with the company. A personal interest includes an interest of any
person in an act or transaction of a company, including a personal interest of one&#8217;s relative or of a corporate body in which such
person or a relative of such person is a 5% or greater shareholder, director or general manager or in which he or she has the right to
appoint at least one director or the general manager, but excluding a personal interest stemming solely from one&#8217;s ownership of
shares in the company. A personal interest includes the personal interest of a person for whom the office holder holds a voting proxy
or the personal interest of the office holder with respect to his or her vote on behalf of a person for whom he or she holds a proxy even
if such shareholder has no personal interest in the matter.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 98; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">If it is determined that an office holder has a
personal interest in a non-extraordinary transaction, meaning any transaction that is in the ordinary course of business, on market terms
and that is not likely to have a material impact on the company&#8217;s profitability, assets or liabilities, approval by the board of
directors is required for the transaction, unless the company&#8217;s articles of association provide for a different method of approval.
Any such transaction that is adverse to the company&#8217;s interests may not be approved by the board of directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Approval first by the company&#8217;s audit committee
and subsequently by the board of directors is required for an extraordinary transaction (meaning, any transaction that is not in the ordinary
course of business, not on market terms or that is likely to have a material impact on the company&#8217;s profitability, assets or liabilities)
in which an office holder has a personal interest.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">A director and any other office holder who has
a personal interest in a transaction which is considered at a meeting of the board of directors or the audit committee may generally (unless
it is with respect to a transaction which is not an extraordinary transaction) not be present at such a meeting or vote on that matter
unless a majority of the directors or members of the audit committee, as applicable, have a personal interest in the matter. If a majority
of the members of the audit committee or the board of directors have a personal interest in the approval of such a transaction then all
of the directors may participate in deliberations of the audit committee or board of directors, as applicable, with respect to such transaction
and vote on the approval thereof and, in such case, shareholder approval is also required.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Certain disclosure and approval requirements apply
under Israeli law to certain transactions with controlling shareholders, certain transactions in which a controlling shareholder has a
personal interest and certain arrangements regarding the terms of service or employment of a controlling shareholder.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Compensation Committee</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In accordance with regulations promulgated under
the Companies Law described above, on March 28, 2022, our board of directors elected to &#8220;opt out&#8221; from the Companies Law requirement
to appoint external directors and related rules concerning the composition of the audit committee and compensation committee, effective
as of March 31, 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Under the Nasdaq corporate governance rules, we
are required to maintain a compensation committee consisting of at least two directors, each of whom is an independent director within
the meaning of the Nasdaq corporate governance rules. Our compensation committee currently complies with the provisions of Nasdaq corporate
governance rules relating to composition requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">The compensation committee currently consists of
Dan Suesskind, Noga Kainan and Erez Alroy. Dan Suesskind serves as chairperson of the compensation committee.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>Compensation Committee Role</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">In accordance with the Companies Law, the roles
of the compensation committee are, among others, as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">to recommend to the board of directors the compensation policy for directors and officers, and, once every three years, or five years from a company&#8217;s initial public offering, to recommend to the board of directors, whether the compensation policy that had been approved should be extended for a longer period of time;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">to recommend to the board of directors updates to the compensation policy, from time to time, and examine its implementation;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">to decide whether to approve the terms of office and employment of directors and officers that require approval of the compensation committee; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 48px">&#160;</td>
    <td style="text-align: justify; width: 24px"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">to decide whether the compensation terms of the chief executive officer, which were determined pursuant to the compensation policy, will be exempted from approval by the shareholders because such approval would harm the ability to engage the chief executive officer.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to the roles mentioned above, our compensation
committee may also make recommendations to our board of directors regarding the awarding of employee equity grants.</p><div>




























































































</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->94<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Compensation
Policy</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
general, under the Companies Law, a public company must have a compensation policy that applies to its office holders approved by the
board of directors after receiving and considering the recommendations of the compensation committee. In addition, the compensation policy,
which must be approved at least once every three years, or five years after a company&#8217;s initial public offering, requires the approval
of the general meeting of the shareholders. In public companies such as our company, shareholder approval by a majority vote of the ordinary
shares present and voting at a meeting of shareholders called for such purpose is required, provided that either: (i)&#160;such majority
includes the majority of the votes of those shareholders who are non-controlling shareholders and shareholders who do not have a personal
interest in the approval of the compensation policy, who voted at the meeting (excluding abstentions) or (ii)&#160;the total number of
votes against the proposal among the shareholders mentioned in clause (i)&#160;does exceed 2% of the voting rights in the company. Under
special circumstances, the board of directors may approve the compensation policy despite the objection of the shareholders on the condition
that the compensation committee and then the board of directors decide, on the basis of detailed arguments and after discussing again
the compensation policy, that approval of the compensation policy, despite the objection of the meeting of shareholders, is in the best
interests of the company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
if a company initially offering its securities to the public, adopts a compensation policy in advance of its initial public offering,
and describes the compensation policy in the prospectus relating to the offering, or adopts a compensation policy within nine months
from the date the company becomes a public company, then the compensation policy is deemed a validly adopted policy in accordance with
the Companies Law requirements described above and will be valid for a term of five years from the date such company becomes a public
company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
compensation policy must be based on certain considerations, include certain provisions and needs to reference certain matters as set
forth in the Companies Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of office holders,
including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement.
The compensation policy must relate to certain factors, including advancement of the company&#8217;s objectives, business plan and long-term
strategy, and creation of appropriate incentives for office holders. It must also consider, among other things, the company&#8217;s risk
management, size and the nature of its operations. The compensation policy must furthermore consider the following additional factors:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the education, skills, experience,
    expertise and accomplishments of the relevant office holder;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the office holder&#8217;s position,
    responsibilities and prior compensation agreements with him or her;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the ratio between the cost
    of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees
    employed through contractors who provide services to the company, in particular the ratio between such cost, the average and median
    salary of the employees of the company, as well as the impact of such disparities on the work relationships in the company;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">if the terms of employment
    include variable components &#8212; the possibility of reducing variable components at the discretion of the board of directors and
    the possibility of setting a limit on the exercise value of non-cash variable equity-based components; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">if the terms of employment
    include severance compensation &#8212; the term of employment or office of the office holder, the terms of his or her compensation
    during such period, the company&#8217;s performance during the such period, his or her individual contribution to the achievement
    of the company goals and the maximization of its profits and the circumstances under which the office holder is leaving the company.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
compensation policy must also include, with regard to variable components:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">with the exception of office
    holders who are subordinate to the chief executive officer, determining the variable components on long-term performance basis and
    on measurable criteria; however, the company may determine that an immaterial part of the variable components of the compensation
    package of an office holder shall be awarded based on non-measurable criteria, if such amount is not higher than three monthly salaries
    per annum while taking into account the office holder&#8217;s contribution to the company;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the ratio between variable
    and fixed components, as well as the limit of the values of variable components at the time of their grant.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a condition under which the
    office holder will return to the company, according to conditions to be set forth in the compensation policy, any amounts paid as
    part of his or her terms of employment, if such amounts were paid based on information later to be discovered to be wrong, and such
    information was than re-presented in the company&#8217;s financial statements;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the minimum holding or vesting
    period of variable equity-based components, while taking into consideration long-term incentives; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a limit
    to retirement grants.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"></p><div>

</div><!-- Field: Page; Sequence: 100; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->95<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
compensation policy was approved by the board of directors and the shareholders on February 9, 2021, and will be in effect for a period
of five years from the date of approval. Our compensation policy is designed to promote retention and motivation of directors and executive
officers, incentivize superior individual excellence, align the interests of our directors and executive officers with our long-term
performance and provide a risk management tool. To that end, a portion of an executive officer&#8217;s compensation package is targeted
to reflect our short and long-term goals, as well as the executive officer&#8217;s individual performance. On the other hand, our compensation
policy includes measures designed to reduce the executive officer&#8217;s incentives to take excessive risks that may harm us in the
long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and
the total compensation of an executive officer and minimum vesting periods for equity-based compensation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
compensation policy also addresses our executive officers&#8217; individual characteristics (such as his or her respective position,
education, scope of responsibilities and contribution to the attainment of our goals) as the basis for compensation variation among our
executive officers, and considers the internal ratios between compensation of our executive officers and directors and other employees.
Pursuant to our compensation policy, the compensation that may be granted to an executive officer may include base salary, annual bonuses
and other cash bonuses (such as relocation, signing and special bonuses) as well as change of control related bonuses, equity-based compensation,
benefits and retirement and termination of employment arrangements. All cash bonuses are limited to a maximum amount linked to the executive
officer&#8217;s base salary (or to the total annual compensation in the case of the special bonus for special achievements).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets. The
annual cash bonus that may be granted to our executive officers, other than our chief executive officer, will be based on performance
objectives and a discretionary evaluation of the executive officer&#8217;s overall performance by our chief executive officer, subject
to minimum thresholds. Furthermore, the performance objectives will be recommended by our chief executive officer and approved by our
compensation committee (and, if required by law, by our board of directors).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
performance measurable objectives of our chief executive officer, which will be determined annually by our compensation committee and
board of directors, will include the weight to be assigned to each achievement in the overall evaluation. A less significant portion
of the chief executive officer&#8217;s annual cash bonus may be based on a discretionary evaluation of the chief executive officer&#8217;s
overall performance by the compensation committee and the board of directors based on quantitative and qualitative criteria.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
equity-based compensation under our compensation policy for our executive officers is designed in a manner consistent with the underlying
objectives in determining the base salary and the annual cash bonus, with its main objectives being to enhance the alignment between
the executive officers&#8217; interests with our long-term interests and those of our shareholders and to strengthen the retention and
the motivation of executive officers in the long term. Our compensation policy entitles our executive officers to compensation in the
form of share options or other equity-based awards, such as RSUs, in accordance with our share incentive plan then in place (subject
to the compensation committee&#8217;s approval or the approval of the board of directors). All equity-based incentives granted to executive
officers shall be subject to vesting periods in order to promote long-term retention of the awarded executive officers. The equity-based
compensation may be granted from time to time and will be individually determined and awarded according to the performance, educational
background, prior business experience, qualifications, role and the personal responsibilities of the executive officer.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, our compensation policy contains compensation recovery provisions which allows us under certain conditions to recover bonuses
paid in excess, enables our chief executive officer to approve an immaterial change in the terms of employment of an executive officer
(provided that the changes of the terms of employment are in accordance with our compensation policy) and allows us to exculpate, indemnify
and insure our executive officers and directors, subject to certain limitations set forth thereto.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
compensation policy also governs the compensation of the members of our board of directors and determines that the compensation of non-executive
directors shall be in accordance with the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director),
5760-2000, as amended by the Companies Regulations (Relief for Public Companies Traded in Stock Exchange Outside of Israel), 5760-2000,
or non-executive directors may be paid cash compensation in the form of an annual fee for service on the Board of Directors and its committees
in the amounts not to exceed those set forth in the compensation policy. Our directors may also be entitled to receive equity-based compensation
in the form of restricted shares, RSUs or share options subject to an annual maximum and to a vesting period in order to promote long-term
retention of the awarded director, subject to the approval of our shareholders, as required under the Companies Law. Furthermore, the
chairman of our board of directors may be entitled to a higher cash base compensation or equity-based compensation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 101; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->96<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Approval
of Compensation of Directors and Executive Officers</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Directors.
</i>Under the Companies Law, the compensation of our directors requires the approval of our compensation committee, the subsequent approval
of the board of directors and, unless exempted under regulations promulgated under the Companies Law, the approval of the shareholders
at a general meeting. If the compensation of our directors is inconsistent with our stated compensation policy, then those provisions
that must be included in the compensation policy according to the Companies Law must have been considered by the compensation committee
and board of directors, and shareholder approval will also be required, provided that:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at least
    a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such
    matter, present and voting at such meeting, are voted in favor of the compensation package, excluding abstentions; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the total
    number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter and who vote
    against the compensation package does not exceed two percent (2%) of the aggregate voting rights in the Company.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Executive
officers other than the Chief Executive Officer. </i>The Companies Law requires the approval of the compensation of a public company&#8217;s
executive officers (other than the chief executive officer) in the following order: (i) the compensation committee, (ii) the company&#8217;s
board of directors, and (iii) if such compensation arrangement is inconsistent with the company&#8217;s stated compensation policy, the
company&#8217;s shareholders (by a special majority vote as discussed above with respect to the approval of director compensation), provided
that the compensation committee and the board of directors members have considered those provisions that must be included in the compensation
policy according to the Companies Law. However, if the shareholders of the company do not approve a compensation arrangement with an
executive officer that is inconsistent with the company&#8217;s stated compensation policy, the compensation committee and board of directors
may override the shareholders&#8217; decision if each of the compensation committee and the board of directors provide detailed reasons
for their decision after re-evaluation of the arrangement, including in view of the shareholders&#8217; objections.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
amendment to an existing arrangement with an office holder who is not the chief executive officer, or a director requires only the approval
of the compensation committee, if the compensation committee determines that the amendment is not material in comparison to the existing
arrangement. However, according to regulations promulgated under the Companies Law, an amendment to an existing arrangement with an office
holder (who is not a director) who is subordinate to the chief executive officer shall not require the approval of the compensation committee
if (i) the amendment is approved by the chief executive officer and the company&#8217;s compensation policy provides that a non-material
amendment to the terms of service of an office holder (other than the chief executive officer) may be approved by the chief executive
officer and (ii) the engagement terms are consistent with the company&#8217;s compensation policy.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Chief
Executive Officer</i>. Under the Companies Law, the compensation of a public company&#8217;s chief executive officer is required to be
approved by: (i) the company&#8217;s compensation committee; (ii) the company&#8217;s board of directors, and (iii) the company&#8217;s
shareholders (by a special majority vote as discussed above with respect to the approval of director compensation). However, if the shareholders
of the company do not approve the compensation arrangement with the chief executive officer, the compensation committee and board of
directors may override the shareholders&#8217; decision if each of the compensation committee and the board of directors provide a detailed
report for their decision. The approval of each of the compensation committee and the board of directors should be in accordance with
the company&#8217;s stated compensation policy; however, in special circumstances, they may approve compensation terms of a chief executive
officer that are inconsistent with such policy provided that they have considered those provisions that must be included in the compensation
policy according to the Companies Law and that shareholder approval was obtained (by a special majority vote as discussed above with
respect to the approval of director compensation). In addition, the compensation committee may waive the shareholder approval requirement
with regards to the approval of the engagement terms of a candidate for the chief executive officer position, if they determine that
the compensation arrangement is consistent with the company&#8217;s stated compensation policy and that the chief executive officer candidate
did not have a prior business relationship with the company or a controlling shareholder of the company and that subjecting the approval
of the engagement to a shareholder vote would impede the company&#8217;s ability to employ the chief executive officer candidate. In
the event that the chief executive officer also serves as a member of the board of directors, his or her compensation terms as chief
executive officer will be approved in accordance with the rules applicable to approval of compensation of directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Fiduciary
Duties of Office Holders</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Companies Law codifies the fiduciary duties that office holders owe to a company. An office holder is defined in the Companies Law as
a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities
of any of these positions regardless of such person&#8217;s title, a director and any other manager directly subordinate to the general
manager. Each person listed in the table under <i>&#8220;Management&#8212;Executive officers and directors&#8221;</i> is an office holder
under the Companies Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
office holder&#8217;s fiduciary duties consist of a duty of care and a duty of loyalty. The duty of care requires an office holder to
act with the level of care with which a reasonable office holder in the same position would have acted under the same circumstances.
The duty of care of an office holder includes a duty to use reasonable means, in light of the circumstances, to obtain:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">information on the business
    advisability of a given action brought for his or her approval or performed by him or her by virtue of his position; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>
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</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">all other important information
    pertaining to such action.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a
duty to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">refrain from any conflict of
    interest between the performance of his or her duties in the company and the performance of his or her other duties or personal affairs;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">refrain from any action that
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">refrain from exploiting any
    business opportunity of the company to receive a personal gain for him or herself or others; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">disclose to the company any
    information or documents relating to the company&#8217;s affairs which the office holder has received due to his or her position
    as an office holder.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Companies Law, a company may approve an act specified above which would otherwise constitute a breach of an office holder&#8217;s
duty of loyalty, provided that the office holder acted in good faith, neither the act nor its approval harms the company and the office
holder discloses his or her personal interest a sufficient time before the approval of such act. Any such approval is subject to the
terms of the Companies Law setting forth, among other things, the appropriate bodies of the company required to provide such approval.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Duties
of Shareholders</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Companies Law, a shareholder has a duty to refrain from abusing his or her power in the company and to act in good faith and in a
customary manner toward the company and other shareholders in exercising his or her rights and performing his or her obligations, including,
among other things, in voting at general meetings of shareholders (and at shareholder class meetings) on the following matters:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an amendment to the articles
    of association;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an increase in the authorized
    share capital;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a merger; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the approval of related-party
    transactions that require shareholder approval.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
shareholder also has a general duty to refrain from discriminating against other shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
shareholders also have a duty of fairness toward the company. These shareholders include any controlling shareholder, any shareholder
who knows that he or she has the power to determine the outcome of a shareholder vote and any shareholder who has the power to appoint
or prevent the appointment of an office holder of the company or any other power towards the company under the company&#8217;s articles
of association. The Companies Law does not define the substance of the duty of fairness, except to state that the remedies generally
available upon a breach of contract will also apply in the event of a breach of the duty of fairness.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Employees</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December&#160;31, 2022, we had 180 employees, of which 119 employees are based in Israel, 2 employees are based in Japan, 28 employees
are based in the United States, 31 employees are based in Korea and the balance in other areas. We have never experienced any employment-related
work stoppages and believe our relationship with our employees is good. The following table sets out our total number of employees by
function for the last three years.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; padding-left: 0pt; text-indent: 0pt; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Area
of Activity</b></span></p></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; width: 64%; text-align: justify">Cost of Revenue</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">&#160;-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">&#160;-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">General and Administrative</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">22</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">76</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">91</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">104</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: justify; padding-bottom: 1.5pt">Sales and Marketing</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">4</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">19</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">7</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Total</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">50</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">186</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">180</td><td style="text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing
and new employees, advisors and consultants. The principal purposes of our equity and cash incentive plans are to attract, retain and
reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase shareholder value and the
success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.</span>

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 103; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.
Share Ownership</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
information regarding the beneficial ownership of our ordinary shares by our directors and executive officers, see &#8220;Item 7. Major
Shareholders and Related Party Transactions&#8212;A. Major Shareholders.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
7. Major Shareholders and Related Party Transactions</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
Major Shareholders</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2023 by:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">each person or entity known by us to own beneficially
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">each of our directors and executive officers; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">all of our directors and executive officers as a group.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
beneficial ownership of our ordinary shares is determined in accordance with the rules of the SEC. Under these rules, a person is deemed
to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting
of the security, or investment power, which includes the power to dispose of or to direct the disposition of the security. In determining
beneficial ownership percentages, we deem ordinary shares that a shareholder has the right to acquire, including the ordinary shares
issuable pursuant to options or warrants that are currently exercisable or exercisable or RSUs that vest within 60 days of March 31,
2023, if any, to be outstanding and to be beneficially owned by the person with such right to acquire additional ordinary shares for
the purposes of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing
the percentage ownership of any other person. The percentage of ordinary shares beneficially owned is based on 55,150,345 ordinary shares
outstanding as of March 31, 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
where otherwise indicated, we believe, based on information furnished to us by such owners, that the beneficial owners of the ordinary
shares listed below have sole investment and voting power with respect to such shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None
of our shareholders have different voting rights from other shareholders. To the best of our knowledge, we are not owned or controlled,
directly or indirectly, by another corporation or by any foreign government. We are not aware of any arrangement that may, at a subsequent
date, result in a change of control of our company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
otherwise noted below, the address for each beneficial owner is c/o Communications Center, Neve Ilan, Israel 9085000.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 25%"><div style="font-size: 1pt; border-top: Black 1.5pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.35in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amount
represents less than 1% of outstanding ordinary shares.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.35in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Based
solely on the </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Schedule 13G filed by SK square Co., Ltd.
and SK Square Americas, Inc. with the SEC on February 14, 2022, consisting of (i) 2,607,466 ordinary shares and (ii) a warrant to purchase
2,262,443 ordinary shares held by SK Square Americas, Inc., a wholly owned subsidiary of SK square. Co., Ltd.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in"></p><div>

</div><!-- Field: Page; Sequence: 104; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->99<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Based on the </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Schedule
    13G/A filed by Ran Poliakine with the SEC on February 14, 2023 and other information available to the company. Represents (i) 2,626,927
    ordinary shares and (ii) options to purchase 715,144 ordinary shares currently exercisable or exercisable within 60 days of <span>March
    31, 2023</span>.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents (i) 7,917 ordinary
    shares, and (ii) options to purchase 120,190 ordinary shares exercisable within 60 days of March 31, 2023.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents options to purchase
    </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">16,667 <span>ordinary
    shares </span>currently exercisable or <span>exercisable within 60 days of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents options to purchase
    </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">60,833 <span>ordinary
    shares </span>currently exercisable or <span>exercisable within 60 days of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents options to purchase
    </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">60,417 <span>ordinary
    shares </span>currently exercisable or <span>exercisable within 60 days of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(7)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents options to purchase
    </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">14,583 <span>ordinary
    shares </span>currently exercisable or <span>exercisable within 60 days of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<span>8</span>)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents options to purchase
    </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">23,625 <span>ordinary
    shares </span>currently exercisable or <span>exercisable within 60 days of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(9)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)
    35,353 ordinary shares and (ii) 13,575 <span>options to purchase ordinary shares </span>currently
    exercisable or exercisable within 60 days <span>of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(10)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents options to purchase
    5,833 ordinary shares </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">currently exercisable or <span>exercisable
    within 60 days of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">(11)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents (i) options to
    purchase 15,489 ordinary shares </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">currently exercisable
    or <span>exercisable within 60 days of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(12)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents
    options to purchase 15,627 ordinary shares </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">currently
    exercisable or exercisable within 60 days <span>of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(13)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents options to purchase
    15,627 ordinary shares </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">currently exercisable or
    exercisable within 60 days <span>of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(14)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents
    options to purchase 9,375 ordinary shares </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">currently
    exercisable or exercisable within 60 days <span>of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.35in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(15)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Represents options to purchase
    15,755 ordinary shares </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">currently exercisable or
    exercisable within 60 days <span>of </span>March 31, <span>2023.</span></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 105; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->100<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
our knowledge, other than as disclosed in the table above, our other filings with the SEC and this Annual Report, there has been no significant
change in the percentage ownership held by any major shareholder since January 1, 2020. The major shareholders listed above do not have
voting rights with respect to their ordinary shares that are different from the voting rights of other holders of our ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">As
of March 31, 2023, according to the records of Continental Stock Transfer &amp; Trust Co., approximately 2,915,792 (or 5.29%) of our
outstanding ordinary shares are held by 22 record holders in the United States, not including Cede &amp; Co., the nominee of the Depository
Trust Company, in whose name all shares held in &#8220;street name&#8221; are held in the United States. </span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Related Party Transactions</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
policy is to enter into transactions with related parties on terms that, on the whole, are no more favorable, or no less favorable, than
those available from unaffiliated third parties. Based on our experience in the business sectors in which we operate and the terms of
our transactions with unaffiliated third parties, we believe that all of the transactions described below met this policy standard at
the time they occurred. The following is a description of material transactions, or series of related material transactions, since January&#160;1,
2022, to which we were or are a party and in which the other parties included or include our directors, executive officers, holders of
more than 5% of our voting securities or any member of the immediate family of any of the foregoing persons.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Relationship
With SKT</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June&#160;17, 2019, Nanox Gibraltar entered into a Strategic Share Purchase Agreement with SK Telecom TMT Investment Corp. (&#8220;SKT&#8221;),
Pureun Partners Asset Management Co., Ltd. and EBEST-PPAM Fund No. 9 (collectively, the &#8220;SKT Entities&#8221;), pursuant to which
Nanox Gibraltar sold 2,262,443 ordinary shares to the SKT Entities for an aggregate purchase price of approximately $5.0&#160;million.
In connection with such transaction, Nanox Gibraltar also issued a warrant to SKT to acquire 2,262,443 ordinary shares at an exercise
price of $20.87 per share (the &#8220;Warrant&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the transactions described above, Nanox Gibraltar also entered into an investor rights agreement with the SKT Entities
(the &#8220;Investor Rights Agreement&#8221;). The agreement provides for the rights to nominate a member of our board of directors,
as well as certain registration rights. The rights under the Investor Rights Agreement terminated upon the closing of our initial public
offering. The SKT Entities became parties to the Registration Rights Agreement prior to the closing of our initial public offering. See
below &#8220;&#8212;Registration Rights Agreements&#8221; for detailed description of the registration rights.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June&#160;4, 2020, we entered into a Share Purchase Agreement with SKT, pursuant to which we sold 1,250,000&#160;ordinary shares to SKT
for an aggregate purchase price of $20.0&#160;million. In connection with such agreement, we amended the Warrant to extend the exercise
period to the earlier of June&#160;17, 2025 or an exit event, which event does not include an initial public offering, and we amended
the Investor Rights Agreement which granted SKT the right to appoint Mr.&#160;Jung Ho Park (or another person designated by SKT) as a
director for a term of three years. In addition, we granted Mr.&#160;Park options to purchase 100,000 of our ordinary shares, vesting
in equal quarterly installments over a period of four years, at an exercise price of $16.00 per ordinary share. In the event that SKT
nominates any replacement director, any such director may receive options with the same terms, but the aggregate number of options granted
to all such directors together shall not exceed 100,000. Mr. Park resigned from our Board of Directors in December 2021, at which time
his unvested options to purchase 68,750 ordinary shares expired, and new options to purchase the same number of ordinary shares (i.e.,
68,750 shares) were granted to Ms. So Young Shin, a successor director appointed by SKT in May 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
on June&#160;4, 2020, we entered into a collaboration agreement with SK Telecom Co., Ltd. (&#8220;SK Telecom&#8221;), pursuant to which
we and SK Telecom continue to explore and engage in good faith to develop a definitive agreement for the deployment of 2,500 Nanox Systems
in South Korea and Vietnam. With the support of SK Telecom we established a wholly-owned subsidiary in South Korea, which in turn established
our fabrication facility in Korea for the manufacturing of MEMs X-ray chips for the Nanox.ARC. The collaboration agreement expired on
December&#160;31, 2021, but we continue to explore business opportunities and assess collaboration with SK Telecom.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, we signed an agreement with Dr. Ilung Kim, who previously served as President of SK Telecom, dated December&#160;16, 2019,
for the provision of consulting services to us. Under the agreement, we granted Dr. Kim options to purchase 1,206,290 of our ordinary
shares at an exercise price of $2.21 per ordinary share, of which options to purchase 150,000 ordinary shares were exercised and the
remaining options are fully vested. The vested options are exercisable until the earlier of (a) the second anniversary of termination
of the engagement between us and Dr.&#160;Kim or (b) the tenth anniversary from the date of grant. Effective as of July 1, 2021, the
consulting agreement was replaced by an employment agreement with Dr. Kim in connection with appointment as the chief executive officer
of our Korean subsidiary.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Agreements
With Directors and Officers </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a summary of each material contract, other than material contracts entered into in the ordinary course of business, to which
we are or have been a party, since January 1, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Relationship
With Illumigyn Ltd.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
December&#160;1, 2019, Illumigyn has sub-leased approximately 165 square meters of private office space, including access to shared public
spaces, from us in Neve Ilan, Israel. Mr.&#160;Poliakine currently serves as a member of senior management of Illumigyn through a service
provider agreement and is a significant shareholder primarily through indirect holdings, and he served as a member of the board of directors
of Illumigyn until August 2019. In addition, the deceased Mr.&#160;Richard Stone, who served as a director until his passing in May 2022,
was a significant shareholder in, and served as a member of the board of directors of Illumigyn, Ms. Noga Kainan, a director, serves
as a member of the board of directors of Illumigyn, and Anat Kaphan, our former Chief Innovation Officer who currently serves as a member
of our advisory board, also serves as a consultant to Illumigyn. Illumigyn pays approximately $12,000 per month under the sub-lease.
During the years ended December 31, 2022 and 2021, the Company received from Illumigyn approximately $171,000 and $125,000, respectively,
under the sub-lease.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Relationship
with SixAI Ltd.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 1pt 0pt 0; text-indent: 40.5pt; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April&#160;16, 2020, we entered into a service agreement (the &#8220;Service Agreement&#8221;) with SixAI, pursuant to which SixAI agreed
to provide Nanox with certain software development and mechanical engineering services. The Service Agreement was effective as of March&#160;1,
2020 and was extended by mutual agreement of the parties several times until terminated on December 31, 2021. During the year ended December
31, 2021, the Company recorded an expense of $80,000 relating to the Service Agreement. Mr.&#160;Poliakine currently serves as a member
of the board of directors of SixAI and is a controlling shareholder of SixAI.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Relationship
with Wellsense Technologies, Ltd.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
February 2020, Wellsense Technologies, Ltd. (&#8220;Wellsense Technologies&#8221;) has sub-leased approximately 165 square meters of
private office space, including access to shared public spaces, from us in Neve Ilan, Israel. Wellsense Technologies, Ltd. pays approximately
$7,000 per month. Ran Poliakine is, and the deceased, Mr. Richard Stone, who served as a director until his passing in May 2022, was,
a shareholder of the parent company of Wellsense Technologies. During the years ended December 31, 2022 and 2021, the Company received
from Wellsense Technologies approximately $47,000 and $66,000, respectively, under the sub lease.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Service
Agreement</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
February 2021, our shareholders approved our engagement of Floyd Katske as a medical consultant, effective as of October 1, 2020, in
addition and unrelated to his role as a director. Floyd Katske served as a director until December 2022 and since such date serves as
a member of our advisory board. We paid Floyd Katske with respect to such medical consultant services $200 per hour, against an invoice,
not to exceed 100 hours in any calendar month, according to hours approved by the Chairman. In addition, we paid Floyd Katske compensation
consisting of RSUs granted in each calendar quarter, in the amount calculated by dividing (i) two times the cash compensation paid during
such quarter as aforesaid by (ii) the fair market value of our ordinary shares on the last trading day of such quarter.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Directorship
Agreements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
previously entered into directorship agreements with certain of our directors in connection with their initial nomination to our board
of directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Equity
Incentive Plans</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">From
time to time we grant options to purchase our ordinary shares and RSUs to our executive officers and directors. </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
a description of our equity incentive plan, see &#8220;Item 6. Directors, Senior Management and Employees&#8212;B. Compensation&#8212;Equity
Incentive Plan.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Directors
and Officers Insurance Policy and Indemnification and Exculpation Agreements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
amended and restated articles of association permit us to exculpate, indemnify and insure each of our directors and officers to the fullest
extent permitted by the Companies Law. We have obtained directors&#8217; and officers&#8217; liability insurance which covers each of
our executive officers and directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have entered into agreements with each of our current directors and officers exculpating them from a breach of their duty of care to
us to the fullest extent permitted by law and undertaking to indemnify them to the fullest extent permitted by law, including with respect
to liabilities resulting from our initial public offering, to the extent that these liabilities are not covered by insurance, all subject
to limited exceptions. Indemnification for any monetary liability incurred by or imposed on a director or officer in favor of a third
party is limited to certain events that were determined as foreseeable by the board of directors based on our current or expected activities.
The maximum aggregate amount of indemnification that we may pay to our directors and officers based on such indemnification agreements
shall not exceed the greater of (i)&#160;in relation to indemnity in connection with an offering to the public of our securities, the
aggregate amount of proceeds from the sale by us and/or any of our shareholders in connection with such public offering, (ii) 25% of
our total shareholders&#8217; equity pursuant to our most recent financial statements as of the time of the actual payment of indemnification,
and (iii) $50&#160;million (in each case as may be increased from time to time by shareholders&#8217; approval). Such indemnification
amounts are in addition to any insurance amounts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
in the opinion of the SEC, indemnification of office holders for liabilities arising under the Securities Act is against public policy
and therefore unenforceable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Registration
Rights Agreements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have entered into a registration rights agreement (the &#8220;Registration Rights Agreement&#8221;) that entitles certain holders of
our ordinary shares and other securities convertible into or exchangeable for ordinary shares, including SK Square Americas, Inc. (formerly
known as SK Telecom TMT Investment Corp.), to certain piggyback registration rights. See &#8220;Item 10. Additional Information&#8212;C.
Material Contracts&#8212;Registration Rights Agreements.&#8221;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Interests of Experts and Counsel</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> <b>Item 8. Financial Information</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
Consolidated Financial Statements and Other Financial Information &#160; &#160; </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 18. Financial Statements.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Legal
Proceedings</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 4. Information on the Company&#8212;B. Business Overview&#8212;Legal Proceedings.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dividend
Policy</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have never declared or paid any cash dividends on our ordinary shares and we anticipate that, for the foreseeable future, we will retain
any future earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay
cash dividends for at least the next several years.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
distribution of dividends may also be limited by the Companies Law, which permits the distribution of dividends only out of retained
earnings or earnings derived over the two most recent fiscal years, whichever is higher, provided that there is no reasonable concern
that payment of a dividend will prevent a company from satisfying its existing and foreseeable obligations as they become due. In the
event that we do not have retained earnings or earnings generated over the two most recent years legally available for distribution,
we must seek the approval of the court in order to distribute a dividend, and the court may approve our request if it is convinced that
there is no reasonable concern that the payment of a dividend will prevent us from satisfying our existing and foreseeable obligations
as they become due. Our amended and restated articles of association provide that dividends will be paid at the discretion of, and upon
resolution by, our board of directors, subject to the provision of the Companies Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Significant Changes</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as disclosed elsewhere in this annual report on Form 20-F, we have not experienced any significant changes since the date of our audited
consolidated financial statements included in this annual report on Form 20-F.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_010"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
9. Offer and Listing</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
Offer and Listing Details</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ordinary shares have been listed on the NASDAQ Global Market since August 20, 2020 under the symbol &#8220;NNOX.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->103<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Plan of Distribution</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Markets</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ordinary shares have been listed on the NASDAQ Global Market since August 20, 2020 under the symbol &#8220;NNOX.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Selling Shareholders</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.
Dilution</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.
Expenses of the Issue</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_011"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> <b>Item 10. Additional Information</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
Share Capital</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Memorandum and Articles of Association</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
copy of our amended and restated articles of association is attached as Exhibit 1.1 to this Annual Report.&#160;Our registration number
with the Israeli Registrar of Companies is 515942076. Our registration number may be changed by the Israeli Registrar of Companies to
indicate that we are a public company. The following are summaries of material provisions of our current amended and restated articles
of association that became effective immediately prior to the completion of our initial public offering in August 2020, insofar as they
relate to the material terms of our ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Objects
of Our Company</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
purpose as set forth in our amended and restated articles of association is to engage in any lawful activity.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Board
of Directors</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 6. Directors, Senior Management and Employees&#8212;C. Board Practices.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Borrowing
Powers</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Companies Law and our amended articles of association, our board of directors may exercise all powers and take all actions that
are not required under law or under our amended and restated articles of association to be exercised or taken by our shareholders, including
the power to borrow money for company purposes.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Ordinary
Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022, we had 55,094,237 ordinary shares outstanding.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Dividends</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have never declared or paid any cash dividends on our ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. See &#8220;Item
8. Financial Information&#8212;A. Consolidated Statements and Other Financial Information&#8212;Dividend Policy&#8221; for more information
with respect to the requirements under Israeli law for the declaration and payment of dividends to our shareholders. Under the Companies
Law, dividend distributions are determined by the board of directors and do not require the approval of the shareholders of a company
unless the company&#8217;s articles of association provide otherwise. Our amended and restated articles of association do not require
shareholder approval of a dividend distribution and provide that dividend distributions may be determined by our board of directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->104<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Voting
Rights</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
of our ordinary shares have identical voting and other rights in all respects.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holders
of our ordinary shares have one vote for each ordinary share held on all matters submitted to a vote before the shareholders at a general
meeting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Quorum.
</i>In any meeting of shareholders, we will follow the quorum requirements for general meetings as set forth in our amended and restated
articles of association, instead of one-third of the issued share capital as required under the Nasdaq Marketplace Rules. Pursuant to
our amended and restated articles of association, the quorum required for our general meetings of shareholders will consist of at least
two shareholders present in person or by proxy (including by voting deed) and holding shares conferring in the aggregate at least 25%
of the voting power of the Company. A meeting adjourned for lack of a quorum will generally be adjourned to the same day of the following
week at the same time and place, or to such other day, time or place as indicated by our board of directors, if so specified in the notice
of the meeting. At the reconvened meeting, subject to a limited exception, any number of shareholders present in person or by proxy shall
constitute a lawful quorum.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Vote
requirements.</i> An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority
of the votes attaching to the ordinary shares cast at a meeting, while a special resolution requires the affirmative vote of no less
than two-thirds of the votes attaching to the ordinary shares cast at a meeting. Under our amended and restated articles of association,
a special resolution is required for the removal of a director from office and the appointment of a director in place of the director
so removed, and to amend the provisions in our articles of association relating to the appointment and removal of directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Transfer
of Ordinary Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
fully paid ordinary shares are issued in registered form and may be freely transferred under our amended and restated articles of association,
unless the transfer is restricted or prohibited by another instrument, applicable law or the rules of a stock exchange on which the shares
are listed for trade. The ownership or voting of our ordinary shares by non-residents of Israel is not restricted in any way by our amended
and restated articles of association or the laws of the State of Israel, except for ownership by nationals of some countries that are,
or have been, in a state of war with Israel.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Liquidation</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the event of our liquidation, after satisfaction of liabilities to creditors and other payments due as per applicable law, our assets
will be distributed to the holders of our ordinary shares in proportion to their shareholdings. This right, as well as the right to receive
dividends, may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential
rights that may be authorized in the future.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Redemption
of Ordinary Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may, subject to applicable law, issue redeemable shares or other securities and redeem the same with such terms and conditions as the
board of directors may deem fit.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Modifications
of Rights of Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Companies Law and our amended and restated articles of association, the rights attached to any class of share, such as voting, liquidation
and dividend rights, may be amended by adoption of a resolution by the holders of a majority of the shares of that class present at a
separate class meeting, or otherwise in accordance with the rights attached to such class of shares, as set forth in our amended and
restated articles of association, in addition to the ordinary majority vote of all classes of voting shares voting together as a single
class.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Issuance
of Additional Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may, upon a resolution of the shareholders at a general meeting, from time to time, increase our share capital by the creation of new
shares. Any such increase shall be in such amount and shall be divided into shares of such nominal amounts or without nominal amounts,
and such shares shall confer such rights and preferences, and shall be subject to such restrictions, as the resolution approving the
creation of such shares shall provide. Except to the extent otherwise provided in the resolution creating such new shares, such new shares
shall be subject to all the provisions applicable to the shares of the original capital. Without prejudice to any special rights previously
conferred upon the holders of existing shares in the Company, the Company may, from time to time, provide for shares with such preferred
or deferred rights or rights of redemption or other special rights and/or such restrictions, whether in regard to dividends, voting,
repayment of share capital or otherwise, as may be stipulated in the resolution pursuant to which such shares are created.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Access
to Corporate Records</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Companies Law, shareholders generally have the right to review minutes of our general meetings, our shareholders register and material
shareholders register, our amended and restated articles of association, our annual audited financial statements and any document that
we are required by law to file publicly with the Israeli Registrar of Companies or the Israel Securities Authority. In addition, any
shareholder who specifies the purpose of their request may request to review any document related to an action or transaction requiring
shareholder approval under the related party transaction provisions of the Companies Law. We may deny this request if we believe it has
not been made in good faith or if such denial is necessary to protect our interests or protect a trade secret or patent.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Exchange
controls</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are currently no Israeli currency control restrictions on remittances of dividends on our ordinary shares, proceeds from the sale of
the ordinary shares or interest or other payments to non-residents of Israel, except for shareholders who are subjects of countries that
are, or have been, in a state of war with Israel.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Acquisitions
under Israeli Law</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Full
Tender Offer. </i>A person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the target
company&#8217;s voting rights or issued and outstanding share capital is required by the Companies Law to make a tender offer to all
of the company&#8217;s shareholders for the purchase of all of the issued and outstanding shares of the company. A person wishing to
acquire shares of a public Israeli company and who would as a result hold over 90% of the voting rights or issued and outstanding share
capital of a certain class of shares is required to make a tender offer to all of the shareholders who hold shares of the relevant class
for the purchase of all of the issued and outstanding shares of that class. If the shareholders who do not accept the offer hold less
than 5% of the issued and outstanding share capital of the company or of the applicable class, and more than half of the shareholders
who do not have a personal interest in the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred
to the acquirer by operation of law. However, a tender offer will also be accepted if the shareholders who do not accept the offer hold
less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
a successful completion of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such shareholder
accepted the tender offer or not, may, within six months from the date of acceptance of the tender offer, petition an Israeli court to
determine whether the tender offer was for less than fair value and that the fair value should be paid as determined by the court. However,
under certain conditions, the offeror may include in the terms of the tender offer that an offeree who accepted the offer will not be
entitled to petition the Israeli court as described above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the full tender offer was not accepted in accordance with the above alternatives, the acquirer may not acquire shares of the company
that will increase its holdings to more than 90% of the company&#8217;s voting rights or issued and outstanding share capital or of the
applicable class from shareholders who accepted the tender offer.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Special
Tender Offer</i>. The Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special
tender offer if as a result of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company
(subject to certain exceptions). This requirement does not apply if there is already another holder of at least 25% of the voting rights
in the company. Similarly, the Companies Law provides that an acquisition of shares in a public company must be made by means of a special
tender offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting rights in the company,
if there is no other shareholder of the company who holds more than 45% of the voting rights in the company, subject to certain exceptions.
A special tender offer must be extended to all shareholders of a company but the offeror is not required to purchase shares representing
more than 5% of the voting power attached to the company&#8217;s outstanding shares, regardless of how many shares are tendered by shareholders.
A special tender offer may be consummated only if (i) at least 5% of the voting power attached to the company&#8217;s outstanding shares
will be acquired by the offeror and (ii) the number of shares tendered by shareholders who accept the offer exceeds the number of shares
whose holders objected to the offer (excluding the purchaser and its controlling shareholders, holders of 25% or more of the voting rights
in the company or any person having a personal interest in the acceptance of the tender offer or any other person acting on their behalf,
including relatives and entities under such person&#8217;s control). If a special tender offer is accepted, then (i) shareholders who
did not respond to or that had objected to the offer may accept the offer within four days of the last date set for the acceptance of
the offer and they will be considered to have accepted the offer from the first day it was made, and (ii) the purchaser or any person
or entity controlling it or under common control with the purchaser or such controlling person or entity may not make a subsequent tender
offer for the purchase of shares of the target company and may not enter into a merger with the target company for a period of one year
from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial
special tender offer.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shares
purchased in contradiction to the tender offer rules under the Companies Law, as described above, will have no rights and will become
dormant shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Merger</i>.
The Companies Law permits merger transactions if approved by each party&#8217;s board of directors and, unless certain requirements described
under the Companies Law are met, by a majority vote of each party&#8217;s shares, and, in the case of the target company, a majority
vote of each class of its shares voted on the proposed merger at a shareholders meeting. The board of directors of a merging company
is required pursuant to the Companies Law to discuss and determine whether in its opinion there exists a reasonable concern that as a
result of a proposed merger, the surviving company will not be able to satisfy its obligations towards its creditors, such determination
taking into account the financial condition of the merging companies. If the board of directors determines that such a concern exists,
it may not approve a proposed merger. Following the approval of the board of directors of each of the merging companies, the boards of
directors must jointly prepare a merger proposal for submission to the Israeli Registrar of Companies. Under the Companies Law, each
merging company must deliver the merger proposal to its secured creditors and inform its unsecured creditors of the merger proposal and
its content.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the votes of
the shares represented at the shareholders meeting that are held by parties other than the other party to the merger, or by any person
(or group of persons acting in concert) who holds (or hold, as the case may be) 25% or more of the voting rights or the right to appoint
25% or more of the directors of the other party, vote against the merger. If, however, the merger involves a merger with a company&#8217;s
own controlling shareholder or if the controlling shareholder has a personal interest in the merger, then the merger is instead subject
to the same special majority approval that governs all extraordinary transactions with controlling shareholders. If the transaction would
have been approved by the shareholders of a merging company but for the separate approval of each class or the exclusion of the votes
of certain shareholders as provided above, a court may still approve the merger upon the request of holders of at least 25% of the voting
rights of a company, if the court holds that the merger is fair and reasonable, taking into account the value to the parties to the merger
and the consideration offered to the shareholders of the target company. Upon the request of a creditor of either party to the proposed
merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result of the merger,
the surviving company will be unable to satisfy the obligations of the merging entities, and may further give instructions to secure
the rights of creditors. In addition, a merger may not be consummated unless at least 50 days have passed from the date on which a proposal
for approval of the merger was filed by each party with the Israeli Registrar of Companies and at least 30 days have passed from the
date on which the merger was approved by the shareholders of each party.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Anti-takeover
measures</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Companies Law allows us to create and issue shares having rights different from those attached to our ordinary shares, including shares
providing certain preferred rights with respect to voting, distributions or other matters and shares having preemptive rights. No preferred
shares are currently authorized under our amended and restated articles of association. In the future, if we do authorize, create and
issue a specific class of preferred shares, such class of shares, depending on the specific rights that may be attached to it, may have
the ability to frustrate or prevent a takeover or otherwise prevent our shareholders from realizing a potential premium over the market
value of their ordinary shares. The authorization and designation of a class of preferred shares will require an amendment to our amended
and restated articles of association, which requires the prior approval of the holders of a majority of the voting power attaching to
our issued and outstanding shares represented at a general meeting. The convening of the meeting, the shareholders entitled to participate
and the majority vote required to be obtained at such a meeting will be subject to the requirements set forth in the Companies Law and
our amended articles of association as described above under &#8220;&#8212;Voting Rights.&#8221; In addition, we have a classified board
structure, which will effectively limit the ability of any investor or potential investor or group of investors or potential investors
to gain control of our board of directors, as disclosed under &#8220;Item 6. Directors, Senior Management and Employees&#8212;C. Board
Practices.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>General
Meetings of Shareholders and Shareholder Proposals</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
Israeli law, we are required to hold an annual general meeting of our shareholders once every calendar year that must be held no later
than 15 months after the date of the previous annual general meeting. All general meetings other than the annual meeting of shareholders
are referred to in our amended and restated articles of association as special general meetings. Our board of directors may call special
general meetings whenever it sees fit, at such time and place, within or outside of Israel, as it may determine. In addition, the Companies
Law provides that our board of directors is required to convene a special general meeting upon the written request of (i)&#160;any two
or more of our directors or one-quarter or more of the members of our board of directors or (ii)&#160;one or more shareholders holding,
in the aggregate, either (a) 5% or more of our outstanding issued shares and 1% or more of our outstanding voting power or (b) 5% or
more of our outstanding voting power.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
Israeli law, one or more shareholders holding at least 1% of the voting rights at the general meeting may request that the board of directors
include a matter on the agenda of a general meeting to be convened in the future, provided that it is appropriate to discuss such a matter
at the general meeting. Our amended and restated articles of association contain procedural guidelines and disclosure items with respect
to the submission of shareholder proposals for shareholder meetings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Companies Law, resolutions regarding the following matters must be passed at a general meeting of shareholders:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">amendments
                                            to the company&#8217;s articles of association;</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">appointment,
                                            fees or termination of the auditors, if the shareholders have not delegated their authority
                                            to set the fees for the auditors to the board of directors;</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">appointment
                                            of external directors (if applicable);</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">approval
                                            of related-party transactions requiring general meeting approval pursuant to the provisions
                                            of the Companies Law;</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">increases
                                            or reductions of the company&#8217;s authorized share capital;</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            merger (as such term is defined in the Companies Law); and</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            exercise of board of directors&#8217; powers by a general meeting, if our board of directors
                                            is unable to exercise its powers and the exercise of any of its powers is required for our
                                            proper management.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Material Contracts</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Acquisition
Transactions</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 2, 2021, the Company completed the acquisition of 100% of the shares of USARAD, pursuant to the terms of the Stock Purchase
Agreement, dated October 25, 2021, among the Company, USARAD, Dr. Michael Yuz, other holders of capital stock of USARAD, and holders
of USARAD options.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 3, 2021, the Company completed the acquisition of the platform and other assets of MDWEB, pursuant to the terms of the Asset
Purchase Agreement, dated October 21, 2021, between the Company and MDWEB.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 4, 2021, the Company, consummated the merger pursuant to the terms of the Agreement and Plan of Merger, dated August 9, 2021,
as amended, among the Company, Zebra (now known as Nanox AI), and Perryllion Ltd., as representative of Zebra&#8217;s equity holders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
details regarding these agreements, see &#8220;Item 4. Information on the Company&#8212;A. History and Development of the Company.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>FoxSemicon
Integrated Technology, Inc. Manufacturing Agreement</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May&#160;26, 2020, we entered into a Contract Manufacturing Agreement with FITI. Under the terms of the agreement, FITI agreed to manufacture,
package, distribute and ship, and we agreed to purchase, certain products and procurement and assembly services, including a minimum
of 1,000 Nanox Systems per year. We agreed to provide FITI with a rolling forecast of our estimated monthly purchases, which FITI will
use to prepare its supply chain to cover the material and manufacturing needs. Subsequently, we agreed to send purchase orders to FITI
for certain products and services. Prices for the products will be agreed by the parties at least 90 days prior to the first expected
delivery date. FITI will be entitled to order materials in accordance with an approved supplier list and on the terms that the parties
agree upon on a quarterly basis, and FITI must obtain our prior written consent if it procures materials from other suppliers. FITI may
also purchase materials from us to support orders pursuant to our requests. The parties also agreed to enter into a quality agreement,
which will set forth the manufacturing standards applicable to FITI. The agreement will be in effect for three years from the date of
the agreement and is renewed for successive terms of one year unless or until either party notifies the other in writing of its intention
not to renew with 90 days&#8217; prior notice. The agreement has not yet been implemented. The agreement may be terminated by notice
of the non-breaching party in case of a material breach of a party&#8217;s material obligations, or by either party in case of the bankruptcy
or insolvency of the other party.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Warrant
Agreements</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of March 31, 2023, there were two outstanding warrants, which are currently exercisable: (i) a warrant issued upon the consummation of
our initial public offering to A-Labs Advisory &amp; Finance Ltd., which provided to us strategic consulting services, to purchase 50,000
ordinary shares, with an exercise price of $18 per share; and (ii) the warrant issued to SK Square Americas, Inc. (formerly known as
SK Telecom TMT Investment Corp.) to purchase 2,262,443 ordinary shares, with an exercise price of $20.87 per share, as described above
under &#8220;Item 7. Major Shareholders and Related Party Transactions&#8212;B. Related Party Transactions&#8212;Relationship With SKT.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 113; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->108<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Registration
Rights Agreements</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have entered into the Registration Rights Agreement with shareholders who held 14,533,835 of our ordinary shares and other securities
convertible into or exchangeable for ordinary shares; however, some of these shares have been sold on the market, and the registration
rights are no longer applicable. As of the date of this annual report, the registration rights apply to 2,607,466 shares held by SK Square
Americas, Inc. (formerly known as SK Telecom TMT Investment Corp.).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the terms of the Registration Rights Agreement, and subject to the limitations specified therein, if we register our ordinary shares
under the Securities Act for sale to the public, either for our own account or for the account of other security holders or both, the
holders of registrable securities are entitled to notice of the intended registration and to include any or all of their registrable
securities in the registration. The right of holders of registrable securities to include shares in an underwritten offering is subject
to the right of the underwriters to limit the number of shares included in such offering. Holders of registrable securities are generally
required to pay all expenses of registration, including the fees and disbursements of its counsel and all underwriting discounts and
commissions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, as of March 31, 2023, SK Square Americas, Inc., as a holder of a warrant to purchase an aggregate of 2,262,443 ordinary shares,
is entitled to piggyback registration rights under the terms of such warrant substantially similar to the registration rights described
in the preceding paragraph.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Exchange Controls</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are currently no Israeli currency control restrictions on remittances of dividends on our ordinary shares, proceeds from the sale of
the shares or interest or other payments to non-residents of Israel, except for shareholders who are subjects of certain countries that
have been, or are considered to be, in a state of war with Israel.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.
Taxation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Israeli
Tax Considerations and Government Programs </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>General
Corporate Tax Structure in Israel</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Israeli
resident companies are generally subject to corporate tax, currently at the rate of 23% of a company&#8217;s taxable income. Capital
gains derived by an Israeli resident company are subject to tax at the regular corporate tax rate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
Israeli tax legislation, a corporation will be considered as an &#8220;Israeli resident company&#8221; if it meets one of the following:
(i)&#160;it was incorporated in Israel; or (ii)&#160;the control and management of its business are exercised in Israel.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Tax
Benefits and Grants for Research and Development</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Israeli
tax law allows, under certain conditions, a tax deduction for expenditures related to scientific research and development projects, including
capital expenditures, for the year in which they are incurred. Expenditures are deemed related to scientific research and development
projects, if:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The expenditures are approved by the relevant Israeli
    government ministry, determined by the field of research; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The research and development is for the promotion of
    the company and is carried out by or on behalf of the company seeking such tax deduction, or that the expenditure is made by a person
    that carries out the research and does not own an enterprise which is engaged in the field of research, or that such expenditure
    constitutes a participation in a research carried out by another person, in both cases, subject to the fulfillment of certain criteria
    set forth in the Israeli tax law. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
amount of such deductible expenses is reduced by the sum of any funds received through government grants for the financing of such scientific
research and development projects. No deduction under these research and development deduction rules is allowed if such deduction is
related to an expense invested in an asset depreciable under the general depreciation rules of the Ordinance. Capital Expenditures for
scientific research incurred by a company for the promotion or development of the company, which do not meet the above conditions, are
deductible in equal amounts over three years.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"></p><div>

</div><!-- Field: Page; Sequence: 114; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->109<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, we may apply to the Israeli Innovation Authority (the &#8220;IIA&#8221;), for approval to allow a tax deduction for research
and development expenses during the year incurred. There can be no assurance that such application will be accepted.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Law
for the Encouragement of Capital Investments, 5719-1959</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Law for the Encouragement of Capital Investments, 5719-1959 (the &#8220;Investment Law&#8221;), provides certain incentives for capital
investments in production facilities (or other eligible assets) by &#8220;Industrial Enterprises&#8221; (as defined under the Investment
Law). The benefits available under the Investment Law are subject to the fulfillment of conditions stipulated therein. If a company does
not meet these conditions, it may be required to refund the amount of tax benefits, as adjusted by the Israeli consumer price index,
and interest, or other monetary penalties.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Tax
Benefits Subsequent to the 2005 Amendment</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
amendment to the Investment Law, which became effective as of April&#160;1, 2005, or the 2005 Amendment, changed certain provisions of
the Investment Law. An eligible investment program under the 2005 Amendment qualifies for benefits as a &#8220;Benefited Enterprise.&#8221;
Prior to the 2005 Amendment, investment programs under the Investment Law were called &#8220;Approved Enterprises.&#8221; The extent
of the tax benefits available under the 2005 Amendment to qualifying income of a Benefited Enterprise depend on, among other things,
the geographic location of the Benefited Enterprise in Israel. The location will also determine the period for which tax benefits are
available. Such tax benefits include an exemption from corporate tax on undistributed income for a period of between two to ten years,
depending on the geographic location of the Benefited Enterprise in Israel, and a reduced corporate tax rate of between 10% and the applicable
corporate tax rate for the remainder of the benefits period, depending on the level of foreign investment in the company in each year
during the benefits period.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are not entitled to tax benefits under the 2005 Amendment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Tax
Benefits Under the 2011 Amendment</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Investment Law was significantly amended as of January&#160;1, 2011, or the 2011 Amendment. The 2011 Amendment introduced new benefits
to replace those granted in accordance with the provisions of the Investment Law in effect prior to the 2011 Amendment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2011 Amendment introduced new tax benefits for income generated by a &#8220;Preferred Company&#8221; through its &#8220;Preferred Enterprise,&#8221;
in accordance with the definition of such terms in the Investment Law. Generally, a &#8220;Preferred Enterprise&#8221; is defined as
an &#8220;Industrial Enterprise&#8221; (including, among others, an enterprise that provides approved research and development services
to foreign residents), with more than 25% of its business income from export. The definition of a Preferred Company, includes, inter
alia, a company incorporated in Israel that (1) is not wholly owned by a government entity, (2) owns a Preferred Enterprise and (3) is
controlled and managed from Israel and is subject to further conditions set forth in the Investment Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
Preferred Company is entitled to a reduced corporate tax rate of 16% with respect to the income attributed to its Preferred Enterprise,
unless the Preferred Enterprise is located in development area &#8220;A,&#8221; in which case the rate will be 7.5%. Our operations are
currently not located in development area &#8220;A.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Dividends distributed from
income which is attributed to a &#8220;Preferred Enterprise&#8221; will be subject to withholding tax at the following rates: (i)&#160;Israeli
resident individuals&#8212;20% and (ii)&#160;non-Israeli residents&#8212;20%, subject to a reduced tax rate under the provisions of an
applicable double tax treaty and subject to the receipt in advance of valid certificate from the Israeli Tax Authority, or the ITA. If
such dividends are paid to an Israeli company, no tax is required to be withheld.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
provisions of the 2011 Amendment do not apply to existing &#8220;Benefited Enterprises&#8221; or &#8220;Approved Enterprises,&#8221;
which will continue to be entitled to the tax benefits under the Investment Law, as in effect prior to the 2011 Amendment, unless the
company owning such enterprises had made an election to apply the provisions of the 2011 Amendment (such election cannot be later rescinded),
which is to be filed with the ITA, not later than the date prescribed for the filing of the company&#8217;s annual Israeli tax return
for the respective year.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are currently not entitled to tax benefits under the 2011 Amendment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Tax
Benefits Under the 2017 Amendment</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additional
amendments to the Investment Law became effective in January 2017, or the 2017 Amendment. The 2017 Amendment provides new tax benefits
for two types of &#8220;Technological Enterprises,&#8221; as described below, and is in addition to the other existing tax benefit programs
under the Investment Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2017 Amendment provides that a technological Preferred Company satisfying certain conditions may qualify as a &#8220;Preferred Technological
Enterprise&#8221; and thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as &#8220;Preferred Technological Income,&#8221;
as defined in the Investment Law. The tax rate is further reduced to 7.5% for a Preferred Technological Enterprise located in development
area &#8220;A.&#8221; In addition, a Preferred Company will benefit from a reduced corporate tax rate of 12% on capital gain derived
from the sale of certain &#8220;Benefited Intangible Assets&#8221; (as defined in the Investment Law) to a related foreign company if
the Benefited Intangible Assets were acquired from a foreign company on or after January&#160;1, 2017, for at least NIS 200&#160;million,
and the sale receives prior approval from the IIA.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2017 Amendment further provides that a technological Preferred Company satisfying certain conditions may qualify as a &#8220;Special
Preferred Technological Enterprise&#8221; and thereby enjoy a reduced corporate tax rate of 6% on &#8220;Preferred Technological Income&#8221;
regardless of the company&#8217;s geographic location within Israel. In addition, a Special Preferred Technological Enterprise will enjoy
a reduced corporate tax rate of 6% on capital gain derived from the sale of certain &#8220;Benefited Intangible Assets&#8221; to a related
foreign company if the Benefited Intangible Assets were either developed by an Israeli company or acquired from a foreign company on
or after January&#160;1, 2017, and the sale received prior approval from the IIA. A Special Preferred Technological Enterprise that acquires
Benefited Intangible Assets from a foreign company for more than NIS 500&#160;million may be eligible for these benefits for a period
of at least ten years, subject to certain approvals as specified in the Investment Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends distributed by a Preferred Company with a Technological Enterprise
or a Special Preferred Technological Enterprise, paid out of Preferred Technological Income or income attributed to production are generally
subject to withholding tax at the rate of 20% or such lower rate, as may be provided in an applicable tax treaty (subject to the receipt
in advance of a valid certificate from the ITA allowing for a reduced tax rate). If such dividends are paid to an Israeli company, no
tax is required to be withheld. If dividends paid out of Preferred Technological Income are distributed to a foreign company and other
conditions are met, the withholding tax rate will be 4% (or a lower rate under a tax treaty, if applicable, subject to the receipt in
advance of a valid certificate from the ITA allowing for a reduced tax rate).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are currently not entitled to tax benefits under the 2017 Amendment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Taxation
of Our Shareholders</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Capital
Gains</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Capital
gain tax is imposed on the disposition of capital assets by an Israeli resident for tax purposes, and on the disposition of such assets
by a non-Israeli resident for tax purposes if those assets are (i) located in Israel; (ii) are shares or a right to a share in an Israeli
resident corporation, (iii) are shares or a right to a share in a non-Israeli resident company, the majority of whose assets are located
in Israel, but only in respect of the portion of the consideration that is attributable to assets located in Israel, or (iv) located
outside of Israel which mainly represent, directly or indirectly, rights to assets, property or inventory located in Israel, but only
with respect to such portion of the assets that are located in Israel. The Ordinance distinguishes between &#8220;Real Capital Gain&#8221;
and the &#8220;Inflationary Surplus.&#8221; Real Capital Gain is the excess of the total capital gain over Inflationary Surplus computed
generally on the basis of the increase in the Israeli consumer price index or, in certain circumstances, a foreign currency exchange
rate, between the date of purchase and the date of disposition. The inflationary surplus accumulated from and after December 31, 1993,
is exempt from any capital gains tax in Israel while the real gain is taxed at the applicable rate discussed below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Real
Capital Gain accrued by individuals on the sale of our ordinary shares will be taxed at the rate of 25%. However, if the individual shareholder
is a &#8220;Controlling Shareholder&#8221; (i.e., a person who holds, directly or indirectly, alone or together with another, 10% or
more of one of the Israeli resident company&#8217;s &#8220;means of control,&#8221; which includes, among other things, the right to
receive profits of the company, voting rights, the rights to receive proceeds upon the company&#8217;s liquidation and the right to appoint
a director) at the time of sale or at any time during the preceding 12-month period, such capital gain will be taxed at the rate of 30%.
Furthermore, where an individual claimed real interest expenses and linkage differentials on securities, the capital gain on the sale
of the securities will taxed at a rate of 30% (exclusive of excess tax described below).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Real
Capital Gain derived by corporations will be generally subject to the corporate tax rate (23% in 2023).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Individual
and corporate shareholder dealing in securities in Israel may be taxed at the tax rates applicable to business income&#8212;23% for corporations
in 2022 and a marginal tax rate of up to 47% (in 2022) for individuals, not including excess tax (described below). Notwithstanding the
foregoing, Real Capital Gain derived from the sale of our ordinary shares by a non-Israeli shareholder may be exempt under the Ordinance
from Israeli taxation provided that the following cumulative conditions are met: (i)&#160;the shares were purchased upon or after the
registration of the shares on the stock exchange, (ii)&#160;the seller does not have a permanent establishment in Israel to which the
derived capital gain is attributable, (iii)&#160;if the seller is a corporation, no more than 25% of its means of control are held, directly
and indirectly, alone or together with another by Israeli residents, and (iv)&#160;if the seller is a corporation, there is no Israeli
resident that is entitled to 25% or more of the revenues or profits of the corporation, directly or indirectly. In addition, such exemption
would not be available to a person whose capital gains from selling or otherwise disposing of the securities are deemed to be business
income. In addition, this exemption shall not be relevant to the part of the capital gains allocable to the holding period before the
shares were listed for trading on the stock exchange (however, such portion might also be exempt from tax in Israel if certain criteria
are met).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the sale of shares may be exempt from Israeli capital gain tax under the provisions of an applicable tax treaty. For example,
the Convention between the Government of the United States and the Government of the State of Israel with respect to Taxes of Income,
as amended, or the U.S.-Israel Double Tax Treaty, exempts U.S.&#160;residents for the purposes of the treaty from Israeli capital gain
tax in connection with such sale, provided (i)&#160;the U.S.&#160;resident owned, directly or indirectly, less than 10% of the Israeli
resident company&#8217;s voting power at any time within the 12-month period preceding such sale; (ii)&#160;the seller, being an individual,
is present in Israel for a period or periods of less than 183 days during the taxable year; and (iii)&#160;the capital gain from the
sale was not derived through a permanent establishment of the U.S. resident in Israel.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shareholders
may be liable for Israeli tax on the sale of their ordinary shares and the payment of the consideration may be subject to withholding
of Israeli tax. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding
at the time of sale. For example, in transactions involving a sale of all of the shares of an Israeli resident company, in the form of
a merger or otherwise, the ITA may require from shareholders who are not liable for Israeli tax to sign declarations in forms specified
by this authority or obtain a specific exemption from the ITA to confirm their status as a non-Israeli resident, and, in the absence
of such declarations or exemptions, may require the purchaser of the shares to withhold taxes.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
purchaser, the Israeli stockbrokers or financial institutions through which the shares are held is obligated, subject to the abovementioned
exemptions, to withhold tax on the amount of consideration paid upon the sale of the shares (or on the Real Capital Gain on the sale,
if known) at the rate of 25% in respect of an individual and 23% in respect of a corporation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the sale of securities traded on a stock exchange, a detailed return, including a computation of the tax due, generally need to be filed
and an advanced payment must be paid on January 31 and July 31 of every calendar year in respect of sales of securities made within the
previous six months. However, if all tax due was withheld according to applicable provisions of the Ordinance and regulations promulgated
thereunder the aforementioned return need not be filed and no advance payment must be paid. Capital gain is also reportable on the annual
income tax return.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Dividends</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have never paid cash dividends. A distribution of dividends to an Israeli resident individual, will generally be subject to withholding
tax at a rate of 25% or 30% if the dividend recipient is a &#8220;Controlling Shareholder&#8221; (as defined above) at the time of distribution
or at any time during the preceding 12-month period and the shares are not held through a nominee company. If the income out of which
the dividend is being paid is attributable to a Preferred Enterprise or Preferred Technology Enterprise under the Investment Law, the
rate is generally not more than 20%. If the recipient of the dividend is an Israeli resident corporation, such dividend will be exempt
from income tax provided the income from which such dividend is distributed was derived or accrued within Israel (although, if such dividends
are subsequently distributed to non-Israeli individuals or a non-Israeli company, withholding tax at a rate of 25% (or 30% if the dividend
recipient is a &#8220;Controlling Shareholder&#8221; (as defined above)) or such lower rate as may be provided if an applicable tax treaty
will apply (subject to the receipt in advance of a valid tax certificate from the ITA allowing for a reduced tax rate)).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
non-Israeli resident (either individual or corporation) is generally subject to Israeli withholding tax on the receipt of dividends at
the rate of 25% (30% if the dividends recipient is a &#8220;Controlling Shareholder&#8221; (as defined above), at the time of distribution
or at any time during the preceding 12-month period and the shares are not held through a nominee company); those rates are subject to
a reduced tax rate under the provisions of an applicable double tax treaty (subject to the receipt in advance of a valid certificate
from the ITA allowing for a reduced tax rate). Under the U.S.-Israel Double Tax Treaty, the following withholding rates will apply in
respect of dividends distributed by an Israeli resident company to a U.S. resident: (i)&#160;if the U.S. resident is a corporation which
holds during that portion of the taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable
year (if any), at least 10% of the outstanding voting shares of the Israeli resident paying corporation and not more than 25% of the
gross income of the Israeli resident paying corporation for such prior taxable year (if any) consists of certain type of interest or
dividends&#8212;the tax rate is 12.5%, (ii)&#160;if both the conditions mentioned in (i)&#160;above are met and the dividend is paid
from an Israeli resident company&#8217;s income which was entitled to a reduced tax rate applicable to an Approved Enterprise, Benefited
Enterprise, Preferred Enterprise or Preferred Technology Enterprise &#8212;the tax rate is 15% if a certificate for a reduced withholding
tax rate would be provided in advance from the ITA and (iii)&#160;in all other cases, the tax rate is 25%. The aforementioned rates under
the U.S.-Israel Double Tax Treaty will not apply if the dividend income was derived through a permanent establishment of the U.S. resident
in Israel.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
non-Israeli resident who receives dividends from which tax was withheld is generally exempt from the obligation to file tax returns in
Israel with respect to such income, provided that (i)&#160;such income was not generated from business conducted in Israel by the taxpayer,
(ii)&#160;the non-Israeli resident is not subject to Excess Tax in Israel, and; (iii) the taxpayer has no other taxable sources of income
in Israel with respect to which a tax return is required to be filed.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Excess
Tax</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Individuals
who are subject to tax in Israel (whether such individual is an Israeli resident or non-Israeli resident) are also subject to an additional
tax on annual income exceeding a certain threshold (NIS 698,280 for 2023), which amount is linked to the Israeli consumer price index
and therefore is usually adjusted on an annual basis, at a rate of 3%, including, but not limited to, income derived from dividends,
interest and capital gains.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Estate
and Gift Tax</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Israeli
law presently does not impose estate tax or in general gift taxes.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>U.S.
Federal Income Tax Considerations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following discussion is a summary of U.S. federal income tax considerations generally applicable to the ownership and disposition of
our ordinary shares. This summary applies only to investors that are U.S. Holders (as defined below) that hold our ordinary shares as
&#8220;capital assets&#8221; (generally, property held for investment) under the U.S.&#160;Internal Revenue Code of 1986, as amended
(the &#8220;Code&#8221;). This discussion is based upon U.S. federal tax law as in effect on the date of this annual report on Form 20-F
and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report on Form 20-F, as well as
judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to
differing interpretations or change, which change could apply retroactively and could affect the tax considerations described below.
No ruling has been sought from the Internal Revenue Service, or the IRS, with respect to any U.S. federal income tax considerations described
below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion, moreover, does not address
the U.S. federal estate, gift, alternative minimum tax considerations, the Medicare tax on certain net investment income, any withholding
or information reporting requirements, or any state, local and non-U.S. tax considerations relating to the ownership or disposition of
our ordinary shares. The following summary does not address all aspects of U.S. federal income taxation that may be important to particular
investors in light of their individual circumstances or to persons in special tax situations such as:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">banks and other financial institutions;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">insurance companies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">pension plans;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">cooperatives;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">regulated investment companies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">real estate investment trusts;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">broker-dealers;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">traders that elect to use a mark-to-market method of
    accounting;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">certain former U.S. citizens or long-term residents;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">tax-exempt entities (including private foundations);</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">holders who acquire our ordinary shares pursuant to
    any employee share option or otherwise as compensation;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">investors that will hold our ordinary shares as part
    of a straddle, hedge, conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons holding our ordinary shares in connection with
    a trade or business outside the United States;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons that actually or constructively own 10% or
    more of our stock (by vote or value);</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">investors that have a functional currency other than
    the U.S. dollar; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">partnerships or other entities classified as partnerships
    for U.S. federal income tax purposes, or persons holding our ordinary shares through such entities, all of whom may be subject to
    tax rules that differ significantly from those discussed below.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Investors
are urged to consult their tax advisors about the application of the U.S. federal income tax rules to their particular circumstances
as well as the state, local, non-U.S. and other tax consequences to them of the ownership and disposition of our ordinary shares.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>General</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of this discussion, a &#8220;U.S. Holder&#8221; is a beneficial owner of our ordinary shares that is, for U.S.&#160;federal
income tax purposes:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an individual who is a citizen or resident of the United
    States;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a corporation (or other entity treated as a corporation
    for U.S. federal income tax purposes) created in, or organized under the law of, the United States or any state thereof or the District
    of Columbia;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an estate the income of which is includible in gross
    income for U.S. federal income tax purposes regardless of its source; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a trust (A) the administration of which is subject
    to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial
    decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person under the Code.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our ordinary shares,
the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership.
Partnerships holding our ordinary shares and their partners are urged to consult their tax advisors regarding the ownership and disposition
of our ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Dividends</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
cash distributions (including the amount of any Israeli tax withheld) paid on our ordinary shares out of our current or accumulated earnings
and profits, as determined under U.S. federal income tax principles, will generally be includible in the gross income of a U.S. Holder
as dividend income on the day actually or constructively received by the U.S. Holder. Because we do not intend to determine our earnings
and profits on the basis of U.S. federal income tax principles, any distribution we pay will generally be treated as a &#8220;dividend&#8221;
for U.S. federal income tax purposes. Dividends received on our ordinary shares will not be eligible for the dividends received deduction
allowed to corporations in respect of dividends received from U.S. corporations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Individuals
and other non-corporate U.S. Holders may be subject to tax at the lower capital gains tax rate applicable to &#8220;qualified dividend
income,&#8221; provided that certain conditions are satisfied, including that (1) the ordinary shares on which the dividends are paid
are readily tradable on an established securities market in the United States, or we are eligible for the benefit of the U.S.-Israel
Double Tax Treaty, (2) we are neither classified as a PFIC nor treated as such with respect to a U.S. Holder (as discussed below) for
the taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period and other requirements are
met. Our ordinary shares are listed and traded on the Nasdaq Global Market. Thus, we believe that our ordinary shares will generally
be considered to be readily tradable on an established securities market in the United States. There can be no assurance that the ordinary
shares will continue to be considered readily tradable on an established securities market in later years. U.S. Holders are urged to
consult their tax advisors regarding the availability of the lower rate for dividends paid with respect to our ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
U.S. foreign tax credit purposes, dividends received on our ordinary shares will generally be treated as income from foreign sources
and will generally constitute passive category income. A U.S. Holder may be subject to Israeli withholding taxes on dividends paid on
our ordinary shares. See &#8220;&#8212;Israeli Tax Considerations and Government Programs&#8212;Taxation of Our Shareholders&#8212;Dividends.&#8221;
Subject to certain conditions and limitations, a U.S. Holder eligible under the U.S.-Israel Double Tax Treaty may be eligible to claim
a foreign tax credit in respect of any Israeli income taxes paid or withheld with respect to dividends on our ordinary shares to the
extent such taxes are nonrefundable under the U.S.-Israel Double Tax Treaty. Alternatively, a U.S.&#160;Holder who does not elect to
claim a foreign tax credit for foreign tax withheld may instead claim a deduction for U.S. federal income tax purposes in respect of
such withholding, but only for a year in which such holder elects to do so for all creditable foreign income taxes paid or accrued in
the relevant taxable year. The rules governing the foreign tax credit are complex and each U.S.&#160;Holder is urged to consult its tax
advisor regarding the availability of the foreign tax credit under its particular circumstances.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->114<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Sale
or Other Disposition</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
U.S. Holder will generally recognize gain or loss upon the sale or other disposition of our ordinary shares in an amount equal to the
difference between the amount realized upon the disposition and the U.S. Holder&#8217;s adjusted tax basis in such ordinary shares. The
gain or loss will generally be capital gain or loss and individuals and other non-corporate U.S. Holders who have held the ordinary shares
for more than one year will generally be eligible for reduced tax rates. The deductibility of a capital loss may be subject to limitations.
Any such gain that the U.S. Holder recognizes may be subject to Israeli income tax and will generally be U.S. source gain, which may
limit a U.S. Holder&#8217;s ability to claim a foreign tax credit for any such Israeli income tax imposed on such gain. U.S. Holders
that are eligible for the benefits of the U.S.-Israel Double Tax Treaty may apply the U.S.-Israel Double Tax Treaty to treat such gain
as exempt from Israeli tax, provided certain requirements are met. Pursuant to recently issued Treasury regulations, however, if a U.S.
Holder is not eligible for the benefits of the U.S.-Israel Double Tax Treaty or does not elect to apply the U.S.-Israel Double Tax Treaty,
then such holder may not be able to claim a foreign tax credit arising from any Israeli tax imposed on the sale or other disposition
of our ordinary shares. The rules regarding foreign tax credits and the deductibility of foreign taxes are complex. U.S. Holders should
consult their tax advisors regarding the availability of a foreign tax credit or deduction in light of their particular circumstances,
including their eligibility for benefits under the U.S.-Israel Double Tax Treaty and the potential impact of the recently issued Treasury
regulations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Passive
Foreign Investment Company Considerations</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
non-U.S. corporation, such as our company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year, if
either (i) 75% or more of its gross income for such year consists of certain types of passive income or (ii) 50% or more of the value
of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce or are
held for the production of passive income. For this purpose, cash and assets readily convertible into cash are generally classified as
passive assets and goodwill and other unbooked intangibles associated with active business activities may generally be classified as
non-passive assets. Passive income generally includes, among other things, dividends, interest, royalties and rents (other than certain
royalties and rents derived in the active conduct of a trade or business and not derived from a related person), and gains from the disposition
of passive assets. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of
any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Whether
we are, or will be, classified as a PFIC is a factual determination made annually that will depend, in part, upon the composition of
our income and assets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
the PFIC income test described above is based on a non-U.S. corporation&#8217;s gross income and not its net income, a non-U.S. corporation
in the early stages of its business, such as our company, can be treated as a PFIC in those taxable years before it has sufficient operating
revenue as a result of earning any amount of interest or other passive income. As a result, we believe that we will technically be classified
as a PFIC for the taxable year ended December 31, 2022. Depending upon the composition of our income and assets and the market price
of our ordinary shares during 2023 and subsequent taxable years and whether we start generating a substantial amount of active revenue,
we could continue to be classified as a PFIC for 2023 and subsequent taxable years if we are classified as a PFIC for 2022. Accordingly,
U.S. Holders of our ordinary shares should be willing to assume the risks of investing in a PFIC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
because there are uncertainties in the application of the relevant rules, it is possible that the IRS may challenge our classification
of certain income or assets as non-passive, or our valuation of our goodwill and other unbooked intangibles, each of which may increase
the likelihood of us becoming classified as a PFIC for the current or subsequent taxable years.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ordinary shares, unless the U.S. Holder makes a
mark-to-market election (as described below), the U.S. Holder will generally be subject to special tax rules on (i)&#160;any excess distribution
that we make to the U.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than
125% of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder&#8217;s holding period
for the ordinary shares), and (ii)&#160;any gain realized on the sale or other disposition of our ordinary shares. In addition, dividends
paid in respect of our ordinary shares would not be eligible for the lower tax rate described under &#8220;&#8212;Dividends&#8221; above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the PFIC rules:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the excess distribution or gain will be allocated ratably
    over the U.S. Holder&#8217;s holding period for the ordinary shares;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the amount allocated to the taxable year of the excess
    distribution, sale or other disposition and to any taxable years in the U.S. Holder&#8217;s holding period prior to the first taxable
    year in which we are classified as a PFIC (each, a &#8220;pre-PFIC year&#8221;), will be taxable as ordinary income;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the amount allocated to each prior taxable year, other
    than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for
    that year; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the interest charge generally applicable to underpayments
    of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ordinary shares, we generally will continue to
be treated as a PFIC with respect to such U.S. Holder for all succeeding years during which the holder holds our ordinary shares. However,
if we cease to meet the threshold requirements for PFIC status, provided that the U.S. Holder has not made a mark-to-market election,
as described below, such holder may avoid some of the adverse effects of the PFIC regime by making a &#8220;deemed sale&#8221; election
with respect to our ordinary shares held by such U.S. Holder. If such election is made, the U.S. Holder will be deemed to have sold our
ordinary shares it holds on the last day of the last taxable year in which we were classified as a PFIC at their fair market value and
any gain from such deemed sale will be taxed under the PFIC rules described above. After the deemed sale election, so long as we do not
become classified as a PFIC in a subsequent taxable year, the ordinary shares with respect to which such election was made will not be
treated as shares in a PFIC and the U.S. Holder will not be subject to the PFIC rules described above with respect to any &#8220;excess
distribution&#8221; received from us or any gain from an actual sale or other disposition of the ordinary shares. The rules dealing with
deemed sale elections are very complex. U.S. Holders of our ordinary shares are strongly urged to consult their tax advisors as to the
possibility and consequences of making a deemed sale election if we cease to be classified as a PFIC and such election becomes available
to such holders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ordinary shares and any subsidiary we own is also
classified as a PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC
for purposes of the application of these rules. As a result, such U.S. Holder may incur liability for the deferred tax and interest charge
described above if either (1) we receive any excess distribution from, or dispose of all or part of our interest in, the lower-tier PFIC
or (2) the U.S. Holder disposes of all or part of our ordinary shares. It is possible that any subsidiary we own would be a PFIC for
the current taxable year or future taxable years. U.S. Holders are urged to consult their tax advisors regarding the application of the
PFIC rules to any subsidiary we own.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
an alternative to the foregoing rules, a U.S. Holder of &#8220;marketable stock&#8221; (as defined below) in a PFIC may make a mark-to-market
election with respect to such stock. If a U.S. Holder makes this election with respect to our ordinary shares, the holder will generally
(i)&#160;include as ordinary income for each taxable year that we are classified as a PFIC the excess, if any, of the fair market value
of the ordinary shares held at the end of the taxable year over the adjusted tax basis of such ordinary shares and (ii)&#160;deduct as
an ordinary loss in each such taxable year the excess, if any, of the adjusted tax basis of the ordinary shares over the fair market
value of such ordinary shares held at the end of the taxable year, but such deduction will only be allowed to the extent of the amount
previously included in income as a result of the mark-to-market election. The U.S. Holder&#8217;s adjusted tax basis in the ordinary
shares would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes a mark-to-market
election in respect of our ordinary shares and we cease to be classified as a PFIC, the holder will not be required to take into account
the gain or loss described above during any period that we are not classified as a PFIC. If a U.S. Holder makes a mark-to-market election,
any gain such U.S. Holder recognizes upon the sale or other disposition of our ordinary shares in a year when we are classified as a
PFIC will be treated as ordinary income and any loss will be treated as ordinary loss, but such loss will only be treated as ordinary
loss to the extent of the net amount previously included in income as a result of the mark-to-market election.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
mark-to-market election is available only for &#8220;marketable stock,&#8221; which is stock that is regularly traded on a qualified
exchange or other market, as defined in applicable U.S. Treasury regulations. Our ordinary shares are listed on the Nasdaq Global Market
and should be treated as regularly traded for purposes of the mark-to-market rules. While we anticipate that our ordinary shares will
continue to qualify as being regularly traded, no assurances may be given in this regard. If any subsidiary we own is, or becomes, classified
as a PFIC, the mark-to-market election will likely not be available with respect to the shares of such subsidiary that are treated as
owned by a U.S.&#160;Holder. Consequently, a U.S. Holder could be subject to the PFIC rules with respect to income of a lower-tier PFIC
the value of which had already been taken into account indirectly via mark-to-market adjustments. U.S. Holders are urged to consult their
tax advisors as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests
in any lower-tier PFIC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"></p><div>

</div><!-- Field: Page; Sequence: 121; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->116<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Alternatively,
a U.S. shareholder of a PFIC may avoid the PFIC tax consequences described above in respect of its shares of PFIC stock by making a timely
&#8220;qualified electing fund,&#8221; or QEF, election. To comply with the requirements of a QEF election, such shareholder must receive
certain information from the PFIC. Because we do not intend to provide information necessary for U.S. Holders to make QEF elections,
such election will not be available to U.S. Holders of our ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a U.S. Holder owns our ordinary shares during any taxable year that we are classified as a PFIC, the holder must generally file an annual
IRS Form 8621 regarding distributions received on, and any gain realized on the disposition of, our ordinary shares. U.S. Holders are
urged to consult their tax advisor regarding our PFIC status and the U.S. federal income tax consequences of owning and disposing of
our ordinary shares if we are, or become, classified as a PFIC, including the possibility of making a mark-to-market or deemed sale election.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
summary of U.S. federal income tax consequences set out above is for general informational purposes only. Investors are urged to consult
their tax advisors about the application of the U.S. federal income tax rules to their particular circumstances as well as the state,
local, non-U.S. and other tax consequences to them of the ownership and disposition of our ordinary shares.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.
Dividends and Paying Agents</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>G.
Statement by Experts</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>H.
Documents on Display</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
allowed by the SEC, in Item 19 of this annual report on Form 20-F, we incorporate by reference certain information and documents we previously
filed with the SEC. This means that we can disclose important information to you by referring you to another document filed separately
with the SEC. The information incorporated by reference is considered to be part of this annual report on Form 20-F.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required
to file reports and other information with the SEC. The SEC maintains a website at www.sec.gov that contains reports and other information
regarding registrants that file electronically with the SEC. Our annual report on Form 20-F and other information submitted by us to
the SEC may be accessed through this website.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a foreign private issuer, we are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements,
and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained
in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file annual, quarterly and current reports
and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange
Act. However, we are required to file with the SEC, within four months after the end of each fiscal year, or such applicable time as
required by the SEC, an annual report on Form 20-F containing financial statements audited by an independent registered public accounting
firm, and we submit to the SEC, on Form 6-K, unaudited quarterly financial information for the first three quarters of each fiscal year.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
maintain a corporate website at http://www.nanox.vision. In accordance with NASDAQ Stock Market Rule 5250(d), we will post this annual
report on Form 20-F on our website. Information contained on our website is not incorporated by reference into this annual report on
Form 20-F. In addition, we will provide hardcopies of our annual report on Form 20-F free of charge to shareholders upon request.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>I.
Subsidiary Information</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>J.
Annual Report to Security Holders</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 122; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->117<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> <b>Item 11. Qualitative and Quantitative Disclosures About Market Risk</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Interest
Rate Risk</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022, we had cash equivalents consisting primarily of U.S. dollar bank deposits. Our&#160;primary exposure to market
risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. Consequently, changes
in market interest rates would not have a material impact on our financial position or results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022, we had an outstanding long-term loan of $3.8 million that was provided to Nanox Korea and <span>approximates
its carrying value since it bears interest at a rate close to the prevailing market rate. </span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Inflation-related
Risks</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not believe that the rate of inflation in Israel has had a material impact on our business to date, however, our costs in Israel will
increase if the inflation rate in Israel exceeds the devaluation of the NIS against the U.S. dollar or if the timing of such devaluation
lags behind inflation in Israel. Similarly, our costs in Korea will increase if the inflation rate in Korea exceeds the devaluation of
the KRW against the U.S. dollar or if the timing of such devaluation lags behind inflation in Korea.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Foreign
Currency Exchange Risk</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
U.S. dollar is our functional and reporting currency. However, a portion of our operating expenses, including personnel and facilities
related expenses, are incurred in NIS and KRW. As a result, our statements of operations and cash flows could be adversely affected in
the future due to changes in foreign exchange rates. If the NIS and KRW appreciate relative to the U.S. dollar, the dollar cost of our
operations in Israel or Korea would increase, respectively, and our dollar-denominated results of operations would be adversely affected.
However, as we have cash and cash equivalents denominated in U.S. dollars, we believe that changes in foreign currency exchange rates
would not have a material impact on our financial position or results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_013"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> <b>Item 12. Description of Securities Other than Equity Securities</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
Debt Securities</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Warrants and Rights</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Other Securities</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
American Depositary Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->118<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_014"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PART
II</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><div><a id="a_015"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
13. Defaults, Dividend Arrearages and Delinquencies</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_016"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
14. Material Modifications to the Rights of Security Holders and Use of Proceeds</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Initial
Public Offering</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 25, 2020, we completed an initial public offering in the United States on Nasdaq of our ordinary shares, par value NIS 0.01 per
share, pursuant to a Registration Statement on Form F-1, as amended (File No. 333-240209), which became effective on August 20, 2020.
Cantor Fitzgerald &amp; Co., Oppenheimer &amp; Co. Inc., Berenberg and CIBC Capital Markets acted as joint book-runners. National Securities
Corporation acted as co-manager for the offering.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
issued and sold 10,555,556 ordinary shares at a public offering price of $18 per share, including 1,376,812 additional ordinary shares
purchased by the underwriters at the public offering price, less the underwriting discount, pursuant to the exercise in full of their
option to purchase additional ordinary shares. Following the sale of our ordinary shares in connection with the initial public offering,
the offering terminated.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
gross proceeds of the shares sold (including the over-allotment option) was approximately $190.0 million. The total expenses of the offering,
including underwriting discounts and commissions, were approximately $20.8 million. The net proceeds we received from the offering (including
the over-allotment option) were approximately $169.2 million. No payments for such expenses were made directly or indirectly to (i)&#160;any
of our directors, officers or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii)&#160;any
of our affiliates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
has been no material change in the expected use of the net proceeds from our initial public offering as described in our final prospectus
filed with the SEC on August 24, 2020 pursuant to Rule 424(b)<span>.</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
15. Controls and Procedures</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disclosure
Controls and Procedures</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
of the Company, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the
Company&#8217;s disclosure controls and procedures as of December&#160;31, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s disclosure controls and procedures are designed to ensure that information required to be disclosed by the issuer in
the reports that it files or submits under the Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within
the time periods specified in the Commission&#8217;s rules and forms, and that such information is accumulated and communicated to management
of the Company, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
on their evaluation, as of the end of the period covered by this Annual Report on Form 20-F, the Company&#8217;s Chief Executive Officer
and Chief Financial Officer have concluded that the Company&#8217;s disclosure controls and procedures were not effective due to a material
weakness in the Company&#8217;s internal control over financial reporting described below.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management&#8217;s
Annual Report on Internal Control Over Financial Reporting</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as described in Rules 13a-15(f)
and 15d-15(f) under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Internal control over financial reporting is
defined as a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, or persons performing
similar functions, and effected by the Company&#8217;s board of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and procedures that: (1) pertain to the maintenance of records that
in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer, (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management
and directors of the issuer and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the issuer&#8217;s assets that could have a material effect on the financial statements.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in our
conditions, or that the degree of compliance with our policies or procedures may deteriorate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 124; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->119<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
management, under the supervision and participation of our Chief Executive Officer and our Chief Financial Officer, has conducted an
assessment of the effectiveness of our internal control over financial reporting as of December&#160;31, 2022 using criteria established
in <i>Internal Control &#8212; Integrated Framework (2013)</i> issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is
a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected
on a timely basis.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 40pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
disclosed previously, as of December&#160;31, 2021, our management had concluded that we did not maintain effective internal control
over financial reporting due to four material weaknesses as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lack
                                            of sufficient number of financial reporting personnel with an appropriate level of knowledge,
                                            experience and training commensurate with our financial reporting requirements.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inability
                                            to maintain effective internal controls over certain information technology (&#8220;IT&#8221;)
                                            general controls for applications used in the preparation of the Company&#8217;s consolidated
                                            financial statements.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inappropriate
                                            segregation of duties.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Insufficient
                                            internal controls to ensure the processing and reporting of valid transactions is complete,
                                            accurate and timely.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
2022, our management, with the oversight of the Audit Committee of the Board of Directors, reevaluated the Company&#8217;s Risks and
Controls by performing full testing procedures, mapped the relevant processes, identified risks in the Company&#8217;s critical processes,
implemented a new Enterprise Resource Planning (&#8220;ERP&#8221;) system and recruited additional financial reporting personnel and
strengthened their professional knowledge and skills.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
resulted with the management&#8217;s conclusion, as of December 31, 2022, that the Company has remediated the above material weaknesses
except for the maintenance of appropriate level of knowledge, experience and training of our personnel commensurate with our financial
reporting requirements. Therefore, our management has concluded that we did not maintain effective internal control over financial reporting
as of December 31, 2022. This control deficiency did not result in material misstatements of the consolidated financial statements; however,
this control deficiency described above could result in a misstatement that would result in a material misstatement of the annual or
interim consolidated financial statements that would not be prevented or detected. Accordingly, our management has determined that this
control deficiency constitutes a material weakness.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 40pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Remediation
Efforts</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have made substantial progress in developing and implementing our remediation plan, as we are adding to and improving our internal processes.
The remaining task of our remediation plan is to increase the appropriate level of knowledge, experience and training commensurate with
the Company&#8217;s financial reporting requirements in&#160;order to reduce the risk of material misstatement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Management&#8217;s
Planned Remediation Activities</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to address the material weakness in internal control over financial reporting on December 31, 2022, management has commenced remediation
efforts, which include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Lack
of sufficient number of financial reporting personnel with an appropriate level of knowledge, experience and training commensurate with
our financial reporting requirements</b>: Management has already made progress to increase the appropriate level of knowledge, experience
and training commensurate with the Company&#8217;s financial reporting requirements, and plans to continue to do so, by mapping and assessing
the required competencies and capabilities of the accounting team to support public company reporting requirements and enhancing and
supplementing the finance team with resources and personnel with knowledge and experience in internal control over financing reporting
commensurate with our financial reporting requirements, including with responsibility for design and implementation of internal controls.
We also provide Company-sponsored training programs related to internal control over financial reporting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 125; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->120<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Remediation
of Previously Disclosed Material Weaknesses</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following captures the activities made by management related to the material weaknesses that were previously identified and which have
been remediated at December&#160;31, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Did
not design and maintain effective internal controls over certain information technology (&#8220;IT&#8221;) general controls for applications
used in the preparation of the Company&#8217;s consolidated financial statements</b>: We successfully implemented a new ERP system to
support efficient automated and manual controls that are dependent on system reporting and to structure effective user access rights
and privileges within our IT systems. We also modified current procedures and documentation and added new procedures and documentation
due to the implementation of the new ERP system. Based on the results of our testing, management has concluded that the IT general controls
for applications used in the preparation of the Company&#8217;s consolidated financial statements are adequately designed and have operated
effectively for a sufficient period of time as of December&#160;31, 2022. Accordingly, the material weakness related to our IT general
controls is remediated.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Inappropriate
segregation of duties</b>: We recruited additional personnel with a requisite level of qualification and experience, including accounting
and finance employees with the specific technical accounting and financial reporting experience necessary for a public company, including
a controller and additional bookkeeper. Based on the results of our testing, management has concluded that this control is adequately
designed and has operated effectively for a sufficient period of time as of December&#160;31, 2022. Accordingly, the material weakness
related to inappropriate segregation of duties is remediated.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Not
maintaining effective internal controls to ensure processing and reporting of valid transactions is complete, accurate and timely</b>:
We designed and implemented additional formal policies, procedures and documentation controls to ensure transactions are properly initiated,
recorded, processed, reported, appropriately authorized and approved, including enhancing our internal review procedures. Specifically,
we have implemented a sufficient level of formal policies, procedures and documentation that define how transactions across the business
cycles are initiated, recorded, processed, reported, documented, appropriately authorized and approved. The new controls and the revised
existing controls include controls to address complex accounting issues, period-end financial reporting and segregation of duties. Based
on the results of our testing, management has concluded that this control is adequately designed and has operated effectively for a sufficient
period of time as of December&#160;31, 2022. Accordingly, the material weakness related to the effectiveness of the internal controls
is remediated.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Attestation Report of the Registered Public Accounting
    Firm</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 7.5pt 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
internal control over financial reporting as of December&#160;31, 2022 has been audited by&#160;Kesselman &amp; Kesselman, an independent
registered public accounting firm in&#160;Israel&#160;and a member of PricewaterhouseCoopers International Limited, as stated in their
report which is included under &#8220;Item 18&#8212;Financial Statements.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 24.5pt; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Changes in Internal Control Over Financial Reporting</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">Other
than the remediation efforts described above taken to address the material weaknesses during the period covered by this Annual Report,
there were no changes in our internal control over financial reporting (as defined in Rules&#160;13a-15(f)&#160;and&#160;15d-15(f)&#160;under
the Securities Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_018"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16. [Reserved]</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="B_001"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Audit Committee Financial Expert</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Noga
Kainan and Dan Suesskind, independent directors and members of our audit committee, are audit committee financial experts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="B_002"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Code of Ethics</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have adopted a code of ethics and conduct, which is applicable to all of our directors, officers and employees. We have made our code
of ethics publicly available on our website.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 126; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->121<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="B_003"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered
by Kesselman &amp; Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited, our
independent registered public accounting firm, for the periods indicated.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year Ended<br/> December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Audit Fees<sup>(1)</sup></span></td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">608,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">577,000</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Audit-Related Fees<sup>(2)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tax Fees<sup>(3)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">19,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">37,000</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All Other Fees<sup>(4)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">11,000</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Total</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">627,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">625,000</td><td style="text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 25%"><div style="font-size: 1pt; border-top: Black 1.5pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Audit Fees&#8221; represents the aggregate fees
    billed or accrued for the interim reviews and audit of our annual financial statements. This category also includes services that
    generally the independent accountant provides, such as consents and assistance with and review of documents filed with the SEC as
    well as fees related to audits in connection with our secondary public offering in February 2021. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Audit-Related Fees&#8221; represents the aggregate
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    our financial statements and not reported under &#8220;Audit Fees.&#8221;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Tax Fees&#8221; represents the aggregate fees
    billed or accrued for professional tax services rendered by our independent registered public accounting firm for tax compliance
    and tax advice on actual or contemplated transactions.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;All Other Fees&#8221; represents the aggregate
    fees billed or accrued for services rendered by our independent registered public accounting firm other than services reported under
    &#8220;Audit Fees,&#8221; &#8220;Audit-related Fees&#8221; and &#8220;Tax Fees.&#8221;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Audit
Committee Pre-Approval Policies and Procedures</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Audit Committee has adopted a policy pursuant to which we will not engage our auditors to perform any non-audit services unless the audit
committee pre-approves the service.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_019"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16D. Exemptions from the Listing Standards for Audit Committees</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_020"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_021"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16F. Change in Registrant&#8217;s Certifying Accountant</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 127; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->122<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_022"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16G. Corporate Governance</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a foreign private issuer, we are permitted to follow certain Israeli corporate governance practices instead of the Nasdaq corporate governance
rules, provided that we disclose which requirements we are not following and the equivalent Israeli requirement. Pursuant to the &#8220;foreign
private issuer exemption&#8221;:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we comply with Israeli law with respect to quorum requirements.
    In accordance with the Companies Law, our amended and restated articles of association provide that a quorum of two or more shareholders
    holding at least 25% of the voting rights in person or by proxy is required for commencement of business at a general shareholder
    meeting. The quorum set forth in our amended and restated articles of association with respect to an adjourned meeting shall, subject
    to a limited exception, consist of one or more shareholders present in person or by proxy (including by voting deed), regardless
    of the number or percentage of our outstanding shares held by them;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we follow Israeli corporate governance practices instead
    of the Nasdaq requirements with regard to the nomination committee and director nomination procedures. The nominations for directors,
    which are presented to our shareholders by our board of directors, are generally made by the board of directors itself, in accordance
    with the provisions of our amended and restated articles of association and the Companies Law. With the exception of directors elected
    by our board of directors due to a vacancy, in accordance with the staggered nomination as described under &#8220;Item 6. Directors,
    Senior Management and Employees&#8212;C. Board Practices&#8212;Board of Directors,&#8221; we intend to elect our directors to hold
    office until the annual general meeting of our shareholders that occurs in the third year following his or her election and until
    his or her successor shall be elected and qualified;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we adopt and approve material changes to equity incentive
    plans in accordance with the Companies Law, which does not impose a requirement of shareholder approval for such actions. In addition,
    we follow Israeli corporate governance practice, which requires shareholder approval prior to an issuance of securities in connection
    with equity-based compensation of officers, directors, employees or consultants only under certain circumstances, in lieu of Nasdaq
    Marketplace Rule 5635(c);</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">as opposed to making periodic reports to shareholders
    and proxy solicitation materials available to shareholders in the manner specified by the Nasdaq corporate governance rules, the
    Companies Law does not require us to distribute periodic reports directly to shareholders, and the generally accepted business practice
    in Israel is not to distribute such reports to shareholders but to make such reports available through a public website. We will
    only mail such reports to shareholders upon request. As a foreign private issuer, we are generally exempt from the SEC&#8217;s proxy
    solicitation rules; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we follow Israeli corporate governance practices instead
    of Nasdaq requirements to obtain shareholder approval for all corporate actions requiring such approval under the requirements of
    the Companies Law such as (i)&#160;transactions with directors concerning the terms of their service or indemnification, exemption
    and insurance for their service (or for any other position that they may hold at our company), (ii)&#160;extraordinary transactions
    with controlling shareholders, (iii)&#160;terms of employment or other engagement of the controlling shareholder of the company or
    such controlling shareholder&#8217;s relative, (iv)&#160;private placements that will result in a change of control, (v)&#160;certain
    transactions, other than a public offering, involving issuances of a 20% or greater interest in us and (vi)&#160;certain acquisitions
    of the stock or assets of another company.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Otherwise,
we intend to comply with the rules generally applicable to U.S. domestic companies listed on the Nasdaq. We may in the future decide
to use the foreign private issuer exemption with respect to some or all of the other Nasdaq corporate governance rules. We also intend
to comply with Israeli corporate governance requirements under the Companies Law applicable to us.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_023"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16H. Mine Safety Disclosure</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_024"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 128; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->123<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_025"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PART
III</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><div><a id="a_026"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> <b>Item 17. Financial Statements</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have elected to provide financial statements pursuant to Item 18.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><div><a id="a_027"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
18. Financial Statements</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements of Nano-X Imaging Ltd. are included at the end of this annual report on Form 20-F.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_028"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
19. Exhibits</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exhibit
    No.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 1%; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 89%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Description</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.1*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000114036120018404/nt10006151x9_ex3-2.htm">Form of Amended and Restated Articles of Association of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant&#8217;s Registration Statement on Form F-1/A (File No. 333-240209) filed on August&#160;14, 2020 with the SEC)</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.1&#8224;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex2-1_nanox.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description of Securities Registered under Section 12 of the Exchange Act</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000121390022022912/f20f2021ex4-1_nanox.htm">Asset Purchase Agreement, dated November&#160;3, 2021, among MDWEB, LLC, Nano-X Imaging. and Nano-X Imaging Ltd. (incorporated by reference to Exhibit 4.1 to the Registrant&#8217;s Registration Statement on Form 20-F (File No. 001-39461) filed on May 2, 2022 with the SEC)</a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1795251/000121390022022912/f20f2021ex4-2_nanox.htm">Agreement
    and Plan of Merger, dated August 9, 2021, among Nano-X Imaging Ltd, Zebra Medical Vision Ltd. and PerryLLion Ltd. (incorporated by
    reference to Exhibit 4.2 to the Registrant&#8217;s Registration Statement on Form 20-F (File No. 001-39461) filed on May 2, 2022
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000121390022022912/f20f2021ex4-3_nanox.htm">First Amendment to the Agreement and Plan of Merger, dated August 9, 2021, among Nano-X Imaging Ltd, Zebra Medical Vision Ltd. and PerryLLion Ltd. (incorporated by reference to Exhibit 4.3 to the Registrant&#8217;s Registration Statement on Form 20-F (File No. 001-39461) filed on  May 2, 2022 with the SEC)</a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.4*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000121390022022912/f20f2021ex4-4_nanox.htm">Stock Purchase Agreement dated November 2, 2021 by and among&#160;Dr. Michael Yuz, Dr. Michael Yuz as the representative of Sellers, USARAD Holdings, Inc. and Nano-X Imaging Ltd (incorporated by reference to Exhibit 4.4 to the Registrant&#8217;s Registration Statement on Form 20-F (File No. 001-39461) filed on  May 2, 2022 with the SEC)</a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.5*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000114036120017084/nt10006151x8_ex4-5.htm">Form of warrants to purchase ordinary shares issued to A-Labs Finance and Advisory Ltd. (incorporated by reference to Exhibit 4.5 to the Registrant&#8217;s Registration Statement on Form F-1 (File No. 333-240209) filed on July&#160;30, 2020 with the SEC)</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.6*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000114036120017084/nt10006151x8_ex4-6.htm">Warrant to purchase ordinary shares, dated September&#160;2, 2019, issued to SK Telecom TMT Investment Corp. (incorporated by reference to Exhibit 4.6 to the Registrant&#8217;s Registration Statement on Form F-1 (File No. 333-240209) filed on July&#160;30, 2020 with the SEC)</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.7*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000114036120017084/nt10006151x8_ex4-7.htm">Amendment to Warrant to purchase ordinary shares, dated June&#160;4, 2020, issued to SK Telecom TMT Investment Corp. (incorporated by reference to Exhibit 4.7 to the Registrant&#8217;s Registration Statement on Form F-1 (File No. 333-240209) filed on July&#160;30, 2020 with the SEC)</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.8*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000114036120017084/nt10006151x8_ex10-1.htm">Contract Manufacturing Agreement, dated May&#160;26, 2020, by and between the Registrant and FoxSemicon Integrated Technology, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant&#8217;s Registration Statement on Form F-1 (File No. 333-240209) filed on July&#160;30, 2020 with the SEC)</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.9*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000114036120018404/nt10006151x9_ex10-2.htm">Registration Rights Agreement by and among the Registrant and the certain shareholders named therein (incorporated by reference to Exhibit 10.2 to the Registrant&#8217;s Registration Statement on Form F-1/A (File No. 333-240209) filed on August&#160;14, 2020 with the SEC)</a></span></td></tr>
</table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span>&#160;</p><div>

