Q3 2024 Nano-X Imaging Ltd Earnings Call

So on a listen only mode. After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone you wouldn't hear an automated message advising your hand is raised to withdraw your question. Please press star.

Speaker Change: SAR one one again please be advised that today's conference is being recorded I would like now to turn the conference over to Mike cabin, All Investor Relations. Sir. Please go ahead.

Erez Meltzer, Erez Meltzer, Mike Cavanaugh

Speaker Change: Yeah.

Mike cabin: Good morning, and thank you for joining us today.

Earlier today, and then cause imaging limited released financial results for the quarter ended September 32024.

The release is currently available on the investors section of the company's website.

Speaker Change: With me today are Erez, Melter, Chief Executive Officer, and acting Chairman and Ron Daniel Chief Financial Officer.

Speaker Change: Ladies and gentlemen, thank you for standing by. Welcome to NANOC's third quarter 2024 earnings call.

Speaker Change: Before we get started I would like to remind everyone that management will be making statements. During this call that include forward looking statements regarding the company's financial results.

At this time, all participants are in the listen-only mode.

Speaker Change: Search and development Manny.

Speaker Change: Manufacturing and commercialization activities.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: Regulatory process operations and other matters.

Speaker Change: To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.

Speaker Change: These statements are subject to risks uncertainties and assumptions that are based on management's current expectations as of today and may not be updated in the future.

Speaker Change: To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded I would like now to turn the conference over to Mike Cavanaugh Investor Relations, sir, please go ahead

Speaker Change: Therefore, these statements should not be relied upon as representing the companys views as of any subsequent date.

Speaker Change: Factors that may cause such a difference include but are not limited to those described in the company's filings with the Securities and Exchange Commission.

and Mike Cavanaugh. And I'm Mike Cavanaugh.

Speaker Change: We will also refer to certain non-GAAP financial measures to provide additional information to investors.

Good morning and thank you for joining us today.

Speaker Change: Earlier today, Nanox Imaging Limited released financial results for the quarter ended September 30, 2024.

Speaker Change: A reconciliation of the non-GAAP to GAAP measures is provided with our press release with the primary differences being non-GAAP net loss attributable to ordinary shares.

Speaker Change: The release is currently available on the investor section of the company's website.

Speaker Change: With me today are Erez Meltzer, Chief Executive Officer and Acting Chairman, and Ron Daniel, Chief Financial Officer.

non-GAAP cost of revenue non-GAAP gross profit non-GAAP gross profit margin non-GAAP research and development expenses non.

Speaker Change: Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements regarding the company's financial results, research and development, manufacturing and commercialization activities,

Speaker Change: non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses and non-GAAP gross loss per share.

Speaker Change: With that I'd now like to turn the call over to Erez Meltzer.

regulatory process operations and other matters.

Erez Meltzer: Thank you for joining us today for our financial results call.

Speaker Change: These statements are subject to risks, uncertainties, and assumptions that are based on management's current expectations as of today and may not be updated in the future.

Erez Meltzer: I am happy to share the progress we've made deploying our innovative Nymex our technology as well as further progress with Nymex.

Speaker Change: Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date.

Erez Meltzer: And the other components of the full <unk> solutions.

Erez Meltzer: Since its commercial deployment at the beginning of this year.

Speaker Change: Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission.

Erez Meltzer: There are now 47 units almost 50 that are in various stages of shipments and deployments for both commercial and clinical use.

Speaker Change: We will also refer to certain non-GAAP financial measures to provide additional information to investors.

Erez Meltzer: The U S. We are deployed across seven states.

Erez Meltzer: Our strategic growth plan is well underway and we are committed to accelerating our efforts to expand our footprint.

Erez Meltzer: And enhance our technology.

Speaker Change: non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross profit margin,

Erez Meltzer: This is a multi pronged effort, which includes doubling our pipeline expanding our sales service and support teams on the ground in the key U S market to drive sales were raised awareness with imaging centers and hospitals as well as supporting our growing customer base.

Speaker Change: non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, and non-GAAP gross loss per share.

Speaker Change: With that, I'd now like to turn the call over to Erez Meltzer.

Erez Meltzer: And then the installations and ongoing use of <unk> solutions.

Erez Meltzer: Thank you for joining us today for our financial results call. I'm happy to share the progress we have made deploying our innovative Nanox R technology, as well as further progress with Nanox AI and the other components of the full Nanox solutions.

Erez Meltzer: Hand in hand with these efforts. We are also continued to advance our regulatory efforts with the U S. FDA for additional clearances and securing the CE Mark in European Union.

While also continued to generate trial data supporting the use of the <unk> arc.

Since its commercial deployment at the beginning of this year,

Erez Meltzer: There are now 47 units, almost 50, that are in various stages of shipments and deployments for both commercial and clinical use.

Erez Meltzer: The positive feedback from healthcare providers and patients alike reinforce our belief in the transformative potential of economics are.

In the U.S., we are deployed across seven states.

Erez Meltzer: We are confident that our continued focus on innovation and strategic partnerships will drive significant value for our shareholders.

Erez Meltzer: Our strategic growth plan is well underway and we are committed to accelerating our efforts to expand our footprint.

Erez Meltzer: We also signed several new deals for <unk> solutions, including Oxford University hospitals, NHS Foundation Trust in the UK.

and enhance our technology.

Erez Meltzer: This is a multi-pronged effort, which includes doubling our pipeline, expanding our sales, service, and support teams on the ground in the key U.S. market to drive sales, raise awareness with imaging centers and hospitals.

Erez Meltzer: I will share more detail on this and other agreements later in my remarks.

Erez Meltzer: But I would say that all of the networks are excited.

Erez Meltzer: To partner with such prestigious institutions.

Erez Meltzer: as well as supporting our growing customer base in the installation and ongoing use of Nanox solutions.

Erez Meltzer: With <unk>, we're also humbled and proud to have novel <unk> selected for a special mentioned in Times' best inventions of 2024 list.

Erez Meltzer: Hand in hand with these efforts, we'll also continue to advance our regulatory efforts with the U.S. FDA for additional clearances and securing the C-mark in European Union.

Erez Meltzer: This annual list highlights groundbreaking products that are transforming industries and non oxeiai certainly beginning to change how we diagnose and manage population health.

Erez Meltzer: while also continue to generate trial data supporting the use of the Nanox Arc.

Erez Meltzer: The positive feedback from health care providers and patients alike reinforced our belief in the transformative potential of NanoxART

Erez Meltzer: I'm also pleased to report that our U S. The rod parallel radiology business continued to produce meaningful revenue.

Erez Meltzer: For our organization generating $2 6 million in revenues.

Erez Meltzer: We are confident that our continued focus on innovation and strategic partnership will drive significant value for our shareholders.

Erez Meltzer: Which is quarterly records and we anticipate its continued growth to.

Erez Meltzer: To complement our business lines.

Erez Meltzer: We also signed several new deals for Nanox AI solutions, including Oxford University Hospitals, NHS Foundation Trust in the UK.

Erez Meltzer: These milestone across.

Erez Meltzer: All our business segments are a testament to our team's dedication and the growing demand for our cutting edge medical imaging solutions globally.

Erez Meltzer: I will share more detail on this and other agreements later in my remarks.

Erez Meltzer: As we look ahead, we remain confident about the opportunities there.

Erez Meltzer: But I will say that all of the Nanooks are excited.

to partner with such prestigious institutions.

Lie before us or.

Erez Meltzer: Our mission to make advanced medical imaging accessible and affordable is more critical than ever.

Speaker Change: We at Nanox were also humbled and proud to have Nanox AI selected for a special mention in Time's Best Inventions of 2024 list.

Erez Meltzer: And we are poised to lead the industry with our pioneering solutions.

Erez Meltzer: Thank you for continued support and confidence in our revision I look forward to discussing our financial performance and future plan in more detail.

Speaker Change: This annual list highlights groundbreaking products that are transforming industries, and Nanox AI is certainly beginning to change how we diagnose and manage population health.

Erez Meltzer: Now, let's dive right into some details around our deployments of dynamics arc in the U S a highly sophisticated and competitive markets.

Speaker Change: I'm also pleased to report that our U.S. Surrogate Telergy business continues to produce meaningful revenue

Erez Meltzer: I'm proud of our market penetration and notable job demonstrating the benefits.

Erez Meltzer: Of introducing the non ops are two imaging and medical centers in the U S.

Speaker Change: which is a quarterly record and we anticipate its continued growth to complement our business lines.

