Q2 2025 Nano-X Imaging Ltd Earnings Call

Operator: Good day and thank you for standing by. Welcome to the Nano-X Imaging Ltd. second quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, we will open it up for questions. 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. I will now hand it over to your first speaker, Mike Cavanaugh, Investor Relations. Please go ahead.

Speaker #2: Good day, and thank you for standing by. Welcome to the NanoX Imaging second quarter 2025 earnings call. At this time, all participants are in a listen-only mode.

Speaker #2: After the speaker's presentation, we'll open up for questions. To ask a question during the session, you will need to press star one-one on your telephone.

Speaker #2: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one-one again. Please be advised that today's conference is being recorded.

Speaker #2: Our next hand is over to your first speaker, Mike Cavanaugh, Investor Relations. Please go ahead.

Mike Cavanaugh: Good morning and thank you for joining us today. Earlier today, Nano-X Imaging Ltd. released financial results for the quarter ended June 30, 2025. The release is currently available on the investor section of the company's website. With me today are Erez Meltzer, Chief Executive Officer and Acting Chairman, and Ran Daniel, Chief Financial Officer. 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 and clinical activities, and other matters. 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. Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date.

Speaker #3: Good Good morning, and thank you for joining us today. Earlier today, NanoX Imaging Ltd. released financial results for the quarter-ended June 30, 2025. The release is currently available on the Investors section of the company's website.

Speaker #3: With me today are Erez Meltzer, Chief Executive Officer and Acting Chairman, and Ran Daniel, Chief Financial Officer. 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 and clinical activities, and other matters.

Speaker #3: These statements are subject to risks, uncertainties, and assumptions that are based on management's current expectations as of today. It may not be updated in the future.

Speaker #3: Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date. 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.

Mike Cavanaugh: 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. We will also refer to certain non-GAAP financial measures to provide additional information to investors. 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, non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, and non-GAAP gross loss per share. With that, I'd now like to turn the call over to Erez Meltzer.

Speaker #3: We will also refer to certain non-GAAP financial measures to provide additional information to investors. A reconciliation of the non-GAAP to GAAP measures is provided with our press release with the primary differences being non-GAAP AP net loss attributable to ordinary shares, non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, and non-GAAP gross loss per share.

Speaker #3: With that, I'd now like to turn the call over to Erez Meltzer.

Erez Meltzer: Thank you, Mike. Good morning and thank you all for joining our second quarter 2025 call. As we enter the second half of 2025, the entire Nano-X team remains focused on disciplined execution and expanding our commercial footprint across our entire ecosystem, including AI and teleradiology solutions, as we pursue our vision of making medical imaging more accessible and thereby improving patient outcomes. In line with the commitments outlined during our May 2025 earnings call, we are making steady progress toward our goal of 100 Nano-X ARC systems installations. Expanding our commercial footprint remains a top priority, and our sales team continues to expand the pipeline of qualified leads and successfully convert those leads into systems being shipped to customers. While most leads and new customer activity are now being sourced from the U.S.

Speaker #4: Thank you, Mike. Good morning and thank you all for joining our second quarter 2025 call. As we enter the second half of 2025, the entire NanoX team remains focused on disciplined execution and expanding our commercial footprint across our entire ecosystem, including AI and teleradiology solutions, as we pursue our vision of making medical imaging more accessible and thereby improving patient outcomes.

Speaker #4: In line with the commitments outlined during our May 2025 earnings call, we are making steady progress toward our goal of 100 NanoX Rx systems installations.

Speaker #4: Expanding our commercial footprint remains a top priority. And our sales team continues to expand the pipeline of qualified leads, and successfully convert those leads into systems being shipped to customers.

Speaker #4: While most leads and new customer activity is now being sourced from the US market, we also continue to expand our network in different countries outside of the US, including various European countries such as Romania, Greece, on the heels of attaining the CE mark designation earlier this year.

Erez Meltzer: market, we also continue to expand our network in different countries outside of the U.S., including various European countries such as Romania and Greece, on the heels of attaining the CE Mark designation earlier this year. We are well on our way to meeting our target of 100 systems installed or being deployed by year's end. As previously indicated, revenues are expected to grow in the second half of 2025. We are also advancing our clinical strategy on multiple fronts as we seek to strengthen our position as a transformative force in medical imaging. To support this movement, we are acting on multiple fronts: clinical data and publication collaboration with global academic institutes, hands-on clinical education initiatives, and expanding our QP leaders network. In other words, our commercial rollout involves bringing new technology to the market while also working to change the habits of healthcare providers.

Speaker #4: We are well on our way to meeting our target of 100 systems installed or being deployed by year's end. As previously indicated, revenues are expected to grow in the second half of 2025.

Speaker #4: We are also advancing our clinical strategy on multiple fronts. As we seek to strengthen our position as a transformative force in medical imaging, to support this movement, we are acting on multiple fronts.

Speaker #4: Clinical data and publication collaboration with global academic institutes, hands-on clinical education initiatives, and expanding our acute leaders network. In other words, our commercial rollout involves bringing new technology to the market while also working to change the habits of healthcare providers.

Erez Meltzer: With respect to academic partners supporting our transformative vision, we seek to partner with organizations that are leaders in medical imaging innovation. A prime example is our collaboration with researchers at Duke University Medical Center, which I'll tell you about later in my prepared remarks. Another example can be found in our recent announcement that Keiser University has established a flagship training and demonstration site integrating the Nano-X ARC into the Radiology Technology Graduate Program and enabling hands-on education for future imaging professionals. This is particularly exciting as the radiologists of the future are immersed in Nano-X ARC early in their careers. To raise awareness and drive education on the Nano-X ARC systems, we created the Clinical Education Program.

Speaker #4: With respect to academic partners, supporting our transformative vision, we seek to partner with organizations that are leaders in medical imaging innovation. A prime example in our collaboration with researchers at Duke University Medical Center, which I'll tell you about later in my preferred remarks.