</div><p style="margin: 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->124<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 10%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.10*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 89%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000114036120017084/nt10006151x8_ex10-3.htm">2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant&#8217;s Registration Statement on Form F-1 (File No. 333-240209) filed on July&#160;30, 2020 with the SEC)</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.11*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000114036120017084/nt10006151x8_ex10-4.htm">U.S. Sub-Plan (incorporated by reference to Exhibit 10.4 to the Registrant&#8217;s Registration Statement on Form F-1 (File No. 333-240209) filed on July&#160;30, 2020 with the SEC)</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.12*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000114036120018404/nt10006151x9_ex10-5.htm">Form of Indemnification Agreement between the Registrant and each director and executive officer (incorporated by reference to Exhibit 10.5 to the Registrant&#8217;s Registration Statement on Form F-1/A (File No. 333-240209) filed on August&#160;14, 2020 with the SEC)</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.13*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1795251/000114036120030050/brhc10018522_ex99-1.htm">Compensation Policy for Executive Officers and Directors (incorporated by reference to Exhibit A to the Proxy Statement filed as Exhibit 99.1 to the Registrant&#8217;s Form 6-K (File No. 001-39461) filed on December 31, 2020 with the SEC)</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.14&#8224;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex4-14_nanox.htm">Settlement Agreement and Release dated December 29, 2022, among Nano-X Imaging Ltd, Nano-X AI Ltd. (formerly Zebra Medical Vision Ltd.) and PerryLLion Ltd.</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.15&#8224;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex4-15_nanox.htm">First Amendment to Stock Purchase Agreement dated April 28, 2023, by and among Dr. Michael Yuz, as the Seller Representative, Nano-X Imaging, Inc. and Nano-X Imaging Ltd</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.1&#8224;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex8-1_nanox.htm">List of subsidiaries of the Registrant</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.1&#8224;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex12-1_nanox.htm">Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.2&#8224;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex12-2_nanox.htm">Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.1&#177;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex13-1_nanox.htm">Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.2&#177;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex13-2_nanox.htm">Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.1&#8224;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex15-1_nanox.htm">Consent of Kesselman &amp; Kesselman, Certified Public Accountants (Isr.) a member firm of PricewaterhouseCoopers International Limited, independent registered public accounting firm.</a></span></td></tr>

<tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="width: 10%">101.INS</td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 89%">Inline XBRL Instance Document.</td></tr>
  <tr style="vertical-align: top; ">
    <td>101.SCH</td>
    <td>&#160;</td>
    <td>Inline XBRL Taxonomy Extension Schema Document.</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>101.CAL</td>
    <td>&#160;</td>
    <td>Inline XBRL Taxonomy Extension Calculation Linkbase Document.</td></tr>
  <tr style="vertical-align: top; ">
    <td>101.DEF</td>
    <td>&#160;</td>
    <td>Inline XBRL Taxonomy Extension Definition Linkbase Document.</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>101.LAB</td>
    <td>&#160;</td>
    <td>Inline XBRL Taxonomy Extension Label Linkbase Document.</td></tr>
  <tr style="vertical-align: top; ">
    <td>101.PRE</td>
    <td>&#160;</td>
    <td>Inline XBRL Taxonomy Extension Presentation Linkbase Document.</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>104</td>
    <td>&#160;</td>
    <td>Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
filed.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8224;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Filed
herewith.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#177;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furnished
herewith.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
reviewing the agreements included as exhibits to this annual report on Form 20-F, please remember they are included to provide you with
information regarding their terms and are not intended to provide any other factual or disclosure information about us or the other parties
to the agreements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties
have been made solely for the benefit of the other parties to the applicable agreement and:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">may apply standards of materiality in a way that is
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SIGNATURES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NANO-X
IMAGING LTD hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on Form 20-F on its behalf.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</span></td>
    <td colspan="2" style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Erez Meltzer</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 4%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name:&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title:</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date:
May 1, 2023</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 0pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">CONSOLIDATED
FINANCIAL STATEMENTS</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">INDEX</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-indent: -0.125in; padding-left: 0.125in; width: 89%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 10%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Page</b></span></td></tr> <tr style="vertical-align: top"> <td style="text-indent: -0.125in; padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr> <tr style="vertical-align: top; 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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span>&#160;</p><div>

</div><div><a id="f_001"></a></div><p style="text-align: left; margin: 0"><img alt="" src="image_001.jpg"/></p><div>

</div><p style="margin: 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>Report of Independent Registered Public
Accounting Firm </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">To the Board of Directors and Shareholders
of Nano-X Imaging Ltd.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b><i>Opinions on the Financial Statements
and Internal Control over Financial Reporting</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">We have audited the accompanying consolidated
balance sheets of Nano-X Imaging Ltd. and its subsidiaries (the &#8220;Company&#8221;) as of December 31, 2022 and 2021, and the related
consolidated statements of operations, of changes in shareholders&#8217; equity and of cash flows for each of the three years in the period
ended December 31, 2022, including the related notes (collectively referred to as the &#8220;consolidated financial statements&#8221;).
We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and
2021<b>, </b>and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in
conformity with accounting principles generally accepted in the United States of America. the effectiveness of the Company&#8217;s internal
control over financial reporting does not affect our opinion on those consolidated financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">Also in our opinion, the Company did not maintain, in all material
respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in <i>Internal Control
- Integrated Framework</i> (2013) issued by the COSO because material weakness in internal control over financial reporting existed as
of that date. The Company lacked a sufficient number of financial reporting personnel with an appropriate level of knowledge, experience
and training commensurate with the Company&#8217;s financial reporting requirements. A material weakness is a deficiency, or a combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses referred to
above are described in Management's Report on Internal Control over Financial Reporting appearing in Item 15A. We considered this material
weakness in determining the nature, timing, and extent of audit tests applied in our audit of the 2022 consolidated financial statements,
and our opinion regarding the effectiveness of the Company&#8217;s internal control over financial reporting does not affect our opinion
on those consolidated financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><b><i>Basis for Opinions</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">The Company's management is responsible for
these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of
the effectiveness of internal control over financial reporting, included in appearing under Item 15A. Our responsibility is to express
opinions on the Company&#8217;s consolidated financial statements and on the Company's internal control over financial reporting based
on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">We conducted our audits in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control
over financial reporting was maintained in all material respects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">Our audits of the consolidated financial statements
included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audits provide a reasonable basis for our opinions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><b><i>Definition and Limitations of Internal
Control over Financial Reporting</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">A company&#8217;s internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company&#8217;s internal control
over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of the company&#8217;s assets that could have a material effect on the financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><b><i>Critical Audit Matters</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; "><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; ">The critical audit matter communicated below
is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated
to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and
(ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "></p><div>

</div><!-- Field: Page; Sequence: 134; Value: 2 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><i>Goodwill impairment assessment &#8211;
AI Solutions reporting unit</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">As described in Note
4 to the consolidated financial statements, the Company&#8217;s consolidated goodwill balance and goodwill balance for AI solutions reporting
unit were $7,420 thousand and $365 thousand, respectively, as of December&#160;31, 2022. As disclosed by management, goodwill is assigned
to reporting units and tested for impairment at least annually, in the fourth quarter of the fiscal year, and whenever events or changes
in circumstances indicate the carrying value of goodwill may not be recoverable. During the second quarter of 2022, management noted the
following main triggering events for its AI solutions reporting unit: (i)&#160;fluctuations in the macroeconomic environment and (ii)&#160;updated
assumptions supporting the cash flow projections of the AI Solutions reporting unit, including certain revenue growth assumptions, and
the associated operating profit margins. As a result, management performed a quantitative analysis and recorded a goodwill impairment
charge of $14,338 thousand related to its AI solutions reporting unit. During the fourth quarter of 2022, management conducted a quantitative
analysis of the reporting unit as part of its annual goodwill impairment test with the assistance of an independent valuation expert.
In the fourth quarter of 2022, management recorded an additional goodwill impairment charge of $36,540 thousand related to its AI solutions
reporting unit. Management determines the fair value of its reporting units using the income approach, according to which, the method
used is the discounted cash flow method. Management starts with a forecast of all the expected net cash flows associated with the reporting
unit, which includes the application of a terminal value, and then applies a discount rate to arrive at a net present value amount. As
disclosed by management, key estimates include the terminal revenue growth rate taking into consideration industry and market conditions
and the discount rate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The principal considerations
for our determination that performing procedures relating to the goodwill impairment assessment for the AI solutions reporting unit is
a critical audit matter is (i)&#160;the significant judgment by management when determining the fair value of the reporting unit; (ii)&#160;a
high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management&#8217;s significant assumptions
related to the terminal revenue growth rate and discount rate; and (iii)&#160;the audit effort involved the use of professionals with
specialized skill and knowledge.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Addressing the matter
involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial
statements. These procedures included testing the effectiveness of controls relating to management&#8217;s goodwill impairment assessment,
including controls over the valuation of the AI solutions reporting unit. These procedures also included, among others, (i)&#160;testing
management&#8217;s process for determining the fair value estimate; (ii)&#160;evaluating the appropriateness of the discounted cash flow
model; (iii)&#160;testing the completeness, accuracy and relevance of underlying data used in the model; and (iv)&#160;evaluating the
significant assumptions used by management related to the terminal revenue growth rate and discount rate. Evaluating management&#8217;s
assumptions related to the terminal revenue growth rate involved evaluating whether the assumptions used by management were reasonable
considering (i)&#160;the current and past performance of the reporting unit, (ii)&#160;the consistency with external market and industry
data, and (iii)&#160;whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with
specialized skill and knowledge were used to assist in the evaluation of management&#8217;s discounted cash flow model and the discount
rate assumption.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">/s/ <ix:nonNumeric contextRef="c0" name="dei:AuditorName">Kesselman &amp; Kesselman</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">Certified Public Accountants (Isr.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">A member firm of PricewaterhouseCoopers International
Limited</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><ix:nonNumeric contextRef="c0" name="dei:AuditorLocation">Tel-Aviv, Israel</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">May 1, 2023</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">We have served as the Company&#8217;s auditor
since 2019.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>


</div><!-- Field: Page; Sequence: 135; Value: 2 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="f_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">CONSOLIDATED
BALANCE SHEETS</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,<br/>
    2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,
    <br/> 2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">U.S.
    Dollars in thousands</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Assets</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">CURRENT ASSETS:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Cash and cash
    equivalents</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CashAndCashEquivalentsAtCarryingValue" scale="3" unitRef="usd">38,463</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CashAndCashEquivalentsAtCarryingValue" scale="3" unitRef="usd">66,645</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Marketable securities -
    short term</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:MarketableSecuritiesCurrent" scale="3" unitRef="usd">39,161</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:MarketableSecuritiesCurrent" scale="3" unitRef="usd">22,066</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Accounts receivables net of allowance for credit losses of $<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent" scale="3" unitRef="usd">34</ix:nonFraction> and $<ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent" scale="3" unitRef="usd">137</ix:nonFraction> as of December&#160;31, 2022 and December 31,2021, respectively.</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsAndOtherReceivablesNetCurrent" scale="3" unitRef="usd">977</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsAndOtherReceivablesNetCurrent" scale="3" unitRef="usd">1,051</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Prepaid expenses</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PrepaidExpenseCurrent" scale="3" unitRef="usd">2,414</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PrepaidExpenseCurrent" scale="3" unitRef="usd">3,129</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Other
    current assets</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherAssetsCurrent" scale="3" unitRef="usd">1,446</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherAssetsCurrent" scale="3" unitRef="usd">1,966</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">TOTAL
    CURRENT ASSETS</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AssetsCurrent" scale="3" unitRef="usd">82,461</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AssetsCurrent" scale="3" unitRef="usd">94,857</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">NON-CURRENT ASSETS:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Restricted cash</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:RestrictedCash" scale="3" unitRef="usd">66</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:RestrictedCash" scale="3" unitRef="usd">127</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Property and equipment,
    net</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentNet" scale="3" unitRef="usd">43,545</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentNet" scale="3" unitRef="usd">37,435</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Operating lease right-of-use
    asset</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseRightOfUseAsset" scale="3" unitRef="usd">1,157</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseRightOfUseAsset" scale="3" unitRef="usd">1,725</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Marketable securities -
    long term</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:MarketableSecuritiesNoncurrent" scale="3" unitRef="usd">25,198</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:MarketableSecuritiesNoncurrent" scale="3" unitRef="usd">67,845</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Intangible assets</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IntangibleAssetsNetExcludingGoodwill" scale="3" unitRef="usd">91,219</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IntangibleAssetsNetExcludingGoodwill" scale="3" unitRef="usd">101,826</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Goodwill</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Goodwill" scale="3" unitRef="usd">7,420</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Goodwill" scale="3" unitRef="usd">58,298</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Other
    non-current assets</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherAssetsNoncurrent" scale="3" unitRef="usd">2,867</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherAssetsNoncurrent" scale="3" unitRef="usd">1,057</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">TOTAL
    NON-CURRENT ASSETS</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AssetsNoncurrent" scale="3" unitRef="usd">171,472</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AssetsNoncurrent" scale="3" unitRef="usd">268,313</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">TOTAL
    ASSETS</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="3" unitRef="usd">253,933</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="3" unitRef="usd">363,170</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Liabilities and Shareholders&#8217;
    Equity</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">CURRENT LIABILITIES:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Accounts payable</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableCurrent" scale="3" unitRef="usd">3,619</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableCurrent" scale="3" unitRef="usd">3,134</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Accrued expenses</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccruedLiabilitiesCurrent" scale="3" unitRef="usd">12,240</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccruedLiabilitiesCurrent" scale="3" unitRef="usd">3,611</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Loan from a Government Agency</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-0; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="3" unitRef="usd">145</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Deferred revenue</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueCurrent" scale="3" unitRef="usd">182</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueCurrent" scale="3" unitRef="usd">247</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Contingent short term earnout
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FinanceLeaseLiabilityCurrent" scale="3" unitRef="usd">4,250</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FinanceLeaseLiabilityCurrent" scale="3" unitRef="usd">42,471</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Current maturities of operating
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityCurrent" scale="3" unitRef="usd">740</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityCurrent" scale="3" unitRef="usd">881</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Other
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLiabilitiesCurrent" scale="3" unitRef="usd">4,043</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLiabilitiesCurrent" scale="3" unitRef="usd">2,262</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">TOTAL
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesCurrent" scale="3" unitRef="usd">52,751</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">NON-CURRENT LIABILITIES:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Non-current operating lease
    liabilities</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityNoncurrent" scale="3" unitRef="usd">398</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityNoncurrent" scale="3" unitRef="usd">950</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Long term loan</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebtNoncurrent" scale="3" unitRef="usd">3,481</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebtNoncurrent" scale="3" unitRef="usd">3,796</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Non-current deferred revenue</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueNoncurrent" scale="3" unitRef="usd">398</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueNoncurrent" scale="3" unitRef="usd">415</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Contingent long-term earnout
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FinanceLeaseLiabilityNoncurrent" scale="3" unitRef="usd">4,089</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FinanceLeaseLiabilityNoncurrent" scale="3" unitRef="usd">5,814</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Deferred tax liability</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredIncomeTaxLiabilitiesNet" scale="3" unitRef="usd">3,330</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredIncomeTaxLiabilitiesNet" scale="3" unitRef="usd">7,063</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Other
    long-term liabilities</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLiabilitiesNoncurrent" scale="3" unitRef="usd">483</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLiabilitiesNoncurrent" scale="3" unitRef="usd">233</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">TOTAL
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesNoncurrent" scale="3" unitRef="usd">12,179</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesNoncurrent" scale="3" unitRef="usd">18,271</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">TOTAL
    LIABILITIES</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Liabilities" scale="3" unitRef="usd">37,253</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Liabilities" scale="3" unitRef="usd">71,022</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">COMMITMENTS AND CONTINGENCIES</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-1"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></div></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></div></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">SHAREHOLDERS&#8217; EQUITY:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Ordinary Shares, par value NIS <ix:nonFraction contextRef="c2" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="ilsPershares"><ix:nonFraction contextRef="c3" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="ilsPershares">0.01</ix:nonFraction></ix:nonFraction> per share <ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares"><ix:nonFraction contextRef="c3" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">100,000,000</ix:nonFraction></ix:nonFraction> authorized at December 31, 2022 and December 31 2021, <ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesOutstanding" scale="0" unitRef="shares">55,094,237</ix:nonFraction></ix:nonFraction> and <ix:nonFraction contextRef="c3" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c3" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesOutstanding" scale="0" unitRef="shares">51,791,441</ix:nonFraction></ix:nonFraction> issued and outstanding at December 31, 2022 and December 31, 2021, respectively</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CommonStockValue" scale="3" unitRef="usd">149</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Additional paid-in capital</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Accumulated other comprehensive
    loss</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax" scale="3" sign="-" unitRef="usd">1,974</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax" scale="3" sign="-" unitRef="usd">607</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Accumulated
    deficit</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:RetainedEarningsAccumulatedDeficit" scale="3" sign="-" unitRef="usd">259,457</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:RetainedEarningsAccumulatedDeficit" scale="3" sign="-" unitRef="usd">146,214</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">TOTAL
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="3" unitRef="usd">216,680</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="3" unitRef="usd">292,148</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">TOTAL
    LIABILITIES AND SHAREHOLDERS&#8217; EQUITY</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesAndStockholdersEquity" scale="3" unitRef="usd">363,170</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>The
accompanying notes are an integral part of these consolidated financial statements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>


</div><!-- Field: Page; Sequence: 136; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="f_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year
    ended December 31,</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2020</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">U.S.
    Dollars in thousands</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">REVENUE</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Revenues" scale="3" unitRef="usd">8,578</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Revenues" scale="3" unitRef="usd">1,304</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="-sec-ix-hidden: hidden-fact-3; font-family: Times New Roman, Times, Serif">-</span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">COST OF REVENUE</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CostOfRevenue" scale="3" unitRef="usd">15,458</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CostOfRevenue" scale="3" unitRef="usd">2,816</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-4; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">GROSS
    LOSS</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GrossProfit" scale="3" sign="-" unitRef="usd">6,880</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GrossProfit" scale="3" sign="-" unitRef="usd">1,512</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-5; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ResearchAndDevelopmentExpense" scale="3" unitRef="usd">9,210</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:SellingAndMarketingExpense" scale="3" unitRef="usd">7,033</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:SellingAndMarketingExpense" scale="3" unitRef="usd">12,445</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">General and administrative</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GeneralAndAdministrativeExpense" scale="3" unitRef="usd">22,268</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-7; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Change in contingent earnout
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherNoncashIncomeExpense" scale="3" sign="-" unitRef="usd">1,182</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-10; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">TOTAL
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingExpenses" scale="3" unitRef="usd">60,046</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingExpenses" scale="3" unitRef="usd">43,923</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">OPERATING
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="3" sign="-" unitRef="usd">117,710</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="3" sign="-" unitRef="usd">61,558</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="3" sign="-" unitRef="usd">43,923</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">FINANCIAL
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:InterestIncomeExpenseNonoperatingNet" scale="3" unitRef="usd">789</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:InterestIncomeExpenseNonoperatingNet" scale="3" sign="-" unitRef="usd">288</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:InterestIncomeExpenseNonoperatingNet" scale="3" unitRef="usd">108</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">OPERATING
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest" scale="3" sign="-" unitRef="usd">116,921</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest" scale="3" sign="-" unitRef="usd">61,846</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest" scale="3" sign="-" unitRef="usd">43,815</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">INCOME
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  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareBasic" scale="0" sign="-" unitRef="usdPershares">1.23</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">THE
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">NET LOSS</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ProfitLoss" scale="3" sign="-" unitRef="usd">113,243</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Unrealized loss from
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:MarketableSecuritiesUnrealizedGainLoss" scale="3" sign="-" unitRef="usd">607</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-15; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Total other comprehensive
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherComprehensiveIncomeLossNetOfTax" scale="3" sign="-" unitRef="usd">607</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-16; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">TOTAL
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ComprehensiveIncomeNetOfTax" scale="3" sign="-" unitRef="usd">114,610</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ComprehensiveIncomeNetOfTax" scale="3" sign="-" unitRef="usd">62,405</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ComprehensiveIncomeNetOfTax" scale="3" sign="-" unitRef="usd">43,815</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>The
accompanying notes are an integral part of these consolidated financial statements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>


</div><!-- Field: Page; Sequence: 137; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p><div>

</div><div><a id="f_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">CONSOLIDATED
STATEMENT OF CHANGES IN SHAREHOLDERS&#8217; EQUITY (CAPITAL DEFICIENCY)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Ordinary
    shares</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="padding-bottom: 1.5pt; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Additional</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="padding-bottom: 1.5pt; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Accumulated<br/>
    other</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Number
    of<br/> shares</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Amount</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">paid-in<br/>
    capital</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">comprehensive<br/>
    loss</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Accumulated<br/>
    deficit</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Total</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="18" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">U.S.
    Dollars in thousands</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; font-weight: bold; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">BALANCE
    AT JANUARY 1, 2020</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 7%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesOutstanding" scale="0" unitRef="shares">27,150,080</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 7%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c6" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="3" unitRef="usd">75</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 7%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c7" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="3" unitRef="usd">31,748</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 7%; text-align: right"><span style="-sec-ix-hidden: hidden-fact-17; font-family: Times New Roman, Times, Serif">-</span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 7%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c9" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="3" sign="-" unitRef="usd">40,601</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 7%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c10" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="3" sign="-" unitRef="usd">8,778</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">CHANGES
    DURING 2020:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Issuance
    of ordinary shares and warrants, net of issuance costs</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="nnox:IssuanceOfOrdinarySharesAndWarrantsNetOfIssuanceCostsShares" scale="0" unitRef="shares">4,624,500</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c11" decimals="-3" format="ixt:num-dot-decimal" name="nnox:IssuanceOfOrdinarySharesAndWarrantsNetOfIssuanceCosts" scale="3" unitRef="usd">14</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c12" decimals="-3" format="ixt:num-dot-decimal" name="nnox:IssuanceOfOrdinarySharesAndWarrantsNetOfIssuanceCosts" scale="3" unitRef="usd">70,999</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-18; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="nnox:IssuanceOfOrdinarySharesAndWarrantsNetOfIssuanceCosts" scale="3" unitRef="usd">71,013</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Initial
    public offering of ordinary shares, net of offering costs</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesOther" scale="0" unitRef="shares">10,555,556</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Issuance
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" scale="0" unitRef="shares">997,863</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c18" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="3" sign="-" unitRef="usd">84,416</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">CHANGES
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="font-weight: bold; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">BALANCE
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Issuance
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-44; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-45; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-46; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Unrealized
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(*)</span></td> <td><ix:footnote id="ix_0_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less than 1 thousand US dollars.</span></ix:footnote></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>The
accompanying notes are an integral part of these consolidated financial statements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>


</div><!-- Field: Page; Sequence: 138; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="f_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">CONSOLIDATED
STATEMENTS OF CASH FLOWS</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensation" scale="3" unitRef="usd">24,781</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Amortization
    of intangible assets</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AmortizationOfIntangibleAssets" scale="3" unitRef="usd">1,768</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Change
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-54; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Depreciation</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredIncomeTaxExpenseBenefit" scale="3" sign="-" unitRef="usd">116</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Exchange
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Amortization
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-57; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Impairment
    of property and equipment</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GainLossOnDispositionOfAssets" scale="3" sign="-" unitRef="usd">214</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-58; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Changes
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Accounts
    receivable</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInReceivables" scale="3" sign="-" unitRef="usd">74</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInReceivables" scale="3" unitRef="usd">40</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-59; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Prepaid
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInPrepaidExpensesOther" scale="3" unitRef="usd">4,478</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherNoncurrentAssets" scale="3" unitRef="usd">374</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherNoncurrentAssets" scale="3" unitRef="usd">522</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Accounts
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsPayableTrade" scale="3" unitRef="usd">469</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsPayableTrade" scale="3" sign="-" unitRef="usd">103</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Accrued
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsPayableAndAccruedLiabilities" scale="3" sign="-" unitRef="usd">719</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Operating
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="nnox:IncreaseDecreaseOperatingLease" scale="3" sign="-" unitRef="usd">125</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="nnox:IncreaseDecreaseOperatingLease" scale="3" unitRef="usd">23</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="nnox:IncreaseDecreaseOperatingLease" scale="3" unitRef="usd">83</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt"><span style="font-family: Times New Roman, Times, Serif">Deferred
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDeferredRevenue" scale="3" sign="-" unitRef="usd">82</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDeferredRevenue" scale="3" unitRef="usd">179</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">CASH
    FLOWS FROM INVESTING ACTIVITIES:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Cash
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-63; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Proceeds
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromSaleOfHeldToMaturitySecurities" scale="3" unitRef="usd">10,986</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-64; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Purchase
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:MarketableSecuritiesRealizedGainLoss" scale="3" unitRef="usd">104,043</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-65; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Proceeds
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromSaleAndMaturityOfMarketableSecurities" scale="3" unitRef="usd">2,754</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Purchase
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Investment
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireEquitySecuritiesFvNi" scale="3" unitRef="usd">1,010</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-67; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-68; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Net
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">CASH
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="nnox:RepaymentOfFinancialLiability" scale="3" sign="-" unitRef="usd">145</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-75; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Proceeds
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Issuance
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromStockOptionsExercised" scale="3" unitRef="usd">3,316</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-77; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in"><span style="font-family: Times New Roman, Times, Serif">Net
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="3" unitRef="usd">7,379</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="3" unitRef="usd">240,991</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">EFFECT
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:EffectOfExchangeRateOnCashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="3" sign="-" unitRef="usd">268</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:EffectOfExchangeRateOnCashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="3" sign="-" unitRef="usd">10</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:EffectOfExchangeRateOnCashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="3" unitRef="usd">122</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">NET
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseIncludingExchangeRateEffect" scale="3" sign="-" unitRef="usd">147,012</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">CASH
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c19" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsIncludingDisposalGroupAndDiscontinuedOperations" scale="3" unitRef="usd">213,784</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c10" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsIncludingDisposalGroupAndDiscontinuedOperations" scale="3" unitRef="usd">8,217</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Fair
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Fair
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Issuance
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-sec-ix-hidden: hidden-fact-90; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Fair
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-sec-ix-hidden: hidden-fact-91; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-sec-ix-hidden: hidden-fact-92; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Operating
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Conversion
    of related party liability to shareholders&#8217; equity</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-sec-ix-hidden: hidden-fact-93; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(*)</span></td><td style="text-align: justify"><ix:footnote id="ix_1_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less than 1 thousand US dollars.</span></ix:footnote></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -7pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>The
accompanying notes are an integral part of these consolidated financial statements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><div><a id="f_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_NatureOfOperations-c0_cont_1" escape="true" name="us-gaap:NatureOfOperations"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 1
- GENERAL:</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_2" id="_NatureOfOperations-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>a.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nano-X Imaging Ltd, an
    Israeli Company (hereinafter &#8220;the Company&#8221; or &#8220;Nanox IL&#8221;), was incorporated on December 20, 2018 and commenced
    its operations on September 3, 2019.</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_3" id="_NatureOfOperations-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">On
September 19, 2019, Nanox IL established Nanox Imaging Inc. (hereinafter &#8220;Nanox Japan&#8221;), a wholly owned subsidiary in Japan.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_4" id="_NatureOfOperations-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">On
September 25, 2020, Nanox IL established Nano-X Korea Inc. (hereinafter &#8220;Nanox Korea&#8221;), a wholly owned subsidiary in Korea.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_5" id="_NatureOfOperations-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">On
September 30, 2021, Nanox IL established Nanox Imaging Inc. (hereinafter &#8220;Nanox U.S.&#8221;), a wholly owned subsidiary in the
United States. On the same date, Nanox U.S. established Nanox MDW Inc. (hereinafter &#8220;Nanox MDW&#8221;).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_6" id="_NatureOfOperations-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">On
November 2, 2021, Nanox U.S. completed the acquisition of <ix:nonFraction contextRef="c36" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationStepAcquisitionEquityInterestInAcquireePercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of the shares of USARAD Holdings, Inc. (refer to Note 3).</span></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_7" id="_NatureOfOperations-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">On
November 4, 2021, the Company completed the merger with Zebra Medical Vision Ltd (refer to Note 3).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_8" id="_NatureOfOperations-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
                                            Company, together with its subsidiaries, develops a commercial-grade tomographic imaging
                                            device with a digital X-ray source, provides teleradiology services and develops artificial
                                            intelligence applications designed to be used in real-world medical imaging applications.
                                            The Company&#8217;s solution, referred to as the Nanox Multi Source System, has two integrated
                                            components &#8211; &#8220;Nanox.ARC&#8221; and &#8220;Nanox. CLOUD&#8221;. Nanox.ARC is a
                                            medical tomographic imaging system incorporating the Company&#8217;s novel digital X-ray
                                            source. Nanox. CLOUD is a platform which employs a matching engine to match medical images
                                            to radiologists, provides image repository, connectivity to diagnostic assistive AI systems,
                                            billing and reporting. On April 1, 2021, the Company received clearance from the FDA to market
                                            the Company&#8217;s Nanox Cart X-Ray System. On September 26, 2022, the Company submitted
                                            a 510(k) premarket notification to the U.S. Food and Drug Administration as part of the Company&#8217;s
                                            510(k) application process for the multi-source Nanox.ARC system.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_9" id="_NatureOfOperations-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company has experienced net losses and negative cash flows from operations since its inception. The&#160;Company anticipates such losses
will continue until its product candidates reach commercial profitability. In August 2020, the Company completed an IPO and its ordinary
shares began to trade on Nasdaq with net proceeds received from the IPO of approximately $<ix:nonFraction contextRef="c37" decimals="-6" format="ixt:num-dot-decimal" name="nnox:InitialPublicOfferingNetProceeds" scale="6" unitRef="usd">169</ix:nonFraction> million. Based on the Company&#8217;s activities
during the year ended December 31, 2022, the Company has sufficient funds for its plans for the next twelve months from the issuance
of these financial statements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_10" id="_NatureOfOperations-c0_cont_9"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>b.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current Impact of geopolitical
    tensions and the start of the military conflict between Russia and Ukraine</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_11" id="_NatureOfOperations-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">U.S.
and global economies are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the
military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported.
Although the length and impact of the ongoing military conflict is highly unpredictable, the ongoing conflict in Ukraine could lead to
market disruptions, including significant volatility in commodity prices, credit and capital markets. As a result, sanctions and penalties
have been levied by the United States, European Union and other countries against Russia. Russian military actions and the resulting
sanctions could have a negative impact on supply chains, the Company&#8217;s MSaaS agreements relating to Russia and Belarus or the region
and adversely affect the global economy and financial markets. Any of the abovementioned factors could affect the Company&#8217;s business,
prospects, financial condition, and operating results. The extent and duration of the military action, sanctions and resulting market
disruptions are impossible to predict, but could be substantial.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 1
- GENERAL </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_12" id="_NatureOfOperations-c0_cont_11"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>c.</b></span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
    Impact of the current financial markets and economic conditions</span></td></tr>
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</div><ix:continuation id="_NatureOfOperations-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The Company&#8217;s business may materially be affected by conditions in the financial markets and economic conditions in the U.S., Europe, Asia and, to a lesser extent, elsewhere in the world. 2022 was characterized by steep declines and significant volatility in global markets, driven by investor concerns over inflation, rising interest rates, slowing economic growth and geopolitical uncertainty. Inflation across many key economies reached generational highs, prompting central banks to take monetary policy tightening actions that are likely to create headwinds to economic growth. Continued global supply chain disruption, including due to China&#8217;s recurrent restrictions and the ongoing war between Russia and Ukraine, are also contributing to mounting inflationary pressure. In 2022, in the U.S., annual inflation rose to the highest level in over <ix:nonNumeric contextRef="c0" format="ixt-sec:duryear" name="nnox:AnnualInflationPeriod">40</ix:nonNumeric> years. Concurrently, Europe experienced high year-over-year inflation. In response to rising inflation, the Federal Reserve raised the federal funds target range and the European Central Bank raised rates for the first time in <ix:nonNumeric contextRef="c0" format="ixt-sec:duryear" name="nnox:ContractHoldersFundsPeriods">11</ix:nonNumeric> years. Both central banks reiterated expectations for additional increases in the coming months. While several key economic factors, including employment, wage growth and household savings, have demonstrated resilience, the U.S. economic contraction in 2022 has opened a debate among economists as to whether the U.S. has entered, or in the near term will enter, a recession.</span></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_1" escape="true" name="us-gaap:SignificantAccountingPoliciesTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES:</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_2" id="_SignificantAccountingPoliciesTextBlock-c0_cont_1"><ix:nonNumeric contextRef="c0" continuedAt="_BasisOfAccountingPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:BasisOfAccountingPolicyPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.75in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif"><b>a.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Basis of presentation</b></span></td>
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_3" id="_SignificantAccountingPoliciesTextBlock-c0_cont_2"><ix:continuation id="_BasisOfAccountingPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company&#8217;s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United
States (hereinafter,&#8220;U.S GAAP&#8221;) and include the accounts of the Company and of all its wholly owned subsidiaries. Intercompany
accounts and transactions have been eliminated in consolidation.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_4" id="_SignificantAccountingPoliciesTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" continuedAt="_UseOfEstimates-c0_cont_1" escape="true" name="us-gaap:UseOfEstimates"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>b.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Use of estimates in the preparation of financial statements</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-indent: -0.75in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_5" id="_SignificantAccountingPoliciesTextBlock-c0_cont_4"><ix:continuation id="_UseOfEstimates-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those
estimates and such differences may have a material impact on the Company&#8217;s consolidated financial statements. As applicable to
these consolidated financial statements, the most significant estimates relate to goodwill impairment, fair-value of contingent earnout
liability, useful lives of intangible assets, deferred taxes and share-based payments. The Company bases its estimates on historical
experience, known trends and events and various other factors that the Company believes are reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources. The Company evaluates its estimates and assumptions on an ongoing basis. The Company&#8217;s actual results may differ from
these estimates under different assumptions or conditions.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_6" id="_SignificantAccountingPoliciesTextBlock-c0_cont_5"><ix:nonNumeric contextRef="c0" continuedAt="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>c.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Functional currency</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_7" id="_SignificantAccountingPoliciesTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><ix:continuation id="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_1">The
U.S. dollar is the currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted.
A substantial portion of the revenue and operational costs are denominated in U.S. dollars. Accordingly, the functional currency of the
Company is the U.S. dollar (&#8220;primary currency&#8221;). Transactions and balances originally denominated in dollars are presented
at their original amounts. Balances in foreign currencies are translated into the primary currency using historical and current exchange
rates for nonmonetary and monetary balances, respectively. For foreign transactions and other items reflected in the statements of operations,
the following exchange rates are used: (1) for transactions &#8211; exchange rates at transaction dates or average rates and (2) for
other items (derived from nonmonetary balance sheet items such as depreciation) &#8211; historical exchange rates. The resulting transaction
gains or losses are recorded as financial income or expenses</ix:continuation>.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_8" id="_SignificantAccountingPoliciesTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c0" continuedAt="_BusinessCombinationsPolicy-c0_cont_1" escape="true" name="us-gaap:BusinessCombinationsPolicy"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>d.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Business Combinations</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_9" id="_SignificantAccountingPoliciesTextBlock-c0_cont_8"><ix:continuation continuedAt="_BusinessCombinationsPolicy-c0_cont_2" id="_BusinessCombinationsPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company allocates the fair value of consideration transferred in a business combination to the assets acquired, liabilities assumed,
and non-controlling interests in the acquired business based on their fair values at the acquisition date. Acquisition-related expenses
are recognized separately from the business combination and are expensed as incurred. The excess of the fair value of the consideration
transferred plus the fair value of any non-controlling interest in the acquiree over the fair value of the assets acquired, liabilities
assumed in the acquired business is recorded as goodwill. The fair value of the consideration transferred may include a combination of
cash, equity securities, earn out payments and deferred payments. The allocation of the consideration transferred in certain cases may
be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from
the acquisition date. The cumulative impact of revisions during the measurement period is recognized in the reporting period in which
the revisions are identified. The Company includes the results of operations of the businesses that it has acquired in its consolidated
results prospectively from the respective dates of acquisition.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>



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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_10" id="_SignificantAccountingPoliciesTextBlock-c0_cont_9"><ix:continuation continuedAt="_BusinessCombinationsPolicy-c0_cont_3" id="_BusinessCombinationsPolicy-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company records obligations in connection with its business combinations at fair value on the acquisition date. Each reporting period
thereafter, the Company revalues earn-out liabilities and records the changes in their fair value in the consolidated statements of operations
and comprehensive loss.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 67.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_11" id="_SignificantAccountingPoliciesTextBlock-c0_cont_10"><ix:continuation id="_BusinessCombinationsPolicy-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Changes
in the fair value of earn-out liabilities can result from adjustments to the discount rates, the Company&#8217;s shares price, sales
and profitability targets. This fair value measurement represent Level 3 measurements, as they are based on significant inputs not observable
in the market. Significant judgment is required in determining the assumptions utilized as of the acquisition date and for each subsequent
period. Accordingly, changes in the assumptions described above could have a material impact on the Company&#8217;s consolidated results
of operations.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_12" id="_SignificantAccountingPoliciesTextBlock-c0_cont_11"><ix:nonNumeric contextRef="c0" continuedAt="_CashAndCashEquivalentsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:CashAndCashEquivalentsPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>d.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cash and cash equivalents </b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_13" id="_SignificantAccountingPoliciesTextBlock-c0_cont_12"><ix:continuation id="_CashAndCashEquivalentsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company considers as cash equivalents all short-term, highly liquid investments, which include short-term bank deposits with original
maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible
to known amounts of cash.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_14" id="_SignificantAccountingPoliciesTextBlock-c0_cont_13"><ix:nonNumeric contextRef="c0" continuedAt="_MarketableSecuritiesPolicy-c0_cont_1" escape="true" name="us-gaap:MarketableSecuritiesPolicy"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>e.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Marketable Securities</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_15" id="_SignificantAccountingPoliciesTextBlock-c0_cont_14"><ix:continuation id="_MarketableSecuritiesPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">All
highly liquid investments are classified as marketable securities and have been classified and accounted for as available-for-sale. Investment
in securities consists of debt securities classified as available-for-sale and recorded at fair value. The Company classifies its marketable
securities as either short-term or long-term based on each instrument&#8217;s underlying contractual maturity date. Unrealized gains
and losses on marketable debt securities classified as available-for-sale are reported net of the related tax effect in other comprehensive
income/(loss).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_16" id="_SignificantAccountingPoliciesTextBlock-c0_cont_15"><ix:nonNumeric contextRef="c0" continuedAt="_TradeAndOtherAccountsReceivablePolicy-c0_cont_1" escape="true" name="us-gaap:TradeAndOtherAccountsReceivablePolicy"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>f.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Accounts receivables</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_17" id="_SignificantAccountingPoliciesTextBlock-c0_cont_16"><ix:continuation continuedAt="_TradeAndOtherAccountsReceivablePolicy-c0_cont_2" id="_TradeAndOtherAccountsReceivablePolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Accounts
receivable are presented net of the allowance for expected credit loss and consists of short term receivables that arise in the normal
course of business. The Company performs ongoing credit evaluations of its customers&#8217; financial condition and typically requires
no collateral from its customers.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_18" id="_SignificantAccountingPoliciesTextBlock-c0_cont_17"><ix:continuation continuedAt="_TradeAndOtherAccountsReceivablePolicy-c0_cont_3" id="_TradeAndOtherAccountsReceivablePolicy-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company adopted the Current Expected Credit Losses (&#8220;CECL&#8221;) guidance effective January 1, 2020. The Company maintains the
allowance for estimated losses resulting from the inability of the Company&#8217;s customers to make required payments. The allowance
represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering
current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company&#8217;s ongoing evaluation
of collectability, customer creditworthiness, historical levels of credit losses, and future expectations.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_19" id="_SignificantAccountingPoliciesTextBlock-c0_cont_18"><ix:continuation id="_TradeAndOtherAccountsReceivablePolicy-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Changes
in the allowance for&#160;credit losses&#160;are recognized in general and administrative expenses. Accounts receivables are written-off
against the allowance for&#160;credit losses&#160;when management deems the accounts are no longer collectible.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_20" id="_SignificantAccountingPoliciesTextBlock-c0_cont_19"><ix:nonNumeric contextRef="c0" continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:PropertyPlantAndEquipmentPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>g.</b></span></td> <td style="font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Property&#160;and&#160;equipment,&#160;net</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_21" id="_SignificantAccountingPoliciesTextBlock-c0_cont_20"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_2" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Property
and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the following
estimated useful lives:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_22" id="_SignificantAccountingPoliciesTextBlock-c0_cont_21"><ix:nonNumeric contextRef="c0" escape="true" name="nnox:ScheduleOfPropertyAndEquipmentAreStatedAtCostNetOfAccumulatedDepreciationTableTextBlock"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_3" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td><span style="font-family: Times New Roman, Times, Serif">Land</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_23" id="_SignificantAccountingPoliciesTextBlock-c0_cont_22"><ix:continuation id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Leasehold
improvements are amortized over the terms of the respective leases or the&#160;estimated useful lives of the improvements, whichever
is shorter.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_24" id="_SignificantAccountingPoliciesTextBlock-c0_cont_23"><ix:nonNumeric contextRef="c0" continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:GoodwillAndIntangibleAssetsPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>h.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Intangible Assets, net</i></b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_25" id="_SignificantAccountingPoliciesTextBlock-c0_cont_24"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_2" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Goodwill</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 76.5pt"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_26" id="_SignificantAccountingPoliciesTextBlock-c0_cont_25"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_3" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Goodwill
reflects the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the business
combination date over the fair values of the identifiable net assets acquired. Goodwill is an asset representing the future economic
benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
The Company allocates goodwill to its reporting units based on the reporting unit expected to benefit from the business combination.
&#160;&#160;The primary items that generate goodwill include the value of the synergies between the acquired companies and the Company
and the acquired assembled workforce, neither of which qualifies for recognition as an intangible asset. ASC 350 allows an entity to
first assess qualitative factors to determine whether a quantitative goodwill impairment test is necessary. Further testing is only required
if the entity determines, based on the qualitative assessment, that it is more likely than&#160;not&#160;that a reporting unit&#8217;s
fair value is less than its carrying amount. Otherwise,&#160;no&#160;further impairment testing is required. Examples of events or circumstances
that may be indicative of impairment include but are not limited to: macroeconomic and industry conditions, overall financial performance
and adverse changes in legal, regulatory, market share and other relevant entity specific events. An entity has the option to bypass
the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative goodwill impairment test. This
would&#160;not&#160;preclude the entity from performing the qualitative assessment in any subsequent period. The quantitative assessment&#160;compares
the fair value of the reporting unit to its carrying value, including goodwill.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_27" id="_SignificantAccountingPoliciesTextBlock-c0_cont_26"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_4" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company determines the fair value of its reporting units using a discounted cash flow model, which utilizes key assumptions such as projected
revenues, cost of revenues and operating expenses. These assumptions are determined by the Company&#8217;s management utilizing its internal
operating plan, growth rates for revenues and operating expenses and margin assumptions.&#160;An additional key assumption under this
approach is the discount rate, based on the weighted average cost of capital, which is adjusted for current risk-free rates of capital,
current market interest rates, and the evaluation of a risk premium relevant to the business segment.&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_28" id="_SignificantAccountingPoliciesTextBlock-c0_cont_27"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_5" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; ">If
the Company&#8217;s assumptions relative to revenue growth rates, cost of revenues and operating expenses were to change, the Company&#8217;s
fair value calculation may change, which could result in impairment. If the Company&#8217;s assumptions relative to the discount rate
and the evaluation of risk premium growth rates were to change, the Company&#8217;s fair value calculation may change, which could result
in impairment. The Company uses the income approach to determine the fair value of the reporting units because it considers the anticipated
future financial performance of the reporting units. Accordingly, changes in the assumptions described above could have a material impact
on the Company&#8217;s consolidated results of operations.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_29" id="_SignificantAccountingPoliciesTextBlock-c0_cont_28"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_6" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company&#8217;s goodwill is tested for impairment at least on an annual basis, on the last day of the fourth quarter of the fiscal year
and whenever events or changes in circumstances indicate the carrying value of a reporting unit may not be recoverable. When necessary,
the Company records charges for impairments of goodwill for the amount by which the carrying amount of the respective reporting unit
exceeds its fair value. However, the loss recognized should&#160;not&#160;exceed the total amount of goodwill allocated to that reporting
unit.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_30" id="_SignificantAccountingPoliciesTextBlock-c0_cont_29"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_7" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
goodwill is assigned to the reporting units of the AI Solutions segment (which was recorded in the acquisition of Nanox AI) and the Radiology
Services segment (which was recorded in the acquisition of USARAD). The carrying value of each reporting unit is determined by assigning
the assets and liabilities, including the existing goodwill, to those reporting units.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 198.25pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_31" id="_SignificantAccountingPoliciesTextBlock-c0_cont_30"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_8" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">As
of December 31, 2021, the Company did not determine that it was more likely that not that the fair value of each reporting unit was less
than its carrying amount. During 2022, the Company recognized a goodwill impairment of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLoss" scale="3" unitRef="usd">50,878</ix:nonFraction> thousand. See note 4.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_32" id="_SignificantAccountingPoliciesTextBlock-c0_cont_31"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_9" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Other
Intangible Assets, net</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 76.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_33" id="_SignificantAccountingPoliciesTextBlock-c0_cont_32"><ix:continuation id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Definite
life intangible assets are amortized using the straight-line method over their estimated period of useful life. Amortization of radiologist
relationships, market platform, developed technology and image big data are recorded under cost of revenues. Amortization of trade names
and customer relationships are recorded under sales and marketing expenses. In addition, the remaining amortization period for the impaired
asset would be reassessed and, if necessary, revised.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_34" id="_SignificantAccountingPoliciesTextBlock-c0_cont_33"><ix:nonNumeric contextRef="c0" continuedAt="_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>i.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Impairment&#160;of&#160;long-lived&#160;assets </b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_35" id="_SignificantAccountingPoliciesTextBlock-c0_cont_34"><ix:continuation id="_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The Company&#8217;s long-lived assets,
such as property, plant and equipment and identifiable intangible assets are reviewed for potential impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators which could trigger an impairment
may include, among others, any significant changes in the manner of the Company&#8217;s use of the assets or the strategy of the Company&#8217;s
overall business, certain reorganization initiatives, significant negative industry or economic trends or when the Company concludes that
it is more likely than not that an asset will be disposed of or sold. The recoverability of assets to be held and used is measured by
a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by such assets. If such
assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets. This measurement includes significant estimates and assumptions inherent in the estimate of the
fair value of identifiable intangible assets such as assumptions associated with forecasting profitability, including&#160;operational
margins and capital expenditures.. Newly acquired and recently impaired long-lived assets are more vulnerable to impairment as the assets
are recorded at fair value and are then subsequently measured at the lower of fair value or carrying value annually or when triggering
events are present. As such, immediately after acquisition or impairment, even small declines in the outlook for these assets can negatively
impact our ability to recover the carrying value and can result in an impairment charge. Accordingly, changes in the assumptions described
above could have a material impact on our consolidated results of operations. An impairment charge in the amount of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherAssetImpairmentCharges" scale="3" unitRef="usd">172</ix:nonFraction> thousand and
$<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherAssetImpairmentCharges" scale="3" unitRef="usd">214</ix:nonFraction> thousand was recorded for the years ended December 31, 2022 and 2021, respectively, in relation to the Company&#8217;s Property,
Plant and Equipment. During the year ended December 31, 2020, the Company did not record any impairment charges related to the Company&#8217;s
Property, Plant and Equipment. During 2022, 2021 and 2020, the Company did not record any impairment charge related to its definite life
intangible assets.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p></ix:continuation></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_36" id="_SignificantAccountingPoliciesTextBlock-c0_cont_35"><ix:nonNumeric contextRef="c0" continuedAt="_InvestmentPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:InvestmentPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; text-align: justify">
<td style="width: 72px"></td><td style="width: 24px; text-align: left"><span style="font-family: Times New Roman, Times, Serif"><b>j.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Investment in Equity Securities</b></span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric></ix:continuation><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_37" id="_SignificantAccountingPoliciesTextBlock-c0_cont_36"><ix:continuation id="_InvestmentPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The Company&#8217;s investment in equity securities consists of non-marketable equity securities, which is an investment in a privately held company. The Company&#8217;s equity investment does not have a readily determinable fair value. The investment is measured as cost method investment under the measurement alternative prescribed within ASU 2016-01 &#8220;Financial Instruments&#8212;Recognition and Measurement of Financial Assets and Financial Liabilities&#8221; to the extent such an investment is not subject to consolidation or the equity method.&#160; In February 2022, the Company&#160;purchased <ix:nonFraction contextRef="c38" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares">67,000</ix:nonFraction> common shares of a privately&#160;held company for an amount of $1,010 thousand.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p></ix:continuation></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_38" id="_SignificantAccountingPoliciesTextBlock-c0_cont_37"><ix:nonNumeric contextRef="c0" continuedAt="nnox_SeverancePayPolicyTextBlock-c0_cont_1" escape="true" name="nnox:SeverancePayPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>k.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Severance&#160;pay</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_39" id="_SignificantAccountingPoliciesTextBlock-c0_cont_38"><ix:continuation continuedAt="nnox_SeverancePayPolicyTextBlock-c0_cont_2" id="nnox_SeverancePayPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Israeli
labor law generally requires severance pay be granted upon dismissal of an employee or upon termination of employment under certain other
circumstances. Pursuant to Section 14 of the Severance Compensation Act, 1963 (&#8220;Section 14&#8221;), all of the Company&#8217;s
employees in Israel are entitled to monthly deposits, at a rate of <ix:nonFraction contextRef="c0" decimals="4" format="ixt:num-dot-decimal" name="nnox:SalaryPercentage" scale="-2" unitRef="pure">8.33</ix:nonFraction>% of their monthly salary, made in their name with insurance companies.
Payments under Section 14 relieve the Company from any future severance payment obligation with respect to those employees and, as such,
the Company may only utilize the insurance policies for the purpose of disbursement of severance pay. As a result, the Company does not
recognize an asset nor liability for these employees.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_40" id="_SignificantAccountingPoliciesTextBlock-c0_cont_39"><ix:continuation id="nnox_SeverancePayPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">In
2022 and 2021, all of the employees of the Company and its subsidiary in Israel are subject to Section 14 of the Severance Law. Severance
pay expenses for 2022, 2021 and 2020 amounted to $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherExpenses" scale="0" unitRef="usd">1,251</ix:nonFraction> thousand, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherExpenses" scale="0" unitRef="usd">846</ix:nonFraction> thousand and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherExpenses" scale="0" unitRef="usd">212</ix:nonFraction> thousand, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:continuation></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_41" id="_SignificantAccountingPoliciesTextBlock-c0_cont_40"><ix:nonNumeric contextRef="c0" continuedAt="nnox_LegalAndOtherContingenciesPolicyTextBlock-c0_cont_1" escape="true" name="nnox:LegalAndOtherContingenciesPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>l.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Legal&#160;and other&#160;contingencies</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_42" id="_SignificantAccountingPoliciesTextBlock-c0_cont_41"><ix:continuation id="nnox_LegalAndOtherContingenciesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Certain
conditions, such as legal proceedings, may exist as of the date the consolidated financial statements are issued that may result in a
loss to the Company, but that will only be resolved when one or more future events occur or fail to occur. In assessing loss contingencies
related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company&#8217;s
management evaluates with its legal advisors the perceived merits of any legal proceedings or unasserted claims as well as the perceived
merits of the amount of relief sought or expected to be sought. Such assessment inherently involves an exercise of judgment. Legal fees
are expensed as incurred. Litigation outcomes and contingencies are unpredictable and excessive verdicts can occur. Therefore, the Company&#8217;s
assessments involve complex judgments concerning future events and often rely heavily on estimates and assumptions. The Company applies
the guidance in ASC 450-20-25 when assessing losses resulting from contingencies. The Company reviews the adequacy of the accruals on
a periodic basis and may determine to alter its reserves at any time in the future if the Company believes it would be appropriate to
do so. As such accruals are based on management&#8217;s judgment as to the probability of losses and, where applicable, actuarially determined
estimates, accruals may materially differ from actual verdicts, settlements or other agreements made with regards to such contingencies.
If the assessment of a contingency indicates that it is probable that a material loss would be incurred and the amount of the liability
can be estimated, then the Company records an accrued expense in the Company&#8217;s consolidated financial statements based on its best
estimate. Loss contingencies considered to be remote by management are generally not disclosed unless material. For additional information,
see note 11.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_43" id="_SignificantAccountingPoliciesTextBlock-c0_cont_42"><ix:nonNumeric contextRef="c0" continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:RevenueRecognitionPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>m.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Revenue Recognition</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_44" id="_SignificantAccountingPoliciesTextBlock-c0_cont_43"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_2" id="_RevenueRecognitionPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
                                            majority of the Company&#8217;s revenues are derived from radiology service fees received
                                            from various payors based on established billing rates. Revenues are derived directly from
                                            hospitals and healthcare providers. The Company recognizes revenue in the period in which
                                            the performance obligation is satisfied. The Company records the amount of revenue that reflects
                                            the consideration that it expects to receive in exchange for those services. The Company
                                            applies the following five-step model in order to determine this amount: (i)&#160;identification
                                            of the contract with a customer; (ii)&#160;identification of the promised services in the
                                            contract and determination of whether they represent performance obligations, including whether
                                            they are distinct in the context of the contract; (iii)&#160;measurement of the transaction
                                            price, including the constraint on variable consideration; (iv)&#160;allocation of the transaction
                                            price to the performance obligations; and (v)&#160;recognition of revenue when (or as) the
                                            Company satisfies each performance obligation. The teleradiology services have one performance
                                            obligation where the Company acts as principal to its customers (imaging centers, hospitals,
                                            and other healthcare providers). Revenue is recognized at a point in time when such performance
                                            obligation is satisfied, specifically when the radiologist completes the reading and the
                                            annotation of the patient&#8217;s images. At large, payments are due at satisfaction of the
                                            Company&#8217;s performance obligation and after the Company issues an invoice. The Company&#8217;s
                                            teleradiology fees are fixed based on the type of modalities and agreed with its customers
                                            prior to rendering its services. Invoices are issued monthly for services rendered in the
                                            same month. Payments are due upon receipt of the invoice. The Company assesses collectability
                                            as part of the revenue recognition model. This assessment includes a number of factors such
                                            past due amounts, past payment history, and current economic conditions. If it is determined
                                            that collectability cannot be reasonably assured, the Company will not recognize the revenue
                                            until collectability is assured.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p></ix:continuation></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_45" id="_SignificantAccountingPoliciesTextBlock-c0_cont_44"><ix:continuation id="_RevenueRecognitionPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company records deferred revenue for any upfront payments received in advance of the Company&#8217;s performance obligations being satisfied.
These contract liabilities consist principally of unearned radiology service fees.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->14<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_46" id="_SignificantAccountingPoliciesTextBlock-c0_cont_45"><ix:nonNumeric contextRef="c0" continuedAt="_ResearchAndDevelopmentExpensePolicy-c0_cont_1" escape="true" name="us-gaap:ResearchAndDevelopmentExpensePolicy"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>n.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Research and development expenses</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_47" id="_SignificantAccountingPoliciesTextBlock-c0_cont_46"><ix:continuation id="_ResearchAndDevelopmentExpensePolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">Research
and development expenses are charged to the statement of operations as incurred and consist primarily of personnel, materials and supplies
for research and development activities.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_48" id="_SignificantAccountingPoliciesTextBlock-c0_cont_47"><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:IncomeTaxPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>o.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Income&#160;tax </b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_49" id="_SignificantAccountingPoliciesTextBlock-c0_cont_48"><ix:continuation continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_2" id="_IncomeTaxPolicyTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 96px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company accounts for
    income taxes in accordance with ASC 740, &#8220;Income Taxes&#8221; (&#8220;ASC&#160;740&#8221;). ASC 740 prescribes the use of the
    liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial
    reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when
    the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets
    to their estimated realizable value if it is more likely than not that a portion or all of the deferred tax assets will not be realized,
    based on the weight of available positive and negative evidence. Deferred tax liabilities and assets are classified as non-current
    in accordance with ASU&#160;2015-17.</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_50" id="_SignificantAccountingPoliciesTextBlock-c0_cont_49"><ix:continuation continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_3" id="_IncomeTaxPolicyTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 96px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2)</span></td>
    <td style="text-align: justify"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Taxes
                                    that would apply in the event of disposal of investments in foreign and domestic subsidiaries have
                                    not been taken into account in computing the deferred income taxes, as it is the Company&#8217;s
                                    intent and ability to hold these investments.</span></p></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_51" id="_SignificantAccountingPoliciesTextBlock-c0_cont_50"><ix:continuation continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_4" id="_IncomeTaxPolicyTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 96px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company accounts for uncertain tax positions in accordance with ASC 740-10. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="nnox:TaxBenefitPercentage" scale="-2" unitRef="pure">50</ix:nonFraction>% (cumulative probability) likely to be realized upon ultimate settlement. The Company accrues interest and penalties related to unrecognized tax benefits under taxes on income (tax benefit).</span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_52" id="_SignificantAccountingPoliciesTextBlock-c0_cont_51"><ix:continuation id="_IncomeTaxPolicyTextBlock-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="width: 24px; text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4)</span></td>
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</div><div>

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</div><div>

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Company accounts for share-based compensation under ASC 718, &#8220;Compensation - Stock Compensation,&#8221; which requires the measurement
and recognition of compensation expense based on estimated fair values for all share-based payment awards made to non-employees, employees,
officers and directors. ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The
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</div><div>

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Company recognizes compensation expenses for its stock-based option awards and RSUs on a straight-line basis over the requisite service
period (primarily a four-year period). The Company accounts for forfeitures as they occur.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_56" id="_SignificantAccountingPoliciesTextBlock-c0_cont_55"><ix:nonNumeric contextRef="c0" continuedAt="_EarningsPerSharePolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:EarningsPerSharePolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>q.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Loss&#160;per&#160;share</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_57" id="_SignificantAccountingPoliciesTextBlock-c0_cont_56"><ix:continuation continuedAt="_EarningsPerSharePolicyTextBlock-c0_cont_2" id="_EarningsPerSharePolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Basic
earnings per share is computed by dividing net income (loss) attributable to holders of ordinary shares of the Company by the weighted
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_58" id="_SignificantAccountingPoliciesTextBlock-c0_cont_57"><ix:continuation continuedAt="_EarningsPerSharePolicyTextBlock-c0_cont_3" id="_EarningsPerSharePolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">In
computing the Company&#8217;s diluted earnings per share, the denominator for diluted earnings per share is a computation of the weighted-average
number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. Potential dilutive ordinary shares
result from assumed exercise of options and the assumed vesting of RSUs, using the &#8220;treasury stock&#8221; method.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_59" id="_SignificantAccountingPoliciesTextBlock-c0_cont_58"><ix:continuation id="_EarningsPerSharePolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">The
Company did not take into account any dilutive instruments, such as investor warrants, share-based payments and earn-out liabilities
that will be settled in ordinary shares upon the achievement of certain milestones, for which the Company assesses their occurrence at
the end of each reporting period-, since their effect is anti-dilutive.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 146; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->15<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_60" id="_SignificantAccountingPoliciesTextBlock-c0_cont_59"><ix:nonNumeric contextRef="c0" continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:FairValueMeasurementPolicyPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>r.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fair&#160;value&#160;measurement</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_61" id="_SignificantAccountingPoliciesTextBlock-c0_cont_60"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_2" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Fair
value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly
transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements,
the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three
broad levels, which are described as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_62" id="_SignificantAccountingPoliciesTextBlock-c0_cont_61"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_3" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="width: 96px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 48px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1:</span></td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Observable prices that
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  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_63" id="_SignificantAccountingPoliciesTextBlock-c0_cont_62"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_4" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">In
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_64" id="_SignificantAccountingPoliciesTextBlock-c0_cont_63"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_5" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
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</div><div>

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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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    <td><span style="font-family: Times New Roman, Times, Serif">Liabilities:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-101; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c51" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationContingentConsiderationLiabilityCurrent" scale="0" unitRef="usd">3,228</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c51" decimals="0" format="ixt:num-dot-decimal" id="ix_7_fact" name="us-gaap:AssetAcquisitionContingentConsiderationLiabilityCurrent" scale="0" unitRef="usd">4,250</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-104; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-105; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c52" decimals="0" format="ixt:num-dot-decimal" id="ix_8_fact" name="us-gaap:AssetAcquisitionContingentConsiderationLiabilityNoncurrent" scale="0" unitRef="usd">4,089</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c51" decimals="0" format="ixt:num-dot-decimal" id="ix_9_fact" name="us-gaap:AssetAcquisitionContingentConsiderationLiabilityNoncurrent" scale="0" unitRef="usd">4,089</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Total liabilities</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-sec-ix-hidden: hidden-fact-106; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-sec-ix-hidden: hidden-fact-107; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c52" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Liabilities" scale="0" unitRef="usd">11,567</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c51" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Liabilities" scale="0" unitRef="usd">11,567</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_66" id="_SignificantAccountingPoliciesTextBlock-c0_cont_65"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_7" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; ">The
Company classifies AFS securities within Level 2 because it uses alternative pricing sources and models utilizing market observable inputs
to determine their fair value.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_67" id="_SignificantAccountingPoliciesTextBlock-c0_cont_66"><ix:continuation continuedAt="_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock-c0_cont_2" id="_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock-c0_cont_1"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_8" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_7"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Balance
    as of <br/> December 31, 2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Level
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Level
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Level
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Total</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">Assets:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c54" decimals="0" format="ixt:num-dot-decimal" id="ix_2_fact" name="us-gaap:DepositsMoneyMarketDeposits" scale="0" unitRef="usd">29,697</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c55" decimals="0" format="ixt:num-dot-decimal" id="ix_3_fact" name="us-gaap:DepositsMoneyMarketDeposits" scale="0" unitRef="usd">29,697</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c55" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:MarketableSecurities" scale="0" unitRef="usd">89,911</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Total assets</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c54" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetsNet" scale="0" unitRef="usd">119,608</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c55" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetsNet" scale="0" unitRef="usd">119,608</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">Liabilities:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Long term loan (**)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-109; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-110; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c56" decimals="0" format="ixt:num-dot-decimal" id="ix_4_fact" name="us-gaap:BusinessCombinationContingentConsiderationLiabilityCurrent" scale="0" unitRef="usd">3,796</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c55" decimals="0" format="ixt:num-dot-decimal" id="ix_5_fact" name="us-gaap:BusinessCombinationContingentConsiderationLiabilityCurrent" scale="0" unitRef="usd">3,796</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Contingent short term earnout liability (***)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-111; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-112; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c56" decimals="0" format="ixt:num-dot-decimal" id="ix_10_fact" name="us-gaap:AssetAcquisitionContingentConsiderationLiabilityCurrent" scale="0" unitRef="usd">42,471</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c55" decimals="0" format="ixt:num-dot-decimal" id="ix_11_fact" name="us-gaap:AssetAcquisitionContingentConsiderationLiabilityCurrent" scale="0" unitRef="usd">42,471</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Contingent long-term
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-113; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-114; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c56" decimals="0" format="ixt:num-dot-decimal" id="ix_12_fact" name="us-gaap:AssetAcquisitionContingentConsiderationLiabilityNoncurrent" scale="0" unitRef="usd">5,814</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c55" decimals="0" format="ixt:num-dot-decimal" id="ix_13_fact" name="us-gaap:AssetAcquisitionContingentConsiderationLiabilityNoncurrent" scale="0" unitRef="usd">5,814</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Total liabilities</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c56" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Liabilities" scale="0" unitRef="usd">52,081</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c55" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Liabilities" scale="0" unitRef="usd">52,081</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_68" id="_SignificantAccountingPoliciesTextBlock-c0_cont_67"><ix:continuation continuedAt="_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock-c0_cont_3" id="_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock-c0_cont_2"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_9" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_8"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">(*)</span></td><td style="text-align: justify"><ix:footnote id="ix_2_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">As of&#160;December 31, 2022,&#160;approximately $<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DebtSecurities" scale="3" unitRef="usd">31,841</ix:nonFraction> thousand of debt securities were classified under &#8220;Cash and Cash equivalents&#8221; in the consolidated balance sheets as such securities met all applicable classification criteria. As of&#160;</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December 31, 2021,&#160;<span>approximately $<ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DebtSecurities" scale="3" unitRef="usd">29,697</ix:nonFraction> thousand of debt securities were classified under &#8220;Cash and Cash equivalents&#8221; in the consolidated balance sheets as such securities met all applicable classification criteria.</span></span></ix:footnote></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p></ix:continuation></ix:continuation></ix:continuation><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_69" id="_SignificantAccountingPoliciesTextBlock-c0_cont_68"><ix:continuation id="_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock-c0_cont_3"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_10" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_9"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 32px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(**)</span></td> <td style="text-align: justify"><p style="margin: 0pt 0"><ix:footnote id="ix_3_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif">As of December 31, 2021, the fair value of the long term loan approximates its carrying value since the loan was originated in September 2021.</span></ix:footnote></p></td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(***)</span></td> <td style="text-align: justify"><ix:footnote id="ix_4_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The income valuation approach is applied and the valuation inputs include the contingent payment arrangement terms, discount rate and probability assessments.</span></ix:footnote></td></tr>
</table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_70" id="_SignificantAccountingPoliciesTextBlock-c0_cont_69"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_11" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Contingent
earnout liability:</b></span></p></ix:continuation></ix:continuation><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_71" id="_SignificantAccountingPoliciesTextBlock-c0_cont_70"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_12" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_11"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 32px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company determines the fair value of the liabilities for the earn-out contingent consideration based on a probability-weighted discounted cash flow analysis with regards to probability assessments of achievement of certain milestones and discount rate. A probability of success factor ranging fro<span>m&#160;<ix:nonFraction contextRef="c39" decimals="2" format="ixt:num-dot-decimal" name="nnox:SuccessRatePercentage" scale="-2" unitRef="pure">0</ix:nonFraction>% to&#160;<ix:nonFraction contextRef="c40" decimals="2" format="ixt:num-dot-decimal" name="nnox:SuccessRatePercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% was us</span>ed in the calculation of the probability of the achievement of each milestone. This fair value measurement is based on significant unobservable inputs and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration liabilities is based on several factors, such as: the cash flows projected from operations; the probability of success of achievement of regulatory clearances, CPT codes, and other industry certification, development of applications and systems deployment and several other milestone events; and the time and resources needed to complete each miles<span>tone and the risk adjusted discount rate for fair value measurement. The weighted average discount rate ranged </span>from&#160;<ix:nonFraction contextRef="c39" decimals="5" format="ixt:num-dot-decimal" name="nnox:WeightedAverageDiscountRate" scale="-2" unitRef="pure">4.696</ix:nonFraction>% to&#160;<ix:nonFraction contextRef="c40" decimals="4" format="ixt:num-dot-decimal" name="nnox:WeightedAverageDiscountRate" scale="-2" unitRef="pure">22.50</ix:nonFraction>%. The contingent short and long term earnout liability consideration is evaluated quarterly. Changes in the fair value of contingent consideration liabilities are recorded in the consolidated statements of operations. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result in material changes in the contingent short and long term earnout liabilities.</span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_72" id="_SignificantAccountingPoliciesTextBlock-c0_cont_71"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_13" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font: normal 10pt Times New Roman, Times, Serif">The
following table summarizes the activity for those financial liabilities where fair value measurements are estimated utilizing Level 3
inputs:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_73" id="_SignificantAccountingPoliciesTextBlock-c0_cont_72"><ix:nonNumeric contextRef="c0" escape="true" name="nnox:ScheduleOfFinancialLiabilitiesWhereFairValueMeasureTableTextBlock"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_14" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_13"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; font-style: italic; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; font-style: italic; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,
    <br/> 2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold; font-style: italic"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; font-style: italic; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; font-style: italic; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,
    <br/> 2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold; font-style: italic"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S. $ in
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Fair value at the beginning of
    the year</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisWithUnobservableInputs" scale="3" unitRef="usd">48,285</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="-sec-ix-hidden: hidden-fact-115; font-family: Times New Roman, Times, Serif">-</span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Initial recognition of earnout liabilities
    -</span></td><td style="font-style: italic"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-style: italic; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-style: italic; text-align: right"><span style="-sec-ix-hidden: hidden-fact-116; font-family: Times New Roman, Times, Serif">-</span></td><td style="font-style: italic; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ContractWithCustomerLiabilityRevenueRecognized" scale="3" unitRef="usd">48,285</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Change in fair value of earn out liabilities
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    <td style="font-style: italic; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-style: italic; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisLiabilityTransfersNet" scale="3" sign="-" unitRef="usd">20,376</ix:nonFraction></span></td><td style="font-style: italic; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Issuance of ordinary shares due to achievement
    of milestones and settlement of contingent consideration</span></td><td style="font-style: italic"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-style: italic; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-style: italic; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisUnobservableInputsReconciliationSettlements" scale="3" sign="-" unitRef="usd">19,570</ix:nonFraction></span></td><td style="font-style: italic; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-118; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Fair value at the end of the year</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisWithUnobservableInputs" scale="3" unitRef="usd">8,339</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisWithUnobservableInputs" scale="3" unitRef="usd">48,285</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_74" id="_SignificantAccountingPoliciesTextBlock-c0_cont_73"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_15" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Quantitative Information about Level 3 Fair Value Measurements of the Company&#8217;s short-term and long-term contingent consideration
liabilities designated as Level 3 are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_75" id="_SignificantAccountingPoliciesTextBlock-c0_cont_74"><ix:nonNumeric contextRef="c0" continuedAt="nnox_ScheduleOfFairValueMeasurementsOfTheShortTermAndLongTermTableTextBlock-c0_cont_1" escape="true" name="nnox:ScheduleOfFairValueMeasurementsOfTheShortTermAndLongTermTableTextBlock"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_16" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_15"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Fair&#160;Value&#160;at&#160;<br/>
                                            December&#160;31,</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>2021</b></span></p></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Valuation<br/>
    Technique</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Significant<br/>
                                            Unobservable</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Input</b></span></p></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 29%; text-align: left; text-indent: -12pt; padding-left: 12pt"><span style="font-family: Times New Roman, Times, Serif">Contingent
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 12%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c57" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationContingentConsiderationLiabilityCurrent" scale="3" unitRef="usd">42,471</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24%; text-align: center"><ix:nonNumeric contextRef="c58" name="nnox:ValuationTechnique"><span style="font-family: Times New Roman, Times, Serif">Discounted&#160;cash&#160;flow</span></ix:nonNumeric></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -12pt; padding-left: 12pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -12pt; padding-left: 12pt"><span style="font-family: Times New Roman, Times, Serif">Contingent
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c59" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationContingentConsiderationLiabilityCurrent" scale="3" unitRef="usd">5,814</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c60" name="nnox:ValuationTechnique"><span style="font-family: Times New Roman, Times, Serif">Discounted&#160;cash&#160;flow</span></ix:nonNumeric></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c60" name="nnox:SignificantUnobservableInput"><span style="font-family: Times New Roman, Times, Serif">contingent payment arrangement terms, and probability of achievement</span></ix:nonNumeric></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_76" id="_SignificantAccountingPoliciesTextBlock-c0_cont_75"><ix:continuation id="nnox_ScheduleOfFairValueMeasurementsOfTheShortTermAndLongTermTableTextBlock-c0_cont_1"><ix:continuation id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_16"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Valuation<br/>
    Technique</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 29%; text-align: left; text-indent: -12pt; padding-left: 12pt"><span style="font-family: Times New Roman, Times, Serif">Contingent
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 12%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c61" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationContingentConsiderationLiabilityCurrent" scale="3" unitRef="usd">4,250</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -12pt; padding-left: 12pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -12pt; padding-left: 12pt"><span style="font-family: Times New Roman, Times, Serif">Contingent
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c63" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationContingentConsiderationLiabilityCurrent" scale="3" unitRef="usd">4,089</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation></ix:continuation><div>


</div><div>

</div><!-- Field: Page; Sequence: 148; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_77" id="_SignificantAccountingPoliciesTextBlock-c0_cont_76"><ix:nonNumeric contextRef="c0" continuedAt="_ConcentrationRiskCreditRisk-c0_cont_1" escape="true" name="us-gaap:ConcentrationRiskCreditRisk"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>s.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Concentration&#160;of&#160;Credit Risks</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_78" id="_SignificantAccountingPoliciesTextBlock-c0_cont_77"><ix:continuation continuedAt="_ConcentrationRiskCreditRisk-c0_cont_2" id="_ConcentrationRiskCreditRisk-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted
cash, marketable securities and accounts receivable.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_79" id="_SignificantAccountingPoliciesTextBlock-c0_cont_78"><ix:continuation id="_ConcentrationRiskCreditRisk-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company&#8217;s cash and cash equivalents and restricted cash are invested with major banks in Israel, the United States, Korea and Japan.
Generally, these investments may be redeemed upon demand and the Company believes that the financial institutions that hold the Company&#8217;s
cash balances are financially sound and, accordingly, bear minimal risk.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_80" id="_SignificantAccountingPoliciesTextBlock-c0_cont_79"><ix:nonNumeric contextRef="c0" continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:LesseeLeasesPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>t.</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Leases</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_81" id="_SignificantAccountingPoliciesTextBlock-c0_cont_80"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_2" id="_LesseeLeasesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company accounts for leases in accordance with ASC 842. The Company determines if an arrangement is a lease at inception. Balances related
to operating leases are included in operating lease right-of-use (&#8220;ROU&#8221;) assets, current maturities of operating leases liabilities
and Non-current operating leases liabilities in the consolidated balance sheets.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_82" id="_SignificantAccountingPoliciesTextBlock-c0_cont_81"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_3" id="_LesseeLeasesPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company also elected not separating lease components from non-lease components and to keep leases with an initial term of 12 months or
less off the balance sheet and recognize the associated lease payments in the consolidated statements of operations on a straight-line
basis over the lease term.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_83" id="_SignificantAccountingPoliciesTextBlock-c0_cont_82"><ix:continuation id="_LesseeLeasesPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">ROU
assets represent the Company&#8217;s right to use an underlying asset for the lease term and lease liabilities represent the Company&#8217;s
obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized as of the commencement
date based on the present value of lease payments over the lease term. The Company&#8217;s lease terms may include options to extend
or terminate the lease when it is reasonably certain that the Company will exercise that option. The discount rate for the lease is the
rate implicit in the lease unless that rate cannot be readily determined. As the Company&#8217;s leases do not provide an implicit rate,
the Company&#8217;s uses its estimated incremental borrowing rate based on the information available at the commencement date in determining
the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term (see
also note 7).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: 0in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 149; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->18<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: 0in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_84" id="_SignificantAccountingPoliciesTextBlock-c0_cont_83"><ix:nonNumeric contextRef="c0" continuedAt="_SegmentReportingPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:SegmentReportingPolicyPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr> <td style="width: 72px; padding-right: 0.8pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="vertical-align: top; width: 24px; padding-right: 0.8pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>u.</b></span></td> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Segment reporting</b></span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation id="_SignificantAccountingPoliciesTextBlock-c0_cont_84"><ix:continuation id="_SegmentReportingPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">ASC
280, &#8220;Segment Reporting,&#8221; establishes standards for reporting information about operating segments. Operating segments are
defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing performance. The Company&#8217;s chief operating decision
maker is the Company&#8217;s Chief Executive Officer (the &#8220;CODM&#8221;), who makes resource allocation decisions and assesses performance
based on financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues, gross profit
and operating loss by the three identified reportable segments. The Company&#8217;s business includes three operating segments based
on the services that the Company provides. The three segments are composed of the Nanox.ARC segment, the AI solutions segment and the
Radiology services segment.</span></p></ix:continuation></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>



</div><!-- Field: Page; Sequence: 150; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->19<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_1" escape="true" name="nnox:CertainTransactionsTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 3
&#8211; BUSINESS COMBINATION AND OTHER TRANSACTION</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_2" id="nnox_CertainTransactionsTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a.</span></td>
    <td style="font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The acquisition of Nanox AI
    Ltd. (formerly Zebra Medical Vision Ltd.).</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_4" id="nnox_CertainTransactionsTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The Nanox AI transaction was accounted in accordance with ASC 805, &#8220;Business Combinations&#8221;, using the acquisition method of accounting with the Company as the acquirer.&#160;The fair value of ordinary shares issued by the Company was determined using the Company&#8217;s closing trading price on the merger date. The consideration represented (a) the basic purchase price minus; (b) certain transaction costs; plus (c) additional consideration as a result of Zebra entering into a designated commercial agreement prior to closing; plus (d) additional contingent consideration as a result of Zebra achieving a designated milestone of obtaining a new FDA clearance for its population health product and additional consideration as a result of Zebra achieving designated milestones as further described below. In addition, since Zebra entered into two additional designated commercial agreements within 6 months of the agreement execution date (August 9, 2021), the Company paid a contingent closing consideration in the amount of $<ix:nonFraction contextRef="c67" decimals="-3" format="ixt:num-dot-decimal" name="nnox:DeferredClosingConsideration" scale="3" unitRef="usd">3,333</ix:nonFraction> thousand in shares for each agreement. The contingent closing consideration was paid in the Company&#8217;s shares in the amount of the relevant installment payment divided by the average closing price of the 30 trading days ending on the applicable agreement signing date. Further, if Zebra achieves the agreed milestones related to obtaining certain FDA clearances and security certifications, completing certain technology integration, or achieving certain revenue and employee retention targets over the next <ix:nonNumeric contextRef="c0" format="ixt-sec:durwordsen" name="nnox:EmployeeRetentionTargetPeriod">three years</ix:nonNumeric>, the Company will pay additional consideration in the amount of up to $<ix:nonFraction contextRef="c67" decimals="-3" format="ixt:num-dot-decimal" name="nnox:AdditionalConsideration" scale="3" unitRef="usd">77,700</ix:nonFraction> thousand. Each of these milestone installments would be paid in the Company&#8217;s shares in the amount of the relevant installment payment divided by the average closing price of the 30 trading days ending on the applicable milestone&#8217;s achievement date. Zebra changed its name to Nanox AI ltd. and Zebra Medical Vision Inc. (a fully owned subsidiary of Zebra, which is incorporated under the laws of the State of Delaware) changed its name to Nanox AI Inc.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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the cost approach method&#160;using the discounted weighted average cost of one image for&#160;$1.75 per one patient record&#160;multiplied
by&#160;approximately 30 million patient records that the Company purchased (patient records represents over 10 years of patient history,
multi modalities, heterogeneous data of ethnicity and age) as of the acquisition date.&#160;This estimate is based on the experience
and knowledge of management from its own experience in its data monetization projects and after taking into consideration the legal aspects
of the non-transferable data. Therefore, the total fair value of the Image Big Data was assumed to be $52,500 thousand at the acquisition
date.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>



</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_6" id="nnox_CertainTransactionsTextBlock-c0_cont_5"><ix:continuation id="nnox_DescriptionOfNetAssets-c67_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The company can generate income immediately
from this asset. In order to estimate the fair value of Zebra&#8217;s technology, the Company used the discounted cash flow method, whereas
the fair value of the tax amortization benefit was $3.0 million and the fair value of the intangible asset related to technology before
tax amortization benefit&#160;was $24.3 million. The tax amortization benefit was calculated based on the applicable tax rate of 23.02%
and economic life of 10 years. The discount rate for Zebra&#8217;s technology was estimated at 18% reflecting a 1% discount on the company&#8217;s
WACC. Therefore, the fair value of Zebra&#8217;s intangible asset related to technology was estimated at $27.3 million at the date of
the acquisition.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_7" id="nnox_CertainTransactionsTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
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acquisition, based on management&#8217;s estimate of how long the know-how will be in place before being subject to a transition into
a new generation of technologies. The Company also examined its estimation compared to other companies operating in the field of healthcare
technologies that the Company considers as market leaders. Compared to such comparable companies, the Company&#8217;s estimation falls
into the middle of the useful life&#8217;s range.&#160;The Company believes that both intangible assets have a useful life of <ix:nonNumeric contextRef="c0" format="ixt-sec:duryear" name="us-gaap:FiniteLivedIntangibleAssetUsefulLife">10</ix:nonNumeric> years,
and that therefore is the appropriate amortization period since the usage of the Image Big Data asset is linked directly to the Company&#8217;s
acquired technology and is used to improve the technology&#8217;s capabilities. Additionally, the Company is not aware of any legal,
regulatory, contractual provisions or other factors that would impact its estimate of the useful life of the technology and the Image
Big Data.<i>&#160;</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_8" id="nnox_CertainTransactionsTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">On
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occurred post-closing.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"></p><div>

</div><!-- Field: Page; Sequence: 151; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 3
&#8211; BUSINESS COMBINATION AND OTHER TRANSACTION </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_9" id="nnox_CertainTransactionsTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">On
December 29, 2022, the Company entered into a settlement with respect to any additional amount that could be granted under the Agreement,
according to which the Company issued Zebra&#8217;s former shareholders an additional <ix:nonFraction contextRef="c70" decimals="0" format="ixt:num-dot-decimal" name="nnox:AdditionalOrdinaryShares1" scale="0" unitRef="shares">2,648,424</ix:nonFraction> ordinary shares (representing additional
consideration of approximately $<ix:nonFraction contextRef="c71" decimals="-3" format="ixt:num-dot-decimal" name="nnox:ConsiderationAmount" scale="3" unitRef="usd">18,617</ix:nonFraction> thousand). As a result of the settlement, both parties&#8217; performance obligations under the
Agreement have been satisfied in full. Therefore, no further revaluations are required due to this settlement.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_10" id="nnox_CertainTransactionsTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in">The following table summarizes the fair value of the consideration
transferred to Zebra shareholders in 2021 for the Zebra transaction:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_11" id="nnox_CertainTransactionsTextBlock-c0_cont_10"><ix:nonNumeric contextRef="c0" continuedAt="nnox_ScheduleOfFairValueConsiderationTransferred-c0_cont_1" escape="true" name="nnox:ScheduleOfFairValueConsiderationTransferred"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-119; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c67" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueNewIssues" scale="3" unitRef="usd">88,510</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    earnout liability</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c83" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AssetAcquisitionContingentConsiderationLiabilityNoncurrent" scale="3" unitRef="usd">2,660</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_12" id="nnox_CertainTransactionsTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">In
accordance with ASC 805, the estimated contingent consideration&#160;as of the Zebra transaction date was&#160;included in the purchase
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all shall be settled through the issuance of ordinary shares.&#160;The Company determined the fair value of the liabilities for the contingent
consideration based on a probability-weighted discounted cash flow analysis. This fair value measurement is based on significant unobservable
inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration
is based on several factors, such as: the cash flows projected from the success of achievements of several achievement and payment of
milestone events; the time and resources needed to achieve those milestones and the risk adjusted discount rate for fair value measurement.
A probability of success factor was used in the fair value calculation to reflect inherent regulatory and commercial risk of the contingent
payments. The weighted average discount rate, applied on the relative fair value of the contingent consideration liabilities, was&#160;<ix:nonFraction contextRef="c72" decimals="2" format="ixt:num-dot-decimal" name="nnox:FairValuePercentage" scale="-2" unitRef="pure">19</ix:nonFraction>%.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"></p><div>

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assets acquired and liabilities assumed in 2021, is as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_14" id="nnox_CertainTransactionsTextBlock-c0_cont_13"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    Purchase<br/> Price</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    thousands)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c83" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="3" unitRef="usd">6,956</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Other labilities</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c83" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLiabilitiesCurrent" scale="3" unitRef="usd">4,525</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Total liabilities assumed</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c83" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLiabilities" scale="3" unitRef="usd">51,727</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Net assets acquired</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c83" decimals="-3" format="ixt:num-dot-decimal" name="nnox:NetAssetsAcquired" scale="3" unitRef="usd">88,510</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_15" id="nnox_CertainTransactionsTextBlock-c0_cont_14"><ix:continuation continuedAt="_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock-c0_cont_2" id="_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 0px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(*)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A 3 years Convertible Loan Agreement, dated August 9, 2021 between the Company and Nanox AI in the amount of $<ix:nonFraction contextRef="c73" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:CompensatingBalanceAmount" scale="6" unitRef="usd">3</ix:nonFraction> million, which bears an annual interest of <ix:nonFraction contextRef="c73" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:DerivativeFixedInterestRate" scale="-2" unitRef="pure">6</ix:nonFraction>% and shall be automatically converted into the Nanox AI&#8217;s Preferred C Shares, at a price per share of $<ix:nonFraction contextRef="c74" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockConvertibleConversionPrice" scale="0" unitRef="usdPershares">23.42</ix:nonFraction>. This loan is eliminated in the consolidated financial statements.</span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 3
&#8211; BUSINESS COMBINATION AND OTHER TRANSACTION </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_16" id="nnox_CertainTransactionsTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
allocation of the purchase price to net assets acquired and liability assumed resulted in the recognition of goodwill of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GoodwillTransfers" scale="3" unitRef="usd">51,243</ix:nonFraction> thousand,
which is primarily attributed to the expected synergies from combining the operations of Zebra&#8217;s AI solutions with the Company&#8217;s
tomographic imaging systems. As such, this goodwill will be assigned to the operational segment of AI solutions. The amount of the acquisition-related
costs was approximately $<ix:nonFraction contextRef="c75" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationAcquisitionRelatedCosts" scale="3" unitRef="usd">310</ix:nonFraction> thousand which was recognized as an expense in the general and administration expenses.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_17" id="nnox_CertainTransactionsTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
results of operations of Nanox AI have been included in the consolidated financial statements since the date of the acquisition. The
amounts of revenues and net loss related to Nanox AI that are included in the Company&#8217;s consolidated statements of operations for
the period starting from the merger date to&#160;December 31, 2021, are $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:RevenuesNetOfInterestExpense" scale="3" unitRef="usd">270</ix:nonFraction> thousand and $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="nnox:NetLoss" scale="3" unitRef="usd">4,157</ix:nonFraction> thousand, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_18" id="nnox_CertainTransactionsTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
following unaudited pro forma information presents the combined results of operations of the Company and Nanox AI as if the acquisition
of Nanox AI had been completed on January 1, 2020.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_19" id="nnox_CertainTransactionsTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
unaudited pro forma results include adjustments primarily related to amortization of the acquired intangible assets and share-based compensation
associated with option grants as referenced above, as of January 1,2020. The unaudited pro forma results do not reflect any cost-saving
synergies from operating efficiencies, or the effect of the incremental costs incurred from integrating Nanox AI. Accordingly, these
unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results
of operations of the combined company would have been if the acquisition of Nanox AI had occurred at the beginning of 2020.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_20" id="nnox_CertainTransactionsTextBlock-c0_cont_19"><ix:nonNumeric contextRef="c0" escape="true" name="srt:CondensedStatementOfComprehensiveIncomeTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">For
    the Year Ended<br/> December&#160;31,<br/>
    2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">For
    the Year Ended<br/> December&#160;31,<br/>
    2020</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">US$ in thousand</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%"><span style="font-family: Times New Roman, Times, Serif">Revenue</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c85" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Revenues" scale="3" unitRef="usd">2,363</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c86" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Revenues" scale="3" unitRef="usd">1,550</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Net loss</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c85" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="3" sign="-" unitRef="usd">87,045</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c86" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="3" sign="-" unitRef="usd">69,875</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
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</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_21" id="nnox_CertainTransactionsTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.75in"><span style="font-family: Times New Roman, Times, Serif">During
2022, the Company tested for goodwill impairment by quantitatively comparing the fair values of the AI solution segment reporting unit
to it carrying amount. Based on the Company&#8217;s analysis, the Company determined that the carrying value of the AI solution segment
reporting unit exceeded its fair value and therefore the Company recorded a non-tax-deductible goodwill impairment charge totaling&#160;$<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="nnox:GoodwillImpairmentCharge" scale="3" unitRef="usd">50,878</ix:nonFraction>
thousand, which was included within the consolidated statement of operations for the&#160;year ended December 31,&#160;2022 (refer to
Note 4).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

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    </div><!-- Field: /Page --><div>

</div><p style="margin: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 3
&#8211; BUSINESS COMBINATION AND OTHER TRANSACTION </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_22" id="nnox_CertainTransactionsTextBlock-c0_cont_21"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">b.</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The acquisition of USARAD Holding Inc.&#160;&#160;(the
    &#8220;USARAD transaction&#8221;)</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_23" id="nnox_CertainTransactionsTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">On
November 2, 2021 (the &#8220;USARAD closing date&#8221;), the Company completed the acquisition of <ix:nonFraction contextRef="c76" decimals="2" format="ixt:num-dot-decimal" name="nnox:AcquisitionOfSharesPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of the shares of USARAD Holdings,
Inc., a Delaware corporation (&#8220;USARAD&#8221;), pursuant to the terms of the Stock Purchase Agreement, dated October 25, 2021, among
the Company, USARAD, Dr. Michael Yuz, other holders of capital stock of USARAD, and holders of USARAD options. At the USARAD closing
date, Nanox U.S. purchased <ix:nonFraction contextRef="c77" decimals="2" format="ixt:num-dot-decimal" name="nnox:PurchaseOfSharesPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of the shares of USARAD on a fully diluted basis for $<ix:nonFraction contextRef="c76" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CashAcquiredFromAcquisition" scale="3" unitRef="usd">7,147</ix:nonFraction> thousand in cash and <ix:nonFraction contextRef="c77" decimals="0" format="ixt:num-dot-decimal" name="nnox:OrdinaryShare" scale="0" unitRef="shares">496,545</ix:nonFraction> of the Company&#8217;s
ordinary shares with fair value of $<ix:nonFraction contextRef="c77" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CashAndCashEquivalentsFairValueDisclosure" scale="3" unitRef="usd">11,500</ix:nonFraction> thousand. The number of ordinary shares issued by the Company was determined using the average
closing trading price during the 30 trading days preceding to the closing date. The total consideration was approximately $<ix:nonFraction contextRef="c76" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AssetAcquisitionConsiderationTransferred" scale="3" unitRef="usd">18,647</ix:nonFraction> thousand.
In addition, upon the successful achievement of certain milestones related to profitability, EBITDA and other operational performance-based
earnouts over <ix:nonNumeric contextRef="c76" format="ixt-sec:duryear" name="nnox:OtherOperationalPerformancebasedEarnoutsOver">2</ix:nonNumeric> years from the date of acquisition, the Company will pay additional cash consideration in the amount of up to $<ix:nonFraction contextRef="c76" decimals="-3" format="ixt:num-dot-decimal" name="nnox:AdditionalCashConsideration" scale="3" unitRef="usd">2,000</ix:nonFraction>
thousand and stock consideration in the amount of up to $<ix:nonFraction contextRef="c76" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockConsiderationReceivedPerTransaction" scale="3" unitRef="usd">6,500</ix:nonFraction> thousand at a per share value determined by the average of (i) the volume
weighted average closing share price of the 30 trading days prior to the relevant milestone completion, and (ii) the volume weighted
average closing share price of the 30 trading days ending on August 6, 2021. Revenue in the amount of $<ix:nonFraction contextRef="c78" decimals="-3" format="ixt:num-dot-decimal" name="nnox:OtherRevenue" scale="3" unitRef="usd">1,034</ix:nonFraction> and net loss in the amount
of $<ix:nonFraction contextRef="c78" decimals="-3" format="ixt:num-dot-decimal" name="nnox:OtherNetLoss" scale="3" unitRef="usd">358</ix:nonFraction> thousand of the acquiree included in the Company&#8217;s consolidated statements of operations for the year ended at December
31, 2021.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&#160;</p></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"></p><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_24" id="nnox_CertainTransactionsTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The USARAD transaction was accounted in
accordance with ASC 805, &#8220;Business Combinations&#8221;, using the acquisition method of accounting with the Company as the acquirer.&#160;The
following table summarizes the fair value of the consideration transferred to USARAD shareholders in 2021 for the USARAD transaction:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_25" id="nnox_CertainTransactionsTextBlock-c0_cont_24"><ix:continuation id="nnox_ScheduleOfFairValueConsiderationTransferred-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">U.S.
    $<br/>
    in&#160;thousands</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Cash payments</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c79" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:CashAcquiredInExcessOfPaymentsToAcquireBusiness" scale="3" unitRef="usd">7,147</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">Issuance of ordinary shares</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c79" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueNewIssues" scale="3" unitRef="usd">11,500</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Contingent consideration
    at estimated fair value</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ContingentConsiderationClassifiedAsEquityFairValueDisclosure" scale="3" unitRef="usd">6,405</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Total consideration</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationContingentConsiderationAsset" scale="3" unitRef="usd">25,052</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_26" id="nnox_CertainTransactionsTextBlock-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">In
accordance with ASC 805, the estimated contingent consideration&#160;as of the USARAD transaction date was&#160;included in the purchase
price. The total contingent payments could reach to a maximum aggregate amount of up to $<ix:nonFraction contextRef="c79" decimals="-3" format="ixt:num-dot-decimal" name="nnox:MaximumAggregateAmount" scale="3" unitRef="usd">8,500</ix:nonFraction> thousand.&#160;Approximately <ix:nonFraction contextRef="c79" decimals="4" format="ixt:num-dot-decimal" name="nnox:SettledInCashPercentage" scale="-2" unitRef="pure">23.52</ix:nonFraction>% of
the payments shall be settled in cash, and <ix:nonFraction contextRef="c79" decimals="4" format="ixt:num-dot-decimal" name="nnox:IssuanceOfOrdinarySharePercentage" scale="-2" unitRef="pure">76.47</ix:nonFraction>% shall be settled through the issuance of ordinary shares.&#160;The estimated fair value
of the contingent consideration is based on management&#8217;s assessment&#160;of whether, and at what level, the financial metrics will
be achieved, and the present value factors associated&#160;with the timing of the payments.&#160;This fair value measurement&#160;is
based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. Changes
in the fair value of contingent consideration will be recorded in&#160;operating expenses. Additional payment&#160;of $<ix:nonFraction contextRef="c79" decimals="-3" format="ixt:num-dot-decimal" name="nnox:AdditionalPayment" scale="3" unitRef="usd">144</ix:nonFraction> thousand was
paid to USARAD&#8217;s shareholders during 2022 since an approval of the PPP loan by the Federal Government occurred and pursuant to
the terms of the Stock Purchase Agreement.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_27" id="nnox_CertainTransactionsTextBlock-c0_cont_26"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The allocation of the purchase price to assets acquired and liabilities
assumed in 2021, is as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_28" id="nnox_CertainTransactionsTextBlock-c0_cont_27"><ix:continuation id="_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Allocation&#160;of<br/>
    Purchase <br/>
    Price</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>(U.S.&#160;$&#160;in&#160;thousands)</b></span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Cash and cash equivalents</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;&#160;<ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherCashEquivalentsAtCarryingValue" scale="3" unitRef="usd">332</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Accounts Receivables</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccountsAndOtherReceivablesNetCurrent" scale="3" unitRef="usd">912</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Intangible assets</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IntangibleAssetsCurrent" scale="3" unitRef="usd">21,187</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">Goodwill</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Goodwill" scale="3" unitRef="usd">7,055</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Other assets</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherAssets" scale="3" unitRef="usd">33</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Total assets acquired</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c79" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalAssetsAcquired" scale="3" unitRef="usd">29,519</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Loan from a government agency</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBankLoansAndNotesPayable" scale="3" unitRef="usd">144</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Other labilities</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherLiabilitiesCurrent" scale="3" unitRef="usd">557</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Net deferred tax liabilities</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredIncomeTaxLiabilities" scale="3" unitRef="usd">3,766</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Contingent short term earnout liability</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c84" decimals="-3" format="ixt:num-dot-decimal" name="nnox:ContingentShortTermEarnoutLiability" scale="3" unitRef="usd">3,453</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Net assets acquired</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>


</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 154; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 3
&#8211; BUSINESS COMBINATION AND OTHER TRANSACTION </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_29" id="nnox_CertainTransactionsTextBlock-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><ix:nonNumeric contextRef="c79" name="us-gaap:ImpairedIntangibleAssetDescription">The
allocation of the purchase price to net assets acquired and liability assumed resulted in the recognition of intangible asset related
to retained radiologists of $17,770 thousand, customers&#8217; relationship of $1,322 thousand, trademark of $2,095 thousand and goodwill
of $7,055 thousand, which is primarily attributed to the expected synergies from combining the operations of teleradiology services with
the Company&#8217;s tomographic imaging systems. As such, goodwill will be assigned to the operational segment of radiology services.
The intangible asset related to retained radiologists has a useful-life of 11.17 years, the intangible asset related to customers&#8217;
relationship has a useful-life of 6.17 years and the intangible asset related to the trademark has a useful-life of 12.17 years.</ix:nonNumeric>&#160;
This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within
the fair value hierarchy. The fair value of the contingent consideration is based on several factors, such as: the cash flows projected
from the success of achievements of several achievement and payment of milestone events; the time and resources needed to achieve those
milestones and the risk adjusted discount rate for fair value measurement. A probability of success factor was used in the fair value
calculation to reflect inherent regulatory and commercial risk of the contingent payments. The weighted average discount rate, calculated
based on the relative fair value of the contingent consideration liabilities, was&#160;<ix:nonFraction contextRef="c79" decimals="3" format="ixt:num-dot-decimal" name="nnox:FairValueOfContingentConsiderationLiabilities" scale="-2" unitRef="pure">21.9</ix:nonFraction>%. The contingent consideration is evaluated
quarterly, or more frequently, if circumstances dictate. Changes in the fair value of contingent consideration are recorded in consolidated
statements of income. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result
in material changes to the contingent consideration liabilities. The amount of the acquisition-related costs was approximately $<ix:nonFraction contextRef="c80" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationAcquisitionRelatedCosts" scale="3" unitRef="usd">198</ix:nonFraction> thousand
which was recognized as an expense in the general and administration expenses.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_30" id="nnox_CertainTransactionsTextBlock-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Pro
forma results of operations related to the USARAD acquisition have not been prepared because they are not material to the Company&#8217;s
consolidated financial statements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CertainTransactionsTextBlock-c0_cont_31" id="nnox_CertainTransactionsTextBlock-c0_cont_30"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>c.</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Assets acquisition of MDWEB LLC.</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><ix:continuation id="nnox_CertainTransactionsTextBlock-c0_cont_31"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">On November 3, 2021, the Company completed the acquisition of the market platform and other assets of MDWEB, LLC (&#8220;MDWEB&#8221;), pursuant to the terms of the Asset Purchase Agreement, dated October 21, 2021, between the Company and MDWEB. <ix:nonNumeric contextRef="c81" name="nnox:AssetsAcquisitionDescription">At the same date, the Company issued 64,715 of its ordinary shares to MDWEB with an estimated fair value of $1,500 thousand. In addition, upon the successful achievement of certain milestones related to technical integration of MDW platform with the Nanox.CLOUD and achieving certain other operational targets, the Company will pay additional stock consideration in the amount of up to $1,500 thousand at a per share value determined by the average closing price of the 30 trading days ending on the applicable milestone&#8217;s achievement date. In addition, upon the successful achievement of certain milestones and other operational performance-based earnouts over 2 years, the Company will pay stock consideration in the amount of up to $1,500 thousand at a per share value determined by the average closing price of; (i) closing price of the 30 trading days ending on the applicable milestone&#8217;s achievement date: and (ii) the volume weighted average closing share price of the 30 trading days prior to the closing date.</ix:nonNumeric> The Company will amortize the intangible assets on a straight-line basis over their expected useful life of <ix:nonNumeric contextRef="c82" format="ixt-sec:duryear" name="us-gaap:FiniteLivedIntangibleAssetsRemainingAmortizationPeriod1">4</ix:nonNumeric> years. Refer to note 2h.</span></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>


</div><!-- Field: Page; Sequence: 155; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif"><b>NOTE&#160;4
&#8212; GOODWILL&#160;&amp; INTANGIBLE ASSETS, NET:</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_2" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif"><i>Goodwill</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_3" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
following table presents the changes in the carrying amount of goodwill during the periods ended December 31, 2022 and 2021 (U.S. dollars
in thousands):</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_4" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfGoodwillTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif">Segment of Operation</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif">AI
    Solutions</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Total</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">Balance as of December 31, 2020</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-120; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-121; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-122; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="-sec-ix-hidden: hidden-fact-123; font-family: Times New Roman, Times, Serif">-</span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GoodwillAcquiredDuringPeriod" scale="3" unitRef="usd">7,055</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">Balance as of December 31, 2021</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c106" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ImpairmentOfIntangibleAssetsExcludingGoodwill" scale="3" unitRef="usd">50,878</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ImpairmentOfIntangibleAssetsExcludingGoodwill" scale="3" unitRef="usd">50,878</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">Balance as of December 31, 2022</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c108" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GoodwillGross" scale="3" unitRef="usd">365</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GoodwillGross" scale="3" unitRef="usd">7,420</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_5" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">The
goodwill balance related to the acquisitions of Nanox AI and USARAD is not&#160;deductible&#160;for tax purposes.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_6" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif"><b><i>Goodwill
impairment assessments for the year ended December 31, 2022</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt; "><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_7" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt; "><span style="font-family: Times New Roman, Times, Serif"><i>AI
solutions reporting unit </i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_8" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">During
the second quarter of 2022, in light of triggering events arising from the increase of the discount rate and changes in the Company&#8217;s
estimates as a result of business specific considerations, the Company performed a quantitative interim assessment for goodwill impairment
for the Company&#8217;s AI solutions reporting unit. The amount of goodwill assigned to the AI solutions reporting unit on the interim
testing date, which had not changed from the amount assigned to such unit on the acquisition date, was $<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="nnox:AssignedAmount" scale="3" unitRef="usd">51,243</ix:nonFraction> thousand. When evaluating
the fair value of the AI solutions reporting unit under the income approach, the Company used a discounted cash flow model which utilized
Level 3 measures that represent unobservable inputs. <ix:nonNumeric contextRef="c87" name="nnox:DiscountCashflowDescription">Key assumptions used to determine the estimated fair value include: (a) internal
cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs to sales and operating expenses;
(b) an estimated terminal value using a terminal year long-term future growth rate of 3.0% determined based on the growth prospects of
the reporting unit; and (c) a discount rate of 22.0% which reflects the weighted-average cost of capital adjusted for the relevant risk
associated with the AI solutions reporting unit&#8217;s operations and the uncertainty inherent in the Company&#8217;s internally developed
forecasts.</ix:nonNumeric> Specifically, as part of the Company&#8217;s interim impairment test, in making the assumptions mentioned in clauses (a) and
(b) above, the Company considered (1) the efforts and time required for the AI solutions reporting unit to achieve financial stability,
(2) its estimate that it would take approximately one year for such unit to generate any material revenue and two years to achieve profitability;
and (3) its estimate that it would take longer than we originally expected for such unit to generate material revenues, gross profit,
and positive operating cash flows, especially from its population health applications. As a result of the impairment assessment, the
Company concluded that the fair value of the AI solutions reporting unit decreased below its carrying value by <ix:nonFraction contextRef="c88" decimals="4" format="ixt:num-dot-decimal" name="nnox:CarryingValuePercentage" scale="-2" unitRef="pure">11.61</ix:nonFraction>%, and therefore
the Company recorded a goodwill impairment charge of <span>$<ix:nonFraction contextRef="c87" decimals="-3" format="ixt:num-dot-decimal" name="nnox:AssetImpairmentCharge" scale="3" unitRef="usd">14,338</ix:nonFraction>&#160;thousand</span> in the second
quarter of 2022. <ix:nonNumeric contextRef="c87" name="us-gaap:GoodwillChangeInGoodwillAllocationDescription">As a result, the remaining amount of goodwill assigned to the AI solutions reporting unit at June 30, 2022 was $36,905
thousand.</ix:nonNumeric></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:nonNumeric contextRef="c89" name="us-gaap:GoodwillChangeInGoodwillAllocationDescription"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_9" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">During
the fourth quarter of 2022, the Company performed a qualitative and quantitative annual assessment for goodwill impairment. Based on
its qualitative analysis, which considered the AI solutions reporting unit results, projections and additional business and industry
specific considerations, the Company performed a further revision of the estimates of the fair value of the AI solutions reporting unit.
As part of this analysis, the Company also considered the potential impacts of the sensitivity of estimates and assumptions. When evaluating
the fair value of the AI solutions reporting unit under the income approach, the Company used the same discounted cash flow model discussed
above; however, in clause (c) the resulting cash flow amounts were discounted using a discount rate of 22.50%. As a result of the impairment
assessment, the Company concluded that the fair value of the AI solutions reporting unit decreased below its carrying value by 34.44%,
and therefore we recorded an additional goodwill impairment charge of <span>$36,540&#160;thousand</span>
in the fourth quarter of 2022. As a result, the amount of goodwill assigned to the AI solutions reporting unit on December 31, 2022,
was $365 thousand.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:nonNumeric><div>


</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_10" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">When evaluating the fair value of the AI solutions reporting unit under the discounted cash flow approach, the Company used a discounted cash flow model which utilized Level 3 measures that represent unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal cash flows forecasts for <ix:nonNumeric contextRef="c90" format="ixt-sec:duryear" name="nnox:InternalCashflowTerm">5</ix:nonNumeric> years following the assessment date, including expected revenue growth, costs of sales and operating expenses; (b) an estimated terminal value using a terminal year long-term future growth rate determined based on the growth prospects of the reporting unit; and (c) a discount rate which reflects the weighted-average cost of capital adjusted for the relevant risk associated with the AI solutions reporting unit&#8217;s operations and the uncertainty inherent in the Company&#8217;s internally developed forecasts.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_11" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">Actual
results may differ from those assumed in the Company&#8217;s valuation method. It is reasonably possible that the Company&#8217;s assumptions
described above could change in future periods. If any of these were to vary materially from the Company&#8217;s plans, the Company may
record impairment of goodwill allocated to this reporting unit in the future. A hypothetical decrease in the terminal growth rate of
<ix:nonFraction contextRef="c91" decimals="3" format="ixt:num-dot-decimal" name="nnox:GrowthPercentage" scale="-2" unitRef="pure">0.5</ix:nonFraction>% or an increase of <ix:nonFraction contextRef="c92" decimals="3" format="ixt:num-dot-decimal" name="nnox:GrowthPercentage" scale="-2" unitRef="pure">0.5</ix:nonFraction>% to the discount rate would have reduced the fair value of AI Solutions reporting unit by approximately $<ix:nonFraction contextRef="c93" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:FairValueOptionIneligibleItemsAggregateCarryingAmount" scale="6" unitRef="usd">1.0</ix:nonFraction>
million and $<ix:nonFraction contextRef="c94" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:FairValueOptionIneligibleItemsAggregateCarryingAmount" scale="6" unitRef="usd">2.9</ix:nonFraction> million, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt"></p><div>