Erez Meltzer: Which are by nature, a sophisticated buyers.

Erez Meltzer: And are exposed to the latest technology the world has to offer.

These milestones across

Speaker Change: All our business segments are a testament to our team's dedication and the growing demand for our cutting-edge medical imaging solutions globally.

Erez Meltzer: Our accelerating commercial traction demonstrates.

Erez Meltzer: Not only the SKU.

Erez Meltzer: The domestic <unk> sales team, but also the value of the dynamics are of rings to health care providers.

Speaker Change: As we look ahead, we remain confident about the opportunities that lie before us.

Erez Meltzer: As our customer base increases along with rising awareness of the non arc within the medical community.

Speaker Change: Our mission to make advanced medical imaging accessible and affordable is more critical than ever.

Erez Meltzer: We will add to our team accordingly.

Speaker Change: and we are poised to lead the industry with our pioneering solutions.

Erez Meltzer: As a result during the quarter, we strengthened our sales team with representative as well as expanded our clinical team along with enhancements to our operational team.

Speaker Change: Thank you for continued support and confidence in our vision. I look forward to discussing our financial performance and future plan in more detail.

Erez Meltzer: As we accelerate our euros commercialization, we doubled our sales and service personnel in the U S to support our expanding client base and long with various channel partners. Our team on the ground will be critical to our accelerating grow outs and we will steadily by.

Speaker Change: Now, let's dive right into some details around our deployments of Dynamics Arc in the U.S., a highly sophisticated and competitive market.

Speaker Change: I'm proud of our market penetration, a notable job demonstrating the benefits of introducing the Nanox art to imaging and medical centers in the U.S., which are by nature sophisticated buyers.

Erez Meltzer: Carefully continue to add to this team.

Erez Meltzer: We have an internal target of 30 to 40 sales service marketing and support personal in place by the end of 2025.

Speaker Change: and are exposed to the latest technology the world has to offer.

Speaker Change: Our accelerating commercial traction demonstrates not only the skill and the tenacity of our sales team, but also the value that Anonymous Art brings to healthcare providers.

Erez Meltzer: In alignment with our commercial progress. Additionally.

Erez Meltzer: We are focusing on expanding our network of strategic collaborations and distributors.

Erez Meltzer: I mentioned on our last call that we have engaged with three prominent imaging groups in the U S.

Speaker Change: As our customer base increases along with rising awareness of the Nanox Arc within the medical community, we will add to our team accordingly.

Erez Meltzer: And during Q3, we continued to gain traction with additional imaging groups.

Erez Meltzer: Our sales team continues to actively engage imaging groups across the U S.

Speaker Change: As a result, during the quarter, we strengthened our sales team with representatives, as well as expanded our clinical team, along with enhancement to our operational team.

Erez Meltzer: In consultative discussions demonstrating the clinical utility to be gained by adding <unk> to their practices.

Speaker Change: As we accelerate our EURUS commercialization, we doubled our sales and service personnel in the U.S. to support our expanding client base, along with various child partners.

Erez Meltzer: Our aim is more standalone imaging groups adapt our technology.

Erez Meltzer: The non arc will eventually be viewed as a standard equipment alongside traditional X-ray and Cps technologies.

Speaker Change: Our team on the ground will be critical to our accelerating rollout, and we will steadily but carefully continue to edge through this team.

Erez Meltzer: We're also working with multiple distributors in Europe charged with expanding our footprint in the EU.

Erez Meltzer: This is an important.

Erez Meltzer: As we anticipate receiving the CE Mark designation for the <unk> arc in the coming months.

Erez Meltzer: To further assist our commercial core technology OEM rollout, we have created the demo kits to more effectively educate potential buyers on the <unk> value proposition.

Speaker Change: We are focusing on expanding our network of strategic collaborations and distributors.

Speaker Change: I mentioned our last call that we have engaged with three prominent imaging groups in the U.S.

Erez Meltzer: We have now shipped several demo kits to the prospective clients to more easily allow them to experience our unique technology clearly we have been ramping up our activity in the U S.

Speaker Change: And during Q3, we continue to gain traction with additional imaging groups.

Speaker Change: Our sales team continues to actively engage imaging groups across the U.S.

Erez Meltzer: And we know we must continue with this momentum and drive even greater adoption going forward.

Speaker Change: in consultative discussions demonstrating the added clinical utility to be gained by adding the Nanox R to their practices.

Erez Meltzer: While we view the key U S market is a strategic priority we continue to advance commercialization efforts in the rest of the world in Mexico.

Speaker Change: It is our aim as more stand-alone imaging groups adapt our technology.

Erez Meltzer: Where we have already made commercial inroads, we are waiting for the import license needed to deploy dynamics art.

Speaker Change: that the Nanox Arc will eventually be viewed as a standard equipment alongside traditional x-ray and CT technologies.

Erez Meltzer: The system allocated for the Mexican market is being manufactured and tested.

Speaker Change: We are also working with multiple distributors in Europe charged with expanding our footprint in the EU.

Erez Meltzer: And as to date ready for shipment and our partner has already designated the first two sites for their networks Arts in Mexico.

Speaker Change: This is an important, as we anticipate, receiving the CMARC designation for the Nanox Arc in the coming months.

Speaker Change: In Chile.

<unk> arc is in registration process. After a successful site visits in our demo center in the U S.

Speaker Change: To further assist our commercial core technology OEM rollout, we have created a demo kit to more effectively educate potential buyers on the NAICS value proposition.

Speaker Change: Also in Europe, we were excited to showcase dynamics or technology at America 2024 in Dusseldorf, Germany recently in November.

Speaker Change: We have now shipped several demo kits to the prospective clients to more easily allow them to experience our unique technology. Clearly, we have been ramping up our activity in the U.S.

Speaker Change: <unk> one of the largest medical b to B trade fairs in the world. Our team was well prepared and did an excellent job raising awareness to the <unk> digital tomography <unk> as a key tool in the future of medical imaging.

Speaker Change: And we know we must continue with this momentum and drive even greater adoption going forward.

Speaker Change: While we view the key U.S. market as a strategic priority, we continue to advance commercialization efforts in the rest of the world. In Mexico,

Speaker Change: Turning to the regulatory front we.

Speaker Change: We have maintained ongoing communication with both the U S FDA and the European Union regulatory bodies.

Speaker Change: As you are aware, we have a pending 500 10-K applications to the FDA for the general use of nano art, which could cover general use including chest, where.

Speaker Change: Where we have already made commercial inroads, we are waiting for the import license needed to deploy the Nanox Arc. The system allocated for the Mexican market has been manufactured and tested.

We will continue to work closely with the FDA and provide any supporting information as needed in a timely matter, including in recent weeks.

Speaker Change: and he's today ready for shipment and our partner has already designated the first two sites for the Nanox arcs in Mexico.

In the EU will continue to work with our notified body in the process aimed to securing the CE Mark designation for the dynamics are.

Speaker Change: In Chile, the Nanox Arc is in registration process after a successful site visit in our demo center in the U.S.

Both mood explanations when secured.

Speaker Change: Also in Europe, we were excited to showcase the Nanox-R technology at MEDICA 2024 in Düsseldorf, Germany, recently in November.

Speaker Change: Would be in our view a considerable expansion for the <unk> arc technology.

Speaker Change: And help to make it standard powered of medical imaging equipment worldwide.

Speaker Change: Medica is one of the largest medical B2B trade fairs in the world. Our team was well prepared and did an excellent job raising awareness to the 3D digital tomography as a key tool in the future of medical imaging.

And results in a significant increase in our total addressable market.

Speaker Change: We are not able to comment specifically on timing, but we're doing everything we can to assist in both review processes and hope to receive the clearances in the coming months.

Speaker Change: Turning to the regulatory front, we have maintained ongoing communication with both the USFDA and the European Union regulatory bodies.

Speaker Change: Turning to our clinical updates embedding some hospital more than 40 patients were already recruited.

Speaker Change: As you are aware, we have a pending 510K applications to the FDA for the general use of NanoXR, which could cover general use, including chest,

Speaker Change: For both the chest trial.

Speaker Change: And the multi site trial together with a staff of bailing. Soon we have reviewed more than 25 of the patients data sets and the results are impressive.

Speaker Change: We will continue to work closely with the FDA and provide any supporting information as needed in a timely manner, including in recent weeks.

Speaker Change: Continued the trend we have published in our recent white paper from the first 12 patients.

Speaker Change: In the EU, we continue to work with our notified body in the process aimed to securing the CMARC designation for the Dynanox ARC.