Speaker #4: Another example can be found in our recent announcement that Kaiser University has established a flagship training and demonstration site integrating the NanoX Rx into the radiology technology graduate program, and enabling hands-on education for future imaging professionals.

Speaker #4: This is particularly exciting as the radiologists of the future are immersed in NanoX Rx early in their careers. To raise awareness and drive education on the NanoX Rx systems, we created the Clinical Education Program.

Erez Meltzer: The clinical education specialists who run this program play a central role in delivering structured customer onboarding and ongoing training through site visits, working with referral physicians, training the site personnel through webinars, and tailoring educational plans. We recently launched the Nano-X Academy digital platform tailored for our clients, partners, and our Nano-X network collaborators, offering full product sales and clinical online training. Extending our clinical evidence, the ultimate output of these studies are peer-reviewed publications and white papers and academic publications derived from data generated by studies such as those currently being conducted with the Shamir and Bellingham Medical Centers. These papers demonstrate the diagnostic potential of our cold catheter thrombolysis system and imaging, offering a low radiation cost-effective alternative to CT. Moreover, we are constantly expanding the number of images bank of case studies, which serves to help illustrate the capabilities of the Nano-X ARC system.

Speaker #4: The Clinical Education Specialist will run this program, play a central role delivering structured customer onboarding and ongoing training through site visits, working with a referral physician, training the site personnel through webinars, and tailored educational plans.

Speaker #4: We recently launched the NanoX Academy Digital Platform, tailored for our clients, partners, and our NanoX network collaborators, offering full product sales and clinical online training.

Speaker #4: Expanding our clinical evidence, the ultimate output of these studies are peer-reviewed publications, and white papers, and academic publications derived from data generated by studies such as those currently being conducted with the Shamir and Bellison Medical Centers.

Speaker #4: These papers demonstrate the diagnostic potential of our cold-catted tomosynthesis system in imaging, offering a lower radiation, cost-effective alternative to CT. Moreover, we are constantly expanding the number of images banked.

Speaker #4: Of case studies, which serves to help illustrate the capabilities of the NanoX Rx system. This growing bank of scans also serves as a useful tool for our sales team when in discussions with imaging centers about the utility of the NanoX Rx.

Erez Meltzer: This growing bank of scans also serves as a useful tool for our sales team when in discussions with imaging centers about the utility of the Nano-X ARC. The final leg of our clinical development platform is our QP leaders network. This strategy is evolving into a structured segmented model that includes visionary leaders on our advisory board, clinical collaborators, and show sites. This approach enables us to amplify our clinical voice, holding seminars and webinars, talking about the clinical value in conferences while supporting pre-sales activities and beta testing in targeted specialties such as orthopedic and lung cancer screening. Together, these efforts form a cohesive clinical narrative that supports commercialization, enhances credibility, and drives adoption positioning Nano-X as a category-defining innovator in low-cost 3D digital radiography. With that said, let's now move ahead to our operational highlights and updates. Turning now to our installation progress in key U.S.

Speaker #4: The final leg of our clinical development platform is our acute opinion leaders network. This strategy is evolving into a structured, segmented model that includes visionary leaders on our advisory board, clinical collaborators, and show sites.

Speaker #4: This approach enables us to amplify our clinical voice, holding seminars and webinars, talking about the clinical value in conferences, while supporting pre-sales activities and beta testing in targeted specialties such as orthopedic and lung cancer screening.

Speaker #4: Together, these efforts form a cohesive clinical narrative that supports commercializations and hence credibility and drives adoption positioning NanoX as a category-defining innovator in low-cost 3D digital radiography.

Speaker #4: With that said, let's now move ahead to our operational highlights and updates. Turning now to our installation progress in key US markets, I'm happy to report that our pipeline has grown substantially since our last call.

Erez Meltzer: markets, I'm happy to report that our pipeline has grown substantially since our last call. We continue to install systems in various facilities, primarily standalone, multi-specialty, small, and medium-sized health clinics. These installations appear to be in line with the industry standard sales cycle. This increase in the sales pipeline is due to our investments in sales development representative initiatives, both internal and external, in order to increase the pipeline and conversion. These efforts are clearly resulting in traction with the medical imaging community, and our commercial ramp will remain a primary focus. On another promising note, a growing number of customers with Nano-X ARC units installed are actively referring and scanning patients. Among the notable customers, the Nano-X ARC systems will soon be installed at Keiser University's Sarasota campus for training healthcare professionals, including live demonstrations and incorporation into Keiser University's Radiology Technology Graduate Program.

Speaker #4: We continue to install systems in various facilities, primarily standalone multi-specialty, small and medium-sized health clinics, these installations appear to be in line with the industry standard sales cycle.

Speaker #4: This increase in the sales pipeline is due to our investments in sales, development, representative initiatives, both internal and external, in order to increase the pipeline and conversion.

Speaker #4: These efforts are clearly resulting in traction with the medical imaging community, and our commercial ramp will remain a primary focus. On another promising note, a growing number of customers with NanoX Rx units installed are actively referring and scanning patients.

Speaker #4: Among the notable customers, the NanoX Rx systems will soon be installed at Kaiser University Sarasota campus for training healthcare professionals, including live demonstrations and incorporation into Kaiser University Radiology Technology Graduate Program.

Erez Meltzer: We have also installed units in several imaging chains in California and New York. Of particular note, one of the largest medical imaging chains in the U.S., with hundreds of locations from which we recently generated revenues, has completed the installation of the ARC and began Nano-X ARC application training for its technicians in the last week of July. This is the final step before patient scanning begins, and we expect this chain to start scanning patients in the third quarter. The chain is also preparing to expand Nano-X ARC deployment to a second site within its network. As many of you are aware, we are supplementing our direct sales efforts via channel partnerships in select markets, and in the U.S. distributor partnerships we announced last quarter with ASI and Swiss Re are both fully completed and are off to good starts.