</div><!-- Field: Page; Sequence: 156; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE&#160;4
&#8212; GOODWILL&#160;&amp; INTANGIBLE ASSETS, NET: </b>(continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_12" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt; "><span style="font-family: Times New Roman, Times, Serif"><i>Radiology
services reporting unit </i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_13" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">During
                                            the fourth quarter of 2022, <span>the Company performed its
                                            annual impairment test for goodwill impairment. </span>The Company performed a quantitative
                                            assessment for goodwill impairment for the Company&#8217;s radiology services reporting unit
                                            and concluded that the fair value of the radiology services reporting unit exceeded its carrying
                                            amount by approximately 5.3%, with a carrying amount of goodwill assigned to this reporting
                                            unit in an amount of $7,055 thousand. When evaluating the fair value of the radiology services
                                            reporting unit under the income approach, the Company used a discounted cash flow model which
                                            utilized Level 3 measures that represent unobservable inputs. Key assumptions used to determine
                                            the estimated fair value include: (a) internal cash flows forecasts for 5 years following
                                            the assessment date, including expected revenue growth, costs of sales and operating expenses;
                                            (b) an estimated terminal value using a terminal year long-term future growth rate of 3%
                                            determined based on the growth prospects of the reporting unit; and (c) a discount rate of
                                            27.5% which reflects the weighted-average cost of capital adjusted for the relevant risk
                                            associated with the radiology services reporting unit&#8217;s operations and the uncertainty
                                            inherent in the Company&#8217;s internally developed forecasts.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_14" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">Actual
results may differ from those assumed in the Company&#8217;s valuation method. It is reasonably possible that the Company&#8217;s assumptions
described above could change in future periods. If any of these were to vary materially from the Company&#8217;s plans, the Company may
record impairment of goodwill allocated to this reporting unit in the future. A hypothetical decrease in the growth rate of <ix:nonFraction contextRef="c95" decimals="3" format="ixt:num-dot-decimal" name="nnox:GrowthPercentage" scale="-2" unitRef="pure">0.5</ix:nonFraction>% or an
increase of <ix:nonFraction contextRef="c96" decimals="3" format="ixt:num-dot-decimal" name="nnox:GrowthPercentage" scale="-2" unitRef="pure">0.5</ix:nonFraction>% to the discount rate would reduce the fair value of the radiology services reporting unit by approximately $<ix:nonFraction contextRef="c97" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:FairValueOptionIneligibleItemsAggregateCarryingAmount" scale="6" unitRef="usd">0.3</ix:nonFraction> million
and $<ix:nonFraction contextRef="c98" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:FairValueOptionIneligibleItemsAggregateCarryingAmount" scale="6" unitRef="usd">0.6</ix:nonFraction> million, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_15" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">As
of December 31, 2022, the percentage by which the estimated fair value of the Company&#8217;s reporting units exceeded the carrying value
was as the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_16" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_15"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Goodwill<br/>
    from<br/>
    acquisition of <br/>
    Nanox AI<br/>
    Unit&#160;#1</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Goodwill<br/>
    from<br/>
    acquisition of <br/>
    USARAD<br/>
    Unit&#160;#2</span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Goodwill
    Assigned&#160;(<i>in millions</i>)</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c109" decimals="-6" format="ixt:num-dot-decimal" name="nnox:GoodwillAssignedinMillions" scale="6" unitRef="usd">365</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c110" decimals="-6" format="ixt:num-dot-decimal" name="nnox:GoodwillAssignedinMillions" scale="6" unitRef="usd">7,055</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif">Fair Value/Carrying Amount</span></td><td style="font-style: italic"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-style: italic; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-style: italic; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c109" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:FairValueInvestmentsEntitiesThatCalculateNetAssetValuePerSharePlannedSaleInvestmentsNotIdentifiedPercentage" scale="-2" unitRef="pure">100.00</ix:nonFraction></span></td><td style="font-style: italic; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td style="font-style: italic"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-style: italic; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-style: italic; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c110" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:FairValueInvestmentsEntitiesThatCalculateNetAssetValuePerSharePlannedSaleInvestmentsNotIdentifiedPercentage" scale="-2" unitRef="pure">105.3</ix:nonFraction></span></td><td style="font-style: italic; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_17" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif; font-style: normal; font-weight: normal">Goodwill
impairment assessment for the year ended December 31, 2021</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_18" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-style: normal; font-weight: normal">As
of December 31, 2021, the Company evaluated that there was no notable change in qualitative factors due to the short period of time that
had lapsed from the acquisition date through December 31, 2021. Therefore, the Company did not determine that it was more likely than
not that the fair value of each reporting unit was less than its carrying amount. As such, the Company concluded that no further <span>impairment
testing was required for either reporting unit as of December 31, 2021.</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_19" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif"><i>Intangible
assets </i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_20" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Identifiable
intangible assets consisted of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_21" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_20"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfIntangibleAssetsAndGoodwillTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 157; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->26<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE&#160;4
&#8212; GOODWILL&#160;&amp; INTANGIBLE ASSETS, NET: </b>(continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_22" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible
assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and
reviewed periodically for impairment. Amortization expenses were $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AmortizationOfFinancingCosts" scale="3" unitRef="usd">10,607</ix:nonFraction> thousand and $<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AmortizationOfFinancingCosts" scale="3" unitRef="usd">1,768</ix:nonFraction> thousand and $<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AmortizationOfFinancingCosts" scale="3" unitRef="usd">0</ix:nonFraction> for the years ended December
31, 2022 2021 and 2020, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_23" id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortization
of intangible assets for each of the next five years and thereafter is expected to be as follows (U.S. dollars in thousands):</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_GoodwillAndIntangibleAssetsDisclosureTextBlock-c0_cont_23"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2026</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2027
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  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  </table></ix:nonNumeric></ix:continuation><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE
5 - PROPERTY AND EQUIPMENT, NET:</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_2" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Composition
of property and equipment grouped by major classifications is as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_3" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:PropertyPlantAndEquipmentTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
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  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c137" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">648</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Computers and electronic equipment</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c138" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">1,304</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c139" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">1,109</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Equipment and machinery</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c140" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">4,326</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c141" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">2,766</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Leasehold improvement</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c142" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">647</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c143" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">544</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vehicles</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c144" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">156</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c145" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">132</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Land &#8211; See b below</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c146" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">6,314</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c147" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">6,314</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Production
    line&#8211; See b below</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c148" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">31,740</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c149" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">26,790</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">45,208</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentGross" scale="3" unitRef="usd">38,303</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less:
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment" scale="3" unitRef="usd">1,663</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment" scale="3" unitRef="usd">868</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    property and equipment, net</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalPropertyAndEquipmentsNet" scale="3" unitRef="usd">43,545</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalPropertyAndEquipmentsNet" scale="3" unitRef="usd">37,435</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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</div><div>

</div><ix:continuation id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>a.</b></span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Total depreciation in respect of property and equipment were approximately $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherDepreciationAndAmortization" scale="3" unitRef="usd">905</ix:nonFraction> thousand, $<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherDepreciationAndAmortization" scale="3" unitRef="usd">524</ix:nonFraction> thousand and $<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherDepreciationAndAmortization" scale="3" unitRef="usd">208</ix:nonFraction> thousand for the years ended December 31, 2022, 2021 and 2020, respectively. An impairment charge in the amount of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:TangibleAssetImpairmentCharges" scale="3" unitRef="usd">172</ix:nonFraction> thousand and $<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:TangibleAssetImpairmentCharges" scale="3" unitRef="usd">214</ix:nonFraction> thousand was recorded for the years ended December 31, 2022 and 2021, respectively in relation to the Company&#8217;s Property, Plant and Equipment.</span></td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>b.</b></span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">In December 2020, Nanox Korea purchased land for approximately $<ix:nonFraction contextRef="c135" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForPurchaseOfOtherAssets1" scale="3" unitRef="usd">6,314</ix:nonFraction> thousand upon which it built a fabrication facility. In 2021, Nanox Korea completed the construction of the permanent fabrication plant.</span></td></tr> </table></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="nnox_CashEquivalentsAndRestrictedCashTextBlock-c0_cont_1" escape="true" name="nnox:CashEquivalentsAndRestrictedCashTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>NOTE
6 - CASH, CASH EQUIVALENTS AND RESTRICTED CASH:</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CashEquivalentsAndRestrictedCashTextBlock-c0_cont_2" id="nnox_CashEquivalentsAndRestrictedCashTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the consolidated balance sheet that
sum to the same total amount as shown in the consolidated statement of cash flows.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_CashEquivalentsAndRestrictedCashTextBlock-c0_cont_3" id="nnox_CashEquivalentsAndRestrictedCashTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfRestrictedCashAndCashEquivalentsTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfRestrictedCashAndCashEquivalentsTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Restricted
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</div><div>

</div><ix:continuation id="nnox_CashEquivalentsAndRestrictedCashTextBlock-c0_cont_3"><ix:continuation id="_ScheduleOfRestrictedCashAndCashEquivalentsTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><ix:footnote id="ix_6_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of December&#160;31, 2022 and 2021, the Company&#8217;s restricted cash consisted of a bank deposit that was denominated in New Israeli Shekel. Restricted deposit is presented at cost including accrued interest. This bank deposit is used as security for credit card use and collateralizing the Company&#8217;s lease contracts.</span></ix:footnote></td>
</tr></table></ix:continuation></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_1" escape="true" name="us-gaap:LesseeOperatingLeasesTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 7
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</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_2" id="_LesseeOperatingLeasesTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">As
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</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_3" id="_LesseeOperatingLeasesTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The Company&#8217;s principal executive offices are located in a leased facility in Neve Ilan, Israel. <ix:nonNumeric contextRef="c0" name="nnox:LeasesSquareDescription">The Company leases approximately 550&#160;square meters (approximately 5,920 square feet) of office space and warehouses. The original lease expired in December&#160;2021, and the Company exercised the option to extend its lease for an additional 24 months until December 31, 2023. The Company leases approximately 620 square meters (approximately 6,670 square feet) of office space in Neve Ilan, Israel, that is used for offices and technical development. The lease expires in June 2023. In November 2020, the Company leased an additional approximately 370 square meters (approximately 3,980 square feet) of office space in Neve-Ilan, Israel. This lease also expires in June 2023. In March 2022, the Company signed a new agreement to lease 105 square meters (approximately 1,130 square feet) of office space in Neve-Ilan, Israel until February 2025.</ix:nonNumeric> The monthly rent payment for all the lease premises in Neve-Ilan, Israel is approximately $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="nnox:MonthlyRentPaymentTheLeasePremises" scale="3" unitRef="usd">42</ix:nonFraction> thousand.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_5" id="_LesseeOperatingLeasesTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Nanox
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</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_6" id="_LesseeOperatingLeasesTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><ix:nonNumeric contextRef="c4" name="nnox:FabricationFacilityAndResearchDevelopmentalCenterDescription">In
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</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_7" id="_LesseeOperatingLeasesTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Nanox
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period for an additional 24 months through November 2026. &#160;Nanox AI concluded that it is not reasonably certain that it will exercise
the renewal option. Accordingly, such renewal option was not included in determining the lease term. The monthly rent payment for this
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_9" id="_LesseeOperatingLeasesTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 159; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->28<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 7
- LEASES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_10" id="_LesseeOperatingLeasesTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">The
table below presents the effects on the amounts relating to the Company&#8217;s total lease costs:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_11" id="_LesseeOperatingLeasesTextBlock-c0_cont_10"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:LeaseCostTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year ended
    <br/> December&#160;31,</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year ended
    <br/> December&#160;31,</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
    Dollars<br/> in thousands)</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
    Dollars <br/> In&#160;thousands)</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">Operating lease cost:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Fixed payments</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LeaseCost" scale="3" unitRef="usd">937</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LeaseCost" scale="3" unitRef="usd">653</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Short-term lease cost</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShortTermLeaseCost" scale="3" unitRef="usd">72</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShortTermLeaseCost" scale="3" unitRef="usd">48</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Total operating lease
    cost</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalOperatingLeaseCost" scale="3" unitRef="usd">1,009</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalOperatingLeaseCost" scale="3" unitRef="usd">701</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_12" id="_LesseeOperatingLeasesTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
table below presents supplemental cash flow information related to operating leases:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_13" id="_LesseeOperatingLeasesTextBlock-c0_cont_12"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfCashFlowSupplementalDisclosuresTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year ended
    <br/> December&#160;31,</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year ended
    <br/> December&#160;31,</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.&#160;Dollars<br/>
    in&#160;thousands)</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.&#160;Dollars<br/>
    in&#160;thousands)</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">Cash paid for amounts included in the measurement of lease liabilities:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Operating
    cash flows used in &#160;operating leases</span></td><td style="width: 1%; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeasePayments" scale="3" unitRef="usd">1,231</ix:nonFraction></span></td><td style="width: 1%; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeasePayments" scale="3" unitRef="usd">507</ix:nonFraction></span></td><td style="width: 1%; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Right-of-use assets obtained in exchange for
    lease obligations (non-cash):</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Operating leases</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:RightOfUseAssetObtainedInExchangeForOperatingLeaseLiability" scale="3" unitRef="usd">320</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:RightOfUseAssetObtainedInExchangeForOperatingLeaseLiability" scale="3" unitRef="usd">194</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_14" id="_LesseeOperatingLeasesTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
table below presents supplemental balance sheet information related to operating leases:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_15" id="_LesseeOperatingLeasesTextBlock-c0_cont_14"><ix:nonNumeric contextRef="c0" continuedAt="nnox_ScheduleOfSupplementalBalanceSheetInformationTableTextBlock-c0_cont_1" escape="true" name="nnox:ScheduleOfSupplementalBalanceSheetInformationTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
    Dollars<br/> in thousands)</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">Operating leases:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Operating lease right-of-use assets</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseRightOfUseAssetAmortizationExpense" scale="3" unitRef="usd">1,725</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Current maturities of operating leases</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="nnox:OperatingLeaseLiabilitiesCurrent" scale="3" unitRef="usd">881</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Non-current operating
    leases</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="nnox:OperatingLeaseLiabilityNoncurrents" scale="3" unitRef="usd">398</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="nnox:OperatingLeaseLiabilityNoncurrents" scale="3" unitRef="usd">950</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Total operating lease
    liabilities</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiability" scale="3" unitRef="usd">1,138</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiability" scale="3" unitRef="usd">1,831</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_16" id="_LesseeOperatingLeasesTextBlock-c0_cont_15"><ix:continuation id="nnox_ScheduleOfSupplementalBalanceSheetInformationTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">Weighted average remaining lease term</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Operating leases</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><ix:nonNumeric contextRef="c2" format="ixt-sec:duryear" name="us-gaap:OperatingLeaseWeightedAverageRemainingLeaseTerm1"><span style="font-family: Times New Roman, Times, Serif">1.52</span></ix:nonNumeric></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><ix:nonNumeric contextRef="c3" format="ixt-sec:duryear" name="us-gaap:OperatingLeaseWeightedAverageRemainingLeaseTerm1"><span style="font-family: Times New Roman, Times, Serif">2.14</span></ix:nonNumeric></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">Weighted average discount rate</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Operating leases</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseWeightedAverageDiscountRatePercent" scale="-2" unitRef="pure">5.84</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseWeightedAverageDiscountRatePercent" scale="-2" unitRef="pure">5.70</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>


</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>


</div><!-- Field: Page; Sequence: 160; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->29<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 7
- LEASES </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_17" id="_LesseeOperatingLeasesTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
table below presents maturities of operating lease liabilities:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_LesseeOperatingLeasesTextBlock-c0_cont_17"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:LesseeOperatingLeaseLiabilityMaturityTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
    Dollars <br/> in thousands)</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">2023</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueYearTwo" scale="3" unitRef="usd">785</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">2024</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueYearThree" scale="3" unitRef="usd">391</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">2025</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueYearFour" scale="3" unitRef="usd">18</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">2026 and thereafter</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-126; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Total operating lease payments</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueAfterYearFive" scale="3" unitRef="usd">1,194</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Less: imputed interest</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="nnox:LesseeOperatingLeaseLiabilityUndiscountedExcessAmounts" scale="3" unitRef="usd">56</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Present value of lease
    liabilities</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="nnox:PresentValueOfLeaseLiabilities" scale="3" unitRef="usd">1,138</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table></ix:nonNumeric></ix:continuation><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="nnox_DeferredRevenuesDisclosureTextBlock-c0_cont_1" escape="true" name="nnox:DeferredRevenuesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 8
&#8211; DEFERRED REVENUE</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="nnox_DeferredRevenuesDisclosureTextBlock-c0_cont_2" id="nnox_DeferredRevenuesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
following table represents the changes in deferred revenue for the year ended December 31, 2022 and December 31, 2021:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_DeferredRevenuesDisclosureTextBlock-c0_cont_3" id="nnox_DeferredRevenuesDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="_DeferredRevenueByArrangementDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:DeferredRevenueByArrangementDisclosureTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Deferred<br/>
                                            Revenue</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>(U.S.
                                            Dollars in thousands)</b></span></p></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">Balance at December 31, 2020</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-127; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="width: 88%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Increase due to the business combinations</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="nnox:IncreaseDueToTheBusinesCombination" scale="3" unitRef="usd">483</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">Additions</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ServicingLiabilityAtFairValueAdditions" scale="3" unitRef="usd">467</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Revenue recognized in the reported period</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueRevenueRecognized1" scale="3" unitRef="usd">288</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">Balance at December 31, 2021 (*)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" id="ix_17_fact" name="us-gaap:DeferredRevenue" scale="3" unitRef="usd">662</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">Additions</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ServicingLiabilityAtFairValueAdditions" scale="3" unitRef="usd">102</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Revenue recognized in
    the reported period -</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueRevenueRecognized1" scale="3" unitRef="usd">184</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Balance at December 31, 2022 (**)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" id="ix_18_fact" name="us-gaap:DeferredRevenue" scale="3" unitRef="usd">580</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="nnox_DeferredRevenuesDisclosureTextBlock-c0_cont_4" id="nnox_DeferredRevenuesDisclosureTextBlock-c0_cont_3"><ix:continuation continuedAt="_DeferredRevenueByArrangementDisclosureTextBlock-c0_cont_2" id="_DeferredRevenueByArrangementDisclosureTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">*</span></td><td style="text-align: justify"><ix:footnote id="ix_7_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif">Includes $<ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueNoncurrent" scale="3" unitRef="usd">415</ix:nonFraction> thousand under long term deferred revenue in the Company&#8217;s consolidated balance sheets as of December 31, 2021.</span></ix:footnote></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation id="nnox_DeferredRevenuesDisclosureTextBlock-c0_cont_4"><ix:continuation id="_DeferredRevenueByArrangementDisclosureTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">**</span></td><td style="text-align: justify"><ix:footnote id="ix_8_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif">Includes $<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueNoncurrent" scale="3" unitRef="usd">398</ix:nonFraction> thousand under long term deferred revenue in the Company&#8217;s consolidated balance sheets as of December 31, 2022.</span></ix:footnote></td>
</tr></table></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>


</div><!-- Field: Page; Sequence: 161; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_1" escape="true" name="nnox:RelatedPartyLiabilityTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE
9 - RELATED PARTIES:</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_2" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif">Related
party balances at December 31, 2022 and December 31, 2021 consisted of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_3" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="nnox:ScheduleOfRelatedPartyTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,
    <br/> 2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31,<br/>
    2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
    Dollars in thousands)</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">(a) Due from Illumigyn</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<ix:nonFraction contextRef="c164" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalDueFromRelatedParties1" scale="3" unitRef="usd">48</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<ix:nonFraction contextRef="c165" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalDueFromRelatedParties1" scale="3" unitRef="usd">3</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">(b) Due from Wellsense Technologies Ltd.</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c166" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalDueFromRelatedParties1" scale="3" unitRef="usd">10</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c167" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalDueFromRelatedParties1" scale="3" unitRef="usd">11</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">(c) Due from Six-Eye Interactive</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c168" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalDueFromRelatedParties1" scale="3" unitRef="usd">21</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c169" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalDueFromRelatedParties1" scale="3" unitRef="usd">1</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">(d) Due from Six AI ltd.</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c170" decimals="-3" format="ixt:num-dot-decimal" name="nnox:TotalDueFromRelatedParties1" scale="3" unitRef="usd">8</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_4" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_5" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfRelatedPartyTransactionsTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="nnox:OtherGeneralAndAdministrativeExpenses" scale="3" sign="-" unitRef="usd">191</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 79.8pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_6" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_5"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>c.</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Six AI Ltd Service agreement</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:continuation><div>
</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_7" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">On April 16, 2020, the Company entered into an agreement with SixAI Ltd. (hereinafter,-&#8220;SixAI&#8221;) a company controlled by Ran Poliakine, the Company&#8217;s former Chief Executive Officer and a chairman of the Company&#8217;s board of directors for certain software development and mechanical engineering services. The service agreement was effective as of March 1, 2020 and has been extended by mutual agreement of the parties several times, until terminated at December 31, 2021. During the years ended December 31, 2022, 2021 and 2020, the Company recorded an expense of $<ix:nonFraction contextRef="c151" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherExpenses" scale="0" unitRef="usd">0</ix:nonFraction>, $<ix:nonFraction contextRef="c152" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherExpenses" scale="3" unitRef="usd">80</ix:nonFraction> thousand, and $<ix:nonFraction contextRef="c153" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OtherExpenses" scale="3" unitRef="usd">355</ix:nonFraction> thousand, respectively. Mr. Poliakine currently serves as a member of the board of directors of SixAI and Mr. Poliakine is a significant shareholder of SixAI.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_8" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_7"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>d.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Illumigyn
    Ltd.</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:continuation><div>
</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_9" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">Illumigyn Ltd (hereinafter, &#8211; &#8220;Illumigyn&#8221;) is a company in which Ran Poliakine, the Company&#8217;s former Chief Executive Officer and a member of the Company&#8217;s board of directors, is a significant shareholder. Ms. Noga Kainan, a member of the Company&#8217;s board of directors serves as a member of the board of directors of Illumigyn, and Anat Kaphan, the Company&#8217;s former Chief Innovation Officer currently who serves as a member of the advisory board of the Company, also serves as a consultant to Illumigyn. Since November 1, 2019, Illumigyn sub-leased in transaction approximately <ix:nonFraction contextRef="c154" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AreaOfLand" scale="0" unitRef="sqm">1,800</ix:nonFraction> square feet of private office space, including access to shared public spaces, from the office spaces which the Company leases in Neve Ilan, Israel. Illumigyn pays approximately $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="nnox:PaysApproximately" scale="3" unitRef="usd">12</ix:nonFraction> thousand per month. During the years ended December 31, 2022, 2021 and 2020, the Company received approximately $<ix:nonFraction contextRef="c155" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LeaseIncome" scale="0" unitRef="usd">171</ix:nonFraction> thousand, $<ix:nonFraction contextRef="c156" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LeaseIncome" scale="3" unitRef="usd">125</ix:nonFraction> thousand and <span style="-sec-ix-hidden: hidden-fact-129">$163</span> thousand, respectively, in relation to the sub lease.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 1in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>


</div><!-- Field: Page; Sequence: 162; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->31<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 9
- RELATED PARTY LIABILITY (</b>continued):<b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_10" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_9"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>e.</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Wellsense Technologies Ltd.</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_11" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">Wellsense
Technologies Ltd.(hereinafter, &#8220;Wellsense&#8221;) is a company in which Ran Poliakine, the Company&#8217;s former Chief Executive
Officer and a member of the Company&#8217;s board of directors, is a shareholder. Since February 2020, Wellsense has sub-leased private
office space, including access to shared public spaces, from the Company in Neve Ilan, Israel. Wellsense pays approximately $<ix:nonFraction contextRef="c5" decimals="-2" format="ixt:num-dot-decimal" name="us-gaap:LeaseIncome" scale="3" unitRef="usd">7.0</ix:nonFraction> thousand
per month. During the years ended December 31, 2022, 2021 and 2020, the Company received $<ix:nonFraction contextRef="c158" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LeaseIncome" scale="0" unitRef="usd">47</ix:nonFraction> thousand, $<ix:nonFraction contextRef="c159" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:LeaseIncome" scale="3" unitRef="usd">66</ix:nonFraction> thousand and <span style="-sec-ix-hidden: hidden-fact-130">$59</span> thousand,
respectively, in relation to the sub lease.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_12" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_11"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>f.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Employment
    Agreements</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_13" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">The
Company has entered into an employment agreement with Ran Poliakine, the Company&#8217;s founder, Chairman of the Board of Directors,
and former Chief Executive Officer. Pursuant to the agreement, if the Company terminates Ran Poliakine&#8217;s employment and waives
his obligation to perform services during the notice period of 180 days, Ran Poliakine will be entitled to receive payments of his base
salary and social benefits in lieu of notice for the waived period, up to the full notice period for an immediate termination. The agreement
provides Ran Poliakine with a gross monthly base salary equal to $<ix:nonFraction contextRef="c161" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:SalariesAndWages" scale="3" unitRef="usd">40</ix:nonFraction> thousand which was increased to $<ix:nonFraction contextRef="c162" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:SalariesAndWages" scale="3" unitRef="usd">60</ix:nonFraction> thousand upon the consummation
of the Company&#8217;s initial public offering. Ran Poliakine served as the Company&#8217;s Chief Executive Officer through December
31, 2021.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_14" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif"><ix:nonNumeric contextRef="c163" name="nnox:EmploymentAgreementDescription">On September 27, 2021, the Company and Erez Meltzer entered into an employment agreement, pursuant to which Mr. Meltzer agreed to serve as the Company&#8217;s new Chief Executive Officer (the &#8220;Meltzer Employment Agreement&#8221;). The Meltzer Employment Agreement commenced and became effective as of January 1, 2022 and shall continue for an indefinite period until it is terminated by either party. Pursuant to the terms of the Meltzer Employment Agreement, Mr. Meltzer will receive an annual base salary of nine hundred ($900) thousand dollars per year, and will be eligible for an annual incentive payment of up to one hundred percent (100%) of his base salary, which of them $450 thousand were guaranteed for the 2022 fiscal year if his employment is continued through the entire fiscal year, and were withdrawn during 2022 as an advance payment on account of the 2022 annual bonus, subject to full recourse (clawback) if the bonus is not earned; Accordingly, in 2022, Mr. Meltzer was paid seven hundred ($700) thousand dollars on the account of his 2022 annual bonus, subject to resource (clawback) as described above. Mr. Meltzer will be entitled to customary social benefits under Israeli law and practice pursuant to which the Company shall insure the CEO with a manager&#8217;s insurance policy or a pension fund, or a combination of both (whereby each will apply partially), all according to his election; &#160;Mr. Meltzer will be granted options to purchase 300,000 Ordinary Shares (the &#8220;Options&#8221;) which will vested equally over a period of 48 months as long as Mr. Meltzer will be employed by the Company. The Options shall be subject to the Company&#8217;s 2019 Equity Incentive plan and, to the extent possible, be granted pursuant to Section 102 of the Israeli Income Tax Ordinance, 5721-1961. The exercise price of the Options shall be $23.84 per share, a share price equals to the 30-day average of the Company&#8217;s share price on NASDAQ, prior to the date of approval of the CEO&#8217;s employment agreement by the Board on September 27, 2021.</ix:nonNumeric> Such amount may be paid by the CEO by way of a cashless exercise mechanism. The agreement calls for a 6 months&#8217; mutual notice of termination and 270 days if the Company provides notice during the first year of employment (except for &#8220;Cause&#8221; as defined in the employment agreement, in which case no prior notice will be required).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="nnox_RelatedPartyLiabilityTextBlock-c0_cont_15" id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_14"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif"><b>g<span style="font-size: 10pt">.</span></b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Service Agreement</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><ix:continuation id="nnox_RelatedPartyLiabilityTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">In February 2021, the shareholders of the Company approved the entry into an agreement with Floyd Katske, effective as of October 1, 2020, whereby Floyd Katske will assist the Chief Executive Officer and the Company with various tasks given his medical knowledge, expertise and experience, as may be requested from time-to-time by the Company&#8217;s Chief Executive Officer. These tasks were in addition and unrelated to his role as a member of the board of directors of the Company. Floyd Katske was paid with respect to such services $200 per hour, against an invoice. The services were limited to 100 hours in any calendar month, according to hours approved by the Chairman. In addition, Floyd Katske was paid cash compensation consisting of RSUs granted in each calendar quarter, in the amount calculated by dividing (i) two times the cash compensation paid during such quarter as aforesaid by (ii) the fair market value of the Company&#8217;s ordinary shares on the last trading day of such quarter. All tax consequences were borne by Floyd Katske. During the year ended December 31, 2022, the agreement was terminated and the Company recorded an expense of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherResearchAndDevelopmentExpense" scale="0" unitRef="usd">47</ix:nonFraction> thousand in research and development expenses with regards to the services provided by Floyd Katske.</span></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; "></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"></p><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->32<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DebtDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:DebtDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 10
&#8211; LONG TERM LOAN </b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation id="_DebtDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">During
September 2021, Nanox Korea entered into a <ix:nonNumeric contextRef="c173" format="ixt-sec:duryear" name="us-gaap:LongTermDebtTerm">3</ix:nonNumeric> year Loan agreement with a Korean Bank, according to which the Bank granted the Company
a loan in the amount of $<ix:nonFraction contextRef="c173" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:LongTermDebt" scale="6" unitRef="usd">3.8</ix:nonFraction> million. The loan bears an annual interest at a rate of 3 months KORIBOR and <ix:nonFraction contextRef="c173" decimals="5" format="ixt:num-dot-decimal" name="nnox:AnnualInterestRate" scale="-2" unitRef="pure">1.149</ix:nonFraction>%, whereas interest payments
are due on a monthly basis and the principal is due at the end of the loan term. The bank received a floating charge on the Nanox Korea&#8217;s
assets.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 52.5pt; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:CommitmentsAndContingenciesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 11
- COMMITMENTS AND CONTINGENCIES</b>:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 52.5pt; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">From
time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.
However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time
that may harm the Company&#8217;s business.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">In
September 2020, two securities class action complaints were filed in the United States District Court for the Eastern District of New
York against the Company and certain current officers and a director, which were subsequently consolidated and captioned as White v.
Nano-X Imaging Ltd. et al, Case No. 1:20-cv-04355, alleging violations of securities laws on behalf of all persons and entities that
purchased or otherwise acquired the Company&#8217;s publicly traded securities between August 21, 2020 and September 15, 2020, and seeking
unspecified damages. On December 7, 2020, proposed lead plaintiffs submissions were fully briefed and remain outstanding. On August 10,
2022, Magistrate Judge Marcia M. Henry issued a Report and Recommendation, recommending that the Court approve Derson O. Jolteus and
Edward Ko as lead plaintiffs, and on August 30, 2022, Judge William Kuntz adopted the Report and Recommendation. On June 24, 2022, the
Company moved to consolidate this action with the action captioned McLaughlin v. Nano-X Imaging Ltd. et al, Case No: 1:21-cv-05517, discussed
further below. The Company&#8217;s motion to consolidate remains outstanding. On October 31, 2022, Lead Plaintiffs filed an amended complaint,
which alleges that defendants violated the federal securities laws in connection with certain disclosures regarding the Company&#8217;s
FDA submission and customer contracts. Lead Plaintiffs seek to represent a class of investors who purchased the Company&#8217;s publicly
traded securities between August 21, 2020 and September 15, 2020. On February 3, 2023, the Company moved to stay this action in favor
of the McLaughlin action, or, in the alternative, until the Company&#8217;s pending motion to consolidate was decided. The Company has
not yet responded to the amended complaint.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_4" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">On October 5, 2021, a class action complaint was filed in the United States District Court for the Eastern District of New York against the Company and certain of its officers, captioned McLaughlin v. Nano-X Imaging Ltd. et al, Case No. 1:21-cv-05517. The plaintiff asserts claims on behalf of persons and entities that purchased or otherwise acquired the Company&#8217;s securities between June 17, 2021 and August 18, 2021, seeking unspecified damages. The plaintiff alleges that the defendants made materially false and misleading statements concerning the Company&#8217;s business, operations and compliance policies beginning on June 17, 2021, based on the Company&#8217;s U.S. Food and Drug Administration submissions. On April 12, 2022 and in the same case, the Lead Plaintiff filed an amended complaint, which alleges that defendants violated the federal securities laws in connection with certain disclosures concerning the cost of the Nanox.ARC system as well as the comparison of the Nanox.ARC to CT scanners. Lead Plaintiff seeks to represent a class of investors who purchased the Company&#8217;s publicly-traded securities between August 21, 2020 and November 17, 2021. The Company moved to dismiss the amended complaint, and briefing on that motion was completed on September 9, 2022, and it remains outstanding. As of December 31, 2022, the Company has accrued an amount of $<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AccruedVacationCurrentAndNoncurrent" scale="3" unitRef="usd">8,000</ix:nonFraction> thousand in connection with the above referenced complaints (refer to Note 16).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"></p><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_5" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">On October
28, 2021, a complaint was filed in the United States District Court for the Central District of California against the Company, Nanox
Imaging Inc.and Nanox Gibraltar from which the Company received certain assets, as well as Mr. Ran Poliakine and certain other unidentified
parties, alleging several causes of action including breach of a consulting agreement between the plaintiff and Gibraltar that was entered
into in 2015. The plaintiff demanded payment of unpaid consulting fees from Gibraltar in the amount of approximately $<ix:nonFraction contextRef="c174" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentFeeAmount" scale="6" unitRef="usd">1</ix:nonFraction> million and approximately
$<ix:nonFraction contextRef="c175" decimals="-5" format="ixt:num-dot-decimal" name="nnox:LossContingencyNewClaimsAmount" scale="6" unitRef="usd">29.5</ix:nonFraction> million from the Company relating to his claimed entitlement to warrants in Nanox Gibraltar. On February 15, 2022, the Company moved
to dismiss the complaint on the grounds, among others, that it was not a party to the agreement with the plaintiff, and it is not Nanox
Gibraltar&#8217;s legal successor for any liabilities that Nanox Gibraltar may owe to the plaintiff. On June 4, 2022, the Court granted
the motion to dismiss with leave to amend. The plaintiff did not amend the complaint, and on July 20, 2022, the Court entered judgment
in the Company&#8217;s favor.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><ix:continuation id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">The
                                            Division of Enforcement of the U.S. Securities &amp; Exchange Commission (the &#8220;SEC&#8221;)
                                            has notified the Company that it is conducting an investigation to determine whether there
                                            had been any violations of the federal securities laws. The Company has been providing documents
                                            and information to the SEC and has received a subpoena from the SEC requesting that the Company
                                            provide documents and other information relating to the development cost of the Company&#8217;s
                                            Nanox.ARC prototypes, as well as the Company&#8217;s estimate for the cost of assembling
                                            the final Nanox.ARC product at scale, among other things. The Company is cooperating with
                                            the SEC in responding to its requests. As of December 31, 2022, the duration and outcome
                                            of this matter cannot be predicted, and the Company is unable to estimate a loss or range
                                            of loss of this Investigation.</span></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 164; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->33<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 12
- SHAREHOLDERS&#8217; EQUITY:</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>a.</b></span></td>
    <td style="font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Share capital</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.75in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Each
holder of the Company&#8217;s ordinary shares, par value NIS <ix:nonFraction contextRef="c2" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:TemporaryEquityParOrStatedValuePerShare" scale="0" unitRef="ilsPershares">0.01</ix:nonFraction> per share, is entitled to one vote. The holders of ordinary shares
are also entitled to receive dividends whenever funds are legally available and declared by the Company&#8217;s Board of Directors (the
&#8220;Board&#8221;). Since inception, the Company has not declared any dividends.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
following table presents the number of authorized and issued and outstanding shares as of each reporting date for each class of shares:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" escape="true" name="nnox:ScheduleOfIssuedAndOutstandingTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December
    31, 2022</span></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December
    31, 2021</span></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Total</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="INF" format="ixt:num-dot-decimal" name="nnox:OrdinarySharesIssuedAndOutstanding" scale="0" unitRef="shares">51,791,441</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">On
January 2, 2022, the Company issued <ix:nonFraction contextRef="c176" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">2,953</ix:nonFraction> RSUs to its Chief Executive Officer for services rendered prior to 2022.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">On
January 19, 2022, the Company issued <ix:nonFraction contextRef="c69" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares">89,286</ix:nonFraction> shares to the former shareholders of Nanox AI due to partial achievement of a milestone that
occurred post-closing.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">On
December 29, 2022, the Company entered into a settlement with respect to any additional amount that could be granted under the Agreement,
according to which the Company issued Nanox AI&#8217;s former shareholders an additional <ix:nonFraction contextRef="c70" decimals="0" format="ixt:num-dot-decimal" name="nnox:AdditionalOrdinaryShares1" scale="0" unitRef="shares">2,648,424</ix:nonFraction> ordinary shares (representing additional
consideration of approximately $<ix:nonFraction contextRef="c177" decimals="0" format="ixt:num-dot-decimal" name="nnox:ConsiderationAmount" scale="0" unitRef="usd">18,617</ix:nonFraction> thousand). As a result of the settlement, both parties&#8217; performance obligations under the
Agreement have been satisfied in full.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_9" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>b.</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Share based compensation </b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_10" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif"><span style="text-decoration:underline">Share
based compensation</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_11" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">On
September 3, 2019, the Company&#8217;s board of directors resolved to adopt an equity incentive plan (the &#8220;Plan&#8221;). Based
on such Plan, each option will be exercisable for one ordinary share of the Company and will become exercisable at such terms and during
such periods, as the Company&#8217;s board of directors shall determine. <ix:nonNumeric contextRef="c178" name="nnox:DescriptionOfSharebasedCompensationExpenses">Pursuant to the Plan (and further increase of option pool approved
by the Company&#8217;s board of directors), 8,041,936 ordinary shares of NIS 0.01 par value of the Company are reserved for issuance
upon the exercise of the same amount of awards to be granted to some of the Company&#8217;s employees, directors and consultants.</ix:nonNumeric></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">As
of December 31, 2022, there were <ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares">1,504,472</ix:nonFraction> ordinary shares reserved for the equity incentive plan. The Company&#8217;s board of directors
also approved the Plan for the purpose of selecting the capital gains tax track, under Section 102 of the Israeli Income Tax Ordinance,
for options granted to the Company&#8217;s Israeli employees.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_13" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">As
of December 31, 2022, there is an unrecognized share-based compensation expense of&#160;$<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="0" unitRef="usd">17,061</ix:nonFraction> thousand to be recognized over the average
remaining vesting period of&#160;<ix:nonNumeric contextRef="c0" format="ixt-sec:duryear" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardAwardVestingPeriod1">2.44</ix:nonNumeric>&#160;years.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 165; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->34<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 12
- SHAREHOLDERS&#8217; EQUITY </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_14" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif"><span style="text-decoration:underline">Share-based
compensation to non-employees</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">The
following table summarizes share-based awards to non-employees for the period ended December 31, 2022:&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_16" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfShareBasedCompensationNonemployeeDirectorStockAwardPlanActivityTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">Year
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    December 31,<br/>
    2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">Number of</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">Weighted</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">share-based</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">average</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">payment</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">exercise</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">price</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif">Granted</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif">Forfeited</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif">Expired</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-131; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; text-align: right"><span style="-sec-ix-hidden: hidden-fact-132; font-family: Times New Roman, Times, Serif">-</span></td><td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Cancelled</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><span style="-sec-ix-hidden: hidden-fact-134; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Outstanding at end of
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c184" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber" scale="0" unitRef="shares">1,838,072</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c184" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice" scale="0" unitRef="usdPershares">8.77</ix:nonFraction></span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Aggregate intrinsic value</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c182" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAggregateIntrinsicValue" scale="3" unitRef="usd">7,669</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Exercisable at end of
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c184" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber" scale="0" unitRef="shares">1,582,254</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c184" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice" scale="0" unitRef="usdPershares">11.23</ix:nonFraction></span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Aggregate intrinsic value</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c184" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAggregateIntrinsicValue" scale="3" unitRef="usd">7,235</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_17" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">The
fair value of each granted award is estimated at the date of grant using the Black-Scholes option-pricing model. The assumptions used
for the year ended December 31, 2022 and year ended at December 31, 2021 are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_17"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year
    ended<br/> December&#160;31,<br/> 2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year
    ended<br/> December&#160;31,<br/> 2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Dividend yield</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate" scale="-2" unitRef="pure">0</ix:nonFraction></span></td><td style="width: 1%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate" scale="-2" unitRef="pure">0</ix:nonFraction></span></td><td style="width: 1%; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Expected volatility</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c39" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure">52.37</ix:nonFraction>-<ix:nonFraction contextRef="c40" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure">52.75</ix:nonFraction></span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c161" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure">50.27</ix:nonFraction>% - <ix:nonFraction contextRef="c162" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure">52.71</ix:nonFraction></span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">%</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Risk-free interest rate</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c39" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure">3.45</ix:nonFraction>-<ix:nonFraction contextRef="c40" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure">3.51</ix:nonFraction></span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c161" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure">0.66</ix:nonFraction>% - <ix:nonFraction contextRef="c162" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure">1.61</ix:nonFraction></span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">%</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Expected term (years)</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif"><ix:nonNumeric contextRef="c0" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTerm2">10</ix:nonNumeric></span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonNumeric contextRef="c4" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTerm2">10</ix:nonNumeric></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
expected volatility is based on the historical volatility of comparable companies. The risk-free interest rate assumption is based on
observed interest rates appropriate for the expected term of the awards granted in dollar terms. The Company does not have sufficient
historical exercise data to provide a reasonable basis upon which to estimate expected term. Accordingly, as to ordinary course options
granted, the expected term was determined using the simplified method, which takes into consideration the option&#8217;s contractual
life and the vesting periods (for non-employees, the expected term is equal to the option&#8217;s contractual life).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"></p><div>

</div><!-- Field: Page; Sequence: 166; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->35<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 12
- SHAREHOLDERS&#8217; EQUITY </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_20" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">The
following table summarizes information concerning outstanding and exercisable awards as of December 31, 2022:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_21" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_20"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td colspan="18" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December
    31, 2022</span></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Awards
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    exercisable</span></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Weighted</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Number of</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Weighted</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">remaining</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Exercise</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">at end of</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">price</span></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">year</span></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">year</span></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">life
    (years)</span></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 17%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c191" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeNumberOfOutstandingOptions" scale="0" unitRef="shares">1,483,416</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 17%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c193" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber" scale="0" unitRef="shares">1,399,414</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 17%; text-align: right"><ix:nonNumeric contextRef="c194" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2"><span style="font-family: Times New Roman, Times, Serif">7.75</span></ix:nonNumeric></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 167; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->36<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 12
- SHAREHOLDERS&#8217; EQUITY </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_22" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_21"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Share-based compensation to employees, officers
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_23" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">During
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years vesting period with a one-year cliff.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_24" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_23"><ix:nonNumeric contextRef="c287" escape="true" name="us-gaap:ScheduleOfCommonStockOutstandingRollForwardTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
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    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December
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  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Outstanding at beginning of year</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Changes during the year:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">Granted</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">1,266,803</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">Exercised</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice" scale="0" unitRef="usdPershares">1.18</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">Forfeited</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="INF" format="ixt:num-dot-decimal" name="nnox:StockIssuedDuringPeriodSharesStockOptionsForfeited" scale="0" sign="-" unitRef="shares">608,511</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice" scale="0" unitRef="usdPershares">22.20</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">Expired</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-137; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-138; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Cancelled</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-139; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-140; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Outstanding at end of
    year</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber" scale="0" unitRef="shares">3,277,838</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="2" format="ixt:num-dot-decimal" name="nnox:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrices" scale="0" unitRef="usdPershares">18.79</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Aggregate intrinsic value</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAggregateIntrinsicValue" scale="0" unitRef="usd">5,660</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Exercisable at end of
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber" scale="0" unitRef="shares">1,364,777</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="nnox:WeightedAverageExercisePriceExercisableAtEndOfYear" scale="0" unitRef="usdPershares">9.51</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Aggregate intrinsic value</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAggregateIntrinsicValue" scale="0" unitRef="usd">5,221</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_25" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
fair value of each granted award is estimated at the date of grant using the Black-Scholes option-pricing model. The assumptions used
as of December 31, 2022 and 2021 are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_26" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_25"><ix:continuation id="_ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">Dividend yield</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c185" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate" scale="-2" unitRef="pure">0</ix:nonFraction></span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c186" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate" scale="-2" unitRef="pure">0</ix:nonFraction></span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Expected volatility</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="white-space: nowrap; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c187" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure">50.75</ix:nonFraction>% - <ix:nonFraction contextRef="c188" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure">52.69</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c189" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure">50.27</ix:nonFraction>%-<ix:nonFraction contextRef="c190" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure">51.84</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Risk-free interest rate</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c187" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure">1.52</ix:nonFraction>% - <ix:nonFraction contextRef="c188" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure">4.34</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c189" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure">0.66</ix:nonFraction>%-<ix:nonFraction contextRef="c190" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure">1.61</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Expected term (years)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonNumeric contextRef="c187" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTerm2">5.52</ix:nonNumeric>-<ix:nonNumeric contextRef="c188" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTerm2">10</ix:nonNumeric></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonNumeric contextRef="c186" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTerm2">6.25</ix:nonNumeric></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>


</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 168; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->37<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 12
- SHAREHOLDERS&#8217; EQUITY </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_27" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_26"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
expected volatility is based on the historical volatility of comparable companies. The risk-free interest rate assumption is based on
observed interest rates appropriate for the expected term of the awards granted in dollar terms. The Company does not have sufficient
historical exercise data to provide a reasonable basis upon which to estimate expected term. Accordingly, as to ordinary course options
granted, the expected term was determined using the simplified method, which takes into consideration the option&#8217;s contractual
life and the vesting periods. The following table summarizes information concerning outstanding and exercisable awards as of December
31, 2022 and 2021:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>



</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_28" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_27"><ix:continuation continuedAt="_ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock-c0_cont_2" id="_ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td colspan="20" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">December
    31, 2022</span></td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="11" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Awards
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    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Awards
    exercisable</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="4" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Number of</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Weighted</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="4" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td colspan="4" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">remaining</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">at end of</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">contractual</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="4" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">price</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">life
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">year</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">life
    (years)</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_29" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_28"><ix:continuation id="_ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*)</span></td> <td style="font-size: 10pt; text-align: justify"><ix:footnote id="ix_9_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Including <ix:nonFraction contextRef="c179" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">22,778</ix:nonFraction> RSUs that were granted to the employees of Nanox AI at the completion of the merger and <ix:nonFraction contextRef="c179" decimals="0" format="ixt:num-dot-decimal" name="nnox:ConsiderationForServicesShares" scale="0" unitRef="shares">3,221</ix:nonFraction> RSUs that were issued in consideration for services.</span></ix:footnote></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 169; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 12
- SHAREHOLDERS&#8217; EQUITY </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_30" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_29"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3)</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share-based compensation expenses</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_31" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_30"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfEmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfEmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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</div><div>

</div><ix:continuation id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_31"><ix:continuation id="_ScheduleOfEmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(*)</span></td> <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:footnote id="ix_10_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif">On October 26, 2020, the Company entered into an amendment to a business development agreement (&#8220;the BD Agreement&#8221;) dated February 4, 2020 with two service providers pursuant to which the Company paid an aggregate one-time payment of $<ix:nonFraction contextRef="c180" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:ValueAddedTaxReceivableNoncurrent" scale="3" unitRef="usd">400</ix:nonFraction> thousand plus VAT and issued to them warrants to purchase an aggregate of <ix:nonFraction contextRef="c181" decimals="0" format="ixt:num-dot-decimal" name="nnox:PurchaseAggregateShares" scale="0" unitRef="shares">650,000</ix:nonFraction> ordinary shares at an exercise price of $<ix:nonFraction contextRef="c181" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WarrantExercisePriceIncrease" scale="0" unitRef="usdPershares">18</ix:nonFraction> per share with a graded vesting ending 10 weeks following the grant date (subject to a standard cashless exercise provision) and expiration date of November 8, 2024. As a result, the Company recorded an expense of $<ix:nonFraction contextRef="c0" decimals="1" format="ixt:num-dot-decimal" name="nnox:RecordedAnExpense" scale="0" unitRef="usd">6.1</ix:nonFraction> million for the warrants granted. The service providers waived any and all past, present and future compensation to which they are or may be entitled pursuant to the BD Agreement and all activities undertaken on behalf of the Company, including the right to a percentage from future revenues from any of the Company&#8217;s systems and the issuance of warrants.</span></ix:footnote></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p></td></tr> </table></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:IncomeTaxDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 13
- INCOME TAX:</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_2" id="_IncomeTaxDisclosureTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>a.</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basis of taxation</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_3" id="_IncomeTaxDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Current
tax is calculated with reference to the profit of the Company and its subsidiaries in their respective countries of operation. Set out
below are details in respect of the significant jurisdictions where the Company and its subsidiaries operate and the factors that influenced
the current and deferred taxation in those jurisdictions:</span></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_4" id="_IncomeTaxDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif"><b>Israel</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 62.05pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_5" id="_IncomeTaxDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">The
Company and Nanox AI Ltd are taxed under the laws of the State of Israel at a corporate tax rate of <ix:nonFraction contextRef="c288" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateContinuingOperations" scale="-2" unitRef="pure">23</ix:nonFraction>%.</span></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_6" id="_IncomeTaxDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">In
2022, 2021 and 2020, the Company is at a loss position and therefore has no corporate tax liability. As of December&#160;31, 2022, 2021
and 2020, the Company has a carry forward loss of approximately $<ix:nonFraction contextRef="c289" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="6" unitRef="usd">88.6</ix:nonFraction>&#160;million, $<ix:nonFraction contextRef="c290" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="6" unitRef="usd">56.3</ix:nonFraction>&#160;million and $<ix:nonFraction contextRef="c291" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="6" unitRef="usd">32.3</ix:nonFraction>&#160;million, respectively.
Such carry forward loss has no expiration date.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 62.05pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_7" id="_IncomeTaxDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">In
2022, 2021 and 2020, Nanox AI Ltd. is at a loss position and therefore has no corporate tax liability. As of December&#160;31, 2022,
2021 and 2020, Nanox AI Ltd. has a carry forward loss of approximately $<ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes" scale="-2" unitRef="pure">67.7</ix:nonFraction>&#160;million, $<ix:nonFraction contextRef="c292" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes" scale="-2" unitRef="pure">61.9</ix:nonFraction>&#160;million and $<ix:nonFraction contextRef="c293" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes" scale="-2" unitRef="pure">45.3</ix:nonFraction>&#160;million,
respectively. Such carry forward loss has no expiration date.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 62.05pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_8" id="_IncomeTaxDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif"><b>United
States</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 62.05pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_9" id="_IncomeTaxDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">The
principal federal tax rate applicable to the U.S. subsidiaries is <ix:nonFraction contextRef="c294" decimals="2" format="ixt:num-dot-decimal" name="nnox:FederalTaxRatePercentage" scale="-2" unitRef="pure">21</ix:nonFraction>%.</span></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 62.05pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_10" id="_IncomeTaxDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Korea</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_11" id="_IncomeTaxDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Nanox
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a loss position and therefore had no corporate tax liability. As of December&#160;31, 2022, 2021 and 2020, Nanox Korea has a carry forward
loss of approximately $<ix:nonFraction contextRef="c298" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="6" unitRef="usd">9.1</ix:nonFraction> million, $<ix:nonFraction contextRef="c299" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="6" unitRef="usd">7.1</ix:nonFraction>&#160;million and $<ix:nonFraction contextRef="c19" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="6" unitRef="usd">0.2</ix:nonFraction> million, respectively. Such carry forward loss has <ix:nonNumeric contextRef="c297" format="ixt-sec:duryear" name="nnox:CarryForwardLossYears">15</ix:nonNumeric> years expiration
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_12" id="_IncomeTaxDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif"><b><i>Japan</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_13" id="_IncomeTaxDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">Nanox
Inc. is subject to national corporate income tax, and enterprise tax, which, in the aggregate resulted in effective tax rate of approximately
<ix:nonFraction contextRef="c300" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateContinuingOperations" scale="-2" unitRef="pure">33.59</ix:nonFraction>%.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:continuation><div>

</div><div>

</div><!-- Field: Page; Sequence: 170; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->39<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 13
- INCOME TAX </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_14" id="_IncomeTaxDisclosureTextBlock-c0_cont_13"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>b.</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Income (loss) Before Income Taxes:</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_15" id="_IncomeTaxDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">Income
(loss) before income taxes consisted of the following for the periods indicated:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"></p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_16" id="_IncomeTaxDisclosureTextBlock-c0_cont_15"><ix:nonNumeric contextRef="c0" continuedAt="nnox_ScheduleOfIncomelossBeforeIncomeTaxesConsisted-c0_cont_1" escape="true" name="nnox:ScheduleOfIncomelossBeforeIncomeTaxesConsisted"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year&#160;Ended&#160;December&#160;31</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2020</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">U.S.
    dollars in thousands</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-align: left; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Domestic
    (Israel)</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c303" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic" scale="3" unitRef="usd">99,979</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c304" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic" scale="3" unitRef="usd">56,609</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c305" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic" scale="3" unitRef="usd">43,449</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Foreign</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c303" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign" scale="3" unitRef="usd">16,942</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c304" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign" scale="3" unitRef="usd">5,237</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c305" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign" scale="3" unitRef="usd">366</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Loss
    before income taxes</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c303" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossAttributableToParent" scale="3" unitRef="usd">116,921</ix:nonFraction></span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c304" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossAttributableToParent" scale="3" unitRef="usd">61,846</ix:nonFraction></span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c305" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossAttributableToParent" scale="3" unitRef="usd">43,815</ix:nonFraction></span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_17" id="_IncomeTaxDisclosureTextBlock-c0_cont_16"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>c.</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif"><b>Income tax expense (benefit) consisted of the following for the periods
    indicated:</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_18" id="_IncomeTaxDisclosureTextBlock-c0_cont_17"><ix:continuation continuedAt="nnox_ScheduleOfIncomelossBeforeIncomeTaxesConsisted-c0_cont_2" id="nnox_ScheduleOfIncomelossBeforeIncomeTaxesConsisted-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Year&#160;Ended&#160;December&#160;31</b></span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022</b></span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2020</b></span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>U.S.
    dollars in thousands</b></span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="width: 64%; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Domestic
    (Israel)</span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c306" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic" scale="3" unitRef="usd">3,357</ix:nonFraction></span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c307" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic" scale="3" unitRef="usd">57</ix:nonFraction></span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 9%; text-align: right"><span style="-sec-ix-hidden: hidden-fact-142; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign</span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c306" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign" scale="3" unitRef="usd">321</ix:nonFraction></span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c307" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign" scale="3" sign="-" unitRef="usd">9</ix:nonFraction></span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-143; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 4pt; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif"><b>Income
    tax benefit</b></span></td>
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 4.5pt double"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 4.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c306" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxExpenseBenefit" scale="3" unitRef="usd">3,678</ix:nonFraction></span></td>
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td>
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 4.5pt double"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 4.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c307" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxExpenseBenefit" scale="3" unitRef="usd">48</ix:nonFraction></span></td>
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td>
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 4.5pt double"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 4.5pt double; text-align: right"><span style="-sec-ix-hidden: hidden-fact-144; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_19" id="_IncomeTaxDisclosureTextBlock-c0_cont_18"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>d.</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Taxes on Income:</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_20" id="_IncomeTaxDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">Taxes
on income for the years ended December&#160;31, 2022, 2021 and 2020 were comprised of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"></p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_21" id="_IncomeTaxDisclosureTextBlock-c0_cont_20"><ix:continuation id="nnox_ScheduleOfIncomelossBeforeIncomeTaxesConsisted-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2020</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">U.S.&#160;dollars&#160;in&#160;thousands</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">Current tax expenses:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Domestic</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-145; font-family: Times New Roman, Times, Serif">&#8212;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-146; font-family: Times New Roman, Times, Serif">&#8212;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-147; font-family: Times New Roman, Times, Serif">&#8212;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="width: 64%; padding-bottom: 1.5pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Foreign</span></td><td style="width: 1%; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c309" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign" scale="3" sign="-" unitRef="usd">55</ix:nonFraction></span></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign" scale="3" sign="-" unitRef="usd">68</ix:nonFraction></span></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right"><span style="-sec-ix-hidden: hidden-fact-148; font-family: Times New Roman, Times, Serif">&#8212;</span></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Total</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c309" decimals="-3" format="ixt:num-dot-decimal" name="nnox:CurrentTotal" scale="3" sign="-" unitRef="usd">55</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="nnox:CurrentTotal" scale="3" sign="-" unitRef="usd">68</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-149; font-family: Times New Roman, Times, Serif">&#8212;</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">Deferred:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Domestic</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c309" decimals="-3" format="ixt:num-dot-decimal" name="nnox:DeferredIncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic" scale="3" unitRef="usd">3,357</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="nnox:DeferredIncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic" scale="3" unitRef="usd">57</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-150; font-family: Times New Roman, Times, Serif">&#8212;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Foreign</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c309" decimals="-3" format="ixt:num-dot-decimal" name="nnox:DeferredIncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign" scale="3" unitRef="usd">376</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="nnox:DeferredIncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign" scale="3" unitRef="usd">59</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-151; font-family: Times New Roman, Times, Serif">&#8212;</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Total</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c310" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:InventoryNet" scale="3" unitRef="usd">3,733</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:InventoryNet" scale="3" unitRef="usd">116</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: hidden-fact-152; font-family: Times New Roman, Times, Serif">&#8212;</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Income
    tax benefit</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c309" decimals="-3" format="ixt:num-dot-decimal" name="nnox:ProvisionForIncomeTaxes" scale="3" unitRef="usd">3,678</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="nnox:ProvisionForIncomeTaxes" scale="3" unitRef="usd">48</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="-sec-ix-hidden: hidden-fact-153; font-family: Times New Roman, Times, Serif">&#8212;</span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 171; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->40<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 13
- INCOME TAX </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_22" id="_IncomeTaxDisclosureTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">A
reconciliation of the Company&#8217;s theoretical income tax expense to actual income tax expense is as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"></p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_23" id="_IncomeTaxDisclosureTextBlock-c0_cont_22"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2020</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">U.S.
    dollars in thousands</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Loss before taxes on income</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossAttributableToParent" scale="3" unitRef="usd">116,921</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossAttributableToParent" scale="3" unitRef="usd">61,846</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossAttributableToParent" scale="3" unitRef="usd">43,815</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Statutory tax rate in
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure">23</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure">23</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure">23</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Theoretical tax benefit</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate" scale="3" unitRef="usd">26,892</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate" scale="3" unitRef="usd">14,225</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate" scale="3" unitRef="usd">10,077</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Increase (decrease) in taxes resulting from:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Effect of different tax rates applicable in
    foreign jurisdictions</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationForeignIncomeTaxRateDifferential" scale="3" unitRef="usd">261</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationForeignIncomeTaxRateDifferential" scale="3" unitRef="usd">110</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-154; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Operating
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-157; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-158; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Other nondeductible
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationOtherAdjustments" scale="3" unitRef="usd">631</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationOtherAdjustments" scale="3" unitRef="usd">3,373</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationOtherAdjustments" scale="3" sign="-" unitRef="usd">2,858</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Actual tax benefit</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationTaxExemptIncome" scale="3" sign="-" unitRef="usd">3,678</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationTaxExemptIncome" scale="3" sign="-" unitRef="usd">48</ix:nonFraction></span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-sec-ix-hidden: hidden-fact-159; font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_24" id="_IncomeTaxDisclosureTextBlock-c0_cont_23"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>e.</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Deferred tax assets </b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_25" id="_IncomeTaxDisclosureTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">The
components of the Company&#8217;s deferred tax assets and liabilities as of December&#160;31, 2022 and 2021 were as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12.5pt"></p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_26" id="_IncomeTaxDisclosureTextBlock-c0_cont_25"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December&#160;31</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">U.S.&#160;dollars&#160;in&#160;thousands</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">Deferred tax assets:</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Tax loss carryforwards</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsOperatingLossCarryforwards" scale="3" unitRef="usd">38,967</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsOperatingLossCarryforwards" scale="3" unitRef="usd">30,234</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsInProcessResearchAndDevelopment" scale="3" unitRef="usd">4,027</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsInProcessResearchAndDevelopment" scale="3" unitRef="usd">4,010</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Employee and payroll accrued
    expenses</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsAccruedLiabilities" scale="3" unitRef="usd">304</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Other</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsOther" scale="3" unitRef="usd">532</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsOther" scale="3" unitRef="usd">109</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Less deferred tax liabilities
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Deferred tax assets</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="-sec-ix-hidden: hidden-fact-161; font-family: Times New Roman, Times, Serif">&#8212;</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><!-- Field: Page; Sequence: 172; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->41<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 13
- INCOME TAX </b>(continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_27" id="_IncomeTaxDisclosureTextBlock-c0_cont_26"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Significant
judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation
allowance, the Company considered all available evidence, including past operating results, the most recent projections for taxable income,
and prudent and feasible tax planning strategies. The Company reassess its valuation allowance periodically and if future evidence allows
for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 62.05pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_28" id="_IncomeTaxDisclosureTextBlock-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">As
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to its deferred taxes (which is mainly tax loss carryforwards and temporary differences due to unallowed research and development expenses)
generated in Israel, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_29" id="_IncomeTaxDisclosureTextBlock-c0_cont_28"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfValuationAllowanceForImpairmentOfRecognizedServicingAssetsTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">U.S.&#160;dollars<br/>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%"><span style="font-family: Times New Roman, Times, Serif">Valuation allowance, December 31, 2021</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsValuationAllowance" scale="3" unitRef="usd">12,882</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Increase</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenuePeriodIncreaseDecrease" scale="3" unitRef="usd">11,822</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Valuation allowance, December 31, 2022</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_30" id="_IncomeTaxDisclosureTextBlock-c0_cont_29"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; text-align: justify">
<td style="width: 72px"></td><td style="width: 24px; text-align: left"><span style="font-family: Times New Roman, Times, Serif"><b>f.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Tax
                                            assessments</b></span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_IncomeTaxDisclosureTextBlock-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">The
Company is currently in the process of routine Israeli income tax audit for the tax years 2019 through 2021.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><!-- Field: Page; Sequence: 173; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->42<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="nnox_SegmentsOfOperationsTextBlock-c0_cont_1" escape="true" name="nnox:SegmentsOfOperationsTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 14
- SEGMENTS OF OPERATIONS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="nnox_SegmentsOfOperationsTextBlock-c0_cont_2" id="nnox_SegmentsOfOperationsTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">The
Company reports segment information based on the &#8220;management&#8221; approach. The management approach designates the internal reporting
used by management for making decisions and assessing performance as the source of the Company&#8217;s reportable operating segments.
The Company manages its business primarily on a service basis. The Company&#8217;s reportable segments consist of the Nanox.ARC division,
the radiology services division and the AI solutions division. Each one is managed separately to better align with the Company&#8217;s
customers and distribution partners and the unique market dynamics of each segment. Operating income for each segment includes net sales
to third parties, related cost of sales and operating expenses directly attributable to the segment. Costs excluded from segment operating
income include various corporate expenses such as income taxes. The Company does not include intercompany transfers between segments
for management reporting. From 2022, total assets for each of the Company&#8217;s reportable segments have been separately presented
to, and reviewed by, the Chief Operating Decision Maker of the Company to assess the performance of the Company&#8217;s segments.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="nnox_SegmentsOfOperationsTextBlock-c0_cont_3" id="nnox_SegmentsOfOperationsTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">The
accounting policies of the various segments are the same as those described in Note 2, &#8220;Summary of Significant Accounting Policies.&#8221;
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</div><div>

</div><ix:continuation continuedAt="nnox_SegmentsOfOperationsTextBlock-c0_cont_4" id="nnox_SegmentsOfOperationsTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" continuedAt="nnox_ScheduleOfReportableOperatingSegmentsBasedOnNetSalesAndOperatingLossTableTextBlock-c0_cont_1" escape="true" name="nnox:ScheduleOfReportableOperatingSegmentsBasedOnNetSalesAndOperatingLossTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year
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  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Nanox.<br/>
    ARC</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c315" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="3" sign="-" unitRef="usd">117,710</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c315" decimals="-3" format="ixt:num-dot-decimal" name="nnox:FinancialIncome" scale="3" unitRef="usd">789</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Loss before taxes on income</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Depreciation and amortization expenses</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c313" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DepreciationAndAmortization" scale="3" unitRef="usd">2,642</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c314" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DepreciationAndAmortization" scale="3" unitRef="usd">8,259</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Change in obligation in earn-out liabilities</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c314" decimals="-3" format="ixt:num-dot-decimal" name="nnox:ChangeInObligationInEarnliabilties" scale="3" sign="-" unitRef="usd">21,216</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c315" decimals="-3" format="ixt:num-dot-decimal" name="nnox:ChangeInObligationInEarnliabilties" scale="3" sign="-" unitRef="usd">20,376</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Goodwill impairment</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c314" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLoss" scale="3" unitRef="usd">50,878</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c315" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLoss" scale="3" unitRef="usd">50,878</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Stock based compensation</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c316" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="3" unitRef="usd">17,049</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c313" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="3" unitRef="usd">224</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c314" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="3" unitRef="usd">1,350</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c315" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="3" unitRef="usd">18,623</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Total Assets</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c317" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="3" unitRef="usd">148,352</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c318" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="3" unitRef="usd">30,753</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c319" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="3" unitRef="usd">74,828</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c320" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="3" unitRef="usd">253,933</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Expenditures for segment&#8217;s assets</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c316" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForProceedsFromProductiveAssets" scale="3" unitRef="usd">8,140</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c313" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForProceedsFromProductiveAssets" scale="3" unitRef="usd">15</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="nnox_SegmentsOfOperationsTextBlock-c0_cont_5" id="nnox_SegmentsOfOperationsTextBlock-c0_cont_4"><ix:continuation continuedAt="nnox_ScheduleOfReportableOperatingSegmentsBasedOnNetSalesAndOperatingLossTableTextBlock-c0_cont_2" id="nnox_ScheduleOfReportableOperatingSegmentsBasedOnNetSalesAndOperatingLossTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year
    ended <br/> December 31, 2021 <br/> (U.S. dollars in thousands)</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Nanox.
    ARC</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    Services</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    Solutions</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Total</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 52%"><span style="font-family: Times New Roman, Times, Serif">Revenues</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c321" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Revenues" scale="3" unitRef="usd">1,034</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c322" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Revenues" scale="3" unitRef="usd">270</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c323" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Revenues" scale="3" unitRef="usd">1,304</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Segment operating loss</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c324" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="3" sign="-" unitRef="usd">56,875</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c321" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="3" sign="-" unitRef="usd">530</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c322" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="3" sign="-" unitRef="usd">4,153</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c323" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="3" sign="-" unitRef="usd">61,558</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Financial expense</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c325" decimals="-3" format="ixt:num-dot-decimal" name="nnox:FinancialExpense" scale="3" sign="-" unitRef="usd">288</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Loss before taxes on income</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c323" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromDiscontinuedOperationsNetOfTax" scale="3" sign="-" unitRef="usd">61,846</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Depreciation and amortization expenses</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c324" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DepreciationAndAmortization" scale="3" unitRef="usd">458</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c321" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DepreciationAndAmortization" scale="3" unitRef="usd">441</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c322" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DepreciationAndAmortization" scale="3" unitRef="usd">1,393</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c323" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DepreciationAndAmortization" scale="3" unitRef="usd">2,292</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Stock based compensation</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c324" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="3" unitRef="usd">18,433</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c321" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="3" unitRef="usd">37</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c322" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="3" unitRef="usd">336</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c323" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="3" unitRef="usd">18,806</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Total Assets</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c326" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="3" unitRef="usd">195,621</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c327" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="3" unitRef="usd">31,802</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c328" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="3" unitRef="usd">135,747</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c329" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="3" unitRef="usd">363,170</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Expenditures for segment&#8217;s assets</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c324" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForProceedsFromProductiveAssets" scale="3" unitRef="usd">23,139</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c321" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForProceedsFromProductiveAssets" scale="3" unitRef="usd">2,859</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c322" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForProceedsFromProductiveAssets" scale="3" unitRef="usd">19</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c323" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForProceedsFromProductiveAssets" scale="3" unitRef="usd">26,017</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>


</div><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->43<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 14
- SEGMENTS OF OPERATIONS</b> (continued):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="nnox_SegmentsOfOperationsTextBlock-c0_cont_6" id="nnox_SegmentsOfOperationsTextBlock-c0_cont_5"><ix:continuation id="nnox_ScheduleOfReportableOperatingSegmentsBasedOnNetSalesAndOperatingLossTableTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year
    ended <br/> December 31, 2020<br/> (U.S. dollars in thousands)</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Nanox.
    ARC</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Radiology
    Services</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">AI
    Solutions</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Total</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 52%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Segment operating loss</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c330" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="3" sign="-" unitRef="usd">43,923</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="3" sign="-" unitRef="usd">43,923</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Financial income</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="nnox:FinancialIncome" scale="3" unitRef="usd">108</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Loss before taxes on income</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromDiscontinuedOperationsNetOfTax" scale="3" sign="-" unitRef="usd">43,815</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">Depreciation</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c330" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DepreciationAndAmortization" scale="3" unitRef="usd">208</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:DepreciationAndAmortization" scale="3" unitRef="usd">208</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Stock based compensation</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c330" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="3" unitRef="usd">24,781</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="3" unitRef="usd">24,781</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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</div><ix:continuation continuedAt="nnox_SegmentsOfOperationsTextBlock-c0_cont_7" id="nnox_SegmentsOfOperationsTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">For the&#160;years ended December&#160;31, 2022 and December&#160;31, 2021, the Company&#8217;s revenues in the United States constituted approximately <ix:nonFraction contextRef="c311" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:RevenueRemainingPerformanceObligationPercentage" scale="-2" unitRef="pure">97</ix:nonFraction>% and <ix:nonFraction contextRef="c312" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:RevenueRemainingPerformanceObligationPercentage" scale="-2" unitRef="pure">98</ix:nonFraction>% of the Company&#8217;s total revenue, respectively. For the years ended December 31, 2022 and December 31, 2021, no individual customer exceeded <ix:nonFraction contextRef="c2" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:RevenueRemainingPerformanceObligationPercentage" scale="-2" unitRef="pure"><ix:nonFraction contextRef="c3" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:RevenueRemainingPerformanceObligationPercentage" scale="-2" unitRef="pure">10</ix:nonFraction></ix:nonFraction>% of the Company&#8217;s total revenue or total accounts receivables.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; "></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="nnox_SegmentsOfOperationsTextBlock-c0_cont_8" id="nnox_SegmentsOfOperationsTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif">Long-lived
assets by geography</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="nnox_SegmentsOfOperationsTextBlock-c0_cont_8"><ix:nonNumeric contextRef="c0" escape="true" name="nnox:ScheduleOfPropertyAndEquipmentByGeographyTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">South Korea</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c334" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentOtherNet" scale="3" unitRef="usd">145</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  </table></ix:nonNumeric></ix:continuation><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 175; Value: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->44<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>NANO-X
IMAGING LTD.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif">(U.S.
dollars in thousands, except share and per share data)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_EarningsPerShareTextBlock-c0_cont_1" escape="true" name="us-gaap:EarningsPerShareTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 15
</b>- <b>LOSS PER SHARE:</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_EarningsPerShareTextBlock-c0_cont_2" id="_EarningsPerShareTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 72px"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>a.</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basic</b></span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_EarningsPerShareTextBlock-c0_cont_3" id="_EarningsPerShareTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">Basic
loss per share is calculated by dividing the loss attributable to the Company&#8217;s owners by the weighted average number of ordinary
shares in issue.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_EarningsPerShareTextBlock-c0_cont_4" id="_EarningsPerShareTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Year
    ended December 31,</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAvailableToCommonStockholdersBasic" scale="3" unitRef="usd">61,798</ix:nonFraction></span></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="width: 1%; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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</div><div>

</div><ix:continuation continuedAt="_EarningsPerShareTextBlock-c0_cont_5" id="_EarningsPerShareTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">For
the calculation of loss per share, the Company used the net loss attributable to Company&#8217;s owners divided by the weighted average
number of the Company&#8217;s ordinary shares for the years ended December 31, 2022, 2021 and 2020.</span></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_EarningsPerShareTextBlock-c0_cont_6" id="_EarningsPerShareTextBlock-c0_cont_5"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Diluted</b></span></td></tr>
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</div><div>

</div><ix:continuation id="_EarningsPerShareTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">As
of December 31, 2022 and 2021, the Company had <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="nnox:BasicAndDilutedShare" scale="0" unitRef="shares">2,312,443</ix:nonFraction> and <ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="nnox:BasicAndDilutedShare" scale="0" unitRef="shares">2,505,370</ix:nonFraction> warrants, respectively, and <ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="nnox:WarrantsShares" scale="0" unitRef="shares">5,065,910</ix:nonFraction> and <ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="nnox:WarrantsShares" scale="0" unitRef="shares">4,842,342</ix:nonFraction> options, respectively.
As of December 31, 2020, the Company had <ix:nonFraction contextRef="c19" decimals="0" format="ixt:num-dot-decimal" name="nnox:WarrantsShares" scale="0" unitRef="shares">3,173,186</ix:nonFraction>&#160;warrants and <ix:nonFraction contextRef="c19" decimals="0" format="ixt:num-dot-decimal" name="nnox:WarrantsOption" scale="0" unitRef="shares">4,673,104</ix:nonFraction> options. These warrants and awards were not considered
when calculating diluted loss per share since their effect is anti-dilutive. In addition, contingently issuable ordinary shares that
are issuable based on certain conditions (see Note 3) are not included in the potential dilutive shares in calculating the diluted loss
per share.</span></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">
</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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a term sheet with Lead Plaintiffs in both the McLaughlin action and the consolidated White action to settle all claims in both actions
in consideration of $<ix:nonFraction contextRef="c338" decimals="-3" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferred1" scale="3" unitRef="usd">8,000</ix:nonFraction> thousand. As of December 31, 2022, the Company has accrued the same amount in connection with the above referenced
complaints and term sheet (refer to Note 11).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation id="_SubsequentEventsTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">On
April 28, 2023, the Company received clearance from the FDA to market the Nanox.ARC (including the Nanox.CLOUD) as a stationary &#8206;X-ray
&#8206;system &#8206;intended to produce tomographic images of the human musculoskeletal system adjunctive to conventional radiography, on
adult patients. This device is &#8206;intended to be used in professional healthcare &#8206;facilities or &#8206;radiological &#8206;environments,
such as &#8206;hospitals, clinics, imaging &#8206;centers and &#8206;other medical practices&#8206; by trained radiographers, &#8206;radiologists
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif">F-45</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>








