FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended June 30,

(in thousands)

2023

Cash flows from:

Operating activities:

Net loss

$            (7,791)

$          (49,409)

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

Depreciation and amortization

7,788

7,925

Stock-based compensation

5,703

8,584

Inventory write-downs

—

8,132

Asset impairment charges

—

4,571

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

(1,327)

(41)

Provision for excess and obsolete inventory

490

1,033

Amortization of debt discount and issuance costs

223

181

Loss on disposal of assets

994

130

Provisions for bad debts, net of recoveries

304

408

Change in operating assets and liabilities:

Decrease (Increase) in:

Accounts receivable

3,943

3,280

Inventories

(3,764)

1,587

Prepaid expenses and other current assets

7,771

3,105

(Decrease) Increase in:

Accounts payable and accrued liabilities

(3,087)

(277)

Income taxes payable

(1,853)

(263)

Customer deposits

1,126

(1,210)

Unearned service revenues

965

(750)

Other liabilities

(698)

(193)

Net cash provided by (used in) operating activities

10,787

(13,207)

Investing activities:

Purchases of property and equipment

(1,688)

(4,312)

Maturity of short-term investments

20,009

(20,024)

Cash paid for technology development, patents and licenses

(3,392)

(3,616)

Net cash provided by (used in) investing activities

14,929

(27,952)

Financing activities:

Payments on finance leases

(109)

(105)

Cash settlement of equity awards

—

(277)

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

—

72,310

Repayment of 5.50% Convertible Senior Notes, due 2028

(2,685)

—

Net cash (used in) provided by financing activities

(2,794)

71,928

Effect of exchange rate changes on cash and cash equivalents

(1,795)

(353)

Increase in cash and cash equivalents

21,127

30,416

Cash and cash equivalents, beginning of period

76,787

37,812

Cash and cash equivalents, end of period

$            97,914

$            68,228