Speaker Change: In Ghana, the Multicenter trial site is actively recruiting.

And the <unk> arc system is actively scanning patients.

Speaker Change: Both new designations, when secured, would be, in our view, a considerable expansion for the Nanox ART technology and help to make it a standard part of medical imaging equipment worldwide.

Speaker Change: Both for the clinical trial as well as part of the clinical practice. Furthermore, non ops is in active discussions with a prominent site in Europe for incorporation into the multi site clinical trial.

Speaker Change: and results in a significant increase in our total addressable market.

Speaker Change: I would like now to discuss the networks AI business segment, which is generating revenues and is also gaining commercial traction worldwide.

Speaker Change: We are not able to comment specifically on timing, but we are doing everything we can to assist in both review processes and hope to receive the clearances in the coming months.

Speaker Change: As previously announced during the quarter, we secured a new 500 10-K clearances.

Speaker Change: Turning to our clinical update, in Bellington Hospital, more than 40 patients were already recruited for both the chest trial

Speaker Change: From the U S. FDA for networks AI Health CCN G version 2.0, the upgraded version of economic psychotic solution, which has already shown clinical utility in several health care systems.

Speaker Change: and the multi-site trial. Together with the staff of Baylingson, we have reviewed more than 25 of the patient's data sets and the results are impressive.

Speaker Change: By identifying patients at high risk of coronary artery disease, and enabling earlier intervention.

Speaker Change: The solution is also easy to use.

Speaker Change: continue the trend we have published in a recent white paper from the first 12 patients.

Speaker Change: Being seamlessly integrated with existing picture archiving and communication systems and electronic medical record systems as.

Speaker Change: In Ghana, the multi-center trial site is actively recruiting and the NanoRx system is actively scanning patients.

Speaker Change: As we know AI has been in the forefront of the news worldwide for some time.

Speaker Change: both for the clinical trial as well as part of the clinical practice. Furthermore, Nanox is in active discussions with a prominent site in Europe for incorporation into the multi-site clinical trial.

Speaker Change: Highlighting its ground breaking benefits to many industries and Mira use case.

Speaker Change: Each of which is largely hypothetical at this point Conversely, the nano AI application.

Speaker Change: It's been fully developed into a practical tool with.

Speaker Change: I'd like now to discuss the Nanox AI business segment, which is generating revenues and is also gaining commercial tractions worldwide.

Speaker Change: With significant clinical utilities, and many many imaging and diagnostic uses.

Speaker Change: As previously announced, during the quarter we secure the new 510k clearances.

Speaker Change: It's advanced algorithm and robust data processing capabilities.

Speaker Change: Have been trained on thousands of images and enable health care providers to identify health problems and much earlier stage than was previously possible with that lets look at some recent non upside being used in the real world.

Speaker Change: from the U.S. FAFTA for Nanox AI Health CCNG version 2.0, the upgraded version of Nanox iCardix solution, which has already shown clinical utility in several healthcare systems.

Speaker Change: by identifying patients at high risk of coronary artery disease and enabling earlier intervention.

Speaker Change: Cornwell, former leading spectrum health one of the early U S based adapters of dynamics AI solution. After two years of successful collaboration and having seen the clinical utility of dynamics AI health to CMG cutting solution the system will implement.

The solution is also easy to use.

Speaker Change: being seamlessly integrated with existing picture archiving and communication systems and electronic medical record systems.

Speaker Change: The health Oh, Steve bone solution into its clinical system.

Speaker Change: As we know, AI has been the forefront of the news worldwide for some time, highlighting its groundbreaking benefits to many industries and myriad use cases, much of which is largely hypothetical at this point.

Speaker Change: The health <unk> algorithm automatically detects vertebral compression fractures and low bone mineral density to help identify patients.

Speaker Change: <unk> disease with a focus on osteoporosis.

Conversely, the Nanox AI application

Speaker Change: With out and need for discrete imaging.

Speaker Change: has been fully developed into a practical tool with significant clinical utilities in many imaging and diagnostic uses.

Speaker Change: We are looking forward to another exciting and productive collaboration with <unk>.

Speaker Change: And it is very gratifying to see sophisticated health system validate the use of Nymex AI solution.

its advanced algorithm and robust data processing capabilities.

Speaker Change: have been trained on thousands of images and enable healthcare providers to identify health problems in a much earlier stage than was previously possible. With that, let's look at some recent nanopsia being used in the real world.

Speaker Change: As previously reported.

Speaker Change: The U K National Health services initiated the adapt trial to evaluate the use of non oxeiai bone solution.

Speaker Change: Through this study the amateurs discovered that it was able to identify six times as many patients with osteoporosis in routine city scans.

The Corps will.

Speaker Change: formerly Spectrum Health, one of the early U.S.-based adopters of the Nanox AI solution. After two years of successful collaboration and having seen the clinical utility of the Nanox AI Health CCNG cardiac solution, the system will implement

Speaker Change: As they were without Nox AI.

Speaker Change: Calling on those powerful results.

Speaker Change: One of the National Health Service sites, Oxford University hospitals, NHS Foundation Trust decided to secure a three year contract for the health host bone solution.

the Health OST Bone Solution into its clinical system.

Speaker Change: The HEALTH-OST algorithm automatically detects vertebral compression fractures and low bone mineral density to help identify patients.

Speaker Change: Adapt will continue into Q1 2025.

Speaker Change: But it is already decided to secure the solution plus the new real plus bone management tool for three years.

at risk of MSK disease with a focus on osteoporosis.

without a need for discrete imaging.

Speaker Change: This is the first time, the real plus bone management tool.

Speaker Change: As Ben mentioned and I'd like to take a few moments to describe this exciting new offerings.

Speaker Change: We are looking forward to another exciting and productive collaboration with Corwell, and it is very gratifying to see sophisticated health systems validate the use of Nanox AI solutions.

Speaker Change: We have developed this application for us either as a standalone applications or alongside the <unk> solution.

is previously reported

Speaker Change: And it is specifically.

Speaker Change: The UK National Health Services initiated the DAPT trial to evaluate the use of Nanox AI bone solution.

Speaker Change: Designed to support fracture liaison services clinics in managing the entire patient lifecycle more effectively from initial detection.

Speaker Change: Through this study, the NHS discovered that it was able to identify six times as many patients with osteoporosis in routine CT scans.

Speaker Change: Whether through AI or others, agnostic mean real plus bone management tool will facilitate the comprehensive management.

as they were without Nanox AI.

Speaker Change: Of treatment and ongoing disease management, including follow up exams update.

Speaker Change: Following on those powerful results, one of the national health services sites, Oxford University Hospitals NHS Foundation Trust, decided to secure a three-year contract for the health host BoneSolution.

Speaker Change: Update later.

Speaker Change: And medication management.

Speaker Change: These are the latest examples of prominent health systems validating the utility of our <unk> solution.

Speaker Change: ADAPT will continue into Q1 2025 but has already decided to secure the Solution Plus, the new Real Plus bone management tool, for three years.

And that is not just a concept, but a real value add solution, we expect many more to come.

Speaker Change: In other AI business news.

Speaker Change: This is the first time the RealPlus bone management tool has been mentioned, and I'd like to take a few moments to describe this exciting new offering.

Speaker Change: Leon Health extended its co operation with Amdocs AI solution.

Available on its clinical AI marketplace than billion health.

Speaker Change: As the healthcare data platform that focuses on AI analytics, it offer and life science companies.

Speaker Change: We have developed this application for use either as a stand-alone application or alongside the health health solution.

Speaker Change: The ability to leverage Nymex AI products to extract clinical insights from their a multimodal.

and it is specifically

Speaker Change: designed to support fractural liaison service clinics in managing the entire patient lifecycle more effectively.

Speaker Change: Longer term now patient data sets.

Speaker Change: With over 10 million patients.

Speaker Change: During the quarter, we also signed a new reseller agreement with <unk> Medical Inc, and distributor of medical equipment based in Florida spine.

Speaker Change: Whether through AI or other diagnostic means, RealPlus Bone Management Tool will facilitate the comprehensive management of treatment and ongoing disease management including follow-up exams

Speaker Change: <unk> will distribute the knobs AI solution in the large Florida market and we look forward to a productive partnership.

update laters, and medication management.

Speaker Change: Looking to the future if not oxeiai the strong validation of these solutions by multiple health systems around the world.

Speaker Change: These are the latest examples of prominent health systems validating the utility of our Nanox AI solution.

Speaker Change: <unk> us to develop additional algorithms.