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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
20-F
(Mark One)
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31
,
2022
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
For the transition period from   
      to
Commission file number
001-39461
NANO-X IMAGING LTD
(Exact name of Registrant as specified in its
charter)
N/A
(Translation of Registrant's name into English)
State of Israel
(Jurisdiction of incorporation or organization)
Communication Center
,
Neve Ilan
,
Israel
9085000
(Address of principal executive offices)
Erez Meltzer
, Chief Executive Officer
Telephone: +972 02 5360360
Facsimile:
+972
02 544 5214
Communication Center
,
Neve Ilan
,
Israel
9085000
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b)
of the Act.
Title of each class
Trading Symbol
Name of each exchange on which registered
Ordinary Shares, par value NIS 0.01 per share
NNOX
The
NASDAQ
Stock Market LLC
Securities registered or to be registered pursuant to Section 12(g)
of the Act: None
Securities for which there is a reporting obligation pursuant to Section
15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer's
classes of capital or common stock as of the close of the period covered by the annual report:
55,094,237
Ordinary Shares as of December
31, 2022
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes
☐
No
☒
If this report is an annual or transition report, indicate by check
mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes
☐
No
☒
Note—Checking the box above will not relieve any registrant required
to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those sections.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer,"
"accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer
☐
Emerging growth company
☐
If an emerging growth company that prepares its financial statements
in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
☐
† The term "new or revised financial accounting standard"
refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on
and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements.
☐
Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during
the relevant recovery period pursuant to §240.10D-1(b).
☐
Indicate by check mark which basis of accounting the registrant has
used to prepare the financial statements included in this annual report:
U.S. GAAP
☒
International Financial Reporting Standards as issued by the International Accounting Standards Board
☐
Other
☐
If "Other" has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17
☐
Item 18
☐
If this is an annual report, indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PAST FIVE YEARS)
Indicate by checkmark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes
☐
No
☐
TABLE OF CONTENTS
Page
PART I
1
Item 1.
Identity of Directors, Senior Management and Advisors
1
Item 2.
Offer Statistics and Expected Timetable
1
Item 3.
Key Information
1
Item 4.
Information on the Company
48
Item 5.
Operating and Financial Review and Prospects
71
Item 6.
Directors, Senior Management and Employees
86
Item 7.
Major Shareholders and Related Party Transactions
99
Item 8.
Financial Information
103
Item 9.
Offer and Listing
103
Item 10.
Additional Information
104
Item 11.
Qualitative and Quantitative Disclosures About Market Risk
118
Item 12.
Description of Securities Other than Equity Securities
118
PART II
119
Item 13.
Defaults, Dividend Arrearages and Delinquencies
119
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
119
Item 15.
Controls and Procedures
119
Item 16.
[Reserved]
121
Item 16A.
Audit Committee Financial Expert
121
Item 16B.
Code of Ethics
121
Item 16C.
Principal Accountant Fees and Services
122
Item 16D.
Exemptions from the Listing Standards for Audit Committees
122
Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
122
Item 16F.
Change in Registrant's Certifying Accountant
122
Item 16G.
Corporate Governance
123
Item 16H.
Mine Safety Disclosure
123
Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
123
PART III
124
Item 17.
Financial Statements
124
Item 18.
Financial Statements
124
Item 19.
Exhibits
124
i
INTRODUCTION
NANO-X IMAGING LTD was incorporated under the laws
of the State of Israel on December 20, 2018 and commenced operations on September 3, 2019. Unless the context otherwise requires,
all references to "Nanox," "we," "us," "our," the "Company" and similar designations
refer to NANO-X IMAGING LTD, an Israeli company, and its consolidated subsidiaries. Unless derived from our financial statements or otherwise
noted, the terms "shekels" and "NIS" refer to New Israeli Shekels, the lawful currency of the State of Israel,
the terms "dollar" or "$" refer to U.S. dollars, the lawful currency of the United States, "and "KRW"
refers to Korean Won, the lawful currency of South Korea.
FORWARD-LOOKING
STATEMENTS
This annual report on Form 20-F contains forward-looking
statements that are based on our management's belief and assumptions and on information currently available to our management. Although
we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events
or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or
achievements stated in or implied by these forward-looking statements.
All statements that are not historical facts contained
in this annual report on Form 20-F are forward-looking statements. These forward-looking statements include information about possible
or assumed future results of our business, financial condition, results of operations, prospects, liquidity, plans and objectives. 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 we have when those statements
are made or our 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.
Forward-looking statements include, but are not limited to, statements concerning:
●
the initiation, timing, progress
and results of our research and development, manufacturing and commercialization activities with respect to our X-ray source technology
or the Nanox.ARC and the Nanox.CLOUD, which comprise the Nanox System;
●
our ability to successfully demonstrate the feasibility of our technology for commercial applications;
●
our expectations regarding the necessity of, timing of filing for, and receipt of, regulatory clearances or approvals regarding our technology, the Nanox.ARC and the Nanox.CLOUD;
●
our ability to secure and maintain required U.S. Food and Drug Administration (the "FDA") clearance and similar approvals from regulatory agencies worldwide, or Notified Body ("CE"), and comply with applicable quality standards and regulatory requirements;
●
our ability to manufacture the Nanox.ARC, following receipt of
clearance from the FDA, and if cleared by the requisite regulatory authorities in other jurisdictions, at substantially lower costs compared
to medical imaging systems that use a legacy analog X-ray source;
●
our expectations regarding the deployment schedule to meet our target minimum installed base of our first Nanox Systems and final deployment of 15,000 Nanox Systems;
●
the pricing structure of our products and services, if such products and services receive regulatory clearance or approval;
●
the implementation of our business models;
●
the ability to successfully integrate the business of companies that we acquire and to realize the anticipated benefits of the acquisitions, which may be affected by, among other things, competition, brand recognition, the ability of the acquired company to grow and manage growth profitably and retain its key employees;
●
our expectations regarding collaborations with third-parties and their potential benefits;
●
our ability to enter into and maintain our arrangements with third-party manufacturers and suppliers;
●
our ability to conduct business globally;
ii
●
our expectations regarding when certain patents may be issued and the protection and enforcement of our intellectual property rights;
●
our ability to operate our business without infringing the intellectual property rights and proprietary technology of third parties;
●
regulatory developments in the United States and other jurisdictions;
●
estimates of our expenses, future revenues, capital requirements and our needs for additional financing;
●
the rate and degree of market acceptance of our technology and our products;
●
development relating to our competitors and the medical imaging industry;
●
our estimates of the adoption of the Medical Screening as Service ("MSaaS") based model by market participants;
●
our estimates regarding the market opportunities for our technology and our products;
●
our ability to attract, motivate and retain key executive managers;
●
our ability to comply with data protection laws, regulations and similar rules and to establish and maintain adequate cyber-security and data protection;
●
our ability to obtain third-party payor coverage or reimbursement of our Nanox System;
●
our expectation regarding the maintenance of our foreign private issuer status;
●
our expectations regarding changes in the global, national, regional or local economic, business, competitive, market, and regulatory landscape, including as a result of the ongoing impact of the COVID-19 pandemic and the ongoing conflict in Ukraine and statements as to the impact of the political and security situation in Israel;
●
the costs incurred with respect
to and the outcome of the securities class action litigation and U.S. Securities and Exchange Commission ("SEC") inquiry
we are currently subject to and any similar or other claims and litigation we may be subject to in the future; and
●
our success at managing other risks and uncertainties, including those listed under "Item 3. Key Information—D. Risk Factors."
Many important factors, in addition to the factors
described above and in other sections of this annual report on Form 20-F, could adversely impact our business and financial performance.
The forward-looking statements contained in this annual report on Form 20-F speak only as of the date of this annual report on Form 20-F
and are subject to a number of known and unknown risks, uncertainties and assumptions, including those described under the sections in
this annual report on Form 20-F entitled "Item 3. Key Information—D. Risk Factors" and "Item 5. Operating and
Financial Review and Prospects" and elsewhere in this annual report on Form 20-F. Because forward-looking statements are inherently
subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should
not rely on these forward-looking statements as predictions of future events. Moreover, we operate in an evolving environment. New risks
and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can
we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results
to differ materially from estimates or forward-looking statements. We qualify all of our forward-looking statements by these cautionary
statements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements after the date of
this annual report on Form 20-F to conform these statements to actual results or to changes in our expectations.
iii
PART I
Item 1.
Identity of Directors, Senior Management and Advisors
Not applicable.
Item 2.
Offer Statistics and Expected Timetable
Not applicable.
Item 3.
Key Information
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
Risk Factors Summary
Risks Related to Our Business
●
We are a development-stage company with limited operating history. We expect to incur significant additional losses in the future and may never be able to effectuate our business plan or achieve significant revenues or reach profitability. Therefore, at this stage of our business, potential investors have a high probability of losing their entire investment.
●
Our efforts may never demonstrate the feasibility of our digital X-ray source technology, including both the micro-electro-mechanical systems ("MEMs") X-ray chips and tubes, for commercial applications.
●
Two of our business models depend on the successful commercial application of the Nanox.CLOUD, which is subject to numerous risks and uncertainties.
●
We are highly dependent on the successful development, marketing and sale of our X-ray source technology and the related products and services.
●
Products utilizing our technology may need to be approved or cleared by the FDA and similar regulatory agencies worldwide. We may not receive, or may be delayed in receiving, the necessary approval or clearance for our future products, which would adversely affect business, financial condition, results of operations and prospects.
●
We may need to obtain additional financing to fund our future operations. If we are unable to obtain such financing, we may be unable to complete the development and commercialization of our technology and our products and services.
●
The success of our primary business model, the Subscription Model, is subject to numerous risks and uncertainties.
●
We may not be successful in tailoring our X-ray source to the specific systems of other medical imaging companies under our Licensing Model, and/or entering into licensing agreements on terms favorable to us.
●
To the extent that we license our X-ray source technology to other medical imaging companies, the products integrating our technology may need to be approved or cleared by the FDA or similar regulatory agencies.
●
We completed the acquisitions of Nanox AI (formerly known as Zebra), USARAD and the assets of MDWEB.  Our failure to successfully, and in a timely manner, integrate the acquired businesses and assets or any future acquisition and/or new lines of businesses could have an adverse effect on our business, financial condition, and results of operations.
1
●
A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and our financial results and could cause a disruption to the development or deployment of the Nanox System.
●
Our industry is highly competitive and is subject to technological change, which may result in new products or solutions that are superior to our technology or other future products we may bring to market from time to time. If we are unable to anticipate or keep pace with changes in the marketplace and the direction of technological innovation and customer demands, our technology may become less useful or obsolete and our operating results will suffer.
●
We expect to depend on third parties to manufacture the Nanox.ARC and to supply certain component parts. Our reliance on third-party manufacturers and suppliers involves certain risks that may result in, among others, increased costs, quality or compliance issues, or failure to timely manufacture the Nanox.ARC, any of which could materially harm our business.
●
We may experience development or manufacturing problems and higher costs, or delays that could limit our revenue, if any, or increase our losses.
●
We may not be able to successfully execute our business models.
●
We have a limited operating history. If we successfully commercially launch the Nanox System, and it does not achieve widespread market acceptance, we will not be able to generate the revenue necessary to support our business.
●
We plan to do business globally, including in certain countries where we might have limited resources and would be subject to additional regulatory burdens and other risks and uncertainties.
●
Because the Nanox System is still in the development stage, it is not yet approved for third-party payor coverage or reimbursement. If in the future we are approved for and are otherwise able to commercialize it, but are unable to obtain adequate reimbursement or insurance coverage from third-party payors, we may not be able to generate significant revenue, in which case we may need to obtain additional financing.
●
Recent changes in the United States related to payment policies for imaging procedures could have a negative impact on the utilization of our imaging services.
●
Billing complexities associated with obtaining payment or reimbursement may negatively affect our revenue, cash flow and profitability.
●
Any collaborative and MSaaS arrangements that we have established or may establish in the future may not be successful or we may otherwise not realize the anticipated benefits from these collaborations. We do not control third parties with whom we have or may have collaborative or MSaaS arrangements, and we will rely on them to achieve results which may be significant to us. In addition, any current or future collaborative and MSaaS arrangements may place the development and commercialization of our technology outside our control, may require us to relinquish important rights or may otherwise be on terms unfavorable to us.
●
We could become subject to product liability claims, product recalls, warranty claims and professional malpractice liability claims that could be expensive, divert management's attention and harm our business reputation and financial results.
●
We are highly dependent on key members of our executive management team. Our inability to retain these individuals could impede our business plan and growth strategies, which could have a negative impact on our business and the value of your investment.
●
The mishandling or the perceived mishandling of sensitive information, or the occurrence of data security breaches, could harm our business.
●
Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security.
●
Our ability to generate revenue from our teleradiology services and AI solutions, as well as the other imaging offerings that we are developing will depend in large part on referrals from physicians.
2
●
If we lose a significant number of our radiologists, our revenue from our teleradiology services and financial results could be adversely affected.
●
Exchange rate fluctuations between the U.S. dollar, the New Israeli Shekel and the KRW and inflation may negatively affect our results of operations, and we may not be able to hedge our currency exchange risks successfully.
●
We have been subject to securities class action litigation and are currently subject to an SEC inquiry and may be subject to similar or other claims, litigation, inquiries and investigations in the future, all of which will require significant management attention, could result in significant legal expenses and may result in unfavorable outcomes, all or any of which could have a material adverse impact on our financial condition and results of operations, harm our reputation or otherwise negatively impact our business.
●
If significant tariffs or other restrictions related to "trade wars" are placed on Chinese imports or any related counter-measures are taken by China, our revenue and results of operations may be materially harmed.
●
Our business may be impacted by changes in general economic conditions.
●
Our business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.
●
We do not expect to carry any business interruption insurance or any other insurance (except for director and officer, property, product liability, malpractice and clinical trials insurance). As a result, we may incur uninsured losses, increasing the possibility that you would lose your entire investment in our company.
●
Certain of our directors and/or officers may have interests that compete with ours.
●
Our management team has limited experience managing a public company.
Risks Related to Our Intellectual Property
●
It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.
●
Patent terms may be inadequate to protect our competitive position on our future products for an adequate amount of time.
●
Claims that our technology or our future products or the sale or use of our future products infringe the patents or other intellectual property rights of third parties could result in costly litigation or could require substantial time and money to resolve, even if litigation is avoided.
●
Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated if we or our future licensors do not comply with these requirements.
●
We may be subject to claims that our employees, consultants or advisers have wrongfully used or disclosed alleged trade secrets of their former employers or claims asserting ownership of what we regard as our own intellectual property.
●
If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
●
Our rights to develop and commercialize our products may be subject to the terms and conditions of licenses and sublicenses granted to us by third parties.
●
We may be required to pay certain milestones and royalties and fulfill other obligations under our license agreements with third-party licensors.
●
If we choose to license our technology to third parties, this could result in disputes or otherwise limit our future operations.
3
Risks Related to Government Regulation
●
Our product candidates and operations are subject to extensive government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could harm our business.
●
We may not receive, or may be delayed in receiving, the necessary clearances or approvals for our future products, and failure to timely obtain necessary clearances or approvals for our future products would adversely affect our ability to grow our business.
●
Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market.
●
Our products must be manufactured in accordance with federal, state and foreign regulations, and we could be forced to recall our devices or terminate production if we fail to comply with these regulations.
●
The misuse or off-label use of our products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.
●
Our products may cause or contribute to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition and results of operations. The discovery of serious safety issues with our products, or a recall of our products either voluntarily or at the direction of the FDA or another governmental authority, could have a negative impact on us.
●
Our relationships with customers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
●
Changes in laws or regulations relating to data protection, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could materially and adversely affect our business or could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.
●
If we do not obtain and maintain international regulatory registrations, clearances or approvals for our products, we will be unable to market and sell our products outside of the United States.
●
Legislative or regulatory reforms in the United States or the EU may make it more difficult and costly for us to obtain regulatory clearances or approvals for our products or to manufacture, market or distribute our products after clearance or approval is obtained.
●
Healthcare reform laws could adversely affect our products and financial condition.
●
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.
Risks Related to Employee Matters
●
Under applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees.
●
We may not be able to attract and retain the highly skilled employees we need to support our planned growth.
Risks Related to Owning Our Ordinary Shares
●
Our share price may be volatile, and you may lose all or part of your investment.
●
As a foreign private issuer, we are exempt from certain requirements that apply to domestic issuers and we are permitted to follow certain home country corporate governance practices instead of applicable SEC and Nasdaq requirements, which may result in less protection than is accorded to shareholders under rules applicable to domestic issuers.
4
●
We may lose our foreign private issuer status which would then require us to comply with the Exchange Act's domestic reporting regime and cause us to incur significant legal, accounting and other expenses.
●
We have not paid dividends in the past and have no immediate plans to pay dividends.
●
We incur significant increased costs as a result of operating as a public company that reports to the SEC and our management may be required to devote substantial time to meet compliance obligations.
●
Shares eligible for future sale may adversely affect the market for our ordinary shares and the issuance of additional ordinary shares as a result of the exercise of our outstanding warrants and options will dilute the percentage ownership of our other shareholders.
●
The purchase price of the ordinary shares may not reflect our actual value.
●
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting and concluded that our internal control over financial reporting was not effective as of December 31, 2022. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our ordinary shares.
●
It is likely that we will be classified as a passive foreign investment company ("PFIC") for U.S. federal income tax purposes for our taxable year ended December 31, 2022, and possibly for the current taxable year and future taxable years, which could result in adverse U.S. federal income tax consequences to U.S. Holders of our ordinary shares.
Risks Related to Our Operations in Israel
●
Conditions in Israel could materially and adversely affect our business.
●
The termination or reduction of tax and other incentives that the Israeli government provides to Israeli companies may increase our costs and taxes.
●
It may be difficult to enforce a U.S. judgment against us, our officers and directors named in this annual report on Form 20-F in Israel or the United States, or to assert U.S. securities laws claims in Israel or serve process on our officers and directors.
●
Your rights and responsibilities as our shareholder will be governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations.
●
Our amended and restated articles of association contains exclusive forum provisions for certain claims, which could limit our shareholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
●
Provisions of our amended and restated articles of association and Israeli law and tax considerations may delay, prevent or make difficult an acquisition of us, which could prevent a change of control and negatively affect the price of our ordinary shares.
Risks Related to Our Business
We are a development-stage company with limited operating history.
We expect to incur significant additional losses in the future and may never be able to effectuate our business plan or achieve significant
revenue or reach profitability. Therefore, at this stage of our business, potential investors have a high probability of losing their
entire investment.
We are a development-stage
company, and are subject to all of the risks inherent in the establishment of a new business enterprise. While we began to generate revenue
in the year ended December 31, 2021 through the sale of teleradiology services and the sale of AI solutions, following the completion
of the acquisitions of Nano-X AI Ltd ("Nanox AI") (formerly known as Zebra Medical Vision Ltd. ("Zebra")), USARAD
Holdings, Inc., a Delaware corporation ("USARAD") and the assets of MDWEB, LLC ("MDWEB") in November 2021, we
have a limited operating history and an unproven business plan upon which investors may evaluate our prospects. We have not yet demonstrated
the feasibility of our digital X-ray source technology, including both the MEMs X-ray chips and tubes, for commercial applications. Although
we have produced several Nanox.ARC units (including the Nanox.CLOUD) for purposes of collecting clinical sample images, obtaining regulatory
approvals and demonstrations and training, we have not yet commercialized the Nanox System. We engaged Dagesh P.K. Ltd. ("Dagesh")
to manufacture these first Nanox.ARC units in Israel on a purchase order basis, and we expect such Nanox.ARC units will be used for the
initial global deployment, among other purposes. Even if we are able to manufacture the Nanox.ARC, we may not be able to do so at the
low costs needed to support our business models, including the Subscription Model, which is our primary business model. We may not receive,
or may be delayed in receiving, the necessary approval or clearance for the Nanox.ARC or our future products. We also have not entered
into any commercial arrangement for the licensing of our X-ray source under the Licensing Model.
5
Furthermore, even if our technology becomes commercially
viable, our business models may not generate sufficient revenue necessary to support our business. We may never achieve any of these thresholds
for units deployed in the near-to-mid-term at any level or at all, which may cause our business to fail. The Subscription Model is based
on selling the Nanox System at low cost or no cost using a pay-per-scan pricing structure, which is pioneering for medical imaging companies
and is subject to numerous risks. The medical imaging industry is also highly competitive and our technology, products, services or business
models may not achieve widespread market acceptance. If we are unable to address any issues mentioned above, or encounter other problems,
expenses, difficulties, complications, and delays in connection with the starting and expansion of our business, our entire business may
fail, in which case you may lose your entire investment.
We have a history of net losses and negative cash flow from operations
since inception and we expect such losses and negative cash flows from operations to continue in the foreseeable future. As of December
31, 2022 and 2021, we had working capital of approximately $57.4 million and $42.1 million, respectively, and shareholders' equity
of approximately $216.7 million and $292.1 million, respectively. For the years ended December 31, 2022, 2021 and 2020, we incurred
net losses of approximately $113.2 million, $61.8 million and $43.8 million, respectively. As of December 31, 2022 and 2021, we had
an accumulated deficit of approximately $259.5 million and $146.2 million, respectively, and negative cash flow from operations
of $43.4 million, $38.1 million and $21.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. We
anticipate our losses will continue to increase from current levels because we expect to incur additional costs related to developing
our business, including research and development costs, manufacturing costs, employee-related costs, costs related to acquisitions, costs
of complying with government regulations, intellectual property development and prosecution costs, marketing and promotion costs, capital
expenditures, general and administrative expenses (including litigation costs), and costs associated with operating as a public company.
Our ability to generate significant revenue from
our operations and, ultimately, achieve profitability will depend on, among others, whether we can complete the development and commercialization
of our technology, our future products and our services, including our X-ray source technology, the Nanox.ARC and the Nanox.CLOUD, whether
we can manufacture the Nanox.ARC on a commercial scale in such amounts and at such costs as we anticipate, and whether we can achieve
market acceptance of our products, services and business models. We may never generate significant revenue or operate on a profitable
basis. Even if we achieve profitability, we may not be able to sustain it.
Our efforts may never demonstrate the feasibility of our digital
X-ray source technology, including both the MEMs X-ray chips and tubes, for commercial applications.
We have developed our X-ray source technology,
including both the MEMs X-ray chips and tubes, and the Nanox System, which includes the Nanox.ARC and the Nanox.CLOUD. Even though we
believe our X-ray source, which we refer to as the Nanox.SOURCE, has achieved commercial applicability, our technology has not been tested
over extended periods of time and therefore no meaningful data exists regarding the durability, safety and effectiveness of our X-ray
source over extended periods. In addition, there is no precedent for commercialization of technology like ours. The commercial scale production
and deployment of the Nanox System will require significant additional sales and marketing efforts, and we may not be able to ensure the
effectiveness, accuracy, consistency and safety of the Nanox System in mass production and deployment. Any unanticipated technical or
other problems and the possible insufficiency of funds and other resources needed to continue the development and commercialization of
our X-ray source, the Nanox.ARC or the Nanox.CLOUD may result in delays and cause us to incur additional expenses that would increase
our losses. If our X-ray source is not commercially feasible now or in the long term, our business may fail.
Two of our business models depend on the successful commercial
application of the Nanox.CLOUD, which is subject to numerous risks and uncertainties.
In addition
to the Nanox.ARC, we have also developed, and continue to improve, the Nanox.CLOUD, a companion cloud software designed to deliver MSaaS.
The continued development and commercialization of the Nanox.CLOUD has a number of risks, including:
●
the Nanox.CLOUD requires a considerable investment of technical, financial, and legal resources, which may not be available to us;
●
it may not be technically viable to integrate the Nanox.CLOUD with the businesses of our potential customers and collaborators, such as local operators, radiologists, cloud storage providers, medical artificial intelligence ("AI") software providers and others;
6
●
market acceptance of the MSaaS model is affected by a variety of factors, including security, reliability, scalability, customization, performance, customer preference, patients' concerns with entrusting a third party to store and manage their health data, public concerns regarding privacy and compliance with restrictive laws or regulations;
●
our cloud-based service may raise concerns among our customer base, including concerns regarding changes to pricing over time, service availability, information security of a cloud-based solution and access to medical images while offline;
●
the Nanox.CLOUD may be subject to computer system failures, infrastructure failures, cyber-attacks or other security breaches;
●
incorrect or improper implementation or use of the Nanox.CLOUD by third-party cloud-service providers under our Sales Model could result in customer dissatisfaction and harm our business and reputation;
●
undetected software errors or flaws in the Nanox.CLOUD could harm our reputation or decrease market acceptance of the MSaaS model; and
●
we may incur higher costs than we expected as we expand our cloud-based services.
If we are unable to successfully commercialize
the Nanox.CLOUD, our business, financial condition, results of operations and prospects could be negatively impacted.
We are highly dependent on the successful manufacturing, marketing
and sale of our X-ray source technology and the related products and services.
Our core digital X-ray source technology is the
basis of our Nanox System. As a result, the success of our business plan is highly dependent on our ability to manufacture and commercialize
our X-ray source technology and related products and services, and our failure to do so could cause our business to fail. Successful commercialization
of medical imaging devices is a complex and uncertain process, dependent on the efforts of management, manufacturers, local operators,
integrators, medical professionals, third-party payors, as well as general economic conditions, among other factors. Any factor that adversely
impacts the manufacture and commercialization of our X-ray source technology or related products and services will have a negative impact
on our business, financial condition, results of operations and prospects. Some potential factors include:
●
our ability to achieve sufficient market acceptance by hospitals and clinics, providers of medical imaging services, medical professionals such as radiologists, third-party payors and others in the medical community;
●
our ability to compete with existing medical imaging technology companies;
●
our ability to establish, maintain and expand our sales, marketing and distribution networks;
●
our ability to obtain and/or maintain necessary regulatory approvals; and
●
our ability to effectively protect our intellectual property.
Our inability to successfully obtain clearance
or approval for and subsequently commercialize our X-ray source technology or related products and services, and/or successfully develop
and commercialize additional products or any enhancements to the products which we may develop would have a material adverse effect on
our business, financial condition, results of operations and prospects.
Products utilizing our technology may need to be approved or
cleared by the FDA and similar regulatory agencies worldwide. We may not receive, or may be delayed in receiving, the necessary approval
or clearance for our future products, which would adversely affect business, financial condition, results of operations and prospects.
We continue to implement a multi-step approach to the regulatory clearance
process. As a first step, we submitted a 510(k) premarket notification to an accredited Review Organization under the FDA's 510(k)
Third Party Review Program (the "Third Party Review Program") for a single-source version of the Nanox.ARC, known as the Nanox
Cart X-Ray System. On April 1, 2021, we received clearance from the FDA to market our Nanox Cart X-Ray System. On June 17, 2021, we submitted
a 510(k) premarket notification application to the FDA for the first version of our multi-source Nanox.ARC 3D digital tomosynthesis system.
On August 12, 2021, we received a request for additional information from the FDA concerning the first submission of our multi-source
system. On January 10, 2022, we withdrew our first submission of our multi-source system. On January 12, 2022, we submitted to the
FDA a Q-submission for the second version of our multi-source Nanox.ARC 3D digital tomosynthesis system. The Q-submission
program provides submitters an opportunity to have early collaboration and discussions about medical device submissions, through a request
for feedback from and/or a meeting with the FDA regarding a potential or planned medical device submission. On September 26, 2022, we
submitted a 510(k) premarket notification to the FDA as part of our 510(k) application process for the second version of our multi-source
Nanox.ARC 3D digital tomosynthesis system (including the Nanox.CLOUD). On April 28, 2023, we received a 510(k) clearance from 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 physicists.
7
We expect to
commercialize the second version of our multi-source Nanox.ARC and the Nanox.CLOUD as the Nanox System. We may need to seek approval
from foreign regulatory authorities. We believe the digital X-ray source falls within a category of radiology vacuum tubes
converting electrical input power into X-rays that utilize the same energy levels, radiation types and throughputs as already
existing and approved X-ray tubes applied in a wide range of radiology medical procedures. As a result, we expect that there will be
no novel claim or methodology related to the X-ray radiation produced by the digital X-ray source; however, regulatory agencies may
not agree. To date, we have not had any discussion with the FDA or other regulatory authorities regarding the regulatory pathways
for the novel digital X-ray source. Although we have received FDA clearance for the Nanox.ARC, efforts to achieve additional
governmental clearances and approvals could be costly and time consuming, and we may not be able to obtain any such required
clearances or approvals in accordance with our anticipated timeline or in a cost-efficient manner. Any delay or failure to obtain
necessary regulatory clearances or approvals could have a material negative impact on our ability to generate revenues. Even if the
products containing our technology receive the required regulatory clearance or approval, such products will remain subject to
extensive regulatory requirements. If we fail to comply with the regulatory requirements of the FDA and other applicable U.S. and
foreign regulatory authorities, or previously unknown problems with any approved commercial products, manufacturers or manufacturing
processes are discovered, we could be subject to administrative or judicially imposed sanctions.
In addition, the cost of compliance with new laws
or regulations governing our technology or future products could adversely affect our business, financial condition, results of operations
and prospects. New laws or regulations may impose restrictions or obligations on us that could force us to redesign our technology or
other future products or services, and may impose restrictions that are not possible or practicable to comply with, which could cause
our business to fail. See "—Risks Related to Government Regulation."
We may need to obtain additional financing to fund our future
operations. If we are unable to obtain such financing, we may be unable to complete the development and commercialization of our technology
and our products and services.
Our operations have consumed substantial amounts
of cash since inception. Our net losses were $113.2 million, $61.8 million and $43.8 million for the years ended December 31,
2022, 2021 and 2020, respectively. In addition, significant resources were invested in the development of our X-ray source technology
prior to us acquiring the technology. We anticipate that our future cash requirements will continue to be significant. While we began
to generate revenue in the year ended December 31, 2021 and continued to generate revenue in the year ended December 31, 2022, we expect
that we will need to obtain additional financing to implement our business plan as described in this annual report on Form 20-F. Specifically,
although we believe our cash on hand is sufficient to complete the manufacture, shipping, installation and deployment of a significant
number of Nanox System units, as well as to support the ongoing development of the Nanox.ARC and the Nanox.CLOUD, we may need to raise
additional funds for such purposes. Such financings could include equity financing, which may be dilutive to shareholders, or debt financing,
which would likely restrict our ability to borrow from other sources. In addition, such securities may contain rights, preferences or
privileges senior to those of the rights of our current shareholders. Further, inflation and rising interest rates across the global economy
have resulted in, and may continue to result in, significant disruption of global financial markets, which may reduce our ability to access
capital and may result in increased financing costs. Additional funds may not be available when we need them, on terms attractive to us,
or at all. If adequate funds are not available on a timely basis, we may be required to curtail the development of our technology, products
or services, or materially delay, curtail, reduce or terminate our research and development and commercialization activities. We could
be forced to sell or dispose of our rights or assets. Any inability to raise adequate funds on commercially reasonable terms could have
a material adverse effect on our business, financial condition, results of operation and prospects, including the possibility that a lack
of funds could cause our business to fail and liquidate with little or no return to investors.
We operate in a capital intensive, high-cost industry
that requires significant amounts of capital to fund operations. We incur capital expenditures to, among other things, manufacture and
commercially deploy our Nanox Systems. To the extent we are unable to generate sufficient cash from our operations or we are unable to
structure or obtain financing, we may be unable to meet our capital expenditure requirements to support the maintenance and continued
growth of our operations.
8
The success of our primary business model, the Subscription Model,
is subject to numerous risks and uncertainties.
We expect the Subscription Model to be our primary
business model and the key to achieving our vision of increasing early-detection of medical conditions that are discoverable by X-ray.
Even if we are able to successfully implement our Sales Model and/or our Licensing Model, the sustainability of our general business plan
depends substantially on the sustainability of our Subscription Model. The success of our Subscription Model will also depend on each
device, once deployed, performing a sufficient number of scans per day to be fully utilized. We may not be successful in achieving these
goals for various reasons, including:
●
the process of manufacturing and deploying the Nanox System is a complex, multi-step process that depends on factors outside our control, and could cause us to expend significant time and resources prior to earning associated revenues;
●
the manufacturing cost of the Nanox.ARC may be higher than we expect, may increase significantly, or may increase at a higher rate than anticipated, and we may not be able to set or timely adjust our pay-per-scan pricing to compensate for any increased costs;
●
the manufacturing of the Nanox.ARC may take longer than we expected, and we may have insufficient manufacturing capacity and experience delays in the manufacturing and deployment of the Nanox System, which would have a negative impact on the timing of our revenues;
●
deployment and full utilization of the Nanox System may not be achieved or may take substantially longer than we expect, and we may not be able to deploy a sufficient number of units of the Nanox System to support our business or to effectively stimulate market interest;
●
a Nanox System may perform fewer scans per day than our estimates due to a number of factors, including low market acceptance rate, technical failures and downtime, service disruptions, outages or other performance problems, which would have a negative impact on our revenues and our ability to recover costs;
●
the implementation, integration and testing of the Nanox.CLOUD with our potential customers and collaborators can be complex, time-consuming and expensive for them, which may have a negative impact on the timing of our revenues;
●
the inability or unwillingness of potential customers to invest in the required safety infrastructure, including customary X-ray shielding, to allow the Nanox.ARC to be safety operated;
●
as part of the Subscription Model, we will be responsible for maintenance of the Nanox System units we deploy, which may be more costly and time-consuming than we expect;
●
our customers may not be able to find or retain a sufficient number of radiologists to review the images generated by the Nanox System, especially as we deploy additional Nanox Systems and the volume of scans increases;
●
the portion of our pay-per-scan pricing allocated to our collaborators may not be acceptable to them, either now or in the future, and pricing negotiations with such collaborators may be a complex and time-consuming process;
●
the availability of insurance coverage and the level of reimbursement for the Nanox.ARC provided by third-party payors may not be sufficient for our customers;
●
our pay-per-scan pricing may not be sufficient to recover our costs and may not be adjusted in a timely manner, which could negatively affect our revenues or cause our revenues and results of operations to vary significantly from period to period;
●
we may be unsuccessful in maintaining our target price per scan because we do not control the price charged by local operators and higher prices may adversely affect market acceptance of the Nanox System; and
●
regulatory authorities may challenge our Subscription Model altogether, and impose significant civil, criminal, and administrative penalties, damages, fines, and/or exclusion from government funded healthcare programs, which could adversely affect our revenues and results of operations.
Any of the above factors may negatively affect
the implementation of our Subscription Model, or cause our Subscription Model to fail.
We may not be successful in tailoring our X-ray source to the
specific systems of other medical imaging companies under our Licensing Model, and/or entering into licensing agreements on terms favorable
to us.
Under our proposed Licensing Model, we expect to
be engaged to tailor our X-ray source to other medical imaging companies' or manufacturers' of other X-ray devices specific
systems to replace the legacy X-ray source or to license our X-ray source technology to them to develop new types of imaging systems,
and we expect to receive a one-time, non-recurring licensing fee upfront, as well as recurring royalty payments for each imaging system
sold by such companies. We expect customization to be a complex and multi-step process that varies for each project, which will require
significant research and testing activities. We may also not be able to demonstrate the feasibility, functionality or safety of our technology
in other medical imaging systems, meet the potential licensees' design and manufacturing requirements, or satisfy their marketing
and product needs. In addition, we may not be successful in entering into licensing agreements with favorable terms as a result of a numbers
of factors, many of which are outside of our control, including willingness of, and the resources available to, other medical imaging
companies to in-license our novel X-ray source technology, our ability to agree with a potential partner on the value of our technology,
or on the related terms, as well as the availability of other technologies at lower cost or other alternative technologies at the time.
We have not entered into any licensing agreements to date. Any of the above factors may negatively affect the implementation of our Licensing
Model, or cause our Licensing Model to fail.
9
To the extent that we license our X-ray source technology to
other medical imaging companies, the products integrating our technology may need to be approved or cleared by the FDA or similar regulatory
agencies.
The FDA or similar regulatory agencies may require
products developed by other medical imaging companies under the Licensing Model to go through lengthier or more rigorous processes than
we expected. These products may also be subject to regulations by governmental agencies in other jurisdictions, or regulation by other
federal, state and local agencies. In addition, we may not have control with respect to any such further regulatory approval strategies
or process. If such products do not receive, or are delayed in receiving, the necessary clearances or approvals, or if the performance
of one or more clinical trials are required in connection with such clearances or approvals, the prospects of our Licensing Model may
be materially affected, which could have a material adverse impact on our business and our revenues.
We may experience operational and financial risks in connection
with acquisitions.
In November 2021, we completed the acquisitions
of Nanox AI (formerly known as Zebra), a deep-learning machine analytics company, USARAD, a leading provider of teleradiology services,
and the assets of MDWEB, a decentralized marketplace connecting imaging facilities with radiologists. We integrated the operations of
these acquired businesses and began to generate revenue in the year ended December 31, 2021 through the sale of teleradiology services
and AI solutions, following the completion of these acquisitions. However, we may never realize the expected synergies, business opportunities
and growth prospects in connection with any future acquisitions and/or joint ventures. We may not be able to capitalize on the expected
business opportunities, assumptions underlying estimates of expected cost savings may be inaccurate or general industry and business conditions
may deteriorate. In addition, integrating operations may require significant efforts and expense on our part. Personnel may leave or be
terminated because of an acquisition. Our management may have its attention diverted while trying to integrate an acquisition. If these
factors limit our ability to integrate the operations of any future acquisition successfully or on a timely basis, our expectations of
future results of operations, including certain cost savings and synergies as a result of these or any future acquisition, may not be
met. The failure to successfully manage these risks in the implementation of any future acquisition and any new lines of business could
have a material, adverse effect on our business, financial condition and results of operations.
Our industry is highly competitive and is subject to technological
change, which may result in new products or solutions that are superior to our technology or other future products we may bring to market
from time to time. If we are unable to anticipate or keep pace with changes in the marketplace and the direction of technological innovation
and customer demands, our technology may become less useful or obsolete and our operating results will suffer.
The medical imaging industry is rapidly evolving
and subject to intense and increasing competition. To compete successfully and to be able to establish and maintain a competitive position
in current and future technologies, we will need to demonstrate the advantages of our technology over well-established alternative solutions,
products and technologies, such as computed tomography ("CT"), as well as newer methods of medical imaging and early detection.
To achieve this, we will need to raise or develop financial resources, technical expertise, marketing, distribution or support capabilities
and we may not be successful in doing so.
Also, companies offering traditional medical imaging
systems, such as General Electric, Siemens, Philips, Hologic, Varian, Fuji, Toshiba and Hitachi, may be better established in the market
than we are, have greater corporate, financial, operational, sales and marketing resources than we do, or have more experience in research
and development than we have. In particular, the field emission technology has been used by a wide range of leading market players in
an attempt to create an alternative digital source of X-ray, the most well-known attempt being the use of carbon nano tubes as the base
materials for a potential field emission-based solution. In addition, early-detection technologies developed by other companies, such
as blood testing and DNA screening, may also reduce the attractiveness of our technology for early detection or render it obsolete. Successful
developments of these or other technologies by competitors resulting in new approaches for medical imaging, including technologies, products
or services that are more effective or commercially attractive, could make our technology less useful or obsolete. We may also face opposition
from certain industry leaders, who may have political influence and the ability to delay deployment of the Nanox System in certain geographical
areas.
Furthermore, as the market expands, we expect the
entry of additional competitors, such as cloud computing companies or leading IT companies, who may have longer operating histories, more
extensive international operations, greater name recognition, and/or substantially greater technical, marketing and financial resources.
10
Our competitive position also depends on our ability
to:
●
generate widespread awareness, acceptance and adoption of our technology and future products or services;
●
develop new or enhanced technologies or features that improve the convenience, efficiency, safety or perceived safety, and productivity of our technology and future products or services;
●
properly identify customer needs and deliver new products or services or product enhancements to address those needs;
●
limit the time required for development until commercial production;
●
limit the timing and cost of regulatory approvals;
●
attract and retain qualified personnel and collaborators;
●
protect our inventions with patents or otherwise develop proprietary products and processes; and
●
secure sufficient capital resources to expand both our continued research and development, and sales and marketing efforts.
With respect to our AI imaging solutions, there
are a number of companies that currently offer AI radiology solutions, such as Aidoc and VIZ.AI, which, to our knowledge, focus on life
threatening and urgent cases. In addition, legacy healthcare technology companies are expected in the future to increase development efforts
in the field of AI imaging solutions. For example, Siemens Healthineers has developed AI-Rad Companion, which provides automatic post-processing
of imaging datasets through AI-powered algorithms for Siemens CTs. The AI medical imaging market is new and competition from new market
players may develop in the next few years.
With respect to our teleradiology services, the
teleradiology market is highly competitive, rapidly evolving and fragmented, and is subject to changing technology and market dynamics.
The market has recently experienced and is expected to continue to experience competitive pricing pressure and radiologist compensation
pressure. We compete directly with both large and small-scale service providers who offer local, regional and national coverage operations.
We believe that our principal competitors are Envision Physician Services and Radiology Partners. We compete to attract and retain relationships
with customers and radiologists in different ways.
If our technology is not, or our future products
or services are not, competitive based on these or other factors, our business would be harmed.
We expect to depend on third parties to manufacture the Nanox.ARC
and to supply certain component parts. Our reliance on third-party manufacturers and suppliers involves certain risks that may result
in, among others, increased costs, quality or compliance issues, or failure to timely manufacture the Nanox.ARC, any of which could materially
harm our business.
We plan to engage third-party
manufacturers and suppliers for the commercial production of our digital X-ray tubes for use in the Nanox.ARC, following receipt of clearance
from the FDA, and if cleared or approved by similar regulatory authorities in other jurisdictions, based on, among other things, cost
effectiveness. We are currently developing both ceramic and glass-based digital X-ray tubes for use in the Nanox.ARC. We are working with
third parties as well as producing digital ceramic tubes at our Korean facility, which is currently our primary manufacturer and supplier
for our digital ceramic tubes.
In May 2020, we entered into a three-year contract
manufacturing agreement with FoxSemicon Integrated Technology, Inc., a subsidiary of Foxconn ("FITI") to manufacture the multi-source
Nanox.ARC. Under the contract manufacturing agreement with FITI, FITI will negotiate and contract with other parties for the supply of
the various other components of the Nanox.ARC in accordance with the pre-approved supplier list and on the terms to be agreed upon by
both parties.
However, due, in part, to travel restrictions as
a result of the COVID-19 pandemic, we engaged Dagesh to manufacture Nanox.ARC units (including the Nanox.CLOUD) in Israel on a purchase
order basis that are being used for purposes of collecting clinical sample images, obtaining regulatory approvals and demonstrations and
training, and we expect such Nanox.ARC units will be used for the initial global deployment, among other purposes. We have not entered
into a formal agreement with Dagesh to date and we may not be able to enforce the obligations under such arrangements. As we further expand
our business in connection with the commercialization of our technology, we expect to seek to engage several manufacturers of the Nanox.ARC.
If any of our manufacturers or suppliers breach their agreements, are unable to meet their contractual or quality requirements, or become
unwilling to perform for any reason, we may be unable, or may be unable in a timely manner, to locate alternative acceptable manufacturers
or suppliers and enter into favorable agreements with them.
11
Our dependence on third-party manufacturers
and suppliers involves a number of risks, including:
●
insufficient capacity or delays in meeting our demand;
●
inadequate manufacturing yields, inferior quality and excessive costs;
●
inability to manufacture products that meet the agreed upon specifications;
●
inability to obtain an adequate supply of materials;
●
inability to comply with the relevant regulatory requirements for the manufacturing process;
●
limited warranties on products supplied to us;
●
inability or failure to comply with our contractual obligations;
●
potential increases in prices; and
●
increased exposure to potential misappropriation of our intellectual property.
We commenced the manufacture of the MEMs X-ray
chips at our fabrication facility in Korea, which is expected to meet our currently anticipated needs. However, we may not be successful
in mass production of the MEMs X-ray chips at the facility or have sufficient capacity to manufacture the MEMs X-ray chips as our business
expands. In addition, we rely on third parties to supply the raw materials and certain component parts. Disruptions of our relationships
with such suppliers could negatively impact our production for an extended period of time. Any inability to acquire sufficient quantities
of any raw materials or components in a timely manner from these third-party suppliers could have a material negative impact on our business.
We may need to enhance or redesign our MEMs X-ray chip to generate licensing revenue from it or for it to be functional for certain medical
imaging applications.
In addition, if we change the manufacturer of a
critical component of our products, we will be required to verify that the new manufacturer maintains facilities, procedures and operations
that comply with our quality and applicable regulatory requirements, which could further impede our ability to manufacture our products
in a timely manner.
Transitioning to a new supplier could be time-consuming
and expensive, may result in interruptions in our operations and product delivery, could affect the performance specifications of our
products or could require that we modify the design of those systems. If the change in manufacturer results in a significant change to
any product, a new 510(k) clearance or approval from the FDA or similar international regulatory authorization may be necessary before
we implement the change, which could cause substantial delays. The occurrence of any of these events could harm our ability to meet the
demand for our products in a timely or cost-effective manner. See "—Risks Related to Government Regulation."
We may experience development or manufacturing problems and higher
costs, or delays that could limit our revenue, if any, or increase our losses.
Developing manufacturing procedures for new products
requires developing specific production processes for those products. Developing such processes could be time consuming, and any unexpected
difficulty in doing so can delay the deployment of the Nanox System. Moreover, difficulties associated with adapting our technology and
product design to the proprietary process technology and design rules of outside manufacturers can lead to reduced yields. Since low yields
may result from either design or process technology failures, yield problems may not be effectively determined or resolved until an actual
product exists that can be analyzed and tested to identify process sensitivities relating to the design rules that are used. As a result,
yield problems may not be identified until well into the production process, and resolution of yield problems may require cooperation
between our manufacturers and us. This risk could be compounded by the offshore location of certain of our manufacturers, increasing the
effort and time required to identify, communicate and resolve manufacturing yield problems. Manufacturing defects that we do not discover
during the manufacturing or testing process may lead to costly product recalls. These risks may lead to increased costs or delayed product
delivery, which would harm our profitability and customer relationships. Furthermore, our, our manufacturers' or our suppliers'
production processes and assembly methods may have to change to accommodate any significant, future expansion of our manufacturing capacity,
which may increase the manufacturing costs, delay production of our products, reduce our product margin, require supplemental filings
with the FDA or other regulatory authorities, any of which may adversely impact our business. If we are unable to keep up with demand
for our products by successfully manufacturing and shipping our products in a timely manner, our revenue could be impaired, and market
acceptance for our products could be adversely affected.
12
We may not be able to successfully execute our business models.
We are pursuing three simultaneous business models
to maximize the commercial potential of our X-ray source technology, each of which requires significant time and resources, in particular,
our primary business model, the Subscription Model. We are a company with limited operating history and we may not have the necessary
resources, expertise and experience to successfully execute any of our business models on a global scale, such as obtaining the necessary
approvals or clearances from the regulatory agencies of our target markets. Our ability to execute our models is dependent on a number
of factors, including the ability of our senior management team to execute our models, our ability to engage local operators and integrators
in different geographic regions, our ability to begin or maintain our pace of product development, manufacturing and commercialization,
our ability to meet the changing needs of the medical imaging market, and the ability of our employees to perform at a high-level. If
we are unable to execute our models, if our models do not drive the growth that we anticipate, or if our market opportunity is not as
large as we have estimated, it could adversely affect our business and our prospects.
We have a limited operating history. If we successfully commercially
launch the Nanox System, and it does not achieve widespread market acceptance, we will not be able to generate the revenue necessary to
support our business.
We have a limited operating history and while we
began the marketing of our AI solutions and teleradiology services following the acquisitions in November 2021, we have limited history
of marketing our X-ray source technology and the Nanox System. We may fail to generate significant interest in our X-ray source technology
or the Nanox System or the imaging products using our technology, or any other product we may develop. These and other factors, including
the following, may affect the rate and level of market acceptance:
●
effectiveness of the sales and marketing efforts of us, and our partners such as the local partners;
●
perception by medical professionals and patients of the convenience, safety, efficiency and benefits of the Nanox System or products using our technology, compared to competing methods of medical imaging, such as the time and skill required to read the tomographic images produced by the Nanox.ARC and our X-ray source;
●
opposition from certain industry leaders, which may limit our ability to promote the Nanox System and to penetrate into the medical imaging market in certain geographical areas;
●
the existence of established medical imaging technology;
●
willingness of market participants to accept the MSaaS model;
●
the changing and volatile U.S. and global economic environments, including as a result of the COVID-19 pandemic, the ongoing military conflict between Russia and Ukraine, the global response to it and any negative impact on the global economy and capital markets resulting from the conflict or any other geopolitical tensions, or inflation;
●
timing of market introduction of competing products, and the sales and marketing initiatives of such products;
●
press and blog coverage, social media coverage, and other publicity and public relations factors by others;
●
lack of financing or other resources to successfully develop and commercialize our technology and implement our business plan;
●
the level of commitment and support that we receive from our partners, such as local operators, cloud storage providers and medical AI software providers, as well as medical professionals such as radiologists; and
●
coverage determinations and reimbursement levels of third party payors.
If cleared or approved for marketing by the Notified
Body (CE) or other regulatory agencies, as the Nanox.ARC (including the Nanox.CLOUD) was cleared for marketing by the FDA, depending on
the approved clinical indication, the Nanox System will be competing with existing and future imaging products and similar offerings.
The technology underlying our X-ray source and the Nanox System may be perceived as inferior or inaccurate and patients may be unwilling
to undergo medical screening using the Nanox.ARC or other products using our technology. Moreover, patients and medical professionals
may be unwilling to depart from the current medical imaging technology. Medical professionals tend to be slow to change their medical
diagnostic practices because of perceived liability risks arising from the use of new technology or products, and they may not recommend
medical imaging using the Nanox.ARC or other products using our technology until there is long-term clinical evidence to convince them
to alter or modify their existing imaging methods. Our efforts to educate patients, radiologists and other members of the medical community
on the benefits of our products require significant resources and may not be successful. Our efforts to educate the marketplace may require
more resources than are required by conventional technologies marketed by our competitors. In particular, gaining market acceptance for
our products in nascent markets, such as Africa, China, India, and certain countries in Latin America, could be challenging. Moreover,
in the event that the Nanox System or other products using our technology are the subject of guidelines, clinical studies or scientific
publications that are unfavorable or damaging, or otherwise call into question their benefits, we may have difficulty in convincing market
participants to adopt our products. In addition, medical professionals, patients, providers of medical imaging services and third-party
payors may not adopt or reimburse the use of the Nanox System in the near term or at all. If we are unable to achieve or maintain an adequate
level of market acceptance, we may not generate significant revenue or become profitable and our business, financial condition, results
of operations and prospects would be significantly harmed.
13
We plan to do business globally, including in certain countries
where we might have limited resources and would be subject to additional regulatory burdens and other risks and uncertainties.
We expect to do business globally, including in
North America and certain countries in Asia, Europe, Africa, Latin America and Australia. Commercialization of our X-ray source technology,
the Nanox.ARC or the Nanox System in foreign markets, either directly or through third parties, is subject to additional risks and uncertainties,
including:
●
reimbursement and insurance coverage;
●
our inability to find agencies, dealers or distributors in specific countries or regions;
●
our inability to directly control commercial activities of third parties;
●
limited resources to be deployed to a specific jurisdiction;
●
the burden of complying with complex and changing regulatory, tax, accounting and legal requirements;
●
different medical imaging practice and customs in foreign countries affecting acceptance in the marketplace;
●
import or export licensing and other requirements;
●
longer accounts receivable collection times;
●
longer lead times for shipping;
●
language barriers for technical training;
●
reduced protection of intellectual property rights in some foreign countries;
●
foreign currency exchange rate fluctuations; and
●
interpretations of contractual provisions governed by foreign laws in the event of a contract dispute.
Specifically, we are subject to the U.S. Foreign
Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the
USA PATRIOT Act, the United Kingdom Bribery Act 2010, the Proceeds of Crime Act 2002, Chapter 9 (sub-chapter 5) of the Israeli Penal Law,
1977, the Israeli Prohibition on Money Laundering Law–2000 and possibly other anti-bribery and anti-money laundering laws in countries
outside of the United States in which we conduct our activities. As we engage finders to obtain MSaaS agreements in certain countries,
we and our finders may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated
entities. We may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries,
our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities. As we expand
our international business, our risks under these laws may increase.
We also may sell the Nanox System to government
entities, which are subject to a number of challenges and risks. Any actual or perceived privacy, data protection, or data security incident,
or even any perceived defect with regard to our practices or measures in these areas, may negatively impact public sector demand for our
products. Government entities may also have statutory, contractual or other legal rights to terminate contracts with us for convenience
or due to a default, and any such termination may adversely affect our future results of operations. Governments routinely investigate
and audit government contractors' administrative processes, and any unfavorable audit could result in the government refusing to
continue buying our subscriptions, a reduction of revenue, or fines or civil or criminal liability if the audit uncovers improper or illegal
activities. In addition, sales of the Nanox System in foreign markets could also be adversely affected by the imposition of governmental
controls, political and economic instability, war, conflicts, civil unrest and other hostilities, trade restrictions and changes in tariffs,
any of which may adversely affect our business, financial condition, results of operations and prospects.
14
Although we received clearance from the FDA to market the Nanox.ARC
(including the Nanox.CLOUD), the device is not yet approved for third-party payor coverage or reimbursement. If in the future we are approved
for and are otherwise able to commercialize it, but are unable to obtain adequate reimbursement or insurance coverage from third-party
payors, we may not be able to generate significant revenue, in which case we may need to obtain additional financing.
Although we received clearance from the FDA to
market the Nanox.ARC (including the Nanox.CLOUD), the device is not yet approved for third-party payor coverage or reimbursement. Coding
and coverage determinations as well as reimbursement levels and conditions are important to the commercial success of an imaging product
or offering. The future availability of insurance coverage and reimbursement for newly approved medical devices is highly uncertain, and
our future business will be greatly impacted by the level of reimbursement provided by third-party payors. In the United States, third-party
payors decide which imaging products and services they will cover, how much they will pay and whether they will continue reimbursement.
Third-party payors may not cover or provide adequate reimbursement for the Nanox System or the imaging services using the Nanox System,
assuming we are able to fully develop and obtain all regulatory approvals and clearances to market it in geographies in addition to the
United States. To date, we have not had any discussions with any third-party payors, including any regulatory agencies administering any
government funded healthcare programs, regarding the coding, coverage or reimbursement for imaging services using the Nanox System. Accordingly,
unless government and other third-party payors provide coverage and reimbursement for our services, patients and healthcare providers
may choose not to use them, which would cause investors to lose their entire investment. A primary trend in the United States healthcare
industry and elsewhere is cost containment. Government authorities and other third-party payors have attempted to control costs by limiting
coverage and the amount of reimbursement for particular products and services. Reimbursement may not be available, or continue to be available,
for the Nanox System or the imaging services using the Nanox System, other products or systems using our X-ray source technology, our
AI solutions, teleradiology services, the Nanox.MARKETPLACE or any other products or services we may develop or offer in the future, or
even if reimbursement is available, such reimbursement may not be adequate. We also will be subject to foreign reimbursement policies
in the international markets we expect to enter. Decisions by health insurers or other third-party payors in these markets not to cover,
or to discontinue reimbursing, our products could materially and adversely affect our business. If such decisions are made, they could
also have a negative impact on our ability to generate revenues, in which case we may need to obtain additional financing.
A pandemic, epidemic or outbreak of an infectious disease, such
as COVID-19, may materially and adversely affect our business and our financial results and could cause a disruption to the development
or deployment of the Nanox System.
Public health crises such as pandemics or similar
outbreaks could adversely impact our business. Beginning in 2019, a novel strain of a virus named SARS-CoV-2 (severe acute respiratory
syndrome coronavirus 2), or coronavirus, which causes COVID-19, spread to most countries across the world, including Israel. The COVID-19
pandemic led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public
health safety measures. While we have not experienced any material adverse impact as a result of the COVID-19 pandemic to date, the extent
to which the COVID-19 pandemic may in the future impact our operations or those of our third-party partners will depend on future developments,
which are highly uncertain and cannot be predicted with confidence. The future spread of COVID-19 globally or the reinstatement of restrictions
or other actions that may be required to contain COVID-19 or treat its impact could adversely impact our development, manufacture or deployment
of the Nanox System, which could adversely affect our ability to commercialize the Nanox System, increase our operating expenses and have
a material adverse effect on our financial results. Further, uncertainty around the COVID-19 pandemic and related issues could lead to
adverse effects on the economy of the United States and other economies, which could impact our ability to raise the necessary capital
needed to develop and commercialize the Nanox System.
Recent changes in the United States related to payment policies
for imaging procedures could have a negative impact on the utilization of our imaging services.
In the United States, over the past several years,
the Centers for Medicare & Medicaid Services ("CMS"), the federal agency responsible for administering the Medicare program,
has implemented numerous changes to payment policies for imaging procedures in both the hospital setting and non-hospital settings, which
include physician offices and freestanding imaging facilities. Some of these changes have had a negative impact on utilization of imaging
services. Examples of these changes include:
●
limiting payments for imaging services in physician offices and free-standing imaging facility settings based upon rates paid to hospital outpatient departments;
●
reducing payments for certain imaging procedures when performed together with other imaging procedures in the same family of procedures on the same patient on the same day in the physician office and free-standing imaging facility setting;
●
making significant revisions to the methodology for determining the practice expense component of the Medicare payment applicable to the physician office and free-standing imaging facility setting which results in a reduction in payment; and
●
revising payment policies and reducing payment amounts for imaging procedures performed in the hospital outpatient setting.
15
We also expect increased regulation and oversight
of advanced diagnostic testing. One provision in the Protecting Access to Medicare Act requires CMS to develop appropriate use criteria
("AUC") that professionals must consult when ordering advanced diagnostic imaging services (which include magnetic resonance
imaging ("MRI"), CT, nuclear medicine (including position emission tomography) and other advanced diagnostic imaging services
that the Secretary of the Department of Health and Human Services ("HHS") may specify). Under this provision, payment is to
be made to the furnishing professional for an applicable advanced diagnostic imaging service only if the claim indicates that the ordering
professional consulted a qualified clinical decision support mechanism, as identified by HHS, as to whether the ordered service adheres
to the applicable AUC. To the extent that these types of changes have the effect of reducing the aggregate number of diagnostic medical
imaging procedures performed in the United States, our business, results of operations, financial condition and cash flows would be adversely
affected. In July 2022, CMS announced that the payment penalty phase for the AUC program would not begin on January 1, 2023 even if the
public health emergency for COVID-19 ended in 2022 and that it was unable to forecast when the payment penalty phase would begin.
Billing complexities associated with obtaining payment or reimbursement
may negatively affect our revenue, cash flow and profitability.
Payment for our imaging-based offerings is, and
is expected to be, provided by individual patients and from a variety of payors, such as commercial insurance carriers, managed care organizations
and governmental programs. Each payor typically has different billing requirements, and the billing requirements of many payors have become
increasingly stringent.
Among the factors complicating our customers'
ability to bill and receive reimbursement from third-party payors are:
●
disputes among payors as to which party is responsible for payment;
●
disparity in coverage among various payors;
●
disparity in information and billing requirements among payors; and
●
incorrect or missing billing information, which is required to be provided by the ordering physician.
In addition, we may be required to seek new billing
codes for imaging services using the Nanox System or any other imaging-based offering that we may provide, and regulatory authorities
may not approve the creation of separate codes. Additionally, even if we are successful, existing or future billing codes or the payment
amounts associated with such codes may change in the future.
These billing complexities, and the related uncertainty
in obtaining payment for our imaging-based offerings, could negatively affect our revenue, cash flow and profitability.
Any collaborative and MSaaS arrangements that we have established
or may establish in the future may not be successful or we may otherwise not realize the anticipated benefits from these collaborations.
We do not control third parties with whom we have or may have collaborative or MSaaS arrangements, and we will rely on them to achieve
results which may be significant to us. In addition, any current or future collaborative and MSaaS arrangements may place the development
and commercialization of our technology outside our control, may require us to relinquish important rights or may otherwise be on terms
unfavorable to us.
We have entered into certain, and expect to enter
into additional, collaborative arrangements and MSaaS agreements with respect to the research, development, manufacture and commercialization
of our technology with different relevant industry participants, including, among others, local operators, integrators, radiologists,
cloud storage providers and medical AI software providers and third-party payors. See "Item 4. Information on the Company—B.
Business Overview—MSaaS Agreements" and "Item 4. Information on the Company—B. Business Overview—Collaboration
Agreements." Any future potential collaborative or MSaaS arrangements may require us to rely on external consultants, advisors and
experts for assistance in several key functions, including research and development, manufacturing, regulatory, intellectual property,
commercialization and distribution. We cannot and will not control these third parties, but we may rely on them to achieve results, which
may be significant to us. Relying upon these collaborative arrangements subjects us to a number of risks, including:
●
we may not be able to control the amount and timing of resources that our collaborators may devote to our technology;
●
should a collaborator fail to comply with applicable laws, rules or regulations when performing services for us, we could be held liable for such violations;
16
●
our collaborators may have a shortage of qualified personnel, particularly radiologists who can review the medical images generated by the Nanox System, especially as we deploy additional Nanox Systems and the volume of scans increases;
●
we may be required to relinquish important rights, such as marketing and distribution rights;
●
business combinations or significant changes in a collaborator's business strategy may adversely affect a collaborator's willingness or ability to complete its obligations under any arrangement;
●
our collaborators may default on their payments to us or fail to deliver standby letters of credit or financial guarantees, and it may be time consuming and difficult to enforce such payment obligations and obligations to provide standby letters of credit and financial guarantees in various jurisdictions, and we may be unsuccessful in enforcing such obligations;
●
our collaborative arrangements are subject to conditionality, including receipt of regulatory clearance and material compliance with acceptance test protocol, among other things, for the Nanox.ARC;
●
under certain circumstances, a collaborator could move forward with a competing product developed either independently or in collaboration with others, including our competitors;
●
our current or future collaborators may utilize our proprietary information in a way that could expose us to competitive harm;
●
our collaborators could obtain ownership or other control over intellectual property that is material to our business; and
●
collaborative arrangements are often terminated or allowed to expire or remain unformalized by a written agreement, which could delay the ability to commercialize our technology.
In addition, if disputes arise between us and any
of our collaborators, it could result in the delay or termination of the development, manufacturing or commercialization of products containing
our technology, lead to protracted and costly legal proceedings, or cause collaborators to act in their own interest, which may not be
in our interest. As a result, the collaborative arrangements that we may enter into, may not achieve their intended goals.
If any of these scenarios materialize, they could
have a material adverse effect on our business, financial condition, results of operations and prospects.
We also may have other future products where it
is desirable or essential to enter into agreements with a collaborator who has greater financial resources or different expertise than
us, but for which we are unable to find an appropriate collaborator or are unable to do so on favorable terms. If we fail to enter into
such collaborative agreements on favorable terms, it could materially delay or impair our ability to develop and commercialize, and increase
the costs of development and commercialization of, our technology.
We could become subject to product liability claims, product
recalls, warranty claims and professional malpractice liability claims that could be expensive, divert management's attention and
harm our business reputation and financial results.
Our business exposes us to potential liability
risks that are inherent in the marketing and sale of products used in patient care. We may be held liable if the Nanox System or if any
other product that integrates our X-ray source technology causes injury or death or is found otherwise unsuitable during usage. The Nanox
System incorporates sophisticated components and computer software. Complex software can contain errors, particularly when first introduced.
In addition, new products or enhancements may contain undetected errors or performance problems that, despite testing, are discovered
only after installation. Patients and end-users of the Nanox System could allege or possibly prove defects of our products or other products
that integrate our technology.
17
A product liability claim, regardless of its merit
or eventual outcome, could result in significant legal defense costs and divert management's attention. Regardless of merit or eventual
outcome, liability claims may result in:
●
decreased demand for the Nanox System;
●
injury to our reputation;
●
costs of related litigation;
●
substantial monetary awards to patients and others;
●
loss of revenue; and
●
the inability to commercialize future products.
In addition, we may be subject to professional
liability claims, including, without limitation, for improper use or malfunction of our diagnostic imaging software.
Further, the radiologists that provide our teleradiology
services may occasionally subject us to malpractice claims. For example, a complaint was recently filed against several defendants, including
one of our radiologists and USARAD, alleging that such radiologist, in his capacity as an employee of USARAD, was negligent in the interpretation
of a PET/CT scan prior to our acquisition of USARAD. Additional claims, suits or complaints relating to services provided by these radiologists
may be asserted against us in the future.
Any of these outcomes may have an adverse effect
on our business, financial condition and results of operations, and may increase the volatility of our share price.
The coverage limits of our insurance policies we
may choose to purchase to cover related risks may not be sufficient to cover future claims. If sales of the Nanox System or other products
integrating our technology increase or we suffer future product liability claims or malpractice claims, we may be unable to maintain product
liability insurance or malpractice insurance at satisfactory rates or with adequate amounts or at all. A product liability claim, any
product recalls or excessive warranty claims, whether arising from defects in design or manufacture or otherwise, could negatively affect
our sales or require a change in the design or manufacturing process, any of which could harm our relationship with our customers and
partners, and have a material adverse impact on our reputation and business, financial condition, results of operations and prospects.
In addition, if the Nanox System or other products
integrating our technology are defective, we, our future customers or partners may be required to notify regulatory authorities and/or
to recall the products. See "—Risks Related to Government Regulation—Our products may cause or contribute to adverse
medical events or be subject to failures or malfunctions that we are required to report to the FDA, and if we fail to do so, we would
be subject to sanctions that could harm our reputation, business, financial condition and results of operations. The discovery of serious
safety issues with our products, or a recall of our products either voluntarily or at the direction of the FDA or another governmental
authority, could have a negative impact on us." Any recall would divert management's attention and financial resources and
harm our reputation with customers, patients, medical professionals and third-party payors. A recall involving the Nanox System would
be particularly harmful to our business. The adverse publicity resulting from any of these actions could adversely affect the perception
of our customers or partners. These investigations or recalls, especially if accompanied by unfavorable publicity, could result in our
incurring substantial costs, losing revenues and damaging our reputation, each of which would harm our business, financial condition,
results of operations and prospects.
We are highly dependent on key members of our executive management
team. Our inability to retain these individuals could impede our business plan and growth strategies, which could have a negative impact
on our business and the value of your investment.
Our ability to implement our business plan depends
on the continued services of key members of our senior management. In particular, and to a critical extent, we are dependent on the continued
efforts and services of the members of management named under "Item 6. Directors, Senior Management and Employees," as well
as the senior management of our significant subsidiaries. If we lose the services of such key members of our management team, we would
likely be forced to expend significant time and money in the pursuit of replacement individuals, which may result in a delay in the implementation
of our business plan and plan of operations. We may not be able to find satisfactory replacements on terms that would not be unduly expensive
or burdensome to us. We do not currently carry a key-man life insurance policy that would assist us in recouping our costs in the event
of the death or disability of a member of our management team. The loss of members of our management team, or our inability to attract
or retain other qualified individuals, could have a material adverse effect on our business, results of operations and financial condition.
18
The mishandling or the perceived mishandling of sensitive information,
or the occurrence of data security breaches, could harm our business.
We expect that our business operations will enable
us to accumulate a significant amount of highly sensitive and/or confidential information, including medical images and other medical
and personal information. While employee contracts generally contain standard confidentiality provisions, our employees, customers or
collaborators may not properly handle or process sensitive or confidential data. The improper handling of sensitive or confidential data,
or even the perception of such mishandling (whether or not valid), or other security lapses by us, our customers or collaborators, could
reduce demand for our offerings or otherwise expose us to financial or reputational harm or legal liability.
In addition, any security breach, including personal
data breaches, or incident, including cybersecurity incidents, that we experience could result in unauthorized access to, misuse of or
unauthorized acquisition of the sensitive or confidential information and data (including medical information), the loss, corruption,
or alteration of this data, interruptions in our operations, or damage to our systems. Any such incidents, or any failure to make adequate
or timely disclosures to the public, regulators or law enforcement agencies following any such incident, could subject us or our service
providers to substantial system downtimes, operational delays, other detrimental impacts on our operations or ability to provide products
and services to our customers, the compromising of confidential or otherwise protected information, including personal data, the destruction
or corruption of data, other manipulation or improper use of our systems and networks, violations of applicable privacy, data collection
and protection and cybersecurity laws and regulations or notification obligations, legal claims, regulatory scrutiny or enforcement actions,
financial losses from remedial actions, loss of business or potential liability and/or damage to our reputation, any of which could have
a material adverse effect on our business operations, cash flows, competitive position, financial condition and results of operations.
An increasing number of digital platforms have
disclosed breaches of their security, some of which have involved sophisticated and highly targeted attacks on portions of their services.
Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often
are not foreseeable or recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate
preventative measures. If an actual or perceived breach of our security occurs, public perception of the effectiveness of our security
measures and brand could be harmed and our results of operations could be negatively affected. Data security breaches and other incidents
may also result from non-technical means (e.g., actions by employees or contractors). Any compromise of our security could result in a
violation of applicable security, privacy or data protection, consumer and other laws, regulatory or other governmental investigations,
enforcement actions, and legal and financial exposure, including potential contractual liability. Any such compromise could also result
in damage to our reputation and a loss of confidence in our security and privacy or data protection measures. Any of these effects could
materially and adversely affect our business, financial condition and results of operations.
Our business and operations would suffer in the event of computer
system failures, cyber-attacks or deficiencies in our cyber-security.
Our ability to execute our business strategy depends,
in part, on the continued and uninterrupted performance of our information technology systems, which support our operations. Despite the
implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage
from, among others, computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks
or cyber-intrusions over the internet, attachments to emails, persons inside our organization, or persons with access to systems inside
our organization or similar disruptive problems. The risk of a security breach or disruption, particularly through cyber-attacks or cyber
intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and
sophistication of attempted attacks and intrusions from around the world have increased. Our systems are also subject to compromise from
internal threats such as improper action by employees, including phishing attacks or malicious insiders, or by vendors, counterparties
and other third parties with otherwise legitimate access to our systems. Our policies, employee training, procedures and technical safeguards
may not prevent all improper access to our network or proprietary or confidential information by employees, vendors, counterparties or
other third parties. For example, in October 2022, we became aware that we were subject to what we believe was a phishing attack. Although
the phishing attack did not have a material adverse effect on our business, a similar event in the future could have a material adverse
effect on our business operations, cash flows and financial condition. If any other similar event were to occur and cause interruptions
in our operations, it could result in a material disruption of our product development programs. We may not be able to anticipate data
breaches, cyber-attacks or other similar incidents, detect or react to such incidents in a timely manner, implement effective preventive
measures against such incidents, or adequately remediate any such incident. In addition, we cannot be certain that our insurance coverage
will be adequate for cybersecurity liabilities actually incurred, that insurance will continue to be available to us on economically reasonable
terms, or at all, or that our insurer will not deny coverage as to any future claim.
Any such security breach may compromise information
stored on our networks and may result in significant data losses or theft of personally identifiable information. A cybersecurity breach
could also hurt our reputation by adversely affecting the patients' perception of the security of their information. A number of
proposed and enacted federal, state and international laws and regulations obligate companies to notify individuals of security breaches
involving particular personally identifiable information, which could result from breaches experienced by us or by third parties, including
collaborators, vendors, contractors or other organizations with which we expect to form strategic relationships. In addition, a cybersecurity
attack could result in other negative consequences, including disruption of our internal operations, increased cyber security protection
costs, lost revenue, regulatory actions or litigations.
19
Our ability to generate revenue from our teleradiology services
and AI solutions, as well as the other imaging offerings that we are developing, will depend in large part on referrals from physicians.
We will depend on referrals of patients from unaffiliated
physicians and other third parties who have no contractual obligations to refer patients to us for our teleradiology services and AI solutions,
as well as the other imaging offerings that we are developing. If these physicians and other third parties do not refer patients to us,
our ability to generate revenue from our teleradiology services and AI solutions, as well as the other imaging offerings that we are developing
would be adversely affected. Further, we currently derive substantially all of our revenue from our teleradiology services from fees
charged for the diagnostic imaging services performed by radiologists. If physicians and other third parties were to discontinue referring
patients to our radiologists, our revenue from our teleradiology services would decrease and our financial results could be adversely
affected.
If we lose a significant number of our radiologists, our revenue
from our teleradiology services and financial results could be adversely affected.
There is a shortage of qualified radiologists in
some of the regional markets that we serve. In addition, competition in recruiting radiologists may make it difficult for us to maintain
adequate levels of radiologists. If a significant number of radiologists terminate their relationships with us and we cannot recruit sufficient
qualified radiologists, our ability to generate revenue from teleradiology services and our financial results could be adversely affected.
We may not receive payment from some of our customers for our
AI solutions as a result of financial hardship.
We contract with hospitals, imaging centers, urgent
care and other facilities to provide reading services. Some of our customers for our AI solutions may not have significant financial resources,
liquidity or access to capital. If these customers experience financial difficulties, they may be unable to pay us for the services that
we provide. A significant deterioration in industry conditions could have a material adverse effect on the financial health of some of
our customers. If our customers suffer financial hardship, they could delay or default on their payment obligations to us, negatively
impacting our operations.
Exchange rate fluctuations between the U.S. dollar, the New Israeli
Shekel and the KRW and inflation may negatively affect our results of operations, and we may not be able to hedge our currency exchange
risks successfully.
The U.S. dollar is our functional and reporting
currency. However, a portion of our operating expenses, including personnel and facilities related expenses, are incurred in NIS or KRW.
As a result, we are exposed to the risks that the NIS and KRW may appreciate relative to the U.S. dollar, or, if the NIS and KRW instead
devalues relative to the U.S. dollar, that the inflation rate in Israel or Korea may exceed such rate of devaluation of the NIS or KRW,
or that the timing of such devaluation may lag behind inflation in Israel or Korea. In any such event, the dollar cost of our operations
in Israel or Korea would increase and our dollar-denominated results of operations would be adversely affected. Given our general lack
of currency hedging arrangements to protect us from fluctuations in the exchange rates of the NIS and KRW and other foreign currencies
in relation to the U.S. dollar (and/or from inflation of such foreign currencies), we may be exposed to adverse effects from such movements.
Our exchange rate exposure may change over time as our business evolves and could result in increased costs or reduced revenue and could
affect our actual cash flow. Changes in the relative values of currencies occur regularly and, in some instances, may have a significant
impact on our operating results. The rate of inflation in Israel or Korea or in currency exchange rates may materially change and we might
not be able to effectively mitigate these risks.
We have been subject to securities class action litigation and
are currently subject to an SEC inquiry and may be subject to similar or other claims, litigation and investigations in the future, all
of which will require significant management attention, could result in significant legal expenses and may result in unfavorable outcomes,
all or any of which could have a material adverse impact on our financial condition and results of operations, harm our reputation or
otherwise negatively impact our business.
We are, and may in the future become, subject to
litigation or claims arising in or outside the ordinary course of business that could negatively affect our business operations and financial
condition, including securities class actions and shareholder derivative actions, both of which are typically expensive to defend. Such
claims and litigation proceedings may be brought by third parties, including our customers, competitors, advisors, service providers,
partners or collaborators, employees, and governmental or regulatory bodies. For example, we currently have two securities class action
complaints pending against us and certain former officers, asserting violations of federal securities laws and seeking unspecified damages.
In addition, the Division of Enforcement of the SEC is conducting an investigation to determine whether there had been any violations
of the federal securities laws, and the duration and outcome of this matter cannot be predicted at this time. A complaint was also recently
filed against several defendants, including one of our radiologists and USARAD, alleging that such radiologist, in his capacity as an
employee of USARAD, was negligent in the interpretation of a PET/CT scan prior to our acquisition of USARAD. See "Item 4. Information
on the Company—B. Business Overview—Legal Proceedings."
20
The outcome of any litigation and SEC inquiry,
regardless of its merits, is inherently uncertain and may differ substantially from our expectations. Any claims and lawsuits, and the
disposition of such claims and lawsuits, or SEC inquiry could be time-consuming and expensive to resolve, divert management attention
and resources, and lead to attempts on the part of other parties to pursue similar claims. We may not be able to determine the amount
of any potential losses and other costs we may incur due to the inherent uncertainties of litigation and settlement negotiations. In the
event we are required or decide to pay amounts in connection with any claims, lawsuits or SEC inquiry, such amounts could be significant
and could have a material adverse impact on our liquidity, business, financial condition and results of operations. In addition, depending
on the nature and timing of any such dispute, a resolution of a legal matter could materially affect our future operating results, our
cash flows or both.
If significant tariffs or other restrictions related to "trade
wars" are placed on Chinese imports or any related counter-measures are taken by China, our revenue and results of operations may
be materially harmed.
The Nanox.ARC production process is expected to
involve manufacturers and/or suppliers in China for the production of certain components of the Nanox.ARC. If significant tariffs or other
restrictions are placed by the United States government on Chinese imports or any related counter-measures are taken by China, our business,
financial condition and results of operations may be materially harmed. Throughout 2018 and 2019, former President Trump called for substantial
changes to foreign trade policy with China and raised, and proposed to further raise in the future, tariffs on several Chinese goods in
order to reverse what he perceived as unfair trade practices that have negatively impacted U.S. businesses. The announcement of such tariffs
has triggered retaliatory actions from foreign governments, including China, and may trigger retaliatory actions by other foreign governments,
resulting in a "trade war." On January 15, 2020, the United States and China signed the Phase One Deal, which took effect
on February 14, 2020, agreeing to the rollback of tariffs, expansion of trade purchases and renewed commitments on intellectual property,
technology transfer and currency practices deescalating the trade war. U.S. President Biden has stated that there are no immediate plans
to cancel the Phase One Deal, but the administration is expected to make changes to the U.S.-China tariff policies. If any forms of duties
or tariffs are imposed on the Nanox.ARC or its components, we may be required to charge higher prices in the United States than we expect,
which may result in fewer customers and harm our operating performance. Alternatively, we or our contractors may seek manufacturers and/or
suppliers outside of China, resulting in significant costs and disruption to our operations and business. Our business could also be impacted
by retaliatory trade measures taken by China or other countries in response to existing or future tariffs, causing us to raise prices
or make changes to our operations, any of which could materially harm our business, financial condition and results of operations.
Our business may be impacted by changes in general economic conditions.
Our business is subject to risks arising from changes
in domestic and global economic conditions, including adverse economic conditions in markets in which we operate, which may harm our business.
For example, the existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital
costs, limited availability of credit, liquidity shortages and constrained capital spending, increased costs of labor, fluctuations in
foreign currency exchange rates, challenging and delayed sales cycles, slower adoption of new technologies, increased price competition
and other similar effects. A failure to adequately respond to these risks could have a material adverse impact on our financial condition,
results of operations or cash flows.
If our future customers significantly reduce spending
in areas in which our technology and products are utilized, or prioritize other expenditures over our technology and products, our business,
financial condition, results of operations and prospects would be materially adversely affected.
Disruption to the global economy could also result
in a number of follow-on effects on our business, including a possible slow-down resulting from lower customer expenditures; inability
of customers to pay for products, solutions or services on time, if at all; an increase in the amount of accounts receivable we are required
to write off; more restrictive export regulations which could limit our potential customer base; negative impact on our liquidity, financial
condition and share price, which may impact our ability to raise capital in the market, obtain financing and secure other sources of funding
in the future on terms favorable to us.
In addition, the occurrence of catastrophic events,
such as hurricanes, storms, earthquakes, tsunamis, floods, medical epidemics and other catastrophes that adversely affect the business
climate in any of our markets could have a material adverse effect on our business, financial condition and results of operations. Some
of our operations are located in areas that have been in the past, and may be in the future, susceptible to such occurrences.
21
Our business, financial condition and results of operations may
be materially adversely affected by adverse developments with respect to geopolitical disputes and financial institutions and associated
liquidity risk.
U.S. and global markets are experiencing volatility
and disruption, in part, as a result of the military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military
invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing military conflict is highly unpredictable,
the ongoing conflict in Ukraine has led, and could lead, to market disruptions, including significant volatility in commodity prices,
credit and capital markets. As a result, sanctions and penalties have been levied by the United States, European Union and other countries
against Russia. Russian military actions and the resulting sanctions could have a negative impact on supply chains, our MSaaS agreements
relating to Russia and Belarus or the region and adversely affect the global economy and financial markets. Any of the abovementioned
factors could affect our business, prospects, financial condition and operating results. The extent and duration of the military action,
sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify
the impact of other risks described in this Annual Report on Form 20-F.
More recently, the closures of Silicon Valley Bank
("SVB") and Signature Bank and their placement into receivership with the Federal Deposit Insurance Corporation ("FDIC")
created bank-specific and broader financial institution liquidity risk and concerns. Although the U.S. Department of the Treasury, the
Federal Reserve and the FDIC jointly released a statement that depositors at SVB and Signature Bank would have access to their funds,
even those in excess of the standard FDIC insurance limits, under a systemic risk exception, future adverse developments with respect
to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the
ability of companies to access near-term working capital needs, and create additional market and economic uncertainty. There can be no
assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur.
Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment
or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, or if adverse developments
are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing
more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secure any necessary
financing in a timely manner and on favorable terms could have a material adverse effect on our strategy, our financial condition, results
of operations or cash flows and stock price and could require us to alter our plans. In addition, there is a risk that one or more of
our service providers, financial institutions, manufacturers, suppliers and other partners may be adversely affected by the foregoing
risks, which could directly affect our ability to attain our operating goals on schedule and on budget.
We do not expect to carry any business interruption insurance
or any other insurance (except for director and officer, property, product and professional liability, malpractice and clinical trials
insurance). As a result, we may incur uninsured losses, increasing the possibility that you would lose your entire investment in our company.
Our products and services are in the medical imaging
field and so may be subject to claims. We are not immune from product liability or other product claim risks, and we may not be able to
maintain insurance on acceptable terms against such risks or that such insurance will be sufficient to protect us against potential claims
or that insurance will be available in the future in amounts sufficient to protect us. A product liability claim, malpractice or other
claim, as well as any claims for uninsured liabilities or in excess of insured liabilities, could have a material adverse effect on our
business, financial condition, results of operations and prospects.
Certain of our directors and/or officers may have interests that
compete with or may differ from ours.
Certain of our directors currently own, operate
and manage other entities, which may have similar or different objectives than ours. Such activities could detract from the time these
people have to allocate to our affairs. We lease office space to an entity in which Ran Poliakine (the chairman of our board of directors)
serves as a member of senior management and is a significant shareholder. See "Item 7. Major Shareholders and Related Party Transactions—B.
Related Party Transactions—Agreements with Directors and Officers—Relationship with Illumigyn Ltd." Additionally, we
lease office space to an entity of which Ran Poliakine is a shareholder of its parent company. See "Item 7. Major Shareholders and
Related Party Transactions—B. Related Party Transactions—Agreements With Directors and Officers—Relationship with Wellsense
Technologies, Ltd." The terms of such agreements may not be as favorable to us as those that could be obtained from a third party.
Moreover, certain of our directors and officers are affiliated with our current shareholders, and may have different interests than other
shareholders. For additional information regarding related party transactions and potential conflicts of interest, see "Item 7.
Major Shareholders and Related Party Transactions—B. Related Party Transactions." Under the Israeli Companies Law, 5759-1999
(the "Companies Law"), office holders must promptly disclose to us any direct or indirect personal interest (within the
meaning of the Companies Law) that he or she may have and all related material information or documents known to him or her relating to
any existing or proposed transaction by us. In addition, we have adopted a code of ethics and conduct that requires our employees, officers
and directors to disclose any situation that reasonably would be expected to give rise to a conflict of interest.
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Our management team has limited experience managing a public
company.
Most members of our management team have limited
experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws
pertaining to public companies in the United States. Our management team may not successfully or efficiently manage our operations a public
company subject to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous
scrutiny of securities analysts and investors. These obligations and constituents require significant attention from our senior management
and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial
condition, results of operations and prospects.
Environmental, social and corporate governance ("ESG")
issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition
and results of operations and damage our reputation.
There is an increasing focus from certain investors,
customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, public interest and legislative pressure
related to public companies' ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,
employee or other stakeholders' evolving expectations and standards for responsible corporate citizenship in areas including environmental
stewardship, support for local communities, Board of Directors and employee diversity, human capital management, employee health and safety
practices, product quality, supply chain management, corporate governance and transparency, our reputation and employee retention may
be negatively impacted, and our suppliers may be unwilling to continue to do business with us.
Investors and other stakeholders are increasingly
focusing on environmental issues, including climate change, energy and water use, plastic waste and other sustainability concerns. Concern
over climate change may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment.
Increased regulatory requirements may result in increased demands or requirements regarding components of our products and their environmental
impact on sustainability. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or
product development costs.
In addition, new sustainability rules and regulations
have been adopted and may continue to be introduced in various states and other jurisdictions. For example, the SEC has published proposed
rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which may
require us to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors.
If we do not adapt to or comply with new regulations,
or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their
capital investment in our Company, which could have a material adverse effect on our business or financial condition.
Risks Related to Our Intellectual Property
It is difficult and costly to protect our intellectual property
and our proprietary technologies, and we may not be able to ensure their protection.
We rely upon a combination of patents and trade
secrets to protect the intellectual property related to our proprietary technologies. Our success depends significantly on our ability
to obtain and maintain intellectual property protection with respect to our technology and products. Patents and other proprietary rights
provide uncertain protections, and we may be unable to protect our intellectual property for reasons including those that result from
complex factual and legal issues such as those that create uncertainty as to the validity, scope and enforceability of any particular
patent that we hold or for which we have applied. As a result, we may be unsuccessful in defending our patents and other proprietary rights
against third-party challenges, which could have a material adverse effect on our business.
Although we are attempting to obtain patent coverage
for our technology where available and where we believe appropriate, there are aspects of the technology for which patent coverage may
never be sought or received. Additionally, we have obtained, and may in the future obtain, certain intellectual property related to our
technology from third parties, and we cannot be certain that such third parties took the necessary actions to maintain such rights or
that the transfer of such rights to us was proper and effective. We may, as a result, be subject to claims challenging the ownership or
enforceability of such rights. Furthermore, we may not possess the resources to, or for other reasons may not choose to, pursue patent
protection on every invention or in any or every country where we may eventually decide to sell our future products. Our ability to prevent
others from making or selling duplicate or similar technologies will be impaired for those technologies with respect to which, and in
those countries where, we have no patent protection. In addition, there is no assurance that all potentially relevant prior art relating
to our patents and patent applications has been found, which can prevent a patent from issuing from a pending patent application or later
invalidate or narrow the scope of an issued patent. Even if patents do successfully issue and even if such patents cover our technology,
third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, invalidated, or
held unenforceable. Any successful challenge to these patents or any other patents owned by or licensed to us could deprive us of rights
necessary for the successful commercialization of our technology.
23
In addition, for patents that we do issue based
on our applications or future applications, any issued patents may not provide us with any competitive advantages. Competitors may be
able to design around our patents and develop products that provide outcomes comparable or superior to ours. Any changes we make to our
product or any future products, including designs that may be required for commercialization or that cause them to have what we view as
more advantageous properties, may not be covered by patents and patent applications we have licensed or own, and we may be required to
file new applications and/or seek other forms of protection for any such altered products if any such protection is available. In addition,
the patent prosecution process is expensive, time-consuming and complicated, and we and our current or future licensors, licensees or
collaborators may not be able to prepare, file, prosecute and maintain all necessary or desirable patents or patent applications at a
reasonable cost or in a timely manner. It is also possible that we or our current or future licensors, licensees or collaborators will
fail to identify patentable aspects of inventions before it is too late to obtain patent protection for them. In addition, if we choose
to and are able to secure patent protection in countries outside the U.S., the laws of some foreign countries may not protect our intellectual
property rights to the same extent as do the laws of the United States. For instance, the legal systems of some countries, including India,
China and other developing countries, do not favor the enforcement of patents and other intellectual property rights. This could make
it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights.
Some countries also have compulsory licensing laws
under which a patent owner may be compelled to grant licenses to third parties. In addition, some countries limit the enforceability of
patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could
materially diminish the value of such patent. If we or any of our licensors is forced to grant a license to third parties with respect
to any patents relevant to our business, our competitive position may be impaired.
Changes in either the patent laws or their interpretation
in the United States and other countries may diminish our ability to protect our inventions and enforce our intellectual property rights,
and more generally could affect the value of our intellectual property. Our efforts to seek patent protection for our technology could
be negatively impacted by any such changes, which could have a material adverse effect on our existing patent rights and our ability to
protect and enforce our intellectual property in the future. In particular, our ability to stop third parties from making, using, selling,
offering to sell or importing products that infringe our intellectual property will depend in part on our success in obtaining and enforcing
patent claims that cover our technology, inventions and improvements.
We may come to believe that third parties are infringing
on, or otherwise violating, our patents or other proprietary rights. To prevent infringement or unauthorized use, we may need to file
infringement and/or misappropriation suits, which are very expensive and time-consuming, could result in meritorious counterclaims against
us and would distract management's attention. Also, in an infringement or misappropriation proceeding, a court may decide that one
or more of our patents is invalid, unenforceable, or both, in which case third parties may be able to use our technology without paying
license fees or royalties. Even if the validity of our patents is upheld, a court may refuse to stop the other party from using the technology
at issue on the grounds that the other party's activities are not covered by our patents.
In addition to patents, we rely on trade secrets
to protect our technology; however, the policies we use to protect our trade secrets may not be effective in preventing misappropriation
of our trade secrets by others. In addition, confidentiality agreements executed by our employees, consultants and advisors may not be
enforceable or may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized
use or disclosure. Litigating a trade secret claim is expensive and time consuming, and the outcome may be unexpected. In addition, courts
outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop knowledge,
methods and know-how that allow them to create substantially similar products or services without misappropriating our trade secrets.
If we are unable to protect our trade secrets, we may be unable to prevent competitors from using our own inventions and intellectual
property to compete against us, and our business may be harmed.
Patent terms may be inadequate to protect our competitive position
on our future products for an adequate amount of time.
Patents have a limited lifespan. In the United
States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S.
non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited.
Even if patents covering our future products are obtained, once the patent life has expired, we may be open to competition from competitive
products.
Given the amount of time required for the development,
testing and regulatory review of new products, patents protecting our future products might expire before or shortly after we or our future
partners commercialize those products. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights
to exclude others from commercializing products similar or identical to ours for a sufficient amount of time, and, as a result, we may
not be able to obtain adequate protection from our patent portfolio against competition, in spite of the time and effort invested in the
commercialization of our future products.
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Claims that our technology or our future products or the sale
or use of our future products infringe the patents or other intellectual property rights of third parties could result in costly litigation
or could require substantial time and money to resolve, even if litigation is avoided.
Because our industry is characterized by competing
intellectual property, we may be subject to legal actions for violating the intellectual property rights of others, including claims that
former employees, collaborators or third parties have an interest in our patents, trade secrets or other intellectual property. For example,
we may have inventorship or ownership disputes arising from conflicting obligations of employees, consultants or others who are involved
in developing our technology or our products.
We also may be required to participate in interference,
derivation or opposition proceedings that concern disputes regarding priority of inventions disclosed in our patents. Determining whether
a product infringes a patent, as well as priority of inventions and other patent-related disputes, involves complex legal and factual
issues and the outcome is often uncertain. We have not conducted any significant search of patents issued to third parties, and third-party
patents containing claims covering our technology or methods that predate our patents may exist. Because of the number of patents issued
and patent applications filed in our technical areas or fields (including some pertaining specifically to medical imaging technologies),
our competitors or other third parties may assert that our technology and the methods we employ in the use of products incorporating our
technology are covered by United States or foreign patents held by them. In addition, because patent applications can take many years
to issue and because publication schedules for pending applications vary by jurisdiction, there may be applications now pending of which
we are unaware, and which may result in issued patents that our technology or other future products would infringe. Also, because the
claims of published patent applications can change between publication and patent grant, there may be published patent applications that
may ultimately issue with claims that we infringe.
As the number of competitors in the market for
medical imaging technologies increases, and as the number of patents issued in this area grows, the possibility of patent infringement
claims against us increases. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than
we can, including if they have substantially greater resources. Defending against such litigation is costly and time consuming, and would
distract our management from our business. In addition, any uncertainties resulting from the initiation and continuation of any litigation
could have a material adverse effect on our ability to raise the funds necessary to continue our operations.
In the event that we become subject to a patent
infringement or other intellectual property lawsuit and if the relevant patents or other intellectual property were upheld as valid and
enforceable and we were found to infringe or violate those rights or the terms of a license to which we are a party, we could be prevented
from selling any infringing products of ours unless we could obtain a license or were able to redesign the product to avoid infringement.
If we were unable to obtain a license or successfully redesign, we might be prevented from selling our technology or other future products.
If we are able to redesign, we may need to invest substantial resources in the redesign process. If there is an allegation or determination
that we have infringed the intellectual property rights of a competitor or other person, we may be required to pay damages, or a settlement
or ongoing royalties, or we may be required to enter into cross-licenses with our competitors. In any of these circumstances, we may be
unable to sell our products at competitive prices or at all, and our business, financial condition, results of operations and prospects
could be harmed.
In addition, we may be required to indemnify our
customers and distributors against claims relating to the infringement of intellectual property rights of third parties related to our
products. Third parties may assert infringement claims against our customers or distributors. These claims may require us to initiate
or defend protracted and costly litigation on behalf of our customers or distributors, regardless of the merits of these claims. If any
of these claims succeed, we may be forced to pay damages on behalf of our customers or distributors, or may be required to obtain licenses
for the products or services they use. If we cannot obtain all necessary licenses on commercially reasonable terms, our distributors may
be forced to stop distributing our products or services, and our customers may be forced to stop using our products or services.
Furthermore, because of the substantial amount
of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could
be compromised by disclosure during discovery. There could also be public announcements of the results of hearings, motions or other interim
proceedings or developments, which could have a material adverse effect on the price of our ordinary shares. If securities analysts or
investors perceive these results to be negative, it could have a material adverse effect on the price of our ordinary shares.
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Obtaining and maintaining patent protection depends on compliance
with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent
protection could be reduced or eliminated if we or our future licensors do not comply with these requirements.
Periodic maintenance fees, renewal fees, annuity
fees and various other government fees on a patent and patent application are due to be paid to the patent offices and agencies in several
stages over the lifetime of the patent and patent application. The U.S. Patent and Trademark Office and various foreign governmental patent
agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application
process. In certain circumstances, we may be required to rely on our licensing partners to take the necessary action to comply with these
requirements with respect to patents or other intellectual property they have licensed to us. While an inadvertent lapse can in many cases
be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance,
which could include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly
legalize and submit formal documents, can result in abandonment or lapse of the patent or patent application, resulting in partial or
complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors may be able to enter the market and compete
with our products, which would have a material adverse effect on our business.
We may be subject to claims that our employees, consultants or
advisers have wrongfully used or disclosed alleged trade secrets of their former employers or claims asserting ownership of what we regard
as our own intellectual property
.
Many of our employees, consultants and advisers,
including our senior management, were previously employed at other companies that may have proprietary rights related to our business.
Some of these employees, consultants and advisers, including members of our senior management, executed proprietary rights, non-disclosure
and non-competition agreements in connection with such previous employment. Although we try to ensure that such individuals do not use
the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used
or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual's former employer.
We are not aware of any such disclosures, or threatened or pending claims related to these matters, but in the future, litigation may
be necessary to defend against such claims. If we fail in defending any such claims, we may lose valuable intellectual property rights
or personnel, in addition to possibly paying monetary damages and being enjoined from conducting our business as contemplated. Even if
we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.
Additionally, a licensor, collaborator, employee,
consultant, adviser or other third party may dispute our or our licensor's ownership of certain intellectual property rights. We
seek to address these concerns in our contractual agreements; however, we may not have contractual arrangements with the party in question
and/or such provisions may not be effective. If these provisions prove to be ineffective, we may not be able to achieve our business objectives.
If we or our licensors fail in defending any such claims, we may have to pay monetary damages and may lose valuable intellectual property
rights, such as exclusive ownership of, or right to use, intellectual property, which could adversely impact our business, financial condition
and results of operations.
If our trademarks and trade names are not adequately protected,
then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
Our unregistered trademarks or trade names are
valuable assets and may be challenged, infringed, circumvented or declared generic or determined to infringe third party's marks.
We may not be able to protect our rights to these trademarks and trade names, which may be necessary to build name recognition among potential
collaborators or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby
impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name
or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our unregistered trademarks
or trade names. We have not conducted any registrability studies for possible future trademarks to assess whether such marks would be
successfully registered. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then
we may not be able to compete effectively and our business may be adversely affected. In addition, we may license our trademarks and trade
names to third parties, such as distributors. Though these license agreements may provide guidelines for how our trademarks and trade
names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights
in or diminish the goodwill associated with our trademarks and trade names. Our efforts to enforce or protect our proprietary rights related
to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result
in substantial costs and diversion of resources and adversely affect our competitive position, business, financial condition, results
of operations and prospects.
26
Our rights to develop and commercialize our products may be subject
to the terms and conditions of licenses and sublicenses granted to us by third parties.
We rely on licenses and sublicenses to certain
patent rights and other intellectual property from third parties that are important or necessary to the development of our products, including
the software modules that we expect to integrate into the Nanox.CLOUD. These and other licenses may not provide exclusive rights to use
such intellectual property in all relevant fields of use and in all territories in which we may wish to develop or commercialize our products
and the underlying patents may fail to provide the intended exclusivity. As a result, we may not be able to prevent competitors from developing
and commercializing competitive products in the markets that we hope to address. Moreover, we would not own at least some of the underlying
intellectual property rights related to these products, and as a result our rights would be subject to the continuation and compliance
with the terms of those agreements. If such in-licenses were terminated, competitors would have the freedom to develop, seek regulatory
approval of, and to market, products similar or identical to ours.
In addition, these license agreements may not grant
us the right to control the preparation, filing, prosecution or maintenance of patents and patent applications covering our products.
Therefore, we cannot be certain that these patents and patent applications will be prepared, filed, prosecuted or maintained in a manner
consistent with the best interests of our business. If our current or future licensing partners fail to file, prosecute or maintain such
patents, including the payment of applicable fees, or otherwise lose rights to those patents or patent applications, the intellectual
property we have licensed or exclusivity we have been granted may be reduced or eliminated, and our right to develop and commercialize
any of our future products that are subject of such licensed rights, and our ability to prevent competitors from developing or commercializing
such products, could be adversely affected. In addition, even where we have the right to control patent prosecution and maintenance of
patents and patent applications we have licensed from third parties, we may still be adversely affected or prejudiced by actions or inactions
of our licensees, our licensors and their counsel that took place prior to the date upon which we assumed control over patent prosecution.
Pursuant to the terms of such license agreements,
the licensors may also have the right to control enforcement of our licensed patents or defense of any claims asserting the invalidity
or unenforceability of these patents. Even if we are permitted to pursue the enforcement or defense of our licensed patents, we may require
the cooperation of our future licensors or collaboration partners and any other applicable patent owners and we cannot be certain that
such cooperation will be provided to us. We also cannot be certain that our licensors will allocate sufficient resources or prioritize
their or our enforcement of such patents or defense of such claims to protect our interests in the licensed patents. Even if we are not
a party to these legal actions, an adverse outcome could harm our business because it might prevent us from continuing to license intellectual
property that we may need to operate our business. If we lose any of our licensed intellectual property, our right to develop and commercialize
any of our products that are subject of such licensed rights could be adversely affected.
In addition, our future licensors may rely on third-party
consultants or collaborators or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents
we in-license. If other third parties have ownership rights to our in-licensed patents, they may be able to license such patents to our
competitors, and our competitors could market competing products and technologies. In addition, if our licensors have not obtained adequate
rights from these third parties, we may need to obtain additional rights from these third parties or we could be prevented from developing
and commercializing the related products. This could have a material adverse effect on our competitive position, business, financial conditions,
results of operations and prospects.
In spite of our best efforts, our licensors might
conclude that we have materially breached our license agreements and might therefore terminate the license agreements, in which event
we may have to cease developing, manufacturing or marketing any product covered by these agreements and we may face other additional penalties
or be required to grant our licensors additional rights. In addition, we may seek to obtain additional licenses from our licensors and,
in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the
licensors, including by agreeing to terms that could enable third parties (potentially including our competitors) to receive licenses
to a portion of the intellectual property that is subject to our existing licenses. Any of these events could have a material adverse
effect on our competitive position, business, financial conditions, results of operations and prospects.
We may be required to pay certain milestones and royalties and
fulfill other obligations under our license agreements with third-party licensors.
We may be required to pay milestones and royalties
related to our development or commercialization activities of our products utilizing the technologies licensed or sublicensed from third
parties under license agreements we may enter into with them. These payments could adversely affect our overall profitability related
to any future products that we may seek to develop or commercialize. In order to maintain our license rights under our license agreements,
we may need to meet certain specified milestones or fulfill certain obligations, including to devote a certain amount of resources, in
the development of our products. Failure to satisfy such obligations could result in the termination of our rights under such agreements.
27
If we choose to license our technology to third parties, this
could result in disputes or otherwise limit our future operations.
We may also in the future, as one of our strategies,
deploy our technology into the market and license patents and other intellectual proprietary rights to third parties. Disputes with our
licensees may arise, including regarding the scope and content of these licenses. Additionally, a licensee may use our intellectual property
without our permission, dispute our ownership of certain intellectual property rights or argue that our intellectual property does not
cover our product. Regardless of whether we pursue legal action to enforce any such dispute, a dispute with a licensee or customer over
intellectual property rights may damage our relationship with that licensee or customer and may also harm our reputation in the industry.
Our ability to expand into additional fields with our technologies also may be restricted by licenses or other rights we may grant to
third parties in the future, including if the licenses are exclusive, the licensee is assigned ownership of intellectual property that
we develop or rights of first negotiation or refusal are granted.
Risks Related to Government Regulation
Our product candidates and operations are subject to extensive
government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could
harm our business.
We expect the Nanox.ARC (including the Nanox.CLOUD)
and other future products we develop to be regulated by the FDA as medical devices. Our product candidate is subject to extensive regulation
in the United States and elsewhere, including by the FDA and its foreign counterparts, the U.S. Department of Justice (the "DOJ")
and the U.S. Department of Health and Human Services-Office of the Inspector General. The FDA and foreign regulatory agencies regulate,
among other things, with respect to medical devices: design, development and manufacturing; testing, labeling, content and language of
instructions for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and
distribution; pre-market clearance and approval; conformity assessment procedures; record keeping procedures; advertising and promotion;
recalls and field safety corrective actions; post-market surveillance, including reporting of deaths or serious injuries and malfunctions
that, if they were to occur, could lead to death or serious injury; post-market approval studies; and product import and export.
The regulations our product
candidate is subject to are complex and have tended to become more stringent over time. Regulatory changes could result in restrictions
on or additional requirements affecting our ability to develop our products, carry on or expand our operations, higher than anticipated
costs or lower than anticipated sales for any approved product. Failure to comply with applicable regulations could jeopardize our ability
to sell our future products, following receipt of clearance from the FDA, and if cleared or approved in other jurisdictions, and result
in enforcement actions such as: warning or untitled letters; fines; injunctions; consent decrees; civil penalties; customer notifications;
termination of distribution; recalls or seizures of products; administrative detention of medical devices believed to be adulterated or
misbranded; delays in the introduction of products into the market; operating restrictions; total or partial suspension of production;
refusal to grant future clearances or approvals for new products, new intended uses or modifications to our products; withdrawals or suspensions
of current approvals, resulting in prohibitions on sales of our products; and in the most serious cases, criminal prosecution or penalties.
The occurrence of any of these events would have a material adverse effect on our business, financial condition and results of operations
and could result in shareholders losing their entire investment.
We may not receive, or may be delayed in receiving, the necessary
clearances or approvals for our future products, and failure to timely obtain necessary clearances or approvals for our future products
