FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended June 30,

(in thousands)

2023

2022

Cash flows from:

Operating activities:

Net loss

$          (49,409)

$          (18,261)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

7,925

6,655

Stock-based compensation

8,584

6,358

Inventory write-downs

8,132

—

Asset impairment charges

4,571

—

Deferred income tax expense (benefit) and other non-cash charges

(41)

80

Provision for excess and obsolete inventory

1,033

82

Amortization of debt discount and issuance costs

181

—

Loss on disposal of assets

130

6

Provisions for bad debts, net of recoveries

408

(48)

Change in operating assets and liabilities:

Decrease (Increase) in:

Accounts receivable

3,280

5,102

Inventories

1,587

4,311

Prepaid expenses and other current assets

3,105

(6,101)

(Decrease) Increase in:

Accounts payable and accrued liabilities

(277)

(2,398)

Income taxes payable

(263)

1,007

Customer deposits

(1,210)

1,769

Unearned service revenues

(750)

(1,822)

Other liabilities

(193)

—

Net cash used in operating activities

(13,207)

(3,260)

Investing activities:

Purchases of property and equipment

(4,312)

(3,481)

Purchases of short-term investments

(20,024)

—

Cash paid for technology development, patents and licenses

(3,616)

(5,548)

Net cash used in investing activities

(27,952)

(9,029)

Financing activities:

Payments on finance leases

(105)

(116)

Payments for taxes related to net share settlement of equity awards

(277)

(1,165)

Proceeds from issuance of 5.50% Convertible Senior Notes, due 2028, net of discount, issuance cost and accrued interest

72,310

—

Net cash provided by (used in) financing activities

71,928

(1,281)

Effect of exchange rate changes on cash and cash equivalents

(353)

(6,450)

Increase (Decrease) in cash and cash equivalents

30,416

(20,020)

Cash and cash equivalents, beginning of period

37,812

121,989

Cash and cash equivalents, end of period

$            68,228

$          101,969