Speaker #4: We have also installed units in several imaging chains in California and New York. Of particular note, one of the largest medical imaging chains in the US, with hundreds of locations, from which we recently generated revenues, has completed installation of the Rx and began NanoX Rx application training for its technicians in the last week of July.

Speaker #4: This is the final step before patient scanning begins, and we expect this chain to start scanning patients in the third quarter. The chain is also preparing to expand NanoX Rx deployment to a second site within its network.

Speaker #4: As many of you are aware, we are supplementing our direct sales efforts via channel partnerships in select markets, and in the US distributor partnerships, we announced last quarter with AHI and SwissRay are both fully completed and are off to good starts.

Erez Meltzer: Additionally, we are in advanced negotiations with large distributors and equipment resellers with a presence throughout the U.S. To support these partnerships, we provide comprehensive training and onboarding, covering everything from system fundamentals and clinical positioning to sales processes and constructing workflows. Our goal is to equip our partners with the tools and knowledge they may need to confidentially re-engage their networks and promote the Nano-X ARC. In spite of our efforts to expand our go-to-market strategy, we're working on developing a future project. Nano-X Imaging Ltd. is developing a mobile imaging solution that integrates the Nano-X ARC system into a commercial vehicle. The mobile Nano-X ARC vehicle will serve as a traveling medical imaging center, visiting clinics to provide high-quality diagnostic imaging without requiring patients to travel to central hospitals.

Speaker #4: Additionally, we are in advanced negotiation with large distributor and equipment reseller with a presence throughout the US. To support these partnerships, we provide comprehensive training and onboarding covering everything from system fundamentals and clinical positioning to sales processes and contracting workflows.

Speaker #4: Our goal is to equip our partners with the tools and knowledge they may need to confidentially re-engage their networks and promote the NanoX Rx.

Speaker #4: As part of our efforts to expand our go-to-market strategy, we're working on developing a future project. NanoX is developing a mobile imaging solution that integrates the NanoX Rx system into a commercial vehicle.

Speaker #4: The mobile NanoX Rx vehicle will serve as a traveling medical imaging center, visiting clinics to provide high-quality diagnostic imaging without requiring patients to travel to central hospitals.

Erez Meltzer: The goal is to expand access to high-quality imaging, improving patient reach, and create new opportunities for service delivery and revenue growth. Turning to our rapidly growing Nano-X AI business, I would like to share details of several product collaborations that we are working on. First, I am pleased to announce that Nano-X AI, a leading provider of advanced AI-powered medical imaging solutions, is collaborating to integrate Nano-X AI's liver and bone products with the provider's advanced visualization software. This new partnership will allow us to extend the benefits of Nano-X AI to a larger customer base, enhancing our collective offering and providing greater value to our users. Another commercial collaboration I can share is between Nano-X AI and a leading company which provides AI-powered health informatics with the aim of empowering breakthroughs in care through imaging.

Speaker #4: The goal is to expand access to high-quality imaging, improving patient reach and creating new opportunities for service delivery and revenue growth. Turning to our rapidly growing NanoX AI business, I'd like to share details of several product collaborations that we are working on.

Speaker #4: First, I'm pleased to announce that NanoX AI, and a leading provider of advanced AI-powered medical imaging solutions, are collaborating to integrate NanoX AI's liver and bone products with the providers, advanced visualization software.

Speaker #4: This new partnership will allow us to extend the benefits of NanoX AI to a larger customer base and hence our collective offering and providing greater value to our users.

Speaker #4: Another commercial collaboration I can share is between NanoX AI and a leading company which provides an AI-powered health informatics with the aim of empowering breakthroughs in care through imaging.

Erez Meltzer: The collaboration leverages advanced AI for operational efficiency and improved clinical outcomes in lung. In another recent example, we have signed an agreement with DeepSea to incorporate cardiac, bone, and liver products onto the DeepSea platform. DeepSea is a multinational company which markets an infrastructure platform, DeepSea OS, designed to unify diverse radiology AI workflows across the enterprise. Having Nano-X AI solutions integrated within this platform will make our products available on a much larger potential customer base. Another collaboration that I would like to share today is with CTIS, a leading provider of health informatics solutions with decades of experience partnering with clinical trials and research stakeholders, particularly in support of NIH projects. Nano-X AI and CTIS have joined forces to pursue two NIH grants aimed at analyzing lung cancer in young VAPS users, which is acknowledged to be a looming health problem in the U.S.

Speaker #4: The collaboration leverages advanced AI for operational efficiency and improved clinical outcomes in length. In another example, we have signed an agreement with DeepSea to incorporate cardiac bone and liver products onto the DeepSea platform, and DeepSea is a multinational company which markets and infrastructure platform.

Speaker #4: DeepSea OS, designed to unify diverse radiology AI workflow across the enterprise. Having NanoX AI solutions integrated within this platform will make our products available on a much larger potential customer base.

Speaker #4: Another collaboration that I'd like to share today is with CTIS. A leading provider of health informatics solutions, with decades of experience partnering with clinical trial and research stakeholders, particularly in support of NIH H projects.

Speaker #4: NanoX AI and CTIS have joined forces to pursue two NIH grants aimed at analyzing gland cancer in young VAX users, which is acknowledged to be a looming health problem in the U.S.

Erez Meltzer: Needless to say, it is encouraging that the growing group of AI platform providers recognizes the value of our technology and is taking the time to integrate the Nano-X AI solutions into their open architecture platform offering. Furthermore, as previously announced, we have finalized the collaboration between Nano-X AI and Ezra Medical, a leading provider of full-body MRI screening services. Initially, the collaboration included Nano-X AI population health solutions integrated to Ezra Medical screening processes at 28 imaging center locations across the United States, which feature AI-powered full-body MRIs and CT scans to screen adults for early detections such as cancer and other serious conditions at their earliest and often most treatable stages. The solution is now integrated into 55 sites with both the number of installations and the volume of scans steadily increasing.