would adversely affect our ability to grow our business.
In the United States, before we can market a new
medical device, or a new use of, new claim for or significant modification to an existing product, we must first receive either clearance
under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (the "FDCA") or approval of a pre-market approval application
(a "PMA") from the FDA, unless an exemption applies. In the 510(k) clearance process, before a device may be marketed, the
FDA must determine that a proposed device is "substantially equivalent" to a legally-marketed "predicate" device,
which includes a device that has been previously cleared through the 510(k) process, a device that was legally marketed prior to May 28,
1976 (pre-amendments device), a device that was originally on the U.S. market pursuant to an approved PMA and later down-classified, or
a 510(k)-exempt device. To be "substantially equivalent," the proposed device must have the same intended use as the predicate
device, and either have the same technological characteristics as the predicate device or have different technological characteristics
and not raise different questions of safety or effectiveness than the predicate device. Clinical data are sometimes required to support
substantial equivalence. In the process of obtaining PMA approval, the FDA must determine that a proposed device is safe and effective
for its intended use based, in part, on extensive data, including, but not limited to, technical, pre-clinical, clinical trial, manufacturing
and labeling data. The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining,
life-supporting or implantable devices.
Modifications to products that are approved through
a PMA application generally require FDA approval. Similarly, certain modifications made to products cleared through a 510(k) may require
a new 510(k) clearance. Both the PMA approval and the 510(k) clearance process can be expensive, lengthy and uncertain. The FDA's
510(k) clearance process usually takes from three to 12 months, but can last longer. The process of obtaining a PMA is generally much
more costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or even longer, from the
time the application is submitted to the FDA. In addition, a PMA generally requires the performance of one or more clinical trials. Despite
the time, effort and cost, a device may not be approved or cleared by the FDA. Any delay or failure to obtain necessary regulatory clearances
or approvals could harm our business. Furthermore, even if we are granted regulatory clearances or approvals, they may include significant
limitations on the indicated uses for the device or other restrictions or requirements, which may limit the market for the device.
28
In the United States, we continue to implement
a multi-step approach to the regulatory clearance process. As a first step, we submitted a 510(k) premarket notification for the Nanox
Cart X-Ray System, a single-source version of the Nanox.ARC, to an accredited Review Organization under the Third Party Review Program
in January 2020. On April 1, 2021, we received clearance from the FDA to market our Nanox Cart X-Ray System. On June 17, 2021, we submitted
a 510(k) premarket notification application to the FDA for the first version of our multi-source Nanox.ARC 3D digital tomosynthesis system.
On August 12, 2021, we received a request for additional information from the FDA concerning the first submission of our multi-source
system. On January 10, 2022, we withdrew our first submission of our multi-source system. On January 12, 2022, we submitted a Q-submission
for the second version of our multi-source Nanox.ARC 3D digital tomosynthesis system to the FDA. The Q-submission program
provides submitters an opportunity to have early collaboration and discussions about medical device submissions, through a request for
feedback from and/or a meeting with the FDA regarding a potential or planned medical device submission. On September 26, 2022, we submitted
a 510(k) premarket notification to the FDA as part of our 510(k) application process for the second version of our multi-source Nanox.ARC
3D digital tomosynthesis system (including the Nanox.CLOUD). On April 28, 2023, we received a 510(k) clearance from 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 physicists.
We expect to commercialize the second version of
our multi-source Nanox.ARC and the Nanox.CLOUD as the Nanox System. Any modification to these systems that has not been previously cleared
may require us to submit a new 510(k) premarket notification and obtain clearance, or submit a PMA and obtain FDA approval prior to implementing
the change. Specifically, any modification to a 510(k)-cleared device that could significantly affect its safety or effectiveness, or
that would constitute a major change in its intended use, design or manufacture, requires a new 510(k) clearance or, possibly, approval
of a PMA. The FDA requires every manufacturer to make this determination in the first instance, but the FDA may review any manufacturer's
decision. The FDA may not agree with our decisions regarding whether new clearances or approvals are necessary. We may make modifications
or add additional features in the future that we believe do not require a new 510(k) clearance or approval of a PMA. If the FDA disagrees
with our determination and requires us to submit new 510(k) notifications or PMA applications for modifications to our previously cleared
products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall
the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties. If the
FDA requires us to go through a lengthier, more rigorous examination for future products or modifications to existing products than we
had expected, including new or additional clinical trial requirements, product introductions or modifications could be delayed or canceled,
which could adversely affect our ability to grow our business.
The FDA can delay, limit or deny clearance or approval
of a medical device for many reasons, including:
●
our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our product candidates are safe or effective for their intended uses or are substantially equivalent to a predicate device;
●
the disagreement of the FDA or the applicable foreign regulatory body with the design or implementation of our clinical trials or the interpretation of data from pre-clinical studies or clinical trials;
●
serious and unexpected adverse effects experienced by participants in our clinical trials;
●
the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required;
●
our inability to demonstrate that the clinical and other benefits of the device outweigh the risks;
●
the manufacturing process or facilities we use may not meet applicable requirements; and
●
the potential for approval policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data or regulatory filings insufficient for clearance or approval.
29
In order to sell our products in member countries
of the European Economic Area ("EEA"), our products must comply with the essential requirements of the EU Medical Devices
Regulation (EU) 2017/745. Compliance with these requirements is a prerequisite to be able to affix the Conformité Européene
("CE") mark to our products, without which they cannot be sold or marketed in the EEA. To demonstrate compliance with the
essential requirements we must undergo a conformity assessment procedure, which varies according to the type of medical device and its
classification. Except for low-risk medical devices (Class I non-sterile, non-measuring devices), where the manufacturer can issue
a European Community ("EC") Declaration of Conformity based on a self-assessment of the conformity of its products with the
essential requirements of the EU Medical Devices Directive, a conformity assessment procedure requires the intervention of an organization
accredited by a member state of the EEA to conduct conformity assessments, or a Notified Body. Depending on the relevant conformity assessment
procedure, the Notified Body would typically audit and examine the technical file and audit the quality system of the manufacturer and
manufacturing sites of our devices. The Notified Body issues a certificate of conformity following successful completion of a conformity
assessment procedure conducted in relation to the medical device and its manufacturer and their conformity with the essential requirements.
This certificate entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EC Declaration
of Conformity.
As a general rule, demonstration of conformity
of medical devices and their manufacturers with the essential requirements must be based, among other things, on the evaluation of clinical
data supporting the safety and performance of the products during normal conditions of use. Specifically, a manufacturer must demonstrate
that the device achieves its intended performance during normal conditions of use, that the known and foreseeable risks, and any adverse
events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the
performance and safety of the device are supported by suitable evidence. If we fail to remain in compliance with applicable European laws
and directives, we would be unable to continue to affix the CE mark to our products, which would prevent us from selling them within the
EEA.
Failure to comply with post-marketing regulatory requirements
could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the
market.
Even though we received clearance from the FDA
to market the Nanox.ARC (including the Nanox.CLOUD), and if we receive regulatory clearance or approval of other future products, we remain
subject to ongoing and pervasive regulatory requirements governing, among other things, the manufacture, marketing, advertising, medical
device reporting, sale, promotion, import, export, registration, and listing of devices. For example, we are required to submit periodic
reports to the FDA as a condition of 510(k) clearance. These reports include information about failures and certain adverse events associated
with the device after its clearance. Failure to submit such reports, or failure to submit the reports in a timely manner, could result
in enforcement action by the FDA. Following its review of the periodic reports, the FDA might ask for additional information or initiate
further investigation.
The regulations to which we are subject are complex
and have become more stringent over time. Regulatory changes could result in restrictions on our ability to continue or expand our operations,
higher than anticipated costs, or lower than anticipated sales. Even after we have obtained the proper regulatory clearance or approval
to market a device, we have ongoing responsibilities under FDA regulations and applicable foreign laws and regulations. The FDA, state
and foreign regulatory authorities have broad surveillance and enforcement powers. Our failure to comply with applicable regulatory requirements
could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions:
●
untitled letters or warning letters;
●
fines, injunctions, consent decrees and civil penalties;
●
recalls, termination of distribution, administrative detention, or seizure of our products;
●
customer notifications or repair, replacement or refunds;
●
operating restrictions or partial suspension or total shutdown of production;
●
delays in or refusal to grant our requests for future clearances or approvals or foreign marketing authorizations of new products, new intended uses, or modifications to existing products;
●
withdrawals or suspensions of product clearances or approvals, resulting in prohibitions on sales of our products;
●
FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and
●
criminal prosecution.
30
Any of these sanctions could result in higher than
anticipated costs or lower than anticipated sales and have a material adverse effect on our reputation, business, financial condition
and results of operations.
In addition, the FDA or state or foreign authorities
may change their clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions,
which may prevent or delay clearance or approval of our future products under development on a timely basis. Such policy or regulatory
changes could impose additional requirements upon us that could delay our ability to obtain new clearances or approvals, increase the
costs of compliance or restrict our ability to maintain any approvals we are able to obtain. For example, the FDA has announced steps
that the FDA intends to take to modernize the premarket notification pathway under Section 510(k) of the FDCA. For more information, see
"—Legislative or regulatory reforms in the United States or the EU may make it more difficult and costly for us to obtain
regulatory clearances or approvals for our products or to manufacture, market or distribute our products after clearance or approval is
obtained."
Our products must be manufactured in accordance with federal,
state and foreign regulations, and we could be forced to recall our devices or terminate production if we fail to comply with these regulations.
The methods used in, and the facilities used for,
the manufacture of our products must comply with the Quality System Regulation ("QSR"), which is a complex regulatory scheme
that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging,
handling, storage, distribution, installation, servicing and shipping of medical devices. As manufacturers of electron radiation-emitting
products, we are also responsible for compliance with the radiological health regulations and certain radiation safety performance standards.
Furthermore, we are required to verify that our
suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements.
The FDA enforces the QSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include
the facilities of subcontractors. Our products are also subject to similar state regulations and various laws and regulations of foreign
countries governing manufacturing.
Our third-party manufacturers may not take the
necessary steps to comply with applicable regulations, which could cause delays in the delivery of our products. In addition, failure
to comply with applicable FDA or state or foreign requirements or later discovery of previously unknown problems with our products or
manufacturing processes could result in, among other things: warning letters or untitled letters; fines, injunctions or civil penalties;
suspension or withdrawal of approvals; seizures or recalls of our products; total or partial suspension of production or distribution;
administrative or judicially imposed sanctions; the FDA's refusal to grant pending or future clearances or approvals for our products;
clinical holds; refusal to permit the import or export of our products; and criminal prosecution of us, our suppliers or our employees.
Any of these actions could significantly and negatively
affect supply of our products. If any of these events occurs, our reputation could be harmed, we could be exposed to product liability
claims and we could lose customers and experience reduced sales and increased costs.
The misuse or off-label use of our products may harm our reputation
in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by
regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.
Advertising and promotion of our future products
that obtains approval in the United States may be heavily scrutinized by the FDA, the DOJ, HHS, state attorneys general, members of Congress,
and the public. In addition, advertising and promotion of any future product that obtains approval outside of the United States will be
heavily scrutinized by comparable foreign regulatory authorities.
We expect that, if cleared or approved, our products,
including the multi-source Nanox.ARC (including the Nanox.CLOUD), will be cleared by the requisite regulatory authorities for specific
indications. For example, on April 28, 2023, we received a 510(k) clearance from 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 physicists. We expect to train our marketing personnel and direct sales force to not promote our devices for uses
outside of the FDA-approved indications for use, known as "off-label uses." We cannot, however, prevent a physician from using
our devices off-label, when in the physician's independent professional medical judgment he or she deems it appropriate. There may
be increased risk of injury to patients if physicians attempt to use our devices off-label. Furthermore, the use of our devices for indications
other than those approved by the FDA or approved by any foreign regulatory body may not effectively treat such conditions, which could
harm our reputation in the marketplace among healthcare providers and patients.
31
If the FDA or any state or foreign regulatory body
determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training
or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter,
which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine or criminal penalties. It is also
possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false
claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties,
including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation
in government healthcare programs and the curtailment of our operations. We may become subject to such actions and, if we are not successful
in defending against such actions, those actions may have a material adverse effect on our business, financial condition and results of
operations. Equivalent laws and potential consequences exist in foreign jurisdictions.
In addition, if our products are cleared or approved,
healthcare providers may misuse our products or use improper techniques if they are not adequately trained, potentially leading to injury
and an increased risk of product liability. If our devices are misused or used with improper technique, we may become subject to costly
litigation by our customers or their patients. As described above, product liability claims could divert management's attention
from our core business, be expensive to defend and result in sizeable damage awards against us that may not be covered by insurance.
Our products may cause or contribute to adverse medical events
or be subject to failures or malfunctions that we are required to report to the FDA, and if we fail to do so, we would be subject to sanctions
that could harm our reputation, business, financial condition and results of operations. The discovery of serious safety issues with our
products, or a recall of our products either voluntarily or at the direction of the FDA or another governmental authority, could have
a negative impact on us.
Because the Nanox.ARC (including the Nanox.CLOUD)
received clearance from the FDA, we are subject to the FDA's medical device reporting regulations and similar foreign regulations,
which require us to report to the FDA when we receive or become aware of information that reasonably suggests that one or more of our
products may have caused or contributed to a death or serious injury or malfunctioned in a way that, if the malfunction were to recur,
could cause or contribute to a death or serious injury. The timing of our obligation to report is triggered by the date we become aware
of the adverse event as well as the nature of the event. We may fail to report adverse events of which we become aware within the prescribed
timeframe. We may also fail to recognize that we have become aware of a reportable adverse event, especially if it is not reported to
us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of the product. If we fail to comply
with our reporting obligations, the FDA or other regulatory bodies could take action, including warning letters, untitled letters, administrative
actions, criminal prosecution, imposition of civil monetary penalties, revocation of our device clearance or approval, seizure of our
products or delay in clearance or approval of future products.
The FDA and foreign regulatory bodies have the
authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of
a product or in the event that a product poses an unacceptable risk to health. The FDA's authority to require a recall must be based
on a finding that there is reasonable probability that the device could cause serious injury or death. We may also choose to voluntarily
recall a product if any material deficiency is found. A government-mandated or voluntary recall by us could occur as a result of an unacceptable
risk to health, component failures, malfunctions, manufacturing defects, labeling or design deficiencies, packaging defects or other deficiencies
or failures to comply with applicable regulations. Product defects or other errors may occur in the future.
Depending on the corrective action we take to redress
a product's deficiencies or defects, the FDA may require, or we may decide, that we will need to obtain new clearances or approvals
for the device before we may market or distribute the corrected device. Seeking such clearances or approvals may delay our ability to
replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with our devices, we may
face additional regulatory enforcement action, including FDA warning letters, product seizure, injunctions, administrative penalties or
civil or criminal fines.
Companies are required to maintain certain records
of recalls and corrections, even if they are not reportable to the FDA. We may initiate voluntary withdrawals or corrections for our products
in the future that we determine do not require notification of the FDA. If the FDA disagrees with our determinations, it could require
us to report those actions as recalls and we may be subject to enforcement action. A future recall announcement could harm our reputation
with customers, potentially lead to product liability claims against us and negatively affect our sales. Any corrective action, whether
voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management
from operating our business and may harm our reputation and financial results.
32
Our relationships with customers and third-party payors will
be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions,
civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
Physicians, other healthcare providers, and third-party
payors will play a primary role with respect to any future products for which we obtain marketing approval. Our arrangements with third-party
payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain
the business or financial arrangements and relationships through which we market, sell and distribute our product. Restrictions under
applicable federal and state healthcare laws and regulations include the following:
●
The U.S. federal healthcare program Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid. Although there are a number of statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly and practices that involve remuneration to those who prescribe, purchase, or recommend medical devices, including certain discounts, or engaging consultants as speakers or consultants, may be subject to scrutiny if they do not fit squarely within the exemption or safe harbor. Our practices may not in all cases meet all of the criteria for safe harbor protection from anti-kickback liability. Moreover, there are no safe harbors for many common practices, such as educational and research grants. Liability may be established without a person or entity having actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act. Due to the breadth of these laws, the narrowness of statutory exceptions and regulatory safe harbors available, and the range of interpretations to which they are subject, it is possible that some of our current or future practices might be challenged under one or more of these laws, including, without limitation, our proposed Subscription Model, and our advisory, consulting and royalty agreements with certain physicians who receive compensation, in part, in the form of stock or stock options.
●
The federal civil False Claims Act prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds, or knowingly making, using, or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government. In recent years, several healthcare companies have faced enforcement actions under the federal False Claims Act for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product or causing false claims to be submitted because of the company's marketing the product for unapproved, and thus non-reimbursable, uses. False Claims Act liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties of tens of thousands of dollars per false claim or statement. Healthcare companies also are subject to other federal false claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs.
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The Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 ("HITECH"), imposes criminal and civil liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services. In addition, HIPAA, as amended by HITECH, and their respective implementing regulations impose obligations, including mandatory contractual terms, on covered healthcare providers, health plans, as well as their business associates, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
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The Physician Payment Sunshine Act, implemented as the Open Payments program, requires manufacturers of certain products reimbursed by Medicare, Medicaid, or the Children's Health Insurance Program to track and report to the federal government payments and transfers of value that they make to physicians and teaching hospitals, certain other healthcare professionals, group purchasing organizations, and ownership interests held by physicians and their families, and provides for public disclosures of these data. Manufacturers are required to submit annual reports to the government and failure to do so may result in civil monetary penalties for all payments, transfers of value and ownership or investment interests not reported in an annual submission, and may result in liability under other federal laws and regulations.
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Federal law prohibiting certain physician self-referrals, known as the Stark Law, prohibits a physician from referring Medicare or Medicaid patients to an entity for certain "designated health services" if the physician has a prohibited financial relationship with that entity, unless an exception applies. Certain radiology services are considered "designated health services" under the Stark Law.
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Many states have adopted laws and regulations analogous to the federal laws cited above, including state anti-kickback and false claims laws, which may apply to items or services reimbursed under Medicaid and other state programs or, in several states, regardless of the payer. Several states have enacted legislation requiring medical device companies to, among other things, establish marketing compliance programs; file periodic reports with the state, including reports on gifts and payments to individual health care providers; make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities; and/or register their sales representatives. Some states prohibit specified sales and marketing practices, including the provision of gifts, meals, or other items to certain health care providers.
Efforts to ensure that our business arrangements
with third parties will comply with applicable healthcare laws and regulations involve substantial costs. Additionally, it is possible
that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or
case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation
of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and
administrative penalties, damages, fines, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the
curtailment or restructuring of our operations. Exclusion, suspension and debarment from government funded healthcare programs would significantly
impact our ability to commercialize, sell or distribute any product. If any of the physicians or other providers or entities with whom
we expect to do business are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative
sanctions, including exclusions from government funded healthcare programs.
Changes in laws or regulations relating to data protection, or
any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could materially and adversely
affect our business or could lead to government enforcement actions and significant penalties against us, and adversely impact our operating
results.
We expect to receive health information and other
highly sensitive or confidential information and data of patients and other third parties (e.g., healthcare providers who refer patients
for scans), which we expect to compile and analyze. While we have adopted measures to ensure that any such data will be transferred to
us, to the extent possible, in a de-identified manner, collection and use of this data may still raise privacy and data protection concerns,
which could negatively impact our business. There are numerous federal, state and international laws and regulations regarding privacy,
data protection, information security, and the collection, storing, sharing, use, processing, transfer, disclosure, and protection of
personal information and other data. These laws and regulations are becoming more complex and/or prevalent in the United States, Europe,
Israel, and elsewhere. The regulatory framework for privacy and data protection worldwide is, and is likely to remain for the foreseeable
future, uncertain and complex, and this or other actual or alleged obligations may be interpreted and applied in a manner that we may
not anticipate or that is inconsistent from one jurisdiction to another and may conflict with other rules or practices including ours.
Further, any significant change to applicable laws, regulations, or industry practices regarding the collection, use, retention, security,
or disclosure of data, or their interpretation, or any changes regarding the manner in which the consent of relevant users for the collection,
use, retention, or disclosure of such data must be obtained, could increase our costs and require us to modify our services and candidate
products, possibly in a material manner, which we may be unable to complete, and may limit our ability to store and process patients'
data or develop new services and features.
In particular, there have been laws and regulations
adopted throughout the United States and in Israel that impose new obligations in areas such as privacy. In the United States, privacy
and data security laws are also complex and changing rapidly, these laws are not consistent, and compliance with them in the event of
a widespread data breach is complex and costly. Both federal and state legislation, U.S. Congress and individual states also govern the
collection, use and other processing of personal data. For example, the California Consumer Privacy Act ("CCPA"), provides
data privacy rights for California residents and operational requirements for covered companies. Among other things, companies covered
by the CCPA must provide new disclosures to California residents and afford such residents the ability to opt-out of certain sales of
personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that
is expected to increase data breach litigation. In addition, the California Privacy Rights Act ("CPRA"), which took effect
in January 2023, has expanded the rights granted under the CCPA and imposes additional requirements. Additional U.S. states have implemented,
or are in the process of implementing, similar new laws or regulations (for example, the Virginia Consumer Data Protection Act ("VCDPA"),
which took effect on January 1, 2023, and the Colorado Privacy Act ("CPA"), which will go into effect on July 1, 2023) that
impose new privacy rights and obligations that resemble the CCPA and CPRA. Further, laws in all 50 states require businesses to provide
notice to consumers whose personal information has been disclosed as a result of a data breach. More generally, some observers have noted
that the CCPA, CPRA, VCDPA and CPA could mark the beginning of a trend toward more stringent United States federal privacy legislation,
which could increase our potential liability and adversely affect our business.
Most of the new regulations exempt personal information
which is subject to the HIPAA and HITECH regulations. Nonetheless, new legislation may affect our operations and business conduct, as
it applies to our general conduct, marketing efforts and where we process data that is not health-related by nature (and, therefore, not
subject to HIPAA), and may increase our compliance costs and potential liability.
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In addition, we expect to obtain health information
that is subject to privacy and security requirements under HIPAA and HITECH and its implementing regulations. The Privacy Standards and
Security Standards under HIPAA establish a set of standards for the protection of individually identifiable health information by health
plans, health care clearinghouses and certain health care providers, referred to as Covered Entities, and the business associates with
whom Covered Entities enter into service relationships pursuant to which individually identifiable health information may be exchanged.
As part of our normal operations, we expect to collect, process and retain personal identifying information regarding patients, including
as a Business Associate of Covered Entities under HIPAA. Therefore, we expect to be subject to HIPAA, including changes implemented through
HITECH, and we could be subject to criminal penalties if we knowingly obtain or disclose individually identifiable health information
in a manner that is not authorized or permitted by HIPAA. A data breach affecting sensitive personal information, including health information,
also could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on
our business.
HIPAA requires Covered Entities (like many of our
potential customers) and Business Associates, like us, to develop and maintain policies and procedures with respect to protected health
information that is used or disclosed, including the adoption of administrative, physical and technical safeguards to protect such information.
HITECH expands the notification requirement for breaches of patient-identifiable health information, restricts certain disclosures and
sales of patient-identifiable health information and provides for civil monetary penalties for HIPAA violations. HITECH also increased
the civil and criminal penalties that may be imposed against Covered Entities and business associates and gave state attorneys general
new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and its implementing regulations and
seek attorney's fees and costs associated with pursuing federal civil actions. Additionally, certain states have adopted comparable
privacy and security laws and regulations, some of which may be more stringent or broader in scope than HIPAA.
Another example of recent U.S. data security requirements
is the Food and Drug Omnibus Reform Act ("FDORA"), enacted in December 2022, which, among other provisions, requires developers
of certain "cyber devices" to design and implement plans to monitor, identify and address cybersecurity vulnerabilities of
those devices and to submit those plans to the FDA as part of every new product application for a cyber device. "Cyber devices"
are defined as devices that include software, connect to the internet, and contain any technological features that could be vulnerable
to cybersecurity threats. This provision entered into effect on March 29, 2023, and FDA has indicated that it expects sponsors of cyber
devices to begin to comply with these requirements as of October 1, 2023.
Internationally, many jurisdictions have or are
considering enacting privacy or data protection laws or regulations relating to the collection, use, storage, transfer, disclosure and/or
other processing of personal data, as well as certification requirements for the hosting of health data specifically. For example, the
European Union's General Data Protection Regulation (2016/679) ("GDPR") governs certain collection and other processing
activities involving personal data about data subjects in the European Economic Area ("EEA"). The GDPR, supplemented by national
laws and further implemented through binding guidance from the European Data Protection Board, imposes stringent European Union data protection
requirements and provides for significant penalties for noncompliance, ranging from €10 million to €20 million or 2% to 4% of
our annual global revenue, whichever is higher. In the UK, we are subject to the UK General Data Protection Regulation and the United
Kingdom's Data Protection Act 2018 (the "UK GDPR"), under which penalties for noncompliance range from £8.7 million
to £17.5 million or 2% to 4% of our annual global revenue, whichever is higher. Our UK and EEA operations are exposed to two parallel
regimes, each of which may subject us to increased compliance risk based on differing, and potentially inconsistent or conflicting, interpretation
and enforcement by regulators and authorities (particularly given that the UK GDPR is likely to be subject to divergence from the GDPR
over time).
Under the GDPR and the UK GDPR, our processing
of health data and other highly sensitive data (referred to as "special category data" in those regulations) exposes us to
further compliance risk. We carry out data protection impact assessments ("DPIAs") in connection with our high-risk processing
activities and implement appropriate safeguards and mechanisms to ensure adequate protection of the personal data, in order to comply
with GDPR/UK GDPR.
Additionally, legal developments in Europe in recent
years, have created complexity and uncertainty regarding transfers of personal data from the EEA to the United States. On July 16, 2020,
in its Schrems II judgment, the Court of Justice of the European Union ("CJEU") invalidated the EU-US Privacy Shield Framework
("Privacy Shield"), under which personal data could be transferred from the EEA to U.S. entities which had self-certified
under the Privacy Shield scheme. On October 7, 2022, President Biden signed an Executive Order on 'Enhancing Safeguards for United
States Intelligence Activities' which introduced new binding safeguards to address the concerns raised by the CJEU in its Schrems
II judgement. Although this Executive Order is intended to form the basis of a new EU-US Data Privacy Framework (the "Framework"),
the Framework is still in development and its route to implementation remains uncertain. Until the Framework is in place, our agreements
and engagements with customers may be affected by the need to sign and implement additional agreements and security measures and this
could lead to additional costs and increase our overall risk exposure. On June 27, 2021, the European Commission published a new set of
modular standard contractual clauses (the "New SCCs"). The New SCCs must be used for all relevant transfers of personal data
outside the EEA (since December 27, 2022) and organizations must ensure that all new and existing contracts involving the transfer of
personal data outside the EEA contain New SCCs and, for transfers out of the UK, the International Data Transfer Agreement ("IDTA")
or the UK Addendum to the New SCCs. In addition to the use of a valid data transfer mechanism, transfer impact assessments must be carried
out in respect of planned transfers of personal data from the EEA/UK to third countries including the U.S., and failure to do so may expose
us to further compliance risk.
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Further, the European Commission regularly re-examines
its adequacy decisions, including its Decision 2011/61/EU regarding the adequacy of Israeli law. If, in light of the GDPR and developments
in Israeli privacy legislation, Israel's adequacy status for purposes of transfers of personal data from the EEA to Israel was revoked,
this would affect our activities as an Israeli-based organization. The outcome of this examination may also affect the UK's approach
on the adequacy of Israeli law with respect to the UK GDPR, which could require us to further review and amend the lawful mechanisms by
which we make and/or receive personal data transfers from the UK. In addition, while the European Commission adopted an adequacy decision
for the UK on June 28, 2021, allowing the continued flow of personal data from the EEA to the UK, this decision will automatically expire
in June 2025 unless the European Commission re-assesses and renews or extends that decision. The decision will be regularly reviewed by
the European Commission going forward and may be revoked if the UK diverges from its current data protection laws and the European Commission
deems the UK to no longer provide adequate protection of personal data.
Virtually every jurisdiction in which we expect
to operate has established its own data security and privacy legal framework with which we must, and our target customers will need to,
comply, including the rules and regulation mentioned above. We may also need to comply with varying and possibly conflicting privacy laws
and regulations in other jurisdictions. As a result, we could face regulatory actions, including significant fines or penalties, adverse
publicity and possible loss of business.
While we are preparing to implement various measures
intended to enable us to comply with applicable privacy or data protection laws, regulations and contractual obligations, these measures
may not always be effective and do not guarantee compliance. Any failure or perceived failure by us to comply with our contractual or
legal obligations or regulatory requirements relating to privacy, data protection, or information security may result in governmental
investigations or enforcement actions, litigation, claims, or public statements against us by consumer advocacy groups or others and could
result in significant liability, cause our customers, partners or patients to lose trust in us, and otherwise materially and adversely
affect our reputation and business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and
policies that are applicable to the businesses of our customers or partners may limit the adoption and use of, and reduce the overall
demand for, our products and services. Additionally, if third parties we work with violate applicable laws, regulations, or agreements,
such violations may put the data we have received at risk, could result in governmental investigations or enforcement actions, fines,
litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability, cause
our customers, partners or patients to lose trust in us, and otherwise materially and adversely affect our reputation and business. Further,
public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to
our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies
to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs
and risks.
Risks associated with regulation of new
and emerging technologies such as artificial intelligence.
As a company that utilizes
AI in our products and services, we are subject to regulatory and legal risks related to the use of AI. The development, deployment and
use of AI technologies are subject to a variety of evolving laws and regulations, which may differ across jurisdictions and may evolve
over time. Our failure to comply with these laws and regulations could result in legal liability, regulatory enforcement actions, negative
publicity and damage to our reputation. For example, the EU Artificial Intelligence Act was proposed on April 21, 2021 by the European
Commission and aims to introduce a common regulatory and legal framework for artificial intelligence. The proposal does not confer rights
on individuals, but regulates the providers of AI systems, and entities making use of them in a professional capacity. Among other things,
the proposal may require us to implement additional quality assurance controls and measures to be reviewed and approved by regulatory
submissions of our products. The European Council adopted a common position on the proposal on December 6, 2022 and the proposal continues
to progress through the EU legislative process. The UK also published a white paper on AI Regulation on March 29, 2023, setting out proposals
for an AI governance framework which existing regulators would apply within their existing remits. Further, the EU Artificial Intelligence
Act may impose certain limitations regarding the utilization of AI and machine learning technologies. Any additional costs and penalties
associated with increased compliance, enforcement and risk reduction could make certain offerings less profitable or increase the difficulty
of bringing certain offerings to market or maintaining certain offerings.
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If we do not obtain and maintain international regulatory registrations,
clearances or approvals for our products, we will be unable to market and sell our products outside of the United States.
Sales of our products outside of the United States
are subject to foreign regulatory requirements that vary widely from country to country. Approval procedures vary among countries and
can involve additional testing. The time required to obtain approval outside of the United States may differ substantially from that required
to obtain FDA approval. In addition, the FDA regulates exports of medical devices from the United States. While the regulations of some
countries may not impose barriers to marketing and selling our products or only require notification, others require that we obtain the
clearance or approval of a specified regulatory body. Complying with foreign regulatory requirements, including obtaining registrations,
clearances or approvals, can be expensive and time-consuming, and we may not receive regulatory clearances or approvals in each country
in which we plan to market our products or we may be unable to do so on a timely basis. The time required to obtain registrations, clearances
or approvals, if required by other countries, may be longer than that required for FDA clearance or approval, and requirements for such
registrations, clearances or approvals may significantly differ from FDA requirements. If we modify our products, we may need to apply
for additional regulatory clearances or approvals before we are permitted to sell the modified product. In addition, we may not continue
to meet the quality and safety standards required to maintain the authorizations that we have received. If we are unable to maintain our
authorizations in a particular country, we will no longer be able to sell the applicable product in that country.
Regulatory clearance or approval by the FDA does
not ensure registration, clearance or approval by regulatory authorities in other countries, and registration, clearance or approval by
one or more foreign regulatory authorities does not ensure registration, clearance or approval by regulatory authorities in other foreign
countries or by the FDA. However, a failure or delay in obtaining registration or regulatory clearance or approval in one country may
have a negative effect on the regulatory process in others.
Legislative or regulatory reforms in the United States or the
EU may make it more difficult and costly for us to obtain regulatory clearances or approvals for our products or to manufacture, market
or distribute our products after clearance or approval is obtained.
From time to time, legislation is drafted and introduced
in Congress that could significantly change the statutory provisions governing the regulation of medical devices. In addition, the FDA
may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions, which
may prevent or delay approval or clearance of our future products under development or impact our ability to modify our currently cleared
products on a timely basis. Over the last several years, the FDA has proposed reforms to its 510(k) clearance process, and such proposals
could include increased requirements for clinical data and a longer review period, or could make it more difficult for manufacturers to
utilize the 510(k) clearance process for their products. For example, in November 2018, FDA officials announced forthcoming steps that
the FDA intends to take to modernize the premarket notification pathway under Section 510(k) of the FDCA. Among other things, the FDA
announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates.
These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k) clearance pathway,
and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate
devices that are more than 10 years old. In May 2019, the FDA solicited public feedback on these proposals. The FDA requested public
feedback on whether it should consider certain actions that might require new authority, such as whether to sunset certain older devices
that were used as predicates under the 510(k) clearance pathway. These proposals have not yet been finalized or adopted, and the FDA may
work with Congress to implement such proposals through legislation. Accordingly, it is unclear the extent to which any proposals, if adopted,
could impose additional regulatory requirements on us that could delay our ability to obtain new 510(k) clearances, increase the costs
of compliance, or restrict our ability to maintain our current clearances, or otherwise create competition that may negatively affect
our business.
In September 2019, the FDA finalized guidance describing
an optional "safety and performance based" premarket review pathway for manufacturers of "certain, well-understood device
types" to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety
and performance criteria established by the FDA, thereby obviating the need, in the case of applicable products, for manufacturers to
compare the safety and performance of their medical devices to specific predicate devices in the clearance process. The FDA maintains
a list of device types appropriate for the "safety and performance based" pathway and will continue to develop product-specific
guidance documents that identify the performance criteria for each such device type, as well as the testing methods recommended in the
guidance documents, where feasible. The FDA may establish performance criteria for classes of devices for which we or our competitors
seek or currently have received clearance, and it is unclear the extent to which such performance standards, if established, could impact
our ability to obtain new 510(k) clearances or otherwise create competition that may negatively affect our business.
In addition, FDA regulations and guidance are often
revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. Any new statutes, regulations
or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of any future products
or make it more difficult to obtain clearance or approval for, manufacture, market or distribute our products. We cannot determine what
effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our
business in the future. Such changes could, among other things, require: additional testing prior to obtaining clearance or approval;
changes to manufacturing methods; recall, replacement or discontinuance of our products; or additional record keeping.
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The FDA's and other regulatory authorities'
policies may change and additional government regulations may be promulgated that could prevent, limit or delay regulatory clearance or
approval of our future products. We cannot predict the likelihood, nature or extent of government regulation that may arise from future
legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing
requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any
marketing approval or clearance that we may have obtained and we may not achieve or sustain profitability.
On April 5, 2017, the European Parliament
passed the Medical Devices Regulation (Regulation 2017/745), which repeals and replaces the EU Medical Devices Directive. Unlike directives,
which must be implemented into the national laws of the EEA member states, the regulations would be directly applicable, i.e., without
the need for adoption of EEA member state laws implementing them, in all EEA member states and are intended to eliminate current differences
in the regulation of medical devices among EEA member States. The Medical Devices Regulation, among other things, is intended to establish
a uniform, transparent, predictable and sustainable regulatory framework across the EEA for medical devices and ensure a high level of
safety and health while supporting innovation.
The Medical Devices Regulation will, however, only
become applicable three years after publication (in 2020). Once applicable, the new regulations will, among other things:
●
strengthen the rules on placing devices on the market and reinforce surveillance once they are available;
●
establish explicit provisions on manufacturers' responsibilities for follow-up regarding the quality, performance and safety of devices placed on the market;
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improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number;
●
set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and
●
strengthened rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.
These modifications may have an effect on the way
we conduct our business in the EEA.
Healthcare reform laws and regulatory changes could adversely
affect our products and financial condition.
During the past several years, the U.S. healthcare
industry has been subject to an increase in governmental regulation, as well as judicial challenges, at both the federal and state levels.
Efforts to control healthcare costs, including limiting access to care, alternative delivery models and changes in the methods used to
determine reimbursement scenarios and rates, are ongoing at the federal and state government levels. From time to time, changes designed
to contain healthcare costs have been implemented, some of which have resulted in decreased reimbursement rates for diagnostic imaging
services that may impact our business or may otherwise affect our ability to commercialize or profitably sell any product candidates for
which we obtain regulatory approval.
In March 2010, former President Obama signed into
law the Patient Protection and Affordable Care Act, and the Health Care and Education Reconciliation Act of 2010 (collectively, the "ACA"),
which included measures that significantly changed the way healthcare is financed by both governmental and private insurers. While a primary
goal of these healthcare reform efforts was to expand coverage to more individuals, it also involved additional regulatory mandates and
other measures designed to constrain medical costs. The ACA significantly impacts the medical device industry. Among other things, the
ACA:
●
Imposes an annual excise tax of 2.3% on any entity that manufactures or imports medical devices offered for sale in the United States, which, through a series of legislative amendments, was suspended, effective January 1, 2016 and subsequently repealed altogether on December 20, 2019;
●
Establishes a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research; and
●
Implements Medicare payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.
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In addition, the ACA and related healthcare reform
laws, regulations and initiatives have significantly increased regulation of managed care plans and decreased reimbursement under Medicare
managed care. Moreover, to alleviate budget shortfalls, states have at times reduced or frozen payments to Medicaid managed care plans.
We cannot accurately predict the complete impact of these healthcare reform initiatives, but they could lead to a decreased demand for
medical devices and other outcomes that could adversely impact our business and financial results.
Some of the provisions of the ACA have yet to be
fully implemented, and certain provisions have been subject to judicial and Congressional challenges. For example, the Tax Cuts and Jobs
Act enacted on December 22, 2017, or TCJA, eliminated the shared responsibility payment for individuals who fail to maintain minimum
essential coverage under section 5000A of the Internal Revenue Code of 1986, commonly referred to as the "individual mandate,"
effective January 1, 2019. On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, or the
Texas District Court Judge, ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because
it was repealed as part of the Tax Cuts and Jobs Act, the remaining provisions of the ACA were invalid as well. On June 17, 2021, the
Supreme Court held that state and individual plaintiffs did not have standing to challenge the individual mandate provision of the ACA;
in so holding, the Supreme Court did not consider larger constitutional questions about the validity of this provision or the validity
of the ACA in its entirety. Another case challenging the ACA's requirement that private insurers cover certain preventative services
is currently pending before the Texas District Court Judge. The Texas District Court Judge struck down this requirement with immediate
nationwide effect on March 30, 2023, and the U.S. government has appealed the decision to the U.S. Court of Appeals for the Fifth Circuit.
It is unclear how this decision and appeal, subsequent decisions and appeals, and other efforts to challenge, repeal or replace the ACA,
or portions thereof, will affect our future products or our business. It is possible that the ACA, as currently enacted or as it may be
amended in the future, and other healthcare reform measures that may be adopted in the future, could have an adverse effect on our industry
generally and on our ability to commercialize our future products and achieve profitability.
Disruptions at the FDA and other government agencies caused by
funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or
otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which
could negatively impact our business.
The ability of the FDA to review and clear or approve
new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy
changes, the FDA's ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise
affect the FDA's ability to perform routine functions. Average review times at the FDA have fluctuated in recent years as a result.
In addition, government funding of other government agencies that fund research and development activities is subject to the political
process, which is inherently fluid and unpredictable.
Disruptions at the FDA and other agencies may also
slow the time necessary for new medical devices or modifications to cleared or approved medical devices to be reviewed and/or approved
by necessary government agencies, which would adversely affect our business. For example, over the last several years, including for 35
days beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the
FDA, have had to furlough critical FDA employees and stop critical activities.
Separately, in response to the COVID-19 pandemic,
beginning in March 2020, the FDA postponed certain inspections of domestic and foreign manufacturing facilities. Since that time, the
FDA has resumed on-site inspections of domestic and foreign manufacturing facilities; however, regulatory authorities within or outside
the United States may adopt or resume similar restrictions or other policy measures in response to the COVID-19 pandemic. If a prolonged
government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their
regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory
authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Risks Related to Employee Matters
Under applicable employment laws, we may not be able to enforce
covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former
employees.
Our employment agreements generally include covenants
not to compete. These agreements prohibit our employees, if they cease working for us, from competing directly with us or working for
our competitors for a limited period. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees
work at all or for a sufficient duration of time to prevent members of our management team from competing with us. For example, Israeli
courts have required employers seeking to enforce covenants not to compete to demonstrate that the competitive activities of a former
employee will harm one of a limited number of material interests of the employer, such as the secrecy of a company's confidential
commercial information or the protection of its intellectual property. In Israel, if we cannot demonstrate that such an interest will
be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our
competitiveness may be diminished.
39
We may not be able to attract and retain the highly skilled employees
we need to support our planned growth.
To continue to execute our business and our growth
plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense. We may not be successful in attracting
and retaining qualified personnel. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business,
financial condition, results of operations and future growth prospects could be severely harmed.
Risks Related to Owning Our Ordinary Shares
Our share price may be volatile, and you may lose all or part
of your investment.
The market price for our shares may be volatile
and subject to wide fluctuations in response to factors including the following:
●
actual or anticipated fluctuations in results of operations;
●
actual or anticipated changes in our growth rate relative to our competitors, as well as announcements by us or our competitors of significant business developments, changes in relationships with our target customers, manufacturers or suppliers, acquisitions or expansion plans;
●
failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public, as well as variance in our financial performance from the expectations of market analysts;
●
issuance of new or updated research reports or short reports by securities analysts or other market participants;
●
share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
●
additions or departures of key management or other personnel;
●
our involvement in litigation and investigations, including the securities class-actions and the SEC inquiry;
●
disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technology;
●
announcement or expectation of additional debt or equity financing efforts;
●
sales of our ordinary shares or other securities by us, our insiders or our other shareholders, or the perception that these sales may occur in the future;
●
the trading volume of our ordinary shares;
●
market conditions in our industry;
●
changes in the estimation of the future size and growth rate of our markets; and
●
general economic, market or political conditions in the United States or elsewhere.
In particular, the market prices of pre-commercial-stage
companies like ours have been highly volatile due to factors, including, but not limited to:
●
our ability to develop and commercialize our technology and future products or services;
●
developments or disputes concerning our product's intellectual property rights;
●
our or our competitors' technological innovations;
●
fluctuations in the valuation of companies perceived by investors to be comparable to us;
●
announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new technologies or patents;
●
failure to complete significant transactions or collaborate with vendors in manufacturing our product; and
●
proposals for legislation that would place restrictions on the price of medical therapies.
40
These and other market and industry factors may
cause the market price and demand for our ordinary shares to fluctuate substantially, regardless of our actual operating performance,
which may limit or prevent investors from readily selling their ordinary shares and may otherwise negatively affect the liquidity of our
ordinary shares. In addition, the stock market in general, and Nasdaq Global Market and emerging growth companies in particular, have
experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these
companies. Such broad market fluctuations, and other factors (such as variations in quarterly and yearly operating results, general trends
in the medical imaging industry, and changes in state, federal or other applicable regulations affecting us and our industry) may adversely
affect the market price of our ordinary shares, if a market for them develops.
In the past, when the market price of shares has
been volatile, holders of those shares have instituted securities class action litigation against the company that issued the shares.
If any of our shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could
also divert resources and the time and attention of our management.
As a foreign private issuer, we are exempt from certain requirements
that apply to domestic issuers and we are permitted to follow certain home country corporate governance practices instead of applicable
SEC and Nasdaq requirements, which may result in less protection than is accorded to shareholders under rules applicable to domestic issuers.
We report under the Exchange Act as a non-U.S.
company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from
certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (1) the sections of the Exchange
Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (2)
the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability
for insiders who profit from trades made in a short period of time and (3) the rules under the Exchange Act requiring the filing with
the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, although we intend to furnish
comparable quarterly information on Form 6-K. In addition, foreign private issuers are not required to file their annual report on Form
20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their
annual report on Form 10-K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large accelerated filers
are required to file their annual report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also
exempt from Regulation FD, which is intended to prevent issuers from making selective disclosures of material information.
In addition, as a foreign private issuer, we are
permitted to follow certain home country corporate governance practices instead of those otherwise required under the listing rules of
the Nasdaq Stock Market for domestic issuers. For instance, we follow home country practice in Israel with regard to, among other things,
the director nomination procedure, approval of compensation of officers, and quorum at shareholder meetings. In addition, we follow our
home country law, instead of the listing rules of the Nasdaq Stock Market, which require that we obtain shareholder approval for certain
dilutive events, such as for the establishment or amendment of certain equity based compensation plans, an issuance that will result in
a change of control of the company, certain transactions other than a public offering involving issuances of a 20% or more interest in
the company and certain acquisitions of the stock or assets of another company. As foreign private issuer we are also permitted to follow
home country practice in Israel with regard to composition of the board of directors.
As a result of all of the above, you may not have
the same protections afforded to shareholders of a company that is not a foreign private issuer.
We may lose our foreign private issuer status which would then
require us to comply with the Exchange Act's domestic reporting regime and cause us to incur significant legal, accounting and other
expenses.
As discussed above, we are a foreign private issuer
and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act
applicable to U.S. domestic issuers. We will remain a foreign private issuer until our board determines that we no longer meet the qualification
set forth in Securities Act Rule 405 and Exchange Act Rule 3b-4, with such determinations to be made on an annual basis as of the end
of our second fiscal quarter. In order to maintain our current status as a foreign private issuer, either (a) a majority of our ordinary
shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive
officers or directors must not be U.S. citizens or residents, (ii) more than 50 percent of our assets cannot be located in the United
States and (iii) our business must be administered principally outside the United States. If we lose this status, we would be required
to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive
than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance
with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with
the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we would incur as a foreign
private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance
costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules
and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer
liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules
and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.
41
We have not paid dividends in the past and have no immediate
plans to pay dividends.
We plan to reinvest all of our future earnings,
to the extent we have earnings, in order to develop and commercialize our technology and products and to cover operating costs, finance
operations and to otherwise become and remain competitive. We have never declared or paid any dividends on our ordinary shares and we
do not plan to pay any cash dividends with respect to our securities in the foreseeable future. As we are a development-stage company
with limited operating history, we may not be able to generate, at any time, sufficient surplus cash that would be available for distribution
to the holders of our ordinary shares as a dividend. Therefore, you should not expect to receive cash dividends on the ordinary shares
we are offering. Consequently, investors may need to rely on sales of their ordinary shares after price appreciation, which may never
occur, as the only way to realize any future gains on their investment. In addition, the Companies Law imposes restrictions on our ability
to declare and pay dividends. See "Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividend
Policy" for additional information. Payment of dividends may also be subject to Israeli withholding taxes. See "Item "10.
Additional Information—E. Taxation—
Taxation of Our Shareholders—Dividends"
for additional information.
We incur significant increased costs as a result of operating
as a public company that reports to the SEC and our management is required to devote substantial time to meet compliance obligations.
As a public company reporting to the SEC, we incur
significant legal, insurance, director compensation, accounting and other expenses that we did not incur as a private company. We are
subject to reporting requirements of the Exchange Act and the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC
that impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and
financial controls and changes in corporate governance practices. In addition, the Dodd-Frank Wall Street Reform and Consumer Protection
Act (the "Dodd-Frank Act") imposes various other requirements on public companies. There are significant corporate governance
and executive compensation-related provisions in the Dodd-Frank Act that may increase our legal and financial compliance costs, make some
activities more difficult, time-consuming or costly and may also place undue strain on our personnel, systems and resources. Our management
and other personnel may need to devote a substantial amount of time to these compliance initiatives. In addition, we expect these rules
and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be
required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a
result, it may be more difficult and expensive for us to attract and retain qualified people to serve on our board of directors, our board
committees or as executive officers.
We also incur costs associated with corporate governance
requirements, including requirements under rules implemented by the SEC and the Nasdaq Global Market, and provisions of Israeli corporate
law applicable to public companies. These rules and regulations have and will continue to increase our legal and financial compliance
costs, introduce costs such as investor relations and stock exchange listing fees, and make some activities more time-consuming and costly.
Our board and other personnel continue to devote a substantial amount of time to these initiatives. To the extent we are not in compliance
with the Companies Law or Nasdaq Global Market rules, we may be subject to additional costs or delisting. We are continuously evaluating
and monitoring developments with respect to these rules, and we cannot estimate the amount of additional costs we may incur or the timing
of such costs.
We have incurred and expect to continue to incur
additional expenses and devote increased management effort toward ensuring compliance with the auditor attestation requirements of Section
404 of the Sarbanes Oxley Act (and the rules and regulations of the SEC thereunder) because we no longer qualify as an "emerging
growth company." We cannot estimate the amount of additional costs we may incur as a result of being a public company or the timing
of such costs.
Pursuant to Section 404 of the Sarbanes-Oxley Act
and the related rules adopted by the SEC and the Public Company Accounting Oversight Board, our management is required to report on the
effectiveness of our internal control over financial reporting. To maintain the effectiveness of our disclosure controls and procedures
and our internal control over financial reporting, we expect that we will need to continue enhancing existing, and implement new, financial
reporting and management systems, procedures and controls to manage our business effectively and support our growth in the future. The
process of evaluating our internal control over financial reporting requires an investment of substantial time and resources, including
by our Chief Financial Officer and other members of our senior management. As a result, this process may divert internal resources and
take a significant amount of time and effort to complete. In addition, as we no longer qualify as an "emerging growth company"
under the JOBS Act, our independent registered public accounting firm must attest to the effectiveness of our internal control over financial
reporting under Section 404. Irrespective of compliance with Section 404, any failure of our internal controls could have a material adverse
effect on our stated results of operations and harm our reputation. As a result, we may experience higher than anticipated operating expenses,
as well as higher independent auditor fees during and after the implementation of these changes. If we are unable to implement any of
the required changes to our internal control over financial reporting effectively or efficiently or are required to do so earlier than
anticipated, it could adversely affect our operations, financial reporting and/or results of operations and could result in an adverse
opinion on internal controls from our independent auditors.
42
Shares eligible for future sale may adversely affect the market
for our ordinary shares and the issuance of additional ordinary shares as a result of the exercise of our outstanding warrants and options
will dilute the percentage ownership of our other shareholders.
From time to time, certain of our shareholders are eligible to sell
all or some of their ordinary shares by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated
under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate shareholders may sell freely
after six months subject only to the current public information requirement (which disappears after one year). Of the 55,150,345
ordinary shares outstanding as of March 31, 2023, approximately 48,104,948 ordinary shares have been registered under the Securities Act
and are freely transferable by persons other than our "affiliates" without restriction or additional registration; the remaining
shares outstanding have not been registered under the Securities Act and may be offered or sold only pursuant to an effective registration
statement or pursuant to an available exemption from the registration requirements. As of March 31, 2023, approximately 49,894,460 of
our ordinary shares are held by "non-affiliates" and are freely tradable without restriction pursuant to Rule 144. In
addition, a certain shareholder has the ability to cause us to register the resale of its shares issuable upon exercise of certain warrants
under the Registration Rights Agreement (as defined below). See "Item 10. Additional Information—C. Material Contracts"
for a description of the registration rights. Any substantial sale of our ordinary shares pursuant to Rule 144 or pursuant to any resale
prospectus may have a material adverse effect on the market price of our ordinary shares.
In addition, as of March 31, 2023, there were two
outstanding warrants to purchase a total of 2,312,443 ordinary shares, with exercise prices ranging from $18.00 per share to $20.87 per
share. As of March 31, 2023, there were 4,993,803 ordinary shares issuable upon the exercise of options to purchase ordinary shares outstanding
under our 2019 Equity Incentive Plan (as defined below), at a weighted average exercise price of $13.18 per share, and 1,523,424 additional
ordinary shares reserved for future issuance under our 2019 Equity Incentive Plan. The warrants are exercisable immediately and expire
on various dates. More convertible securities may be granted in the future to the Company's officers, directors, employees or consultants
or as part of future financings. The exercise of outstanding options and warrants will dilute the percentage ownership of the Company's
other shareholders.
The purchase price of the ordinary shares may not reflect our
actual value.
The price of our ordinary shares may not be indicative
of our actual value or any future market price for our securities. This price may not accurately reflect the value of the ordinary shares
or the value that potential investors will realize upon their disposition of ordinary shares. The price does not necessarily bear any
relationship to our assets, earnings, book value per share or other generally accepted criteria of value.
If equity research analysts discontinue research
or reports about us or our business or if they issue unfavorable commentary or downgrade our ordinary shares, or if other market participants
such as short sellers issue unfavorable reports about us, the price of our ordinary shares could decline.
The trading market for our ordinary shares relies
in part on the research and reports that equity research analysts publish about us and our business. The analysts' estimates are
based upon their own opinions and are often different from our estimates or expectations. If our results of operations are below the estimates
or expectations of public market analysts and investors, the price of our ordinary shares could decline. Moreover, the price of our ordinary
shares could decline if one or more securities analysts downgrade our ordinary shares or if those analysts issue other unfavorable commentary
or cease publishing reports about us or our business.
43
Our management conducted an evaluation of the effectiveness of
our internal control over financial reporting and concluded that our internal control over financial reporting was not effective as of
December 31, 2022. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately
report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting,
which would harm our business and the trading price of our ordinary shares.
Effective internal controls over financial reporting
are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures are designed
to prevent fraud. Our management is required to assess the effectiveness of our internal controls and procedures and disclose changes
in these controls on an annual basis and our independent registered public accounting firm is required to attest to the effectiveness
of our internal controls over financial reporting pursuant to Section 404.
Any failure to implement required new or improved
controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any
testing by us conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm,
may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require
prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior
internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect
on the trading price of our ordinary shares.
Our management conducted an evaluation of the effectiveness
of our internal control over financial reporting and concluded that our internal control over financial reporting was not effective as
of December 31, 2022 due to a lack of sufficient number of financial reporting personnel with an appropriate level of knowledge, experience
and training commensurate with our financial reporting requirements, as described in Item 15, "Controls and Procedures" of
this annual report. As defined in Regulation 12b-2 under the Exchange Act, a "material weakness" is a deficiency, or
combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of our annual financial statements will not be prevented, or detected on a timely basis.
While management has continued the process of remediating
the material weaknesses, as described in Item 15, "Controls and Procedures," if significant deficiencies or other material
weaknesses are identified in our internal control over financial reporting that we cannot remediate in a timely manner, investors and
others may lose confidence in the reliability of our financial statements and the trading price of our shares and ability to obtain any
necessary equity or debt financing could suffer. The material weaknesses will not be considered remediated until we have completed implementing
the necessary controls.
We have made, and will continue to make, changes
in these and other areas. In any event, the process of determining whether our existing internal controls are compliant with Section 404
and sufficiently effective will require the investment of substantial time and resources, including by our chief financial officer and
other members of our senior management. As a result, this process may divert internal resources and take a significant amount of time
and effort to complete. In addition, we cannot predict the outcome of this process and whether we will need to implement remedial actions
in order to implement effective controls over financial reporting. The determination of whether or not our internal controls are sufficient
and any remedial actions required could result in us incurring additional costs that we did not anticipate, including the hiring of outside
consultants. We may also fail to complete our evaluation, testing and any required remediation needed to comply with Section 404 in a
timely fashion. Irrespective of compliance with Section 404, any additional failure of our internal controls could have a material adverse
effect on our stated results of operations and harm our reputation. As a result, we may experience higher than anticipated operating expenses,
as well as higher independent auditor fees during and after the implementation of these changes. If we are unable to implement any of
the required changes to our internal control over financial reporting effectively or efficiently or are required to do so earlier than
anticipated, it could adversely affect our operations, financial reporting or results of operations and could result in an adverse opinion
on internal controls from our independent auditors.
Furthermore, if we are unable to certify that our
internal control over financial reporting is effective and in compliance with Section 404, we may be subject to sanctions or investigations
by regulatory authorities, such as the SEC or stock exchanges, and we could lose investor confidence in the accuracy and completeness
of our financial reports, which could hurt our business, the price of our ordinary shares and our ability to access the capital markets.
It is likely that we will be classified as a passive foreign
investment company ("PFIC") for U.S. federal income tax purposes for our taxable year ended December 31, 2022, and possibly
for the current taxable year and future taxable years, which could result in adverse U.S. federal income tax consequences to U.S. Holders
of our ordinary shares.
A non-U.S. corporation will be a PFIC for any taxable
year if either (1) at least 75% of its gross income for such year consists of certain types of passive income; or (2) at least 50% of
the value of its assets (generally determined based on an average of the quarterly values of the assets) during such year is attributable
to assets that produce passive income or are held for the production of passive income. For this purpose, cash and assets readily convertible
into cash are categorized as passive assets and our goodwill and other unbooked intangibles will generally be taken into account in determining
our asset value.
44
A non-U.S. corporation's PFIC status is a
factual determination made annually after the close of each taxable year. Because the PFIC income test described above is based on a non-U.S.
corporation's gross income and not its net income, a non-U.S. corporation in the early stages of its business, such as our company,
can be treated as a PFIC in those taxable years before it has sufficient operating revenue as a result of earning any amount of interest
or other passive income. As a result, we believe that we will technically be classified as a PFIC for the taxable year ended December
31, 2022. Depending upon the composition of our income and assets and the market price of our ordinary shares during 2023 and subsequent
taxable years and whether we start generating a substantial amount of active revenue, we could continue to be classified as a PFIC for
2023 and subsequent taxable years if we are classified as a PFIC for 2022. In addition, it is possible that any subsidiary that we own
would also be classified as a PFIC for such taxable years.
If we were classified as a PFIC for any taxable
year during which a U.S. Holder (as defined below) holds our ordinary shares, certain adverse U.S. federal income tax consequences could
apply to such U.S. Holder. See "Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations."
Risks Related to Our Operations in Israel
Conditions in Israel could materially and adversely affect our
business.
Our executive offices are located in Neve Ilan,
Israel. In addition, a number of our officers and directors are residents of Israel. Accordingly, political, economic and military conditions
in Israel and the surrounding region may directly affect our business and operations. Since the establishment of the State of Israel in
1948, a number of armed conflicts have taken place between Israel and its neighboring countries, as well as terrorist acts committed within
Israel by hostile elements. In recent years, Israel has been engaged in sporadic armed conflicts with Hamas, an Islamist terrorist group
that controls the Gaza Strip, with Hezbollah, an Islamist terrorist group that controls large portions of southern Lebanon, and with Iranian-backed
military forces in Syria. Some of these hostilities were accompanied by missiles being fired from the Gaza Strip against civilian targets
in various parts of Israel, and negatively affected business conditions in Israel. In addition, Iran has threatened to attack Israel,
may be developing nuclear weapons and has targeted cyber-attacks against Israeli entities. Iran also has a strong influence among extremist
groups in the region, including Hamas in Gaza, Hezbollah in Lebanon and various rebel militia groups in neighboring countries. Any hostilities
involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations
and results of operations. Any armed conflicts, terrorist activities or political instability in the region could adversely affect business
conditions and could harm our results of operations and could make it more difficult for us to raise capital. In addition, the political
and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they
are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.
We currently do not, and we do not expect to, carry
any commercial insurance that covers losses resulting from events associated with war and terrorism. Although the Israeli government currently
covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot be assured that this government
coverage will be maintained or, if maintained, that it will be sufficient to compensate us fully for damages incurred and the government
may cease providing such coverage or the coverage might not suffice to cover potential damages. Any losses or damages incurred by us could
have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect
business conditions and could harm our results of operations.
Further, in the past, the State of Israel and Israeli
companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli
companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or the expansion
of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely impact
our business.
Furthermore, the Israeli government has recently
been pursuing legislation, which if adopted, would result in changes to Israel's judicial system. This has prompted protests in
Israel and triggered a considerable political debate. In response to the foregoing developments, individuals, organizations and institutions,
both within and outside of Israel, have voiced concerns that the proposed changes and the public response and political debate may negatively
impact the business environment in Israel, including due to reluctance of foreign investors to invest or conduct business in Israel, as
well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in securities
markets and other changes in macroeconomic conditions. Such proposed changes may also adversely affect the labor market in Israel or lead
to political instability or civil unrest. To the extent that any of these negative developments occur, they may have an adverse effect
on our business, our results of operations and our ability to raise additional funds.
45
In addition, many Israeli citizens are obligated
to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older for
certain reservists) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity,
there have been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups
in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption
could materially adversely affect our business, prospects, financial condition and results of operations.
The termination or reduction of tax and other incentives that
the Israeli government provides to Israeli companies may increase our costs and taxes.
The Israeli government currently provides tax and
capital investment incentives to Israeli companies, as well as grant and loan programs relating to research and development and marketing
and export activities (see "Item 10. Additional Information—E. Taxation—Israeli Tax Considerations and Government Programs").
In recent years, the Israeli government has reduced the benefits available under these programs and the Israeli governmental authorities
may in the future further reduce or eliminate the benefits of these programs. We may take advantage of these benefits and programs in
the future; however, there can be no assurance that such benefits and programs will be available to us. If we qualify for such benefits
and programs and fail to meet the conditions thereof, the benefits could be canceled and we could be required to refund any benefits we
might already have enjoyed and become subject to penalties. Additionally, if we qualify for such benefits and programs and they are subsequently
terminated or reduced, it could have an adverse effect on our financial condition and results of operations.
It may be difficult to enforce a U.S. judgment against us, our
officers and directors named in this annual report on Form 20-F in Israel or the United States, or to assert U.S. securities laws claims
in Israel or serve process on our officers and directors.
We are incorporated in Israel. Many of our directors
and officers are not residents of the United States and a significant portion of their and our assets are located outside the United States.
Service of process upon us or our non-U.S. resident directors and officers may be difficult to obtain within the United States. We have
been informed by our legal counsel in Israel that it may be difficult to assert claims under U.S. securities laws in original actions
instituted in Israel or obtain a judgment based on the civil liability provisions of U.S. federal securities laws. Israeli courts may
refuse to hear a claim based on a violation of U.S. securities laws against us or our directors and officers because Israel may not be
the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that
Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must
be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law.
There is little binding case law in Israel addressing the matters described above. Additionally, Israeli courts might not enforce judgments
obtained in the United States against us or our directors and officers, which may make it difficult to collect on judgments rendered against
us or our directors and officers.
Moreover, an Israeli court will not enforce a non-Israeli
judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional
cases), if its enforcement is likely to prejudice the sovereignty or security of the State of Israel, if it was obtained by fraud or in
the absence of due process, if it is at variance with another valid judgment that was given in the same matter between the same parties,
or if a suit in the same matter between the same parties was pending before a court or tribunal in Israel at the time the foreign action
was brought.
Your rights and responsibilities as our shareholder will be governed
by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations.
We are incorporated under Israeli law. The rights
and responsibilities of holders of our ordinary shares are governed by our amended and restated articles of association and the Companies
Law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations.
In particular, pursuant to the Companies Law, each shareholder of an Israeli company has to act in good faith and in a customary manner
in exercising his or her rights and fulfilling his or her obligations toward the company and other shareholders and to refrain from abusing
his or her power in the company, including, among other things, in voting at the general meeting of shareholders on amendments to a company's
articles of association, increases in a company's authorized share capital, mergers and certain transactions requiring shareholders'
approval under the Companies Law. In addition, under Israeli law, a controlling shareholder of an Israeli company or a shareholder who
knows that it possesses the power to determine the outcome of a shareholder vote or who has the power to appoint or prevent the appointment
of a director or officer in the company or has other powers toward the company has a duty of fairness toward the company. However, Israeli
law does not define the substance of this duty of fairness. There is little case law available in Israel to assist in understanding the
implications of these provisions that govern shareholder behavior.
46
Our amended and restated articles of association contains exclusive
forum provisions for certain claims, which could limit our shareholders' ability to obtain a favorable judicial forum for disputes
with us or our directors, officers or employees.
Our amended and restated articles of association
provides that the federal district courts of the United States of America will, to the fullest extent permitted by law, be the exclusive
forum for resolving any complaint asserting a cause of action arising under the Securities Act (the "Federal Forum Provision").
Our decision to adopt a Federal Forum Provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions
are facially valid under Delaware law. While there can be no assurance that U.S. federal or state courts or Israeli courts will follow
the holding of the Delaware Supreme Court or determine that the Federal Forum Provision should be enforced in a particular case, application
of the Federal Forum Provision means that suits brought by our shareholders to enforce any duty or liability created by the Securities
Act must be brought in federal court and cannot be brought in state court. Section 27 of the Exchange Act creates exclusive federal jurisdiction
over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder and the Federal
Forum Provision does not apply to suits brought to enforce any duty or liability created by the Exchange Act. Accordingly, actions by
our shareholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must also be brought
in federal court. Our shareholders will not be deemed to have waived our compliance with the federal securities laws and the regulations
promulgated thereunder.
Any person or entity purchasing or otherwise acquiring
or holding any interest in any of our securities shall be deemed to have notice of and consented to the Federal Forum Provision. This
provision may limit our shareholders' ability to bring a claim in a judicial forum they find favorable for disputes with us or our
directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. Alternatively,
if a court were to find the Federal Forum Provision contained in our amended and restated articles of association to be inapplicable or
unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm
our business, operating results and financial condition.
Provisions of our amended and restated articles of association
and Israeli law and tax considerations may delay, prevent or make difficult an acquisition of us, which could prevent a change of control
and negatively affect the price of our ordinary shares.
Israeli corporate law regulates mergers, requires
tender offers for acquisitions of shares if such acquisitions cause the acquirer to hold more than specified thresholds, requires special
approvals for certain transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant
to these types of transactions. For example, under Israeli law, a merger may not be consummated unless at least 50 days have passed from
the date that a merger proposal was filed by each merging company with the Israel Registrar of Companies and at least 30 days have passed
from the date that the shareholders of both merging companies approved the merger.
Furthermore, Israeli tax considerations may make
potential transactions unappealing to us or to our shareholders, such as for those shareholders whose country of residence for tax purposes
does not have a tax treaty with Israel which exempts such shareholders from Israeli tax. For example, Israeli tax law does not recognize
tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in certain
circumstances but makes the deferral contingent on the fulfillment of a number of conditions, including, in some cases, a holding period
of two years from the date of the transaction during which sales and dispositions of shares of the participating companies are subject
to certain restrictions. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such
time expires, the tax becomes payable even if no disposition of the shares has occurred. In order to benefit from the tax deferral, a
pre-ruling from the Israel Tax Authority may be required.
These provisions of Israeli law and Israeli tax
laws may delay, prevent or make difficult a merger with, or an acquisition of us, or all or a significant portion of our assets, which
could prevent a change of control and may make it more difficult for a third party to acquire us, even if doing so would be beneficial
to our shareholders. These provisions may limit the price that investors may be willing to pay in the future for our ordinary shares and
therefore depress the price of our shares.
Our amended and restated articles of association
provide that our directors (other than external directors) are elected on a staggered basis, such that a potential acquirer cannot readily
replace our entire board of directors at a single annual general shareholder meeting.
47
Item 4.
Information on the Company
A.
History and Development of the Company
NANO-X IMAGING LTD was incorporated under the laws
of the State of Israel on December 20, 2018 and commenced operations on September 3, 2019.
Substantially all of our assets at the time of
commencement of our operations were acquired or assigned (the "Asset Purchase") from our predecessor company, Nanox Imaging
PLC ("Nanox Gibraltar"), a Gibraltar public company, under an Asset Purchase Agreement, dated as of September 3, 2019 and
as amended on December 3, 2019 and December 31, 2019, between Nanox Gibraltar and us. Pursuant to the Asset Purchase Agreement,
substantially all of the assets of Nanox Gibraltar, including all patents, patent applications and all other intellectual property rights,
but not including the shares of Nanox Japan, Inc., a wholly owned subsidiary of Nanox Gibraltar ("Nanox Japan (predecessor)"),
were sold to the Company for an aggregate consideration of $13.3 million, reflecting the fair market value of the transferred assets,
which was estimated to be $6.1 million (excluding cash) based on an independent valuation report, plus the cash balance less $200,000,
which cash amount totaled $7.2 million as of the date of the Asset Purchase Agreement.
In January 2020, the board of directors of the
Company and the board of directors and shareholders of Nanox Gibraltar approved the issuance of shares in accordance with the terms of
the Asset Purchase Agreement described above. As a result, 1,109,245 of the Company's ordinary shares were issued to Nanox Gibraltar,
representing an aggregate consideration of approximately $17.8 million, and the Company has no further obligations to Nanox Gibraltar
under the Asset Purchase Agreement.
On November 2, 2021, the Company completed the
acquisition of 100% of the shares of USARAD Holdings, Inc., a Delaware corporation ("USARAD"), pursuant to the terms of the
Stock Purchase Agreement, dated October 25, 2021 (the "USARAD SPA"), among the Company, USARAD, Dr. Michael Yuz, other holders
of capital stock of USARAD and holders of USARAD options. USARAD
is a U.S.-based teleradiology company
with over 116  U.S. certified radiologists in its network
. At closing, the Company (through a wholly-owned subsidiary) purchased
100% of the shares of USARAD on a fully diluted basis for $7,300,000 in cash and 496,545 ordinary shares. In addition, upon the successful
achievement of certain milestones related to profitability, EBITDA and other operational performance metrics, the Company undertook to
pay additional cash consideration in the amount of up to $2,000,000 and stock consideration in the amount of up to $6,500,000 at a per
share value determined by the average of: (i) the volume weighted average closing share price of the 30 trading days prior to the relevant
milestone completion, and (ii) the volume weighted average closing share price of the 30 trading days ending on August 6, 2021.
On April 28, 2023, the Company and Dr. Michael
Yuz, as the representative of the former stockholders of USARAD, entered into the first amendment to the USARAD SPA, according to which
the parties to the USARAD SPA agreed that (i) the Company shall pay to the former stockholders of USARAD an aggregate amount of $290,063
in cash and 45,392 ordinary shares, in consideration for the achievement of certain milestones in connection with the first earn out period,
as defined in and in accordance with the USARAD SPA; and (ii) the rights and obligations under the USARAD SPA regarding the remaining
earn out periods were amended such that the parties agreed that the Company shall pay to the former stockholders of USARAD an aggregate
amount of $500,000 in cash and 210,000 ordinary shares as consideration for the remainder of the milestones and applicable earn-outs under
the USARAD SPA. As a result of the amendment to the USARAD SPA, obligations of the Company and the rights of the former stockholders of
USARAD relating to the purchase price (including the earn-outs) under the USARAD SPA have been satisfied in full.
On November 3, 2021, the Company completed the
acquisition of the platform and other assets of MDWEB, pursuant to the terms of the Asset Purchase Agreement, dated October 21, 2021,
between the Company and MDWEB, a USARAD-related company. Pursuant to the acquisition, we acquired the MDW platform, now known as the Nanox.MARKETPLACE,
a decentralized marketplace connecting imaging facilities with radiologists. At closing, the Company issued 64,715 ordinary shares to
MDWEB. In addition, upon the successful achievement of certain milestones related to technical integration of the Nanox.MARKETPLACE with
the Nanox.CLOUD and achieving certain other operational targets, the Company undertook to pay additional stock consideration in the amount
of up to $1,500,000 at a per share value determined by the average of: (i) closing price of the 30 trading days ending on the applicable
milestone's achievement date: and (ii) the volume weighted average closing share price of the 30 trading days prior to the closing
date.
On November 4, 2021, the Company consummated its
purchase of 100% of the equity of Zebra Medical Vision Ltd., an Israeli company ("Zebra") pursuant to the terms of the Agreement
and Plan of Merger, dated August 9, 2021, as amended (the "Zebra Merger Agreement"), among the Company, Zebra and Perryllion
Ltd., as representative of Zebra's equity holders. Zebra, now known as Nanox AI, is a leading medical AI developer, with eight FDA-cleared
and 11 CE-marked AI solutions for medical imaging. At closing, the Company issued 3,249,142 ordinary shares of the Company and committed
to issue 70,211 employee options to the equity holders of Zebra, which represented (a) the basic purchase price of $100,000,000; minus
(b) certain transaction costs; plus (c) deferred closing consideration in the amount of $3,333,333 as a result of Zebra entering into
a designated commercial agreement prior to closing; plus (d) $6,300,000 as a result of Zebra achieving a designated milestone of obtaining
a new FDA clearance for its population health product. All shares, except for the shares issued for the designated milestone, were issued
at a deemed per share value of $33.18 and the shares issued for the designated milestone were issued at a per share value of $25.01. In
addition, according to the terms of the Zebra Merger Agreement, under certain circumstances, the Company was obligated to issue additional
ordinary shares as deferred closing consideration and certain milestone consideration (should such be achieved) representing an aggregate
amount of up to $100,000,000 within three years following the closing. An aggregate of $9,633,333 of such consideration was paid at closing
as described above. In addition, on January 19, 2022, we issued 89,286 additional ordinary shares to the former shareholders of Nanox
AI due to partial achievement of a milestone that occurred post-closing. On December 29, 2022, the parties entered into a settlement with
respect to any additional amount that could be granted under the Zebra Merger Agreement, according to which the Company issued Nanox AI's
former shareholders an additional 2,648,424 ordinary shares. As a result of the settlement, both parties' performance obligations
under the agreement have been satisfied in full.
48
Our principal executive offices are located at
Communications Center, Neve Ilan, Israel 9085000, and our telephone number is +972 02 5360360. Our website address is
http://www.nanox.vision
.
The information contained therein or connected thereto shall not be deemed to be incorporated into this annual report on Form 20-F. Our
agent for service of process in the United States is CT Corporation System.
Public Offerings
In August 2020, we completed our initial public
offering of 10,555,556 ordinary shares at a public offering price of $18 per share, including 1,376,812 additional ordinary shares purchased
by the underwriters at the public offering price, less the underwriting discount, pursuant to the exercise in full of their option to
purchase additional ordinary shares. Our ordinary shares are listed on the NASDAQ Global Market under the symbol "NNOX."
On February 10, 2021, certain of our shareholders
sold an aggregate of 3,091,635 ordinary shares in a public offering pursuant to an Underwriting Agreement by and among us, Cantor Fitzgerald
& Co., acting as representative of the underwriters, and the selling shareholders named therein (the "Selling Shareholders").
We did not receive any of the proceeds from the sale of ordinary shares offered by the Selling Shareholders.
B. Business Overview
Overview
Early detection saves lives—and we at Nanox
are focused on applying our proprietary medical imaging technology and solutions to make diagnostic medicine more accessible and affordable
across the globe. We are developing an end-to-end imaging service solution, which includes the Nanox System, comprised of the Nanox.ARC
using our novel MEMs X-ray source technology, and the Nanox.CLOUD, a companion cloud software, integrated with AI solutions and teleradiology
services. Our vision is to increase early detection of medical conditions that are discoverable by X-ray by improving access to imaging,
reducing imaging costs and enhancing imaging efficiency, which we believe is key to increasing early prevention and treatment, improving
health outcomes and, ultimately, saving lives.
Our imaging solution is designed as a modular open
system, and we intend in the future to explore the expansion of the solution to include additional components, which may be developed
by us or third parties.
Our holistic imaging solution is currently comprised
of the following four principal components:
The Nanox System
. As a first step
to producing a new class of accessible and affordable medical imaging systems, we focused on identifying and developing a novel digital
X-ray source, which we refer to as the Nanox.SOURCE. Our X-ray source is based on a novel digital MEMs semiconductor cathode that we believe
can achieve the same functionalities as legacy X-ray analog cathodes, while allowing for lower-cost production than existing medical imaging
systems. We have been developing this technology over ten years towards the goal of commercial applicability. This novel digital X-ray
source is the basis of core technology in the imaging system we are developing, and we believe it also has the potential to replace the
legacy X-ray source in other existing imaging systems. Our technology aims to disrupt medical imaging by providing accessibility and affordability
on a global scale. Our goal is to enable medical institutions and other significant medical players to either employ our solutions as
a closed end-to-end system or to adopt a modular approach to our technologies, by acquiring or licensing our different components and
integrating our technologies into their specific product.
The Nanox System includes two integrated components—hardware
(Nanox.ARC), a medical imaging system incorporating our novel digital X-ray source, and software (Nanox.CLOUD). We developed, and continue
to improve, the multi-source Nanox.ARC, a 3D tomosynthesis imaging system, which received a 510(k) clearance from the FDA and remains
subject to regulatory clearance and approval in other jurisdictions. Tomosynthesis is an imaging technique used for early detection, that
is designed to produce a high-resolution, 3D, X-ray image reconstruction of the scanned human body part for review by a professional diagnostics
expert. In parallel, we have developed, and continue to improve, the Nanox.CLOUD, a companion cloud-based software to which scanned images
may be securely uploaded to the cloud system. By integrating the Nanox.CLOUD with the Nanox.ARC, we believe the Nanox System could provide
a streamlined process and end-to-end medical imaging service, including services such as image repository, radiologist matching, online
and offline diagnostics review and annotation, connectivity to diagnostic assistive AI systems, billing, monitoring and reporting.
49
Following receipt of clearance from the FDA, and
if cleared by similar regulatory agencies in other jurisdictions, we plan to market and deploy the Nanox System globally at a substantially
lower cost than currently available medical imaging systems, such as legacy X-ray and Computerized Tomography ("CT") systems,
because our digital X-ray source will allow the Nanox.ARC to have a simpler structure without the costly cooling equipment used in legacy
X-ray systems or the complex rotating mechanism used in CT devices. See "—Our Technology—The Nanox System." We
believe that the Nanox System could increase the accessibility and affordability of early-detection medical imaging systems worldwide,
substantially reduce wait-times for imaging results and increase early detection rates compared to currently employed imaging process
protocol.
We continue to implement a multi-step approach
to the regulatory clearance process for the Nanox System. On April 1, 2021, we received clearance from the FDA to market our Nanox Cart
X-Ray System, a single-source version of the Nanox.ARC. On June 17, 2021, we submitted a 510(k) premarket notification application to
the FDA for the first version of our multi-source Nanox.ARC 3D digital tomosynthesis system. On August 12, 2021, we received a request
for additional information from the FDA concerning the first submission of our multi-source system. On January 10, 2022, we withdrew our
first submission of our multi-source system. On January 12, 2022, we submitted to the FDA a Q-submission for the second version of our
multi-source Nanox.ARC 3D digital tomosynthesis system. The second version of the Nanox.ARC is an improved and enhanced version that
was designed, among other things, to address certain deficiencies raised by the FDA during their review of the first submission from June
2021. On September 26, 2022, we submitted a 510(k) premarket notification to the FDA as part of our 510(k) application process for the
second version of our multi-source Nanox.ARC 3D digital tomosynthesis system (including the Nanox.CLOUD). On April 28, 2023, we received
a 510(k) clearance from 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 physicists.
Following receipt of clearance from the FDA, and
if authorized by similar regulatory agencies in other jurisdictions, our goal is to finalize deployment of the initial 15,000 Nanox System
units within three years following receipt of FDA clearance for our multi-source Nanox.ARC (including the Nanox.CLOUD). We have started
to ship several units of the Nanox System for purposes of collecting clinical sample images, obtaining regulatory approvals and demonstrations
and training. See "Item 3. Key Information—D. Risk Factors—Products utilizing our technology may need to be approved
or cleared by the FDA and similar regulatory agencies worldwide. We may not receive, or may be delayed in receiving, the necessary approval
or clearance for our future products, which would adversely affect business, financial condition, results of operations and prospects."
We have also initiated the process to obtain CE
marking for the marketing and sale of our Nanox.ARC (including the Nanox.CLOUD) in the European Union. We have engaged with a Notified
Body and intend to submit requisite technical and other documentation during the coming months.
We expect that the Nanox System will enable us
to accumulate a significant number of medical images, which have the potential to be used by collaborators, such as medical AI-analytics
companies, through machine learning algorithms to increase the probability of early disease detection.
Nanox.MARKETPLACE.
Nanox.MARKETPLACE
(formerly known as the MDW platform), which we acquired from MDWEB in November 2021, is our proprietary decentralized marketplace that
connects imaging facilities with radiologists and enables radiologists to provide, and customers to obtain, remote interpretations of
imaging data. The platform was designed by radiologists for the imaging industry. The radiologists connecting to Nanox.MARKETPLACE include
those radiologists who are part of our network and provide teleradiology services through USARAD, as well as other radiologists, all of
whom undergo an accreditation process that we perform and are required to be certified by the American Board of Radiology. Based primarily
on customer location and area of specialization, radiologists will be matched to conduct the imaging interpretation. The radiologist receives
payment through the platform from the customer upon the delivery of the imaging interpretation. The Nanox.MARKETPLACE service is currently
offered on a standalone basis. In the future, we plan to incorporate the Nanox.MARKETPLACE into the Nanox System, such that images that
were generated by the Nanox.ARC and uploaded to the Nanox.CLOUD, can be streamlined and referred through the Nanox.MARKETPLACE to radiologists
for remote reading.
AI Imaging Solutions
. Following our
acquisition of Zebra, renamed Nanox AI, in November 2021, we offer FDA cleared AI-based software imaging solutions to hospitals, health
maintenance organizations ("HMOs"), integrated delivery networks ("IDNs"), pharmaceutical companies, marketplaces
and insurers, that are designed to identify or predict undiagnosed or underdiagnosed medical conditions, through the mining of data of
existing CT scans. We currently offer AI imaging population health solutions aimed at identifying underlying findings, which are correlated
to osteoporosis and cardiovascular disease. In addition, we are currently in advanced stages of developing a product for fatty liver to
help detect patients at risk for more advanced liver disease, such as non-alcoholic liver steatosis ("NASH"). With our AI
imaging population health solutions, we aim to further our mission to enable preventative healthcare through early detection. We also
continue to maintain certain legacy contracts for AI imaging triage solutions.
50
In addition, since the acquisition and completion
of integration with Nanox AI, we have begun to develop AI-based features to enhance the images generated by the Nanox.ARC, with the goal
of improving diagnostic capabilities for the Nanox.ARC in chest and musculoskeletal imaging. Ultimately, we expect to integrate these
AI imaging capabilities, which we refer to as Robodiology, into the Nanox System. Subject to completion of the development and receipt
of requisite regulatory approvals, we plan to offer these AI imaging solutions as an optional service to our MSaaS partners.
Teleradiology Services
.
Following our acquisition of USARAD in November 2021, we offer teleradiology services to customers in the U.S. market and an additional
seven countries by U.S.-based radiologists, certified by the American Board of Radiology. We offer imaging interpretation services for
radiology practices, hospitals, medical clinics, diagnostic imaging centers, urgent care facilities and multi-specialty physician groups
and USARAD contracts directly with these customers. In addition, we provide second opinion radiology readings, primarily to imaging centers.
We have a network of over 116 independent radiologists in our marketplace, all of whom have undergone an accreditation process by us,
and we provide our teleradiology services to approximately 187 customers representing approximately 241 facilities. We allocate images
that we receive from our customers, through our picture archiving and documentation system, to radiologists in our network based on the
radiologist's area of specialization. Payment is made by the customer directly to us monthly based on the number of monthly readings
and we pay the radiologist a predetermined fixed fee per reading.
Currently, our teleradiology services are offered
as a standalone product through USARAD. In the future, we plan to incorporate our teleradiology services as part of our Nanox System offering.
Limitation of Current Medical Imaging Solutions and Our Market Opportunity
The main categories of current medical imaging
systems that use X-ray sources include legacy X-ray systems, CT, mammography, fluoroscopy and angiogram. The analog X-ray source used
by these systems produces X-rays by accelerating electrons to high energies, causing them to hit a metal target from which the X-rays
are emitted. This requires a significant amount of electrical energy to be transferred to the X-ray tube. Due to the heat generated by
this process, one of the most complex mechanical challenges is cooling the analog X-ray source. In addition, for CTs, the mechanical structure
is even more complex because the analog X-ray source needs to rotate in a heavy gantry at high speed. We believe these are key factors
leading to the high cost and complexity of existing medical imaging systems, which in turn significantly limits the availability of medical
imaging for early detection globally.
According to a report from the Pan American Health
Organization and World Health Organization ("WHO") in 2012, approximately two-thirds of the world population did not have
access to medical imaging. Further, many people with access to medical imaging face substantial wait times for scanning. For example,
in Canada, access to medical imaging procedures is a growing problem with months of reported wait times for MRI and CT screening. Long
wait times not only negatively impact patient outcomes but also add significant costs to the Canadian healthcare system each year due
to delays in detection and treatment. Wait times for a CT scan can be longer than six weeks in Scotland, over 12 months in Ireland, and
in the UK, tens of thousands of suspected cancer patients face month-long wait times to discover whether they have a particular illness
due to delays in analyzing scans and X-rays.
In addition, most market participants, including
medical imaging manufacturing companies, medical imaging providers and radiologists, among others, have not provided the same level of
end-to-end medical imaging services. One of the reasons is that the scanning process is currently not integrated with the diagnostics
process, which contributes to extended wait times for image diagnostics by experts.
According to a report of Fortune Business Insights
from January 2022, the global medical imaging market size was $36.19 billion in 2020, and the market is expected to grow from $37.97 billion
in 2021 to $56.53 billion in 2028 at a CAGR of 5.8% in the 2021-2028 period. The X-ray equipment segment held a dominant market share
in 2020, accounting for 33.9% of the global medical imaging market share in such period. Further, according to such report, increasing
use of advanced AI-enabled diagnostic equipment for the rapid diagnosis and predictive analysis in developed countries is one of the major
factors anticipated to contribute to the rising product demand during the forecast period. Currently, only a handful of players operating
in the market are providing AI-enabled imaging technologies to the healthcare industry.
The Nanox Ecosystem
The Nanox System
We have developed, and continue to improve, the
Nanox System, which has two integrated components — hardware (Nanox.ARC) and software (Nanox.CLOUD). The Nanox.ARC, a 3D tomosynthesis
imaging system, is designed to integrate our proprietary and novel digital X-ray source, known as Nanox.SOURCE. Our X-ray source is based
on a novel digital MEMs semiconductor cathode that we believe can achieve the same functionalities as legacy X-ray analog cathodes, while
allowing for lower-cost production than existing medical imaging systems. We have been developing this technology over ten years towards
the goal of commercial applicability.
Our technology aims to disrupt the medical imaging
market by providing accessibility and affordability on a global scale. Our goal is to enable medical institutions and other significant
medical players to either employ our solutions as a closed end-to-end system or to adopt a modular approach to our technologies, by acquiring
or licensing our different components and integrating our technologies into their specific product.
51
Legacy Analog X-ray Source and Limitations of Existing Medical
Imaging Systems
The X-ray tube technology has essentially remained
unchanged since its inception in 1895. For any type of imaging system to generate X-rays, the system must use X-ray tubes as a source
for the X-rays. The X-ray tube converts electrical power into X-rays by accelerating electrons to high energies, causing them to hit a
metal target from which the X-rays are emitted. X-rays can only be produced if the X-ray tube is energized, which has historically required
a significant amount of electrical energy to be transferred to the X-ray tube. However, only a small amount of the energy deposited into
the X-ray tube is actually converted into X-rays; the majority of the energy turns into heat. This is called a thermionic (heat-based)
mode of operation where a metal filament needs to be heated up to approximately 2,000°C to generate the electron stream (a "cathode")
that will hit a metal target (an "anode") to generate the photon-based X-ray stream resulting from that high-energy impact.
Heating the filament to approximately 2,000°C
requires the mechanical cathode support systems to withstand high temperatures within a high vacuum, high voltage environment. Tungsten
was introduced into the X-ray tube in 1903 for its properties of a high melting point and ductility. The tungsten filaments still used
today are critical components of X-ray tubes, but they limit the lifetime of the X-ray tube due to the progressive evaporation of filament
material under these high temperatures. At temperatures of up to 2,000°C, the filament evaporates in hot spots close to the peak temperature
locations which over time can cause a catastrophic failure of the filament.
We believe that the use of
the legacy analog X-ray source is one of the key factors for the high cost of existing medical imaging systems. The main categories of
medical imaging systems that use X-ray sources include legacy X-ray systems, CT (3D cross-sectional 360° "slicing"
X-ray imaging), mammography (2D and 3D breast X-ray imaging), fluoroscopy (real-time X-ray video imaging) and angiogram (blood vessels,
contrast X-ray imaging). CT scanners, for example, are complex diagnostic imaging systems that use X-rays to take images of a patient's
internal structures and organs. Due to the limitations of the analog X-ray source described above, general radiographic X-ray tubes are
not well suited for use in a CT scanner. CT scanners instead use a specialized X-ray tube designed to withstand the excessive amount of
heat produced by continuous energization. This X-ray tube is located in the gantry, which is the largest part of a CT scanner and consists
of the X-ray detectors, the mechanical supports and the scanner housing. Due to the heat generated by this process, one of the most complex
mechanical challenges is cooling the analog X-ray source while rotating it in a heavy gantry at high-speed. One solution used is the rotating
anode, where a tungsten metal disk rotates at high revolutions per minute so the electron beam hits a different spot on the disk on a
continuous basis to prevent the concentration of heat in one spot on the disk and reduce the likelihood of overheating or burning. In
addition, CT scanners require a long continuous exposure time to create 3D images of the patient's body using multiple X-ray images,
which means that the X-ray tube must be continually energized and that patients are continuously exposed to radiation throughout that
period. As a result of these complexities, most high-quality X-ray tubes for a CT scanner weigh between approximately 50 and 100 kilograms
with the cooling mechanism.
Our Novel Digital X-ray Source
Realizing that the X-ray tube technology has essentially
not changed in more than 100 years and remains a significant source of complexity and cost-driver of existing X-ray-based medical
imaging systems, we developed a novel digital X-ray source that we believe addresses these drawbacks and will enable a new class of medical
imaging systems that can be produced at a significantly lower cost than the existing systems.
Our technology has its roots in field emission
display ("FED") technology. FED technology was originally developed by Sony with other technology partners, for television
screens and monitors, offering a novel way of lighting screen pixels compared to traditional cathode-ray tubes that were based on a one-source
electron gun beam. The field emission display innovation used multiple nano-scale electron guns to achieve a much higher quality image
with significantly reduced motion blur effects. In 2009, after having invested substantial resources in the development of this technology
for over a decade including through a joint venture called Field Emission Technologies, Inc. ("FET"), Sony ceased development
of the project.
In 2009, FET dissolved and transferred certain
assets to FET Japan Inc. ("FETJ"). Scientists on our team, who worked at FETJ, applied their expertise to develop non-display
related applications, including our X-ray source technology. In 2011, our predecessor company acquired certain non-display related know-how
from FETJ and certain members of the FETJ technical team joined us.
After acquiring the technology, we spent over eight
years developing a digital X-ray source for the medical imaging industry that could be produced on a commercial scale. Our X-ray source
is a MEMs-based semiconductor cathode that achieves electron emission by a non-thermionic low-voltage trigger to approximately 100 million
nano-scale molybdenum cones that act as multiple electron "guns," instead of a single heated filament. The cathode is housed
in a customized X-ray tube.
52
We believe our X-ray source has the following technological
advantages over the analog X-ray source:
Reduced duration of radiation exposure
.
Our X-ray source uses a digital chip that is designed to provide better control and enables near-instantaneous on/off toggling of the
electron beam. This source control also enables a precise "stop and start" operation, which we believe can potentially result
in significantly reduced duration of radiation exposure compared to an analog X-ray source.
X-ray source KvP / mA decoupling.
Our X-ray
source is designed to create imaging using one X-ray source chip because there is complete independence and separation between the strength
of X-ray penetration and the amount of photons for illumination (referred to as "KvP / mA"). KvP represents the speed of electrons
that gives the X-ray its penetrating power, and higher KvP means the X-rays can penetrate higher density materials such as bones. mA represents
the amount of photons or brightness levels of the X-ray image. For legacy X-ray sources, KvP / mA ratios were codependent in a linear
relationship and each X-ray source could only produce one set of KvP / mA combinations dedicated for a particular use (for example, either
tissue images or bone images, but not both simultaneously). We believe our X-ray source technology can produce multi-spectral imaging
from one X-ray source, which allows for variable energy levels to be controlled during one scan. Therefore, one source chip can be used
for multiple types of scans, such as head-scans, abdomen, mammography and angiograms, involving both soft and hard tissues at variable
densities, simultaneously. We believe this multi-spectral imaging could also be applied to real-time video imaging. Our latest working
prototype uses up to 160 KvP / mA under lab conditions, and we intend to commercialize the multi-source Nanox.ARC with a range of 40 –
110 KvP / mA.
Longer lifetime
. Our X-ray source is based
on a field of multiple electron guns on our MEMs-based cathode that spread the load of electron generation among many "producers"
compared to a single filament that heats to a high temperature in the analog X-ray tube. As a result, our digital X-ray source is designed
to produce an electron beam from different locations on the chip towards the anode during each duty cycle without the need for the complex,
high precision rotating mechanism. In addition, the near instant on/off toggling feature of our digital X-ray source is designed to allow
us to reduce the duration of each operation. As a result, we believe our medical imaging system will have higher stability and a longer
lifetime, with a longer mean time between failures.
Simplified hardware structure
. Because our
chip-based X-ray source and tube are designed to be quickly triggered electronically, we are able to have multiple stationary-anode tubes
arranged around the patient as opposed to one larger tube that rotates around the patient. We believe this could reduce the complexity
and cost of the Nanox.ARC compared to legacy imaging devices. This current approach to increase durability of the tungsten anode in imaging
devices, the rotating anode mechanism requires both a significant increase in tube size and mechanical component cost to allow for the
complex movements of the tube. In contrast, we believe by using our X-ray source we will be able to significantly reduce the size of X-ray
tubes and simplify the structure of our medical imaging system.
We believe our X-ray source has the potential to
replace the legacy X-ray source in other existing imaging systems, as well as the X-ray source in systems used in other industries, such
as security scanners.
Nanox System
We have developed, and continue to improve, the
multi-source Nanox.ARC, a medical device that integrates our proprietary and novel X-ray source. Subject to receiving requisite regulatory
clearance and approval, the version of the multi-source Nanox.ARC that we expect to introduce to the market is expected to be a 3D tomosynthesis
imaging system that produces a 3D reconstruction of the scanned human body part. The Nanox.ARC, using our X-ray source, is designed to
produce partial-body scans of various body parts, with remote operation capability, and to have a full kVp / mA energy throughout range
as per industry standards, multi-spectral imaging range, as well as cloud connectivity and standard compliance safety mechanisms. It is
designed for easy setup and operation with multiple stationary X-ray tubes arranged around the patient. We anticipate that part of the
software will be used to run the Nanox.ARC will be cloud-computing based and integrated with the Nanox.CLOUD, as further explained below.
In addition to the Nanox.ARC, we have developed,
and continue to improve, the Nanox.CLOUD, a companion cloud software that will allow for the delivery of medical screening as a service.
With the Nanox.CLOUD, we anticipate that the high-cost components of existing medical imaging systems, such as analytics and computing
software that are traditionally installed via multiple licenses on-premise and on a per-system basis, will become centralized through
the cloud.
We believe this will significantly reduce on-going
software and IT licensing costs and enable a wide range of functionalities, such as multiple AI diagnostics and remote support. By integrating
the Nanox.CLOUD with the Nanox.ARC, we believe the Nanox System could provide a streamlined process and end-to-end medical imaging service,
including services such as image repository, radiologist matching, online and offline diagnostics review and annotation, connectivity
to diagnostic assistive AI systems, billing, monitoring and reporting.
53
We believe the Nanox System,
following receipt of clearance from the FDA, and if cleared and approved by the requisite regulatory authorities in other jurisdictions,
if successfully deployed, will streamline the entire medical screening process ranging from scanning to support diagnostics, and solve
the bottleneck of imaging-to-diagnostics.
We also expect to be able to offer the Nanox System
for a substantially lower cost than existing medical imaging systems, which we believe is key to achieving our goal of making early-detection
medical imaging systems more accessible globally. We believe our novel X-ray source is crucial to our ability to substantially reduce
the manufacturing cost of the Nanox.ARC. Our digital X-ray source generates X-ray radiation that is measurably identical in all key metrics
to the X-ray radiation generated by existing analog X-ray sources, but without creating the high temperature that results from the filament
used in the analog X-ray tube, thereby eliminating the need for the costly cooling equipment. In addition, our digital X-ray source is
designed to enable the Nanox.ARC to have multiple stationary tubes arranged around the patient, which allows for a more simplified structure,
as opposed to requiring the heavy, complex, high-precision rotating mechanisms used in legacy CT devices. As a result, we expect that
if we achieve the expected scale, we will be able to offer the Nanox System at a substantially lower cost than the cost of existing medical
imaging systems based on analog X-ray sources.
As we continue to develop the Nanox System, we
continue to implement a multi-step approach to the regulatory clearance process. On June 17, 2021, we submitted a 510(k) premarket notification
application to the FDA for the first version of our multi-source Nanox.ARC 3D digital tomosynthesis system. On August 12, 2021, we received
a request for additional information from the FDA concerning the first submission of our multi-source system. On January 10, 2022, we
withdrew our first submission of our multi-source system. On January 12, 2022, we submitted to the FDA a Q-submission for the second version
of our multi-source Nanox.ARC 3D digital tomosynthesis system. The second version of the Nanox.ARC is an improved and enhanced
version that was designed, among other things, to address certain deficiencies raised by the FDA during their review of the first
submission from June 2021. On September 26, 2022, we submitted a 510(k) premarket notification to the FDA as part of our 510(k) application
process for the second version of our multi-source Nanox.ARC 3D digital tomosynthesis system (including the Nanox.CLOUD). On April 28,
2023, we received a 510(k) clearance from 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 physicists.
Following receipt of clearance from the FDA, and
if authorized by similar regulatory agencies in other jurisdictions, our goal is to finalize deployment of the initial 15,000 Nanox System
units within three years following receipt of FDA clearance for our multi-source Nanox.ARC (including the Nanox.CLOUD). We have started
to ship several units of the Nanox System for clinical image samples, regulatory approvals and demonstration and training purposes. To
date, we have not obtained feedback from the FDA regarding the regulatory pathways for the novel digital X-ray source.
We expect to commercialize the second version of
the multi-source Nanox.ARC and the Nanox.CLOUD as the Nanox System.
We expect that the Nanox System will enable us
to accumulate a significant number of medical images, which have the potential to be used by collaborators, such as medical AI-analytics
companies, through machine learning algorithms to increase the probability of early disease detection.
Business Model
We plan to commercialize our X-ray source technology
through three simultaneous business models: (i) the Subscription Model, (ii) the Sales Model and (iii) the Licensing Model.
We expect the Subscription Model to be our primary business model for the X-ray source technology and the key vehicle to achieving our
vision of increasing early detection of medical conditions that are discoverable by X-ray.
The Subscription Model (MSaaS Model)
The foundation of the Subscription
Model is our integrated offering of the Nanox.ARC and the Nanox.CLOUD, which we refer to as the Nanox System. Under the Subscription Model,
which we also refer to as the MSaaS model (Medical Software as a Service), we expect to sell the Nanox System, following receipt of clearance
from the FDA, and if cleared or approved by the requisite regulatory authorities in other jurisdictions, at low cost or to provide the
system at no cost, and to receive a portion of the proceeds from each scan as the right-to-use licensing fee, and potentially additional
fees for usage of the Nanox.MARKETPLACE, AI capability and teleradiology services, with the remaining amount allocated among our partners,
including the local operators, radiologists, cloud storage providers, medical AI software providers and others, on a case by case basis.
While the actual pricing charged by local operators may be greater than our suggested retail price, the retail price per scan in all markets
other than the United States is still expected to be substantially less than the global average. In the United States, we expect the retail
price to represent a significant reduction compared to the average cost of a CT scan. We expect the Nanox System will be operated by local
operators independent from us, but we would contract with third parties to provide the day-to-day maintenance of the Nanox System.
54
While we believe our novel X-ray source could provide
existing market participants with the paradigm shift needed for preventive healthcare disruption, we also believe existing market participants
are not likely to undertake the change-leadership route and will be slow to adopt the MSaaS model. Accordingly, following receipt of clearance
from the FDA, and if authorized by similar regulatory agencies in other jurisdictions, our goal is to finalize deployment of the initial
15,000 Nanox System units within three years following receipt of FDA clearance for our multi-source Nanox.ARC (including the Nanox.CLOUD)
to jumpstart the MSaaS-based medical imaging market, including in the United States and certain countries in Asia, Europe, Africa, Latin
America and Australia.
The Sales Model
In certain countries, we intend
to commercialize our X-ray source technology using the Sales Model to accommodate specific local regulatory requirements. Under this model,
we expect to sell the Nanox System, following receipt of clearance from the FDA, and if cleared or approved by the requisite regulatory
authorities in other jurisdictions, for a one-time charge. We expect this retail price to be higher than the upfront sales price under
the Subscription Model but still substantially lower than the cost of existing medical imaging systems. If required by applicable regulatory
requirements in any jurisdiction, we may enter into arrangements with third-party cloud vendors, on a case-by-case basis, which will be
responsible for providing the cloud services (instead of the Nanox.CLOUD) and will be paid separately by the owner-operators of the Nanox
Systems. In addition, we expect to contract with third-party service providers to provide maintenance services for the Nanox Systems at
the owner-operators' own costs.
The Licensing Model (OEM Model)
While we believe the medical imaging industry will
eventually migrate towards the recurring revenue-based MSaaS model, we expect certain leading market participants will be slower to adopt
this model. For these market participants, we expect to provide an intermediate solution through which they will adopt our X-ray source
technology for their existing systems. Under the Licensing Model, which we also refer to as the OEM (Original Equipment Manufacturer)
model, we would be engaged to tailor our X-ray source to the specific systems of medical imaging device manufacturers or other X-ray device
manufacturers or to license our X-ray source technology to them to develop new types of imaging systems for a one-time licensing fee upfront
for the X-ray source, as well as recurring royalty payments for each system sold that incorporates our X-ray source. The licensees would
be responsible for the operation of the medical imaging systems integrating our X-ray source. Although we expect to initially rely on
the Licensing Model, in part, we view the Licensing Model as a transitional phase, aimed at maximizing the commercial value of our technology
and strategic buy-in from market participants to our vision through partnership and commercial relationships.
Nanox.MARKETPLACE
Nanox.MARKETPLACE (formerly known as the MDW platform),
which we acquired from MDWEB in November 2021, is our proprietary decentralized marketplace that connects imaging facilities with radiologists
and enables radiologists to provide, and customers to obtain, remote interpretations of imaging data. The platform was designed by radiologists
for the imaging industry. The radiologists connecting to Nanox.MARKETPLACE include those radiologists who are part of our network and
provide teleradiology services through USARAD, as well as other radiologists, all of whom undergo an accreditation process that we perform
and are required to be certified by the American Board of Radiology. Based primarily on customer location and area of specialization,
radiologists will be matched to conduct the imaging interpretation.
Nanox.MARKETPLACE has created a payments system
through which the radiologist receives on demand payment from the customer, via the platform, upon the delivery of the imaging interpretation.
The customer can order an image interpretation on an as-need basis, through the web-based platform, without any special hardware or technical
knowledge.
The Nanox.MARKETPLACE service is currently offered
on a standalone basis. In the future, we plan to incorporate the Nanox.MARKETPLACE into the Nanox System, such that images that were generated
by the Nanox.ARC and uploaded to the Nanox.CLOUD, can be streamlined and referred through the Nanox.MARKETPLACE to radiologists for remote
reading.
55
AI Imaging Solutions
Nanox AI (previously known
as Zebra) that we acquired in November 2021, has developed machine learning platforms, based on its database of over 500 million imaging
scans, which facilitate the development of AI medical imaging solutions. Nanox AI has FDA clearance for eight radiology AI solutions,
CE mark in Europe for five radiology AI solutions and regulatory approvals in other countries for its radiology AI solutions. Nanox AI
has been granted over one dozen patents in the field of radiology AI. Nanox AI gathers underutilized image data from CT scans and helps
medical service providers focus on patients that, upon findings generated by use of our AI solutions, require additional medical attention.
Following our acquisition of Nanox AI, we offer
FDA cleared AI-based software imaging solutions to hospitals, HMOs, IDNs, marketplaces, pharmaceutical companies and insurers that are
designed to identify or predict undiagnosed or underdiagnosed medical conditions, through the mining of data of existing CT scans. We
are party to collaboration agreements with marketplaces for access and distribution of our Nanox AI solutions, and agreements with IDNs
and hospitals with respect to our AI imaging solutions. We currently offer AI imaging population health solutions aimed at identifying
underlying findings, which are correlated to osteoporosis and cardiovascular disease. In addition, we are currently in advanced stages
of developing a product for fatty liver to help detect patients at risk for more advanced liver disease such as NASH. With our AI imaging
population health solutions, we aim to further our mission to enable preventative healthcare through early detection. We also continue
to maintain certain legacy contracts for AI imaging triage solutions.
In addition, since the acquisition and completion
of the integration with Nanox AI, we have begun to develop AI-based features to enhance the images generated by the Nanox.ARC, with the
goal of improving diagnostic capabilities for the Nanox.ARC in chest and musculoskeletal imaging. Ultimately, we expect to integrate these
AI imaging capabilities, which we refer to as Robodiology, into the Nanox System. Subject to completion of the development and receipt
of requisite regulatory approvals, we plan to offer these AI imaging solutions as an optional service to our MSaaS partners.
Teleradiology Services
Following our acquisition of USARAD in November
2021, we offer teleradiology services to customers in the U.S market as well as five additional countries. We provide radiologic interpretations
or reads for emergency, routine, and subspecialty care cases through the utilization of our scalable communications network, incorporating
encrypted servers and broadband Internet connections with workflow management and clinical applications software. Our radiologists'
network is comprised of U.S.-based radiologists, certified by the American Board of Radiology. We have a network of over 110 independent
radiologists, all of whom have undergone an accreditation process by us, and we provide our services to approximately 187 customers representing
approximately 241 facilities. We allocate images that we receive from our customers, through our picture archiving and documentation system,
to radiologists in our network based on the radiologist's area of specialization. Payment is made by the customer directly to us
monthly based on the number of monthly readings and we pay the radiologist a predetermined fixed fee per reading.
We offer imaging interpretation services for radiology