And that is not just a concept.

Speaker Change: Can identify more health problems.

Speaker Change: but a real value-add solution. We expect many more to come.

Speaker Change: We are now working on the pulmonary solution, which is expected to be the first AI application designed specifically for the Nymex or the.

Speaker Change: In other AI business news, Dandelion Health extended its cooperation with Anox AI solution available on its clinical AI marketplace. Dandelion Health is a healthcare data platform that focuses on AI analytics. It offers life science companies

The algorithm aims to automatically identify patients with pulmonary nodules.

Speaker Change: With a goal of identifying chest diseases, especially lung cancer.

Speaker Change: Through routine chest since.

The amount of steam will provide timely updates on the development of this exciting new AI solutions as we advance its development.

of over 10 million patients.

Speaker Change: Yeah.

Speaker Change: Turning to our OEM efforts, which will help to ensure we have the manufacturing capacity for our expected lines base out in the future.

Speaker Change: During the quarter we also signed a new reseller agreement with Spinax Medical Inc., a distributor of medical equipment based in Florida.

Speaker Change: As mentioned in the past, we finalize the establishment of our Technology Development Center is based in our headquarters.

Speaker Change: Spinax will distribute the NanoPSAI solution in the large Florida market and we look forward to a productive partnership.

Speaker Change: The primary purpose of the center.

Speaker Change: Looking to the future of Nanox AI, the strong validation of these solutions by multiple health systems around the world drives us to develop additional algorithms that can identify more health problems.

Speaker Change: Is to consolidate our core assets and knowledge and to advance the development of the chips and the tubes and to lead our future roadmap.

This center has eight R&D labs.

Speaker Change: We are now working on a pulmonary solution, which is expected to be the first AI application designed specifically for the Nanox Arc.

Speaker Change: And these meant by a highly credentialed team of engineers and researchers who are also advancing now chip and tube technology from the robust technology.

The algorithm aims to automatically identify patients with pulmonary nodules.

Speaker Change: <unk> library.

Speaker Change: The library includes dozens.

Speaker Change: with a goal of identifying chest diseases, especially lung cancer through routine chest scans.

Speaker Change: <unk> assemblies for Nox and Nellix AI.

Speaker Change: <unk> added this center is tasked with the ongoing work on Nymex future technology innovations as well as the development of our next products in our roadmap and I know our future development is in a very capable hence.

Speaker Change: The Nanox team will provide timely updates on the development of this exciting new AI solution as we advance its development.

Speaker Change: Turning to our OEM efforts, which will help to ensure we have the manufacturing capacity for our expected client base of the future.

Speaker Change: I would now like to provide an update on our OEM partners.

Speaker Change: We will play an important role in ensuring that we have the supply of systems.

Speaker Change: As mentioned in the past, we finalized the establishment of our technology development centers based in our headquarters.

To meet our accelerating growth trajectory over the coming years.

Speaker Change: The primary purpose of the Center is to consolidate our core assets and knowledge and to advance the development of the chips and the tubes and to lead our future roadmap.

Speaker Change: There are many manufacturing agreements in place as well as multiple development projects in motion at various stages and sites globally and increased pipeline of potential leads and I'd like to provide a high level overview of some of these activities.

Speaker Change: This center has eight R&D labs and is manned by a highly credentialed team of engineers and researchers who are also advancing nanochip and tube technology from the robust technology patent library.

Speaker Change: <unk> has completed assembly of the first arc tubes, with Nymex propriety amateur and we have taken delivery of them at our manufacturing facility. We are now performing systems integration and pre NDA submission testings on tubes.

Speaker Change: The library includes dozens of patents of families for Nanooks and Nanooks AI.

Speaker Change: Which will be used in the <unk> <unk> is also engaged in development of our multi source modules utilizing.

Speaker Change: The team at the center is tasked with the ongoing work on NANUC's future technology innovations as well as the development of our next products in our roadmap, and I know our future development is in a very capable hands.

Speaker Change: Therefore mentioned <unk> testing of this unit should commence in Q1 2025.

Speaker Change: As part of our efforts to raise awareness of <unk> value and security applications, such as screening analytics team attended the international security expert in September in London.

Speaker Change: I'd now like to provide an update on our OEM partners.

Speaker Change: who will play an important role in ensuring that we have the supply of systems.

to meet our accelerating growth trajectory over the coming years.

Speaker Change: We're over 300 international exhibitors showcased products and solutions from across the entire security spectrum.

Speaker Change: There are many manufacturing agreements in place, as well as multiple development projects in motion at various stages and sites globally. An increased pipeline of potential leads and I'd like to provide a high-level overview of some of these activities.

Speaker Change: As a result of this event we are following up on multiple opportunities to expand our penetration in the security vertical.

A leading global medical and diagnostic solutions provider is assembly. The first prototype tubes utilizing dynamics amateur we are working closely with them and have delivered.

Speaker Change: LARC has completed assembly of the first ARC tubes with Nanox propriety emitter and we have taken delivery of them at our manufacturing facility. We are now performing systems integration and pre-FDA submission testings on the tubes.

Speaker Change: <unk>, our demo kit to serve as test bench for prototype under development.

We have been partnering with the U S government security application projects to develop non invasive screening applications.

Speaker Change: which will be used in the NanoX arc. Varex is also engaged in development of a multi-source module utilizing

Speaker Change: The team has successfully completed component build assembly and testing.

Speaker Change: Therefore mentioned Nanox emitters, testing of this unit should commence in Q1 2025.

Speaker Change: We have since received a follow on purchase order to finalize two unique designs for advancing prototyping, which are to be delivered in the first half of 2025.

Speaker Change: As part of our efforts to raise awareness of NANUX's value in security applications such as screening, a NANUX team attended the International Security Expo in September in London.

Speaker Change: We also delivered in Q3 and Alex demo kit to view works.

Global X-ray imaging solution provider for assessment of our technologies viewer ex recently completed their assessment.

Speaker Change: where over 300 international exhibitors showcased products and solutions from across the entire security spectrum.

Speaker Change: Should their findings and ever since requested to acquire knowledge tube towards specific application testing and development.

Speaker Change: As a result of this event, we are following up on multiple opportunities to expand our penetration in the security vertical.

Speaker Change: We are pleased that our demo kit inclusive of our amateur cube high voltage power supply and software is already enabled multiple global solution providers to more easily experience our technology.

Speaker Change: A leading global medical and diagnostic solution provider is Assembly, the first prototype tubes utilizing the Nanox emitter. We are working closely with them and have delivered

Speaker Change: and Nanox Art Demo Kit to serve as test bench for a prototype under development.

Speaker Change: Additionally, the first cube utilizing CCM chips have been successfully built and the initial sub of production quality chips is scheduled to commence in Q1 2025.

Speaker Change: We have been partnering with the U.S. government security application projects to develop non-invasive screening applications.

The team has successfully completed component build, assembly, and testing.

Speaker Change: This is another example of the non ops team's dedication to security and manufacturing agreements to ensure the supply of Thermodox our system can meet our expected demand.

Speaker Change: We have since received a follow-on purchase order to finalize two unique tube designs for advancing prototyping, which are to be delivered in the first half of 2025.

Speaker Change: That concludes my business update and I would like now to turn the call over to Ram Daniel for a review of our financials run.

Ram Daniel: Thank you Erez, we reported a GAAP net loss for the third quarter of 2024 of $13 6 million, which I will refer to the reported period compared with a net loss of 21 $4 million.

Ram Daniel: In the third quarter of 2023, which I'll refer to the comparable period. The decrease was largely due to a decrease of $7 4 million in expenses related to impairment of goodwill, which were recorded in the comparable period and not in the reported period.

Speaker Change: We are pleased that our demo kit, including the power emitter, tube, high voltage power supply, and software has already enabled multiple global solution providers to more easily experience our technology.

Ram Daniel: Revenue for the reported period was 3.0 million and gross loss was $2 8 million on a GAAP basis compared to a revenue of $2 5 million and a gross loss of $1 7 million on a GAAP basis for the comparable period.

Additionally, the first cube utilizing system chips.

Speaker Change: have been successfully built, and the initial fab of production-quality chips

Speaker Change: is scheduled to commence in Q1 2025. This is another example of the Nanox team's dedication to security manufacturing agreements to ensure the supply of Nanox Arc System can meet our expected demand.

Ram Daniel: non-GAAP gross loss for the reported period was.

Zero point $2 million as compared to a non-GAAP gross profit of zero point $9 million in the comparable period.