Speaker #4: Needless to say, it is encouraging that the growing group of AI platform providers recognize the value of our technology and are taking the time to integrate the NanoX AI solution into their open architecture platform offering.

Speaker #4: Furthermore, as previously announced, we have finalized the collaboration between NanoX AI and Ezra, a leading provider of full-body MRI screening services. Initially, the collaboration included NanoX AI population health solutions integrated to Ezra Medical screening processes at 28 imaging center locations across the United States, which feature AI-powered full-body MRI and CT scan to screen adults for early detection such as cancer, and other serious conditions at their earliest and often most treatable stages.

Speaker #4: The solution is now integrated into 55 zero sites, with both the number of installations and the volume of scans steadily increasing. To continue our updates for NanoX AI, I'm pleased to report that the leading academic institution has launched a major collaboration with NanoX AI, selecting three of our advanced artificial intelligence applications to power a new population health clinical study targeting asymptomatic individuals aged 70 and above.

Erez Meltzer: To continue our updates for Nano-X AI, I am pleased to report that the leading academic institution has launched a major collaboration with Nano-X AI, selecting three of our advanced artificial intelligence applications to power a new population health clinical study targeting asymptomatic individuals aged 70 and above. This marks another milestone in our ongoing academic collaboration. We continue to partner with leading academic institutions that are leveraging our AI solutions. I can also report that we signed an agreement to provide Nano-X AI solutions to customers of Radiology Diagnostic Group, RDG, a network of specialized senior radiologists offering rapid expert imaging interpretation, valuable second opinions, and detailed explanation of imaging findings. In addition, we recently partnered with a reseller in India to market Nano-X AI solutions, securing two pilot projects and positioning us to expand our footprint in the region. Moreover, we are strengthening our U.S.

Speaker #4: These marks and other milestones in our ongoing academic collaboration demonstrate that we continue to partner with leading academic institutions that are leveraging our AI solution. I can also report that we signed an agreement to provide the NanoX AI solution to customers of the Radiology Diagnostic Group.

Speaker #4: RDG, a network of specialized senior radiologists offering rapid expert imaging interpretation valuable second opinions and detailed explanation of imaging findings. In addition, we recently partnered with a reseller in India to market NanoX AI solution, securing two pilot projects and positioned us to expand our footprint in the region.

Speaker #4: Moreover, we're strengthening our US presence with the expansion of our service and sales infrastructure to support growing market demand. Turning to deployment and other activities outside of the US, we continue to advance along multiple fronts such as key EU markets and where we feel that distributor models is an efficient way to make initial inroads into the various nations of the EU.

Erez Meltzer: presence with the expansion of our service and sales infrastructure to support growing market demand. Turning to deployment and other activities outside of the U.S., we continue to advance along multiple fronts such as the EU market and where we feel that the distributor model is an efficient way to make initial inroads into the various nations of the EU. We accelerated our efforts in the EU after Nanox.ARC was granted the CE Mark designation under EU MDR standards earlier this year. Our team recently met with our partner in Romania, Medis Imaging, which is a leading medical equipment supplier in the country. It was a highly productive engagement, which included a training session for medical sales personnel. The next step is to launch the Nanox.ARC in the annual Radiology Congress in Romania with our new partner at the end of September.

Speaker #4: We accelerated our efforts in the EU after NanoX Rx was granted the CE Mark designation under EU MDR standards earlier this year. Our team recently met with our partner in Romania, Medis Imaging, which is a leading medical equipment supplier in the country.

Speaker #4: It was a highly productive engagement, which included a training session for medical sales personnel. Next step is to launch the NanoX Rx in the annual radiology congress in Romania with our new partner end of September.

Erez Meltzer: The system is ready for shipment for that purpose. This is an exciting step forward in making Nano-X innovation and imaging solutions more accessible across Europe and a promising start bringing next-generation medical imaging technology to Romania. We are currently working with our local partner in Greece to secure the required import permits and are engaged in advanced discussions with additional potential partners in the region. We will continue to focus on the large EU market and expect that our strong business momentum will continue in many other European countries in 2025 and beyond. In Latin America, we are also pursuing the import license to ship two demo units to a distributor in Mexico. I will provide an update when I have something material to share. The company notified the FDA of its intent to submit the TAP2D software module to the FDA through the 510(k) program.

Speaker #4: The system is ready for shipment for that purpose. This is an exciting step forward in making NanoX innovation in imaging solutions more accessible across Europe, and promising start bringing next generation medical imaging technology to Romania.

Speaker #4: We are currently working with our local partner in Greece, to secure the required import permits and are engaging advanced discussions with additional potential partners in the region.

Speaker #4: We will continue to focus on the large EU market and expect that our strong business momentum will continue in many other European countries in 2025 and beyond.

Speaker #4: In Latin America, we're also pursuing the import license to ship to demo units to distributor in New Mexico, and I will provide an update when I have something material to share.

Speaker #4: The company notified the FDA of its intent to submit the TAP2D software module to the FDA through the 510(k) program. TAP2D submission purpose to receive clearance for 2D re-image output for NanoX Rx system, a practical tool for radiologists to enhance their diagnostic confidence as they become more experienced evaluating DPS images.

Erez Meltzer: TAP2D's submission purpose is to receive clearance for a 2D re-image output for the Nanox.ARC system, a practical tool for radiologists to enhance their diagnostic confidence as they become more experienced evaluating DTS images. TAP2D, once cleared, will be part of a wider vision held by Nano-X Imaging Ltd. to alleviate adjunct test use limitations in the future. Moving on to the clinical work that helps support all of our efforts by generating data supporting the use of our solutions. As I mentioned in my introductory remarks, we have several successes to share today, including our collaboration with Keiser University and our ongoing partnership with Duke University Medical Center. We have mentioned the Duke partnership on previous calls, and I am now able to share that this collaboration has resulted in the publication of a new paper that has just been published. In collaboration with Dr.