practices, hospitals, medical clinics, diagnostic imaging centers, urgent care facilities and multi-specialty physician groups and USARAD
contracts directly with these customers. In addition, we provide second opinion radiology readings. We believe this service offers our
customers a solution to improve service levels, streamline underlying practice economics and enhance physician efficiency without sacrificing
the quality of patient care.
Currently, our teleradiology services are offered
as a standalone product through USARAD. In the future, we plan to incorporate our teleradiology services as part of our Nanox System offering.
Sales and Marketing
X-Ray Technology
.
We plan to commercialize
our X-ray technology using the three simultaneous business models described above broadly across the globe in the next few years, including
in the United States and certain countries in Asia, Europe, Africa, Latin America, and Australia. Our sales and marketing strategy varies
depending on specific geographical regions, as different regions generally require different marketing approaches.
In most countries, other than the United States,
we expect to primarily market through local partnerships with strong national branding and operational market participants in the target
region. These local partners would be engaged in deploying and operating our medical imaging systems, training and recruiting a local
medical professional workforce to operate the systems and providing medical imaging diagnostics for the systems' scan results.
In the United States, we expect to deploy the Nanox
System primarily through our local subsidiaries. In countries other than United States, we also expect to engage local value-added resellers
or integrators in different geographic regions to facilitate the local integration of our systems with health maintenance organizations,
electronic health record systems, payment methods and insurance coverage companies. We estimate that it will take approximately three
to six months of integration and localization efforts before we can generate sales in a given region.
56
AI Solutions
.
We currently focus
our sales and marketing efforts for our AI solutions in the U.S., EU and UK markets and target large hospitals, HMOs, IDNs, marketplaces,
pharmaceutical companies and insurers.
Teleradiology Services and Nanox.MARKETPLACE
.
We currently focus our sales and marketing efforts for our teleradiology services and the Nanox.MARKETPLACE in the U.S. market and target
daytime costumers, which include urgent care facilities, stand-alone imaging facilities and outpatient imaging centers, as well as night-time
and weekend customers, comprised of hospitals and community hospitals (state and local government).
Following the completion of our acquisitions, we
are continuing to explore the potential synergies and the expansion of our offerings. We aim to integrate the Nanox.ARC and the Nanox.CLOUD
with the Nanox.MARKETPLACE, creating a 3D imaging system that enables remote readings of scans with AI-powered imaging analysis and a
global teleradiology solution.
Manufacturing and Supply of the Nanox.ARC
We have optimized the MEMs proprietary manufacturing
process and initially used our own equipment in the clean rooms located at the University of Tokyo to manufacture the MEMs X-ray chip.
We commenced manufacture of the MEMs X-ray chips at our fabrication facility in Korea, which is expected to meet our currently anticipated
manufacturing needs.
We plan to engage with third-party
manufacturers and suppliers for the commercial production of our digital X-ray tubes for use in the Nanox.ARC, following receipt of clearance
from the FDA, and if cleared or approved by the requisite regulatory authorities in other jurisdictions, based on, among other things,
cost effectiveness. We are currently developing both ceramic and glass-based digital X-ray tubes for use in the Nanox.ARC. We are working
with third parties as well as producing digital ceramic tubes at our Korean facility, which is currently our primary manufacturer and
supplier for our digital ceramic tubes. In April 2023, Nanox Korea received ISO 13485 certification for Medical Devices Quality Management
Systems, covering Design, Development, Manufacturing, and Sales of X-Ray Tube for Medical Use, which is valid for a period of three years.
In May 2020, we entered into a three-year contract
manufacturing agreement with FITI for mass production of the multi-source Nanox.ARC. Under the contract manufacturing agreement, FITI
will negotiate and subcontract with other third parties for the commercial supply of the components of the Nanox.ARC in accordance with
the pre-approved supplier list and on the terms to be agreed upon by both parties, except for the MEMs X-ray chip and X-ray tube. As we
further expand our business in connection with the commercialization of our X-ray technology, we also expect to seek to engage alternative
manufacturers of the Nanox.ARC. The agreement will be in effect for three years from the date of the agreement and is renewed for successive
terms of one year unless or until either party notifies the other in writing of its intention not to renew with 90 days' prior notice.
However, due, in part, to travel restrictions as
a result of the COVID-19 pandemic, we decided to manufacture the first Nanox.ARC units in Israel and we engaged with Dagesh to manufacture
Nanox.ARC units in Israel on a purchase order basis. These units are being used for purposes of collecting clinical sample images, obtaining
regulatory approvals and demonstrations and training, and we expect they will be used for the initial global deployment, among other purposes.
MSaaS Agreements for the Nanox System
We have entered into 12 MSaaS agreements to deploy
a total of 6,850 Nanox Systems in 17 regions, including in Europe, South and Central America, Asia, Australia, New Zealand, Russia and
Africa. Under the terms of each agreement, we grant the other party a limited, non-transferable, sub-licensable right to access and operate
the Nanox System in the region applicable for such party. We undertake to provide a specified number of Nanox Systems to each entity based
on agreed shipment schedules, subject to local regulatory approval and material compliance with acceptance test protocol (the "Conditions
Precedent"). The other party undertakes to deploy the Nanox Systems to provide a minimum number of scans per year (generally based
on 7 scans per day and 23 days per month) on a pay-per-scan basis, and to pay a minimum annual fee (including payments to our partners)
ranging from approximately $2 million to $58 million, or approximately $155 million in total, excluding the payments to our partners.
The MSaaS agreements, subject to certain conditions, require each of our counterparties to deliver to us a standby letter of credit or
financial guarantee in the amount equal to the minimum annual fee in favor of us after receipt of the Conditions Precedent. However, there
can be no guaranty that our counterparties will be able to obtain such letters of credit or financial guarantees. In addition, a majority
of our MSaaS agreements are exclusive; however, under several agreements, we may seek alternative partners in the applicable region while
maintaining the possibility to eventually resume the agreement, if the requisite regulatory authorizations are received.
The Nanox Systems provided under each agreement
will remain our property, and the other party will only have a limited license to use the Nanox Systems. In addition, we must approve
in writing any sublicense granted under the applicable agreement. We undertake to provide billing services and training for a local medical
professional workforce to operate the Nanox System and typically also undertake to provide radiology and maintenance services to operate
the Nanox System.
57
Each agreement will be in effect for multiple years,
ranging from three to seven years from the date of the applicable agreement or the date of fulfilment of the Conditions Precedent, as
applicable, and is renewable for an additional multi-year term with both parties' mutual consent. Each agreement may be terminated
by, among other things, notice of the non-breaching party in case of a material breach of a party's material obligations, or by
either party in case of the bankruptcy or insolvency of the other party.
Most of the MSaaS agreements are in initial phases
as the deployment of the Nanox System remains subject to regulatory clearance or approval (including, in certain cases, FDA clearance).
We are collaborating with our partners to obtain the applicable regulatory authorizations and other requisite Conditions Precedent in
the applicable region. In parallel, we have entered into several memorandums of understanding and/or preliminary agreements with existing
and potential partners for evaluation of market penetration and deployment in various regions. Within the scope of these engagements,
we have shipped several Nanox System units for purposes of collecting clinical sample images, obtaining regulatory approvals and demonstrations
and training.
We believe our MSaaS business model has the potential
to expand the total size of the X-ray-based medical imaging market. We plan to measure the success of our MSaaS business model by annual
capacity for Above-the-Line ("ATL") scans which represent the increased capacity of imaging care we can provide to people
that originally had no meaningful access to medical imaging. As we expand our operations and deploy more units of the Nanox System in
an increasing number of countries using the MSaaS model, we expect our ATL scans metric to increase accordingly.
Collaboration Agreements
We enter into collaboration agreements in the ordinary
course of business.
For example, we previously entered into a collaboration
agreement, dated September 8, 2019, with Hadasit Medical Research Services and Development Ltd., a wholly owned subsidiary of the
Hadassah Medical Organization, to collaborate with respect to our medical imaging technology and resulting medical images devices, by
way of (among other things) joint research and development projects.
In addition, on June 4, 2020, we entered into
a collaboration agreement with SK Telecom, pursuant to which we and SK Telecom continue to explore and engage in good faith to develop
a definitive agreement for the deployment of 2,500 Nanox Systems in South Korea and Vietnam, and we have established a wholly-owned subsidiary
in South Korea with the support of SK Telecom for the purpose of manufacturing MEMs X-ray chips for the Nanox.ARC. Although the agreement
expired according to its terms, we continue to explore business opportunities and assess potential collaborations with SK Telecom in various
business areas and opportunities.
We also entered into several non-exclusive collaboration
agreements with certain AI partners and image transfer partners, which we may utilize to complement our in-house AI capabilities, including
those developed by the companies we acquired in November 2021.
Given that the Nanox.CLOUD and the Nanox.MARKETPLACE
are designed with the capability to receive scans from different imaging sources, in addition to the Nanox.ARC, we intend to explore additional
collaboration opportunities in the near future. For example, in 2022, we invested $1.0 million for approximately 1% of the shares of Remedi
co Ltd. ("Remedi"), a Korean radiation specialist company in radiography and therapy based on X-ray components. Remedi is
a privately owned company, and we have an ongoing collaboration in the development of the high voltage power supply for Nanox.ARC. In
August 2022, we entered into a supply agreement with Remedi in order to integrate Remedi's two-dimensional ("2D") imaging
systems (using traditional X-ray tubes) to the Nanox.CLOUD and the Nanox.MARKETPLACE, creating a mobile 2D X-ray system that enables remote
readings of scans with AI-powered imaging analysis and a global teleradiology solution, which we refer to as the "Nanox.CONNECT."
The Nanox.CONNECT is currently deployed in a several beta sites in order to receive local regulatory approvals and explore and evaluate
the business model and the potential service.
Competition
Several large companies, such as General Electric,
Siemens, Philips, Hologic, Varian, Fuji, Toshiba and Hitachi currently dominate the medical imaging market. High regulatory, distribution,
manufacturing and service-related long-term contractual costs represent significant barriers to entry for any new player. We expect that
the existing market participants will remain key players in the future and we aim to form alliances with several of these leading market
participants, including through licensing.
58
Over time, we anticipate that the evolution in
the industry will bring new players into the market. Digital healthcare disruptors such as cloud computing companies or leading IT companies
may enter the industry and we believe that they may become partners over time through our Subscription Model.
As a general matter, we view competition on two
levels:
●
Competing digital X-ray sources with same or better attributes; and
●
Competing enterprises operating an MSaaS business model.
In terms of digital X-ray sources, the field emission
display technology is known and a wide range of industry leaders have used it to attempt to create an alternative, digital source of X-ray.
To our knowledge, the most well-known attempt to achieve a commercial grade, stable digital X-ray source was the use of carbon nano tubes
("CNT") as the base material for a potential field emission-based solution, and at least one company has recently commercialized
an X-ray system based on a CNT solution and there are several other companies currently in the process of developing this technology.
In terms of the MSaaS business model, we currently
seek a first-mover advantage by introducing the Subscription Model, as the main pre-requisite for this model is the low cost of the X-ray
source (when manufactured at scale). However, the primary competition comes from established market participants. While in developing
countries we are experiencing keen interest, the United States and other Western regions already have major market participants that are
well entrenched in the market with strong political influence and the ability to delay deployment of our systems.
With respect to our AI imaging solutions, there
are a number of companies that currently offer AI radiology solutions, such as Aidoc and VIZ.AI, which, to our knowledge, are focused
on life threatening and urgent cases. In addition, legacy healthcare technology companies are expected in the future to increase development
efforts in the field of AI imaging solutions. For example, Siemens Healthineers has developed AI-Rad Companion, which provides automatic
post-processing of imaging datasets through AI-powered algorithms for Siemens CTs.
With respect to our teleradiology services, the
teleradiology market is highly competitive, rapidly evolving, and fragmented, and is subject to changing technology and market dynamics.
The market has recently experienced and is expected to continue to experience competitive pricing pressure and radiologist compensation
pressure. We compete directly with both large and small-scale service providers who offer local, regional and national coverage operations.
We believe that our principal competitors are Envision Physician Services and Radiology Partners. We compete to attract and retain relationships
with customers and radiologists in different ways.
Security and Data Privacy
The Nanox System is being designed and developed
with personal privacy, data security and protection in mind as a top priority for all development parties. Medical imaging information
and other health information is highly personal and sensitive and thus regarded as a prime target for hacks and malicious theft. As part
of our normal operations, we expect to collect, process and retain personal identifying information regarding patients.
We believe we will likely be subject to U.S. rules
and regulations governing data protection, including HIPAA, HITECH and other privacy and data security regulations. See"—Government
Regulation—Healthcare Regulatory Laws—Data Privacy and Security."
Separate from, and in addition to, the GDPR/UK
GDPR requirements, certification requirements for the hosting of health data will vary by jurisdiction (and may or may not apply to hosts
of health data). As the Nanox System is projected to operate in various EEA countries, we may be required to comply with other national
healthcare regulations or regulatory requirements. For example, in France, there is a procedure as of April 1, 2018, for hosts of
health data to obtain a prior certification with the competent certification body. Similarly, in Israel, any provision of cloud-based
systems to public health sector entities requires certain certifications, such as ISO 27001 and ISO 27799 pertaining to the secured processing
of health-related data. Such certifications require further compliance investments and maintenance costs.
We are dedicated to making our systems and software
both HIPAA and GDPR/UK GDPR compliant. We intend to submit our systems to an independent external audit on a regular basis as required
by HHS. We also intend to develop our privacy protocols to comply with the GDPR/UK GDPR. In addition, we are undertaking intendant measures
to ensure a high-level of imaging data encryption, complete separation between the imaging data and personal information (anonymization)
as well as three-factor authentication procedures during on-boarding and usage of the Nanox System. We also intend to undertake to perform
periodic Pen-Tests by external cyber security professionals and publish the results of such audits publicly and without delay on our website
and via public relations channels.
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Government Regulation
The Nanox System and our operations will be subject
to extensive regulation by the FDA, and other federal and state authorities in the United States, as well as comparable authorities in
foreign jurisdictions. The Nanox.ARC will be subject to regulation as medical devices and radiation-emitting devices in the United States
under the FDCA, as implemented and enforced by the FDA, and under comparable regulatory schemes in foreign jurisdictions.
FDA Regulation of Medical Devices
The FDA regulates the development, design, non-clinical
and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket
clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices
to ensure that medical devices distributed within the United States are safe and effective for their intended uses or are substantially
equivalent to a predicate device and otherwise meet the requirements of the FDCA.
FDA Premarket Clearance and Approval Requirements
Subject to certain exceptions, each medical device
commercially distributed in the United States requires either FDA clearance of a 510(k) premarket notification, or approval of a PMA application.
Under the FDCA, medical devices are classified into one of three classes—Class I, Class II or Class III—depending
on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to ensure its safety
and effectiveness. Class I includes devices with the lowest risk to the patient and are those for which safety and effectiveness
can be assured by adherence to the FDA's General Controls for medical devices, which include compliance with the applicable portions
of QSR, facility registration and product listing, reporting of adverse medical events and truthful and non-misleading labeling, advertising
and promotional materials. Class II devices are subject to the FDA's General Controls, and special controls as deemed necessary
by the FDA to ensure the safety and effectiveness of the device. These special controls can include performance standards, post-market
surveillance, patient registries and FDA guidance documents.
While most Class I devices are exempt from
the 510(k) premarket notification requirement, manufacturers of most Class II devices are required to submit to the FDA a premarket
notification under Section 510(k) of the FDCA requesting permission to commercially distribute the device. The FDA's permission
to commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance. Devices deemed
by the FDA to pose the greatest risks, such as life sustaining, life supporting or some implantable devices, or devices that have a new
intended use, or use advanced technology that is not substantially equivalent to that of a legally marketed device, are placed in Class III,
requiring approval of a PMA. Some pre-amendment devices are unclassified, but are subject to the FDA's premarket notification and
clearance process in order to be commercially distributed.
510(k) Clearance Marketing Pathway
The Nanox.ARC is a Class II device that was
subject to premarket notification and clearance under section 510(k) of the FDCA. To obtain 510(k) clearance, we submitted to the FDA
a premarket notification submission demonstrating that the proposed device is "substantially equivalent" to a predicate device
already on the market. A predicate device is a legally marketed device that is not subject to premarket approval, i.e., a device that
was legally marketed prior to May 28, 1976 (pre-amendments device), and for which a PMA is not required, a device that has been reclassified
from Class III to Class II or I, or a device that was found substantially equivalent through the 510(k) process. The FDA's
510(k) clearance process usually takes from three to twelve months, but often takes longer. In certain cases, the FDA may require additional
information, including clinical data, to make a determination regarding substantial equivalence. In addition, the FDA collects user fees
for certain medical device submissions and annual fees and for medical device establishments. For fiscal year 2023, the standard user
fee for a 510(k) premarket notification application is $
19,870
.
If the FDA agrees that the device is substantially
equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially market the device. If the FDA
determines that the device is "not substantially equivalent" to a previously cleared device, the device is automatically designated
as a Class III device. The device sponsor must then fulfill more rigorous PMA requirements, or can request a risk-based classification
determination for the device in accordance with the "
de novo
" process, which is a route to market for novel medical
devices that are low to moderate risk and are not substantially equivalent to a predicate device.
After a device receives 510(k) marketing clearance,
any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification
in its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval or
de novo
reclassification.
The FDA requires each manufacturer to determine whether the proposed change requires submission of a 510(k), a
de novo
request
or a PMA in the first instance, but the FDA can review any such decision and disagree with a manufacturer's determination. If the
FDA disagrees with a manufacturer's determination, the FDA can require the manufacturer to cease marketing and/or request the recall
of the modified device until 510(k) marketing clearance or until PMA approval is obtained or a
de novo
request is granted. Also,
in these circumstances, the manufacturer may be subject to significant regulatory fines or penalties.
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Over the last several years, the FDA has proposed
reforms to its 510(k) clearance process, and such proposals could include increased requirements for clinical data and a longer review
period, or could make it more difficult for manufacturers to utilize the 510(k) clearance process for their products. For example, in
November 2018, the FDA officials announced forthcoming steps that the FDA intends to take to modernize the premarket notification pathway
under Section 510(k) of the FDCA. Among other things, the FDA announced that it planned to develop proposals to drive manufacturers utilizing
the 510(k) pathway toward the use of newer predicates. These proposals included plans to potentially sunset certain older devices that
were used as predicates under the 510(k) clearance pathway, and to potentially publish a list of devices that have been cleared on the
basis of demonstrated substantial equivalence to predicate devices that are more than 10 years old. In May 2019, the FDA solicited
public feedback on these proposals. The FDA requested public feedback on whether it should consider certain actions that might require
new authority, such as whether to sunset certain older devices that were used as predicates under the 510(k) clearance pathway. These
proposals have not yet been finalized or adopted, and the FDA may work with Congress to implement such proposals through legislation.
In September 2019, the FDA finalized guidance describing
an optional "safety and performance based" premarket review pathway for manufacturers of "certain, well-understood device
types" to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety
and performance criteria established by the FDA, thereby obviating the need, in the case of applicable products, for manufacturers to
compare the safety and performance of their medical devices to specific predicate devices in the clearance process. The FDA maintains
a list of device types appropriate for the "safety and performance based" pathway and will continue to develop product-specific
guidance documents that identify the performance criteria for each such device type, as well as the testing methods recommended in the
guidance documents, where feasible. Also in September 2019, the FDA finalized guidance describing its current approach to the "Special
510(k)" program, which provides an optional pathway for certain well-defined device modifications where a manufacturer modifies
its own legally marketed device, and design control procedures produce reliable results that can form, in addition to other 510(k) content
requirements, the basis for substantial equivalence.
PMA Approval Pathway
Class III devices require PMA approval before
they can be marketed, although some pre-amendment Class III devices for which the FDA has not yet required a PMA are cleared through
the 510(k) process. The PMA process is more demanding than the 510(k) premarket notification process. In a PMA, the manufacturer must
demonstrate that the device is safe and effective, and the PMA must be supported by extensive data, including data from preclinical studies
and human clinical trials. The PMA must also contain a full description of the device and its components, a full description of the methods,
facilities and controls used for manufacturing and proposed labeling. Following receipt of a PMA, the FDA determines whether the application
is sufficiently complete to permit a substantive review. If the FDA accepts the application for review, it has 180 days under the FDCA
to complete its review of a PMA, although in practice, the FDA's review often takes significantly longer, and can take up to several
years. An advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations
to the FDA as to the approvability of the device. The FDA may or may not accept the panel's recommendation. In addition, the FDA
will generally conduct a pre-approval inspection of the applicant or its third-party manufacturers' or suppliers' manufacturing
facility or facilities to ensure compliance with the QSR. PMA devices are also subject to the payment of user fees, which for fiscal year
2023 includes a standard application fee of $
441,547
and an annual establishment registration
fee of $6,493.
The FDA will approve the new device for commercial
distribution if it determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable
assurance that the device is safe and effective for its intended use(s). The FDA may approve a PMA with post-approval conditions intended
to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution
and collection of long-term follow-up data from patients in the clinical study that supported PMA approval or requirements to conduct
additional clinical studies post-approval. The FDA may condition PMA approval on some form of post-market surveillance when deemed necessary
to protect the public health or to provide additional safety and efficacy data for the device in a larger population or for a longer period
of use. In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to make periodic
reports to the FDA on the clinical status of those patients. Failure to comply with the conditions of approval can result in material
adverse enforcement action, including withdrawal of the approval.
Certain changes to an approved device, such as
changes in manufacturing facilities, methods or quality control procedures, or changes in the design performance specifications, which
affect the safety or effectiveness of the device, require submission of a PMA supplement. PMA supplements often require submission of
the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device
covered by the original PMA and may not require as extensive clinical data or the convening of an advisory panel. Certain other changes
to an approved device require the submission of a new PMA, such as when the design change causes a different intended use, mode of operation,
and technical basis of operation, or when the design change is so significant that a new generation of the device will be developed, and
the data that were submitted with the original PMA are not applicable for the change in demonstrating a reasonable assurance of safety
and effectiveness. We do not expect any of our products to be marketed pursuant to a PMA.
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Clinical Trials
Clinical trials are almost always required to support
a PMA and are sometimes required to support a 510(k) submission. All clinical investigations of devices to determine safety and effectiveness
must be conducted in accordance with FDA and other regulatory requirements, including the FDA's investigational device exemption
("IDE") regulations which govern investigational device labeling, prohibit promotion of the investigational device and specify
an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents
a "significant risk" to human health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application
to the FDA, which must become effective prior to commencing human clinical trials. If the device under evaluation does not present a significant
risk to human health, then the device sponsor is not required to submit an IDE application to the FDA before initiating human clinical
trials, but must still comply with abbreviated IDE requirements when conducting such trials. A significant risk device is one that presents
a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human
life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health,
or otherwise presents a potential for serious risk to a subject. An IDE application must be supported by appropriate data, such as animal
and laboratory test results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound.
The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies the company that the investigation
may not begin. If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires modification, the
FDA may permit a clinical trial to proceed under a conditional approval.
Regardless of the degree of risk presented by the
medical device, clinical studies must be approved by, and conducted under the oversight of, an Institutional Review Board ("IRB")
for each clinical site. The IRB is responsible for the initial and continuing review of the IDE, and may pose additional requirements
for the conduct of the study. If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a
specific number of investigational sites with a specific number of patients, as approved by the FDA. If the device presents a non-significant
risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate
approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators
obtain informed consent and labeling and record-keeping requirements. Acceptance of an IDE application for review does not guarantee that
the FDA will allow the IDE to become effective and, if it does become effective, the FDA may or may not determine that the data derived
from the trials support the safety and effectiveness of the device or warrant the continuation of clinical trials. An IDE supplement must
be submitted to, and approved by, the FDA before a sponsor or investigator may make a change to the investigational plan that may affect
its scientific soundness, study plan or the rights, safety or welfare of human subjects.
During a study, the sponsor is required to comply
with the applicable FDA requirements, including, for example, trial monitoring, selecting clinical investigators and providing them with
the investigational plan, ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of investigational
devices or on making safety or effectiveness claims for them. The clinical investigators in the clinical study are also subject to FDA
regulations and must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition
of the investigational device and comply with all reporting and recordkeeping requirements. Additionally, after a trial begins, we, the
FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to study
subjects outweigh the anticipated benefits.
Post-market Regulation
After a device is cleared or approved for marketing,
numerous and pervasive regulatory requirements continue to apply. These include:
●
establishment registration and device listing with the FDA;
●
QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process;
●
labeling regulations and FDA prohibitions against the promotion of investigational products, or the promotion of "off-label" uses of cleared or approved products;
●
requirements related to promotional activities;
●
clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of certain modifications to PMA-approved devices;
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●
medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur;
●
correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health;
●
the FDA's recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and
●
post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
Our manufacturing processes are required to comply
with the applicable portions of the QSR, which cover the methods and the facilities and controls for the design, manufacture, testing,
production, processes, controls, quality assurance, labeling, packaging, distribution, installation and servicing of finished devices
intended for human use. The QSR also requires, among other things, maintenance of a device master file, device history file and complaint
files. As a manufacturer, we will be subject to periodic scheduled or unscheduled inspections by the FDA. Our failure to maintain compliance
with the QSR requirements could result in the shut-down of, or restrictions on, our manufacturing operations and the recall or seizure
of our products, which would have a material adverse effect on our business. The discovery of previously unknown problems with any of
our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the
use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions
on the device, including the removal of the product from the market or voluntary or mandatory device recalls.
The FDA has broad regulatory compliance and enforcement
powers. If the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or
enforcement actions, which may result in any of the following sanctions:
●
warning letters, untitled letters, fines, injunctions, consent decrees and civil penalties;
●
recalls, withdrawals or administrative detention or seizure of our products;
●
operating restrictions or partial suspension or total shutdown of production;
●
refusing or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified products;
●
withdrawing 510(k) clearances or PMA approvals that have already been granted;
●
refusal to grant export approvals for our products; or
●
criminal prosecution.
Teleradiology
The healthcare industry is highly regulated. Our
ability to operate profitably will depend in part upon the ability of us, our affiliated radiologists, and our customers to obtain and
maintain all necessary licenses and other approvals to comply with applicable healthcare regulations. We believe healthcare regulations
will continue to change. Therefore, we monitor developments in healthcare law and we are likely to be required to modify our operations
from time to time as the business and regulatory environment changes. Although we believe that we are operating in compliance with applicable
federal and state laws, we cannot assure you that review of our business by courts or regulatory authorities will not result in determination
that could adversely affect our operations or that the healthcare regulatory environment will not change in way that restricts our operations.
Future changes in healthcare regulation are difficult to predict and may constrain or require us to restructure our operations, which
could negatively impact our business and operating results.
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Radiological Devices
We and our products will also be regulated by the
FDA under the Electronic Product Radiation Control provisions of the FDCA because the Nanox.ARC contains radiation emitting components,
and because we assemble these components during manufacturing and service activities. The Electronic Product Radiation Control provisions
require radiation-producing products to comply with certain regulations and applicable performance standards. Manufacturers are required
to certify in product labeling and reports to the FDA that their products comply with all necessary standards as well as maintain manufacturing,
testing and sales records for their products. The Electronic Product Radiation Control provisions also require manufacturers to report
product defects and affix appropriate labeling to covered products. Failure to comply with these requirements could result in enforcement
action by the FDA, which can include any of the sanctions described above.
Healthcare Regulatory Laws
Within the United States, our products and our
customers will be subject to extensive regulation by a wide range of federal and state agencies that govern business practices in the
medical device industry. These laws include federal and state anti-kickback, fraud and abuse, false claims, transparency and anti-corruption
statutes and regulations. Internationally, other governments also impose regulations in connection with their healthcare reimbursement
programs and the delivery of healthcare items and services.
U.S. federal healthcare fraud and abuse laws will
generally apply to our activities, among other reasons because we expect that our products will be covered under federal healthcare programs
such as Medicare and Medicaid. The Anti-Kickback Statute is particularly relevant because of its broad applicability. Specifically, the
Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly
or indirectly, in exchange for, or to induce, either the referral of an individual, or the furnishing, arranging for or recommending a
good or service for which payment may be made in whole or part under federal healthcare programs, such as the Medicare and Medicaid programs.
A broad range of financial interactions with a healthcare provider, patient or customer may implicate the Anti-Kickback Statute. Statutory
exceptions and regulatory safe harbors protect certain interactions if specific requirements are met. However, only those interactions
that represent fair market value exchanges generally are protected by a safe harbor or exception. The government can exercise enforcement
discretion in taking action against unprotected activities. Further, a person or entity does not need to have actual knowledge of the
Anti-Kickback Statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert
that a claim involving items or services resulting from a violation of the federal Anti-Kickback Statute also constitutes a false or fraudulent
claim for purposes of the federal False Claims Act or federal civil money penalties statute. Penalties for Anti-Kickback Statute violations
may include both criminal penalties such as imprisonment and fines and civil sanctions such as civil penalties and possible exclusion
from Medicare, Medicaid and other federal healthcare programs. Exclusion would mean that diagnostic tests using our products would no
longer be eligible for reimbursement under federal healthcare programs.
Many states have adopted laws similar to the Anti-Kickback
Statute. Some of these state prohibitions apply to referral of patients for healthcare items or services reimbursed by any payor, not
only federal healthcare programs. Insurance companies may also bring a private cause of action for treble damages against a manufacturer
for a pattern of causing false claims to be filed under the federal Racketeer Influenced and Corrupt Organizations Act. We believe that
we are operating in compliance with applicable federal and state anti-kickback laws and that our contractual arrangements with our customers
are structured in manner that complies with such laws.
Another development affecting the healthcare industry
is the increased use of the federal civil False Claims Act and, in particular, actions brought pursuant to the False Claims Act's
"whistleblower" or "qui tam" provisions. The False Claims Act imposes liability on any person or entity that,
among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a federal healthcare program.
The qui tam provisions of the False Claims Act allow a private individual to bring actions on behalf of the federal government alleging
that the defendant has submitted a false claim to the federal government, and to share in any monetary recovery. In recent years, the
number of suits brought against healthcare providers by private individuals has increased dramatically. In addition, various states have
enacted false claim laws analogous to the Civil False Claims Act, although many of these state laws apply where a claim is submitted to
any third-party payor and not merely a federal healthcare program.
Under the Federal False Claims Act, we may be liable
if we or one of our customers submitted a false claim. If we were found to have violated these laws and regulations and as result submitted
or caused our customers to submit a false claim, any sanctions imposed under the Federal False Claims Act could result in substantial
fines and penalties or exclusion from participation in federal and state healthcare programs which could have a material adverse effect
on our business and financial condition. If we are excluded from participation in federal or state healthcare programs, our customers
who participate in those programs could not do business with us. Federal regulatory and law enforcement authorities regularly review and
enforce activities with respect to Medicare and Medicaid fraud and abuse regulations and other reimbursement laws and regulations, including
laws and regulations that govern our activities and the activities of teleradiologists. These increased enforcement activities may have
a direct or indirect adverse effect on our business, financial condition and results of operations. We believe that we are operating in
compliance with these laws. However, if we are found to have violated such laws, our business, results of operations and financial condition
would be harmed.
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The federal physician self-referral statute, known
as the Stark Law, prohibits physicians from making referrals for certain designated health services, including radiology services, to
any entity with which the physician has a financial relationship unless there is an exception in the statute that allows the referral.
The entity that receives a prohibited referral from a physician may not submit the bill to Medicare for that service. Federal courts have
ruled that violations of the Stark Law, as well as violations of the federal anti-kickback laws described above, can serve as the basis
for Federal False Claims Act suits. Many state laws prohibit physician referrals to entities with which the physician has a financial
interest or require that the physician provide the patient with notice of the physician's financial relationship before making the
referral. Violation of the Stark Law can result in substantial civil penalties for both the referring physician and any entity that submits
a claim for healthcare service made pursuant to a prohibited referral. We believe that all our customer arrangements are in compliance
with the Stark Law. However, these laws could be interpreted in a manner inconsistent with our operations. Federal or state self-referral
regulation could impact our arrangements with certain customers.
The federal Health Insurance Portability and Accountability
Act of 1996, or HIPAA, among other things, created two new federal crimes: healthcare fraud and false statements relating to healthcare
matters. The HIPAA healthcare fraud statute prohibits, among other things, knowingly and willfully executing, or attempting to execute,
a scheme to defraud any healthcare benefit program, including private payors. A violation of this statute is a felony and may result in
fines, imprisonment and/or exclusion from government-sponsored programs. The HIPAA false statements statute prohibits, among other things,
knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent
statement or representation in connection with the delivery of or payment for healthcare benefits, items or services. A violation of this
statute is a felony and may result in fines and/or imprisonment. Similar to the federal Anti-Kickback Statute, a person or entity does
not need to have actual knowledge of the statutes or specific intent to violate them in order to have committed a violation.
In addition, HIPAA authorizes the imposition of
civil money penalties against entities that employ or enter into contracts with individuals or entities who have been excluded from participation
in the Medicare or Medicaid programs. We perform background checks on our affiliated radiologists, and we do not believe that we engage
or contract with any excluded individuals or entities. However, a finding that we have violated this provision of HIPAA could have a material
adverse effect on our business and financial condition. We believe that our services have not historically been provided in a way that
would place either our clients or ourselves at risk of violating HIPAA anti-fraud statutes, including those in which we may be considered
to receive an indirect reimbursement, because of the reassignment by us to our customers of the right to collect for final reads. We have
entered into agreements, and may in the future enter into agreements, with hospitals that are subject to an integrity order by the U.S.
Department of Health and Human Services Office of the Inspector General (the "HHS-OIG") that requires the hospital to ensure
that each subcontractor to the hospital fully complies with HIPAA and the terms of the integrity order, including written policies and
procedures assuring compliance, and subjects each subcontractor to audit at the determination of the HHS-OIG. We could be vulnerable to
prosecution under these statutes if any of our customers deliberately or recklessly submits claims that contain false, misleading or incomplete
information. In addition, the administrative simplification provisions of HIPAA require the promulgation of regulations establishing national
standards for, among other things, certain electronic healthcare transactions, the use and disclosure of certain individually identifiable
patient health information and the security of the electronic systems maintaining this information. These are commonly known as the HIPAA
transaction and code set standards, privacy rule and security rule, respectively. The administrative simplification provisions of HIPAA
direct the federal government to adopt national electronic standards for automated transfer of certain healthcare data among healthcare
payers plans and providers, intended to enable healthcare industry participants to communicate electronic data using a single set of standards.
We are a covered entity under HIPAA and as such we must operate in compliance with the electronic transaction and code set standards,
privacy rule and security rule. We are also a business associate under HIPAA because we perform services for or on behalf of other covered
entities. We have developed policies, procedures and systems for handling patient health information that we believe comply with the requirements
of HIPAA.
Laws and regulations have also been enacted by
the federal government and various states to regulate the sales and marketing practices of medical device and pharmaceutical manufacturers.
The laws and regulations generally limit financial interactions between manufacturers and healthcare providers, require pharmaceutical
and medical device companies to comply with voluntary compliance standards issued by industry associations and the relevant compliance
guidance promulgated by the U.S. federal government and/or require disclosure to the government and/or public of financial interactions
(so-called "sunshine laws"). Many of these laws and regulations contain ambiguous requirements or require administrative guidance
for implementation. Manufacturers must adopt reasonable interpretations of requirements if there is ambiguity and those interpretations
could be challenged. Given the lack of clarity in laws and their implementation, our activities could be subject to the penalty provisions
of the pertinent federal and state laws and regulations.
In addition, the practice of medicine, including
the practice of radiology and teleradiology, is subject to state licensure laws, regulations and approvals. Physicians located in one
state who provide professional medical services to patients located in another state via a telemedicine system must ordinarily hold a
valid license to practice medicine in both the state where the physician is located and the state in which the patient is located. We
have established a system for ensuring that our affiliated radiologists are appropriately licensed under applicable state law. If we are
unable to obtain proper physician licenses or hospital credentials on behalf of our affiliated radiologists, or if our affiliated radiologists
lose those licenses or credentials, our business financial condition and results of operations may be negatively impacted.
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Generally, corporate practice of medicine laws
prohibit anyone but duly licensed physicians from exercising control over the medical judgments or decisions rendered by another physician.
Given that general prohibition, some states permit business corporations to hold directly or indirectly customer contracts for the provision
of medical services, including radiology and teleradiology, and to own a medical practice that provides such services, provided that only
physicians exercise control over the medical judgments or decisions of other physicians. Moreover, the laws of such states may prohibit
anyone but a physician who is duly licensed in such state from owning any interest in a medical practice that is incorporated or doing
business in such state or the state of incorporation. Failure to comply with these laws could have material and adverse consequences including
the judicially sanctioned refusal of third-party payers to pay for services rendered, the absolute right of customers to immediately repudiate
the contract for services, malpractice claims or license revocation or suspension proceedings against the provider and possibly the hospital
based upon the alleged violation of statute designed to protect the public, as well as civil or criminal penalties. We believe that we
are following the corporate practice of medicine laws in each state in which our affiliated radiologists provide medical services. Each
of these are duly licensed or qualified as a medical practice in the states where such license or qualification is required. We do not
exercise control over the medical judgments or decisions of our affiliated radiologists. While we believe we follow the requirements of
the corporate practice of medicine laws in each state where our affiliated radiologists provide services, these laws and their interpretations
are continually evolving and may change in the future. Moreover, these laws and their interpretations are generally enforced by state
courts and regulatory agencies that have broad discretion in their enforcement. If our arrangements with our affiliated radiologists or
our customers are found to violate state laws prohibiting the practice of medicine by general business corporations or fee splitting,
our business financial condition and ability to operate in those states could be adversely affected.
Many states have enacted laws prohibiting physicians
from splitting fees derived from the practice of medicine with anyone else. We believe that the management administrative technical and
other nonmedical services we provide to each of our affiliated radiologists for service fee does not constitute fee splitting. Our belief
notwithstanding, these laws and their interpretations also vary from state to state and are also enforced by state courts and regulatory
authorities that have broad discretion in their enforcement. If our arrangements with our affiliated radiologists or our customers are
found to violate state laws prohibiting the practice of medicine by general business corporations or fee splitting our business financial
condition and ability to operate in those states could be adversely affected.
CMS has certain anti-markup rules relating to diagnostic
tests paid for by the Medicare program. The anti-markup rules are generally applicable where a physician or other supplier bills for the
technical component or professional component of a diagnostic test that was ordered by the physician or other supplier or ordered by a
party related to such physician or other supplier through common ownership or control, and the diagnostic test is performed by a physician
that does not share a practice with the billing physician or other supplier. If the anti-markup rule applies to a diagnostic test, then
the reimbursement provided by Medicare to the billing physician or other supplier for that transaction may be limited. Because our affiliated
radiologists do not order diagnostic tests and no party under common control with either us or our affiliated radiologists orders diagnostic
tests, we believe that the anti-markup rule does not apply to the professional services our affiliated radiologists perform. However,
this rule could be subject to an interpretation that affects the amounts either we or our customers may be reimbursed by Medicare for
professional diagnostic interpretations.
Coverage and Reimbursement
Over the past few years, the growth rate of advanced
imaging volumes has slowed in part due to additional patient-related cost-sharing programs and an increasing trend of third-party payors
intensifying their utilization management efforts, for example, through benefit managers who require prior authorizations to control the
growth rate of imaging services generally. We expect that these trends will continue.
By way of example, in the United States, the Protecting
Access to Medicare Act of 2014 required CMS, in conjunction with medical specialty societies, to adopt AUC for certain advanced diagnostic
imaging services, including MRI, CT, nuclear medicine (including position emission tomography). Under this provision, payment is to be
made to the furnishing professional for an applicable advanced diagnostic imaging service only if the claim indicates that the ordering
professional consulted a qualified clinical decision support mechanism, as identified by HHS, as to whether the ordered service adheres
to the applicable AUC. Applicable settings include physician offices, hospital outpatient departments, including emergency departments,
ambulatory surgical centers and independent diagnostic testing facilities. Advanced imaging services ordered by certain physicians identified
as having outlier-ordering partners will be subject to prior authorization for applicable imaging services provided to Medicare beneficiaries.
In July 2022, CMS announced that the payment penalty phase for the AUC program would not begin on January 1, 2023 even if the public health
emergency for COVID-19 ended in 2022 and that it was unable to forecast when the payment penalty phase would begin. The outlier methodology
used by CMS will be subject to future notice and comment rulemaking before the prior authorization component is implemented. We cannot
predict the full impact of this project.
Third-party payors may impose limits on coverage
or reimbursement for diagnostic imaging services, including denying reimbursement for tests that do not follow recommended diagnostic
procedures or can only be billed using an unlisted or miscellaneous code. To the extent our customers will depend on third-party payors,
unfavorable coding, coverage and reimbursement policies may constrict the profit margins of our provider customers, which may force us
to lower our fees to attract and retain customers. If we are required to request new billing codes that more precisely identify and describe
our imaging services, coverage is limited or reimbursement rates are inadequate, a healthcare provider might find it financially unattractive
to own our diagnostic imaging systems. It is possible that third-party payor coding, coverage and reimbursement policies will affect the
need or prices for our products in the future, which could significantly affect our financial performance and our ability to conduct our
business.
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In addition, as of December
31, 2022, all of our affiliated radiologists were located within the United States and are eligible to submit to Medicare and state Medicaid
programs for reimbursement for services performed. Where our affiliated radiologists provide final reads that are reimbursable under these
programs, our business model generally provides that we are still paid service fees by our customers who accept reassignment and bear
the risk of loss of reimbursement when collecting from payers. As a result, our service fees do not fluctuate or change based solely on
changes in Medicare or Medicaid reimbursement levels. Medicare reimbursement rules generally provide that the proper Medicare carrier
to pay physicians' claims is the Medicare carrier for the region in which the physician or practice providing the service is located
rather than the Medicare carrier for the region in which the patient receiving the services is located. Many of our affiliated radiologists
are located in a Medicare region that is different from the Medicare region in which the patients and treating hospitals are located.
It may be necessary for our customers to enroll with additional Medicare carriers to properly submit claims for reimbursement. CMS has
stated that for certain interpretation services provided to certain customers, reimbursement will be based upon the location of the interpreting
physician, yet that reimbursement will be made by the Medicare carrier for the region in which the patient and facility are located. Whether
this policy will be expanded to other types of interpretation services and facilities is unclear.
Healthcare Reform
In the United States and certain foreign jurisdictions,
there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system. In
March 2010, the ACA was signed into law and substantially changed the way healthcare is financed by both governmental and private insurers
in the United States. The ACA contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement
adjustments and fraud and abuse changes. Additionally, the ACA imposed, among other things, a new federal excise tax on the sale of certain
medical devices, which, through a series of legislative amendments, was suspended, effective January 1, 2016, and subsequently repealed
altogether on December 20, 2019, provided incentives to programs that increase the federal government's comparative effectiveness
research and implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians
and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.
Since its enactment, there have been judicial and
Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in
the future. By way of example, in 2017, Congress enacted the TCJA, which eliminated the tax-based shared responsibility payment imposed
by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred
to as the "individual mandate." On December 14, 2018, a Texas U.S. District Court Judge (the "Texas District Court
Judge") ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed
as part of the TCJA, the remaining provisions of the ACA are invalid as well. On June 17, 2021, the U.S. Supreme Court held that state
and individual plaintiffs did not have standing to challenge the individual mandate provision of the ACA; in so holding, the Supreme Court
did not consider larger constitutional questions about the validity of this provision or the validity of the ACA in its entirety. Another
case challenging the ACA's requirement that private insurers cover certain preventative services is currently pending before the
Texas District Court Judge. The Texas District Court Judge struck down this requirement with immediate nationwide effect on March 30,
2023, and the U.S. government has appealed the decision to the U.S. Court of Appeals for the Fifth Circuit. It is unclear how these decisions
and appeals, future decisions, subsequent appeals, and other efforts to repeal and replace the ACA will impact the ACA.
Other legislative changes have been proposed and
adopted in the United States since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal
year, which was temporarily suspended from May 1, 2020 through March 31, 2022, followed by a 1% reduction in effect from April 2022 through
June 2022 with the full 2% reduction resuming thereafter, and reduced payments to several types of Medicare providers. We believe the
overall escalating cost of medical products and services being paid for by the government and private health insurance has led to, and
will continue to lead to, increased pressures on the healthcare and medical device industry to reduce the costs of products and services.
Data Privacy and Security
Medical device companies may be subject to U.S.
federal and state and foreign health information privacy, security and data breach notification laws, which may govern the collection,
use, disclosure and protection of health-related and other personal information. In the United States, HIPAA imposes privacy, security
and breach reporting obligations with respect to individually identifiable health information upon "covered entities" (health
plans, health care clearinghouses and certain health care providers), and their respective business associates, individuals or entities
that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered
entity. HIPAA and its respective implementing regulations, including the final omnibus rule published on January 25, 2013, impose
specified requirements relating to the privacy, security and transmission of individually identifiable health information. HIPAA mandates
the reporting of certain breaches of health information to HHS, affected individuals, and if the breach is large enough, the media. Entities
that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information ("PHI"), a
complaint about privacy practices or an audit by HHS, may be subject to significant civil, criminal and administrative fines and penalties
and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with
HHS to settle allegations of HIPAA non-compliance. The Health Information Technology For Economic and Clinical Health Act also increased
the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave
state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA
laws and seek attorney's fees and costs associated with pursuing federal civil actions.
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Even when HIPAA does not apply, according to the
Federal Trade Commission or the FTC, failing to take appropriate steps to keep consumers' personal information secure constitutes
unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C § 45(a).
The FTC expects a company's data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer
information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
Individually identifiable health information is considered sensitive data that merits stronger safeguards. The FTC's guidance for
appropriately securing consumers' personal information is similar to what is required by the HIPAA Security Rule.
Another example of recent U.S. data security requirements
is FDORA, which, among other provisions, requires developers of certain "cyber devices" to design and implement plans to monitor,
identify and address cybersecurity vulnerabilities of those devices and to submit those plans to the FDA as part of every new product
application for a cyber device. "Cyber devices" are defined as devices that include software, connect to the internet, and
contain any technological features that could be vulnerable to cybersecurity threats. This provision entered into effect on March 29,
2023, and FDA has indicated that it expects sponsors of cyber devices to begin to comply with these requirements as of October 1, 2023.
In addition, certain state and non-U.S. laws, such
as the GDPR/UK GDPR, govern the privacy and security of health information in certain circumstances, some of which are more stringent
or broader in scope than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating
compliance efforts. Further, "business associates," defined as independent contractors or agents of covered entities that
create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered
entity, are also subject to certain HIPAA privacy and security standards. Failure to comply with these laws, where applicable, can result
in the imposition of significant civil and/or criminal penalties and private litigation. For example, California enacted the CCPA, which
went into effect January 1, 2020. The CCPA, among other things, creates new data privacy obligations for covered companies and provides
new privacy rights to California residents, including the right to opt out of certain disclosures of their information. The CCPA also
creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with
a data breach. Although the law includes limited exceptions, including for PHI maintained by a covered entity or business associate, it
may regulate or impact our expected processing of personal information depending on the context. Further, the California Privacy Rights
Act (CPRA) imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations
on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It also created a new California
data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.
The majority of the provisions went into effect on January 1, 2023, and additional compliance investment and potential business process
changes may be required. In Europe, the GDPR went into effect in May 2018 and introduces strict requirements for processing the personal
data of individuals within the EEA. Companies that must comply with the GDPR face increased compliance obligations and risk, including
more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million
or 4% of the annual global revenues of the noncompliant company, whichever is greater. Relatedly, following the United Kingdom's
withdrawal from the European Economic Area and the European Union, and the expiry of the transition period, companies have to comply with
both the UK GDPR and the GDPR, the latter regime having the ability to separately fine up to the greater of £17.5 million or 4%
of global turnover. The State of Israel has also implemented data protection laws and regulations, including the Israeli Protection of
Privacy Law of 1981.
Foreign Regulation
As we plan to market and deploy our Nanox System
broadly across the globe, we will be subject to regulations applicable to medical and radiation-emitting devices in the jurisdictions
in which we operate, which regulations vary among countries. While some countries' regulations may not impose barriers to marketing
and selling our products or only require certain notification, others may require that we obtain the clearance, registration or approval
of a specified regulatory body. Process for obtaining such clearance, registration or approvals may involve additional testing and time.
Furthermore, complying with foreign regulatory requirements can be expensive and time-consuming, and we will need to seek for regulatory
clearances or approvals in each country in which we plan to market our products.
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In addition, depending on the country, if we modify
our products, we may need to apply for additional regulatory clearances or approvals before we are permitted to sell the modified product.
Also, for maintaining our authorizations in a particular country, we will need to continue meeting quality and safety standards required
in such country.
Finally, while regulatory clearance or approval
by the FDA does not ensure registration, clearance or approval by regulatory authorities in other countries, registration or regulatory
clearance or approval in one country, or denial thereof, may have effects on the regulatory process in others.
Legal Proceedings
From time to time, we may become involved in various
lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties,
and an adverse result in these or other matters may arise from time to time that may harm our business.
In September 2020, two securities class action
complaints were filed in the United States District Court for the Eastern District of New York against the Company and certain then-current
officers and a director, which were subsequently consolidated and captioned as
White v. Nano-X Imaging Ltd. et al
, Case No. 1:20-cv-04355,
alleging violations of securities laws on behalf of all persons and entities that purchased or otherwise acquired the Company's
publicly traded securities between August 21, 2020 and September 15, 2020, and seeking unspecified damages. On December 7, 2020, proposed
lead plaintiffs submissions were fully briefed, on August 10, 2022, Magistrate Judge Marcia M. Henry issued a Report and Recommendation,
recommending that the Court approve Derson O. Jolteus and Edward Ko as lead plaintiffs, and on August 30, 2022, Judge William Kuntz adopted
the Report and Recommendation. On June 24, 2022, the Company moved to consolidate this action with the action captioned
McLaughlin
v. Nano-X Imaging Ltd. et al
, Case No: 1:21-cv-05517, discussed further below. The Company's motion to consolidate remains outstanding.
On October 31, 2022, Lead Plaintiffs filed an amended complaint, which alleges that defendants violated the federal securities laws in
connection with certain disclosures regarding the Company's FDA submission and customer contracts. Lead Plaintiffs seek to represent
a class of investors who purchased the Company's publicly traded securities between August 21, 2020 and September 15, 2020. On February
3, 2023, the Company moved to stay this action in favor of the McLaughlin action, or, in the alternative, until the Company's pending
motion to consolidate was decided. The Company has not yet responded to the amended complaint.
On October 5, 2021, a class action complaint was
filed in the United States District Court for the Eastern District of New York against the Company and certain of its officers, captioned
McLaughlin v. Nano-X Imaging Ltd. et al
, Case No. 1:21-cv-05517. On January 25, 2022, Magistrate Judge Peggy Kuo appointed Davian
Holdings Limited as Lead Plaintiff in the
McLaughlin v. Nano-X Imaging Ltd. et al
, Case No. 1:21-cv-05517. On April 12, 2022 and
in the same case, the Lead Plaintiff filed an amended complaint, which alleges that defendants violated the federal securities laws in
connection with certain disclosures concerning the cost of the Nanox.ARC system as well as the comparison of the Nanox.ARC to CT scanners.
Lead Plaintiff seeks to represent a class of investors who purchased the Company's publicly-traded securities between August 21,
2020 and November 17, 2021. The Company moved to dismiss the amended complaint, and briefing on that motion was completed on September
9, 2022, and it remains outstanding. On April 28, 2023, the Company signed a term sheet with Lead Plaintiffs in both this action and the
above-referenced consolidated White action to settle all claims in both actions. The settlement is subject to finalization of a formal
settlement agreement and court approval of the settlement.
The Division of Enforcement of the SEC notified
the Company that it is conducting an investigation to determine whether there had been any violations of the federal securities laws.
The Company has been providing documents and information to the SEC and has received a subpoena from the SEC requesting that the Company
provide documents and other information relating to the development cost of the Company's Nanox.ARC prototypes, as well as the Company's
estimate for the cost of assembling the final Nanox.ARC product at scale, among other things. The Company is cooperating with the SEC
in responding to its requests. The duration and outcome of this matter cannot be predicted at this time and the Company is unable to estimate
a loss or range of loss of this investigation.
On October 28, 2021, a complaint was filed in the
United States District Court for the Central District of California against the Company, the Company's recently-formed Delaware
subsidiary and Nanox Gibraltar PLC ("Gibraltar") from which the Company received certain assets, as well as Mr. Ran Poliakine
and certain other unidentified parties, alleging several causes of action including breach of a consulting agreement between the plaintiff
and Gibraltar that was entered into in 2015. The plaintiff demanded payment of unpaid consulting fees from Gibraltar in the amount of
approximately $1 million and approximately $29.5 million from the Company relating to his claimed entitlement to warrants in Gibraltar.
On February 15, 2022, the Company moved to dismiss the complaint on the grounds, among others, that it was not a party to the agreement
with the plaintiff, and it is not Gibraltar's legal successor for any liabilities that Gibraltar may owe to the plaintiff. On June
4, 2022, the Court granted the motion to dismiss with leave to amend. The plaintiff did not amend the complaint, and on July 20, 2022,
the Court entered judgment in the Company's favor.
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On October 5, 2022, a complaint was filed in the
Court of Common Pleas of Washington County, Pennsylvania against several defendants, including Dr. Michael Yuz and USARAD, alleging medical
negligence due to the failure to properly diagnose metastatic breast cancer. Dr Yuz's only involvement in the case was on July 18,
2017, prior to our acquisition of USARAD, when he reviewed and interpreted an imaging study, identified a lesion and referred for an additional
imaging. The only claim against USARAD is for vicarious liability based on Dr. Yuz's involvement, as an employee of USARAD. We intend
to vigorously defend this matter.
As of December 31, 2022, we accrued $8 million
for future settlement expenses in connection with the two pending class action lawsuits against the Company. We are unable to estimate
a range of loss, if any, that could result were there to be an adverse final outcome in the SEC investigation or civil liability
complaint. If an unfavorable outcome were to occur, it is possible that the impact could be material to our results of operations in the
period in which any such outcome becomes probable and estimable.
C. Organizational Structure
NANO-X IMAGING LTD, an Israeli Company ("Nanox
IL"), was incorporated on December 20, 2018 and commenced its operations on September 3, 2019.
On September 19, 2019, Nanox IL established
Nanox Imaging Inc. ("Nanox Japan"), a wholly owned subsidiary in Japan.
On September 25, 2020, Nanox IL established
Nano-X Korea Inc. ("Nanox Korea"), a wholly owned subsidiary in Korea.
On September 13, 2021, Nanox IL established Nano-X
Imaging Inc ("Nanox Inc."), a wholly owned Delaware subsidiary. On November 2, 2021, Nanox Inc. completed the acquisition
of 100% of the shares of USARAD Holdings, Inc. ("USARAD"), a Delaware corporation.
On September 30, 2021, Nanox Inc. established a
new wholly-owned Delaware subsidiary, Nano-X MDW Inc, which owns the platform and other assets purchased by us from MDWEB, LLC on November
3, 2021.
On November 4, 2021, Nanox IL purchased all the
shares of Nano-X AI Ltd. ("Nanox AI"), an Israeli company formerly named Zebra Medical Vision Ltd. Nanox AI has a wholly owned
Delaware subsidiary named Nanox-X AI Inc.
On November 23, 2021, USARAD established another
wholly-owned Delaware subsidiary Nanox RAD Inc.
D. Property, Plants and Equipment
Our principal executive offices are located in
a leased facility in Neve Ilan, Israel.
We lease approximately 550 square
meters (approximately 5,920 square feet) of office space and warehouses. The original lease expired in December 2021, and the Company
exercised the option to extend its lease for an additional 24 months until December 31, 2023.
We lease approximately 620 square meters (approximately
6,670 square feet) of office space in Neve Ilan, Israel, that may be used for offices and technical development. The lease expires in
June 2023. In November 2020, we leased an additional approximately 370 square meters (approximately 3,980 square feet) of office space
in Neve Ilan, Israel. This lease also expires in June 2023.
In March 2022, we signed a new agreement to lease
105 square meters (approximately 1,130 square feet) of office space in Neve Ilan, Israel, until February 2025. In September 2022, we leased
an additional approximately 60 square meters (approximately 645 square feet) of office space in Neve Ilan, Israel, that may be used for
technical development. This lease expires in August 2028.
Nanox Japan (predecessor) leases additional facilities
of approximately 740 square feet of lab space and approximately 190 square feet of space in a clean room at the premises of the University
of Tokyo for research and development activities. The lease automatically renews on a semi-annual basis.
Nanox Inc. leases office space of approximately
2,300 square feet in Fort Lee, New Jersey. The monthly rent payment for this agreement is approximately $6,000.
In December 2020, we purchased approximately 11,889
square meters of land in Yongin, Geonggi province, Korea, on which we built our fabrication facility for approximately $6.2 million, which
is operational.
Nanox AI leases approximately 841 square meters
of office space under an operating lease agreement that expires on November 30, 2024. The monthly rent payment for this agreement is approximately
$19,000.
USARAD leases approximately 6,000 square feet in
Oakland Park, Broward County, Florida, under a lease agreement that expires on December 31, 2027. The monthly rent payment for this agreement
is approximately $12,000.
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Item 4A
Unresolved Staff Comments
Not applicable.
Item 5.
Operating and Financial Review and Prospects
The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes
included elsewhere in this annual report on Form 20-F. This discussion contains forward-looking statements based upon current expectations
that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements
as a result of various factors, including those discussed in the section titled "Item 3. Key Information—D. Risk Factors"
and in other parts of this annual report on Form 20-F. Our consolidated financial statements have been prepared in accordance with U.S.
GAAP. The functional currency of NANO-X IMAGING LTD is the U.S. dollar.
A. Operating Results
Overview
Early detection saves lives—and we at Nanox
are focused on applying our proprietary medical imaging technology and solutions to make diagnostic medicine more accessible and affordable
across the globe. We are developing an end-to-end imaging service solution, which includes the Nanox System, comprised of the Nanox.ARC
using our novel MEMs X-ray source technology, and the Nanox.CLOUD, a companion cloud software, integrated with AI solutions and teleradiology
services. Our vision is to increase early detection of medical conditions that are discoverable by X-ray by improving access to imaging,
reducing imaging costs and enhancing imaging efficiency, which we believe is key to increasing early prevention and treatment, improving
health outcomes and, ultimately, saving lives.
Our imaging solution is designed
as a modular open system, and we intend in the future to explore the expansion of the solution to include additional components, which
may be developed by us or third parties. Following receipt of clearance from the FDA, and if cleared by the requisite regulatory authorities
in other jurisdictions, we plan to market and deploy the Nanox System broadly across the globe at a substantially lower cost compared
to currently available medical imaging systems, such as CT. We believe that, if cleared by the requisite regulatory authorities, as the
Nanox.ARC (including the Nanox.CLOUD) was cleared for marketing by the FDA, our technology's relatively low cost will enable us
to increase accessibility and affordability of early-detection medical imaging systems globally, substantially reduce wait-times for imaging
results and increase early detection rates compared to currently employed imaging process protocol.
We have devoted substantially all of our financial resources to acquiring
the base technology for our X-ray source and related know-how, our AI solutions and our teleradiology services, conducting research and
development activities, organizing and staffing our company, developing our business plan, securing related intellectual property rights
and raising capital. Historically, we have funded our operations primarily with proceeds from the sale of our ordinary shares and warrants
(after September 3, 2019) and those of our predecessor company (prior to September 3, 2019). During the years ended December
31, 2022, 2021 and 2020, we received net cash proceeds of $0.8 million, $7.4 million and $241.0 million, respectively, from the sales
of our and our predecessor's ordinary shares.  In the year ended December 31, 2021, we began to generate revenues through the
sale of teleradiology services and the sale of AI solutions, following the completion of the merger with Zebra, renamed Nanox AI Ltd.,
and the acquisitions of USARAD and the assets of MDWEB in November 2021.
We have incurred significant operating losses since
our inception. Our ability to achieve profitability depends on the successful development and commercialization of our technology and
our products. We incurred net losses of $113.2 million, $61.8 million, and $43.8 million for the years ended December 31, 2022,
2021 and 2020, respectively. As of December 31, 2022 and 2021, we had an accumulated deficit of $259.5 million and $146.2 million,
respectively. We expect to continue to incur significant expenses for at least the next several years as we advance the Nanox System through
further development, regulatory approval and commercial deployment. Following obtaining marketing clearance for the multi-source Nanox.ARC,
we expect to incur significant capital expenditures and commercialization expenses related to product manufacturing, marketing, sales,
regulation, distribution and support. In addition, we continue to incur additional costs associated with operating as a public company,
including significant legal, accounting, investor relations and other expenses.
Our goal is to jumpstart the MSaaS-based medical
imaging market by producing and deploying an initial wave of approximately 15,000 Nanox System units within three years following receipt
of clearance from the FDA for our multi-source Nanox.ARC (including the Nanox.CLOUD). We expect to incur significant expenses for the
manufacturing, installation, deployment, repairs, and maintenance of the Nanox System. As a result, we may need substantial funding
to support our continuing operations and pursue our business strategy before we can generate significant revenues. Until such time as
we can generate significant revenue from sales of services, we expect to finance our operations through the sale of equity, debt financings
or other capital sources, including collaborations, strategic partnerships or marketing, distribution or licensing arrangements with third
parties. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms,
or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back
or discontinue the development and commercialization of one or more of our systems and products or delay our pursuit of potential in-licenses
or acquisitions.
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As of December 31, 2022, we had marketable securities,
cash and cash equivalents of $102.9 million. We believe that our cash on hand and cash equivalents will enable us to fund our operating
expenses and capital expenditure requirements for at least the next twelve months from the date of issuance of the financial statements.
We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect.
See "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources."
Recent Developments
During 2022, we issued (i)
89,286 of our ordinary shares to the former shareholders of Nanox AI due to the partial achievement of a milestone that occurred following
the closing of the acquisition of Nanox AI pursuant to the terms of the Zebra Merger Agreement and (ii) an additional 2,648,424 ordinary
shares to the former shareholders of Nanox AI with respect to any additional amount that could be granted under the Zebra Merger Agreement
pursuant to a settlement agreement between us and the former shareholders of Nanox AI.
On April 28, 2023, the Company
and Dr. Michael Yuz, as the representative of the former stockholders of USARAD, entered into the first amendment to the USARAD SPA, according
to which the parties to the USARAD SPA agreed that (i) the Company shall pay to the former stockholders of USARAD an aggregate amount
of $290,063 in cash and 45,392 ordinary shares, in consideration for the achievement of certain milestones in connection with the first
earn out period, as defined and in accordance with in the USARAD SPA; and (ii) the rights and obligations under the USARAD SPA regarding
the remaining earn out periods were amended such that the parties agreed that the Company shall pay to the former stockholders of USARAD
an aggregate amount of $500,000 in cash and 210,000 ordinary shares as consideration for the remainder of the milestones and applicable
earn-outs under the USARAD SPA. As a result of the amendment to the USARAD SPA, obligations of the Company and the rights of the former
stockholders of USARAD relating to the purchase price (including the earn-outs) under the USARAD SPA have been satisfied in full.
For additional information regarding these acquisitions,
including the consideration that we paid and is payable in connection with these acquisitions, see "Item 4. Information on the Company—A.
History and Development of the Company." Beginning in the year ended December 31, 2021 and continuing in the year ended December
31, 2022, we began to generate revenues through the sale of teleradiology services and the sale of AI solutions.
Components of Our Results of Operations
Revenue
We began to generate revenues in year ended December
31, 2021, through the sale of teleradiology services and the sale of AI solutions, following the completion of the merger with Nanox AI,
and the acquisitions of USARAD and the assets of MDWEB in November 2021. The majority of our revenues are derived from our teleradiology
services, which consist primarily of fees received from various payors based on established billing rates, and also of fees from hospitals
and healthcare providers. We recognize revenue in the period in which performance obligations are satisfied by providing services to our
customers, and record the amount of revenue that reflects the consideration that we expect to receive in exchange for those services.
We have not generated any revenue to date from sales of the Nanox System.
Cost of Revenue
Cost of the sale of teleradiology services mainly
consists of the cost of radiologists and the cost of picture archiving and communication software (a medical imaging technology used to
securely store and digitally transmit electronic images and clinical reports). The cost of the sale of AI solutions mainly consists of
the cost of labor and amortization of intangible assets. In 2022, the cost of revenue through the sale of AI solutions consisted mainly
of salaries and wages expense in the amount of $0.5 million, and amortization of intangible assets of $8.0 million. In 2021, the cost
of revenue through the sale of AI solutions consisted mainly of salaries and wages expense in the amount of $0.4 million and amortization
of intangible assets of $1.3 million. The amortization of intangible assets is the periodic amortization expense with regards to the acquisition
of the shares of Nanox AI since the date of acquisition through the year end.
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Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily
of costs incurred in connection with the research and development of our products. These expenses include:
●
employee-related expenses, including salaries, related benefits and share-based compensation expenses for employees engaged in research and development activities;
●
expenses incurred in connection with the development of our systems and solutions, including payments made pursuant to agreements with third parties, such as outside consultants related to process development and manufacturing activities, as well as patent registrations;
●
costs of components and materials that are used to develop our systems, including payments made pursuant to agreements with third parties;
●
costs of laboratory supplies incurred;
●
facilities, depreciation and other expenses, including direct or allocated expenses for rent and maintenance of facilities, as well as insurance costs; and
●
costs related to compliance with clinical and regulatory requirements.
We recognize external development costs based on
an evaluation of the progress to completion of specific tasks using information provided to us by our suppliers and service providers.
Upfront payments, milestone payments (other than those deemed contingent consideration in a business combination) and annual maintenance
fees under license agreements are expensed in the period in which they are incurred.
Research and development activities are central
to our business. We expect that our research and development expenses will increase substantially over the next several years as we continue
the development and improvement of the Nanox System. We expect to continue to devote a substantial portion of our resources to the Nanox.ARC
multi-source system, the Nanox.CLOUD, the Nanox.MARKETPLACE, our AI solutions and our future systems and solutions for the foreseeable
future.
The successful development and commercialization
of our systems are highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that
will be necessary to complete the development for commercialization of any of our products. This uncertainty is due to the numerous risks
and uncertainties associated with product development and commercialization, including the uncertainty of:
●
the timing and progress of activities to improve our products;
●
our ability to maintain our current research and development
    programs and to establish new ones;
●
the receipt
    of regulatory approvals from applicable regulatory authorities, especially if there will be a need for independent clinical trials
    or validation;
●
the timing, receipt and terms of any marketing approvals from applicable regulatory authorities;
●
our ability to establish new licensing or collaboration arrangements;
●
the performance of our future collaborators, if any;
●
establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;
●
obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;
●
launching commercial sales of our products, including the Nanox.ARC, the Nanox.CLOUD and our AI solutions, whether alone or in collaboration with others; and
●
maintaining a continued acceptable safety profile of the products following approval.
Any changes in the outcome of any of these variables
with respect to the development or improvement of our products could result in a significant change in the costs and timing associated
with the deployment of these products. For example, if the FDA or another regulatory authority were to require us to conduct clinical
trials or other testing beyond what we currently expect, we could be required to expend significant time, personnel and additional financial
resources to complete development of our products. We may never obtain regulatory approval for any of our products and third parties may
never obtain regulatory approvals for any products containing our technology.
73
Marketing and Selling Expenses
Marketing and selling expenses consist of cost
of labor, public relations, participation in conferences and other general marketing and selling expenses.
We anticipate that our selling and marketing expenses
will increase as we begin the commercial deployment of our systems.
General and Administrative Expenses
General and administrative expenses consist primarily
of salaries, related benefits and share-based compensation expense for personnel in executive, finance and administrative functions. General
and administrative expenses also include facilities, depreciation and other expenses, which include direct or allocated expenses for rent
and maintenance of facilities and insurance, as well as professional fees for legal, patent, consulting, investor and public relations,
accounting and audit services.
We anticipate that our general and administrative
expenses will increase as we increase our headcount to support our continued research and development activities and commercialization
of our products. We also incur accounting, audit, legal, regulatory, compliance, directors' and officers' liability insurance
and investor and public relations costs associated with being a public company.
Results of Operations
Comparison of the years ended December 31, 2022 and 2021
The table below summarizes the results of operations
for the years ended December 31, 2022 and 2021, respectively:
Revenue
The table below summarizes our revenue incurred
during the periods presented:
Year Ended December 31,
2022
2021
($ in thousands)
Teleradiology services
$
8,235
$
1,034
AI
343
270
Total
$
8,578
$
1,304
For the year ended December 31, 2022, we reported
revenue of $8.6 million, compared to $1.3 million for the year ended December 31, 2021. During the year ended December 31, 2022, we generated
revenue through the sale of teleradiology services in the amount of $8.2 million and the sale of AI solutions in the amount of $0.3 million.
During the year ended December 31, 2021, we generated revenue through the sale of teleradiology services in the amount of $1.0 million
and the sale of AI solutions in the amount of $0.3 million. The increase in revenue was mainly due to the consolidation of both the teleradiology
services and AI solutions divisions for the full year ended December 31, 2022 as compared to only two months during the year ended December
31, 2021 following the acquisitions in November 2021, as well as an increase of approximately 33% in the sales of our teleradiology business
segment on an annualized basis.
Cost of Revenue
The table below summarizes
our cost of revenue incurred during the periods presented:
Year Ended December 31,
2022
2021
($ in thousands)
Teleradiology services
$
6,933
$
1,000
AI
8,525
1,816
Total
$
15,458
$
2,816
74
For the year ended December 31, 2022, we reported
cost of revenue of $15.5 million, compared to $2.8 million for the year ended December 31, 2021. During the year ended December 31, 2022,
we incurred cost of revenue through the sale of teleradiology services in the amount of $6.9 million and the sale of AI solutions in the
amount of $8.5 million. The cost of revenue through the sale of AI solutions consisted mainly of salaries and wages and share based compensation
expenses in the amount of $0.5 million and amortization of intangible assets of $8.0 million. The amortization of the intangible assets
of developed technology and image big data is the periodic amortization expense with regard to the acquisition of the shares of Nanox
AI since the date of acquisition through the year end. As a result, the cost of revenue recognized for the AI Solutions segment significantly
exceeds the amount of revenue recognized. The cost of revenue through the sale of teleradiology services consisted mainly of cost of radiologists'
expenses in the amount of $4.0 million and amortization of intangible assets of $2.2 million.
During the year ended December 31, 2021, we incurred
cost of revenue through the sale of teleradiology services in the amount of $1.0 million and the sale of AI solutions in the amount of
$1.8 million. During 2021, the cost of revenue through the sale of AI solutions consisted mainly of salaries and wages expense in the
amount of $0.4 million and amortization of intangible assets of $1.4 million. During 2021, the cost of revenue through the sale of teleradiology
services consisted mainly of cost of the radiologists' expenses in the amount of $0.5 million and amortization of intangible assets
of $0.4 million.
Gross Loss
The table below summarizes our gross loss incurred
from each segment during the periods presented:
Year Ended December 31,
2022
2021
($ in thousands)
Nanox.ARC
$
-
$
-
Teleradiology services
1,302
$
34
AI
(8,182
)
(1,546
)
Total
$
(6,880
)
$
(1,512
)
For the year ended December 31, 2022, we reported
a gross loss of $6.9 million, compared to a gross loss of $1.5 million for the year ended December 31, 2021. Our gross profit from teleradiology
services for the year ended December 31, 2022 was $1.3 million. Our gross loss from our AI solutions for the year ended December 31, 2022,
was $8.2 million. Our gross profit from teleradiology services for the year ended December 31, 2021, was $0.0 million. Our gross loss
from our AI solutions for the year ended December 31, 2021 was $1.5 million.
Research and Development Expenses
The table below summarizes our research and development
expenses incurred during the periods presented:
Year Ended December 31,
2022
2021
($ in thousands)
Research and Development Expenses:
Salaries and wages
$
12,486
$
6,047
Share-based compensation
4,806
3,248
R&D - professional services
5,644
6,072
Other
3,571
1,755
Total
$
26,507
$
17,122
Research and development expenses
increased by $9.4 million to $26.5 million for the year ended December 31, 2022, from $17.1 million for the year ended December 31,
2021. The increase in research and development expenses was primarily attributable to the increase of $4.8 million due to the merger with
Nanox AI, increase in salaries and wages in the amount of $2.3 million and the increase in share-based compensation of $0.4 million as
we continued to expand our research and development activities relating to the Nanox System.
75
Sales and
Marketing Expenses
The table below summarizes our sales and marketing
expenses incurred during the periods presented:
Year Ended December 31,
2022
2021
($ in thousands)
Sales and Marketing Expenses:
Salaries and wages
$
1,134
$
1,711
Share-based compensation
997
2,442
Sales and marketing activities
2,245
2,880
Total
$
4,376
$
7,033
Sales and marketing expenses
decreased by $2.6 million to $4.4 million for the year ended December 31, 2022, from $7.0 million for the year ended December 31,
2021. The decrease in sales and marketing expenses was primarily attributable to a decrease in salaries in the amount of $0.6 million
and share-based compensation in amount of $1.4 and sales and marketing activities in the amount of $0.6 million.
General and Administrative Expenses
The table below summarizes our general and administrative
expenses incurred during the periods presented:
Year Ended December 31,
2022
2021
($ in thousands)
General and Administrative Expenses:
Salaries and wages
$
8,180
$
6,159
Share-based compensation
12,721
13,065
Directors' and officers' insurance
4,139
4,445
Professional services
3,234
3,128
Legal fees in connection with the SEC inquiry and class actions
7,730
1,120
Legal fees
1,055
3,356
Rent and Maintenance
722
820
Depreciation and Amortization
353
228
Other
3,116
2,388
Total
$
41,250
$
34,709
General and administrative expenses increased to
$41.3 million for the year ended December 31, 2022, from $34.7 million for the year ended December 31, 2021. The increase in general
and administrative expenses was primarily attributable to an increase of approximately $1.1 million due to the merger with Nanox AI, and
the acquisitions of USARAD and the assets of MDWEB, and an increase of approximately $4.5 million in legal fees primarily due to the SEC
inquiry and class-actions, which was mitigated by a decrease of $0.3 million in our directors' and officers' liability insurance
premium and a decrease of $0.5 million in our professional services.
Change in obligation in connection of acquisitions
Change in obligation in connection of acquisitions
was $20.4 million for the year ended December 31, 2022, as compared to none for the year ended December 31, 2021, due to the
decrease in our contingent earnout liabilities in connection of acquisitions in the same amount, mainly due to the issuance of 89,286
of our ordinary shares to the former equity holders of Nanox AI due to the achievement of a milestone pursuant to the terms of the Zebra
Merger Agreement and the issuance of additional 2,648,424 ordinary shares under a settlement with respect to any additional amount that
could be granted under the Zebra Merger Agreement.
On April 28, 2023, the Company and Dr. Michael
Yuz, as the representative of the former stockholders of USARAD, entered into the first amendment to the USARAD SPA, according to which
the parties to the USARAD SPA agreed that (i) the Company shall pay to the former stockholders of USARAD an aggregate amount of $290,063
in cash and 45,392 ordinary shares, in consideration for the achievement of certain milestones in connection with the first earn out period,
as defined in and in accordance with the USARAD SPA; and (ii) the rights and obligations under the USARAD SPA regarding the remaining
earn out periods were amended such that the parties agreed that the Company shall pay to the former stockholders of USARAD an aggregate
amount of $500,000 in cash and 210,000 ordinary shares as consideration for the remainder of the milestones and applicable earn-outs under
the USARAD SPA. As a result of the amendment to the USARAD SPA, obligations of the Company and the rights of the former stockholders of
USARAD relating to the purchase price (including the earn-outs) under the USARAD SPA have been satisfied in full.
76
Goodwill impairment
Goodwill impairment for the year ended December 31,
2022 was $50.9 million due to the goodwill impairment related to the Nanox AI reporting unit. There was no goodwill impairment for the
year ended December 31, 2021.
During the second quarter of 2022, in light of
triggering events arising from the increase of the discount rate and changes in our estimates as a result of business specific considerations,
we performed a quantitative interim assessment for goodwill impairment for our AI solutions reporting unit. The amount of goodwill assigned
to the AI solutions reporting unit on the interim testing date, which had not changed from the amount assigned to such unit on the acquisition
date, was $51.2 million.
When evaluating the fair value of the AI solutions
reporting unit under the income approach, we used a
discounted cash flow
model which utilized
Level 3 measures that represent unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal
cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs to sales and operating expenses;
(b) an estimated terminal value using a terminal year long-term future growth rate of 3.0% determined based on the growth prospects of
the reporting unit; and (c) a discount rate of 22.0% which reflects the weighted-average cost of capital adjusted for the relevant risk
associated with the AI solutions reporting unit's operations and the uncertainty inherent in our internally developed forecasts.
Specifically, as part of our interim impairment test, in making the assumptions mentioned in clauses
(a) and (b) above, we considered (1) the efforts and time required for the AI solutions reporting unit to achieve financial stability,
(2) our estimate that it would take approximately one year for such unit to generate any material revenue and two years to achieve profitability;
and (3) our estimate that it would take longer than we originally expected for such unit to generate material revenues, gross profit,
and positive operating cash flows, especially from its population health applications. As a result of the impairment assessment, we concluded
that the fair value of the AI solutions reporting unit decreased below its carrying value by 11.61%, and therefore
we recorded a goodwill impairment charge of $14.3 million in the second quarter of 2022.
As a result, the remaining amount of goodwill
assigned to the AI solutions reporting unit at June 30, 2022 was $36.9 million.
During the fourth quarter of 2022,
we
performed a qualitative and quantitative annual assessment for goodwill impairment. Based on our qualitative analysis, which considered
the
AI solutions reporting unit
results, projections
and additional business and industry
specific considerations, we performed a further revision of the estimates of the fair value of the AI solutions reporting unit.
As part of this analysis, we also considered the potential impacts of the sensitivity of estimates and assumptions. When evaluating the
fair value of the AI solutions reporting unit under the income approach, we used
the same discounted
cash flow model discussed above; however, in clause (c) the resulting cash flow amounts were discounted using a discount rate of 22.50%.
As a result of the impairment assessment, we concluded that the fair value of the AI solutions reporting unit decreased below its carrying value
by 34.44%, and therefore, we recorded an additional goodwill impairment charge of $36.6 million in the fourth quarter of 2022.
As a result, the amount of goodwill assigned to the AI solutions reporting unit at December 31, 2022 was $0.4 million.
Other Expenses
Other expenses were $8.2 million for the year ended
December 31, 2022, and $1.2 million for the year ended December 31, 2021. The increase in other expenses was primarily attributable
to the accrual for future settlement in connection with the pending class action lawsuits against the Company.
Comparison of the years ended December 31, 2021 and 2020
The table below summarizes the results of operations
for the years ended December 31, 2021 and 2020, respectively:
Revenue
The table below summarizes our revenue incurred
during the periods presented:
Year Ended December 31,
2021
2020
($ in thousands)
Teleradiology services
$
1,034
$
-
AI
270
-
Total
$
1,304
$
-
For the year ended December 31, 2021, we reported
revenue of $ 1.3 million, compared to none for the year ended December 31, 2020. During the year ended December 31, 2021, we generated
revenues through the sale of teleradiology services in the amount of $1.0 million and the sale of AI solutions in the amount of $0.3 million.
77
Cost of Revenue
The table below summarizes our cost of revenue
incurred during the periods presented:
Year Ended December 31,
2021
2020
($ in thousands)
Teleradiology services
$
1,000
$
-
AI
1,816
-
Total
$
2,816
$
-
For the year ended December 31, 2021, we reported
cost of revenue of $2.8 million, compared to none for the year ended December 31, 2020. During the year ended December 31, 2021, we incurred
cost of revenue through the sale of teleradiology services in the amount of $1.0 million and the sale of AI solutions in the amount of
$1.8 million. The cost of revenue through the sale of AI solutions consisted mainly of salaries and wages expense in the amount of $0.4
million and amortization of intangible assets of $1.4 million. The amortization of intangible assets is the periodic amortization expense
with regards to the acquisition of the shares of Nanox AI since the date of acquisition through the year end. As a result, the cost of
revenue recognized for the AI Solutions segment significantly exceeds the amount of revenue recognized.
Gross Loss
The table below summarizes our gross loss incurred
from each segment during the periods presented:
Year Ended December 31,
2021
2020
($ in thousands)
Teleradiology services
$
34
$
-
AI
(1,546
)
-
Total
$
(1,512
)
$
-
For the year ended December 31, 2021, we reported
a gross loss of $1.5 million, compared to no profit or loss for the year ended December 31, 2020. Our gross profit from teleradiology
services for the year ended December 31, 2021 was $0.0 million. Our gross loss from our AI solutions for the year ended December 31, 2021
was $1.5 million.
Research and Development Expenses
The table below summarizes our research and development
expenses incurred during the periods presented:
Year Ended December 31,
2021
2020
($ in thousands)
Research and Development Expenses:
Salaries and wages
$
6,047
$
2,091
Share-based compensation
3,248
3,384
R&D - professional services
6,072
3,647
Other
1,755
88
Total
$
17,122
$
9,210
Research and development expenses increased by
$7.9 million to $17.1 million for the year ended December 31, 2021 from $9.2 million for the year ended December 31, 2020. The increase
in research and development expenses was primarily attributable to the increase of $1.7 million due to the merger with Nanox AI, and increases
in salaries and wages and professional services of $5.1 million as we continued to expand our research and development activities relating
to the Nanox System.
78
Sales and
Marketing Expenses
The table below summarizes our sales and marketing
expenses incurred during the periods presented:
Year Ended December 31,
2021
2020
($ in thousands)
Sales and Marketing Expenses:
Salaries and wages
$
1,711
$
733
Share-based compensation
2,442
9,252
Marketing and business development
2,880
2,460
Total
$
7,033
$
12,445
Sales and marketing expenses decreased to $7.0 million
for the year ended December 31, 2021, from $12.4 million for the year ended December 31, 2020. The decrease in sales and marketing
expenses was primarily attributable to a decrease in share-based compensation.
General and Administrative Expenses
The table below summarizes our general and administrative
expenses incurred during the periods presented:
Year Ended December 31,
2021
2020
($ in thousands)
General and Administrative Expenses:
Salaries and wages
$
6,159
$
3,847
Share-based compensation
13,065
12,145
Directors' and officers' insurance
4,445
1,812
Professional services
3,128
2,449
Legal fees
4,476
671
Rent and Maintenance
820
620
Depreciation and Amortization
228
208
Other
2,388
516
Total
$
34,709
$
22,268
General and administrative expenses increased to
$34.7 million for the year ended December 31, 2021, from $22.3 million for the year ended December 31, 2020. The increase in general
and administrative expenses was primarily attributable to an increase of approximately $3.9 million due to the merger with Nanox AI, and
the acquisitions of USARAD and the assets of MDWEB, an increase in the amount of approximately $1.9 million due to the increase in our
head count in connection with the expansion of our management team and the overall organization infrastructure, an increase of approximately
$1.9 million in legal fees primarily due to the SEC inquiry and class-actions, an increase of $2.6 million in our directors' and
officers' liability insurance premium and an increase of approximately $0.5 due to transaction expenses in connection with the merger
with Nanox AI, and the acquisitions of USARAD and the assets of MDWEB.
Change in obligation in connection of acquisitions
We did not record a change in obligation in connection
of acquisitions for the years ended December 31, 2021 or 2020.
Goodwill impairment
We did not record a goodwill impairment for the
years ended December 31, 2021 or 2020.
79
Other Expenses
Other expenses were $1.2 million for the year ended
December 31, 2021, and none for the year ended December 31, 2020. The increase in other expenses was primarily attributable to the
relocation of our fabrication facility from its temporary location to its permanent location in South Korea.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements
that may potentially impact our financial position and results of operations is disclosed in Note 2 to our audited consolidated financial
statements, included elsewhere in this annual report on Form 20-F.
B. Liquidity and Capital Resources
From our inception and prior to November 2021,
we did not generate any revenue from product sales or otherwise and have incurred significant operating losses and negative cash flows
from our operations. Beginning in the year ended December 31, 2021 and continuing in the year ended December 31, 2022, we generated revenue
through the sale of teleradiology services and the sale of AI solutions following the completion of the merger with Nanox AI, and the
acquisitions of USARAD in November 2021. We have not generated any revenue to date from sales of imaging services from the Nanox System.
Historically, we have funded our operations primarily with proceeds from the sale of our and our predecessor company's ordinary
shares.
Cash Flows
The following table provides information regarding
our cash flows for the periods presented:
Year Ended December 31,
2022
2021
2020
($ in thousands)
Net cash used in operating activities
$
(43,385
)
$
(38,061
)
$
(21,609
)
Net cash from (used in) investing activities
14,606
(116,320
)
(13,937
)
Net cash provided by financing activities
804
7,379
240,991
Effect on changes in exchange rates on cash balances in foreign currencies
(268
)
(10
)
122
Net change in cash and cash equivalents and restricted cash
$
(28,243
)
$
(147,012
)
$
205,567
Net Cash used in Operating Activities
During the years ended December 31,
2022, 2021 and 2020, net cash used in operating activities was $43.4 million, $38.1 million and $21.6 million, respectively, resulting
from our net loss of $113.2 million, $61.8 million and $43.8 million, respectively, adjusted for stock-based compensation changes
of $18.6 million, $18.8 million and $24.8 million, respectively, amortization of intangible assets of $10.6 million, $1.8 million
and none, respectively, goodwill impairment of $50.9 million, none and none, respectively, change in contingent earnout liability of $20.4
million, none and none, respectively, non-cash charges of ($1.3) million, $0.4 million and $0.1 million, respectively, and changes in
components of working capital of $11.4 million, 2.7 million and ($2.7) million, respectively. In 2022, the increase in
cash used in operating activities was primarily due to the development of our products and AI solutions. In 2021, the increase in
cash used in operating activities was primarily due to activities related to our business expansion.
Net Cash provided by (used) in Investing Activities
During the years ended December 31, 2022,
2021 and 2020, net cash provided by (used in) investment activities was $14.6 million, $(116.3) million and $(13.9) million,
respectively. The increase in cash provided by investing activities during the year ended December 31, 2022, was primarily due to proceeds
from the sale of marketable securities in the amount of $22.8 million which was offset in part by the purchase of property and equipment
in the amount of $7.2 million and an investment of $1.0 million in an unconsolidated entity. The increase in cash used in investing activities
during the year ended December 31, 2021, was primarily due to purchase of marketable securities, the acquisition of USARAD and the completion
of our fabrication facility in Korea, as part of the preparation for the commencement of full manufacturing activity.
Net Cash provided by Financing Activities
During the years ended December 31, 2022,
2021 and 2020, net cash provided by financing activities was $0.8 million, $7.4 million and $241.0 million, respectively, primarily
due to proceeds from the issuance of ordinary shares and warrants, net of issuance costs, and from the issuance of ordinary shares upon
exercise of options and warrants.
80
Contractual Obligations
Our long-term contractual obligations mainly consist
of our lease agreements for our offices and other facilities in Israel, Japan, Korea and the United States. For details regarding these
lease agreements, see "Item 4. Information on the Company—D. Property, Plants and Equipment."
In addition, we have lease agreements for the lease
of vehicles for certain of our employees in Israel and Korea, which are effective through July 2025.
As of December 31, 2022, we had non-current operating
leases liabilities of $0.4 million. For additional details regarding our operating lease agreements, see Note 7 to our audited consolidated
financial statements, which are included elsewhere in this annual report on Form 20-F.
Funding Requirements
We expect our expenses to increase in connection
with our ongoing activities, particularly as we continue the research and development and improvement of the Nanox System and seek marketing
approval for this product. In addition, we incur additional costs associated with operating as a public company. Our expenses will also
increase if, and as, we:
●
seek regulatory approvals for any additional products;
●
seek to discover and develop additional products;
●
establish a manufacturing, sales, marketing, medical affairs and distribution infrastructure to commercialize the Nanox System for which we may obtain marketing approval and intend to commercialize on our own or jointly;
●
hire additional quality control and scientific personnel;
●
expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company;
●
operate our manufacturing facility in South Korea for the purpose of manufacturing MEMs X-ray chips;
●
maintain, expand and protect our intellectual property portfolio; and
●
acquire or in-license other products and technologies.
We believe that our cash on hand and cash equivalents
will enable us to fund our operating expenses and capital expenditure requirements for at least the next twelve months from the date of
issuance of the financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our
available capital resources sooner than we expect.
Because of the numerous risks and uncertainties
associated with manufacture, research, development and commercialization of products, we are unable to estimate the exact amount of our
working capital requirements. Our future funding requirements will depend on, and could increase significantly as a result of, many
factors, including:
●
the scope, progress, results and costs of researching and developing the Nanox System;
●
the costs, timing and outcome of regulatory review of the Nanox.ARC (including the Nanox.CLOUD);
●
the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for the Nanox System for which we receive marketing approval;
●
commercial manufacturing, shipping, installation and deployment of the Nanox System and sufficient inventory to support commercial launch;
●
the revenue, if any, received from commercial sale of the Nanox System, should the Nanox.ARC receive marketing approval;
●
the cost and timing of hiring new employees to support our continued growth;
●
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
81
●
the ability to establish and maintain collaborations on favorable terms, if at all;
●
the costs incurred with respect to and the outcome of the securities litigations and SEC investigation we are currently subject to and any similar or other claims, litigation and investigations we may be subject to in the future; and
●
the timing, receipt and amount of sales of the Nanox System, if any.
A change in any of these or other variables with
respect to the development of any of our products could significantly change the costs and timing associated with the development of that
product. Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital
requirements associated with such operating plans.
Until such time, if ever, as we can generate substantial
product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, collaborations,
strategic partnerships or marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional
capital through the sale of equity or convertible debt securities, your ownership interest may be materially diluted, and the terms of
such securities could include liquidation or other preferences that adversely affect your rights as an ordinary shareholder. Debt financing
and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take
specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. In addition, debt financing
would result in increased fixed payment obligations.
If we raise funds through collaborations, strategic
partnerships or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our
technologies, future revenue streams, research programs or products or grant licenses on terms that may not be favorable to us.
If we are unable to raise additional funds when
needed, we may be required to delay, reduce or eliminate our product development or future commercialization efforts, or grant rights
to develop and market products that we would otherwise prefer to develop and market ourselves.
C. Research and Development, Patents and Licenses, etc.
Research and Development Expenses
Research and development expenses are charged to
the statement of operations as incurred and consist primarily of personnel, materials and supplies for research and development activities.
See "Item 5. Operating and Financial Review and Prospects—A. Operating Results—Critical Accounting Policies and Significant
Judgments and Estimates—Research and Development Expenses."
Intellectual Property
As of April 17, 2023, we
and our subsidiaries had 26 issued patents and 11 pending patent applications in the United States. We also had three issued patents
and one pending patent application in Israel, one issued patent and nine pending patent applications in the European Patent Office,
and one issued patent and three pending patent applications in Hong Kong. We also have one international patent application pending.
Our issued patents generally expire between the years 2032 and 2041, and some are directed to various features and combinations of
features of the Nanox.ARC and the others for AI and teleradiology. We also have five trademarks registered in the United States, one
trademark pending in the United States and eight trademarks registered in Israel.
We intend to continue filing for patents on new
technologies as they are developed and to actively pursue any infringement upon our patents. We believe that our know-how and trade secrets
represent de facto barriers to potential competition.
D. Trend Information
We are a development-stage company and cannot predict
with any degree of accuracy the outcome of our research and development efforts. As such, we cannot predict with any degree of accuracy
any significant trends, uncertainties or events that are reasonably likely to have a material effect on our net loss, liquidity or capital
resources, or cause financial information to not be indicative of future operating results or financial condition. However, to the extent
possible, certain trends, uncertainties, demands, commitments and events are described in this "Item 5. Operating and Financial
Review and Prospects."
82
E. Critical Accounting Estimates
We have provided a summary of our significant accounting
policies, estimates and judgments in Note 2 to our consolidated financial statements. The following critical accounting estimates discussion
pertain to accounting policies management believes are most critical to the portrayal of our historical financial condition and results
of operations and that require significant, difficult, subjective or complex judgments.
The Company regularly reviews its accounting estimates
and assumptions to determine whether any should be disclosed as critical accounting estimates or whether sensitivities should be updated
for those critical accounting estimates already disclosed. The preparation of financial statements in accordance with GAAP requires management
to make certain estimates and assumptions based on our historical experience and on various other assumptions which we believe to be reasonable
under the circumstances. Because of the uncertainty inherent in these matters, actual results could differ materially from the estimates
we use in applying these policies.
Goodwill
We determine
the fair value of our reporting units using a discounted cash flow model, which utilizes key assumptions such as projected revenues, cost
of revenues and operating expenses. These assumptions were determined by management utilizing our internal operating plan, growth rates
for revenues and operating expenses and margin assumptions. An additional key assumption under this approach is the discount rate,
based on the weighted average cost of capital, which is adjusted for current risk-free rates of capital, current market interest rates,
and the evaluation of a risk premium relevant to the business segment.
If our assumptions
relative to revenue growth rates, cost of revenues and operating expenses were to change, our fair value calculation may change, which
could result in impairment. If our assumptions relative to the discount rate and the evaluation of risk premium growth rates were to change,
our fair value calculation may change, which could result in impairment. Management uses the income approach to determine the fair value
of the reporting units because it considers the anticipated future financial performance of the reporting units. Accordingly, changes
in the assumptions described above could have a material impact on our consolidated results of operations.
Our goodwill
is tested for impairment at least on an annual basis, on the last day of the fourth quarter of the fiscal year and whenever events or
changes in circumstances indicate the carrying value of a reporting unit may not be recoverable. When necessary, we record charges for
impairments of goodwill for the amount by which the carrying amount of the respective reporting unit exceeds its fair value.
Goodwill impairment assessments for
the year ended December 31, 2022
AI solutions reporting
unit
During the second quarter of 2022, in light of
triggering events arising from the increase of the discount rate and changes in our estimates as a result of business specific considerations,
we performed a quantitative interim assessment for goodwill impairment for our AI solutions reporting unit. The amount of goodwill assigned
to the AI solutions reporting unit on the interim testing date, which had not changed from the amount assigned to such unit on the acquisition
date, was $51.2 million. When evaluating the fair value of the AI solutions reporting unit under the income approach, we used a
discounted
cash flow
model which utilized Level 3 measures that represent unobservable inputs. Key assumptions used to determine the estimated
fair value include: (a) internal cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs
to sales and operating expenses; (b) an estimated terminal value using a terminal year long-term future growth rate of 3.0% determined
based on the growth prospects of the reporting unit; and (c) a discount rate of 22.0% which reflects the weighted-average cost of capital
adjusted for the relevant risk associated with the AI solutions reporting unit's operations and the uncertainty inherent in our
internally developed forecasts.
Specifically, as part of our interim impairment test, in making
the assumptions mentioned in clauses (a) and (b) above, we considered (1) the efforts and time required for the AI solutions reporting
unit to achieve financial stability, (2) our estimate that it would take approximately one year for such unit to generate any material
revenue and two years to achieve profitability; and (3) our estimate that it would take longer than we originally expected for such unit
to generate material revenues, gross profit, and positive operating cash flows, especially from its population health applications. As
a result of the impairment assessment, we concluded that the fair value of the AI solutions reporting unit decreased below its carrying value
by 11.61%, and therefore we recorded a goodwill impairment charge of $14.3 million in the second quarter of 2022.
As a result,
the remaining amount of goodwill assigned to the AI solutions reporting unit at June 30, 2022 was $36.9 million.
During the fourth quarter
of 2022,
we performed a qualitative and quantitative annual assessment for goodwill impairment.
Based on our qualitative analysis, which considered the
AI solutions reporting unit
results,
projections
and additional business and industry specific considerations, we performed a further revision of the estimates of the
fair value of the AI solutions reporting unit. As part of this analysis, we also considered the potential impacts of the sensitivity
of estimates and assumptions. When evaluating the fair value of the AI solutions reporting unit under the income approach, we used
the
same discounted cash flow model discussed above; however, in clause (c) the resulting cash flow amounts were discounted using a discount
rate of 22.50%. As a result of the impairment assessment, we concluded that the fair value of the AI solutions reporting unit decreased below its carrying value
by 34.44%, and therefore we recorded an additional goodwill impairment charge of $36.6 million in the fourth quarter of 2022.
As
a result, the amount of goodwill assigned to the AI solutions reporting unit on December 31, 2022 was $0.4 million.
83
When
evaluating the fair value of the AI solutions reporting unit under the income approach, we used a discounted cash flow model which utilized
Level 3 measures that represent unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal
cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs of sales and operating expenses;
(b) an estimated terminal value using a terminal year long-term future growth rate determined based on the growth prospects of the reporting
unit; and (c) assumed discount rate which reflects the weighted-average cost of capital adjusted for the relevant risk associated with
the AI solutions reporting unit's operations and the uncertainty inherent in our internally developed forecasts.
Specifically, as part
of our interim impairment test, in making the assumptions mentioned in clauses (a) and (b) above, we considered (1) the efforts and time
required for the AI solutions reporting unit to achieve financial stability, (2) our estimate that it would take approximately one year
for such unit to generate any material revenue and three years to achieve profitability; and (3) our estimate that it would take longer
than we originally expected for such unit to generate material revenues, gross profit, and positive operating cash flows, especially from
its population health applications. For the assumption mentioned in clause (b) above, we assumed a terminal year long-term future growth
rate of 3.0% as of June 30, 2022 and December 31,2022. For the assumption mentioned in clause (c) above, we assumed a discount rate of
22.0% as of June 30, 2022, and 22.5% as of December 31, 2022.
Actual results may differ
from those assumed in our valuation method. It is reasonably possible that our assumptions described above could change in future periods.
If any of these were to vary materially from our plans, we may record impairment of goodwill allocated to this reporting unit in the future.
A hypothetical decrease in the growth rate of 0.5% or an increase of 0.5% to the discount rate would have reduced the fair value of the
AI solutions reporting unit by approximately $1.0 million and $2.9 million, respectively.
Radiology services reporting
unit
During the fourth quarter
of 2022, we performed a quantitative assessment for goodwill impairment for our teleradiology reporting unit and concluded that the fair
value of the radiology services reporting unit exceeded its carrying amount by approximately 5.3%, with a carrying amount of goodwill
assigned to this reporting unit in an amount of $7.1 million.
When evaluating the fair
value of the radiology services reporting unit under the income approach, we used a discounted cash flow model which utilized Level 3
measures that represent unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal cash flows
forecasts for 5 years following the assessment date, including expected revenue growth, costs to sales and operating expenses; (b) an
estimated terminal value using a terminal year long-term future growth rate of 3% determined based on the growth prospects of the reporting
unit; and (c) a discount rate of 27.5% which reflects the weighted-average cost of capital adjusted for the relevant risk associated with
the radiology services reporting unit's operations and the uncertainty inherent in our internally developed forecasts.
Actual
results may differ from those assumed in our valuation method. It is reasonably possible that our assumptions described above could change
in future periods. If any of these were to vary materially from our plans, we may record impairment of goodwill allocated to this reporting
unit in the future. A hypothetical decrease in the growth rate of 0.5% or an increase of 0.5% to the discount rate would have reduced
the fair value of the radiology services reporting unit by approximately $0.3 million and $0.6 million, respectively.
As of December 31, 2022, the percentage by which
the estimated fair value of our reporting units exceeded the carrying value was as the following:
Goodwill
from
acquisition of
Nanox AI
Unit #1
Goodwill
from
acquisition of
USARAD Unit #2
Goodwill Assigned
(
in millions
)
$
0.4
$
7.1
Fair Value/Carrying Amount
100.00
%
105.3
%
84
Goodwill impairment assessment for the
year ended December 31, 2021
As of December 31, 2021, we evaluated that there
was no notable change in qualitative factors due to the short period of time that had lapsed from the acquisition date through December
31, 2021. Therefore, we did not determine that it was more likely that not that the fair value of each reporting unit was less than its
carrying amount. As such, we concluded that no further
impairment testing was required for either
reporting unit as of December 31, 2021
.
Impairment of Long-Lived Assets
Our long-lived assets
,
such as property, plant and equipment and
identifiable intangible assets, are reviewed for potential impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators
which
could trigger an impairment
may include, among others, any significant changes in the manner of our use of the assets or the
strategy of our overall business, certain reorganization initiatives, significant negative industry or economic trends
or
when we conclude that it is more likely than not that an asset will be disposed of or sold.
The recoverability of assets
to be held and used is measured by a comparison of the carrying amount of an asset with the future undiscounted cash flows expected to
be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by
which the carrying amount of the assets exceeds the fair value of the assets. Our identifiable intangible assets were recognized as part
of the business combinations we executed in 2021. Our identifiable intangible assets are comprised of developed technology, image big
data, market platform, radiologists' relationships, trade names and customer relationships.
This measurement includes
significant estimates and assumptions inherent in the estimate of the fair value of identifiable intangible assets such as
assumptions
associated with forecasting profitability, including
operational margins and capital expenditures.
Newly acquired and recently
impaired long-lived assets are more vulnerable to impairment as the assets are recorded at fair value and are then subsequently measured
at the lower of fair value or carrying value annually or when triggering events are present. As such, immediately after acquisition or
impairment, even small declines in the outlook for these assets can negatively impact our ability to recover the carrying value and can
result in an impairment charge. Accordingly, changes in the assumptions described above could have a material impact on our consolidated
results of operations.
During the year ended December
31, 2022, we recorded an impairment charge in the amount of $50.9 million related to our definite-life intangible assets. During the year
ended December 31, 2021, we did not record any impairment charges related to our definite-life intangible assets.
An impairment charge in the
amount of $0.2 million was recorded for each of the years ended December 31, 2022 and 2021 in relation to our property, plant and equipment.
During the year ended December 31, 2020, we did not record any impairment charges related to our property, plant and equipment.
Legal and Other Contingencies
We are involved in claims and other legal proceedings
that arise from time to time in the ordinary course of business. We record accruals for these types of contingencies to the extent that
we conclude their occurrence is probable and that the related liabilities are estimable. When accruing these costs, we recognize an accrual
in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate
than any other amount, we accrue the minimum amount within the range. We record anticipated recoveries under existing insurance contracts
that are virtually certain of occurring at the gross amount that is expected to be collected. Management applies the guidance in ASC 450-20-25
when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss
would be incurred and the amount of the liability can be estimated, then the Company records an accrued expense in the Company's
consolidated financial statements based on its best estimate. Loss contingencies considered by management to be remote are generally not
disclosed unless material.
We review the adequacy of the accruals on a periodic
basis and may determine to alter our reserves at any time in the future if we believe it would be appropriate to do so. As such accruals
are based on management's judgment as to the probability of losses and, where applicable, actuarially determined estimates, accruals
may materially differ from actual verdicts, settlements or other agreements made with regards to such contingencies. Litigation outcomes
and contingencies are unpredictable and excessive verdicts can occur. Accordingly, management's assessments involve complex judgments
concerning future events and often rely heavily on estimates and assumptions.
As of December 31, 2022, we
had accrued $8 million for future settlement expenses in connection with the two pending class action lawsuits against the Company. On
April 28, 2023, the Company signed a term sheet with Lead Plaintiffs in both the McLaughlin action and the consolidated White action to
settle all claims in both actions in consideration for $8 million. The settlement is subject to finalization of a formal settlement agreement
and court approval of the settlement. We had not accrued any losses other than legal fees in connection with the SEC investigation and
given the status of the SEC investigation as of such date, we could not reasonably estimate the possible loss or a range of possible loss
from the SEC investigation due to the unpredictable nature of future events. We did not accrue any liability in connection with the dismissed
complaint brought against the Company, its recently formed Delaware subsidiary and Nanox Gibraltar PLC.
85
As of December 31, 2021, we
had not accrued any losses other than legal fees in connection with our legal proceedings, including two securities class action lawsuits
and the SEC investigation. At that time, given the status of the two securities class action cases and the SEC investigation as of such
date, we could not reasonably estimate the possible loss or a range of possible loss from such cases or the SEC investigation due to the
lack of specific damages claimed and the unpredictable nature of future events.
Income Tax
Valuation allowances are provided unless it is
more likely than not that the deferred tax asset will be realized. In the determination of the appropriate valuation allowances, we consider
future reversals of existing taxable temporary differences and the most recent projections of future business results that may enhance
the likelihood of realization of a deferred tax asset. Assessments for the realization of deferred tax assets made at a given balance
sheet date are subject to change in the future, particularly if earnings of a subsidiary are significantly higher or lower than expected,
or if we take operational or tax positions that could impact the future taxable earnings of a subsidiary. Accordingly, changes in the
assumptions described above could have a material impact on our consolidated results of operations.
Item 6.
Directors, Senior Management and Employees
A. Directors and Senior Management
The following table sets forth information concerning
our executive officers and directors, including their ages, as of May 1, 2023:
Name
Age
Position
Executive Officers
Erez Meltzer
65
Chief Executive Officer, Director
Ran Daniel
55
Chief Financial Officer
James Dara
53
General Manager Source & Services Division
Ofir Koren
53
General Manager Nanox.ARC Division
Pini Ben Elazar
53
General Manager Nanox AI
Tamar Aharon Cohen
46
Executive Vice President and Chief Marketing Officer
Guy Yoskovitz
44
Chief Clinical Officer
Gali Yahav Attias
44
Chief of Staff and Vice President Corporate Resources
Marina Gofman Feler
34
Chief Legal Officer
Orit Wimpfheimer
52
Chief Medical Officer and Vice President Product Nanox AI
Non-Employee Directors
Ran Poliakine
55
Founder, Chairman of the Board
Noga Kainan
68
Director
Dan Suesskind
79
Director
Erez Alroy
60
Director
So Young Shin
44
Director
Executive Officers
Erez Meltzer
has served as a member of our
board of directors since December 2019 and in January 2022, assumed the role of our Chief Executive Officer. Mr. Meltzer served as
the Executive Chairman of the board of directors of Hadassah Medical and University Center from 2014 to 2020. Since 2008, Mr. Meltzer
has served as a teaching professor at the Tel Aviv Faculty of Medicine in the area of crisis management. Mr. Meltzer served as Executive
Vice Chairman and Chief Executive Officer of Gadot Chemicals & Shipping Group from 2009 to 2014. Prior to that, Mr. Meltzer served
as Chief Executive Officer of Africa-Israel Ltd. from 2006 to 2007 and President and Chief Executive Officer of Netafim Ltd. from 2001
to 2006. Mr. Meltzer also served as Chief Executive Officer of Creo Scitex from 1996 to 2001. Mr. Meltzer serves as a director of
Turpaz Industries Ltd. (TASE), Eltek Ltd. (NASDAQ) and Hadasit Bio Holdings Ltd. (TASE) as well as of a number of private companies.
Ran Daniel
has served as our Chief Financial
Officer since August 2021. Mr. Daniel has extensive experience working as a chief financial officer in both rapidly growing companies
and publicly traded companies. Mr. Daniel served as the chief financial officer of the IDH Group from 2012 until 2014, the chief
financial officer of Elie Tahari family office from 2014 to 2016, the chief financial officer of Blue Sphere Corporation from 2016 to
2018 and Chief Financial Officer at Cuentas from 2018 to the present. Mr. Daniel is licensed as a Certified Public Accountant in the United
States and Israel, Chartered Financial Analyst (CFA) and is admitted to practice law in the State of New York. Mr. Daniel holds a Bachelor
of Economics, a Bachelor of Accounting and an MBA in Finance from the Hebrew University of Jerusalem, as well as a Graduate Degree in
Law from Bar Ilan University.
86
James Dara
has served as our General Manager
Source & Services Division since January 2022, after having served as our Chief Operating Officer beginning in January 2021. Prior
to joining us, Mr. Dara served as President of myCharge from 2012 to 2020. Prior to myCharge, Mr. Dara served as Vice President
of Business Development for Powermat Technologies Ltd. from 2009 to 2014 and as Interim CEO and Vice President of Business Development
of Wellsense Technologies Ltd. from 2009 to 2015. From 2003 to 2009, Mr. Dara served as Chief Sales Officer, Senior Vice President
and General Manager of North America for Braintech Inc. In addition, from 1998 to 2002, Mr. Dara served as a Sales Manager and Sales
Engineer for ITW Shakeproof Group. Mr. Dara received his Bachelor of Science degree in Mechanical Engineering from Michigan State
University, and his Master's degree in Finance from Walsh University.
Ofir Koren
has served as our General Manager
Nanox.ARC Division since January 2022, after having served as our Chief Technology Officer beginning in January 2021. Prior to joining
us, Mr. Koren served as General Manager Israel and Vice President of Research & Development and Regulatory at ReWalk Robotics
from 2013 to 2021. From 2012 to 2013, Mr. Koren served as Research & Development Manager for ReWalk Robotics. Prior to ReWalk
Robotics, Mr. Koren served as General Manager at RuggedCOM from 2009 to 2012. From 2007 to 2009, Mr. Koren served as Vice President
of Research & Development at Alvarion. Mr. Koren served as Research & Development Director at Alvarion from 2004 to 2007.
Mr. Koren received his Bachelor of Science degree in Electrical Engineering from Tel Aviv University, and he holds an M.B.A. degree
from Heriot-Watt University.
Tamar Aharon Cohen
has served as our Executive
Vice President and Chief Marketing Officer since June 2022, after having served as our Chief Marketing Officer from January 2021. Prior
to joining us, Ms. Aharon Cohen served as the Chief Executive Officer of Tempo Beverages Cyprus Ltd. from 2017 to 2021. Ms. Aharon
Cohen served as a Marketing Manager and a Division Manager at Tempo Beverages Ltd. from 2010 to 2017. From 2006 to 2010, Ms. Aharon
Cohen served as a Marketing Manager for L'Oréal Israel. Ms. Aharon Cohen holds a LLB degree, a B.A. degree in Management
and an executive M.B.A. degree, all from Tel Aviv University.
Guy Yoskovitz
has served as our Chief Clinical
Officer since January 2022. Prior to that, Dr. Yoskovitz served as our VP Clinical Innovation, reporting to the Chief Product Officer,
beginning in November 2019. Prior to joining the company and from 2014, Dr. Yoskovitz served as Head of International Ventures & Deputy
Director of Research, Innovation and International Affairs Authority, and as a lecturer, at Holon Institute of Technology, Israel. Dr.
Yoskovitz holds a PhD in Human Genetics from the Faculty of Biology, University of Barcelona; an MSc degree in Medical Sciences from the
School of Graduate Studies, The Faculty of Medicine, Tel Aviv University, Israel; and a BSc degree in Computational Biology from Bar Ilan
University, Israel.
Pini Ben Elazar
has served as General Manager
Nanox AI since March 2022. Mr. Ben Elazar brings 25 years of strategic and commercial expertise in the healthcare industry. Mr. Ben Elazar
previously served on the board of Zebra Medical. From 2003 to March 2022, Mr. Ben Elazar has served as Chief Executive Officer of Mor
Research Applications, a technology transfer organization of Clalit Health Services, the largest health maintenance organization in Israel
and the second-largest HMO in the world. Mr. Ben Elazar holds an MBA degree from Johnson & Wales University, Providence,
RI.
Gali Yahav Attias
has served as our Chief
of Staff since December 2021 and commencing May 2022, as Vice President Corporate Resources. Ms. Yahav Attias first joined our company
as project manager in August 2021. From 2007 to 2021, Ms. Yahav Attias served as the Executive Administrator as well as Secretary of the
Board and the external audit committee and compliance officer of the Hadassah Medical and University Center. From 2014 to 2017, Ms. Yahav
Attias also served as the executive liaison of the government recovery agreement implementation in Hadassah Medical Center. Ms. Yahav
Attias holds a B.A. degree in Social Sciences and Humanities from the Open University of Ra'anana, Israel.
Marina Gofman Feler
has served as our Chief
Legal Officer since November 2022. Prior to that, Ms. Gofman Feler served as the General Counsel of CollPlant Biotechnologies Ltd. (NASDAQ),
a publicly traded biotech company, from 2021 to 2022. Prior to that, Ms. Gofman Feler served as the Legal Counsel of CollPlant Biotechnologies
Ltd. from 2018 to 2021. Prior to that, Ms. Gofman Feler served as an associate at Yaron-Eldar, Paller, Schwartz & Co., law offices,
from 2015 to 2018. Ms. Gofman Feler holds a L.LB degree in Law and a B.A degree in Economics from Tel Aviv University.