Speaker Change: That concludes my business update and I would like now to turn the call over to Rem Daniel for a review of our financials. Rem?

Ram Daniel: This represents a gross loss margin of approximately 6% on a non-GAAP basis for the reported period.

Rem Daniel: Thank you, Erez. We reported a gap net loss for the third quarter of 2024 of $13.6 million, which I will refer as to the reported period.

Ram Daniel: Compared to a gross profit margin of 77% on a non-GAAP basis in the comparable period.

Ram Daniel: Revenue from the Teleradiology services for the reported period was $2 6 million with a gross profit of zero point $3 million on a GAAP basis in the reported period, which represents a gross profit margins of approximately 13% on a GAAP basis for the reported peer.

Rem Daniel: compared with a net loss of $21.4 million in the third quarter of 2023.

We shall refer as to the comparable period.

Rem Daniel: The decrease was largely due to a decrease of $7.4 million in expenses related to impairment of goodwill, which were recorded in the comparable period and not in the reported period.

Ram Daniel: non-GAAP gross profit of the company's Teleradiology services for the reported period was <unk> 9 million.

Ram Daniel: Which represents a gross profit margin of approximately 35% on a non-GAAP basis.

Rem Daniel: Revenue for the reported period was $3.0 million and gross loss was $2.8 million on a gap basis compared to a revenue of $2.5 million and a gross loss of $1.7 million on a gap basis for the comparable period.

Ram Daniel: Revenue from the tariff Audiology services for the comparable period was $2 2 million with a gross profit of zero point $2 million on a GAAP basis, which represents a gross profit margins of approximately 11% on a gulf of bases.

Non-GAAP gross loss for the reported period was

Ram Daniel: non-GAAP gross profit of the company instead of Audiology services for the comparable periods was 0.8 million, which represents a gross profit margin of approximately 36% on a non-GAAP basis.

Rem Daniel: $0.2 million, as compared to a non-GAAP gross profit of $0.9 million in their comparable period.

Rem Daniel: which represents a gross loss margin of approximately 6% on a non-GAP basis for the reported period as compared to a gross profit margin of 37% on a non-GAP basis in the comparable period.

Ram Daniel: The increase in the Companys revenue from the Teleradiology services was mainly attributable to customer retention and increased volume of the company's reading services during the week day shifts.

Rem Daniel: The revenue from the teleradiology services for the reported period was $2.6 million with a gross profit of $0.3 million on a gap basis in the reported period.

Ram Daniel: During the reported periods the company generated revenues through the sales of its AI solutions in the amount of zero point $4 million as compared to a revenue of zero point $1 million in the comparable period. The increase was mainly due to a completion of the project of the installations of our AI solution.

Rem Daniel: which represents a gross profit margin of approximately 13% on a gap basis for the reported period.

Rem Daniel: NAMGAP gross profit of the company's telebiology service for the reported period was $0.9 million, which represents a gross profit margin of approximately 35% on a NAMGAP basis.

During the reporting period, the company generated revenues for the sales and deployment of imaging systems, which amounted to $29000 with a gross loss of $1 $5 million on a GAAP and non-GAAP basis.

Rem Daniel: Revenue from the telebiology services for the comparable period was $2.2 million with a gross profit of $0.2 million on a GAAP basis, which represents a gross profit margin of approximately 11% on a GAAP basis.

Ram Daniel: Those revenue stems from the sales and deployment of dynamics Ax systems in the U S and the sales of our two these systems in the rest of the world.

Ram Daniel: Research and development expenses net for the reported period were $4 $7 million compared to $6.0 million in the comparable period, a decrease of $1.3 million was largely due to a decrease of zero point $3 million in salaries and wages.

Rem Daniel: Non-GAAP gross profits of the company's tele-radiology services for the comparable period was $0.8 million, which represents a gross profit margin of approximately 36% on a non-GAAP basis.

Rem Daniel: The increase in the company's revenue from the tele-radiology services was mainly attributable to customer retention and increased volume of the company's reading services during the week-day shifts.

Ram Daniel: <unk> zero point $4 million and share based compensation and a decrease of zero point $6 million and expenses that are related to other research and development activities.

Rem Daniel: During the reported period, the company generated revenues through the sales of its AI solutions in the amount of $0.4 million, as compared to a revenue of $1.5 million.

Ram Daniel: Sales and marketing expenses for the reporting period was <unk> 9 million compared to $1 $1 million in the comparable period.

Ram Daniel: General and administrative expenses for the reporting period were $5 7 million as compared to $5.0 million in the comparable period.

Ram Daniel: The increase of zero point $7 million was mainly due to an increase of zero point $5 million and share based compensation increase in our legal expenses in the amount of zero point $5 million.

Rem Daniel: During the reported period, the company generated revenue through the sales and deployment of its imaging systems, which amounted to $29,000, with a gross loss of $1.5 million on a gap and non-gap basis.

Ram Daniel: Which was offset by a decrease in the cost of our D&O liability insurance premium in the amount of zero point $3 million.

Rem Daniel: Those revenues stem from the sales and deployment of the NanoXarc systems in the U.S. and the sales of our 2D systems in the rest of the world.

Ram Daniel: Our non-GAAP net loss attributable to ordinary shares for the period was $8 7 million as compared to a non-GAAP net loss of $9 $4 million in the comparable period, the decrease of zero point $7 million.

Rem Daniel: Research and development expenses net for the reported period were $4.7 million compared to $6.0 million in the comparable period.

Rem Daniel: The decrease of $1.3 million was largely due to a decrease of $0.3 million in salaries and wages, decrease of $0.4 million in share-based compensation, and a decrease of $0.6 million in expenses that are related to other research and development activities.

Ram Daniel: Mainly due to a decrease in our non-GAAP operating expenses of $1.8 million, which was offset by a decrease of $1 $1 million and our non-GAAP gross profit.

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

Speaker Change: Turning to our balance sheet.

Speaker Change: As of September 30th 'twenty, 'twenty, four with cash cash equivalents and restricted deposits and marketable securities of approximately $57 1 million.

Rem Daniel: General and administrative expenses for the reported period were 5.7 million dollars as compared to 5.0 million dollars in the comparable period.

And we add $3 $4 million loans from a bank.

Speaker Change: <unk> ended the third quarter of 2024, with a property and equipment net of $44 $7 million.

Rem Daniel: The increase of $0.7 million was mainly due to an increase of $0.5 million in share base compensation, increase in our legal expenses in the amount of $0.5 million.

As of September 32024, we had approximately 58 5 million shares outstanding.

Erez Meltzer: With that I will end the call back over to Erez.

Rem Daniel: which was offset by decreasing the cost of our DNO liability insurance premium in the amount of 0.3 million dollars

Erez Meltzer: As we conclude our discussion today.

Speaker Change: Filled with confidence about the future of networks. Our initial deployment of the non op art technology across multiple states in the U S.

Rem Daniel: Our non-GAAP net loss attributable to ordinary shares for the reported period was $8.7 million.

Speaker Change: Along with our expanding footprint in international markets as being a testament to our unwavering commitment to making advanced medical imaging accessible and affordable worldwide.

Rem Daniel: as compared to a non-GAAP net loss of $9.4 million in the comparable period.

Speaker Change: The positive feedback from health care providers and patients.

Speaker Change: Reaffirm their transformative potential of our solution.

Turning to our balance sheet.

Speaker Change: Coupled with a robust infrastructure.

Rem Daniel: As of September 30, 2024, we had cash equivalents with strictly deposits and marketable securities of approximately $57.1 million, and we had $3.4 million loans from a bank.

Speaker Change: We have established this past year, we are well positioned to accelerate our progress in 2025.

Speaker Change: On the regulatory front, we are diligently working with the FDA and European Union bodies to secure the necessary approvals.

Speaker Change: Which will further solidify our position in the market.

Speaker Change: Our ongoing trials and collaborations with leading health system demonstrate the clinical utility and the value of our AI solutions paving the way for broader adoption of groundbreaking advancement in medical imaging.

Erez Meltzer: With that, I will end the call back over to Erez.

As we conclude our discussion today,

Erez Meltzer: I'm filled with confidence about the future of Nanox, our initial deployment of the Nanox ARC technology across multiple states in the U.S.

Speaker Change: We take pride in our robust clinical performance by prioritizing clinical needs and development efforts in close collaboration with the medical community. We ensure that our innovations are not only advance but also deeply relevant to those we serve.

Erez Meltzer: along with our expanding footprint in international markets, as being a testament to our unwavering commitment to making advanced medical imaging accessible and affordable worldwide.