Speaker #4: TAP2D once cleared will be part of a wider vision held by NanoX to alleviate adjunctive use limitations in the future. Moving on to the clinical work that helps support all of our efforts by generating data supporting the use of our solution.

Speaker #4: As I mentioned in my introductory remarks, we have several successes to share today. Including our collaboration with Kaiser University, and our ongoing partnership with Duke University Center for Virtual Trials.

Speaker #4: We have mentioned the Duke partnership on previous calls, and I'm now able to share that this collaboration has resulted in the publication of a new paper that has just been published.

Speaker #4: In collaboration with Dr. Eshan Stami's team at the Center for Virtual Imaging Trials (CVIT) at Duke, we have seen promising results of the potential values of NanoX Rx digital tomosynthesis that DPS configuration in handling patient motion, as opposed to standard linear configuration DPS system.

Erez Meltzer: Eshan Sami's team at the Center for Virtual Imaging Trials, CVIC at Duke, we have seen promising results of the potential values of Nanox.ARC digital tomosynthesis, the DTS configuration in handling patient motion as opposed to standard linear configuration DTS systems. Patient movement during image acquisition can adversely affect the quality of medical images, and the study shows the benefit that Nanox.ARC configuration has the potential to effectively manage this issue. The study addressed various types of patient motions and showed that the Nanox.ARC configuration is less susceptible to motion-induced artifacts. The data and conclusions of the study have now been published in Biomedical Physics and Engineering Express, making key opinion leaders aware of the value of the Nano-X ARC for surmounting a common imaging challenge. Earlier, I acknowledged the value of bringing medical imaging experts and key opinion leaders onto the Nano-X team.

Speaker #4: Patient movement during image acquisition can adversely affect the quality of medical image, and the study shows that benefits that NanoX Rx configuration has a potential to effectively manage this issue.

Speaker #4: The study addressed various types of patient motions and showed that the NanoX Rx configuration is less susceptible to motion-induced artifacts, the data and conclusions of the study have now been published in Biomedical Physics and Engineering Express, making key opinion leaders aware of the value of the NanoX Rx for cell mounting a common imaging challenge.

Speaker #4: Earlier, I acknowledged the value of bringing medical imaging expert and acute opinion leaders onto the NanoX team. And with that goal in mind, we have recently strengthened our medical advisory board with two new additions.

Erez Meltzer: With that goal in mind, we have recently strengthened our medical advisory board with two new additions. Dr. Lawrence Tannenbaum is an active consultant in the medical imaging space. He is a long-term collaborator with the medical imaging industry and continues to chair the advisory board for imaging OEMs, pharma, and AI concerns. He has interest in developing applications for AI and machine learning, concert agents, MR, CT, and advanced rendering. Dr. Tannenbaum served as Vice President, Chief Technology Officer, and Director of Advanced Imaging at PREVNET Inc. from 2015 to 2024. Second, George Espada is a medical imaging executive with over 25 years of global leadership experience. He has held senior roles at AGFA and Philips, specializing in imaging technology and digital health transformation. He is an expert in bringing innovation to market and scaling customer-centric tech-driven healthcare solutions.

Speaker #4: Dr. Laurence Tannenbaum is an active consultant in the medical imaging space. He is the long-term collaborator with the medical imaging industry and continues to chair advisory boards for imaging OEMs, pharma, and AI concerns.

Speaker #4: He has interest in developing applications for AI and machine learning, concert agents, MR, CT, and advanced rendering. Dr. Tannenbaum served as vice president and chief technology officer and director of advanced imaging at RadNet Inc. from 2015 to 2024.

Speaker #4: Second, George Espada is a medical imaging executive with over 25 years of global leadership experience. He has held senior roles at Agfa and Philips, specializing in imaging technologies and digital health transformation.

Speaker #4: He is an expert in bringing innovation to market and scaling customer-centric, tech-driven healthcare solutions. We are excited to have these talented individuals join the NanoX team as we seek to innovate and change the medical imaging landscape.

Erez Meltzer: We are excited to have these talented individuals join the Nano-X team as we seek to innovate and change the medical imaging landscape. Our key opinion leader strategy is evolving into a structured segmented model that includes visionary leaders, clinical collaborators, and show sites. This approach enables us to amplify our clinical voice while supporting pre-sales activities and beta testing in targeted specialties such as orthopedic and lung cancer screening. Together, these efforts form a cohesive clinical narrative that supports commercialization, enhances credibility, and drives adoption, positioning Nano-X as a category-defining innovator in digital radiology. We continue close collaboration with our OEM partners to ensure the supply of components needed as our ARC deployment continues. Furthermore, we are seeking partnerships with additional providers of unique imaging equipment to develop new and innovative uses of our 3D thrombolysis technology.

Speaker #4: Our acute opinion leaders strategy is evolving into a structure, segmented model that includes visionary leaders, clinical collaborators, and show sites. This approach enables us to amplify our clinical voice while supporting pre-sales activities and beta testing in targeted specialties such as orthopedic and lung cancer screening.

Speaker #4: Together, these efforts form a cohesive clinical narrative that supports commercialization and, hence, credibility and driven adoption, positioning NanoX as a category-defining innovator in digital radiology.

Speaker #4: We continue close collaboration with our OEM partners here at the supply of components needed as our Rx deployment continues. Furthermore, we are seeking partnership with additional providers of unique imaging equipment to develop new and innovative uses of our 3D tomosynthesis technology.

Erez Meltzer: Additionally, in Q2, we met with multiple companies across a handful of application areas we believe our technology provides unique and even disruptive technical benefits. These companies were approached based on an exhaustive review of their applications, market position, our perceived product fit, and, of course, the commercial opportunity potential. Having received several requests for additional data and/or testing the results, we are now reviewing, prioritizing, and formulating responses to outline proposed next steps. New applications and business development efforts take time, but this activity level demonstrates our continuous probing for new use cases and applications for our differentiated imaging technology. I would also like to follow up on my comments regarding VAREX from our last call. We are sourcing glass tubes from VAREX for our units as they are more economical than ceramic and advantageous for our application.