Dr. Orit Wimpfheimer
has served as our Chief
Medical Officer and Vice President Product Nanox AI since January 2022. Dr. Wimpfheimer previously held the position of Chief Medical
Officer and Head of Product Strategy at Zebra Medical Vision, until its acquisition by the Company. Dr. Wimpfheimer is the co-founder
of Remote Radiology International, with over 20 years of experience in the radiology field. Dr Wimpfheimer received her MD degree from
Albert Einstein College of Medicine and completed her diagnostic radiology residency at New York Presbyterian Hospital in New York.
87
Non-Employee Directors
Ran Poliakine
, our founder, has served as
a member of our board of directors since our inception and has served as the Chairman of the Board of Directors since the closing of our
initial public offering. Mr. Poliakine served as our Chief Executive Officer from September 2019 until January 2022, and served as
Chief Executive Officer of Nanox Gibraltar from August 2018 until November 2019. Prior to that, Mr. Poliakine served as Chief Strategy
Officer of Nanox Gibraltar from June 2015 to August 2018. Mr. Poliakine is a serial entrepreneur and has founded numerous companies
over the past two decades, including SixAI Ltd. ("SixAI") and its two controlled subsidiaries 634 Ai Ltd. ("634 Ai")
and Musashi Ai Ltd., Powermat Technologies Ltd., Wellsense, Inc., and Illumigyn Ltd. ("Illumigyn"). Mr. Poliakine is
the chief executive officer and a member of the board of directors of SixAI, the chairman of the board of directors and a senior advisor
to Illumigyn, and a member of the board of directors of Powermat Technologies Ltd.
Noga Kainan
has served as a member of our
board of directors since February 2021. Ms. Kainan established in 2008 the forum for owners, chairpersons and CEOs of the leading companies
in the Israeli economy. Ms. Kainan also serves as chairperson of the CFO Forum, which brings together the CFOs of the leading companies
in the economy, since she established it in 1997. Ms. Kainan's public activities include membership in committees in the Israeli
Prime Minister's Office, member in the Board of Trustees of Bar Ilan University, the College of Management in Israel, and the council
of an NGO for IDF soldiers' welfare. Ms. Kainan heads an association that she founded to promote the integration of autistic students
in academia. Ms. Kainan serves as a director of Illumigyn and previously served as a director of the following companies traded on the
Tel Aviv Stock Exchange: Bizportal Ltd., Poalim I.B.I – Managing & Underwriting Ltd. and Analyst Provident Funds Ltd. Ms. Kainan
also served as director at Oil Refineries Ltd. before the company was listed on the Tel Aviv Stock Exchange. Ms. Kainan served as a representative
at the International Association of Financial Executives Institutes (IAFEI). Ms.  Kainan, co-authored "Israel–- Success
Story," translated to English under the name: "Israel–- Island of Success." Ms. Kainan has a bachelor's
degree in art and literature from Haifa University and an M.B.A. degree from Tel Aviv University.
Dan Suesskind
has served as a member of
our board of directors since February 2021. Mr. Suesskind served as the Chief Financial Officer of Teva Pharmaceutical Industries Ltd.
("Teva") from 1977 to 2008 and as a director of Teva for several periods of time until 2018. Mr. Suesskind is currently a
director of Nextar Chempharma Solutions Ltd., Sanotize Research and Development Corp., Imed Infinity Medical Limited partnership (TASE)
and The Jerusalem Foundation. Mr. Suesskind previously served as a director of the following companies: Israel Corporation Ltd., Redhill
Biopharma Ltd., Syneron Medical Ltd., Migdal Ltd., Ness Technologies Inc., the First International Bank of Israel, First International
Selective Investment – Portfolio Management Company Ltd., LanOptics Ltd., ESC Medical Systems and the Hadassah Medical Center in
Jerusalem. Mr. Suesskind's public activities include membership in the Investment Committee of the Israeli Academy of Sciences and
Humanities, Ben Gurion University and the Jerusalem Foundation. Mr. Suesskind is a member of the Board of Trustees of the Hebrew University
of Jerusalem and of the Board of Trustees of the Ben Gurion University. Mr. Suesskind has a bachelor's degree in economics and political
science from the Hebrew University of Jerusalem and an M.B.A. degree from the University of Massachusetts.
So Young Shin
has served as a member of
our board of directors since May 2022. Ms. Shin has served as Chief Executive Officer of SK Square Americas, Inc., a U.S. investment entity
of the SK Telecom group, based in New York, since November 2021 and prior to that, served as Chief Executive Officer of SK Telecom TMT
Investment Corp. from January 2020, a U.S. investment entity of the SK Telecom group, based in New York. Prior to that, Ms. Shin served
in the SK Telecom group as Managing Director, Head of SK Telecom EU office (May 2017-January 2020) and Team Leader, Smart Learning TF
(January 2010- May 2017). Ms. Shin has a BA degree in Computer Science from Ewha Womans University, an MA degree in Economics from Seoul
National University and an MBA degree from Oxford Saïd Business School, Oxford University.
Erez Alroy
has served
as a member of our board of directors since June 2022. Mr. Alroy was part of the founders of SHL Telemedicine (SIX: SHLTN) and for more
than 20 years served in various positions in the SHL Telemedicine group, including 15 years as its Chief Executive Officer. From 2014
and until 2020, Mr. Alroy was a major shareholder and the chairman of Migvan Engineering and Technology. Currently Mr. Alroy is a private
investor and consultant and holds several board positions, including SHL Telemedicine Ltd. and Merhavia Holdings and Investments Ltd.
(TASE), an investment firm that invests mainly in life science and healthcare companies. Mr. Alroy holds an MBA degree from the Hebrew
University of Jerusalem.
2
B. Compensation
Compensation of Executive Officers and Directors
The aggregate compensation, including share-based
compensation, paid or expensed by us to our executive officers and directors for the year ended December 31, 2022 was approximately
$9.7 million. This amount does not include approximately $0.5 million set aside or accrued to provide pension, severance, retirement or
similar benefits or expenses, and does not include business travel, relocation, professional and business association dues, meals and
expenses reimbursed to officers, and other benefits commonly reimbursed or paid by companies in Israel, on the same basis for all full-time
employees generally.
88
The table below sets forth the salary expenses
and social benefit costs of our five most highly compensated office holders (as defined in the Companies Law) during or with respect to
the year ended December 31, 2022. We refer to the five individuals for whom disclosure is provided herein as our "Covered Executives."
For purposes of the table and the summary below, "compensation" includes base salary, bonuses, equity-based compensation,
retirement or termination payments, and any benefits or perquisites such as car, phone and social benefits, as well as any undertaking
to provide such compensation in the future.
Information Regarding the Covered Executive
(1)
Name and Principal Position
(2)
Base
Salary
Benefits and
Perquisites
(3)
Variable
Compensation
(4)
Equity-Based
Compensation
(5)
Total
Ran Poliakine, Chairman of the Board and Former Chief Executive Officer
(6)
$
587,361
209,154
-
3,179,688
3,976,203
Erez Meltzer, Chief Executive Officer
903,577
258,040
700,000
1,256,732
3,118,349
IU Kim, Head of Nanox Korea
240,000
60,000
-
3,264,595
3,564,595
Ofir Koren, Head of the Nanox.ARC Division
228,725
70,708
36,374
941,718
1,277,525
James Dara, Head of Source and Services Division
270,000
31,843
75,000
941,718
1,318,561
(1)
In accordance with Israeli law, all amounts reported in the table are in terms of cost to our Company, as recorded in our financial statements for the year ended December 31, 2022.
(2)
Cash compensation amounts denominated in currencies other than the U.S. dollar were converted into U.S. dollars at the average conversion rate for the year ended December 31, 2022.
(3)
Amounts reported in this column include benefits and perquisites, including those mandated by applicable law. Such benefits and perquisites may include, to the extent applicable to each executive, payments, contributions and/or allocations for pension, severance, vacation, car or car allowance, convalescence pay, payments for social security, tax gross-up payments and other benefits and perquisites consistent with our guidelines, regardless of whether such amounts have actually been paid to the executive.
(4)
Amounts reported in this column refer to Variable Compensation such as incentives and earned or paid bonuses as recorded in our financial statements for the year ended December 31, 2022.  With respect to Mr. Meltzer, the reported amount represents an advance paid to him on account of his 2022 annual bonus, subject to recourse (clawback) for any amount of the 2022 annual bonus that is not earned in excess of $450,000 (the guaranteed portion of Mr. Meltzer's 2022 annual bonus).
(5)
Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2022 with respect to equity-based compensation, reflecting also equity awards made in previous years which have vested during the current year. Assumptions and key variables used in the calculation of such amounts are described in Note 12 to our audited consolidated financial statements, which are included elsewhere in this annual report on Form 20-F.
(6)
Ran Poliakine ceased to serve as our Chief Executive Officer on December 31, 2021 and his employment formally terminated effective as of September 30, 2022.
We pay each of our non-employee
directors (other than Mr. Ran Poliakine, the non-executive Chairman of our Board of Directors) a cash fee of $36,000 per year plus an
additional annual fee for service on a board committee of $7,500 per each committee (or $15,000 for the chairperson of a committee).
89
Mr. Ran Poliakine, who served as our Chief Executive
Officer until December 31, 2021 and as Executive Chairman of our Board of Directors until September 30, 2022, began to serve as a non-executive
Chairman of our Board of Directors effective as of October 1, 2022. In lieu of cash compensation for his services as non-executive Chairman
of the Board of Directors, Mr. Poliakine was granted options to purchase 85,000 ordinary shares, at an exercise price of $17.63 per share,
pursuant to the approval of our shareholders at the annual general meeting held on December 28, 2022. The options shall vest in 16 equal
installments over a period of four years, such that 6.25% of the options shall vest on each of the three-month anniversaries of the effective
vesting commencement date, which is October 1, 2022 (the date of the commencement of his service as non-executive Chairman of the Board
of Directors), subject to Mr. Poliakine's continuing service as Chairman of the Board of Directors on each applicable vesting date,
and will be exercisable for a period of 24 months following termination of service. The vesting of any outstanding options shall fully
accelerate upon an M&A Transaction, as defined in the 2019 Equity Incentive Plan.
Directorship Agreements
We previously entered into
directorship agreements with certain of our directors in connection with their initial nomination to our board of directors. There are
currently no arrangements or understandings between us, on the one hand, and any of our directors, on the other hand, providing for benefits
upon termination of their service as directors of our Company; however, our agreement with Mr. Erez Meltzer, our Chief Executive Officer
and a director, provides for benefits upon termination of his service as Chief Executive Officer, as described below.
Employment Agreements
We have entered into written agreements with all
of our current executive officers. These agreements provide for notice periods of varying duration for termination of the agreement by
us or by the relevant executive officer, during which time the executive officer will continue to receive base salary and benefits. These
agreements also contain customary provisions regarding non-competition, confidentiality of information and assignment of inventions. However,
the enforceability of the non-competition provisions may be limited under applicable law. See "Item 3. Key Information—D.
Risk Factors—Risks Related to Employee Matters—Under applicable employment laws, we may not be able to enforce covenants not
to compete and therefore may be unable to prevent our competitors from benefitting from the expertise of some of our former employees"
for a further description of the enforceability of non-competition clauses.
We entered into an employment agreement with Mr.
Meltzer, who has served as a director since December 2019, in connection with his appointment as our Chief Executive Officer, effective
as of January 1, 2022. Under the agreement, Mr. Meltzer is entitled to a gross annual salary of $900,000. In addition, Mr. Meltzer is
entitled to an annual bonus (discretionary and based on measurable criteria) of $900,000, with a guaranteed bonus of at least $450,000
for the 2022 fiscal year if his employment is continued through the entire fiscal year, with the possibility to withdraw an advance payment
on account of the 2022 annual bonus, subject to recourse (clawback) for any amount of the 2022 annual bonus that is not earned in excess
of the guaranteed portion of the 2022 annual bonus. Accordingly, in 2022, Mr. Meltzer withdrew an advance payment in the amount of $700,000
on account of his 2022 annual bonus, subject to resource (clawback) as described. Under the agreement, we and Mr. Meltzer are required
to provide six months' prior notice of employment termination (except for "Cause" as defined in his employment agreement,
in which case no prior notice will be required). If we terminate Mr. Meltzer's employment and waive his obligation to perform services
during the notice period, Mr. Meltzer will be entitled to receive payments of his base salary, social benefits and a company car in lieu
of notice for the waived period, up to the full notice period for an immediate termination. In connection with his appointment as our
Chief Executive Officer, we granted Mr. Meltzer options to purchase 300,000 ordinary shares at an exercise price of US$23.84 (which may
be by way of a cashless exercise mechanism) under our 2019 Equity Incentive Plan. The options vest over a period of four years, such that
25% of the options vested on the first anniversary of the date of grant and thereafter, the options vest equally on a quarterly basis,
subject to the continuous engagement by us at each vesting date. These options will have full acceleration in case of consummation of
an M&A Transaction (as such term is defined under our 2019 Equity Incentive Plan). The above equity compensation is in addition to
Mr. Meltzer's equity compensation as a director. Mr. Meltzer does not receive additional cash compensation as a director.
Equity Incentive Plan
On September 3, 2019, we adopted the 2019 Equity
Incentive Plan and its U.S. sub-Plan (the "2019 Equity Incentive Plan"). The 2019 Equity Incentive Plan is intended to afford
an incentive to any of our and our affiliates' employees, directors, officers, consultants, advisors and any other person or entity
who provides services to us, to continue as service providers, to increase their efforts on our and our affiliates' behalf and to
promote our success, by providing such persons with opportunities to acquire a proprietary interest in us. The U.S. sub-Plan applies to
our and any of our affiliates' employees, directors, officers, consultants, advisors and any other person or entity who provides
services to us who are subject to United States federal income tax.
We may issue under the 2019 Equity Incentive Plan
and its U.S. sub-Plan up to 8,041,936 of our ordinary shares, subject to adjustment if particular capital changes affect our share capital
or such other number as our board of directors may determine from time to time. Ordinary shares subject to outstanding awards under the
2019 Equity Incentive Plan and its U.S. sub-Plan that subsequently expire, or are cancelled, forfeited or terminated for any reason before
being exercised will be automatically, and without any further action, returned to the share reserve under the 2019 Equity Incentive Plan
and will again be available for grant.
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During the
year ended December 31, 2022, our directors and officers were granted
a total of options to purchase an aggregate of 699,500 ordinary
shares, with a weighted average exercise price of $20.29 per share.
As of December 31, 2022, options
to purchase 1,890,561 ordinary shares granted to our executive officers and directors under our 2019 Equity Incentive Plan, at a weighted
average exercise price of $16.78, granted under the 2019 Equity Incentive Plan, were outstanding.
For a description of our compensation policy, see
"Item 6. Directors, Senior Management and Employees—C. Board Practices—Compensation Committee."
C. Board Practices
Board of Directors
Our board of directors currently consists of six
directors. Four of our directors qualify as independent directors under the corporate governance standards of the Nasdaq corporate governance
rules and the independence requirements of Rule 10A-3 of the Exchange Act.
Under our amended and restated articles of association,
the number of directors on our board of directors will be no less than five and no more than ten. The minimum and maximum number of directors
may be changed, at any time and from time to time, by vote of our shareholders.
Our directors are divided into three classes with
staggered three-year terms. Each class of directors consists, as nearly as possible, of one-third of the total number of directors constituting
the entire board of directors. At each annual general meeting of our shareholders, the election or re-election of directors following
the expiration of the term of office of the directors of that class of directors will be for a term of office that expires on the third
annual general meeting following such election or re-election. Each director holds office until the third annual general meeting of our
shareholders and until his or her successor is duly appointed, unless the tenure of such director expires earlier pursuant to the Companies
Law or unless removed from office as described below.
Our directors are divided among three classes as
follows: the Class I directors, consisting of Erez Meltzer, will hold office until our annual general meeting of shareholders to
be held in 2024; the Class II directors, consisting of Erez Alroy and Noga Kainan, will hold office until our annual general meeting
of shareholders to be held in 2025; and the Class III directors, consisting of Ran Poliakine, Dan Suesskind and So Young Shin, will
hold office until our annual general meeting of shareholders to be held in 2023.
Each of the directors shall be elected by a vote
of the holders of a majority of the voting power present and voting at that meeting (excluding abstentions). Each director will hold office
until the annual general meeting of our shareholders for the year in which his or her term expires, unless the tenure of such director
expires earlier pursuant to the Companies Law or unless he or she is removed from office. Under our amended and restated articles of association,
the approval of the holders of at least sixty-six and two-thirds percent or more of the votes cast by those shareholders voting in person
or by proxy (including by voting deed) is required to remove any of our directors from office (excluding abstentions).
Under our amended and restated articles of association,
our board of directors may appoint directors to fill vacancies on our board of directors, including if the number of directors is below
the maximum number of directors who may serve as provided in our amended and restated articles, for a term of office equal to the remaining
period of the term of office of the director(s) whose office(s) has been vacated, or in case of a vacancy due to the number of directors
serving being less than the maximum number stated in our amended and restated articles, the board of directors shall determine at the
time of appointment the class to which the additional director shall be assigned.
Under Israeli law, the chief executive officer
or a relative of the chief executive officer of a public company may not serve as the chairman of the board of directors of the company
and the chairman or a relative of the chairman may not be vested with the authority of the chief executive officer, in each case, unless
approved by our shareholders by a special majority vote as discussed below with respect to the approval of director compensation, as required
under the Companies Law. The shareholders' approval can be provided for a period of five years following an initial public offering,
and subsequently, for additional periods of up to three years. In addition, a person who is subordinated, directly or indirectly, to the
chief executive officer may not serve as the chairman of the board of directors; the chairman of the board of directors may not be vested
with authorities that are granted to persons who are subordinated to the chief executive officer; and the chairman of the board of directors
may not serve in any other position in the company or in a controlled subsidiary, but he or she may serve as a director or chairman of
a controlled subsidiary. Prior to our initial public offering, we obtained our shareholders' approval that Mr. Ran Poliakine
may serve as both our chairman of the board of directors and chief executive officer for a period of up to five years from the closing
of our initial public offering. Mr. Poliakine retired from the position of Chief Executive Officer effective as of December 31, 2021 and
continues to serve as non-executive chairman of our board of directors.
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In addition, under the Companies Law, our board
of directors must determine the minimum number of directors who are required to have financial and accounting expertise. Under applicable
regulations, a director with financial and accounting expertise is a director who, by reason of his or her education, professional experience
and skill, has a high level of proficiency in and understanding of business accounting matters and financial statements. He or she must
be able to thoroughly comprehend the financial statements of the company and initiate debate regarding the manner in which financial information
is presented. In determining the number of directors required to have such expertise, the board of directors must consider, among other
things, the type and size of the company and the scope and complexity of its operations. Our board of directors has determined that we
require at least one director with the requisite financial and accounting expertise and that Noga Kainan has such expertise.
There are no family relationships among any of
our officers and directors.
External Directors
Under the Companies Law, companies incorporated
under the laws of the State of Israel, whose shares are publicly traded, including companies with shares listed on the Nasdaq, are required
to appoint at least two external directors within three months of the closing of the initial public offering. While we exceeded the three-month
period, our shareholders approved the appointment of two external directors, Noga Kainan and Dan Suesskind as external directors in February
2021.
However, pursuant to regulations promulgated under
the Companies Law, companies
that do not have a controlling shareholder
(within the meaning of the Companies Law) with shares traded on certain U.S. stock exchanges, including the Nasdaq Global Market, may,
subject to certain conditions, "opt out" from the Companies Law requirements to appoint external directors and related Companies
Law rules concerning the composition of the audit committee and compensation committee of the board of directors.
On March 28, 2022, in accordance with these regulations,
our board of directors elected to "opt out" from the Companies Law requirement to appoint external directors and related Companies
Law rules concerning the composition of the audit committee and compensation committee of the board of directors, effective as of March
31, 2022. Under these regulations, the exemptions from such Companies Law requirements will continue to be available to us so long as:
(i) we do not have a "controlling shareholder" (as such term is defined under the Companies Law), (ii) our shares are traded
on certain U.S. stock exchanges, including the Nasdaq Global Market, and (iii) we comply with the director independence requirements and
the audit committee and compensation committee composition requirements under U.S. laws (including applicable Nasdaq rules) applicable
to U.S. domestic issuers. Our directors who were previously designated as external directors, Noga Kainan and Dan Suesskind, continue
to serve to serve as "ordinary" (non-external) directors, as Class II and Class III directors, respectively, until the end
of the term of their respective class.
Audit Committee
Companies Law Requirements
In accordance with regulations promulgated under
the Companies Law described above, on March 28, 2022, our board of directors elected to "opt out" from the Companies Law requirement
to appoint external directors and related rules concerning the composition of the audit committee and compensation committee, effective
as of March 31, 2022. Under such exemption, among other things, the composition of our audit committee must comply with the requirements
of SEC and Nasdaq rules.
Nasdaq Listing Requirements
Under the Nasdaq corporate governance rules, we
are required to maintain an audit committee consisting of at least three independent directors, all of whom are financially literate,
none of whom has participated in the preparation of our or any of our subsidiary's financial statements at any time during the prior
three years and one of whom has accounting or related financial management expertise.
In accordance with U.S. law and Nasdaq requirements,
our audit committee is responsible for the appointment, compensation and oversight of the work of our independent auditors and for assisting
our board of directors in monitoring our financial statements, the effectiveness of our internal controls and our compliance with legal
and regulatory requirements.
Our audit committee currently consists of Noga
Kainan, Dan Suesskind and Erez Alroy. Noga Kainan serves as chairperson of the audit committee. Our board of directors has determined,
in its business judgment, that each of Noga Kainan and Dan Suesskind is an audit committee financial expert as defined by the SEC rules
and has the requisite financial experience as defined by the Nasdaq corporate governance rules.
92
Each of the members of the audit committee is required
to be "independent" as such term is defined in Rule 10A-3(b)(1) under the Exchange Act.
Audit Committee Role
Our board of directors has adopted an audit committee
charter setting forth the responsibilities of the audit committee consistent with the rules of the SEC and the Nasdaq corporate governance
rules, as well as the requirements for such committee under the Companies Law, which include:
●
recommending the retention and termination of our independent registered public accounting firm to the board of directors in accordance with Israeli law;
●
recommending to the board of directors in accordance with Israeli law the appointment, compensation, retention and oversight of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit services;
●
recommending the terms of audit and non-audit services to be provided by the independent registered public accounting firm for pre-approval by our board of directors;
●
recommending the engagement or termination of the person filling the office of our internal auditor;
●
reviewing with management and our independent directors our financial statements prior to their submission to the SEC; and
●
approval of certain transactions with office holders and controlling shareholders, as described below, and other related party transactions.
Additionally, under the Companies Law, the role
of the audit committee includes the identification of irregularities in our business management, among other things, by consulting with
the internal auditor or our independent auditors and suggesting an appropriate course of action to the board of directors. The audit committee
is also required to adopt procedures with respect to processing of employees' complaints in connection with deficiencies in the
management of the company, and the appropriate means of protection afforded to such employees. In addition, the audit committee or the
board of directors, as set forth in the articles of association of the company, is required to approve the yearly or periodic work plan
proposed by the internal auditor, and where the board of directors approves such work plan, to examine such work plan before its submission
to the board of directors and propose amendments thereto. The audit committee is required to assess the company's internal audit
system and the performance of its internal auditor. The Companies Law also requires that the audit committee assess the scope of the work
and compensation of the company's external auditor. In addition, the audit committee is required to determine whether certain related
party actions and transactions are "material" or "extraordinary" for the purpose of the requisite approval procedures
under the Companies Law and whether certain transactions with a controlling shareholder will be subject to a competitive procedure.
The audit committee charter states that in fulfilling
its role the committee is empowered to conduct or authorize investigations into any matters within its scope of responsibilities.
Approval of Transactions with Related Parties
The approval of the audit committee is required
to effect specified actions and transactions with office holders and controlling shareholders and their relatives, or in which they have
a personal interest. The audit committee may not approve an action or a transaction with a controlling shareholder or with an office holder
unless, among other things, at the time of approval the audit committee meets the composition requirements under the Companies Law.
The Companies Law requires that an office holder
promptly disclose to the
company and, in any event, not later than the board
meeting at which the transaction is first discussed,
any personal interest that he or she may have, and all related material information
known to him or her concerning any existing or proposed transaction with the company. A personal interest includes an interest of any
person in an act or transaction of a company, including a personal interest of one's relative or of a corporate body in which such
person or a relative of such person is a 5% or greater shareholder, director or general manager or in which he or she has the right to
appoint at least one director or the general manager, but excluding a personal interest stemming solely from one's ownership of
shares in the company. A personal interest includes the personal interest of a person for whom the office holder holds a voting proxy
or the personal interest of the office holder with respect to his or her vote on behalf of a person for whom he or she holds a proxy even
if such shareholder has no personal interest in the matter.
93
If it is determined that an office holder has a
personal interest in a non-extraordinary transaction, meaning any transaction that is in the ordinary course of business, on market terms
and that is not likely to have a material impact on the company's profitability, assets or liabilities, approval by the board of
directors is required for the transaction, unless the company's articles of association provide for a different method of approval.
Any such transaction that is adverse to the company's interests may not be approved by the board of directors.
Approval first by the company's audit committee
and subsequently by the board of directors is required for an extraordinary transaction (meaning, any transaction that is not in the ordinary
course of business, not on market terms or that is likely to have a material impact on the company's profitability, assets or liabilities)
in which an office holder has a personal interest.
A director and any other office holder who has
a personal interest in a transaction which is considered at a meeting of the board of directors or the audit committee may generally (unless
it is with respect to a transaction which is not an extraordinary transaction) not be present at such a meeting or vote on that matter
unless a majority of the directors or members of the audit committee, as applicable, have a personal interest in the matter. If a majority
of the members of the audit committee or the board of directors have a personal interest in the approval of such a transaction then all
of the directors may participate in deliberations of the audit committee or board of directors, as applicable, with respect to such transaction
and vote on the approval thereof and, in such case, shareholder approval is also required.
Certain disclosure and approval requirements apply
under Israeli law to certain transactions with controlling shareholders, certain transactions in which a controlling shareholder has a
personal interest and certain arrangements regarding the terms of service or employment of a controlling shareholder.
Compensation Committee
In accordance with regulations promulgated under
the Companies Law described above, on March 28, 2022, our board of directors elected to "opt out" from the Companies Law requirement
to appoint external directors and related rules concerning the composition of the audit committee and compensation committee, effective
as of March 31, 2022.
Under the Nasdaq corporate governance rules, we
are required to maintain a compensation committee consisting of at least two directors, each of whom is an independent director within
the meaning of the Nasdaq corporate governance rules. Our compensation committee currently complies with the provisions of Nasdaq corporate
governance rules relating to composition requirements.
The compensation committee currently consists of
Dan Suesskind, Noga Kainan and Erez Alroy. Dan Suesskind serves as chairperson of the compensation committee.
Compensation Committee Role
In accordance with the Companies Law, the roles
of the compensation committee are, among others, as follows:
●
to recommend to the board of directors the compensation policy for directors and officers, and, once every three years, or five years from a company's initial public offering, to recommend to the board of directors, whether the compensation policy that had been approved should be extended for a longer period of time;
●
to recommend to the board of directors updates to the compensation policy, from time to time, and examine its implementation;
●
to decide whether to approve the terms of office and employment of directors and officers that require approval of the compensation committee; and
●
to decide whether the compensation terms of the chief executive officer, which were determined pursuant to the compensation policy, will be exempted from approval by the shareholders because such approval would harm the ability to engage the chief executive officer.
In addition to the roles mentioned above, our compensation
committee may also make recommendations to our board of directors regarding the awarding of employee equity grants.
94
Compensation
Policy
In
general, under the Companies Law, a public company must have a compensation policy that applies to its office holders approved by the
board of directors after receiving and considering the recommendations of the compensation committee. In addition, the compensation policy,
which must be approved at least once every three years, or five years after a company's initial public offering, requires the approval
of the general meeting of the shareholders. In public companies such as our company, shareholder approval by a majority vote of the ordinary
shares present and voting at a meeting of shareholders called for such purpose is required, provided that either: (i) such majority
includes the majority of the votes of those shareholders who are non-controlling shareholders and shareholders who do not have a personal
interest in the approval of the compensation policy, who voted at the meeting (excluding abstentions) or (ii) the total number of
votes against the proposal among the shareholders mentioned in clause (i) does exceed 2% of the voting rights in the company. Under
special circumstances, the board of directors may approve the compensation policy despite the objection of the shareholders on the condition
that the compensation committee and then the board of directors decide, on the basis of detailed arguments and after discussing again
the compensation policy, that approval of the compensation policy, despite the objection of the meeting of shareholders, is in the best
interests of the company.
However,
if a company initially offering its securities to the public, adopts a compensation policy in advance of its initial public offering,
and describes the compensation policy in the prospectus relating to the offering, or adopts a compensation policy within nine months
from the date the company becomes a public company, then the compensation policy is deemed a validly adopted policy in accordance with
the Companies Law requirements described above and will be valid for a term of five years from the date such company becomes a public
company.
The
compensation policy must be based on certain considerations, include certain provisions and needs to reference certain matters as set
forth in the Companies Law.
The
compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of office holders,
including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement.
The compensation policy must relate to certain factors, including advancement of the company's objectives, business plan and long-term
strategy, and creation of appropriate incentives for office holders. It must also consider, among other things, the company's risk
management, size and the nature of its operations. The compensation policy must furthermore consider the following additional factors:
●
the education, skills, experience,
    expertise and accomplishments of the relevant office holder;
●
the office holder's position,
    responsibilities and prior compensation agreements with him or her;
●
the ratio between the cost
    of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees
    employed through contractors who provide services to the company, in particular the ratio between such cost, the average and median
    salary of the employees of the company, as well as the impact of such disparities on the work relationships in the company;
●
if the terms of employment
    include variable components — the possibility of reducing variable components at the discretion of the board of directors and
    the possibility of setting a limit on the exercise value of non-cash variable equity-based components; and
●
if the terms of employment
    include severance compensation — the term of employment or office of the office holder, the terms of his or her compensation
    during such period, the company's performance during the such period, his or her individual contribution to the achievement
    of the company goals and the maximization of its profits and the circumstances under which the office holder is leaving the company.
The
compensation policy must also include, with regard to variable components:
●
with the exception of office
    holders who are subordinate to the chief executive officer, determining the variable components on long-term performance basis and
    on measurable criteria; however, the company may determine that an immaterial part of the variable components of the compensation
    package of an office holder shall be awarded based on non-measurable criteria, if such amount is not higher than three monthly salaries
    per annum while taking into account the office holder's contribution to the company;
●
the ratio between variable
    and fixed components, as well as the limit of the values of variable components at the time of their grant.
●
a condition under which the
    office holder will return to the company, according to conditions to be set forth in the compensation policy, any amounts paid as
    part of his or her terms of employment, if such amounts were paid based on information later to be discovered to be wrong, and such
    information was than re-presented in the company's financial statements;
●
the minimum holding or vesting
    period of variable equity-based components, while taking into consideration long-term incentives; and
●
a limit
    to retirement grants.
95
Our
compensation policy was approved by the board of directors and the shareholders on February 9, 2021, and will be in effect for a period
of five years from the date of approval. Our compensation policy is designed to promote retention and motivation of directors and executive
officers, incentivize superior individual excellence, align the interests of our directors and executive officers with our long-term
performance and provide a risk management tool. To that end, a portion of an executive officer's compensation package is targeted
to reflect our short and long-term goals, as well as the executive officer's individual performance. On the other hand, our compensation
policy includes measures designed to reduce the executive officer's incentives to take excessive risks that may harm us in the
long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and
the total compensation of an executive officer and minimum vesting periods for equity-based compensation.
Our
compensation policy also addresses our executive officers' individual characteristics (such as his or her respective position,
education, scope of responsibilities and contribution to the attainment of our goals) as the basis for compensation variation among our
executive officers, and considers the internal ratios between compensation of our executive officers and directors and other employees.
Pursuant to our compensation policy, the compensation that may be granted to an executive officer may include base salary, annual bonuses
and other cash bonuses (such as relocation, signing and special bonuses) as well as change of control related bonuses, equity-based compensation,
benefits and retirement and termination of employment arrangements. All cash bonuses are limited to a maximum amount linked to the executive
officer's base salary (or to the total annual compensation in the case of the special bonus for special achievements).
An
annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets. The
annual cash bonus that may be granted to our executive officers, other than our chief executive officer, will be based on performance
objectives and a discretionary evaluation of the executive officer's overall performance by our chief executive officer, subject
to minimum thresholds. Furthermore, the performance objectives will be recommended by our chief executive officer and approved by our
compensation committee (and, if required by law, by our board of directors).
The
performance measurable objectives of our chief executive officer, which will be determined annually by our compensation committee and
board of directors, will include the weight to be assigned to each achievement in the overall evaluation. A less significant portion
of the chief executive officer's annual cash bonus may be based on a discretionary evaluation of the chief executive officer's
overall performance by the compensation committee and the board of directors based on quantitative and qualitative criteria.
The
equity-based compensation under our compensation policy for our executive officers is designed in a manner consistent with the underlying
objectives in determining the base salary and the annual cash bonus, with its main objectives being to enhance the alignment between
the executive officers' interests with our long-term interests and those of our shareholders and to strengthen the retention and
the motivation of executive officers in the long term. Our compensation policy entitles our executive officers to compensation in the
form of share options or other equity-based awards, such as RSUs, in accordance with our share incentive plan then in place (subject
to the compensation committee's approval or the approval of the board of directors). All equity-based incentives granted to executive
officers shall be subject to vesting periods in order to promote long-term retention of the awarded executive officers. The equity-based
compensation may be granted from time to time and will be individually determined and awarded according to the performance, educational
background, prior business experience, qualifications, role and the personal responsibilities of the executive officer.
In
addition, our compensation policy contains compensation recovery provisions which allows us under certain conditions to recover bonuses
paid in excess, enables our chief executive officer to approve an immaterial change in the terms of employment of an executive officer
(provided that the changes of the terms of employment are in accordance with our compensation policy) and allows us to exculpate, indemnify
and insure our executive officers and directors, subject to certain limitations set forth thereto.
Our
compensation policy also governs the compensation of the members of our board of directors and determines that the compensation of non-executive
directors shall be in accordance with the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director),
5760-2000, as amended by the Companies Regulations (Relief for Public Companies Traded in Stock Exchange Outside of Israel), 5760-2000,
or non-executive directors may be paid cash compensation in the form of an annual fee for service on the Board of Directors and its committees
in the amounts not to exceed those set forth in the compensation policy. Our directors may also be entitled to receive equity-based compensation
in the form of restricted shares, RSUs or share options subject to an annual maximum and to a vesting period in order to promote long-term
retention of the awarded director, subject to the approval of our shareholders, as required under the Companies Law. Furthermore, the
chairman of our board of directors may be entitled to a higher cash base compensation or equity-based compensation.
96
Approval
of Compensation of Directors and Executive Officers
Directors.
Under the Companies Law, the compensation of our directors requires the approval of our compensation committee, the subsequent approval
of the board of directors and, unless exempted under regulations promulgated under the Companies Law, the approval of the shareholders
at a general meeting. If the compensation of our directors is inconsistent with our stated compensation policy, then those provisions
that must be included in the compensation policy according to the Companies Law must have been considered by the compensation committee
and board of directors, and shareholder approval will also be required, provided that:
●
at least
    a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such
    matter, present and voting at such meeting, are voted in favor of the compensation package, excluding abstentions; or
●
the total
    number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter and who vote
    against the compensation package does not exceed two percent (2%) of the aggregate voting rights in the Company.
Executive
officers other than the Chief Executive Officer.
The Companies Law requires the approval of the compensation of a public company's
executive officers (other than the chief executive officer) in the following order: (i) the compensation committee, (ii) the company's
board of directors, and (iii) if such compensation arrangement is inconsistent with the company's stated compensation policy, the
company's shareholders (by a special majority vote as discussed above with respect to the approval of director compensation), provided
that the compensation committee and the board of directors members have considered those provisions that must be included in the compensation
policy according to the Companies Law. However, if the shareholders of the company do not approve a compensation arrangement with an
executive officer that is inconsistent with the company's stated compensation policy, the compensation committee and board of directors
may override the shareholders' decision if each of the compensation committee and the board of directors provide detailed reasons
for their decision after re-evaluation of the arrangement, including in view of the shareholders' objections.
An
amendment to an existing arrangement with an office holder who is not the chief executive officer, or a director requires only the approval
of the compensation committee, if the compensation committee determines that the amendment is not material in comparison to the existing
arrangement. However, according to regulations promulgated under the Companies Law, an amendment to an existing arrangement with an office
holder (who is not a director) who is subordinate to the chief executive officer shall not require the approval of the compensation committee
if (i) the amendment is approved by the chief executive officer and the company's compensation policy provides that a non-material
amendment to the terms of service of an office holder (other than the chief executive officer) may be approved by the chief executive
officer and (ii) the engagement terms are consistent with the company's compensation policy.
Chief
Executive Officer
. Under the Companies Law, the compensation of a public company's chief executive officer is required to be
approved by: (i) the company's compensation committee; (ii) the company's board of directors, and (iii) the company's
shareholders (by a special majority vote as discussed above with respect to the approval of director compensation). However, if the shareholders
of the company do not approve the compensation arrangement with the chief executive officer, the compensation committee and board of
directors may override the shareholders' decision if each of the compensation committee and the board of directors provide a detailed
report for their decision. The approval of each of the compensation committee and the board of directors should be in accordance with
the company's stated compensation policy; however, in special circumstances, they may approve compensation terms of a chief executive
officer that are inconsistent with such policy provided that they have considered those provisions that must be included in the compensation
policy according to the Companies Law and that shareholder approval was obtained (by a special majority vote as discussed above with
respect to the approval of director compensation). In addition, the compensation committee may waive the shareholder approval requirement
with regards to the approval of the engagement terms of a candidate for the chief executive officer position, if they determine that
the compensation arrangement is consistent with the company's stated compensation policy and that the chief executive officer candidate
did not have a prior business relationship with the company or a controlling shareholder of the company and that subjecting the approval
of the engagement to a shareholder vote would impede the company's ability to employ the chief executive officer candidate. In
the event that the chief executive officer also serves as a member of the board of directors, his or her compensation terms as chief
executive officer will be approved in accordance with the rules applicable to approval of compensation of directors.
Fiduciary
Duties of Office Holders
The
Companies Law codifies the fiduciary duties that office holders owe to a company. An office holder is defined in the Companies Law as
a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities
of any of these positions regardless of such person's title, a director and any other manager directly subordinate to the general
manager. Each person listed in the table under
"Management—Executive officers and directors"
is an office holder
under the Companies Law.
An
office holder's fiduciary duties consist of a duty of care and a duty of loyalty. The duty of care requires an office holder to
act with the level of care with which a reasonable office holder in the same position would have acted under the same circumstances.
The duty of care of an office holder includes a duty to use reasonable means, in light of the circumstances, to obtain:
●
information on the business
    advisability of a given action brought for his or her approval or performed by him or her by virtue of his position; and
97
●
all other important information
    pertaining to such action.
The
duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a
duty to:
●
refrain from any conflict of
    interest between the performance of his or her duties in the company and the performance of his or her other duties or personal affairs;
●
refrain from any action that
    is competitive with the company's business;
●
refrain from exploiting any
    business opportunity of the company to receive a personal gain for him or herself or others; and
●
disclose to the company any
    information or documents relating to the company's affairs which the office holder has received due to his or her position
    as an office holder.
Under
the Companies Law, a company may approve an act specified above which would otherwise constitute a breach of an office holder's
duty of loyalty, provided that the office holder acted in good faith, neither the act nor its approval harms the company and the office
holder discloses his or her personal interest a sufficient time before the approval of such act. Any such approval is subject to the
terms of the Companies Law setting forth, among other things, the appropriate bodies of the company required to provide such approval.
Duties
of Shareholders
Under
the Companies Law, a shareholder has a duty to refrain from abusing his or her power in the company and to act in good faith and in a
customary manner toward the company and other shareholders in exercising his or her rights and performing his or her obligations, including,
among other things, in voting at general meetings of shareholders (and at shareholder class meetings) on the following matters:
●
an amendment to the articles
    of association;
●
an increase in the authorized
    share capital;
●
a merger; and
●
the approval of related-party
    transactions that require shareholder approval.
A
shareholder also has a general duty to refrain from discriminating against other shareholders.
Certain
shareholders also have a duty of fairness toward the company. These shareholders include any controlling shareholder, any shareholder
who knows that he or she has the power to determine the outcome of a shareholder vote and any shareholder who has the power to appoint
or prevent the appointment of an office holder of the company or any other power towards the company under the company's articles
of association. The Companies Law does not define the substance of the duty of fairness, except to state that the remedies generally
available upon a breach of contract will also apply in the event of a breach of the duty of fairness.
D.
Employees
As
of December 31, 2022, we had 180 employees, of which 119 employees are based in Israel, 2 employees are based in Japan, 28 employees
are based in the United States, 31 employees are based in Korea and the balance in other areas. We have never experienced any employment-related
work stoppages and believe our relationship with our employees is good. The following table sets out our total number of employees by
function for the last three years.
Area
of Activity
As of
December 31, 2020
As of
December 31, 2021
As of
December 31, 2022
Cost of Revenue
-
-
2
General and Administrative
22
76
67
Research and Development
24
91
104
Sales and Marketing
4
19
7
Total
50
186
180
Our
human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing
and new employees, advisors and consultants. The principal purposes of our equity and cash incentive plans are to attract, retain and
reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase shareholder value and the
success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.
98
E.
Share Ownership
For
information regarding the beneficial ownership of our ordinary shares by our directors and executive officers, see "Item 7. Major
Shareholders and Related Party Transactions—A. Major Shareholders."
Item
7. Major Shareholders and Related Party Transactions
A.
Major Shareholders
The
following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2023 by:
●
each person or entity known by us to own beneficially
    more than 5% of our outstanding ordinary shares;
●
each of our directors and executive officers; and
●
all of our directors and executive officers as a group.
The
beneficial ownership of our ordinary shares is determined in accordance with the rules of the SEC. Under these rules, a person is deemed
to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting
of the security, or investment power, which includes the power to dispose of or to direct the disposition of the security. In determining
beneficial ownership percentages, we deem ordinary shares that a shareholder has the right to acquire, including the ordinary shares
issuable pursuant to options or warrants that are currently exercisable or exercisable or RSUs that vest within 60 days of March 31,
2023, if any, to be outstanding and to be beneficially owned by the person with such right to acquire additional ordinary shares for
the purposes of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing
the percentage ownership of any other person. The percentage of ordinary shares beneficially owned is based on 55,150,345 ordinary shares
outstanding as of March 31, 2023.
Except
where otherwise indicated, we believe, based on information furnished to us by such owners, that the beneficial owners of the ordinary
shares listed below have sole investment and voting power with respect to such shares.
None
of our shareholders have different voting rights from other shareholders. To the best of our knowledge, we are not owned or controlled,
directly or indirectly, by another corporation or by any foreign government. We are not aware of any arrangement that may, at a subsequent
date, result in a change of control of our company.
Unless
otherwise noted below, the address for each beneficial owner is c/o Communications Center, Neve Ilan, Israel 9085000.
Shares Beneficially Owned
Name of Beneficial Owner
Number
Percentage
5% or greater shareholders
SK square Co., Ltd. and SK Square Americas, Inc. (formerly known as SK Telecom TMT Investment Corp.)(1)
4,869,909
7.82
%
Ran Poliakine(2)
3,342,071
5.64
%
Executive Officers
Erez Meltzer(3)
128,107
*
Ran Daniel (4)
16,667
*
James Dara (5)
60,833
*
Ofir Koren (6)
60,417
*
Pini Ben Elazar (7)
14,583
*
Tamar Aharon Cohen (8)
23,625
*
Guy Yoskovitz (9)
48,928
*
Gali Yahav Attias (10)
5,833
*
Marina Gofman Feler
--
*
Orit Wimpfheimer (11)
15,489
*
Directors
Ran Poliakine(2)
3,342,071
5.64
%
Erez Meltzer (3)
128,107
*
Noga Kainan (12)
15,627
*
Dan Suesskind (13)
15,627
*
Erez Alroy (14)
9,375
*
So Young Shin (15)
15,755
*
All directors and executive officers as a group (15 persons)
3,772,936
6.70
%
*
Amount
represents less than 1% of outstanding ordinary shares.
(1)
Based
solely on the
Schedule 13G filed by SK square Co., Ltd.
and SK Square Americas, Inc. with the SEC on February 14, 2022, consisting of (i) 2,607,466 ordinary shares and (ii) a warrant to purchase
2,262,443 ordinary shares held by SK Square Americas, Inc., a wholly owned subsidiary of SK square. Co., Ltd.
99
(2)
Based on the
Schedule
    13G/A filed by Ran Poliakine with the SEC on February 14, 2023 and other information available to the company. Represents (i) 2,626,927
    ordinary shares and (ii) options to purchase 715,144 ordinary shares currently exercisable or exercisable within 60 days of
March
    31, 2023
.
(3)
Represents (i) 7,917 ordinary
    shares, and (ii) options to purchase 120,190 ordinary shares exercisable within 60 days of March 31, 2023.
(4)
Represents options to purchase
16,667
ordinary
    shares
currently exercisable or
exercisable within 60 days of
March 31,
2023.
(5)
Represents options to purchase
60,833
ordinary
    shares
currently exercisable or
exercisable within 60 days of
March 31,
2023.
(6)
Represents options to purchase
60,417
ordinary
    shares
currently exercisable or
exercisable within 60 days of
March 31,
2023.
(7)
Represents options to purchase
14,583
ordinary
    shares
currently exercisable or
exercisable within 60 days of
March 31,
2023.
(
8
)
Represents options to purchase
23,625
ordinary
    shares
currently exercisable or
exercisable within 60 days of
March 31,
2023.
(9)
Represents
(i)
    35,353 ordinary shares and (ii) 13,575
options to purchase ordinary shares
currently
    exercisable or exercisable within 60 days
of
March 31,
2023.
(10)
Represents options to purchase
    5,833 ordinary shares
currently exercisable or
exercisable
    within 60 days of
March 31,
2023.
(11)
Represents (i) options to
    purchase 15,489 ordinary shares
currently exercisable
    or
exercisable within 60 days of
March 31,
2023.
(12)
Represents
    options to purchase 15,627 ordinary shares
currently
    exercisable or exercisable within 60 days
of
March 31,
2023.
(13)
Represents options to purchase
    15,627 ordinary shares
currently exercisable or
    exercisable within 60 days
of
March 31,
2023.
(14)
Represents
    options to purchase 9,375 ordinary shares
currently
    exercisable or exercisable within 60 days
of
March 31,
2023.
(15)
Represents options to purchase
    15,755 ordinary shares
currently exercisable or
    exercisable within 60 days
of
March 31,
2023.
100
To
our knowledge, other than as disclosed in the table above, our other filings with the SEC and this Annual Report, there has been no significant
change in the percentage ownership held by any major shareholder since January 1, 2020. The major shareholders listed above do not have
voting rights with respect to their ordinary shares that are different from the voting rights of other holders of our ordinary shares.
As
of March 31, 2023, according to the records of Continental Stock Transfer & Trust Co., approximately 2,915,792 (or 5.29%) of our
outstanding ordinary shares are held by 22 record holders in the United States, not including Cede & Co., the nominee of the Depository
Trust Company, in whose name all shares held in "street name" are held in the United States.
We
are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
B.
Related Party Transactions
Our
policy is to enter into transactions with related parties on terms that, on the whole, are no more favorable, or no less favorable, than
those available from unaffiliated third parties. Based on our experience in the business sectors in which we operate and the terms of
our transactions with unaffiliated third parties, we believe that all of the transactions described below met this policy standard at
the time they occurred. The following is a description of material transactions, or series of related material transactions, since January 1,
2022, to which we were or are a party and in which the other parties included or include our directors, executive officers, holders of
more than 5% of our voting securities or any member of the immediate family of any of the foregoing persons.
Relationship
With SKT
On
June 17, 2019, Nanox Gibraltar entered into a Strategic Share Purchase Agreement with SK Telecom TMT Investment Corp. ("SKT"),
Pureun Partners Asset Management Co., Ltd. and EBEST-PPAM Fund No. 9 (collectively, the "SKT Entities"), pursuant to which
Nanox Gibraltar sold 2,262,443 ordinary shares to the SKT Entities for an aggregate purchase price of approximately $5.0 million.
In connection with such transaction, Nanox Gibraltar also issued a warrant to SKT to acquire 2,262,443 ordinary shares at an exercise
price of $20.87 per share (the "Warrant").
In
connection with the transactions described above, Nanox Gibraltar also entered into an investor rights agreement with the SKT Entities
(the "Investor Rights Agreement"). The agreement provides for the rights to nominate a member of our board of directors,
as well as certain registration rights. The rights under the Investor Rights Agreement terminated upon the closing of our initial public
offering. The SKT Entities became parties to the Registration Rights Agreement prior to the closing of our initial public offering. See
below "—Registration Rights Agreements" for detailed description of the registration rights.
On
June 4, 2020, we entered into a Share Purchase Agreement with SKT, pursuant to which we sold 1,250,000 ordinary shares to SKT
for an aggregate purchase price of $20.0 million. In connection with such agreement, we amended the Warrant to extend the exercise
period to the earlier of June 17, 2025 or an exit event, which event does not include an initial public offering, and we amended
the Investor Rights Agreement which granted SKT the right to appoint Mr. Jung Ho Park (or another person designated by SKT) as a
director for a term of three years. In addition, we granted Mr. Park options to purchase 100,000 of our ordinary shares, vesting
in equal quarterly installments over a period of four years, at an exercise price of $16.00 per ordinary share. In the event that SKT
nominates any replacement director, any such director may receive options with the same terms, but the aggregate number of options granted
to all such directors together shall not exceed 100,000. Mr. Park resigned from our Board of Directors in December 2021, at which time
his unvested options to purchase 68,750 ordinary shares expired, and new options to purchase the same number of ordinary shares (i.e.,
68,750 shares) were granted to Ms. So Young Shin, a successor director appointed by SKT in May 2022.
Furthermore,
on June 4, 2020, we entered into a collaboration agreement with SK Telecom Co., Ltd. ("SK Telecom"), pursuant to which
we and SK Telecom continue to explore and engage in good faith to develop a definitive agreement for the deployment of 2,500 Nanox Systems
in South Korea and Vietnam. With the support of SK Telecom we established a wholly-owned subsidiary in South Korea, which in turn established
our fabrication facility in Korea for the manufacturing of MEMs X-ray chips for the Nanox.ARC. The collaboration agreement expired on
December 31, 2021, but we continue to explore business opportunities and assess collaboration with SK Telecom.
In
addition, we signed an agreement with Dr. Ilung Kim, who previously served as President of SK Telecom, dated December 16, 2019,
for the provision of consulting services to us. Under the agreement, we granted Dr. Kim options to purchase 1,206,290 of our ordinary
shares at an exercise price of $2.21 per ordinary share, of which options to purchase 150,000 ordinary shares were exercised and the
remaining options are fully vested. The vested options are exercisable until the earlier of (a) the second anniversary of termination
of the engagement between us and Dr. Kim or (b) the tenth anniversary from the date of grant. Effective as of July 1, 2021, the
consulting agreement was replaced by an employment agreement with Dr. Kim in connection with appointment as the chief executive officer
of our Korean subsidiary.
101
Agreements
With Directors and Officers
The
following is a summary of each material contract, other than material contracts entered into in the ordinary course of business, to which
we are or have been a party, since January 1, 2022.
Relationship
With Illumigyn Ltd.
Since
December 1, 2019, Illumigyn has sub-leased approximately 165 square meters of private office space, including access to shared public
spaces, from us in Neve Ilan, Israel. Mr. Poliakine currently serves as a member of senior management of Illumigyn through a service
provider agreement and is a significant shareholder primarily through indirect holdings, and he served as a member of the board of directors
of Illumigyn until August 2019. In addition, the deceased Mr. Richard Stone, who served as a director until his passing in May 2022,
was a significant shareholder in, and served as a member of the board of directors of Illumigyn, Ms. Noga Kainan, a director, serves
as a member of the board of directors of Illumigyn, and Anat Kaphan, our former Chief Innovation Officer who currently serves as a member
of our advisory board, also serves as a consultant to Illumigyn. Illumigyn pays approximately $12,000 per month under the sub-lease.
During the years ended December 31, 2022 and 2021, the Company received from Illumigyn approximately $171,000 and $125,000, respectively,
under the sub-lease.
Relationship
with SixAI Ltd.
On
April 16, 2020, we entered into a service agreement (the "Service Agreement") with SixAI, pursuant to which SixAI agreed
to provide Nanox with certain software development and mechanical engineering services. The Service Agreement was effective as of March 1,
2020 and was extended by mutual agreement of the parties several times until terminated on December 31, 2021. During the year ended December
31, 2021, the Company recorded an expense of $80,000 relating to the Service Agreement. Mr. Poliakine currently serves as a member
of the board of directors of SixAI and is a controlling shareholder of SixAI.
Relationship
with Wellsense Technologies, Ltd.
Since
February 2020, Wellsense Technologies, Ltd. ("Wellsense Technologies") has sub-leased approximately 165 square meters of
private office space, including access to shared public spaces, from us in Neve Ilan, Israel. Wellsense Technologies, Ltd. pays approximately
$7,000 per month. Ran Poliakine is, and the deceased, Mr. Richard Stone, who served as a director until his passing in May 2022, was,
a shareholder of the parent company of Wellsense Technologies. During the years ended December 31, 2022 and 2021, the Company received
from Wellsense Technologies approximately $47,000 and $66,000, respectively, under the sub lease.
Service
Agreement
In
February 2021, our shareholders approved our engagement of Floyd Katske as a medical consultant, effective as of October 1, 2020, in
addition and unrelated to his role as a director. Floyd Katske served as a director until December 2022 and since such date serves as
a member of our advisory board. We paid Floyd Katske with respect to such medical consultant services $200 per hour, against an invoice,
not to exceed 100 hours in any calendar month, according to hours approved by the Chairman. In addition, we paid Floyd Katske compensation
consisting of RSUs granted in each calendar quarter, in the amount calculated by dividing (i) two times the cash compensation paid during
such quarter as aforesaid by (ii) the fair market value of our ordinary shares on the last trading day of such quarter.
Directorship
Agreements
We
previously entered into directorship agreements with certain of our directors in connection with their initial nomination to our board
of directors.
Equity
Incentive Plans
From
time to time we grant options to purchase our ordinary shares and RSUs to our executive officers and directors.
For
a description of our equity incentive plan, see "Item 6. Directors, Senior Management and Employees—B. Compensation—Equity
Incentive Plan."
Directors
and Officers Insurance Policy and Indemnification and Exculpation Agreements
Our
amended and restated articles of association permit us to exculpate, indemnify and insure each of our directors and officers to the fullest
extent permitted by the Companies Law. We have obtained directors' and officers' liability insurance which covers each of
our executive officers and directors.
102
We
have entered into agreements with each of our current directors and officers exculpating them from a breach of their duty of care to
us to the fullest extent permitted by law and undertaking to indemnify them to the fullest extent permitted by law, including with respect
to liabilities resulting from our initial public offering, to the extent that these liabilities are not covered by insurance, all subject
to limited exceptions. Indemnification for any monetary liability incurred by or imposed on a director or officer in favor of a third
party is limited to certain events that were determined as foreseeable by the board of directors based on our current or expected activities.
The maximum aggregate amount of indemnification that we may pay to our directors and officers based on such indemnification agreements
shall not exceed the greater of (i) in relation to indemnity in connection with an offering to the public of our securities, the
aggregate amount of proceeds from the sale by us and/or any of our shareholders in connection with such public offering, (ii) 25% of
our total shareholders' equity pursuant to our most recent financial statements as of the time of the actual payment of indemnification,
and (iii) $50 million (in each case as may be increased from time to time by shareholders' approval). Such indemnification
amounts are in addition to any insurance amounts.
However,
in the opinion of the SEC, indemnification of office holders for liabilities arising under the Securities Act is against public policy
and therefore unenforceable.
Registration
Rights Agreements
We
have entered into a registration rights agreement (the "Registration Rights Agreement") that entitles certain holders of
our ordinary shares and other securities convertible into or exchangeable for ordinary shares, including SK Square Americas, Inc. (formerly
known as SK Telecom TMT Investment Corp.), to certain piggyback registration rights. See "Item 10. Additional Information—C.
Material Contracts—Registration Rights Agreements."
C.
Interests of Experts and Counsel
Not
applicable.
Item 8. Financial Information
A.
Consolidated Financial Statements and Other Financial Information
See
"Item 18. Financial Statements."
Legal
Proceedings
See
"Item 4. Information on the Company—B. Business Overview—Legal Proceedings."
Dividend
Policy
We
have never declared or paid any cash dividends on our ordinary shares and we anticipate that, for the foreseeable future, we will retain
any future earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay
cash dividends for at least the next several years.
The
distribution of dividends may also be limited by the Companies Law, which permits the distribution of dividends only out of retained
earnings or earnings derived over the two most recent fiscal years, whichever is higher, provided that there is no reasonable concern
that payment of a dividend will prevent a company from satisfying its existing and foreseeable obligations as they become due. In the
event that we do not have retained earnings or earnings generated over the two most recent years legally available for distribution,
we must seek the approval of the court in order to distribute a dividend, and the court may approve our request if it is convinced that
there is no reasonable concern that the payment of a dividend will prevent us from satisfying our existing and foreseeable obligations
as they become due. Our amended and restated articles of association provide that dividends will be paid at the discretion of, and upon
resolution by, our board of directors, subject to the provision of the Companies Law.
B.
Significant Changes
Except
as disclosed elsewhere in this annual report on Form 20-F, we have not experienced any significant changes since the date of our audited
consolidated financial statements included in this annual report on Form 20-F.
Item
9. Offer and Listing
A.
Offer and Listing Details
Our
ordinary shares have been listed on the NASDAQ Global Market since August 20, 2020 under the symbol "NNOX."
103
B.
Plan of Distribution
Not
applicable.
C.
Markets
Our
ordinary shares have been listed on the NASDAQ Global Market since August 20, 2020 under the symbol "NNOX."
D.
Selling Shareholders
Not
applicable.
E.
Dilution
Not
applicable.
F.
Expenses of the Issue
Not
applicable.
Item 10. Additional Information
A.
Share Capital
Not
applicable.
B.
Memorandum and Articles of Association
A
copy of our amended and restated articles of association is attached as Exhibit 1.1 to this Annual Report. Our registration number
with the Israeli Registrar of Companies is 515942076. Our registration number may be changed by the Israeli Registrar of Companies to
indicate that we are a public company. The following are summaries of material provisions of our current amended and restated articles
of association that became effective immediately prior to the completion of our initial public offering in August 2020, insofar as they
relate to the material terms of our ordinary shares.
Objects
of Our Company
Our
purpose as set forth in our amended and restated articles of association is to engage in any lawful activity.
Board
of Directors
See
"Item 6. Directors, Senior Management and Employees—C. Board Practices."
Borrowing
Powers
Pursuant
to the Companies Law and our amended articles of association, our board of directors may exercise all powers and take all actions that
are not required under law or under our amended and restated articles of association to be exercised or taken by our shareholders, including
the power to borrow money for company purposes.
Ordinary
Shares
As
of December 31, 2022, we had 55,094,237 ordinary shares outstanding.
Dividends
We
have never declared or paid any cash dividends on our ordinary shares.
We
may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. See "Item
8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividend Policy" for more information
with respect to the requirements under Israeli law for the declaration and payment of dividends to our shareholders. Under the Companies
Law, dividend distributions are determined by the board of directors and do not require the approval of the shareholders of a company
unless the company's articles of association provide otherwise. Our amended and restated articles of association do not require
shareholder approval of a dividend distribution and provide that dividend distributions may be determined by our board of directors.
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Voting
Rights
All
of our ordinary shares have identical voting and other rights in all respects.
Holders
of our ordinary shares have one vote for each ordinary share held on all matters submitted to a vote before the shareholders at a general
meeting.
Quorum.
In any meeting of shareholders, we will follow the quorum requirements for general meetings as set forth in our amended and restated
articles of association, instead of one-third of the issued share capital as required under the Nasdaq Marketplace Rules. Pursuant to
our amended and restated articles of association, the quorum required for our general meetings of shareholders will consist of at least
two shareholders present in person or by proxy (including by voting deed) and holding shares conferring in the aggregate at least 25%
of the voting power of the Company. A meeting adjourned for lack of a quorum will generally be adjourned to the same day of the following
week at the same time and place, or to such other day, time or place as indicated by our board of directors, if so specified in the notice
of the meeting. At the reconvened meeting, subject to a limited exception, any number of shareholders present in person or by proxy shall
constitute a lawful quorum.
Vote
requirements.
An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority
of the votes attaching to the ordinary shares cast at a meeting, while a special resolution requires the affirmative vote of no less
than two-thirds of the votes attaching to the ordinary shares cast at a meeting. Under our amended and restated articles of association,
a special resolution is required for the removal of a director from office and the appointment of a director in place of the director
so removed, and to amend the provisions in our articles of association relating to the appointment and removal of directors.
Transfer
of Ordinary Shares
Our
fully paid ordinary shares are issued in registered form and may be freely transferred under our amended and restated articles of association,
unless the transfer is restricted or prohibited by another instrument, applicable law or the rules of a stock exchange on which the shares
are listed for trade. The ownership or voting of our ordinary shares by non-residents of Israel is not restricted in any way by our amended
and restated articles of association or the laws of the State of Israel, except for ownership by nationals of some countries that are,
or have been, in a state of war with Israel.
Liquidation
In
the event of our liquidation, after satisfaction of liabilities to creditors and other payments due as per applicable law, our assets
will be distributed to the holders of our ordinary shares in proportion to their shareholdings. This right, as well as the right to receive
dividends, may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential
rights that may be authorized in the future.
Redemption
of Ordinary Shares
We
may, subject to applicable law, issue redeemable shares or other securities and redeem the same with such terms and conditions as the
board of directors may deem fit.
Modifications
of Rights of Shares
Under
the Companies Law and our amended and restated articles of association, the rights attached to any class of share, such as voting, liquidation
and dividend rights, may be amended by adoption of a resolution by the holders of a majority of the shares of that class present at a
separate class meeting, or otherwise in accordance with the rights attached to such class of shares, as set forth in our amended and
restated articles of association, in addition to the ordinary majority vote of all classes of voting shares voting together as a single
class.
Issuance
of Additional Shares
We
may, upon a resolution of the shareholders at a general meeting, from time to time, increase our share capital by the creation of new
shares. Any such increase shall be in such amount and shall be divided into shares of such nominal amounts or without nominal amounts,
and such shares shall confer such rights and preferences, and shall be subject to such restrictions, as the resolution approving the
creation of such shares shall provide. Except to the extent otherwise provided in the resolution creating such new shares, such new shares
shall be subject to all the provisions applicable to the shares of the original capital. Without prejudice to any special rights previously
conferred upon the holders of existing shares in the Company, the Company may, from time to time, provide for shares with such preferred
or deferred rights or rights of redemption or other special rights and/or such restrictions, whether in regard to dividends, voting,
repayment of share capital or otherwise, as may be stipulated in the resolution pursuant to which such shares are created.
105
Access
to Corporate Records
Under
the Companies Law, shareholders generally have the right to review minutes of our general meetings, our shareholders register and material
shareholders register, our amended and restated articles of association, our annual audited financial statements and any document that
we are required by law to file publicly with the Israeli Registrar of Companies or the Israel Securities Authority. In addition, any
shareholder who specifies the purpose of their request may request to review any document related to an action or transaction requiring
shareholder approval under the related party transaction provisions of the Companies Law. We may deny this request if we believe it has
not been made in good faith or if such denial is necessary to protect our interests or protect a trade secret or patent.
Exchange
controls
There
are currently no Israeli currency control restrictions on remittances of dividends on our ordinary shares, proceeds from the sale of
the ordinary shares or interest or other payments to non-residents of Israel, except for shareholders who are subjects of countries that
are, or have been, in a state of war with Israel.
Acquisitions
under Israeli Law
Full
Tender Offer.
A person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the target
company's voting rights or issued and outstanding share capital is required by the Companies Law to make a tender offer to all
of the company's shareholders for the purchase of all of the issued and outstanding shares of the company. A person wishing to
acquire shares of a public Israeli company and who would as a result hold over 90% of the voting rights or issued and outstanding share
capital of a certain class of shares is required to make a tender offer to all of the shareholders who hold shares of the relevant class
for the purchase of all of the issued and outstanding shares of that class. If the shareholders who do not accept the offer hold less
than 5% of the issued and outstanding share capital of the company or of the applicable class, and more than half of the shareholders
who do not have a personal interest in the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred
to the acquirer by operation of law. However, a tender offer will also be accepted if the shareholders who do not accept the offer hold
less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares.
Upon
a successful completion of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such shareholder
accepted the tender offer or not, may, within six months from the date of acceptance of the tender offer, petition an Israeli court to
determine whether the tender offer was for less than fair value and that the fair value should be paid as determined by the court. However,
under certain conditions, the offeror may include in the terms of the tender offer that an offeree who accepted the offer will not be
entitled to petition the Israeli court as described above.
If
the full tender offer was not accepted in accordance with the above alternatives, the acquirer may not acquire shares of the company
that will increase its holdings to more than 90% of the company's voting rights or issued and outstanding share capital or of the
applicable class from shareholders who accepted the tender offer.
Special
Tender Offer
. The Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special
tender offer if as a result of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company
(subject to certain exceptions). This requirement does not apply if there is already another holder of at least 25% of the voting rights
in the company. Similarly, the Companies Law provides that an acquisition of shares in a public company must be made by means of a special
tender offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting rights in the company,
if there is no other shareholder of the company who holds more than 45% of the voting rights in the company, subject to certain exceptions.
A special tender offer must be extended to all shareholders of a company but the offeror is not required to purchase shares representing
more than 5% of the voting power attached to the company's outstanding shares, regardless of how many shares are tendered by shareholders.
A special tender offer may be consummated only if (i) at least 5% of the voting power attached to the company's outstanding shares
will be acquired by the offeror and (ii) the number of shares tendered by shareholders who accept the offer exceeds the number of shares
whose holders objected to the offer (excluding the purchaser and its controlling shareholders, holders of 25% or more of the voting rights
in the company or any person having a personal interest in the acceptance of the tender offer or any other person acting on their behalf,
including relatives and entities under such person's control). If a special tender offer is accepted, then (i) shareholders who
did not respond to or that had objected to the offer may accept the offer within four days of the last date set for the acceptance of
the offer and they will be considered to have accepted the offer from the first day it was made, and (ii) the purchaser or any person
or entity controlling it or under common control with the purchaser or such controlling person or entity may not make a subsequent tender
offer for the purchase of shares of the target company and may not enter into a merger with the target company for a period of one year
from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial
special tender offer.
106
Shares
purchased in contradiction to the tender offer rules under the Companies Law, as described above, will have no rights and will become
dormant shares.
Merger
.
The Companies Law permits merger transactions if approved by each party's board of directors and, unless certain requirements described
under the Companies Law are met, by a majority vote of each party's shares, and, in the case of the target company, a majority
vote of each class of its shares voted on the proposed merger at a shareholders meeting. The board of directors of a merging company
is required pursuant to the Companies Law to discuss and determine whether in its opinion there exists a reasonable concern that as a
result of a proposed merger, the surviving company will not be able to satisfy its obligations towards its creditors, such determination
taking into account the financial condition of the merging companies. If the board of directors determines that such a concern exists,
it may not approve a proposed merger. Following the approval of the board of directors of each of the merging companies, the boards of
directors must jointly prepare a merger proposal for submission to the Israeli Registrar of Companies. Under the Companies Law, each
merging company must deliver the merger proposal to its secured creditors and inform its unsecured creditors of the merger proposal and
its content.
For
purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the votes of
the shares represented at the shareholders meeting that are held by parties other than the other party to the merger, or by any person
(or group of persons acting in concert) who holds (or hold, as the case may be) 25% or more of the voting rights or the right to appoint
25% or more of the directors of the other party, vote against the merger. If, however, the merger involves a merger with a company's
own controlling shareholder or if the controlling shareholder has a personal interest in the merger, then the merger is instead subject
to the same special majority approval that governs all extraordinary transactions with controlling shareholders. If the transaction would
have been approved by the shareholders of a merging company but for the separate approval of each class or the exclusion of the votes
of certain shareholders as provided above, a court may still approve the merger upon the request of holders of at least 25% of the voting
rights of a company, if the court holds that the merger is fair and reasonable, taking into account the value to the parties to the merger
and the consideration offered to the shareholders of the target company. Upon the request of a creditor of either party to the proposed
merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result of the merger,
the surviving company will be unable to satisfy the obligations of the merging entities, and may further give instructions to secure
the rights of creditors. In addition, a merger may not be consummated unless at least 50 days have passed from the date on which a proposal
for approval of the merger was filed by each party with the Israeli Registrar of Companies and at least 30 days have passed from the
date on which the merger was approved by the shareholders of each party.
Anti-takeover
measures
The
Companies Law allows us to create and issue shares having rights different from those attached to our ordinary shares, including shares
providing certain preferred rights with respect to voting, distributions or other matters and shares having preemptive rights. No preferred
shares are currently authorized under our amended and restated articles of association. In the future, if we do authorize, create and
issue a specific class of preferred shares, such class of shares, depending on the specific rights that may be attached to it, may have
the ability to frustrate or prevent a takeover or otherwise prevent our shareholders from realizing a potential premium over the market
value of their ordinary shares. The authorization and designation of a class of preferred shares will require an amendment to our amended
and restated articles of association, which requires the prior approval of the holders of a majority of the voting power attaching to
our issued and outstanding shares represented at a general meeting. The convening of the meeting, the shareholders entitled to participate
and the majority vote required to be obtained at such a meeting will be subject to the requirements set forth in the Companies Law and
our amended articles of association as described above under "—Voting Rights." In addition, we have a classified board
structure, which will effectively limit the ability of any investor or potential investor or group of investors or potential investors
to gain control of our board of directors, as disclosed under "Item 6. Directors, Senior Management and Employees—C. Board
Practices."
General
Meetings of Shareholders and Shareholder Proposals
Under
Israeli law, we are required to hold an annual general meeting of our shareholders once every calendar year that must be held no later
than 15 months after the date of the previous annual general meeting. All general meetings other than the annual meeting of shareholders
are referred to in our amended and restated articles of association as special general meetings. Our board of directors may call special
general meetings whenever it sees fit, at such time and place, within or outside of Israel, as it may determine. In addition, the Companies
Law provides that our board of directors is required to convene a special general meeting upon the written request of (i) any two
or more of our directors or one-quarter or more of the members of our board of directors or (ii) one or more shareholders holding,
in the aggregate, either (a) 5% or more of our outstanding issued shares and 1% or more of our outstanding voting power or (b) 5% or
more of our outstanding voting power.
107
Under
Israeli law, one or more shareholders holding at least 1% of the voting rights at the general meeting may request that the board of directors
include a matter on the agenda of a general meeting to be convened in the future, provided that it is appropriate to discuss such a matter
at the general meeting. Our amended and restated articles of association contain procedural guidelines and disclosure items with respect
to the submission of shareholder proposals for shareholder meetings.
Under
the Companies Law, resolutions regarding the following matters must be passed at a general meeting of shareholders:
●
amendments
                                            to the company's articles of association;
●
appointment,
                                            fees or termination of the auditors, if the shareholders have not delegated their authority
                                            to set the fees for the auditors to the board of directors;
●
appointment
                                            of external directors (if applicable);
●
approval
                                            of related-party transactions requiring general meeting approval pursuant to the provisions
                                            of the Companies Law;
●
increases
                                            or reductions of the company's authorized share capital;
●
a
                                            merger (as such term is defined in the Companies Law); and
●
the
                                            exercise of board of directors' powers by a general meeting, if our board of directors
                                            is unable to exercise its powers and the exercise of any of its powers is required for our
                                            proper management.
C.
Material Contracts
Acquisition
Transactions
On
November 2, 2021, the Company completed the acquisition of 100% of the shares of USARAD, pursuant to the terms of the Stock Purchase
Agreement, dated October 25, 2021, among the Company, USARAD, Dr. Michael Yuz, other holders of capital stock of USARAD, and holders
of USARAD options.
On
November 3, 2021, the Company completed the acquisition of the platform and other assets of MDWEB, pursuant to the terms of the Asset
Purchase Agreement, dated October 21, 2021, between the Company and MDWEB.
On
November 4, 2021, the Company, consummated the merger pursuant to the terms of the Agreement and Plan of Merger, dated August 9, 2021,
as amended, among the Company, Zebra (now known as Nanox AI), and Perryllion Ltd., as representative of Zebra's equity holders.
For
details regarding these agreements, see "Item 4. Information on the Company—A. History and Development of the Company."
FoxSemicon
Integrated Technology, Inc. Manufacturing Agreement
On
May 26, 2020, we entered into a Contract Manufacturing Agreement with FITI. Under the terms of the agreement, FITI agreed to manufacture,
package, distribute and ship, and we agreed to purchase, certain products and procurement and assembly services, including a minimum
of 1,000 Nanox Systems per year. We agreed to provide FITI with a rolling forecast of our estimated monthly purchases, which FITI will
use to prepare its supply chain to cover the material and manufacturing needs. Subsequently, we agreed to send purchase orders to FITI
for certain products and services. Prices for the products will be agreed by the parties at least 90 days prior to the first expected
delivery date. FITI will be entitled to order materials in accordance with an approved supplier list and on the terms that the parties
agree upon on a quarterly basis, and FITI must obtain our prior written consent if it procures materials from other suppliers. FITI may
also purchase materials from us to support orders pursuant to our requests. The parties also agreed to enter into a quality agreement,
which will set forth the manufacturing standards applicable to FITI. The agreement will be in effect for three years from the date of
the agreement and is renewed for successive terms of one year unless or until either party notifies the other in writing of its intention
not to renew with 90 days' prior notice. The agreement has not yet been implemented. The agreement may be terminated by notice
of the non-breaching party in case of a material breach of a party's material obligations, or by either party in case of the bankruptcy
or insolvency of the other party.
Warrant
Agreements
As
of March 31, 2023, there were two outstanding warrants, which are currently exercisable: (i) a warrant issued upon the consummation of
our initial public offering to A-Labs Advisory & Finance Ltd., which provided to us strategic consulting services, to purchase 50,000
ordinary shares, with an exercise price of $18 per share; and (ii) the warrant issued to SK Square Americas, Inc. (formerly known as
SK Telecom TMT Investment Corp.) to purchase 2,262,443 ordinary shares, with an exercise price of $20.87 per share, as described above
under "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Relationship With SKT."
108
Registration
Rights Agreements
We
have entered into the Registration Rights Agreement with shareholders who held 14,533,835 of our ordinary shares and other securities
convertible into or exchangeable for ordinary shares; however, some of these shares have been sold on the market, and the registration
rights are no longer applicable. As of the date of this annual report, the registration rights apply to 2,607,466 shares held by SK Square
Americas, Inc. (formerly known as SK Telecom TMT Investment Corp.).
Under
the terms of the Registration Rights Agreement, and subject to the limitations specified therein, if we register our ordinary shares
under the Securities Act for sale to the public, either for our own account or for the account of other security holders or both, the
holders of registrable securities are entitled to notice of the intended registration and to include any or all of their registrable
securities in the registration. The right of holders of registrable securities to include shares in an underwritten offering is subject
to the right of the underwriters to limit the number of shares included in such offering. Holders of registrable securities are generally
required to pay all expenses of registration, including the fees and disbursements of its counsel and all underwriting discounts and
commissions.
In
addition, as of March 31, 2023, SK Square Americas, Inc., as a holder of a warrant to purchase an aggregate of 2,262,443 ordinary shares,
is entitled to piggyback registration rights under the terms of such warrant substantially similar to the registration rights described
in the preceding paragraph.
D.
Exchange Controls
There
are currently no Israeli currency control restrictions on remittances of dividends on our ordinary shares, proceeds from the sale of
the shares or interest or other payments to non-residents of Israel, except for shareholders who are subjects of certain countries that
have been, or are considered to be, in a state of war with Israel.
E.
Taxation
Israeli
Tax Considerations and Government Programs
General
Corporate Tax Structure in Israel
Israeli
resident companies are generally subject to corporate tax, currently at the rate of 23% of a company's taxable income. Capital
gains derived by an Israeli resident company are subject to tax at the regular corporate tax rate.
Under
Israeli tax legislation, a corporation will be considered as an "Israeli resident company" if it meets one of the following:
(i) it was incorporated in Israel; or (ii) the control and management of its business are exercised in Israel.
Tax
Benefits and Grants for Research and Development
Israeli
tax law allows, under certain conditions, a tax deduction for expenditures related to scientific research and development projects, including
capital expenditures, for the year in which they are incurred. Expenditures are deemed related to scientific research and development
projects, if:
●
The expenditures are approved by the relevant Israeli
    government ministry, determined by the field of research; and
●
The research and development is for the promotion of
    the company and is carried out by or on behalf of the company seeking such tax deduction, or that the expenditure is made by a person
    that carries out the research and does not own an enterprise which is engaged in the field of research, or that such expenditure
    constitutes a participation in a research carried out by another person, in both cases, subject to the fulfillment of certain criteria
    set forth in the Israeli tax law.
The
amount of such deductible expenses is reduced by the sum of any funds received through government grants for the financing of such scientific
research and development projects. No deduction under these research and development deduction rules is allowed if such deduction is
related to an expense invested in an asset depreciable under the general depreciation rules of the Ordinance. Capital Expenditures for
scientific research incurred by a company for the promotion or development of the company, which do not meet the above conditions, are
deductible in equal amounts over three years.
109
From
time to time, we may apply to the Israeli Innovation Authority (the "IIA"), for approval to allow a tax deduction for research
and development expenses during the year incurred. There can be no assurance that such application will be accepted.
Law
for the Encouragement of Capital Investments, 5719-1959
The
Law for the Encouragement of Capital Investments, 5719-1959 (the "Investment Law"), provides certain incentives for capital
investments in production facilities (or other eligible assets) by "Industrial Enterprises" (as defined under the Investment
Law). The benefits available under the Investment Law are subject to the fulfillment of conditions stipulated therein. If a company does
not meet these conditions, it may be required to refund the amount of tax benefits, as adjusted by the Israeli consumer price index,
and interest, or other monetary penalties.
Tax
Benefits Subsequent to the 2005 Amendment
An
amendment to the Investment Law, which became effective as of April 1, 2005, or the 2005 Amendment, changed certain provisions of
the Investment Law. An eligible investment program under the 2005 Amendment qualifies for benefits as a "Benefited Enterprise."
Prior to the 2005 Amendment, investment programs under the Investment Law were called "Approved Enterprises." The extent
of the tax benefits available under the 2005 Amendment to qualifying income of a Benefited Enterprise depend on, among other things,
the geographic location of the Benefited Enterprise in Israel. The location will also determine the period for which tax benefits are
available. Such tax benefits include an exemption from corporate tax on undistributed income for a period of between two to ten years,
depending on the geographic location of the Benefited Enterprise in Israel, and a reduced corporate tax rate of between 10% and the applicable
corporate tax rate for the remainder of the benefits period, depending on the level of foreign investment in the company in each year
during the benefits period.
We
are not entitled to tax benefits under the 2005 Amendment.
Tax
Benefits Under the 2011 Amendment
The
Investment Law was significantly amended as of January 1, 2011, or the 2011 Amendment. The 2011 Amendment introduced new benefits
to replace those granted in accordance with the provisions of the Investment Law in effect prior to the 2011 Amendment.
The
2011 Amendment introduced new tax benefits for income generated by a "Preferred Company" through its "Preferred Enterprise,"
in accordance with the definition of such terms in the Investment Law. Generally, a "Preferred Enterprise" is defined as
an "Industrial Enterprise" (including, among others, an enterprise that provides approved research and development services
to foreign residents), with more than 25% of its business income from export. The definition of a Preferred Company, includes, inter
alia, a company incorporated in Israel that (1) is not wholly owned by a government entity, (2) owns a Preferred Enterprise and (3) is
controlled and managed from Israel and is subject to further conditions set forth in the Investment Law.
A
Preferred Company is entitled to a reduced corporate tax rate of 16% with respect to the income attributed to its Preferred Enterprise,
unless the Preferred Enterprise is located in development area "A," in which case the rate will be 7.5%. Our operations are
currently not located in development area "A."
Dividends distributed from
income which is attributed to a "Preferred Enterprise" will be subject to withholding tax at the following rates: (i) Israeli
resident individuals—20% and (ii) non-Israeli residents—20%, subject to a reduced tax rate under the provisions of an
applicable double tax treaty and subject to the receipt in advance of valid certificate from the Israeli Tax Authority, or the ITA. If
such dividends are paid to an Israeli company, no tax is required to be withheld.
The
provisions of the 2011 Amendment do not apply to existing "Benefited Enterprises" or "Approved Enterprises,"
which will continue to be entitled to the tax benefits under the Investment Law, as in effect prior to the 2011 Amendment, unless the
company owning such enterprises had made an election to apply the provisions of the 2011 Amendment (such election cannot be later rescinded),
which is to be filed with the ITA, not later than the date prescribed for the filing of the company's annual Israeli tax return
for the respective year.
We
are currently not entitled to tax benefits under the 2011 Amendment.
110
Tax
Benefits Under the 2017 Amendment
Additional
amendments to the Investment Law became effective in January 2017, or the 2017 Amendment. The 2017 Amendment provides new tax benefits
for two types of "Technological Enterprises," as described below, and is in addition to the other existing tax benefit programs
under the Investment Law.
The
2017 Amendment provides that a technological Preferred Company satisfying certain conditions may qualify as a "Preferred Technological
Enterprise" and thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as "Preferred Technological Income,"
as defined in the Investment Law. The tax rate is further reduced to 7.5% for a Preferred Technological Enterprise located in development
area "A." In addition, a Preferred Company will benefit from a reduced corporate tax rate of 12% on capital gain derived
from the sale of certain "Benefited Intangible Assets" (as defined in the Investment Law) to a related foreign company if
the Benefited Intangible Assets were acquired from a foreign company on or after January 1, 2017, for at least NIS 200 million,
and the sale receives prior approval from the IIA.
The
2017 Amendment further provides that a technological Preferred Company satisfying certain conditions may qualify as a "Special
Preferred Technological Enterprise" and thereby enjoy a reduced corporate tax rate of 6% on "Preferred Technological Income"
regardless of the company's geographic location within Israel. In addition, a Special Preferred Technological Enterprise will enjoy
a reduced corporate tax rate of 6% on capital gain derived from the sale of certain "Benefited Intangible Assets" to a related
foreign company if the Benefited Intangible Assets were either developed by an Israeli company or acquired from a foreign company on
or after January 1, 2017, and the sale received prior approval from the IIA. A Special Preferred Technological Enterprise that acquires
Benefited Intangible Assets from a foreign company for more than NIS 500 million may be eligible for these benefits for a period
of at least ten years, subject to certain approvals as specified in the Investment Law.
Dividends distributed by a Preferred Company with a Technological Enterprise
or a Special Preferred Technological Enterprise, paid out of Preferred Technological Income or income attributed to production are generally
subject to withholding tax at the rate of 20% or such lower rate, as may be provided in an applicable tax treaty (subject to the receipt
in advance of a valid certificate from the ITA allowing for a reduced tax rate). If such dividends are paid to an Israeli company, no
tax is required to be withheld. If dividends paid out of Preferred Technological Income are distributed to a foreign company and other
conditions are met, the withholding tax rate will be 4% (or a lower rate under a tax treaty, if applicable, subject to the receipt in
advance of a valid certificate from the ITA allowing for a reduced tax rate).
We
are currently not entitled to tax benefits under the 2017 Amendment.
Taxation
of Our Shareholders
Capital
Gains
Capital
gain tax is imposed on the disposition of capital assets by an Israeli resident for tax purposes, and on the disposition of such assets
by a non-Israeli resident for tax purposes if those assets are (i) located in Israel; (ii) are shares or a right to a share in an Israeli
resident corporation, (iii) are shares or a right to a share in a non-Israeli resident company, the majority of whose assets are located
in Israel, but only in respect of the portion of the consideration that is attributable to assets located in Israel, or (iv) located
outside of Israel which mainly represent, directly or indirectly, rights to assets, property or inventory located in Israel, but only
with respect to such portion of the assets that are located in Israel. The Ordinance distinguishes between "Real Capital Gain"
and the "Inflationary Surplus." Real Capital Gain is the excess of the total capital gain over Inflationary Surplus computed
generally on the basis of the increase in the Israeli consumer price index or, in certain circumstances, a foreign currency exchange
rate, between the date of purchase and the date of disposition. The inflationary surplus accumulated from and after December 31, 1993,
is exempt from any capital gains tax in Israel while the real gain is taxed at the applicable rate discussed below.
Real
Capital Gain accrued by individuals on the sale of our ordinary shares will be taxed at the rate of 25%. However, if the individual shareholder
is a "Controlling Shareholder" (i.e., a person who holds, directly or indirectly, alone or together with another, 10% or
more of one of the Israeli resident company's "means of control," which includes, among other things, the right to
receive profits of the company, voting rights, the rights to receive proceeds upon the company's liquidation and the right to appoint
a director) at the time of sale or at any time during the preceding 12-month period, such capital gain will be taxed at the rate of 30%.
Furthermore, where an individual claimed real interest expenses and linkage differentials on securities, the capital gain on the sale
of the securities will taxed at a rate of 30% (exclusive of excess tax described below).
Real
Capital Gain derived by corporations will be generally subject to the corporate tax rate (23% in 2023).
111
Individual
and corporate shareholder dealing in securities in Israel may be taxed at the tax rates applicable to business income—23% for corporations
in 2022 and a marginal tax rate of up to 47% (in 2022) for individuals, not including excess tax (described below). Notwithstanding the
foregoing, Real Capital Gain derived from the sale of our ordinary shares by a non-Israeli shareholder may be exempt under the Ordinance
from Israeli taxation provided that the following cumulative conditions are met: (i) the shares were purchased upon or after the
registration of the shares on the stock exchange, (ii) the seller does not have a permanent establishment in Israel to which the
derived capital gain is attributable, (iii) if the seller is a corporation, no more than 25% of its means of control are held, directly
and indirectly, alone or together with another by Israeli residents, and (iv) if the seller is a corporation, there is no Israeli
resident that is entitled to 25% or more of the revenues or profits of the corporation, directly or indirectly. In addition, such exemption
would not be available to a person whose capital gains from selling or otherwise disposing of the securities are deemed to be business
income. In addition, this exemption shall not be relevant to the part of the capital gains allocable to the holding period before the
shares were listed for trading on the stock exchange (however, such portion might also be exempt from tax in Israel if certain criteria
are met).
In
addition, the sale of shares may be exempt from Israeli capital gain tax under the provisions of an applicable tax treaty. For example,
the Convention between the Government of the United States and the Government of the State of Israel with respect to Taxes of Income,
as amended, or the U.S.-Israel Double Tax Treaty, exempts U.S. residents for the purposes of the treaty from Israeli capital gain
tax in connection with such sale, provided (i) the U.S. resident owned, directly or indirectly, less than 10% of the Israeli
resident company's voting power at any time within the 12-month period preceding such sale; (ii) the seller, being an individual,
is present in Israel for a period or periods of less than 183 days during the taxable year; and (iii) the capital gain from the
sale was not derived through a permanent establishment of the U.S. resident in Israel.
Shareholders
may be liable for Israeli tax on the sale of their ordinary shares and the payment of the consideration may be subject to withholding
of Israeli tax. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding
at the time of sale. For example, in transactions involving a sale of all of the shares of an Israeli resident company, in the form of
a merger or otherwise, the ITA may require from shareholders who are not liable for Israeli tax to sign declarations in forms specified
by this authority or obtain a specific exemption from the ITA to confirm their status as a non-Israeli resident, and, in the absence
of such declarations or exemptions, may require the purchaser of the shares to withhold taxes.
The
purchaser, the Israeli stockbrokers or financial institutions through which the shares are held is obligated, subject to the abovementioned
exemptions, to withhold tax on the amount of consideration paid upon the sale of the shares (or on the Real Capital Gain on the sale,
if known) at the rate of 25% in respect of an individual and 23% in respect of a corporation.
Upon
the sale of securities traded on a stock exchange, a detailed return, including a computation of the tax due, generally need to be filed
and an advanced payment must be paid on January 31 and July 31 of every calendar year in respect of sales of securities made within the
previous six months. However, if all tax due was withheld according to applicable provisions of the Ordinance and regulations promulgated
thereunder the aforementioned return need not be filed and no advance payment must be paid. Capital gain is also reportable on the annual
income tax return.
Dividends
We
have never paid cash dividends. A distribution of dividends to an Israeli resident individual, will generally be subject to withholding
tax at a rate of 25% or 30% if the dividend recipient is a "Controlling Shareholder" (as defined above) at the time of distribution
or at any time during the preceding 12-month period and the shares are not held through a nominee company. If the income out of which
the dividend is being paid is attributable to a Preferred Enterprise or Preferred Technology Enterprise under the Investment Law, the
rate is generally not more than 20%. If the recipient of the dividend is an Israeli resident corporation, such dividend will be exempt
from income tax provided the income from which such dividend is distributed was derived or accrued within Israel (although, if such dividends
are subsequently distributed to non-Israeli individuals or a non-Israeli company, withholding tax at a rate of 25% (or 30% if the dividend
recipient is a "Controlling Shareholder" (as defined above)) or such lower rate as may be provided if an applicable tax treaty
will apply (subject to the receipt in advance of a valid tax certificate from the ITA allowing for a reduced tax rate)).
A
non-Israeli resident (either individual or corporation) is generally subject to Israeli withholding tax on the receipt of dividends at
the rate of 25% (30% if the dividends recipient is a "Controlling Shareholder" (as defined above), at the time of distribution
or at any time during the preceding 12-month period and the shares are not held through a nominee company); those rates are subject to
a reduced tax rate under the provisions of an applicable double tax treaty (subject to the receipt in advance of a valid certificate
from the ITA allowing for a reduced tax rate). Under the U.S.-Israel Double Tax Treaty, the following withholding rates will apply in
respect of dividends distributed by an Israeli resident company to a U.S. resident: (i) if the U.S. resident is a corporation which
holds during that portion of the taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable
year (if any), at least 10% of the outstanding voting shares of the Israeli resident paying corporation and not more than 25% of the
gross income of the Israeli resident paying corporation for such prior taxable year (if any) consists of certain type of interest or
dividends—the tax rate is 12.5%, (ii) if both the conditions mentioned in (i) above are met and the dividend is paid
from an Israeli resident company's income which was entitled to a reduced tax rate applicable to an Approved Enterprise, Benefited
Enterprise, Preferred Enterprise or Preferred Technology Enterprise —the tax rate is 15% if a certificate for a reduced withholding
tax rate would be provided in advance from the ITA and (iii) in all other cases, the tax rate is 25%. The aforementioned rates under
the U.S.-Israel Double Tax Treaty will not apply if the dividend income was derived through a permanent establishment of the U.S. resident
in Israel.
112
A
non-Israeli resident who receives dividends from which tax was withheld is generally exempt from the obligation to file tax returns in
Israel with respect to such income, provided that (i) such income was not generated from business conducted in Israel by the taxpayer,
(ii) the non-Israeli resident is not subject to Excess Tax in Israel, and; (iii) the taxpayer has no other taxable sources of income
in Israel with respect to which a tax return is required to be filed.
Excess
Tax
Individuals
who are subject to tax in Israel (whether such individual is an Israeli resident or non-Israeli resident) are also subject to an additional
tax on annual income exceeding a certain threshold (NIS 698,280 for 2023), which amount is linked to the Israeli consumer price index
and therefore is usually adjusted on an annual basis, at a rate of 3%, including, but not limited to, income derived from dividends,
interest and capital gains.
Estate
and Gift Tax
Israeli
law presently does not impose estate tax or in general gift taxes.
U.S.
Federal Income Tax Considerations
The
following discussion is a summary of U.S. federal income tax considerations generally applicable to the ownership and disposition of
our ordinary shares. This summary applies only to investors that are U.S. Holders (as defined below) that hold our ordinary shares as
"capital assets" (generally, property held for investment) under the U.S. Internal Revenue Code of 1986, as amended
(the "Code"). This discussion is based upon U.S. federal tax law as in effect on the date of this annual report on Form 20-F
and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report on Form 20-F, as well as
judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to
differing interpretations or change, which change could apply retroactively and could affect the tax considerations described below.
No ruling has been sought from the Internal Revenue Service, or the IRS, with respect to any U.S. federal income tax considerations described
below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion, moreover, does not address
the U.S. federal estate, gift, alternative minimum tax considerations, the Medicare tax on certain net investment income, any withholding
or information reporting requirements, or any state, local and non-U.S. tax considerations relating to the ownership or disposition of
our ordinary shares. The following summary does not address all aspects of U.S. federal income taxation that may be important to particular
investors in light of their individual circumstances or to persons in special tax situations such as:
●
banks and other financial institutions;
●
insurance companies;
●
pension plans;
●
cooperatives;
●
regulated investment companies;
●
real estate investment trusts;
●
broker-dealers;
●
traders that elect to use a mark-to-market method of
    accounting;
●
certain former U.S. citizens or long-term residents;
●
tax-exempt entities (including private foundations);
●
holders who acquire our ordinary shares pursuant to
    any employee share option or otherwise as compensation;
113
●
investors that will hold our ordinary shares as part
    of a straddle, hedge, conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes;
●
persons holding our ordinary shares in connection with
    a trade or business outside the United States;
●
persons that actually or constructively own 10% or
    more of our stock (by vote or value);
●
investors that have a functional currency other than
    the U.S. dollar; and
●
partnerships or other entities classified as partnerships
    for U.S. federal income tax purposes, or persons holding our ordinary shares through such entities, all of whom may be subject to
    tax rules that differ significantly from those discussed below.
Investors
are urged to consult their tax advisors about the application of the U.S. federal income tax rules to their particular circumstances
as well as the state, local, non-U.S. and other tax consequences to them of the ownership and disposition of our ordinary shares.
General
For
purposes of this discussion, a "U.S. Holder" is a beneficial owner of our ordinary shares that is, for U.S. federal
income tax purposes:
●
an individual who is a citizen or resident of the United
    States;
●
a corporation (or other entity treated as a corporation
    for U.S. federal income tax purposes) created in, or organized under the law of, the United States or any state thereof or the District
    of Columbia;
●
an estate the income of which is includible in gross
    income for U.S. federal income tax purposes regardless of its source; or
●
a trust (A) the administration of which is subject
    to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial
    decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person under the Code.
If
a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our ordinary shares,
the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership.
Partnerships holding our ordinary shares and their partners are urged to consult their tax advisors regarding the ownership and disposition
of our ordinary shares.
Dividends
Any
cash distributions (including the amount of any Israeli tax withheld) paid on our ordinary shares out of our current or accumulated earnings
and profits, as determined under U.S. federal income tax principles, will generally be includible in the gross income of a U.S. Holder
as dividend income on the day actually or constructively received by the U.S. Holder. Because we do not intend to determine our earnings
and profits on the basis of U.S. federal income tax principles, any distribution we pay will generally be treated as a "dividend"
for U.S. federal income tax purposes. Dividends received on our ordinary shares will not be eligible for the dividends received deduction
allowed to corporations in respect of dividends received from U.S. corporations.
Individuals
and other non-corporate U.S. Holders may be subject to tax at the lower capital gains tax rate applicable to "qualified dividend
income," provided that certain conditions are satisfied, including that (1) the ordinary shares on which the dividends are paid
are readily tradable on an established securities market in the United States, or we are eligible for the benefit of the U.S.-Israel
Double Tax Treaty, (2) we are neither classified as a PFIC nor treated as such with respect to a U.S. Holder (as discussed below) for
the taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period and other requirements are
met. Our ordinary shares are listed and traded on the Nasdaq Global Market. Thus, we believe that our ordinary shares will generally
be considered to be readily tradable on an established securities market in the United States. There can be no assurance that the ordinary
shares will continue to be considered readily tradable on an established securities market in later years. U.S. Holders are urged to
consult their tax advisors regarding the availability of the lower rate for dividends paid with respect to our ordinary shares.
For
U.S. foreign tax credit purposes, dividends received on our ordinary shares will generally be treated as income from foreign sources
and will generally constitute passive category income. A U.S. Holder may be subject to Israeli withholding taxes on dividends paid on
our ordinary shares. See "—Israeli Tax Considerations and Government Programs—Taxation of Our Shareholders—Dividends."
Subject to certain conditions and limitations, a U.S. Holder eligible under the U.S.-Israel Double Tax Treaty may be eligible to claim
a foreign tax credit in respect of any Israeli income taxes paid or withheld with respect to dividends on our ordinary shares to the
extent such taxes are nonrefundable under the U.S.-Israel Double Tax Treaty. Alternatively, a U.S. Holder who does not elect to
claim a foreign tax credit for foreign tax withheld may instead claim a deduction for U.S. federal income tax purposes in respect of
such withholding, but only for a year in which such holder elects to do so for all creditable foreign income taxes paid or accrued in
the relevant taxable year. The rules governing the foreign tax credit are complex and each U.S. Holder is urged to consult its tax
advisor regarding the availability of the foreign tax credit under its particular circumstances.
114
Sale
or Other Disposition
A
U.S. Holder will generally recognize gain or loss upon the sale or other disposition of our ordinary shares in an amount equal to the
difference between the amount realized upon the disposition and the U.S. Holder's adjusted tax basis in such ordinary shares. The
gain or loss will generally be capital gain or loss and individuals and other non-corporate U.S. Holders who have held the ordinary shares
for more than one year will generally be eligible for reduced tax rates. The deductibility of a capital loss may be subject to limitations.
Any such gain that the U.S. Holder recognizes may be subject to Israeli income tax and will generally be U.S. source gain, which may
limit a U.S. Holder's ability to claim a foreign tax credit for any such Israeli income tax imposed on such gain. U.S. Holders
that are eligible for the benefits of the U.S.-Israel Double Tax Treaty may apply the U.S.-Israel Double Tax Treaty to treat such gain
as exempt from Israeli tax, provided certain requirements are met. Pursuant to recently issued Treasury regulations, however, if a U.S.
Holder is not eligible for the benefits of the U.S.-Israel Double Tax Treaty or does not elect to apply the U.S.-Israel Double Tax Treaty,
then such holder may not be able to claim a foreign tax credit arising from any Israeli tax imposed on the sale or other disposition
of our ordinary shares. The rules regarding foreign tax credits and the deductibility of foreign taxes are complex. U.S. Holders should
consult their tax advisors regarding the availability of a foreign tax credit or deduction in light of their particular circumstances,
including their eligibility for benefits under the U.S.-Israel Double Tax Treaty and the potential impact of the recently issued Treasury
regulations.
Passive
Foreign Investment Company Considerations
A
non-U.S. corporation, such as our company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year, if
either (i) 75% or more of its gross income for such year consists of certain types of passive income or (ii) 50% or more of the value
of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce or are
held for the production of passive income. For this purpose, cash and assets readily convertible into cash are generally classified as
passive assets and goodwill and other unbooked intangibles associated with active business activities may generally be classified as
non-passive assets. Passive income generally includes, among other things, dividends, interest, royalties and rents (other than certain
royalties and rents derived in the active conduct of a trade or business and not derived from a related person), and gains from the disposition
of passive assets. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of
any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock.
Whether
we are, or will be, classified as a PFIC is a factual determination made annually that will depend, in part, upon the composition of
our income and assets.
Because
the PFIC income test described above is based on a non-U.S. corporation's gross income and not its net income, a non-U.S. corporation
in the early stages of its business, such as our company, can be treated as a PFIC in those taxable years before it has sufficient operating
revenue as a result of earning any amount of interest or other passive income. As a result, we believe that we will technically be classified
as a PFIC for the taxable year ended December 31, 2022. Depending upon the composition of our income and assets and the market price
of our ordinary shares during 2023 and subsequent taxable years and whether we start generating a substantial amount of active revenue,
we could continue to be classified as a PFIC for 2023 and subsequent taxable years if we are classified as a PFIC for 2022. Accordingly,
U.S. Holders of our ordinary shares should be willing to assume the risks of investing in a PFIC.
Furthermore,
because there are uncertainties in the application of the relevant rules, it is possible that the IRS may challenge our classification
of certain income or assets as non-passive, or our valuation of our goodwill and other unbooked intangibles, each of which may increase
the likelihood of us becoming classified as a PFIC for the current or subsequent taxable years.
If
we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ordinary shares, unless the U.S. Holder makes a
mark-to-market election (as described below), the U.S. Holder will generally be subject to special tax rules on (i) any excess distribution
that we make to the U.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than
125% of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder's holding period
for the ordinary shares), and (ii) any gain realized on the sale or other disposition of our ordinary shares. In addition, dividends
paid in respect of our ordinary shares would not be eligible for the lower tax rate described under "—Dividends" above.
115
Under
the PFIC rules:
●
the excess distribution or gain will be allocated ratably
    over the U.S. Holder's holding period for the ordinary shares;
●
the amount allocated to the taxable year of the excess
    distribution, sale or other disposition and to any taxable years in the U.S. Holder's holding period prior to the first taxable
    year in which we are classified as a PFIC (each, a "pre-PFIC year"), will be taxable as ordinary income;
●
the amount allocated to each prior taxable year, other
    than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for
    that year; and
●
the interest charge generally applicable to underpayments
    of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year.
If
we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ordinary shares, we generally will continue to
be treated as a PFIC with respect to such U.S. Holder for all succeeding years during which the holder holds our ordinary shares. However,
if we cease to meet the threshold requirements for PFIC status, provided that the U.S. Holder has not made a mark-to-market election,
as described below, such holder may avoid some of the adverse effects of the PFIC regime by making a "deemed sale" election
with respect to our ordinary shares held by such U.S. Holder. If such election is made, the U.S. Holder will be deemed to have sold our
ordinary shares it holds on the last day of the last taxable year in which we were classified as a PFIC at their fair market value and
any gain from such deemed sale will be taxed under the PFIC rules described above. After the deemed sale election, so long as we do not
become classified as a PFIC in a subsequent taxable year, the ordinary shares with respect to which such election was made will not be
treated as shares in a PFIC and the U.S. Holder will not be subject to the PFIC rules described above with respect to any "excess
distribution" received from us or any gain from an actual sale or other disposition of the ordinary shares. The rules dealing with
deemed sale elections are very complex. U.S. Holders of our ordinary shares are strongly urged to consult their tax advisors as to the
possibility and consequences of making a deemed sale election if we cease to be classified as a PFIC and such election becomes available
to such holders.
If
we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ordinary shares and any subsidiary we own is also
classified as a PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC
for purposes of the application of these rules. As a result, such U.S. Holder may incur liability for the deferred tax and interest charge
described above if either (1) we receive any excess distribution from, or dispose of all or part of our interest in, the lower-tier PFIC
or (2) the U.S. Holder disposes of all or part of our ordinary shares. It is possible that any subsidiary we own would be a PFIC for
the current taxable year or future taxable years. U.S. Holders are urged to consult their tax advisors regarding the application of the
PFIC rules to any subsidiary we own.
As
an alternative to the foregoing rules, a U.S. Holder of "marketable stock" (as defined below) in a PFIC may make a mark-to-market
election with respect to such stock. If a U.S. Holder makes this election with respect to our ordinary shares, the holder will generally
(i) include as ordinary income for each taxable year that we are classified as a PFIC the excess, if any, of the fair market value
of the ordinary shares held at the end of the taxable year over the adjusted tax basis of such ordinary shares and (ii) deduct as
an ordinary loss in each such taxable year the excess, if any, of the adjusted tax basis of the ordinary shares over the fair market
value of such ordinary shares held at the end of the taxable year, but such deduction will only be allowed to the extent of the amount
previously included in income as a result of the mark-to-market election. The U.S. Holder's adjusted tax basis in the ordinary
shares would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes a mark-to-market
election in respect of our ordinary shares and we cease to be classified as a PFIC, the holder will not be required to take into account
the gain or loss described above during any period that we are not classified as a PFIC. If a U.S. Holder makes a mark-to-market election,
any gain such U.S. Holder recognizes upon the sale or other disposition of our ordinary shares in a year when we are classified as a
PFIC will be treated as ordinary income and any loss will be treated as ordinary loss, but such loss will only be treated as ordinary
loss to the extent of the net amount previously included in income as a result of the mark-to-market election.
The
mark-to-market election is available only for "marketable stock," which is stock that is regularly traded on a qualified
exchange or other market, as defined in applicable U.S. Treasury regulations. Our ordinary shares are listed on the Nasdaq Global Market
and should be treated as regularly traded for purposes of the mark-to-market rules. While we anticipate that our ordinary shares will
continue to qualify as being regularly traded, no assurances may be given in this regard. If any subsidiary we own is, or becomes, classified
as a PFIC, the mark-to-market election will likely not be available with respect to the shares of such subsidiary that are treated as
owned by a U.S. Holder. Consequently, a U.S. Holder could be subject to the PFIC rules with respect to income of a lower-tier PFIC
the value of which had already been taken into account indirectly via mark-to-market adjustments. U.S. Holders are urged to consult their
tax advisors as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests
in any lower-tier PFIC.
116
Alternatively,
a U.S. shareholder of a PFIC may avoid the PFIC tax consequences described above in respect of its shares of PFIC stock by making a timely
"qualified electing fund," or QEF, election. To comply with the requirements of a QEF election, such shareholder must receive
certain information from the PFIC. Because we do not intend to provide information necessary for U.S. Holders to make QEF elections,
such election will not be available to U.S. Holders of our ordinary shares.
If
a U.S. Holder owns our ordinary shares during any taxable year that we are classified as a PFIC, the holder must generally file an annual
IRS Form 8621 regarding distributions received on, and any gain realized on the disposition of, our ordinary shares. U.S. Holders are
urged to consult their tax advisor regarding our PFIC status and the U.S. federal income tax consequences of owning and disposing of
our ordinary shares if we are, or become, classified as a PFIC, including the possibility of making a mark-to-market or deemed sale election.
The
summary of U.S. federal income tax consequences set out above is for general informational purposes only. Investors are urged to consult
their tax advisors about the application of the U.S. federal income tax rules to their particular circumstances as well as the state,
local, non-U.S. and other tax consequences to them of the ownership and disposition of our ordinary shares.
F.
Dividends and Paying Agents
Not
applicable.
G.
Statement by Experts
Not
applicable.
H.
Documents on Display
As
allowed by the SEC, in Item 19 of this annual report on Form 20-F, we incorporate by reference certain information and documents we previously
filed with the SEC. This means that we can disclose important information to you by referring you to another document filed separately
with the SEC. The information incorporated by reference is considered to be part of this annual report on Form 20-F.
We
are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required
to file reports and other information with the SEC. The SEC maintains a website at www.sec.gov that contains reports and other information
regarding registrants that file electronically with the SEC. Our annual report on Form 20-F and other information submitted by us to
the SEC may be accessed through this website.
As
a foreign private issuer, we are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements,
and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained
in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file annual, quarterly and current reports
and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange
Act. However, we are required to file with the SEC, within four months after the end of each fiscal year, or such applicable time as
required by the SEC, an annual report on Form 20-F containing financial statements audited by an independent registered public accounting
firm, and we submit to the SEC, on Form 6-K, unaudited quarterly financial information for the first three quarters of each fiscal year.
We
maintain a corporate website at http://www.nanox.vision. In accordance with NASDAQ Stock Market Rule 5250(d), we will post this annual
report on Form 20-F on our website. Information contained on our website is not incorporated by reference into this annual report on
Form 20-F. In addition, we will provide hardcopies of our annual report on Form 20-F free of charge to shareholders upon request.
I.
Subsidiary Information
Not
applicable.
J.
Annual Report to Security Holders
Not
applicable.
117
Item 11. Qualitative and Quantitative Disclosures About Market Risk
Interest
Rate Risk
As
of December 31, 2022, we had cash equivalents consisting primarily of U.S. dollar bank deposits. Our primary exposure to market
risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. Consequently, changes
in market interest rates would not have a material impact on our financial position or results of operations.
As
of December 31, 2022, we had an outstanding long-term loan of $3.8 million that was provided to Nanox Korea and
approximates
its carrying value since it bears interest at a rate close to the prevailing market rate.
Inflation-related
Risks
We
do not believe that the rate of inflation in Israel has had a material impact on our business to date, however, our costs in Israel will
increase if the inflation rate in Israel exceeds the devaluation of the NIS against the U.S. dollar or if the timing of such devaluation
lags behind inflation in Israel. Similarly, our costs in Korea will increase if the inflation rate in Korea exceeds the devaluation of
the KRW against the U.S. dollar or if the timing of such devaluation lags behind inflation in Korea.
Foreign
Currency Exchange Risk
The
U.S. dollar is our functional and reporting currency. However, a portion of our operating expenses, including personnel and facilities
related expenses, are incurred in NIS and KRW. As a result, our statements of operations and cash flows could be adversely affected in
the future due to changes in foreign exchange rates. If the NIS and KRW appreciate relative to the U.S. dollar, the dollar cost of our
operations in Israel or Korea would increase, respectively, and our dollar-denominated results of operations would be adversely affected.
However, as we have cash and cash equivalents denominated in U.S. dollars, we believe that changes in foreign currency exchange rates
would not have a material impact on our financial position or results of operations.
Item 12. Description of Securities Other than Equity Securities
A.
Debt Securities
Not
applicable.
B.
Warrants and Rights
Not
applicable.
C.
Other Securities
Not
applicable.
D.
American Depositary Shares
Not
applicable.
118
PART
II
Item
13. Defaults, Dividend Arrearages and Delinquencies
None.
Item
14. Material Modifications to the Rights of Security Holders and Use of Proceeds
Initial
Public Offering
On
August 25, 2020, we completed an initial public offering in the United States on Nasdaq of our ordinary shares, par value NIS 0.01 per
share, pursuant to a Registration Statement on Form F-1, as amended (File No. 333-240209), which became effective on August 20, 2020.
Cantor Fitzgerald & Co., Oppenheimer & Co. Inc., Berenberg and CIBC Capital Markets acted as joint book-runners. National Securities
Corporation acted as co-manager for the offering.
We
issued and sold 10,555,556 ordinary shares at a public offering price of $18 per share, including 1,376,812 additional ordinary shares
purchased by the underwriters at the public offering price, less the underwriting discount, pursuant to the exercise in full of their
option to purchase additional ordinary shares. Following the sale of our ordinary shares in connection with the initial public offering,
the offering terminated.
The
gross proceeds of the shares sold (including the over-allotment option) was approximately $190.0 million. The total expenses of the offering,
including underwriting discounts and commissions, were approximately $20.8 million. The net proceeds we received from the offering (including
the over-allotment option) were approximately $169.2 million. No payments for such expenses were made directly or indirectly to (i) any
of our directors, officers or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any
of our affiliates.
There
has been no material change in the expected use of the net proceeds from our initial public offering as described in our final prospectus
filed with the SEC on August 24, 2020 pursuant to Rule 424(b)
.
Item
15. Controls and Procedures
(a)
Disclosure
Controls and Procedures
Management
of the Company, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the
Company's disclosure controls and procedures as of December 31, 2022.
The
Company's disclosure controls and procedures are designed to ensure that information required to be disclosed by the issuer in
the reports that it files or submits under the Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within
the time periods specified in the Commission's rules and forms, and that such information is accumulated and communicated to management
of the Company, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure.
Based
on their evaluation, as of the end of the period covered by this Annual Report on Form 20-F, the Company's Chief Executive Officer
and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were not effective due to a material
weakness in the Company's internal control over financial reporting described below.
(b)
Management's
Annual Report on Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as described in Rules 13a-15(f)
and 15d-15(f) under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Internal control over financial reporting is
defined as a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, or persons performing
similar functions, and effected by the Company's board of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and procedures that: (1) pertain to the maintenance of records that
in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer, (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management
and directors of the issuer and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the issuer's assets that could have a material effect on the financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in our
conditions, or that the degree of compliance with our policies or procedures may deteriorate.
119
Our
management, under the supervision and participation of our Chief Executive Officer and our Chief Financial Officer, has conducted an
assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022 using criteria established
in
Internal Control — Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is
a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected
on a timely basis.
As
disclosed previously, as of December 31, 2021, our management had concluded that we did not maintain effective internal control
over financial reporting due to four material weaknesses as follows:
1.
Lack
                                            of sufficient number of financial reporting personnel with an appropriate level of knowledge,
                                            experience and training commensurate with our financial reporting requirements.
2.
Inability
                                            to maintain effective internal controls over certain information technology ("IT")
                                            general controls for applications used in the preparation of the Company's consolidated
                                            financial statements.
3.
Inappropriate
                                            segregation of duties.
4.
Insufficient
                                            internal controls to ensure the processing and reporting of valid transactions is complete,
                                            accurate and timely.
During
2022, our management, with the oversight of the Audit Committee of the Board of Directors, reevaluated the Company's Risks and
Controls by performing full testing procedures, mapped the relevant processes, identified risks in the Company's critical processes,
implemented a new Enterprise Resource Planning ("ERP") system and recruited additional financial reporting personnel and
strengthened their professional knowledge and skills.
This
resulted with the management's conclusion, as of December 31, 2022, that the Company has remediated the above material weaknesses
except for the maintenance of appropriate level of knowledge, experience and training of our personnel commensurate with our financial
reporting requirements. Therefore, our management has concluded that we did not maintain effective internal control over financial reporting
as of December 31, 2022. This control deficiency did not result in material misstatements of the consolidated financial statements; however,
this control deficiency described above could result in a misstatement that would result in a material misstatement of the annual or
interim consolidated financial statements that would not be prevented or detected. Accordingly, our management has determined that this
control deficiency constitutes a material weakness.
Remediation
Efforts
We
have made substantial progress in developing and implementing our remediation plan, as we are adding to and improving our internal processes.
The remaining task of our remediation plan is to increase the appropriate level of knowledge, experience and training commensurate with
the Company's financial reporting requirements in order to reduce the risk of material misstatement.
Management's
Planned Remediation Activities
In
order to address the material weakness in internal control over financial reporting on December 31, 2022, management has commenced remediation
efforts, which include:
Lack
of sufficient number of financial reporting personnel with an appropriate level of knowledge, experience and training commensurate with
our financial reporting requirements
: Management has already made progress to increase the appropriate level of knowledge, experience
and training commensurate with the Company's financial reporting requirements, and plans to continue to do so, by mapping and assessing
the required competencies and capabilities of the accounting team to support public company reporting requirements and enhancing and
supplementing the finance team with resources and personnel with knowledge and experience in internal control over financing reporting
commensurate with our financial reporting requirements, including with responsibility for design and implementation of internal controls.
We also provide Company-sponsored training programs related to internal control over financial reporting.
120
Remediation
of Previously Disclosed Material Weaknesses
The
following captures the activities made by management related to the material weaknesses that were previously identified and which have
been remediated at December 31, 2022.
Did
not design and maintain effective internal controls over certain information technology ("IT") general controls for applications
used in the preparation of the Company's consolidated financial statements
: We successfully implemented a new ERP system to
support efficient automated and manual controls that are dependent on system reporting and to structure effective user access rights
and privileges within our IT systems. We also modified current procedures and documentation and added new procedures and documentation
due to the implementation of the new ERP system. Based on the results of our testing, management has concluded that the IT general controls
for applications used in the preparation of the Company's consolidated financial statements are adequately designed and have operated
effectively for a sufficient period of time as of December 31, 2022. Accordingly, the material weakness related to our IT general
controls is remediated.
Inappropriate
segregation of duties
: We recruited additional personnel with a requisite level of qualification and experience, including accounting
and finance employees with the specific technical accounting and financial reporting experience necessary for a public company, including
a controller and additional bookkeeper. Based on the results of our testing, management has concluded that this control is adequately
designed and has operated effectively for a sufficient period of time as of December 31, 2022. Accordingly, the material weakness
related to inappropriate segregation of duties is remediated.
Not
maintaining effective internal controls to ensure processing and reporting of valid transactions is complete, accurate and timely
:
We designed and implemented additional formal policies, procedures and documentation controls to ensure transactions are properly initiated,
recorded, processed, reported, appropriately authorized and approved, including enhancing our internal review procedures. Specifically,
we have implemented a sufficient level of formal policies, procedures and documentation that define how transactions across the business
cycles are initiated, recorded, processed, reported, documented, appropriately authorized and approved. The new controls and the revised
existing controls include controls to address complex accounting issues, period-end financial reporting and segregation of duties. Based
on the results of our testing, management has concluded that this control is adequately designed and has operated effectively for a sufficient
period of time as of December 31, 2022. Accordingly, the material weakness related to the effectiveness of the internal controls
is remediated.
(c)
Attestation Report of the Registered Public Accounting
    Firm
Our
internal control over financial reporting as of December 31, 2022 has been audited by Kesselman & Kesselman, an independent
registered public accounting firm in Israel and a member of PricewaterhouseCoopers International Limited, as stated in their
report which is included under "Item 18—Financial Statements."
(d)
Changes in Internal Control Over Financial Reporting
Other
than the remediation efforts described above taken to address the material weaknesses during the period covered by this Annual Report,
there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under
the Securities Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
Item
16. [Reserved]
(a)
Audit Committee Financial Expert
Noga
Kainan and Dan Suesskind, independent directors and members of our audit committee, are audit committee financial experts.
(b)
Code of Ethics
We
have adopted a code of ethics and conduct, which is applicable to all of our directors, officers and employees. We have made our code
of ethics publicly available on our website.
121
(c)
Principal Accountant Fees and Services
The
following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered
by Kesselman & Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited, our
independent registered public accounting firm, for the periods indicated.
Year Ended
December 31,
2021
2022
Audit Fees
(1)
$
608,000
$
577,000
Audit-Related Fees
(2)
—
—
Tax Fees
(3)
19,000
37,000
All Other Fees
(4)
—
11,000
Total
$
627,000
$
625,000
(1)
"Audit Fees" represents the aggregate fees
    billed or accrued for the interim reviews and audit of our annual financial statements. This category also includes services that
    generally the independent accountant provides, such as consents and assistance with and review of documents filed with the SEC as
    well as fees related to audits in connection with our secondary public offering in February 2021.
(2)
"Audit-Related Fees" represents the aggregate
    fees billed or accrued for assurance and related services that are reasonably related to the performance of the audit or review of
    our financial statements and not reported under "Audit Fees."
(3)
"Tax Fees" represents the aggregate fees
    billed or accrued for professional tax services rendered by our independent registered public accounting firm for tax compliance
    and tax advice on actual or contemplated transactions.
(4)
"All Other Fees" represents the aggregate
    fees billed or accrued for services rendered by our independent registered public accounting firm other than services reported under
    "Audit Fees," "Audit-related Fees" and "Tax Fees."
Audit
Committee Pre-Approval Policies and Procedures
Our
Audit Committee has adopted a policy pursuant to which we will not engage our auditors to perform any non-audit services unless the audit
committee pre-approves the service.
Item
16D. Exemptions from the Listing Standards for Audit Committees
Not
applicable.
Item
16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Not
applicable.
Item
16F. Change in Registrant's Certifying Accountant
Not
applicable.
122
Item
16G. Corporate Governance
As
a foreign private issuer, we are permitted to follow certain Israeli corporate governance practices instead of the Nasdaq corporate governance
rules, provided that we disclose which requirements we are not following and the equivalent Israeli requirement. Pursuant to the "foreign
private issuer exemption":
●
we comply with Israeli law with respect to quorum requirements.
    In accordance with the Companies Law, our amended and restated articles of association provide that a quorum of two or more shareholders
    holding at least 25% of the voting rights in person or by proxy is required for commencement of business at a general shareholder
    meeting. The quorum set forth in our amended and restated articles of association with respect to an adjourned meeting shall, subject
    to a limited exception, consist of one or more shareholders present in person or by proxy (including by voting deed), regardless
    of the number or percentage of our outstanding shares held by them;
●
we follow Israeli corporate governance practices instead
    of the Nasdaq requirements with regard to the nomination committee and director nomination procedures. The nominations for directors,
    which are presented to our shareholders by our board of directors, are generally made by the board of directors itself, in accordance
    with the provisions of our amended and restated articles of association and the Companies Law. With the exception of directors elected
    by our board of directors due to a vacancy, in accordance with the staggered nomination as described under "Item 6. Directors,
    Senior Management and Employees—C. Board Practices—Board of Directors," we intend to elect our directors to hold
    office until the annual general meeting of our shareholders that occurs in the third year following his or her election and until
    his or her successor shall be elected and qualified;
●
we adopt and approve material changes to equity incentive
    plans in accordance with the Companies Law, which does not impose a requirement of shareholder approval for such actions. In addition,
    we follow Israeli corporate governance practice, which requires shareholder approval prior to an issuance of securities in connection
    with equity-based compensation of officers, directors, employees or consultants only under certain circumstances, in lieu of Nasdaq
    Marketplace Rule 5635(c);
●
as opposed to making periodic reports to shareholders
    and proxy solicitation materials available to shareholders in the manner specified by the Nasdaq corporate governance rules, the
    Companies Law does not require us to distribute periodic reports directly to shareholders, and the generally accepted business practice
    in Israel is not to distribute such reports to shareholders but to make such reports available through a public website. We will
    only mail such reports to shareholders upon request. As a foreign private issuer, we are generally exempt from the SEC's proxy
    solicitation rules; and
●
we follow Israeli corporate governance practices instead
    of Nasdaq requirements to obtain shareholder approval for all corporate actions requiring such approval under the requirements of
    the Companies Law such as (i) transactions with directors concerning the terms of their service or indemnification, exemption
    and insurance for their service (or for any other position that they may hold at our company), (ii) extraordinary transactions
    with controlling shareholders, (iii) terms of employment or other engagement of the controlling shareholder of the company or
    such controlling shareholder's relative, (iv) private placements that will result in a change of control, (v) certain
    transactions, other than a public offering, involving issuances of a 20% or greater interest in us and (vi) certain acquisitions
    of the stock or assets of another company.
Otherwise,
we intend to comply with the rules generally applicable to U.S. domestic companies listed on the Nasdaq. We may in the future decide
to use the foreign private issuer exemption with respect to some or all of the other Nasdaq corporate governance rules. We also intend
to comply with Israeli corporate governance requirements under the Companies Law applicable to us.
Item
16H. Mine Safety Disclosure
Not
applicable.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not
applicable.
123
PART
III
Item 17. Financial Statements
We
have elected to provide financial statements pursuant to Item 18.
Item
18. Financial Statements
The
consolidated financial statements of Nano-X Imaging Ltd. are included at the end of this annual report on Form 20-F.
Item
19. Exhibits
Exhibit
    No.
Description
1.1*
Form of Amended and Restated Articles of Association of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form F-1/A (File No. 333-240209) filed on August 14, 2020 with the SEC)
2.1†
Description of Securities Registered under Section 12 of the Exchange Act
4.1*
Asset Purchase Agreement, dated November 3, 2021, among MDWEB, LLC, Nano-X Imaging. and Nano-X Imaging Ltd. (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form 20-F (File No. 001-39461) filed on May 2, 2022 with the SEC)
4.2*
Agreement
    and Plan of Merger, dated August 9, 2021, among Nano-X Imaging Ltd, Zebra Medical Vision Ltd. and PerryLLion Ltd. (incorporated by
    reference to Exhibit 4.2 to the Registrant's Registration Statement on Form 20-F (File No. 001-39461) filed on May 2, 2022
    with the SEC)
4.3*
First Amendment to the Agreement and Plan of Merger, dated August 9, 2021, among Nano-X Imaging Ltd, Zebra Medical Vision Ltd. and PerryLLion Ltd. (incorporated by reference to Exhibit 4.3 to the Registrant's Registration Statement on Form 20-F (File No. 001-39461) filed on  May 2, 2022 with the SEC)
4.4*
Stock Purchase Agreement dated November 2, 2021 by and among Dr. Michael Yuz, Dr. Michael Yuz as the representative of Sellers, USARAD Holdings, Inc. and Nano-X Imaging Ltd (incorporated by reference to Exhibit 4.4 to the Registrant's Registration Statement on Form 20-F (File No. 001-39461) filed on  May 2, 2022 with the SEC)
4.5*
Form of warrants to purchase ordinary shares issued to A-Labs Finance and Advisory Ltd. (incorporated by reference to Exhibit 4.5 to the Registrant's Registration Statement on Form F-1 (File No. 333-240209) filed on July 30, 2020 with the SEC)
4.6*
Warrant to purchase ordinary shares, dated September 2, 2019, issued to SK Telecom TMT Investment Corp. (incorporated by reference to Exhibit 4.6 to the Registrant's Registration Statement on Form F-1 (File No. 333-240209) filed on July 30, 2020 with the SEC)
4.7*
Amendment to Warrant to purchase ordinary shares, dated June 4, 2020, issued to SK Telecom TMT Investment Corp. (incorporated by reference to Exhibit 4.7 to the Registrant's Registration Statement on Form F-1 (File No. 333-240209) filed on July 30, 2020 with the SEC)
4.8*
Contract Manufacturing Agreement, dated May 26, 2020, by and between the Registrant and FoxSemicon Integrated Technology, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant's Registration Statement on Form F-1 (File No. 333-240209) filed on July 30, 2020 with the SEC)
4.9*
Registration Rights Agreement by and among the Registrant and the certain shareholders named therein (incorporated by reference to Exhibit 10.2 to the Registrant's Registration Statement on Form F-1/A (File No. 333-240209) filed on August 14, 2020 with the SEC)
124
4.10*
2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant's Registration Statement on Form F-1 (File No. 333-240209) filed on July 30, 2020 with the SEC)
4.11*
U.S. Sub-Plan (incorporated by reference to Exhibit 10.4 to the Registrant's Registration Statement on Form F-1 (File No. 333-240209) filed on July 30, 2020 with the SEC)
4.12*
Form of Indemnification Agreement between the Registrant and each director and executive officer (incorporated by reference to Exhibit 10.5 to the Registrant's Registration Statement on Form F-1/A (File No. 333-240209) filed on August 14, 2020 with the SEC)
4.13*
Compensation Policy for Executive Officers and Directors (incorporated by reference to Exhibit A to the Proxy Statement filed as Exhibit 99.1 to the Registrant's Form 6-K (File No. 001-39461) filed on December 31, 2020 with the SEC)
4.14†
Settlement Agreement and Release dated December 29, 2022, among Nano-X Imaging Ltd, Nano-X AI Ltd. (formerly Zebra Medical Vision Ltd.) and PerryLLion Ltd.
4.15†
First Amendment to Stock Purchase Agreement dated April 28, 2023, by and among Dr. Michael Yuz, as the Seller Representative, Nano-X Imaging, Inc. and Nano-X Imaging Ltd
8.1†
List of subsidiaries of the Registrant
12.1†
Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2†
Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1±
Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2±
Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1†
Consent of Kesselman & Kesselman, Certified Public Accountants (Isr.) a member firm of PricewaterhouseCoopers International Limited, independent registered public accounting firm.
101.INS
Inline XBRL Instance Document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*
Previously
filed.
†
Filed
herewith.
±
Furnished
herewith.
In
reviewing the agreements included as exhibits to this annual report on Form 20-F, please remember they are included to provide you with
information regarding their terms and are not intended to provide any other factual or disclosure information about us or the other parties
to the agreements.
The
agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties
have been made solely for the benefit of the other parties to the applicable agreement and:
●
should not in all instances be treated as categorical
    statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
●
have been qualified by disclosures that were made to
    the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in
    the agreement;
●
may apply standards of materiality in a way that is
    different from what may be viewed as material to you or other investors; and
●
were made only as of the date of the applicable agreement
    or such other date or dates as may be specified in the agreement and are subject to more recent developments.
Accordingly,
these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.
125
SIGNATURES
NANO-X
IMAGING LTD hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on Form 20-F on its behalf.
NANO-X IMAGING LTD
By:
/s/
    Erez Meltzer
Name:
Erez Meltzer
Title:
Chief Executive Officer
Date:
May 1, 2023
126
NANO-X
IMAGING LTD.
CONSOLIDATED
FINANCIAL STATEMENTS
INDEX
Page
Report of Independent Registered Public Accounting Firm (PCAOB name: Kesselman & Kesselman C.P.A.s and PCAOB ID:
1309
)
F-2
Consolidated Balance Sheets
F-5
Consolidated Statements of Operations and Comprehensive Loss
F-6
Consolidated Statements of Changes in Shareholders' Equity (Capital Deficiency)
F-7
Consolidated Statements of Cash Flows
F-8
Notes to the Consolidated Financial Statements
F-9 – F-45
F-
1
Report of Independent Registered Public
Accounting Firm
To the Board of Directors and Shareholders
of Nano-X Imaging Ltd.
Opinions on the Financial Statements
and Internal Control over Financial Reporting
We have audited the accompanying consolidated
balance sheets of Nano-X Imaging Ltd. and its subsidiaries (the "Company") as of December 31, 2022 and 2021, and the related
consolidated statements of operations, of changes in shareholders' equity and of cash flows for each of the three years in the period
ended December 31, 2022, including the related notes (collectively referred to as the "consolidated financial statements").
We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and
2021
,
and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in
conformity with accounting principles generally accepted in the United States of America. the effectiveness of the Company's internal
control over financial reporting does not affect our opinion on those consolidated financial statements.
Also in our opinion, the Company did not maintain, in all material
respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in
Internal Control
- Integrated Framework
(2013) issued by the COSO because material weakness in internal control over financial reporting existed as
of that date. The Company lacked a sufficient number of financial reporting personnel with an appropriate level of knowledge, experience
and training commensurate with the Company's financial reporting requirements. A material weakness is a deficiency, or a combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses referred to
above are described in Management's Report on Internal Control over Financial Reporting appearing in Item 15A. We considered this material
weakness in determining the nature, timing, and extent of audit tests applied in our audit of the 2022 consolidated financial statements,
and our opinion regarding the effectiveness of the Company's internal control over financial reporting does not affect our opinion
on those consolidated financial statements.
F-
2
Basis for Opinions
The Company's management is responsible for
these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of
the effectiveness of internal control over financial reporting, included in appearing under Item 15A. Our responsibility is to express
opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based
on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control
over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements
included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal
Control over Financial Reporting
A company's internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control
over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below
is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated
to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and
(ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
F-
3
Goodwill impairment assessment –
AI Solutions reporting unit
As described in Note
4 to the consolidated financial statements, the Company's consolidated goodwill balance and goodwill balance for AI solutions reporting
unit were $7,420 thousand and $365 thousand, respectively, as of December 31, 2022. As disclosed by management, goodwill is assigned
to reporting units and tested for impairment at least annually, in the fourth quarter of the fiscal year, and whenever events or changes
in circumstances indicate the carrying value of goodwill may not be recoverable. During the second quarter of 2022, management noted the
following main triggering events for its AI solutions reporting unit: (i) fluctuations in the macroeconomic environment and (ii) updated
assumptions supporting the cash flow projections of the AI Solutions reporting unit, including certain revenue growth assumptions, and
the associated operating profit margins. As a result, management performed a quantitative analysis and recorded a goodwill impairment
charge of $14,338 thousand related to its AI solutions reporting unit. During the fourth quarter of 2022, management conducted a quantitative
analysis of the reporting unit as part of its annual goodwill impairment test with the assistance of an independent valuation expert.
In the fourth quarter of 2022, management recorded an additional goodwill impairment charge of $36,540 thousand related to its AI solutions
reporting unit. Management determines the fair value of its reporting units using the income approach, according to which, the method
used is the discounted cash flow method. Management starts with a forecast of all the expected net cash flows associated with the reporting
unit, which includes the application of a terminal value, and then applies a discount rate to arrive at a net present value amount. As
disclosed by management, key estimates include the terminal revenue growth rate taking into consideration industry and market conditions
and the discount rate.
The principal considerations
for our determination that performing procedures relating to the goodwill impairment assessment for the AI solutions reporting unit is
a critical audit matter is (i) the significant judgment by management when determining the fair value of the reporting unit; (ii) a
high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management's significant assumptions
related to the terminal revenue growth rate and discount rate; and (iii) the audit effort involved the use of professionals with
specialized skill and knowledge.
Addressing the matter
involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial
statements. These procedures included testing the effectiveness of controls relating to management's goodwill impairment assessment,
including controls over the valuation of the AI solutions reporting unit. These procedures also included, among others, (i) testing
management's process for determining the fair value estimate; (ii) evaluating the appropriateness of the discounted cash flow
model; (iii) testing the completeness, accuracy and relevance of underlying data used in the model; and (iv) evaluating the
significant assumptions used by management related to the terminal revenue growth rate and discount rate. Evaluating management's
assumptions related to the terminal revenue growth rate involved evaluating whether the assumptions used by management were reasonable
considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry
data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with
specialized skill and knowledge were used to assist in the evaluation of management's discounted cash flow model and the discount
rate assumption.
/s/
Kesselman & Kesselman
Certified Public Accountants (Isr.)
A member firm of PricewaterhouseCoopers International
Limited
Tel-Aviv, Israel
May 1, 2023
We have served as the Company's auditor
since 2019.
F-
4
NANO-X
IMAGING LTD.
CONSOLIDATED
BALANCE SHEETS
(U.S.
dollars in thousands, except share and per share data)
December 31,
2022
December 31,
2021
U.S.
    Dollars in thousands
Assets
CURRENT ASSETS:
Cash and cash
    equivalents
38,463
66,645
Marketable securities -
    short term
39,161
22,066
Accounts receivables net of allowance for credit losses of $
34
and $
137
as of December 31, 2022 and December 31,2021, respectively.
977
1,051
Prepaid expenses
2,414
3,129
Other
    current assets
1,446
1,966
TOTAL
    CURRENT ASSETS
82,461
94,857
NON-CURRENT ASSETS:
Restricted cash
66
127
Property and equipment,
    net
43,545
37,435
Operating lease right-of-use
    asset
1,157
1,725
Marketable securities -
    long term
25,198
67,845
Intangible assets
91,219
101,826
Goodwill
7,420
58,298
Other
    non-current assets
2,867
1,057
TOTAL
    NON-CURRENT ASSETS
171,472
268,313
TOTAL
    ASSETS
253,933
363,170
Liabilities and Shareholders'
    Equity
CURRENT LIABILITIES:
Accounts payable
3,619
3,134
Accrued expenses
12,240
3,611
Loan from a Government Agency
-
145
Deferred revenue
182
247
Contingent short term earnout
    liability
4,250
42,471
Current maturities of operating
    lease liabilities
740
881
Other
    current liabilities
4,043
2,262
TOTAL
    CURRENT LIABILITIES
25,074
52,751
NON-CURRENT LIABILITIES:
Non-current operating lease
    liabilities
398
950
Long term loan
3,481
3,796
Non-current deferred revenue
398
415
Contingent long-term earnout
    liability
4,089
5,814
Deferred tax liability
3,330
7,063
Other
    long-term liabilities
483
233
TOTAL
    NON-CURRENT LIABILITIES
12,179
18,271
TOTAL
    LIABILITIES
37,253
71,022
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Ordinary Shares, par value NIS
0.01
per share
100,000,000
authorized at December 31, 2022 and December 31 2021,
55,094,237
and
51,791,441
issued and outstanding at December 31, 2022 and December 31, 2021, respectively
158
149
Additional paid-in capital
477,953
438,820
Accumulated other comprehensive
    loss
(
1,974
)
(
607
)
Accumulated
    deficit
(
259,457
)
(
146,214
)
TOTAL
    SHAREHOLDERS' EQUITY
216,680
292,148
TOTAL
    LIABILITIES AND SHAREHOLDERS' EQUITY
253,933
363,170
The
accompanying notes are an integral part of these consolidated financial statements
F-
5
NANO-X
IMAGING LTD.
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(U.S.
dollars in thousands, except share and per share data)
Year
    ended December 31,
2022
2021
2020
U.S.
    Dollars in thousands
REVENUE
8,578
1,304
-
COST OF REVENUE
15,458
2,816
-
GROSS
    LOSS
(
6,880
)
(
1,512
)
-
OPERATING EXPENSES:
Research and development
26,507
17,122
9,210
Sales and Marketing
4,376
7,033
12,445
General and administrative
41,254
34,709
22,268
Goodwill impairment
50,878
-
-
Change in contingent earnout
    liability
(
20,376
)
-
-
Other
    expenses
8,191
1,182
-
TOTAL
    OPERATING EXPENSES
110,830
60,046
43,923
OPERATING
    LOSS
(
117,710
)
(
61,558
)
(
43,923
)
FINANCIAL
    INCOME (EXPENSES), net
789
(
288
)
108
OPERATING
    LOSS BEFORE INCOME TAXES
(
116,921
)
(
61,846
)
(
43,815
)
INCOME
    TAX BENEFIT
3,678
48
-
NET
    LOSS
(
113,243
)
(
61,798
)
(
43,815
)
BASIC AND DILUTED LOSS PER SHARE
(
2.17
)
(
1.28
)
(
1.23
)
THE
    WEIGHTED AVERAGE OF THE NUMBER OF ORDINARY SHARES (in thousands)
52,235
48,216
35,654
NET LOSS
(
113,243
)
(
61,798
)
(
43,815
)
Other comprehensive loss:
Unrealized loss from
    available-for-sale securities
(
1,367
)
(
607
)
-
Total other comprehensive
    loss:
(
1,367
)
(
607
)
-
TOTAL
    COMPERHENSIVE LOSS
(
114,610
)
(
62,405
)
(
43,815
)
The
accompanying notes are an integral part of these consolidated financial statements
F-
6
NANO-X
IMAGING LTD.
CONSOLIDATED
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY)
(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
U.S.
    Dollars in thousands
BALANCE
    AT JANUARY 1, 2020
27,150,080
75
31,748
-
(
40,601
)
(
8,778
)
CHANGES
    DURING 2020:
Issuance
    of ordinary shares and warrants, net of issuance costs
4,624,500
14
70,999
-
-
71,013
Initial
    public offering of ordinary shares, net of offering costs
10,555,556
31
169,136
-
-
169,167
Issuance
    of ordinary shares to employees and non-employees upon exercise of warrants
997,863
3
497
-
-
500
Issuance
    of ordinary shares to investors upon exercise of warrants
1,662,929
5
125
-
-
130
Share-based
    compensation
24,781
24,781
Conversion
    of related party liability to shareholders' equity,
1,109,245
3
17,745
-
-
17,748
Net
    loss for the year
(
43,815
)
(
43,815
)
BALANCE
    AT DECEMBER 31, 2020
46,100,173
131
315,031
-
(
84,416
)
230,746
CHANGES
    DURING 2021:
Issuance of ordinary
    shares upon exercise of warrants
780,920
2
265
-
-
267
Issuance
    of ordinary shares to employees and non-employees upon exercise of options
1,099,946
3
3,330
-
-
3,333
Issuance
    of ordinary shares due to business combination and assets acquisition (refer to Note 3)
3,810,402
13
101,497
-
-
101,510
Share-based
    compensation
-
-
18,697
-
-
18,697
Unrealized
    loss from available-for-sale securities
-
-
-
(
607
)
-
(
607
)
Net
    loss for the year
-
-
(
61,798
)
(
61,798
)
BALANCE
    AT DECEMBER 31, 2021
51,791,441
149
438,820
(
607
)
(
146,214
)
292,148
CHANGES
    DURING 2022:
Issuance of ordinary
    shares upon exercise of warrants
192,927
1
369
-
-
370
Issuance
    of ordinary shares to employees and non-employees upon exercise of options
372,159
1
578
-
-
579
Issuance of ordinary
    shares in connection with earnout liability. (refer to Note 3)
89,286
*
953
-
-
953
Issuance
    of ordinary shares under settlement agreement with former shareholders of Nanox AI Ltd.  (refer to Note 3)
2,648,424
7
18,610
-
-
18,617
Share-based
    compensation
-
-
18,623
-
-
18,623
Unrealized
    loss from available-for-sale securities
-
-
-
(
1,367
)
-
(
1,367
)
Net
    loss for the year
-
-
-
-
(
113,243
)
(
113,243
)
BALANCE
    AT DECEMBER 31, 2022
55,094,237
158
477,953
(
1,974
)
(
259,457
)
216,680
(*)
Less than 1 thousand US dollars.
The
accompanying notes are an integral part of these consolidated financial statements
F-
7
NANO-X
IMAGING LTD.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
Year
    ended December 31,
2022
2021
2020
U.S.
    Dollars in thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net
    loss for the year
(
113,243
)
(
61,798
)
(
43,815
)
Adjustments
    required to reconcile net loss to net cash used in operating activities:
Share-based
    compensation
18,623
18,806
24,781
Amortization
    of intangible assets
10,607
1,768
-
Impairment of goodwill
50,878
-
-
Change
    in contingent earnout liability
(
20,376
)
-
-
Depreciation
905
524
208
Deferred
    tax liability, net
(
3,733
)
(
116
)
-
Exchange
    rate differentials
(
47
)
10
(
122
)
Amortization
    of premium, discount and accrued interest on marketable securities
1,398
(
216
)
-
Impairment
    of property and equipment
172
214
-
Changes
    in operating assets and liabilities, net of effects of businesses acquired:
Accounts
    receivable
74
(
40
)
-
Prepaid
    expenses and other current assets
1,235
1,724
(
4,478
)
Other
    non-current assets
(
800
)
(
374
)
(
522
)
Accounts
    payable
469
1,721
(
103
)
Accrued
    expenses and other liabilities
10,410
(
719
)
2,359
Operating
    lease assets and liabilities
(
125
)
23
83
Deferred
    revenue
(
82
)
179
-
Other
    long-term liabilities
250
233
-
Net
    cash used in operating activities
(
43,385
)
(
38,061
)
(
21,609
)
CASH
    FLOWS FROM INVESTING ACTIVITIES:
Cash
    paid for business combinations, net of cash and restricted cash acquired
-
(
2,859
)
-
Proceeds
    from maturity of marketable securities
31,241
10,986
-
Purchase
    of marketable securities
(
8,454
)
(
104,043
)
-
Proceeds
    from sale of marketable securities
-
2,754
Purchase
    of property and equipment
(
7,171
)
(
23,158
)
(
13,937
)
Investment
    in equity securities
(
1,010
)
-
-
Net
    cash provided by (used in) investing activities
14,606
(
116,320
)
(
13,937
)
CASH
    FLOWS FROM FINANCING ACTIVITIES:
Proceeds
    from long term loan
-
3,796
-
Proceeds
    from issuance of ordinary shares and warrants, net of issuance costs
-
-
71,013
Proceeds
    from initial public offering of ordinary shares, net of issuance costs
-
-
169,348
Repayment
    of financial liability
(
145
)
-
-
Proceeds
    from issuance of ordinary shares upon exercise of warrants
370
267
630
Issuance
    of ordinary shares to employees and non-employees upon exercise of options
579
3,316
-
Net
    cash provided by financing activities
804
7,379
240,991
EFFECT
    OF CHANGES IN EXCHANGE RATES ON CASH BALANCES IN FOREIGN CURRENCIES
(
268
)
(
10
)
122
NET
    CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
(
28,243
)
(
147,012
)
205,567
CASH
    AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE YEAR
66,772
213,784
8,217
CASH
    AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE YEAR
38,529
66,772
213,784
SUPPLEMENTARY
    INFORMATION ON ACTIVITIES INVOLVING CASH FLOWS:
Cash
    paid for income taxes
147
7
8
Cash
    paid for interest
90
13
-
SUPPLEMENTARY
    INFORMATION ON ACTIVITIES NOT INVOLVING CASH FLOWS:
Issuance
    of ordinary shares to investor upon exercise of warrants
-
-
200
Fair
    value of ordinary shares issued as consideration for purchase of assets
-
1,500
-
Fair
    value of ordinary shares issued as consideration for business combinations and achievement of milestones
-
100,010
-
Issuance
    of ordinary shares in connection with earnout liability.
953
-
-
Issuance
    of ordinary shares under settlement agreement with former shareholders of Nanox AI Ltd.
18,617
-
-
Fair
    value of contingent consideration assumed in business combinations
-
47,194
-
Fair
    value of contingent consideration assumed in purchase of assets
-
1,091
-
Operating
    lease liabilities arising from obtaining operating right-of use assets
320
194
1,085
Conversion
    of related party liability to shareholders' equity
-
17,748
(*)
Less than 1 thousand US dollars.
The
accompanying notes are an integral part of these consolidated financial statements
F-
8
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS
(U.S.
dollars in thousands, except share and per share data)
NOTE 1
- GENERAL:
a.
Nano-X Imaging Ltd, an
    Israeli Company (hereinafter "the Company" or "Nanox IL"), was incorporated on December 20, 2018 and commenced
    its operations on September 3, 2019.
On
September 19, 2019, Nanox IL established Nanox Imaging Inc. (hereinafter "Nanox Japan"), a wholly owned subsidiary in Japan.
On
September 25, 2020, Nanox IL established Nano-X Korea Inc. (hereinafter "Nanox Korea"), a wholly owned subsidiary in Korea.
On
September 30, 2021, Nanox IL established Nanox Imaging Inc. (hereinafter "Nanox U.S."), a wholly owned subsidiary in the
United States. On the same date, Nanox U.S. established Nanox MDW Inc. (hereinafter "Nanox MDW").
On
November 2, 2021, Nanox U.S. completed the acquisition of
100
% of the shares of USARAD Holdings, Inc. (refer to Note 3).
On
November 4, 2021, the Company completed the merger with Zebra Medical Vision Ltd (refer to Note 3).
The
                                            Company, together with its subsidiaries, develops a commercial-grade tomographic imaging
                                            device with a digital X-ray source, provides teleradiology services and develops artificial
                                            intelligence applications designed to be used in real-world medical imaging applications.
                                            The Company's solution, referred to as the Nanox Multi Source System, has two integrated
                                            components – "Nanox.ARC" and "Nanox. CLOUD". Nanox.ARC is a
                                            medical tomographic imaging system incorporating the Company's novel digital X-ray
                                            source. Nanox. CLOUD is a platform which employs a matching engine to match medical images
                                            to radiologists, provides image repository, connectivity to diagnostic assistive AI systems,
                                            billing and reporting. On April 1, 2021, the Company received clearance from the FDA to market
                                            the Company's Nanox Cart X-Ray System. On September 26, 2022, the Company submitted
                                            a 510(k) premarket notification to the U.S. Food and Drug Administration as part of the Company's
                                            510(k) application process for the multi-source Nanox.ARC system.
The
Company has experienced net losses and negative cash flows from operations since its inception. The Company anticipates such losses
will continue until its product candidates reach commercial profitability. In August 2020, the Company completed an IPO and its ordinary
shares began to trade on Nasdaq with net proceeds received from the IPO of approximately $
169
million. Based on the Company's activities
during the year ended December 31, 2022, the Company has sufficient funds for its plans for the next twelve months from the issuance
of these financial statements.
b.
Current Impact of geopolitical
    tensions and the start of the military conflict between Russia and Ukraine
U.S.
and global economies are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the
military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported.
Although the length and impact of the ongoing military conflict is highly unpredictable, the ongoing conflict in Ukraine could lead to
market disruptions, including significant volatility in commodity prices, credit and capital markets. As a result, sanctions and penalties
have been levied by the United States, European Union and other countries against Russia. Russian military actions and the resulting
sanctions could have a negative impact on supply chains, the Company's MSaaS agreements relating to Russia and Belarus or the region
and adversely affect the global economy and financial markets. Any of the abovementioned factors could affect the Company's business,
prospects, financial condition, and operating results. The extent and duration of the military action, sanctions and resulting market
disruptions are impossible to predict, but could be substantial.
F-
9
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 1
- GENERAL
(continued):
c.
Current
    Impact of the current financial markets and economic conditions
The Company's business may materially be affected by conditions in the financial markets and economic conditions in the U.S., Europe, Asia and, to a lesser extent, elsewhere in the world. 2022 was characterized by steep declines and significant volatility in global markets, driven by investor concerns over inflation, rising interest rates, slowing economic growth and geopolitical uncertainty. Inflation across many key economies reached generational highs, prompting central banks to take monetary policy tightening actions that are likely to create headwinds to economic growth. Continued global supply chain disruption, including due to China's recurrent restrictions and the ongoing war between Russia and Ukraine, are also contributing to mounting inflationary pressure. In 2022, in the U.S., annual inflation rose to the highest level in over
40
years. Concurrently, Europe experienced high year-over-year inflation. In response to rising inflation, the Federal Reserve raised the federal funds target range and the European Central Bank raised rates for the first time in
11
years. Both central banks reiterated expectations for additional increases in the coming months. While several key economic factors, including employment, wage growth and household savings, have demonstrated resilience, the U.S. economic contraction in 2022 has opened a debate among economists as to whether the U.S. has entered, or in the near term will enter, a recession.
NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES:
a.
Basis of presentation
The
Company's consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United
States (hereinafter,"U.S GAAP") and include the accounts of the Company and of all its wholly owned subsidiaries. Intercompany
accounts and transactions have been eliminated in consolidation.
b.
Use of estimates in the preparation of financial statements
The
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those
estimates and such differences may have a material impact on the Company's consolidated financial statements. As applicable to
these consolidated financial statements, the most significant estimates relate to goodwill impairment, fair-value of contingent earnout
liability, useful lives of intangible assets, deferred taxes and share-based payments. The Company bases its estimates on historical
experience, known trends and events and various other factors that the Company believes are reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources. The Company evaluates its estimates and assumptions on an ongoing basis. The Company's actual results may differ from
these estimates under different assumptions or conditions.
c.
Functional currency
The
U.S. dollar is the currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted.
A substantial portion of the revenue and operational costs are denominated in U.S. dollars. Accordingly, the functional currency of the
Company is the U.S. dollar ("primary currency"). Transactions and balances originally denominated in dollars are presented
at their original amounts. Balances in foreign currencies are translated into the primary currency using historical and current exchange
rates for nonmonetary and monetary balances, respectively. For foreign transactions and other items reflected in the statements of operations,
the following exchange rates are used: (1) for transactions – exchange rates at transaction dates or average rates and (2) for
other items (derived from nonmonetary balance sheet items such as depreciation) – historical exchange rates. The resulting transaction
gains or losses are recorded as financial income or expenses
.
d.
Business Combinations
The
Company allocates the fair value of consideration transferred in a business combination to the assets acquired, liabilities assumed,
and non-controlling interests in the acquired business based on their fair values at the acquisition date. Acquisition-related expenses
are recognized separately from the business combination and are expensed as incurred. The excess of the fair value of the consideration
transferred plus the fair value of any non-controlling interest in the acquiree over the fair value of the assets acquired, liabilities
assumed in the acquired business is recorded as goodwill. The fair value of the consideration transferred may include a combination of
cash, equity securities, earn out payments and deferred payments. The allocation of the consideration transferred in certain cases may
be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from
the acquisition date. The cumulative impact of revisions during the measurement period is recognized in the reporting period in which
the revisions are identified. The Company includes the results of operations of the businesses that it has acquired in its consolidated
results prospectively from the respective dates of acquisition.
F-
10
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES
(continued):
The
Company records obligations in connection with its business combinations at fair value on the acquisition date. Each reporting period
thereafter, the Company revalues earn-out liabilities and records the changes in their fair value in the consolidated statements of operations
and comprehensive loss.
Changes
in the fair value of earn-out liabilities can result from adjustments to the discount rates, the Company's shares price, sales
and profitability targets. This fair value measurement represent Level 3 measurements, as they are based on significant inputs not observable
in the market. Significant judgment is required in determining the assumptions utilized as of the acquisition date and for each subsequent
period. Accordingly, changes in the assumptions described above could have a material impact on the Company's consolidated results
of operations.
d.
Cash and cash equivalents
The
Company considers as cash equivalents all short-term, highly liquid investments, which include short-term bank deposits with original
maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible
to known amounts of cash.
e.
Marketable Securities
All
highly liquid investments are classified as marketable securities and have been classified and accounted for as available-for-sale. Investment
in securities consists of debt securities classified as available-for-sale and recorded at fair value. The Company classifies its marketable
securities as either short-term or long-term based on each instrument's underlying contractual maturity date. Unrealized gains
and losses on marketable debt securities classified as available-for-sale are reported net of the related tax effect in other comprehensive
income/(loss).
f.
Accounts receivables
Accounts
receivable are presented net of the allowance for expected credit loss and consists of short term receivables that arise in the normal
course of business. The Company performs ongoing credit evaluations of its customers' financial condition and typically requires
no collateral from its customers.
The
Company adopted the Current Expected Credit Losses ("CECL") guidance effective January 1, 2020. The Company maintains the
allowance for estimated losses resulting from the inability of the Company's customers to make required payments. The allowance
represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering
current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company's ongoing evaluation
of collectability, customer creditworthiness, historical levels of credit losses, and future expectations.
Changes
in the allowance for credit losses are recognized in general and administrative expenses. Accounts receivables are written-off
against the allowance for credit losses when management deems the accounts are no longer collectible.
g.
Property and equipment, net
Property
and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the following
estimated useful lives:
Years
Computers and electronic equipment
3
-
7
Office furniture and lab equipment
5
-
17
Vehicles
7
Equipment and machinery
5
-
10
Land
N/A
Leasehold
improvements are amortized over the terms of the respective leases or the estimated useful lives of the improvements, whichever
is shorter.
F-
11
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES
(continued):
h.
Intangible Assets, net
Goodwill
Goodwill
reflects the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the business
combination date over the fair values of the identifiable net assets acquired. Goodwill is an asset representing the future economic
benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
The Company allocates goodwill to its reporting units based on the reporting unit expected to benefit from the business combination.
  The primary items that generate goodwill include the value of the synergies between the acquired companies and the Company
and the acquired assembled workforce, neither of which qualifies for recognition as an intangible asset. ASC 350 allows an entity to
first assess qualitative factors to determine whether a quantitative goodwill impairment test is necessary. Further testing is only required
if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit's
fair value is less than its carrying amount. Otherwise, no further impairment testing is required. Examples of events or circumstances
that may be indicative of impairment include but are not limited to: macroeconomic and industry conditions, overall financial performance
and adverse changes in legal, regulatory, market share and other relevant entity specific events. An entity has the option to bypass
the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative goodwill impairment test. This
would not preclude the entity from performing the qualitative assessment in any subsequent period. The quantitative assessment compares
the fair value of the reporting unit to its carrying value, including goodwill.
The
Company determines the fair value of its reporting units using a discounted cash flow model, which utilizes key assumptions such as projected
revenues, cost of revenues and operating expenses. These assumptions are determined by the Company's management utilizing its internal
operating plan, growth rates for revenues and operating expenses and margin assumptions. An additional key assumption under this
approach is the discount rate, based on the weighted average cost of capital, which is adjusted for current risk-free rates of capital,
current market interest rates, and the evaluation of a risk premium relevant to the business segment.
If
the Company's assumptions relative to revenue growth rates, cost of revenues and operating expenses were to change, the Company's
fair value calculation may change, which could result in impairment. If the Company's assumptions relative to the discount rate
and the evaluation of risk premium growth rates were to change, the Company's fair value calculation may change, which could result
in impairment. The Company uses the income approach to determine the fair value of the reporting units because it considers the anticipated
future financial performance of the reporting units. Accordingly, changes in the assumptions described above could have a material impact
on the Company's consolidated results of operations.
The
Company's goodwill is tested for impairment at least on an annual basis, on the last day of the fourth quarter of the fiscal year
and whenever events or changes in circumstances indicate the carrying value of a reporting unit may not be recoverable. When necessary,
the Company records charges for impairments of goodwill for the amount by which the carrying amount of the respective reporting unit
exceeds its fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting
unit.
The
goodwill is assigned to the reporting units of the AI Solutions segment (which was recorded in the acquisition of Nanox AI) and the Radiology
Services segment (which was recorded in the acquisition of USARAD). The carrying value of each reporting unit is determined by assigning
the assets and liabilities, including the existing goodwill, to those reporting units.
F-
12
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES
(continued):
As
of December 31, 2021, the Company did not determine that it was more likely that not that the fair value of each reporting unit was less
than its carrying amount. During 2022, the Company recognized a goodwill impairment of $
50,878
thousand. See note 4.
Other
Intangible Assets, net
Definite
life intangible assets are amortized using the straight-line method over their estimated period of useful life. Amortization of radiologist
relationships, market platform, developed technology and image big data are recorded under cost of revenues. Amortization of trade names
and customer relationships are recorded under sales and marketing expenses. In addition, the remaining amortization period for the impaired
asset would be reassessed and, if necessary, revised.
i.
Impairment of long-lived assets
The Company's long-lived assets,
such as property, plant and equipment and identifiable intangible assets are reviewed for potential impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators which could trigger an impairment
may include, among others, any significant changes in the manner of the Company's use of the assets or the strategy of the Company's
overall business, certain reorganization initiatives, significant negative industry or economic trends or when the Company concludes that
it is more likely than not that an asset will be disposed of or sold. The recoverability of assets to be held and used is measured by
a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by such assets. If such
assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets. This measurement includes significant estimates and assumptions inherent in the estimate of the
fair value of identifiable intangible assets such as assumptions associated with forecasting profitability, including operational
margins and capital expenditures.. Newly acquired and recently impaired long-lived assets are more vulnerable to impairment as the assets
are recorded at fair value and are then subsequently measured at the lower of fair value or carrying value annually or when triggering
events are present. As such, immediately after acquisition or impairment, even small declines in the outlook for these assets can negatively
impact our ability to recover the carrying value and can result in an impairment charge. Accordingly, changes in the assumptions described
above could have a material impact on our consolidated results of operations. An impairment charge in the amount of $
172
thousand and
$
214
thousand was recorded for the years ended December 31, 2022 and 2021, respectively, in relation to the Company's Property,
Plant and Equipment. During the year ended December 31, 2020, the Company did not record any impairment charges related to the Company's
Property, Plant and Equipment. During 2022, 2021 and 2020, the Company did not record any impairment charge related to its definite life
intangible assets.
j.
Investment in Equity Securities
The Company's investment in equity securities consists of non-marketable equity securities, which is an investment in a privately held company. The Company's equity investment does not have a readily determinable fair value. The investment is measured as cost method investment under the measurement alternative prescribed within ASU 2016-01 "Financial Instruments—Recognition and Measurement of Financial Assets and Financial Liabilities" to the extent such an investment is not subject to consolidation or the equity method.  In February 2022, the Company purchased
67,000
common shares of a privately held company for an amount of $1,010 thousand.
F-
13
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES
(continued):
k.
Severance pay
Israeli
labor law generally requires severance pay be granted upon dismissal of an employee or upon termination of employment under certain other
circumstances. Pursuant to Section 14 of the Severance Compensation Act, 1963 ("Section 14"), all of the Company's
employees in Israel are entitled to monthly deposits, at a rate of
8.33
% of their monthly salary, made in their name with insurance companies.
Payments under Section 14 relieve the Company from any future severance payment obligation with respect to those employees and, as such,
the Company may only utilize the insurance policies for the purpose of disbursement of severance pay. As a result, the Company does not
recognize an asset nor liability for these employees.
In
2022 and 2021, all of the employees of the Company and its subsidiary in Israel are subject to Section 14 of the Severance Law. Severance
pay expenses for 2022, 2021 and 2020 amounted to $
1,251
thousand, $
846
thousand and $
212
thousand, respectively.
l.
Legal and other contingencies
Certain
conditions, such as legal proceedings, may exist as of the date the consolidated financial statements are issued that may result in a
loss to the Company, but that will only be resolved when one or more future events occur or fail to occur. In assessing loss contingencies
related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's
management evaluates with its legal advisors the perceived merits of any legal proceedings or unasserted claims as well as the perceived
merits of the amount of relief sought or expected to be sought. Such assessment inherently involves an exercise of judgment. Legal fees
are expensed as incurred. Litigation outcomes and contingencies are unpredictable and excessive verdicts can occur. Therefore, the Company's
assessments involve complex judgments concerning future events and often rely heavily on estimates and assumptions. The Company applies
the guidance in ASC 450-20-25 when assessing losses resulting from contingencies. The Company reviews the adequacy of the accruals on
a periodic basis and may determine to alter its reserves at any time in the future if the Company believes it would be appropriate to
do so. As such accruals are based on management's judgment as to the probability of losses and, where applicable, actuarially determined
estimates, accruals may materially differ from actual verdicts, settlements or other agreements made with regards to such contingencies.
If the assessment of a contingency indicates that it is probable that a material loss would be incurred and the amount of the liability
can be estimated, then the Company records an accrued expense in the Company's consolidated financial statements based on its best
estimate. Loss contingencies considered to be remote by management are generally not disclosed unless material. For additional information,
see note 11.
m.
Revenue Recognition
The
                                            majority of the Company's revenues are derived from radiology service fees received
                                            from various payors based on established billing rates. Revenues are derived directly from
                                            hospitals and healthcare providers. The Company recognizes revenue in the period in which
                                            the performance obligation is satisfied. The Company records the amount of revenue that reflects
                                            the consideration that it expects to receive in exchange for those services. The Company
                                            applies the following five-step model in order to determine this amount: (i) identification
                                            of the contract with a customer; (ii) identification of the promised services in the
                                            contract and determination of whether they represent performance obligations, including whether
                                            they are distinct in the context of the contract; (iii) measurement of the transaction
                                            price, including the constraint on variable consideration; (iv) allocation of the transaction
                                            price to the performance obligations; and (v) recognition of revenue when (or as) the
                                            Company satisfies each performance obligation. The teleradiology services have one performance
                                            obligation where the Company acts as principal to its customers (imaging centers, hospitals,
                                            and other healthcare providers). Revenue is recognized at a point in time when such performance
                                            obligation is satisfied, specifically when the radiologist completes the reading and the
                                            annotation of the patient's images. At large, payments are due at satisfaction of the
                                            Company's performance obligation and after the Company issues an invoice. The Company's
                                            teleradiology fees are fixed based on the type of modalities and agreed with its customers
                                            prior to rendering its services. Invoices are issued monthly for services rendered in the
                                            same month. Payments are due upon receipt of the invoice. The Company assesses collectability
                                            as part of the revenue recognition model. This assessment includes a number of factors such
                                            past due amounts, past payment history, and current economic conditions. If it is determined
                                            that collectability cannot be reasonably assured, the Company will not recognize the revenue
                                            until collectability is assured.
The
Company records deferred revenue for any upfront payments received in advance of the Company's performance obligations being satisfied.
These contract liabilities consist principally of unearned radiology service fees.
F-
14
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES
(continued):
n.
Research and development expenses
Research
and development expenses are charged to the statement of operations as incurred and consist primarily of personnel, materials and supplies
for research and development activities.
o.
Income tax
1)
The Company accounts for
    income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the
    liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial
    reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when
    the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets
    to their estimated realizable value if it is more likely than not that a portion or all of the deferred tax assets will not be realized,
    based on the weight of available positive and negative evidence. Deferred tax liabilities and assets are classified as non-current
    in accordance with ASU 2015-17.
2)
Taxes
                                    that would apply in the event of disposal of investments in foreign and domestic subsidiaries have
                                    not been taken into account in computing the deferred income taxes, as it is the Company's
                                    intent and ability to hold these investments.
3)
The Company accounts for uncertain tax positions in accordance with ASC 740-10. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than
50
% (cumulative probability) likely to be realized upon ultimate settlement. The Company accrues interest and penalties related to unrecognized tax benefits under taxes on income (tax benefit).
4)
Valuation allowances are provided unless it is more likely than not that the deferred tax asset will be realized. In the determination of the appropriate valuation allowances, the Company considers future reversals of existing taxable temporary differences, the most recent projections of future business results, that may enhance the likelihood of realization of a deferred tax asset. Assessments for the realization of deferred tax assets made at a given balance sheet date are subject to change in the future, particularly if earnings of a subsidiary are significantly higher or lower than expected, or if the Company takes operational or tax positions that could impact the future taxable earnings of a subsidiary. Accordingly, changes in the assumptions described above could have a material impact on the Company's consolidated results of operations.
p.
Share-based compensation
The
Company accounts for share-based compensation under ASC 718, "Compensation - Stock Compensation," which requires the measurement
and recognition of compensation expense based on estimated fair values for all share-based payment awards made to non-employees, employees,
officers and directors. ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The
Company uses the Black-Scholes-Merton option-pricing model as part of such estimation.
The
Company recognizes compensation expenses for its stock-based option awards and RSUs on a straight-line basis over the requisite service
period (primarily a four-year period). The Company accounts for forfeitures as they occur.
q.
Loss per share
Basic
earnings per share is computed by dividing net income (loss) attributable to holders of ordinary shares of the Company by the weighted
average number of ordinary shares outstanding for each reporting period.
In
computing the Company's diluted earnings per share, the denominator for diluted earnings per share is a computation of the weighted-average
number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. Potential dilutive ordinary shares
result from assumed exercise of options and the assumed vesting of RSUs, using the "treasury stock" method.
The
Company did not take into account any dilutive instruments, such as investor warrants, share-based payments and earn-out liabilities
that will be settled in ordinary shares upon the achievement of certain milestones, for which the Company assesses their occurrence at
the end of each reporting period-, since their effect is anti-dilutive.
F-
15
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES
(continued):
r.
Fair value measurement
Fair
value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly
transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements,
the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three
broad levels, which are described as follows:
Level 1:
Quoted prices (unadjusted)
    in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest
    priority to Level 1 inputs.
Level 2:
Observable prices that
    are based on inputs not quoted on active markets, but corroborated by market data.
Level 3:
Unobservable inputs are
    used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
In
determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of
unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.
The
Company's financial instruments consist mainly of cash and cash equivalents, restricted cash, accounts receivable, accounts payable,
accrued expenses and other liabilities. The fair value of these financial instruments approximates their carrying value.
Balance
    as of
December 31, 2022
Level
    1
Level
    2
Level
    3
Total
Assets:
Money market funds (*)
-
31,841
31,841
Marketable securities
-
64,359
-
64,359
Total assets
-
96,200
-
96,200
Liabilities:
Long term loan
-
-
3,228
3,228
Contingent short term earnout liability (***)
-
-
4,250
4,250
Contingent long-term
    earnout liability (***)
-
-
4,089
4,089
Total liabilities
-
-
11,567
11,567
The
Company classifies AFS securities within Level 2 because it uses alternative pricing sources and models utilizing market observable inputs
to determine their fair value.
Balance
    as of
December 31, 2021
Level
    1
Level
    2
Level
    3
Total
Assets:
Money market funds (*)
-
29,697
29,697
Marketable securities
-
89,911
-
89,911
Total assets
-
119,608
-
119,608
Liabilities:
Long term loan (**)
-
-
3,796
3,796
Contingent short term earnout liability (***)
-
-
42,471
42,471
Contingent long-term
    earnout liability (***)
-
-
5,814
5,814
Total liabilities
-
-
52,081
52,081
(*)
As of December 31, 2022, approximately $
31,841
thousand of debt securities were classified under "Cash and Cash equivalents" in the consolidated balance sheets as such securities met all applicable classification criteria. As of
December 31, 2021,
approximately $
29,697
thousand of debt securities were classified under "Cash and Cash equivalents" in the consolidated balance sheets as such securities met all applicable classification criteria.
F-
16
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES
(continued):
(**)
As of December 31, 2021, the fair value of the long term loan approximates its carrying value since the loan was originated in September 2021.
(***)
The income valuation approach is applied and the valuation inputs include the contingent payment arrangement terms, discount rate and probability assessments.
Contingent
earnout liability:
The Company determines the fair value of the liabilities for the earn-out contingent consideration based on a probability-weighted discounted cash flow analysis with regards to probability assessments of achievement of certain milestones and discount rate. A probability of success factor ranging fro
m
0
% to
100
% was us
ed in the calculation of the probability of the achievement of each milestone. This fair value measurement is based on significant unobservable inputs and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration liabilities is based on several factors, such as: the cash flows projected from operations; the probability of success of achievement of regulatory clearances, CPT codes, and other industry certification, development of applications and systems deployment and several other milestone events; and the time and resources needed to complete each miles
tone and the risk adjusted discount rate for fair value measurement. The weighted average discount rate ranged
from
4.696
% to
22.50
%. The contingent short and long term earnout liability consideration is evaluated quarterly. Changes in the fair value of contingent consideration liabilities are recorded in the consolidated statements of operations. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result in material changes in the contingent short and long term earnout liabilities.
The
following table summarizes the activity for those financial liabilities where fair value measurements are estimated utilizing Level 3
inputs:
December 31,
2022
December 31,
2021
(U.S. $ in
    thousands)
Fair value at the beginning of
    the year
$
48,285
$
-
Initial recognition of earnout liabilities
    -
-
48,285
Change in fair value of earn out liabilities
    obligation -
(
20,376
)
-
Issuance of ordinary shares due to achievement
    of milestones and settlement of contingent consideration
(
19,570
)
-
Fair value at the end of the year
$
8,339
$
48,285
The
Quantitative Information about Level 3 Fair Value Measurements of the Company's short-term and long-term contingent consideration
liabilities designated as Level 3 are as follows:
Fair Value at
December 31,
2021
Valuation
Technique
Significant
Unobservable
Input
Contingent
    short term earnout liability — (Nanox AI, MDW Inc. and USARAD Holding Inc.)
$
42,471
Discounted cash flow
contingent payment arrangement terms, and probability of achievement
Contingent
    long term earnout liability — (Nanox AI, MDW Inc. and USARAD Holding Inc.)
$
5,814
Discounted cash flow
contingent payment arrangement terms, and probability of achievement
Fair Value at
December 31,
2022
Valuation
Technique
Significant
Unobservable
Input
Contingent
    short term earnout liability — (MDW Inc. and USARAD Holding Inc.)
$
4,250
Discounted cash flow
contingent payment arrangement terms, and probability of achievement
Contingent
    long term earnout liability — (USARAD Holding Inc.)
$
4,089
Discounted cash flow
contingent payment arrangement terms, and probability of achievement
F-
17
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES
(continued):
s.
Concentration of Credit Risks
Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted
cash, marketable securities and accounts receivable.
The
Company's cash and cash equivalents and restricted cash are invested with major banks in Israel, the United States, Korea and Japan.
Generally, these investments may be redeemed upon demand and the Company believes that the financial institutions that hold the Company's
cash balances are financially sound and, accordingly, bear minimal risk.
t.
Leases
The
Company accounts for leases in accordance with ASC 842. The Company determines if an arrangement is a lease at inception. Balances related
to operating leases are included in operating lease right-of-use ("ROU") assets, current maturities of operating leases liabilities
and Non-current operating leases liabilities in the consolidated balance sheets.
The
Company also elected not separating lease components from non-lease components and to keep leases with an initial term of 12 months or
less off the balance sheet and recognize the associated lease payments in the consolidated statements of operations on a straight-line
basis over the lease term.
ROU
assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's
obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized as of the commencement
date based on the present value of lease payments over the lease term. The Company's lease terms may include options to extend
or terminate the lease when it is reasonably certain that the Company will exercise that option. The discount rate for the lease is the
rate implicit in the lease unless that rate cannot be readily determined. As the Company's leases do not provide an implicit rate,
the Company's uses its estimated incremental borrowing rate based on the information available at the commencement date in determining
the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term (see
also note 7).
F-
18
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 2
- SIGNIFICANT ACCOUNTING POLICIES
(continued):
u.
Segment reporting
ASC
280, "Segment Reporting," establishes standards for reporting information about operating segments. Operating segments are
defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing performance. The Company's chief operating decision
maker is the Company's Chief Executive Officer (the "CODM"), who makes resource allocation decisions and assesses performance
based on financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues, gross profit
and operating loss by the three identified reportable segments. The Company's business includes three operating segments based
on the services that the Company provides. The three segments are composed of the Nanox.ARC segment, the AI solutions segment and the
Radiology services segment.
F-
19
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 3
– BUSINESS COMBINATION AND OTHER TRANSACTION
a.
The acquisition of Nanox AI
    Ltd. (formerly Zebra Medical Vision Ltd.).
On November 4, 2021 ("the merger date"), the Company completed the merger ("the Nanox AI transaction") pursuant to the terms of the Agreement and Plan of Merger, dated August 9, 2021 (with certain amendments, the "Agreement"), among the Company, Zebra Medical Vision Ltd. ("Zebra" or "Nanox AI") and Perryllion Ltd., as representative of Zebra's equity holders. At November 4, 2021, the Company issued
3,249,142
ordinary shares of the Company and committed to issue
70,211
employee options and restricted stock units to the equity holders of Zebra with an estimated fair value at the closing date of $
88,510
thousand, representing $
26.57
per share in consideration for the fully outstanding shares on a fully diluted basis of Zebra.
$315 thousand was allocated to the purchase consideration and $970 thousand was allocated to future services and continued employment and shall be expensed over remaining service periods of up to 4 years.
The Nanox AI transaction was accounted in accordance with ASC 805, "Business Combinations", using the acquisition method of accounting with the Company as the acquirer. The fair value of ordinary shares issued by the Company was determined using the Company's closing trading price on the merger date. The consideration represented (a) the basic purchase price minus; (b) certain transaction costs; plus (c) additional consideration as a result of Zebra entering into a designated commercial agreement prior to closing; plus (d) additional contingent consideration as a result of Zebra achieving a designated milestone of obtaining a new FDA clearance for its population health product and additional consideration as a result of Zebra achieving designated milestones as further described below. In addition, since Zebra entered into two additional designated commercial agreements within 6 months of the agreement execution date (August 9, 2021), the Company paid a contingent closing consideration in the amount of $
3,333
thousand in shares for each agreement. The contingent closing consideration was paid in the Company's shares in the amount of the relevant installment payment divided by the average closing price of the 30 trading days ending on the applicable agreement signing date. Further, if Zebra achieves the agreed milestones related to obtaining certain FDA clearances and security certifications, completing certain technology integration, or achieving certain revenue and employee retention targets over the next
three years
, the Company will pay additional consideration in the amount of up to $
77,700
thousand. Each of these milestone installments would be paid in the Company's shares in the amount of the relevant installment payment divided by the average closing price of the 30 trading days ending on the applicable milestone's achievement date. Zebra changed its name to Nanox AI ltd. and Zebra Medical Vision Inc. (a fully owned subsidiary of Zebra, which is incorporated under the laws of the State of Delaware) changed its name to Nanox AI Inc.
The
allocation of the purchase price to net assets acquired and liability assumed for the acquisition of Zebra resulted in the recognition
of intangible assets related to technology of $
27,316
thousand and Image Big Data of $
52,500
thousand, both of which will be amortized
over a remaining useful life period of
10
years. In order to estimate the fair value of Zebra's Image Big Data, the Company used
the cost approach method using the discounted weighted average cost of one image for $1.75 per one patient record multiplied
by approximately 30 million patient records that the Company purchased (patient records represents over 10 years of patient history,
multi modalities, heterogeneous data of ethnicity and age) as of the acquisition date. This estimate is based on the experience
and knowledge of management from its own experience in its data monetization projects and after taking into consideration the legal aspects
of the non-transferable data. Therefore, the total fair value of the Image Big Data was assumed to be $52,500 thousand at the acquisition
date.
The company can generate income immediately
from this asset. In order to estimate the fair value of Zebra's technology, the Company used the discounted cash flow method, whereas
the fair value of the tax amortization benefit was $3.0 million and the fair value of the intangible asset related to technology before
tax amortization benefit was $24.3 million. The tax amortization benefit was calculated based on the applicable tax rate of 23.02%
and economic life of 10 years. The discount rate for Zebra's technology was estimated at 18% reflecting a 1% discount on the company's
WACC. Therefore, the fair value of Zebra's intangible asset related to technology was estimated at $27.3 million at the date of
the acquisition.
The
Company considered the criteria in ASC 350-30-35 and determined the estimated useful life of the technology to be
10
years as of Zebra's
acquisition, based on management's estimate of how long the know-how will be in place before being subject to a transition into
a new generation of technologies. The Company also examined its estimation compared to other companies operating in the field of healthcare
technologies that the Company considers as market leaders. Compared to such comparable companies, the Company's estimation falls
into the middle of the useful life's range. The Company believes that both intangible assets have a useful life of
10
years,
and that therefore is the appropriate amortization period since the usage of the Image Big Data asset is linked directly to the Company's
acquired technology and is used to improve the technology's capabilities. Additionally, the Company is not aware of any legal,
regulatory, contractual provisions or other factors that would impact its estimate of the useful life of the technology and the Image
Big Data.
On
January 19, 2022, the Company issued
89,286
shares to the former shareholders of Zebra due to partial achievement of a milestone that
occurred post-closing.
F-
20
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 3
– BUSINESS COMBINATION AND OTHER TRANSACTION
(continued):
On
December 29, 2022, the Company entered into a settlement with respect to any additional amount that could be granted under the Agreement,
according to which the Company issued Zebra's former shareholders an additional
2,648,424
ordinary shares (representing additional
consideration of approximately $
18,617
thousand). As a result of the settlement, both parties' performance obligations under the
Agreement have been satisfied in full. Therefore, no further revaluations are required due to this settlement.
The following table summarizes the fair value of the consideration
transferred to Zebra shareholders in 2021 for the Zebra transaction:
U.S.$
in thousand
Cash payments
$
-
Issuance of ordinary shares, options
    and RSUs
88,510
Contingent short term earnout liability
38,129
Contingent long term
    earnout liability
2,660
Total consideration
$
129,299
In
accordance with ASC 805, the estimated contingent consideration as of the Zebra transaction date was included in the purchase
price. As of the acquisition date, the total contingent payments could reach to a maximum aggregate amount of up to $
77,700
thousand,
all shall be settled through the issuance of ordinary shares. The Company determined the fair value of the liabilities for the contingent
consideration based on a probability-weighted discounted cash flow analysis. This fair value measurement is based on significant unobservable
inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration
is based on several factors, such as: the cash flows projected from the success of achievements of several achievement and payment of
milestone events; the time and resources needed to achieve those milestones and the risk adjusted discount rate for fair value measurement.
A probability of success factor was used in the fair value calculation to reflect inherent regulatory and commercial risk of the contingent
payments. The weighted average discount rate, applied on the relative fair value of the contingent consideration liabilities, was
19
%.
The allocation of the purchase price to
assets acquired and liabilities assumed in 2021, is as follows:
Allocation of
Purchase
Price
(U.S. $ in
thousands)
Cash, cash equivalents
    and Restricted Cash
$
6,956
Accounts Receivables
99
Other current assets
430
Intangible assets
79,816
Goodwill
51,243
Other assets
1,693
Total assets acquired
140,237
Net deferred tax liabilities
3,413
Contingent short term earnout liability
38,129
Contingent long-term earnout liability
2,660
Convertible note (*)
3,000
Other labilities
4,525
Total liabilities assumed
51,727
Net assets acquired
$
88,510
(*)
A 3 years Convertible Loan Agreement, dated August 9, 2021 between the Company and Nanox AI in the amount of $
3
million, which bears an annual interest of
6
% and shall be automatically converted into the Nanox AI's Preferred C Shares, at a price per share of $
23.42
. This loan is eliminated in the consolidated financial statements.
F-
21
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 3
– BUSINESS COMBINATION AND OTHER TRANSACTION
(continued):
The
allocation of the purchase price to net assets acquired and liability assumed resulted in the recognition of goodwill of $
51,243
thousand,
which is primarily attributed to the expected synergies from combining the operations of Zebra's AI solutions with the Company's
tomographic imaging systems. As such, this goodwill will be assigned to the operational segment of AI solutions. The amount of the acquisition-related
costs was approximately $
310
thousand which was recognized as an expense in the general and administration expenses.
The
results of operations of Nanox AI have been included in the consolidated financial statements since the date of the acquisition. The
amounts of revenues and net loss related to Nanox AI that are included in the Company's consolidated statements of operations for
the period starting from the merger date to December 31, 2021, are $
270
thousand and $
4,157
thousand, respectively.
The
following unaudited pro forma information presents the combined results of operations of the Company and Nanox AI as if the acquisition
of Nanox AI had been completed on January 1, 2020.
The
unaudited pro forma results include adjustments primarily related to amortization of the acquired intangible assets and share-based compensation
associated with option grants as referenced above, as of January 1,2020. The unaudited pro forma results do not reflect any cost-saving
synergies from operating efficiencies, or the effect of the incremental costs incurred from integrating Nanox AI. Accordingly, these
unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results
of operations of the combined company would have been if the acquisition of Nanox AI had occurred at the beginning of 2020.
For
    the Year Ended
December 31,
2021
For
    the Year Ended
December 31,
2020
US$ in thousand
Revenue
$
2,363
$
1,550
Net loss
$
(
87,045
)
$
(
69,875
)
During
2022, the Company tested for goodwill impairment by quantitatively comparing the fair values of the AI solution segment reporting unit
to it carrying amount. Based on the Company's analysis, the Company determined that the carrying value of the AI solution segment
reporting unit exceeded its fair value and therefore the Company recorded a non-tax-deductible goodwill impairment charge totaling $
50,878
thousand, which was included within the consolidated statement of operations for the year ended December 31, 2022 (refer to
Note 4).
F-
22
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 3
– BUSINESS COMBINATION AND OTHER TRANSACTION
(continued):
b.
The acquisition of USARAD Holding Inc.  (the
    "USARAD transaction")
On
November 2, 2021 (the "USARAD closing date"), the Company completed the acquisition of
100
% of the shares of USARAD Holdings,
Inc., a Delaware corporation ("USARAD"), pursuant to the terms of the Stock Purchase Agreement, dated October 25, 2021, among
the Company, USARAD, Dr. Michael Yuz, other holders of capital stock of USARAD, and holders of USARAD options. At the USARAD closing
date, Nanox U.S. purchased
100
% of the shares of USARAD on a fully diluted basis for $
7,147
thousand in cash and
496,545
of the Company's
ordinary shares with fair value of $
11,500
thousand. The number of ordinary shares issued by the Company was determined using the average
closing trading price during the 30 trading days preceding to the closing date. The total consideration was approximately $
18,647
thousand.
In addition, upon the successful achievement of certain milestones related to profitability, EBITDA and other operational performance-based
earnouts over
2
years from the date of acquisition, the Company will pay additional cash consideration in the amount of up to $
2,000
thousand and stock consideration in the amount of up to $
6,500
thousand at a per share value determined by the average of (i) the volume
weighted average closing share price of the 30 trading days prior to the relevant milestone completion, and (ii) the volume weighted
average closing share price of the 30 trading days ending on August 6, 2021. Revenue in the amount of $
1,034
and net loss in the amount
of $
358
thousand of the acquiree included in the Company's consolidated statements of operations for the year ended at December
31, 2021.
The USARAD transaction was accounted in
accordance with ASC 805, "Business Combinations", using the acquisition method of accounting with the Company as the acquirer. The
following table summarizes the fair value of the consideration transferred to USARAD shareholders in 2021 for the USARAD transaction:
U.S.
    $
in thousands
Cash payments
$
7,147
Issuance of ordinary shares
11,500
Contingent consideration
    at estimated fair value
6,405
Total consideration
$
25,052
In
accordance with ASC 805, the estimated contingent consideration as of the USARAD transaction date was included in the purchase
price. The total contingent payments could reach to a maximum aggregate amount of up to $
8,500
thousand. Approximately
23.52
% of
the payments shall be settled in cash, and
76.47
% shall be settled through the issuance of ordinary shares. The estimated fair value
of the contingent consideration is based on management's assessment of whether, and at what level, the financial metrics will
be achieved, and the present value factors associated with the timing of the payments. This fair value measurement is
based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. Changes
in the fair value of contingent consideration will be recorded in operating expenses. Additional payment of $
144
thousand was
paid to USARAD's shareholders during 2022 since an approval of the PPP loan by the Federal Government occurred and pursuant to
the terms of the Stock Purchase Agreement.
The allocation of the purchase price to assets acquired and liabilities
assumed in 2021, is as follows:
Allocation of
Purchase
Price
(U.S. $ in thousands)
Cash and cash equivalents
$
332
Accounts Receivables
912
Intangible assets
21,187
Goodwill
7,055
Other assets
33
Total assets acquired
29,519
Loan from a government agency
144
Other labilities
557
Net deferred tax liabilities
3,766
Contingent short term earnout liability
3,453
Contingent long term
    earnout liability
2,952
Total liabilities assumed
10,872
Net assets acquired
$
18,647
F-
23
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 3
– BUSINESS COMBINATION AND OTHER TRANSACTION
(continued):
The
allocation of the purchase price to net assets acquired and liability assumed resulted in the recognition of intangible asset related
to retained radiologists of $17,770 thousand, customers' relationship of $1,322 thousand, trademark of $2,095 thousand and goodwill
of $7,055 thousand, which is primarily attributed to the expected synergies from combining the operations of teleradiology services with
the Company's tomographic imaging systems. As such, goodwill will be assigned to the operational segment of radiology services.
The intangible asset related to retained radiologists has a useful-life of 11.17 years, the intangible asset related to customers'
relationship has a useful-life of 6.17 years and the intangible asset related to the trademark has a useful-life of 12.17 years.
This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within
the fair value hierarchy. The fair value of the contingent consideration is based on several factors, such as: the cash flows projected
from the success of achievements of several achievement and payment of milestone events; the time and resources needed to achieve those
milestones and the risk adjusted discount rate for fair value measurement. A probability of success factor was used in the fair value
calculation to reflect inherent regulatory and commercial risk of the contingent payments. The weighted average discount rate, calculated
based on the relative fair value of the contingent consideration liabilities, was
21.9
%. The contingent consideration is evaluated
quarterly, or more frequently, if circumstances dictate. Changes in the fair value of contingent consideration are recorded in consolidated
statements of income. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result
in material changes to the contingent consideration liabilities. The amount of the acquisition-related costs was approximately $
198
thousand
which was recognized as an expense in the general and administration expenses.
Pro
forma results of operations related to the USARAD acquisition have not been prepared because they are not material to the Company's
consolidated financial statements.
c.
The Assets acquisition of MDWEB LLC.
On November 3, 2021, the Company completed the acquisition of the market platform and other assets of MDWEB, LLC ("MDWEB"), pursuant to the terms of the Asset Purchase Agreement, dated October 21, 2021, between the Company and MDWEB.
At the same date, the Company issued 64,715 of its ordinary shares to MDWEB with an estimated fair value of $1,500 thousand. In addition, upon the successful achievement of certain milestones related to technical integration of MDW platform with the Nanox.CLOUD and achieving certain other operational targets, the Company will pay additional stock consideration in the amount of up to $1,500 thousand at a per share value determined by the average closing price of the 30 trading days ending on the applicable milestone's achievement date. In addition, upon the successful achievement of certain milestones and other operational performance-based earnouts over 2 years, the Company will pay stock consideration in the amount of up to $1,500 thousand at a per share value determined by the average closing price of; (i) closing price of the 30 trading days ending on the applicable milestone's achievement date: and (ii) the volume weighted average closing share price of the 30 trading days prior to the closing date.
The Company will amortize the intangible assets on a straight-line basis over their expected useful life of
4
years. Refer to note 2h.
F-
24
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 4
— GOODWILL & INTANGIBLE ASSETS, NET:
Goodwill
The
following table presents the changes in the carrying amount of goodwill during the periods ended December 31, 2022 and 2021 (U.S. dollars
in thousands):
Segment of Operation
Radiology
Services
AI
    Solutions
Total
Balance as of December 31, 2020
$
-
$
-
$
-
Goodwill from acquisition of USARAD
$
7,055
$
-
$
7,055
Goodwill from acquisition of Nanox AI
$
-
$
51,243
$
51,243
Balance as of December 31, 2021
$
7,055
$
51,243
$
58,298
Impairment of the Goodwill related to the acquisition
    of Nanox AI
$
-
$
(
50,878
)
$
(
50,878
)
Balance as of December 31, 2022
$
7,055
$
365
$
7,420
The
goodwill balance related to the acquisitions of Nanox AI and USARAD is not deductible for tax purposes.
Goodwill
impairment assessments for the year ended December 31, 2022
AI
solutions reporting unit
During
the second quarter of 2022, in light of triggering events arising from the increase of the discount rate and changes in the Company's
estimates as a result of business specific considerations, the Company performed a quantitative interim assessment for goodwill impairment
for the Company's AI solutions reporting unit. The amount of goodwill assigned to the AI solutions reporting unit on the interim
testing date, which had not changed from the amount assigned to such unit on the acquisition date, was $
51,243
thousand. When evaluating
the fair value of the AI solutions reporting unit under the income approach, the Company used a discounted cash flow model which utilized
Level 3 measures that represent unobservable inputs.
Key assumptions used to determine the estimated fair value include: (a) internal
cash flows forecasts for 5 years following the assessment date, including expected revenue growth, costs to sales and operating expenses;
(b) an estimated terminal value using a terminal year long-term future growth rate of 3.0% determined based on the growth prospects of
the reporting unit; and (c) a discount rate of 22.0% which reflects the weighted-average cost of capital adjusted for the relevant risk
associated with the AI solutions reporting unit's operations and the uncertainty inherent in the Company's internally developed
forecasts.
Specifically, as part of the Company's interim impairment test, in making the assumptions mentioned in clauses (a) and
(b) above, the Company considered (1) the efforts and time required for the AI solutions reporting unit to achieve financial stability,
(2) its estimate that it would take approximately one year for such unit to generate any material revenue and two years to achieve profitability;
and (3) its estimate that it would take longer than we originally expected for such unit to generate material revenues, gross profit,
and positive operating cash flows, especially from its population health applications. As a result of the impairment assessment, the
Company concluded that the fair value of the AI solutions reporting unit decreased below its carrying value by
11.61
%, and therefore
the Company recorded a goodwill impairment charge of
$
14,338
thousand
in the second
quarter of 2022.
As a result, the remaining amount of goodwill assigned to the AI solutions reporting unit at June 30, 2022 was $36,905
thousand.
During
the fourth quarter of 2022, the Company performed a qualitative and quantitative annual assessment for goodwill impairment. Based on
its qualitative analysis, which considered the AI solutions reporting unit results, projections and additional business and industry
specific considerations, the Company performed a further revision of the estimates of the fair value of the AI solutions reporting unit.
As part of this analysis, the Company also considered the potential impacts of the sensitivity of estimates and assumptions. When evaluating
the fair value of the AI solutions reporting unit under the income approach, the Company used the same discounted cash flow model discussed
above; however, in clause (c) the resulting cash flow amounts were discounted using a discount rate of 22.50%. As a result of the impairment
assessment, the Company concluded that the fair value of the AI solutions reporting unit decreased below its carrying value by 34.44%,
and therefore we recorded an additional goodwill impairment charge of
$36,540 thousand
in the fourth quarter of 2022. As a result, the amount of goodwill assigned to the AI solutions reporting unit on December 31, 2022,
was $365 thousand.
When evaluating the fair value of the AI solutions reporting unit under the discounted cash flow approach, the Company used a discounted cash flow model which utilized Level 3 measures that represent unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal cash flows forecasts for
5
years following the assessment date, including expected revenue growth, costs of sales and operating expenses; (b) an estimated terminal value using a terminal year long-term future growth rate determined based on the growth prospects of the reporting unit; and (c) a discount rate which reflects the weighted-average cost of capital adjusted for the relevant risk associated with the AI solutions reporting unit's operations and the uncertainty inherent in the Company's internally developed forecasts.
Actual
results may differ from those assumed in the Company's valuation method. It is reasonably possible that the Company's assumptions
described above could change in future periods. If any of these were to vary materially from the Company's plans, the Company may
record impairment of goodwill allocated to this reporting unit in the future. A hypothetical decrease in the terminal growth rate of
0.5
% or an increase of
0.5
% to the discount rate would have reduced the fair value of AI Solutions reporting unit by approximately $
1.0
million and $
2.9
million, respectively.
F-
25
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 4
— GOODWILL & INTANGIBLE ASSETS, NET:
(continued)
Radiology
services reporting unit
During
                                            the fourth quarter of 2022,
the Company performed its
                                            annual impairment test for goodwill impairment.
The Company performed a quantitative
                                            assessment for goodwill impairment for the Company's radiology services reporting unit
                                            and concluded that the fair value of the radiology services reporting unit exceeded its carrying
                                            amount by approximately 5.3%, with a carrying amount of goodwill assigned to this reporting
                                            unit in an amount of $7,055 thousand. When evaluating the fair value of the radiology services
                                            reporting unit under the income approach, the Company used a discounted cash flow model which
                                            utilized Level 3 measures that represent unobservable inputs. Key assumptions used to determine
                                            the estimated fair value include: (a) internal cash flows forecasts for 5 years following
                                            the assessment date, including expected revenue growth, costs of sales and operating expenses;
                                            (b) an estimated terminal value using a terminal year long-term future growth rate of 3%
                                            determined based on the growth prospects of the reporting unit; and (c) a discount rate of
                                            27.5% which reflects the weighted-average cost of capital adjusted for the relevant risk
                                            associated with the radiology services reporting unit's operations and the uncertainty
                                            inherent in the Company's internally developed forecasts.
Actual
results may differ from those assumed in the Company's valuation method. It is reasonably possible that the Company's assumptions
described above could change in future periods. If any of these were to vary materially from the Company's plans, the Company may
record impairment of goodwill allocated to this reporting unit in the future. A hypothetical decrease in the growth rate of
0.5
% or an
increase of
0.5
% to the discount rate would reduce the fair value of the radiology services reporting unit by approximately $
0.3
million
and $
0.6
million, respectively.
As
of December 31, 2022, the percentage by which the estimated fair value of the Company's reporting units exceeded the carrying value
was as the following:
Goodwill
from
acquisition of
Nanox AI
Unit #1
Goodwill
from
acquisition of
USARAD
Unit #2
Goodwill
    Assigned (
in millions
)
$
365
$
7,055
Fair Value/Carrying Amount
100.00
%
105.3
%
Goodwill
impairment assessment for the year ended December 31, 2021
As
of December 31, 2021, the Company evaluated that there was no notable change in qualitative factors due to the short period of time that
had lapsed from the acquisition date through December 31, 2021. Therefore, the Company did not determine that it was more likely than
not that the fair value of each reporting unit was less than its carrying amount. As such, the Company concluded that no further
impairment
testing was required for either reporting unit as of December 31, 2021.
Intangible
assets
Identifiable
intangible assets consisted of the following:
Accumulated
Gross
    carrying amount
amortization
Net
    carrying amount
December
    31,
2022
2021
2022
2021
2022
2021
(U.S. $ in
    millions)
Developed technology
27,316
$
27,316
$
3,187
$
455
$
24,129
$
26,861
Image big data
52,500
52,500
6,125
875
46,375
51,625
Market platform
2,591
2,591
756
108
1,835
2,483
Radiologist relationships
17,770
17,770
1,856
265
15,914
17,505
Trade name
2,095
2,095
201
29
1,894
2,066
Customer relationships
1,322
1,322
250
36
1,072
1,286
$
103,594
$
103,594
$
12,375
$
1,768
$
91,219
$
101,826
F-
26
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 4
— GOODWILL & INTANGIBLE ASSETS, NET:
(continued)
Intangible
assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and
reviewed periodically for impairment. Amortization expenses were $
10,607
thousand and $
1,768
thousand and $
0
for the years ended December
31, 2022 2021 and 2020, respectively.
Amortization
of intangible assets for each of the next five years and thereafter is expected to be as follows (U.S. dollars in thousands):
Year
    ended December 31,
2023
$
10,607
2024
10,607
2025
10,498
2026
9,959
2027
    and thereafter
49,548
Total
$
91,219
NOTE
5 - PROPERTY AND EQUIPMENT, NET:
Composition
of property and equipment grouped by major classifications is as follows:
December
    31,
2022
2021
(U.S.
    Dollars
in thousands)
Office furniture
    and lab equipment
721
648
Computers and electronic equipment
1,304
1,109
Equipment and machinery
4,326
2,766
Leasehold improvement
647
544
Vehicles
156
132
Land – See b below
6,314
6,314
Production
    line– See b below
31,740
26,790
45,208
38,303
Less:
    accumulated depreciation
(
1,663
)
(
868
)
Total
    property and equipment, net
43,545
37,435
a.
Total depreciation in respect of property and equipment were approximately $
905
thousand, $
524
thousand and $
208
thousand for the years ended December 31, 2022, 2021 and 2020, respectively. An impairment charge in the amount of $
172
thousand and $
214
thousand was recorded for the years ended December 31, 2022 and 2021, respectively in relation to the Company's Property, Plant and Equipment.
b.
In December 2020, Nanox Korea purchased land for approximately $
6,314
thousand upon which it built a fabrication facility. In 2021, Nanox Korea completed the construction of the permanent fabrication plant.
F-
27
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE
6 - CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
The
following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the consolidated balance sheet that
sum to the same total amount as shown in the consolidated statement of cash flows.
December
    31,
2022
2021
(U.S.
    Dollars
in thousands)
Cash and cash
    equivalents
38,463
66,645
Restricted
    bank deposit (1)
66
127
Total
    cash, cash equivalents and restricted cash shown in the statement of cash flows
38,529
66,772
(1)
As of December 31, 2022 and 2021, the Company's restricted cash consisted of a bank deposit that was denominated in New Israeli Shekel. Restricted deposit is presented at cost including accrued interest. This bank deposit is used as security for credit card use and collateralizing the Company's lease contracts.
NOTE 7
- LEASES:
As
of December 31, 2022, the Company has several operating building and car lease agreements:
The Company's principal executive offices are located in a leased facility in Neve Ilan, Israel.
The Company leases approximately 550 square meters (approximately 5,920 square feet) of office space and warehouses. The original lease expired in December 2021, and the Company exercised the option to extend its lease for an additional 24 months until December 31, 2023. The Company leases approximately 620 square meters (approximately 6,670 square feet) of office space in Neve Ilan, Israel, that is used for offices and technical development. The lease expires in June 2023. In November 2020, the Company leased an additional approximately 370 square meters (approximately 3,980 square feet) of office space in Neve-Ilan, Israel. This lease also expires in June 2023. In March 2022, the Company signed a new agreement to lease 105 square meters (approximately 1,130 square feet) of office space in Neve-Ilan, Israel until February 2025.
The monthly rent payment for all the lease premises in Neve-Ilan, Israel is approximately $
42
thousand.
The
Company leases vehicles to some of its employees.
The lease agreement is effective through July 2025 and the monthly payment for this
agreement is approximately $
9
thousand.
Nanox
Korea leases 3 vehicles to some employees. These lease agreements are effective through February 2024 and the monthly payment for these
agreements is approximately $
4
thousand. Nanox Korea leases an apartment for its employees.
The lease agreement is effective through
November 2024 and the monthly payment for this agreement is approximately $1 thousand.
In
2021, Nanox Korea leased approximately 390 square meters of space for a temporary fabrication facility and approximately 200 square meters
of space for a research and development center in Korea.
During 2021 this lease ended due to the transfer of the temporary fabrication
facility to the Company's permanent fabrication facility in Yongin, Geonggi province.
Nanox
AI leases its offices in Israel under an operating lease agreement which expires in November 2024. Nanox AI has an option to extend the
period for an additional 24 months through November 2026.  Nanox AI concluded that it is not reasonably certain that it will exercise
the renewal option. Accordingly, such renewal option was not included in determining the lease term. The monthly rent payment for this
agreement is approximately $
19
thousand.
Nanox Imaging Inc. leases its offices in the U.S. under operating lease agreement which expires on
December 31, 2024
.
The monthly rent payment for this agreement is approximately $6 thousand.
The
total monthly rent payment is approximately $
81
thousand.
F-
28
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 7
- LEASES
(continued):
The
table below presents the effects on the amounts relating to the Company's total lease costs:
Year ended
December 31,
Year ended
December 31,
2022
2021
(U.S.
    Dollars
in thousands)
(U.S.
    Dollars
In thousands)
Operating lease cost:
Fixed payments
937
653
Short-term lease cost
72
48
Total operating lease
    cost
1,009
701
The
table below presents supplemental cash flow information related to operating leases:
Year ended
December 31,
Year ended
December 31,
2022
2021
(U.S. Dollars
in thousands)
(U.S. Dollars
in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating
    cash flows used in  operating leases
1,231
507
Right-of-use assets obtained in exchange for
    lease obligations (non-cash):
Operating leases
320
194
The
table below presents supplemental balance sheet information related to operating leases:
December 31,
December 31,
2022
2021
(U.S.
    Dollars
in thousands)
(U.S.
    Dollars
in thousands)
Operating leases:
Operating lease right-of-use assets
1,157
1,725
Current maturities of operating leases
740
881
Non-current operating
    leases
398
950
Total operating lease
    liabilities
1,138
1,831
December 31,
December 31,
2022
2021
Weighted average remaining lease term
Operating leases
1.52
2.14
Weighted average discount rate
Operating leases
5.84
%
5.70
%
F-
29
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 7
- LEASES
(continued):
The
table below presents maturities of operating lease liabilities:
December 31,
2022
(U.S.
    Dollars
in thousands)
2023
785
2024
391
2025
18
2026 and thereafter
-
Total operating lease payments
1,194
Less: imputed interest
56
Present value of lease
    liabilities
1,138
NOTE 8
– DEFERRED REVENUE
The
following table represents the changes in deferred revenue for the year ended December 31, 2022 and December 31, 2021:
Deferred
Revenue
(U.S.
                                            Dollars in thousands)
Balance at December 31, 2020
$
-
Increase due to the business combinations
483
Additions
467
Revenue recognized in the reported period
(
288
)
Balance at December 31, 2021 (*)
$
662
Additions
102
Revenue recognized in
    the reported period -
(
184
)
Balance at December 31, 2022 (**)
$
580
*
Includes $
415
thousand under long term deferred revenue in the Company's consolidated balance sheets as of December 31, 2021.
**
Includes $
398
thousand under long term deferred revenue in the Company's consolidated balance sheets as of December 31, 2022.
F-
30
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE
9 - RELATED PARTIES:
Related
party balances at December 31, 2022 and December 31, 2021 consisted of the following:
December 31,
2022
December 31,
2021
(U.S.
    Dollars in thousands)
(a) Due from Illumigyn
$
48
$
3
(b) Due from Wellsense Technologies Ltd.
10
11
(c) Due from Six-Eye Interactive
21
1
(d) Due from Six AI ltd.
8
3
( e)  Due
    from Musashi
2
-
Total from related parties
$
89
$
18
b.
Related parties transactions:
Year
    ended December 31,
2022
2021
2020
(U.S.
    Dollars in thousands)
Research and
    development – see c below
-
80
355
General and administrative
    – see d and e below
(
218
)
(
191
)
(
222
)
c.
Six AI Ltd Service agreement
On April 16, 2020, the Company entered into an agreement with SixAI Ltd. (hereinafter,-"SixAI") a company controlled by Ran Poliakine, the Company's former Chief Executive Officer and a chairman of the Company's board of directors for certain software development and mechanical engineering services. The service agreement was effective as of March 1, 2020 and has been extended by mutual agreement of the parties several times, until terminated at December 31, 2021. During the years ended December 31, 2022, 2021 and 2020, the Company recorded an expense of $
0
, $
80
thousand, and $
355
thousand, respectively. Mr. Poliakine currently serves as a member of the board of directors of SixAI and Mr. Poliakine is a significant shareholder of SixAI.
d.
Illumigyn
    Ltd.
Illumigyn Ltd (hereinafter, – "Illumigyn") is a company in which Ran Poliakine, the Company's former Chief Executive Officer and a member of the Company's board of directors, is a significant shareholder. Ms. Noga Kainan, a member of the Company's board of directors serves as a member of the board of directors of Illumigyn, and Anat Kaphan, the Company's former Chief Innovation Officer currently who serves as a member of the advisory board of the Company, also serves as a consultant to Illumigyn. Since November 1, 2019, Illumigyn sub-leased in transaction approximately
1,800
square feet of private office space, including access to shared public spaces, from the office spaces which the Company leases in Neve Ilan, Israel. Illumigyn pays approximately $
12
thousand per month. During the years ended December 31, 2022, 2021 and 2020, the Company received approximately $
171
thousand, $
125
thousand and
$163
thousand, respectively, in relation to the sub lease.
F-
31
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 9
- RELATED PARTY LIABILITY (
continued):
e.
Wellsense Technologies Ltd.
Wellsense
Technologies Ltd.(hereinafter, "Wellsense") is a company in which Ran Poliakine, the Company's former Chief Executive
Officer and a member of the Company's board of directors, is a shareholder. Since February 2020, Wellsense has sub-leased private
office space, including access to shared public spaces, from the Company in Neve Ilan, Israel. Wellsense pays approximately $
7.0
thousand
per month. During the years ended December 31, 2022, 2021 and 2020, the Company received $
47
thousand, $
66
thousand and
$59
thousand,
respectively, in relation to the sub lease.
f.
Employment
    Agreements
The
Company has entered into an employment agreement with Ran Poliakine, the Company's founder, Chairman of the Board of Directors,
and former Chief Executive Officer. Pursuant to the agreement, if the Company terminates Ran Poliakine's employment and waives
his obligation to perform services during the notice period of 180 days, Ran Poliakine will be entitled to receive payments of his base
salary and social benefits in lieu of notice for the waived period, up to the full notice period for an immediate termination. The agreement
provides Ran Poliakine with a gross monthly base salary equal to $
40
thousand which was increased to $
60
thousand upon the consummation
of the Company's initial public offering. Ran Poliakine served as the Company's Chief Executive Officer through December
31, 2021.
On September 27, 2021, the Company and Erez Meltzer entered into an employment agreement, pursuant to which Mr. Meltzer agreed to serve as the Company's new Chief Executive Officer (the "Meltzer Employment Agreement"). The Meltzer Employment Agreement commenced and became effective as of January 1, 2022 and shall continue for an indefinite period until it is terminated by either party. Pursuant to the terms of the Meltzer Employment Agreement, Mr. Meltzer will receive an annual base salary of nine hundred ($900) thousand dollars per year, and will be eligible for an annual incentive payment of up to one hundred percent (100%) of his base salary, which of them $450 thousand were guaranteed for the 2022 fiscal year if his employment is continued through the entire fiscal year, and were withdrawn during 2022 as an advance payment on account of the 2022 annual bonus, subject to full recourse (clawback) if the bonus is not earned; Accordingly, in 2022, Mr. Meltzer was paid seven hundred ($700) thousand dollars on the account of his 2022 annual bonus, subject to resource (clawback) as described above. Mr. Meltzer will be entitled to customary social benefits under Israeli law and practice pursuant to which the Company shall insure the CEO with a manager's insurance policy or a pension fund, or a combination of both (whereby each will apply partially), all according to his election;  Mr. Meltzer will be granted options to purchase 300,000 Ordinary Shares (the "Options") which will vested equally over a period of 48 months as long as Mr. Meltzer will be employed by the Company. The Options shall be subject to the Company's 2019 Equity Incentive plan and, to the extent possible, be granted pursuant to Section 102 of the Israeli Income Tax Ordinance, 5721-1961. The exercise price of the Options shall be $23.84 per share, a share price equals to the 30-day average of the Company's share price on NASDAQ, prior to the date of approval of the CEO's employment agreement by the Board on September 27, 2021.
Such amount may be paid by the CEO by way of a cashless exercise mechanism. The agreement calls for a 6 months' mutual notice of termination and 270 days if the Company provides notice during the first year of employment (except for "Cause" as defined in the employment agreement, in which case no prior notice will be required).
g
.
Service Agreement
In February 2021, the shareholders of the Company approved the entry into an agreement with Floyd Katske, effective as of October 1, 2020, whereby Floyd Katske will assist the Chief Executive Officer and the Company with various tasks given his medical knowledge, expertise and experience, as may be requested from time-to-time by the Company's Chief Executive Officer. These tasks were in addition and unrelated to his role as a member of the board of directors of the Company. Floyd Katske was paid with respect to such services $200 per hour, against an invoice. The services were limited to 100 hours in any calendar month, according to hours approved by the Chairman. In addition, Floyd Katske was paid cash compensation consisting of RSUs granted in each calendar quarter, in the amount calculated by dividing (i) two times the cash compensation paid during such quarter as aforesaid by (ii) the fair market value of the Company's ordinary shares on the last trading day of such quarter. All tax consequences were borne by Floyd Katske. During the year ended December 31, 2022, the agreement was terminated and the Company recorded an expense of $
47
thousand in research and development expenses with regards to the services provided by Floyd Katske.
F-
32
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 10
– LONG TERM LOAN
During
September 2021, Nanox Korea entered into a
3
year Loan agreement with a Korean Bank, according to which the Bank granted the Company
a loan in the amount of $
3.8
million. The loan bears an annual interest at a rate of 3 months KORIBOR and
1.149
%, whereas interest payments
are due on a monthly basis and the principal is due at the end of the loan term. The bank received a floating charge on the Nanox Korea's
assets.
NOTE 11
- COMMITMENTS AND CONTINGENCIES
:
From
time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.
However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time
that may harm the Company's business.
In
September 2020, two securities class action complaints were filed in the United States District Court for the Eastern District of New
York against the Company and certain current officers and a director, which were subsequently consolidated and captioned as White v.
Nano-X Imaging Ltd. et al, Case No. 1:20-cv-04355, alleging violations of securities laws on behalf of all persons and entities that
purchased or otherwise acquired the Company's publicly traded securities between August 21, 2020 and September 15, 2020, and seeking
unspecified damages. On December 7, 2020, proposed lead plaintiffs submissions were fully briefed and remain outstanding. On August 10,
2022, Magistrate Judge Marcia M. Henry issued a Report and Recommendation, recommending that the Court approve Derson O. Jolteus and
Edward Ko as lead plaintiffs, and on August 30, 2022, Judge William Kuntz adopted the Report and Recommendation. On June 24, 2022, the
Company moved to consolidate this action with the action captioned McLaughlin v. Nano-X Imaging Ltd. et al, Case No: 1:21-cv-05517, discussed
further below. The Company's motion to consolidate remains outstanding. On October 31, 2022, Lead Plaintiffs filed an amended complaint,
which alleges that defendants violated the federal securities laws in connection with certain disclosures regarding the Company's
FDA submission and customer contracts. Lead Plaintiffs seek to represent a class of investors who purchased the Company's publicly
traded securities between August 21, 2020 and September 15, 2020. On February 3, 2023, the Company moved to stay this action in favor
of the McLaughlin action, or, in the alternative, until the Company's pending motion to consolidate was decided. The Company has
not yet responded to the amended complaint.
On October 5, 2021, a class action complaint was filed in the United States District Court for the Eastern District of New York against the Company and certain of its officers, captioned McLaughlin v. Nano-X Imaging Ltd. et al, Case No. 1:21-cv-05517. The plaintiff asserts claims on behalf of persons and entities that purchased or otherwise acquired the Company's securities between June 17, 2021 and August 18, 2021, seeking unspecified damages. The plaintiff alleges that the defendants made materially false and misleading statements concerning the Company's business, operations and compliance policies beginning on June 17, 2021, based on the Company's U.S. Food and Drug Administration submissions. On April 12, 2022 and in the same case, the Lead Plaintiff filed an amended complaint, which alleges that defendants violated the federal securities laws in connection with certain disclosures concerning the cost of the Nanox.ARC system as well as the comparison of the Nanox.ARC to CT scanners. Lead Plaintiff seeks to represent a class of investors who purchased the Company's publicly-traded securities between August 21, 2020 and November 17, 2021. The Company moved to dismiss the amended complaint, and briefing on that motion was completed on September 9, 2022, and it remains outstanding. As of December 31, 2022, the Company has accrued an amount of $
8,000
thousand in connection with the above referenced complaints (refer to Note 16).
On October
28, 2021, a complaint was filed in the United States District Court for the Central District of California against the Company, Nanox
Imaging Inc.and Nanox Gibraltar from which the Company received certain assets, as well as Mr. Ran Poliakine and certain other unidentified
parties, alleging several causes of action including breach of a consulting agreement between the plaintiff and Gibraltar that was entered
into in 2015. The plaintiff demanded payment of unpaid consulting fees from Gibraltar in the amount of approximately $
1
million and approximately
$
29.5
million from the Company relating to his claimed entitlement to warrants in Nanox Gibraltar. On February 15, 2022, the Company moved
to dismiss the complaint on the grounds, among others, that it was not a party to the agreement with the plaintiff, and it is not Nanox
Gibraltar's legal successor for any liabilities that Nanox Gibraltar may owe to the plaintiff. On June 4, 2022, the Court granted
the motion to dismiss with leave to amend. The plaintiff did not amend the complaint, and on July 20, 2022, the Court entered judgment
in the Company's favor.
The
                                            Division of Enforcement of the U.S. Securities & Exchange Commission (the "SEC")
                                            has notified the Company that it is conducting an investigation to determine whether there
                                            had been any violations of the federal securities laws. The Company has been providing documents
                                            and information to the SEC and has received a subpoena from the SEC requesting that the Company
                                            provide documents and other information relating to the development cost of the Company's
                                            Nanox.ARC prototypes, as well as the Company's estimate for the cost of assembling
                                            the final Nanox.ARC product at scale, among other things. The Company is cooperating with
                                            the SEC in responding to its requests. As of December 31, 2022, the duration and outcome
                                            of this matter cannot be predicted, and the Company is unable to estimate a loss or range
                                            of loss of this Investigation.
F-
33
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 12
- SHAREHOLDERS' EQUITY:
a.
Share capital
Each
holder of the Company's ordinary shares, par value NIS
0.01
per share, is entitled to one vote. The holders of ordinary shares
are also entitled to receive dividends whenever funds are legally available and declared by the Company's Board of Directors (the
"Board"). Since inception, the Company has not declared any dividends.
The
following table presents the number of authorized and issued and outstanding shares as of each reporting date for each class of shares:
December
    31, 2022
December
    31, 2021
Authorized
Issued
    and Outstanding
Authorized
Issued
    and Outstanding
Ordinary shares
100,000,000
55,094,237
100,000,000
51,791,441
Total
100,000,000
55,094,237
100,000,000
51,791,441
On
January 2, 2022, the Company issued
2,953
RSUs to its Chief Executive Officer for services rendered prior to 2022.
On
January 19, 2022, the Company issued
89,286
shares to the former shareholders of Nanox AI due to partial achievement of a milestone that
occurred post-closing.
On
December 29, 2022, the Company entered into a settlement with respect to any additional amount that could be granted under the Agreement,
according to which the Company issued Nanox AI's former shareholders an additional
2,648,424
ordinary shares (representing additional
consideration of approximately $
18,617
thousand). As a result of the settlement, both parties' performance obligations under the
Agreement have been satisfied in full.
b.
Share based compensation
Share
based compensation
On
September 3, 2019, the Company's board of directors resolved to adopt an equity incentive plan (the "Plan"). Based
on such Plan, each option will be exercisable for one ordinary share of the Company and will become exercisable at such terms and during
such periods, as the Company's board of directors shall determine.
Pursuant to the Plan (and further increase of option pool approved
by the Company's board of directors), 8,041,936 ordinary shares of NIS 0.01 par value of the Company are reserved for issuance
upon the exercise of the same amount of awards to be granted to some of the Company's employees, directors and consultants.
As
of December 31, 2022, there were
1,504,472
ordinary shares reserved for the equity incentive plan. The Company's board of directors
also approved the Plan for the purpose of selecting the capital gains tax track, under Section 102 of the Israeli Income Tax Ordinance,
for options granted to the Company's Israeli employees.
As
of December 31, 2022, there is an unrecognized share-based compensation expense of $
17,061
thousand to be recognized over the average
remaining vesting period of
2.44
years.
F-
34
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 12
- SHAREHOLDERS' EQUITY
(continued):
Share-based
compensation to non-employees
The
following table summarizes share-based awards to non-employees for the period ended December 31, 2022:
Year
    ended
December 31,
2022
Number of
Weighted
share-based
average
payment
exercise
awards
price
Outstanding at beginning of year
2,324,243
$
6.17
Changes during the year:
Granted
20,000
17.63
Exercised
(
423,702
)
2.08
Forfeited
(
82,469
)
11.86
Expired
-
-
Cancelled
-
-
Outstanding at end of
    year
1,838,072
8.77
Aggregate intrinsic value
7,669
Exercisable at end of
    year
1,582,254
11.23
Aggregate intrinsic value
7,235
The
fair value of each granted award is estimated at the date of grant using the Black-Scholes option-pricing model. The assumptions used
for the year ended December 31, 2022 and year ended at December 31, 2021 are as follows:
Year
    ended
December 31,
2022
Year
    ended
December 31,
2021
Dividend yield
0
0
Expected volatility
52.37
-
52.75
%
50.27
% -
52.71
%
Risk-free interest rate
3.45
-
3.51
%
0.66
% -
1.61
%
Expected term (years)
10
10
The
expected volatility is based on the historical volatility of comparable companies. The risk-free interest rate assumption is based on
observed interest rates appropriate for the expected term of the awards granted in dollar terms. The Company does not have sufficient
historical exercise data to provide a reasonable basis upon which to estimate expected term. Accordingly, as to ordinary course options
granted, the expected term was determined using the simplified method, which takes into consideration the option's contractual
life and the vesting periods (for non-employees, the expected term is equal to the option's contractual life).
F-
35
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 12
- SHAREHOLDERS' EQUITY
(continued):
The
following table summarizes information concerning outstanding and exercisable awards as of December 31, 2022:
December
    31, 2022
Awards
    outstanding
Awards
    exercisable
Number of
Weighted
Number of
Weighted
awards
average
award
average
outstanding
remaining
exercisable
remaining
Exercise
at end of
contractual
at end of
contractual
price
year
life
    (years)
year
life
    (years)
$
2.21
1,483,416
7.71
1,399,414
7.75
$
16.00
156,484
5.96
101,410
5.21
$
17.63
20,000
9.81
-
-
$
23.19
21,000
8.78
5,250
8.78
$
23.84
30,000
8.88
7,500
8.88
$
30.93
20,000
7.81
20,000
7.81
$
40.21
7,172
8.19
4,930
8.19
$
49.68
100,000
8.05
43,750
8.05
F-
36
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 12
- SHAREHOLDERS' EQUITY
(continued):
Share-based compensation to employees, officers
    and directors
During
2022, the Company granted to certain employees, officers and directors awards to purchase
1,266,803
of the Company's ordinary shares
for an average exercise price of $
19.00
. Most of the awards agreement term is
10
years unless the agreement is terminated with
3
or
4
years vesting period with a one-year cliff.
Year ended
December
    31, 2022
Number of
Weighted
share-based
average
payment
    awards
exercise
price
Outstanding at beginning of year
2,760,930
$
15.85
Changes during the year:
Granted
1,266,803
$
19.00
Exercised
(
141,384
)
1.18
Forfeited
(
608,511
)
22.20
Expired
-
-
Cancelled
-
-
Outstanding at end of
    year
3,277,838
$
18.79
Aggregate intrinsic value
$
5,660
Exercisable at end of
    year
1,364,777
$
9.51
Aggregate intrinsic value
$
5,221
The
fair value of each granted award is estimated at the date of grant using the Black-Scholes option-pricing model. The assumptions used
as of December 31, 2022 and 2021 are as follows:
2022
2021
Dividend yield
0
0
Expected volatility
50.75
% -
52.69
%
50.27
%-
51.84
%
Risk-free interest rate
1.52
% -
4.34
%
0.66
%-
1.61
%
Expected term (years)
5.52
-
10
6.25
F-
37
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 12
- SHAREHOLDERS' EQUITY
(continued):
The
expected volatility is based on the historical volatility of comparable companies. The risk-free interest rate assumption is based on
observed interest rates appropriate for the expected term of the awards granted in dollar terms. The Company does not have sufficient
historical exercise data to provide a reasonable basis upon which to estimate expected term. Accordingly, as to ordinary course options
granted, the expected term was determined using the simplified method, which takes into consideration the option's contractual
life and the vesting periods. The following table summarizes information concerning outstanding and exercisable awards as of December
31, 2022 and 2021:
December
    31, 2022
Awards
    outstanding
Awards
    exercisable
Number of
Weighted
Number of
Weighted
awards
average
awards
average
outstanding
remaining
exercisable
remaining
Exercise
at end of
contractual
at end of
contractual
price
year
life
    (years)
year
life
    (years)
$
0.00
-
0.01
28,952
*)
-
19,219
-
$
2.21
1,053,594
6.95
982,445
6.94
$
16.00
110,999
8.45
43,967
7.07
$
17.63
897,265
9.63
20,738
9.4
$
23.19
189,000
8.78
47,250
8.78
$
23.42
16,000
8.77
4,000
8.77
$
23.84
625,943
9.06
112,310
8.89
$
23.86
69,400
8.75
17,350
8.75
$
24.97
21,900
8.42
8,919
8.42
$
28.96
18,875
7.85
18,875
7.85
$
30.66
34,000
8.53
10,623
8.53
$
36.74
3,000
7.93
1,500
7.93
$
40.21
37,900
8.19
16,579
8.19
$
49.68
133,000
8.05
43,750
8.05
$
59.2
13,000
8.17
6,312
8.15
$
64.61
25,010
8.12
10,940
8.12
*)
Including
22,778
RSUs that were granted to the employees of Nanox AI at the completion of the merger and
3,221
RSUs that were issued in consideration for services.
F-
38
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 12
- SHAREHOLDERS' EQUITY
(continued):
3)
Share-based compensation expenses
Year
    Ended December 31,
2022
2021
2020
(U.S.
    dollars in thousands)
Cost of revenue
99
51
-
Research and development
4,806
3,248
3,384
Sales and Marketing (*)
997
2,442
9,252
General and administrative
12,721
13,065
12,145
18,623
18,806
24,781
(*)
On October 26, 2020, the Company entered into an amendment to a business development agreement ("the BD Agreement") dated February 4, 2020 with two service providers pursuant to which the Company paid an aggregate one-time payment of $
400
thousand plus VAT and issued to them warrants to purchase an aggregate of
650,000
ordinary shares at an exercise price of $
18
per share with a graded vesting ending 10 weeks following the grant date (subject to a standard cashless exercise provision) and expiration date of November 8, 2024. As a result, the Company recorded an expense of $
6.1
million for the warrants granted. The service providers waived any and all past, present and future compensation to which they are or may be entitled pursuant to the BD Agreement and all activities undertaken on behalf of the Company, including the right to a percentage from future revenues from any of the Company's systems and the issuance of warrants.
NOTE 13
- INCOME TAX:
a.
Basis of taxation
Current
tax is calculated with reference to the profit of the Company and its subsidiaries in their respective countries of operation. Set out
below are details in respect of the significant jurisdictions where the Company and its subsidiaries operate and the factors that influenced
the current and deferred taxation in those jurisdictions:
Israel
The
Company and Nanox AI Ltd are taxed under the laws of the State of Israel at a corporate tax rate of
23
%.
In
2022, 2021 and 2020, the Company is at a loss position and therefore has no corporate tax liability. As of December 31, 2022, 2021
and 2020, the Company has a carry forward loss of approximately $
88.6
million, $
56.3
million and $
32.3
million, respectively.
Such carry forward loss has no expiration date.
In
2022, 2021 and 2020, Nanox AI Ltd. is at a loss position and therefore has no corporate tax liability. As of December 31, 2022,
2021 and 2020, Nanox AI Ltd. has a carry forward loss of approximately $
67.7
million, $
61.9
million and $
45.3
million,
respectively. Such carry forward loss has no expiration date.
United
States
The
principal federal tax rate applicable to the U.S. subsidiaries is
21
%.
Korea
Nanox
Korea is subject to a Corporate income tax with accordance with the Korean tax law. The tax rate ranges between
10
% to
25
%, depending
on the companies' taxable income. In addition, Nanox Korea is subject to a Local income tax of
10
%. In 2022, Nanox Korea was at
a loss position and therefore had no corporate tax liability. As of December 31, 2022, 2021 and 2020, Nanox Korea has a carry forward
loss of approximately $
9.1
million, $
7.1
million and $
0.2
million, respectively. Such carry forward loss has
15
years expiration
date.
Japan
Nanox
Inc. is subject to national corporate income tax, and enterprise tax, which, in the aggregate resulted in effective tax rate of approximately
33.59
%.
F-
39
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 13
- INCOME TAX
(continued):
b.
Income (loss) Before Income Taxes:
Income
(loss) before income taxes consisted of the following for the periods indicated:
Year Ended December 31
2022
2021
2020
U.S.
    dollars in thousands
Domestic
    (Israel)
(
99,979
)
(
56,609
)
(
43,449
)
Foreign
(
16,942
)
(
5,237
)
(
366
)
Loss
    before income taxes
(
116,921
)
(
61,846
)
(
43,815
)
c.
Income tax expense (benefit) consisted of the following for the periods
    indicated:
Year Ended December 31
2022
2021
2020
U.S.
    dollars in thousands
Domestic
    (Israel)
(
3,357
)
(
57
)
-
Foreign
(
321
)
9
-
Income
    tax benefit
(
3,678
)
(
48
)
-
d.
Taxes on Income:
Taxes
on income for the years ended December 31, 2022, 2021 and 2020 were comprised of the following:
December 31
2022
2021
2020
U.S. dollars in thousands
Current tax expenses:
Domestic
—
—
—
Foreign
55
68
—
Total
55
68
—
Deferred:
Domestic
(
3,357
)
(
57
)
—
Foreign
(
376
)
(
59
)
—
Total
(
3,733
)
(
116
)
—
Income
    tax benefit
(
3,678
)
(
48
)
—
F-
40
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 13
- INCOME TAX
(continued):
A
reconciliation of the Company's theoretical income tax expense to actual income tax expense is as follows:
December 31
2022
2021
2020
U.S.
    dollars in thousands
Loss before taxes on income
(
116,921
)
(
61,846
)
(
43,815
)
Statutory tax rate in
    Israel
23
%
23
%
23
%
Theoretical tax benefit
(
26,892
)
(
14,225
)
(
10,077
)
Increase (decrease) in taxes resulting from:
Effect of different tax rates applicable in
    foreign jurisdictions
(
261
)
(
110
)
-
Operating
    losses and other temporary differences for which valuation allowance was provided
11,467
6,571
7,235
Permanent differences:
Stock based compensation
4,361
4,343
5,700
Goodwill impairment
11,702
-
-
Change in earnout liability
(
4,686
)
-
-
Other nondeductible
    items
631
3,373
(
2,858
)
Actual tax benefit
(
3,678
)
(
48
)
-
e.
Deferred tax assets
The
components of the Company's deferred tax assets and liabilities as of December 31, 2022 and 2021 were as follows:
December 31
2022
2021
U.S. dollars in thousands
Deferred tax assets:
Tax loss carryforwards
38,967
30,234
Research and development
4,027
4,010
Employee and payroll accrued
    expenses
740
304
Other
532
109
Total deferred tax assets
44,266
34,657
Less deferred tax liabilities
    (related to intangible assets)
(
19,562
)
(
21,775
)
Deferred tax assets, net
24,704
12,882
Less valuation allowance
    for deferred tax assets
(
24,704
)
(
12,882
)
Deferred tax assets
—
—
F-
41
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 13
- INCOME TAX
(continued):
Significant
judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation
allowance, the Company considered all available evidence, including past operating results, the most recent projections for taxable income,
and prudent and feasible tax planning strategies. The Company reassess its valuation allowance periodically and if future evidence allows
for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.
As
of December 31, 2022, and 2021, the Company has recorded a full valuation allowance of $
24,704
and $
12,882
thousand with regard
to its deferred taxes (which is mainly tax loss carryforwards and temporary differences due to unallowed research and development expenses)
generated in Israel, respectively.
U.S. dollars
in thousands
Valuation allowance, December 31, 2021
$
12,882
Increase
11,822
Valuation allowance, December 31, 2022
$
24,704
f.
Tax
                                            assessments
The
Company is currently in the process of routine Israeli income tax audit for the tax years 2019 through 2021.
F-
42
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 14
- SEGMENTS OF OPERATIONS
The
Company reports segment information based on the "management" approach. The management approach designates the internal reporting
used by management for making decisions and assessing performance as the source of the Company's reportable operating segments.
The Company manages its business primarily on a service basis. The Company's reportable segments consist of the Nanox.ARC division,
the radiology services division and the AI solutions division. Each one is managed separately to better align with the Company's
customers and distribution partners and the unique market dynamics of each segment. Operating income for each segment includes net sales
to third parties, related cost of sales and operating expenses directly attributable to the segment. Costs excluded from segment operating
income include various corporate expenses such as income taxes. The Company does not include intercompany transfers between segments
for management reporting. From 2022, total assets for each of the Company's reportable segments have been separately presented
to, and reviewed by, the Chief Operating Decision Maker of the Company to assess the performance of the Company's segments.
The
accounting policies of the various segments are the same as those described in Note 2, "Summary of Significant Accounting Policies."
The Company evaluates the performance of its reportable operating segments based on net sales and operating loss.
Year
    ended
December 31, 2022
(U.S. dollars in thousands)
Nanox.
ARC
Radiology
Services
AI
    Solutions
Total
Revenues
$
-
$
8,235
$
343
$
8,578
Segment operating loss
(
67,066
)
(
2,760
)
(
47,884
)
(
117,710
)
Financial income
789
Loss before taxes on income
$
(
116,921
)
Depreciation and amortization expenses
$
611
$
2,642
$
8,259
$
11,512
Change in obligation in earn-out liabilities
$
-
$
840
$
(
21,216
)
$
(
20,376
)
Goodwill impairment
$
-
$
-
$
50,878
$
50,878
Stock based compensation
$
17,049
$
224
$
1,350
$
18,623
Total Assets
$
148,352
$
30,753
$
74,828
$
253,933
Expenditures for segment's assets
$
8,140
$
15
$
26
$
8,181
Year
    ended
December 31, 2021
(U.S. dollars in thousands)
Nanox.
    ARC
Radiology
    Services
AI
    Solutions
Total
Revenues
$
-
$
1,034
$
270
$
1,304
Segment operating loss
(
56,875
)
(
530
)
(
4,153
)
(
61,558
)
Financial expense
(
288
)
Loss before taxes on income
$
(
61,846
)
Depreciation and amortization expenses
458
441
1,393
2,292
Stock based compensation
$
18,433
$
37
$
336
$
18,806
Total Assets
$
195,621
$
31,802
$
135,747
$
363,170
Expenditures for segment's assets
$
23,139
$
2,859
$
19
$
26,017
F-
43
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 14
- SEGMENTS OF OPERATIONS
(continued):
Year
    ended
December 31, 2020
(U.S. dollars in thousands)
Nanox.
    ARC
Radiology
    Services
AI
    Solutions
Total
Segment operating loss
$
(
43,923
)
$
-
$
-
$
(
43,923
)
Financial income
108
Loss before taxes on income
$
(
43,815
)
Depreciation
208
-
-
208
Stock based compensation
$
24,781
$
-
$
-
$
24,781
Total Assets
$
236,149
$
-
$
-
$
236,149
Expenditures for segment's assets
$
13,937
-
$
-
$
13,937
For the years ended December 31, 2022 and December 31, 2021, the Company's revenues in the United States constituted approximately
97
% and
98
% of the Company's total revenue, respectively. For the years ended December 31, 2022 and December 31, 2021, no individual customer exceeded
10
% of the Company's total revenue or total accounts receivables.
Long-lived
assets by geography
Year Ended
December 31
2022
2021
Israel
5,476
4,986
South Korea
38,922
33,949
Unites States
159
29
Japan
145
196
44,702
39,160
F-
44
NANO-X
IMAGING LTD.
NOTES
TO THE FINANCIAL STATEMENTS (continued)
(U.S.
dollars in thousands, except share and per share data)
NOTE 15
-
LOSS PER SHARE:
a.
Basic
Basic
loss per share is calculated by dividing the loss attributable to the Company's owners by the weighted average number of ordinary
shares in issue.
Year
    ended December 31,
2022
2021
2020
Net loss
    attributable to Company's owners
$
(
113,243
)
$
(
61,798
)
(
43,815
)
The weighted average of the number of ordinary
    shares (in thousands)
52,235
48,216
35,654
Basic
    and diluted loss per share
$
(
2.17
)
$
(
1.28
)
(
1.23
)
For
the calculation of loss per share, the Company used the net loss attributable to Company's owners divided by the weighted average
number of the Company's ordinary shares for the years ended December 31, 2022, 2021 and 2020.
b.
Diluted
As
of December 31, 2022 and 2021, the Company had
2,312,443
and
2,505,370
warrants, respectively, and
5,065,910
and
4,842,342
options, respectively.
As of December 31, 2020, the Company had
3,173,186
warrants and
4,673,104
options. These warrants and awards were not considered
when calculating diluted loss per share since their effect is anti-dilutive. In addition, contingently issuable ordinary shares that
are issuable based on certain conditions (see Note 3) are not included in the potential dilutive shares in calculating the diluted loss
per share.
NOTE
16 - SUBSEQUENT EVENTS:
On April 28, 2023, the Company agreed to pay an aggregate amount of $
290,063
in cash and
45,392
ordinary shares to the former stockholders of USARAD, in consideration for the achievement of certain milestones in connection with the first earn out period, as defined in the USARAD Stock Purchase Agreement. In addition, the Company and the former shareholders of USARAD entered into a settlement agreement with respect to any additional amount that could be granted to the shareholders of USARAD as consideration for the remainder of the milestones and applicable earn-outs under the USARAD Stock Purchase Agreement, according to which the Company agreed to pay an aggregate of $
500,000
in cash and
210,000
ordinary shares to the former stockholders of USARAD. As a result of the settlement, both parties' performance obligations under the USARAD Stock Purchase Agreement have been satisfied in full.
On April 28, 2023, the Company signed
a term sheet with Lead Plaintiffs in both the McLaughlin action and the consolidated White action to settle all claims in both actions
in consideration of $
8,000
thousand. As of December 31, 2022, the Company has accrued the same amount in connection with the above referenced
complaints and term sheet (refer to Note 11).
On
April 28, 2023, the Company received clearance from 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 physicists.
F-45