Speaker Change: Our commitment to providing advanced diagnosis imaging capabilities continues to elevate market needs and utilization setting new standards in the industry.

The positive feedback from healthcare providers and patients

reaffirm their transformative potential for our solution.

Erez Meltzer: Coupled with the robust infrastructure we have established this past year, we are well-positioned to accelerate our progress in 2025.

Speaker Change: Moreover, we're constantly working to improve and innovate.

Speaker Change: With solutions designed to meet and exceed market expectations.

Speaker Change: Thank you for continued support and confidence in our revision together, we will drive significant value for our stakeholders and make a lasting positive impact on global health care.

Erez Meltzer: On the regulatory front, we are diligently working with the FDA and European Union bodies to secure the necessary approvals.

which will further solidify our position in the market.

Speaker Change: As always we welcome your feedback and are happy to meet with interested investors. Please contact our investor relations partner at ICR and they will assist with that operator, let's now open the call for questions.

Erez Meltzer: Our ongoing trials and collaborations with leading health systems demonstrate the clinical utility and the value of our AI solutions, paving the way for broader adoption of groundbreaking advancement in medical imaging.

Speaker Change: Thank you and as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Erez Meltzer: We take pride in our robust clinical performance. By prioritizing clinical needs and development efforts in close collaboration with the medical community, we ensure that our innovations are not only advanced, but also deeply relevant to those we serve.

Speaker Change: And our first question will come from Ross Nussbaum with Cantor Fitzgerald. Your line is open.

Erez Meltzer: Our commitment to providing advanced diagnosis imaging capabilities continues to elevate market needs and utilization, setting new standards in the industry.

Ross Nussbaum: Hey, guys. Thanks for taking our questions and congrats on the progress.

Ross Nussbaum: Starting off how many systems.

Ross Nussbaum: Blake in the U S. During the quarter and how many we're operating and as a follow up what types of imaging centers are adopted.

Erez Meltzer: Thank you for continued support and confidence in our vision. Together, we will drive significant value for our stakeholders and make a lasting positive impact on global health care.

So I think it was mentioned altogether.

Speaker Change: The number was 47.

Speaker Change: The.

Speaker Change: I would say majority of the.

Erez Meltzer: As always, we welcome your feedback and are happy to meet with interested investors. Please contact our investor relations partner at ICR and they will assist. With that, Operator, let's now open the call for questions.

Speaker Change: The medical center as our imaging centers small medium.

Speaker Change: And another part.

Imaging imaging.

Speaker Change: Our medical imaging chains that we mentioned that we added.

Speaker Change: Thank you. And as a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced.

Speaker Change: A few right now.

Speaker Change: And.

Speaker Change: Have a.

Speaker Change: To withdraw your question, please press star 11 again. And our first question will come from Ross Osborne with Cantor Fitzgerald. Your line is open. Hi, guys. Thanks for taking our questions and congrats on the progress. So starting off, how many systems did you deploy in the U.S. during the quarter?

Speaker Change: A few.

Speaker Change: In hospitals or I would say.

Speaker Change: Multi functional.

Speaker Change: Functionality.

Speaker Change: Medical centers.

And.

Speaker Change: And some chiropractors.

Speaker Change: Clinics or in orthopedic clinics.

Speaker Change: Okay.

Speaker Change: Altogether in terms of the.

Speaker Change: The locations and the place by far.

Speaker Change: and how many were operating. And as a follow-up, what types of imaging centers are adopting ARC? So, I think it was mentioned all together.

Speaker Change: Our pipeline and deal flow.

Speaker Change: Far bigger than.

Speaker Change: What we have indicated.

Speaker Change: And we can do to continue to work.

The number was 47-

Speaker Change: Okay, and then looking at placement to date, how has the average utilization trended in terms of scans per day or a month for park.

The majority, I would say the majority of the

Speaker Change: of the medical centers are imaging centers, small and medium. Another part are imaging, imaging, medical imaging chains that we mentioned, and we added a few right now.

Speaker Change: I think it's similar to what.

Speaker Change: It.

Speaker Change: We reported last time that India and the operating.

Speaker Change: And the places which are operating this is.

Speaker Change: Around the number that we've indicated in the past in working days seven seven days seven scans per day.

Speaker Change: and we have a few in hospitals or I would say multifunctional functionality medical centers

Okay, and then lastly for us I'll jump back in queue, you mentioned ongoing conversations with the FDA, but could you parse out how those conversations are going and any updates on arc acts.

Speaker Change: and some chiropractors clinics or an orthopedic clinic in terms of the

Speaker Change: A label expansion for a full body.

Speaker Change: So.

Speaker Change: As you know Ross, we don't give any.

Speaker Change: The locations and the place, by far, our pipeline and deal flow is far bigger than what we have indicated and we continue to work.

Indication on something that is not in our hands.

Speaker Change: We.

Speaker Change: From our point of view and the best we can judge the all the information all the all the answer all the questions were answered.

Thank you.

Speaker Change: From our point of view the indication is positive.

Speaker Change: And.

Speaker Change: From the FDA point of view I don't see a reason why it will not be.

Speaker Change: I think it's similar to what what we reported last time that in the in the operating in the places which are operating this is around the the number that we've indicated in the past in working days seven seven days seven scans per day

Speaker Change: Sure.

Speaker Change: <unk>.

Speaker Change: In the in the short.

Speaker Change: In the short future.

Speaker Change: In terms of the RPX this is something that.

Speaker Change: We are going to submit.

Speaker Change: Few months next early next year.

Speaker Change: Sure.

Speaker Change: Our Texas anyhow scheduled to be deployed some.

Speaker Change: Okay, and then lastly for us, we'll jump back in queue. You mentioned ongoing conversations with the FDA, but could you parse out how those conversations are going and any updates on ARC-X and then the label extension for full-body?

Speaker Change: Sometimes.

Speaker Change: During the next year I.

Speaker Change: I would say probably second half.

Speaker Change: If everything goes right it goes well.

Speaker Change: But.

Speaker Change: From the FDA point of view right now.

So, um

Process seems to be in line.

Speaker Change: As you know, Ross, we don't give any indication on something that is not in our hands. We, from our point of view and the best we can judge.

Speaker Change: Great. Thanks for taking my questions.

Speaker Change: And our next question comes from Jeffrey Cohen with Ladenburg. Your line is now open.

Speaker Change: All the information, all the answers, all the questions were answered. From our point of view the indication is positive.

Speaker Change: Hey, good morning, Erez around how are you.

Speaker Change: Good.

Speaker Change: So a few questions for Merrell.

And...

Speaker Change: Congrats on the progress, although recall that that occur.

Speaker Change: From the FDA point of view, I don't see a reason why it will not be in the short future.

Speaker Change: Can you talk about Europe.

Speaker Change: How old are they.

Speaker Change: They play out.

Speaker Change: Throughout.

Speaker Change: In terms of the ARCX, this is something that we are going to submit in a few months, early next year. And the ARCX is anyhow...

Speaker Change: The first year or two of commercialization after our CE Mark are you anticipating that.

Speaker Change: That will also become 30 or 40 or 50 commercial folks on the ground across Europe or do you imagine that it will be.

scheduled to be deployed sometime during the next year.

Speaker Change: More critical related to.

Speaker Change: Agreements by country as far as our distributors.

Speaker Change: I would say probably second half, if everything goes well. But from the FDA point of view, right now,

Speaker Change: So if you remember from what we presented.

Speaker Change: As a strategy for the company for sales and distribution Europe.

The process seems to be in line.

Speaker Change: Main maybe with the exception of the UK.

Great. Thanks for taking our questions.

Europe will be based on the distributors.

Speaker Change: And our next question comes from Jeffrey Cohen with Ladenburg. Your line is now open.

Speaker Change: We have already few agreements with the distributors that were signed.

Speaker Change: The Medicare actually indicated a very high interest.

Good morning, Erez and Ren. How are you?

Good.

Speaker Change: For.

So a few questions from our own and...

Speaker Change: Other countries new distributors.

Speaker Change: Congrats on the progress. I know you called out Medica that you were, she could talk about Europe, generally speaking, how that may play out throughout.

Speaker Change: Sure.

Speaker Change: And based on the right.

Right now the current indication I think that.

Speaker Change: I don't want to give a number but it will be.

Speaker Change: Hopefully.

Miller to the the one that we currently have.

Speaker Change: And we're going to deploy we have already a few purchase orders.

Speaker Change: Which are.