Speaker #4: Additionally, in Q2, we met with multiple companies across a handful of application areas we believe our technology provides unique and even disruptive technical benefits.

Speaker #4: These companies were approached based on exhaustive review of their applications, market position, our perceived product fit, and of course, the commercial opportunity potential. Having received several requests for additional data and/or testing results, we are now reviewing prioritizing and formulating responses outlined proposed next steps.

Speaker #4: New applications and business development efforts take time, but this activity level demonstrates our continuous probing for new use cases and applications for our differentiated imaging technology.

Speaker #4: I'd also like to follow up on my comments regarding VARIT from our last call. We are sourcing glass tubes from VARIT for our units as they are a more economical than ceramic and advantageous for our application.

Erez Meltzer: At this time, I shared that VAREX had delivered tubes for use in the newly developed Nano-X ARC and that Nano-X has technical staff at VAREX's facility for validation and training on multiple source demo units. The ARC team in Israel began system integration of VAREX tubes into the ARC-X earlier this month, and we approached the time to start manufacturing the new ARC-X at scale to meet anticipated customer demand. Also, delivery of the first multi-source demonstrator from VAREX is anticipated later this month. With regard to mass production, we have recently entered into a multi-year volume supply agreement with Fabrinet, a leading global electronics manufacturing services provider, to support the scalable production of Nano-X ARC and Nano-X advanced medical imaging. Under this agreement, Fabrinet will provide contract manufacturing services, including assembly, testing, procurement, and quality control, ensuring reliable and cost-effective product delivery aligned with Nano-X specifications.

Speaker #4: At this time, I shared that VARIT had delivered tubes for use in the newly developed NanoX Rx, and that NanoX has technical staff that VARIT's facility will use for validation and training on multiple source demo units.

Speaker #4: The Rx team in Israel began system integration of VARIT tubes into the Rx earlier this month, and we approached the time to start manufacturing the new Rx at scale to meet anticipated customer demand.

Speaker #4: Also, delivery of the first multi-source demonstrator from VARIT is anticipated later this month. With regard to mass production, we have recently entered into a multi-year volume supply agreement with Fabrinet, a leading global electronics manufacturing services provider, to support the scalable production of NanoX Rx NanoX advanced medical imaging.

Speaker #4: Under this agreement, Fabrinet will provide contract manufacturing services, including assembly, testing, procurement, and quality control, ensuring the reliable and cost-effective product delivery aligned with NanoX's specifications.

Erez Meltzer: The long-term agreement will help to ensure stable and high-quality manufacturing, as well as flexible production and forecasting to support our anticipated growth. In addition to manufacturing services, Fabrinet will support regulatory compliance, quality assurance, and continuous improvement processes to help Nano-X optimize the efficiency of the manufacturing process. We believe this collaboration will drive down our manufacturing costs over time and strengthen our global supply chain, which will in turn support our mission to expand access to innovative, affordable imaging technology worldwide. Thank you, Erez Meltzer. We reported a GAAP net loss for the second quarter of 2025 of $14.7 million, which is the reported period, compared with a net loss of $13.6 million in the second quarter of 2024, which is the comparable period.

Speaker #4: The long-term agreement will help to ensure stable and high-quality manufacturing as well as flexible production and forecasting to support our anticipated growth. In addition to manufacturing services, Fabrinet will support regulatory compliance, quality assurance, and continuous improvement processes to help NanoX optimize the efficiency of the manufacturing process.

Speaker #4: We believe this collaboration will drive down our manufacturing costs over time and strengthen our global supply chain, which will, in turn, support our mission to expand access to innovative, affordable imaging technology worldwide.

Speaker #5: Thank you, Erez. We reported a gap net loss for the second quarter of 2025 of $14.7 million, which is the reported period. This compares with the net loss of $13.6 million in the second quarter of 2024, which is the comparable period.

Erez Meltzer: The increase in net loss was mainly due to the increase of $0.4 million in our gross loss and $1.0 million in our finance expenses net, which was mitigated by a decrease of $0.4 million in our operating expenses. Revenue for the reported period was $3.0 million, and gross loss was $3.2 million on a GAAP basis. Revenue for the comparable period was $2.7 million, and gross loss was $2.9 million on a GAAP basis. Non-GAAP gross loss for the reported period was $0.6 million, as compared to a gross loss of $0.2 million in the comparable period, which represents a gross loss margin of approximately 21% on a non-GAAP basis for the reported period, as compared to a gross loss margin of 9% on a non-GAAP basis in the comparable period.

Speaker #5: The increase in net loss was mainly due to the increase of 0.4 million dollars in August loss and 1.0 million dollars in our finance expense, net, which was mitigated by a decrease of 0.4 million dollars in our operating expenses.

Speaker #5: Revenue for the reported period was $3.0 million, and gross loss was $3.2 million on a GAAP basis. Revenue for the comparable period was $2.7 million, and gross loss was $2.9 million on a GAAP basis.

Speaker #5: Non-GAAP gross loss for the reported period was $0.6 million, compared to a gross loss of $0.2 million in the comparable period. This represents a gross loss margin of approximately 21% on a non-GAAP basis for the reported period, as compared to a gross loss margin of 9% on a non-GAAP basis in the comparable period.

Erez Meltzer: Revenue from the teleradiology services for the reported period was $2.7 million, with a gross profit of $0.5 million on a GAAP basis, as compared to revenue of $2.5 million with a gross profit of $0.4 million on a GAAP basis in the comparable period, which represents a gross profit margin of approximately 18% on a GAAP basis for the reported period, as compared to 15% on a GAAP basis in the comparable period. Non-GAAP gross profit of the company's radiology services for the reported period was $1.0 million, as compared to $0.9 million in the comparable period, which represents a gross profit margin of approximately 38% on a non-GAAP basis for the reported period, as compared to 37% on a non-GAAP basis in the comparable period.