Great.

Speaker Change: And once we get the CE I think we have already a plan.

Speaker Change: Our near term plan for the go to market is already in place and we're going to start with one other thing which is important with respect to the Europe.

agreements by country as far as distribution.

So, if you remember from what we presented

Europe, we have indicated that we are planning to.

as a strategy for the company for sales and distribution.

Speaker Change: Do another clinical trial and in a prominent.

Speaker Change: Europe, maybe with the exception of the UK, Europe will be based on the distributors. We have already few agreements with the distributors that were signed. The Medica actually indicated a very high interest.

Speaker Change: Institution in Europe, which will help us too.

Speaker Change: GAAP clinical samples and have a lot of clinical data to help us too.

Speaker Change: The work in Europe, but in terms of the.

Speaker Change: Salespeople our channel.

Speaker Change: Channel management.

Speaker Change: Directors.

The.

Speaker Change: The.

Speaker Change: Agreements with distributors and the contact and <unk>.

Speaker Change: And based on the, right now, the current indication, I think that

And the promotion in the marketing we are already in place and we are.

Speaker Change: Roger.

Speaker Change: I don't want to give a number, but it will be, hopefully, similar to the one that we currently have. And we're going to deploy. We have already a few purchase orders, which are concrete.

Speaker Change: Forward bear in mind that another country that is relates to the ASC.

Is Australia, which we have already in agreement over there.

Speaker Change: Got it and there is carry that over for a moment to APAC and Latam as far as those territories and walk us through.

Speaker Change: And once we get the CE, I think we have already a plan.

Speaker Change: Our reaction plan for the go-to market is already in place, and we're going to start.

Speaker Change: Plans, there and also.

Speaker Change: Talk about the.

The regulatory.

Speaker Change: The one other thing which is important with respect to the Europe, we have indicated that we are planning to

Speaker Change: Who is carrying the burden and where thats being pursued currently besides.

Speaker Change: Mexico and Chile.

Speaker Change: do another clinical trial in a prominent institution in Europe which will help us to get clinical samples and have a lot of clinical data to help us to

Speaker Change: Okay. So.

Speaker Change: Late later means also.

Speaker Change: Going to be based on the distributors.

Speaker Change: The processes already in place in these countries in Mexico, and Chile, So the request for the regulation approvals.

to work in Europe, but in terms of the

Speaker Change: Salespeople, our channel management directors, the agreement with distributors and the contact and the promotion and the marketing, we are already in place and we are...

Speaker Change: It was already submitted and bi submitted by the distributors they carry actually the process we are.

Speaker Change: In touch with them actually with Mexico, just a fish.

Speaker Change: Another call.

Speaker Change: running fast forward. Bear in mind that another country that is related to the EACE is Australia, which we have a loyalty agreement over there.

Speaker Change: And it's going to be similar in terms of the efforts that we do there we have a channel manager that is responsible for this area.

The beauty of.

Erez Meltzer: Got it and Erez, carry that over for a moment to APAC and LATAM as far as those territories and walk us through

Speaker Change: What we can do is we bring people from <unk>.

Speaker Change: Latin America to see the demos that we have in the in the U S.

In order to take them all the way to to Israel. So it's good for them to make a short trip and see the.

Speaker Change: plans there and also, you know, talk about the regulatory and who's carrying that burden and where that's being pursued currently besides Mexico and Chile.

Speaker Change: System operating.

See the clinical value that we add disc.

Speaker Change: Discuss the economic value that we can contribute et cetera.

Okay, so Leighton is also...

Speaker Change: Okay. That's helpful. And then lastly for US a quick one I didn't hear any mention about the mattox connects was there any update there or any anticipations for that platform for 25.

Speaker Change: going to be based on distributors. The process is already in place in these countries, in Mexico and Chile, so the request for the regulation approvals was already submitted by the distributors. They carry, actually, the process.

Speaker Change:

Speaker Change: We'll probably have more clarity on 2025.

Speaker Change: And right now.

Speaker Change: I think the next the next one on the agenda will be Mexico.

Speaker Change: in touch with them, actually, with Mexico just now. I've used another call and...

Speaker Change:

And.

Speaker Change: That we're going to get orders once we get the approval.

Speaker Change: It's going to be similar in terms of the efforts that we do there. We have a channel manager that is responsible for this area.

Speaker Change: And we have submitted already.

Requests for a regulation.

Speaker Change: Approvals and a few other countries for the connect as well.

Speaker Change: The beauty of what we can do is we bring people from Latin America to see the demos that we have in the in the U.S.

Speaker Change: Perfect.

Speaker Change: Thanks for the color.

Speaker Change: Thank you.

Speaker Change: As a reminder to ask a question. Please press star one on your catalyst town.

Speaker Change: in order to take them all the way to to Israel, so it's good for them to make a short trip and see the system operating See the clinical value that we had Discussed the economic value that we can contribute etc

Speaker Change: The next question comes from Scott Henry with Alliance.

Speaker Change: Alliance Global your line is now open.

Speaker Change: Thank you and good afternoon.

Speaker Change: For starters.

When we think about Europe, and the rest of the world.

Speaker Change: Okay, that's helpful. And then lastly for us a quick one, I didn't hear any mention about the Nanox Connect. Was there any update there or any anticipations for that platform for 2025?

How should we think of that opportunity relative to the U S. I know you.

Speaker Change: You need to think of all of that comparable to the U S as far as potential revenues, but I just wanted to get your thoughts on that.

We'll probably have more clarity on 2025, but...

I cannot say that we don't have any internal thoughts about it.

An indication what's the split.

Speaker Change: and that we're going to get orders once we get the approval.

Speaker Change: When the U S and the rest of the world and especially Europe, but I would say that.

Speaker Change: We have submitted already a request for regulation approvals in a few other countries for the Connect as well.

Speaker Change: It will be smarter to indicate or to give an answer to your question. Once we get the CE approval.

Speaker Change: And.

Speaker Change: And we know that we can move fast forward in terms of our strategy and the go to market we are definitely.

Perfect. Erez Rand, thanks for the color.

Thank you

Speaker Change: As a reminder, to ask a question, please press star 11 on your telephone. The next question comes from Scott Henry with Alliance Global. Your line is now open.

As we have mentioned a few times last year in 2023 and in 2024 in the beginning when we started the deployment in the U S.

Speaker Change: We have put the U S as a priority.

Thank you and good afternoon. For starters...

Speaker Change: Mainly because of the FDA approval and the fact that.

you.

When we think about Europe

That we can get.

Speaker Change: and the rest of the world, how should we think of that opportunity relative to the U.S.? I know you used to think of all of that comparable to the U.S. as far as potential revenues, but I just wanted to get your thoughts on that.

Speaker Change: Easier access to customer and customer base and to generate big deal flow and.

Speaker Change: And the pipeline.

Speaker Change: And.

So right now U S would be a priority and in Europe.

Speaker Change: I cannot say that we don't have any internal thoughts about it and indication what's the split

Speaker Change: We will follow.

Speaker Change: We will follow up will follow after.

Speaker Change: between the U.S. and the rest of the world, and especially Europe.

Speaker Change: [noise], but Scott in terms of modeling you should thinking about it like the way that we did with the U S.

Speaker Change: But I would say that I will be smarter to indicate or to give an answer to your question once we get the the CE approval and And we know that we can move fast forward

Speaker Change: We have learned more lessons from the past.

Speaker Change: So you can think about them more efficient.

In terms of strategy and the go-to-market, we've definitely...

Speaker Change: Okay great.

Speaker Change: Then.

Speaker Change: As we have mentioned a few times last year in 2023 and in 2024, in the beginning when we started the deployment in the U.S.,

Speaker Change: I noticed revenues for AI solutions.

Or were higher than the trend line.

Speaker Change: Is that a signal that AI solutions revenue should continue to be higher.

Speaker Change: And is there a little bit of seasonality because I know they were they were strong in the third quarter of last year as well just trying to get a sense of that line.

Speaker Change: Okay.

Speaker Change: Mike Cavanaugh, Erez Meltzer, Mike Cavanaugh, Erez Meltzer, Mike Cavanaugh, Erez Meltzer,

Speaker Change: The first question.

David I will start then Ron will continue the the.

Speaker Change: The first question is yes.

And I anticipate that the number will continue to grow.

Speaker Change: In terms of seasonality.

Speaker Change: Usually relates to the.

We'll follow up, we'll follow after.

Speaker Change: So the budget related decisions, especially in the U S and the public.