Speaker #5: Revenue from the teleradiology services for the reported period was $2.7 million dollars with a gross profit of 0.5 million dollars on a gap basis.

Speaker #5: As compared to revenue of $2.5 million with a gross profit of $0.4 million on a GAAP basis in the comparable period, which represents a gross profit margin of approximately 18% on a GAAP basis for the reported period.

Speaker #5: As compared to 15% on a gap basis in the comparable period. Non-gap gross profits of the company's teleradiology services for the reported period was $1.0 million dollars.

Speaker #5: As compared to $0.9 million dollars in the comparable period. Which represents a gross profit margin of approximately 38% on a non-gap basis for the reported period.

Speaker #5: As compared to 37% on a non-gap basis in the comparable period. The increase in the company's revenue and gross profit margins from the teleradiology services was mainly attributable to customer retention, increased rates, and increased volume of the company's reading services during the weekdays, weekends, and night shifts.

Erez Meltzer: The increase in the company's revenue and gross profit margins from the teleradiology services was mainly attributable to customer retention, increased rates, and increased volume of the company's reading services during the weekdays, weekends, and night shifts. During the reported period, the company generated revenue through the sale and deployment of its imaging systems and OEM services, which amounted to $221,000 for the reported period, with a gross loss of $1.7 million on a GAAP basis and non-GAAP basis, compared to revenue of $68,000 with a gross loss of $1.3 million on a GAAP basis and non-GAAP basis in the comparable period. The company's revenue from its AI solutions for the reported period was $0.1 million, with a gross loss of $2.0 million on a GAAP basis, compared to revenue of $0.1 million with a gross loss of $2.0 million in the comparable period.

Speaker #5: During the reported period, the company generated revenue through the sale and deployment of its imaging systems and OEM services, which amounted to $221,000. For the reported period, with a gross loss of $1.7 million dollars on a gap basis and non-gap basis compared to revenue of $68,000 with a gross loss of $1.3 million dollars on a gap basis and non-gap basis in the comparable period.

Speaker #5: The company's revenue from its AI solutions for the reported period was $0.1 million dollars. With a gross loss of $2.0 million dollars on a gap basis, compared to revenue of $0.1 million dollars with a gross loss of $2.0 million dollars in the comparable period.

Erez Meltzer: Non-GAAP gross loss of the company's AI solutions for the reported period was $19,000, compared to a gross profit of $57,000 in the comparable period. Research and development expenses net for the reported and comparable period were $4.8 million, reflecting no change between the periods. Nevertheless, there was a decrease of $0.4 million in share-based compensation and $0.3 million in expenses related to our development activities, which were mitigated by an increase of $0.3 million in salaries and wages and a decrease of $0.4 million in grants received. Sales and marketing expenses for the reported period were $1.2 million, compared to $0.8 million in the comparable period, which represents an increase of $0.4 million mainly due to an increase of $0.3 million in salaries and wages and $0.1 million in marketing activities with connection to the commercialization in the U.S. market.

Speaker #5: Non-gap gross loss of the company's AI solutions for the reported period was $19,000 compared to a gross profit of $57,000 in the comparable period.

Speaker #5: Research and development expenses, net for the reported and comparable periods, were $4.8 million, reflecting no change between the periods. Nevertheless, there was a decrease of $0.4 million in share-based compensation and $0.3 million in expenses related to our development activities. This was mitigated by an increase of $0.3 million in salaries and wages, along with a decrease of $0.4 million in grants received.

Speaker #5: Sales and marketing expenses for the reported period were $1.2 million dollars compared to $0.8 million dollars in the comparable period. Which represents an increase of 0.4 million dollars, mainly due to increase of $0.3 million dollars in salaries and wages and $0.1 million dollars in marketing activities with connections to the commercializations in the US market.

Erez Meltzer: General and administrative expenses for the reported period were $5.1 million, compared to $5.9 million in the comparable period. A decrease of $0.8 million was mainly due to a decrease of $0.5 million in share-based compensation, a decrease of $0.5 million in the company's legal expenses, and a decrease of $0.2 million in D&O insurance expenses, which was mitigated by an increase of $0.2 million in salaries and wages. Non-GAAP net loss attributable to ordinary shares for the reported period was $10.9 million, compared to $8.4 million in the comparable period. The increase of $2.5 million was mainly due to an increase of $0.4 million in non-GAAP gross loss, an increase of $1.0 million in the non-GAAP operating expenses, and an increase of $1.0 million in non-GAAP finance expenses. Turning to our balance sheet.

Speaker #5: General and administrative expenses for the reported period were $5.1 million dollars compared to $5.9 million dollars in the comparable period. A decrease of $0.8 million dollars was mainly due to a decrease of $0.5 million dollars in share-based compensation.

Speaker #5: A decrease of $0.5 million dollars in the company's legal expenses. And a decrease of $0.2 million dollars in DNO insurance expenses, which was mitigated by an increase of $0.2 million dollars in salaries and wages.

Speaker #5: Non-gap net loss attributable to ordinary shares for the reported period was $10.9 million dollars. Compared to $8.4 million dollars in the comparable period. The increase of $2.5 million dollars was mainly due to an increase of $0.4 million dollars in non-gap gross loss increase of $1.0 million dollars in the non-gap operating expenses, and an increase of $1.0 million dollars in non-gap financial expenses.

Speaker #5: Turning to our balance sheet. As of June 30th, 2025, we had cash equivalents restricted deposits and marketable securities of approximately $62.6 million. And as $3.3 million dollars in short-term loans from a bank.

Erez Meltzer: As of June 30, 2025, we had cash equivalents, restricted deposits, and marketable securities of approximately $62.6 million and added $3.3 million in short-term loans from a bank. We ended the quarter with a property and equipment net of $46.1 million. As of June 30, 2025 and December 31, 2024, we had approximately 63.9 and 63.8 million shares outstanding, respectively. With that, I will end the call back over to Erez.