Erez Meltzer, Mike Cavanaugh

Speaker Change: Scott, in terms of modeling, you should think about it like the way that we did with the U.S. We have learned more lessons from the past.

Speaker Change: Health care market, but things part of it is in the U K and it's not necessarily related to the U S.

Speaker Change: Budget processes then.

So you can think about a more efficient post-processing.

I wouldn't say that.

Speaker Change: The seasonality or the seasonality impact on this Ron would you like to add anything else.

Okay, great. And then I noticed revenues for AI solutions.

Ron Daniel: Yes. Thank you so as we explained in the in the PR.

Speaker Change: were higher than the trend line. Is that a signal that AI solutions revenue should continue to be higher and is there a little bit of seasonality because I know they were they were strong in third quarter of last year as well. Just trying to get a sense of that line.

The increase in the revenue of the.

Speaker Change: You too.

Speaker Change: Please.

Roger.

Speaker Change: Oh Wow.

Speaker Change: Well, we installed our solution as for.

Speaker Change: As for what the second part of your question do.

Okay, so as the first question...

Speaker Change: <unk> two to build up our own customer base and our backlog whether it.

Speaker Change: I will start, then Ron will continue. The first question is yes, you can anticipate that the number will continue to grow.

Speaker Change: Or extend them cope.

Speaker Change: Cope with existing customers so.

Speaker Change: No it's not it's not related to seasonality and as noted in your expansion over here, but you do this.

In terms of seasonality, it usually relates to the...

Speaker Change: We do see some expansion in the scope of it.

Erez Meltzer, Mike Cavanaugh

to the budget-related...

decisions, especially in the U.S. in the public

The AI Division does.

Speaker Change: Okay. Thank you for that feedback.

Speaker Change: health market, but since part of it is in the UK and it's not necessarily related to the U.S. budget processes, then I wouldn't say that it's a seasonality, there is a seasonality impact on this run. Would you like to add anything else?

Speaker Change: A final question.

Speaker Change: Which is very much of a big picture question.

When we think about the revenue trajectory.

Speaker Change: When do you think we would start to see an inflection point would that be the expanded indication and then obviously, we get Europe coming in I mean are we thinking kind of middle of 2025, we should start to see.

Speaker Change: Yes, thank you. So as we explained in the PR, this decrease in the revenue of the...

Speaker Change: The AI division was due to a completion of a project where we installed our solution. As for

Speaker Change: Kind of that hockey stick upward turn just trying to get your sense of when we should look for the inflection point. Thank you.

Speaker Change: As for what the second part of your question is, we do...

Speaker Change: Ron.

Speaker Change: Yes.

So.

Speaker Change: continue to build up our customer base and backlog, whether it's existing or extend the scope with existing customers.

Speaker Change: Without specifying that'd be playing any specific point of time.

Speaker Change: It's connected for Maria.

Speaker Change: Factor.

First of all.

Speaker Change: You know, it's not related to seasonality, and there's no linear expansion over here, but you do with this...

Speaker Change: Unwilling or <unk>.

Speaker Change: When you combine all of our devices.

Speaker Change: The commercialization there.

Speaker Change: We do see some expansion in the scope of the businesses.

Speaker Change: That is also related to expanding the deployment or the general use in the U S. In the CE Mark.

that the AI division does.

Okay, thank you for that feedback.

Speaker Change: It's really a combination of many things.

The final question...

Speaker Change: We hope that will come to fruition.

which is very much a big picture question.

Gotcha.

Speaker Change: When we think about the revenue trajectory, when do you think we would start to see an inflection point? Would that be the expanded indication and then obviously we get Europe coming in, I mean are we thinking kind of middle of 2025 we should start to see kind of that hockey stick upward turn? Just trying to get your sense of when we should look for the inflection point. Thank you.

Okay.

Speaker Change: Thank you.

Speaker Change: I would actually look at it more not a <unk>.

Speaker Change: <unk>.

Speaker Change: Inflection point to point.

Speaker Change: But more of the kind of the milestones that each one of them can.

Speaker Change: <unk> game changer, so what will be the the chest and the full body. Another one will be the CE.

Speaker Change: Later on sometimes in 2025.

We're on?

Speaker Change: The FDA approval of the <unk> launch so we have a lot of the <unk>.

Yes, so without specifying, specifying any statistics

Speaker Change: Milestones along the way that each one of them will be a game changer.

Speaker Change: point of time. It's connected for various factors, of course, first of all, and really are the clinical value of our devices.

Speaker Change: The way at least we see it internally.

Okay. Thank you that is helpful. Thank you for taking the questions.

Speaker Change: Thank you.

Speaker Change: It's the commercialization, it's the, of course, it's also related to expanding the the clearances for the general use in the U.S. and the C.E.M.A.R.C. So it's really a combination of many things which we hope that will come to fruition in the near future.

Yeah.

Speaker Change: I am showing no further questions at this time and I do want to thank you for participating in today's call and.

Speaker Change: And you may now disconnect.

Speaker Change: but more of a kind of a milestone that each one of them can make a be a game changer. So one will be the chess in the full body. Another one will be the CE later on, sometime 2025.

Speaker Change: the FDA approval of the ARCX, the ARCX launch. So we have a lot of milestones along the way that each one of them will be a game changer. That's the way at least we see it internally.

Speaker Change: Okay, thank you. That is helpful. Thank you for taking the questions.

Thank you.

Speaker Change: I am showing no further questions at this time and I do want to thank you for participating today's call and you may now disconnect.

The The

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Ezer Meltzer, Mike Cavanaugh

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The End

Speaker Change: Ladies and gentlemen, thank you for standing by. Welcome to NANOC's third quarter 2024 earnings call.

At this time, all participants are in a listen-only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.

To withdraw your question, please press star 11 again.

Please be advised that today's conference is being recorded.

Speaker Change: I would like now to turn the conference over to Mike Cavanaugh, Investor Relations.

Sir, please go ahead.

Speaker Change: Good morning and thank you for joining us today. Earlier today, Nanox Imaging Limited released financial results for the quarter ended September 30, 2024.

Speaker Change: With me today are Erez Meltzer, Chief Executive Officer and Acting Chairman, and Ron Daniel, Chief Financial Officer.

Speaker Change: Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements regarding the company's financial results, research and development, manufacturing and commercialization activities,

regulatory process operations and other matters.

Speaker Change: These statements are subject to risks, uncertainties, and assumptions that are based on management's current expectations as of today and may not be updated in the future.

Speaker Change: Therefore these statements should not be relied upon as representing the company's views as of any subsequent date.

Speaker Change: Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission.

Speaker Change: We will also refer to certain non-GAAP financial measures to provide additional information to investors.

Speaker Change: non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, and non-GAAP gross loss per share.

Speaker Change: With that, I'd now like to turn the call over to Erez Meltzer.

Erez Meltzer: Thank you for joining us today for our financial results call. I'm happy to share the progress we have made deploying our innovative Nanox R technology as well as further progress with Nanox AI and the other components of the full Nanox solutions.

Since its commercial deployment at the beginning of this year,

Erez Meltzer: There are now 47 units, almost 50, that are in various stages of shipments and deployments for both commercial and clinical use.

Erez Meltzer: Our strategic growth plan is well underway and we are committed to accelerating our efforts to expand our footprint.

and enhance our technology.

Erez Meltzer: This is a multi-pronged effort, which includes doubling our pipeline, expanding our sales, service, and support teams on the ground in the key U.S. market to drive sales, raise awareness with imaging centers and hospitals.

Erez Meltzer: as well as supporting our growing customer base in installations and ongoing use of Nanox solutions.

Erez Meltzer: Hand in hand with these efforts, we'll also continue to advance our regulatory efforts with the USFDA for additional clearances and securing the C-mark in European Union.

Erez Meltzer: while also continue to generate trial data supporting the use of the NANUX-ARC.

Erez Meltzer: The positive feedback from healthcare providers and patients alike reinforced our belief in the transformative potential of NanoxART.

Erez Meltzer: We are confident that our continued focus on innovation and strategic partnership will drive significant value for our shareholders.

Erez Meltzer: We also signed several new deals for Nanox AI solutions, including Oxford University Hospitals, NHS Foundation Trust in the UK.

Erez Meltzer: I will share more detail on this and other agreements later in my remarks.

Erez Meltzer: But I will say that all of the Nanooks are excited.

to partner with such prestigious institutions.

Speaker Change: We at Nanox were also humbled and proud to have Nanox AI selected for a special mention in Time's Best Inventions of 2024 list.