Speaker #5: We ended the quarter with a property and equipment net of $46.1 million. As of June 30th, 2025, and December 31st, 2024, we had approximately $63.9 and $63.8 million shares outstanding respectively.

Speaker #5: With that, I will end the call back over to Erez.

Mike Cavanaugh: Thank you all for joining us today's quarterly call. We appreciate the ongoing support from our investors, which is vital in helping us achieve our vision of making medical imaging more accessible worldwide and improving patient outcomes. Nano-X Imaging Ltd. has made progress advancing our AI solutions business on multiple fronts and the deployment of the Nanox.ARC system in Q2. We are on pace to meet our target of 100 units in the deployment by year's end, with revenues expected in the second half of 2025. We are seeing a growing and increasingly robust manufacturing pipeline. We are proud to mark a breakthrough in the European market with the first system ready for shipment and working on enlarging our network. By expanding our system output with a 2D view image, we reaffirm our commitment to continuous program enhancement in line with the evolving market needs.

Speaker #4: Thank you all for joining us today, quarterly call. We appreciate the ongoing support from our investors, which is vital in helping us achieve our vision of making medical imaging more accessible worldwide and improving patient outcomes.

Speaker #4: NanoX has made progress advancing our NanoX AI business on multiple fronts and the deployment of the NanoX Rx system in the second quarter, and we are on pace to meet our target of 100 units in the deployment by year's end, with revenues expected in the second half of 2025.

Speaker #4: We are seeing a growing and increasingly robust manufacturing pipeline, and we are proud to mark a breakthrough in the European market with the first system ready for shipment and working on enlarging our network.

Speaker #4: By expanding our systems output with the 2D view image, we reaffirm our commitment to continuous product enhancement in line with the evolving market needs.

Mike Cavanaugh: Alongside our commercial efforts, we are executing a robust clinical program designed to product-base, supporting the use case of Nanox.ARC technology. We continue to partner with leading academic institutions that are leveraging our AI solutions and engaging key opinion leaders who can partner with Nano-X Imaging Ltd. to drive behavioral change in the medical imaging sector. I am proud of our team's diligent execution of our multifaceted growth strategy. If you would like an update call with the team, please contact our investor relations partners at ICR Healthcare. Thanks again for your time and attention today. We look forward to our next update.

Speaker #4: Alongside our commercial efforts, we are executing a robust clinical program designed to product dating supporting the use case of NanoX Rx technology. We continue to partner with leading academic institutions that are leveraging our AI solution and engaging key opinion leaders who can partner with NanoX to drive behavior change in the medical imaging sector.

Speaker #4: I'm proud of our team's diligent execution of our multi-faceted growth strategy. If you would like an update call with the team, please contact our investor relations partners at ICR Healthcare, thanks again for your time and attention today, and we look forward to our next update.

Operator: Thank you. As a reminder, to ask a question, you will need to press star 101 on your telephone and wait for a name to be announced. To withdraw your question, please press star 101 again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of Ross Osborne from Cantor Fitzgerald. Your line is open.

Speaker #2: Thank you, and as a reminder, to ask a question, you will need to press star one-on-one on your telephone and wait for your name to be announced.

Speaker #2: To withdraw your question, please press star one-on-one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question from Conference Line of Ross Osborne from Cantor Fitzgerald.

Speaker #2: Your line is open.

Ross Osborne: Hi. Good morning, and thanks for taking our questions. Starting off, how many systems were operating during the quarter that resulted in $221,000 in imaging-related revenue?

Speaker #6: Hi, good morning and thanks for taking our questions. so starting off, how many systems were operating during the quarter that resulted in $221,000 in imaging-related revenue?

Mike Cavanaugh: Can you repeat the question?

Speaker #4: Can Can you repeat the question?

Ross Osborne: Yes. How many systems were operating during the quarter, meaning scans were being performed that resulted in the reported $221,000 in imaging-related revenue?

Speaker #6: Yes. How many systems were operating during the quarter? How many scans were performed that resulted in your reported $221,000 in imaging-related revenue?

Mike Cavanaugh: Out of the 100 that we are currently targeting for the end of the year, and the more than 60 that we published last time?

Speaker #4: Out of the 100 that we are currently, targeting for the end of the year and, and the, and the more than 60 that we, published last time?

Ross Osborne: Yes. So, out of those 60 or however many are in the field, how many systems were operating, meaning that patients were being scanned?

Speaker #6: Yes. So, I mean, I guess out of those 60, or however many are in the field, how many systems, were operating? Meaning that patients were being scanned?

Mike Cavanaugh: Right now, more than 20 are operating and scanning patients. All the numbers that we gave last time have increased. So the number of operating systems, the number of systems which are being in the process to install, the number of leads have grown exponentially that we are currently dealing with, namely the deal flow. Right now, as previously indicated, we can say that the 100 that we are talking about are identified. So we know each one of them, almost each one of them, when it is going to be installed and when it is going to be shipped and start to operate.

Speaker #4: okay. So, more right now, more than 20, are operating and, scanning patients. and, all the numbers that we gave last time, have increased. So the number of operating systems, the number of, the, systems which are being in the process to install, the, the number, the number of leads have, grown exponentially that we are currently, dealing with namely the, the deal flow, right now, as previously indicated, we are, we can say that the 100 that we are talking about are identified.

Speaker #4: So we know each one of them, almost each one of them when it's going to be installed and when it's going to be shipped and start to operate.

Ross Osborne: That's great to hear. Looking at those 100 leads, are you expecting any of those to be capex sales, or should we assume they will all be placed via the SaaS model?

Speaker #6: Okay. That's great to hear. And then looking at those 100 leads, are you expecting any of those to be capital sales, or should we assume they will all be placed via the MSAS model?

Mike Cavanaugh: I would say that a part of them will be CapEx.

Speaker #4: I would say that, a part of them will be CapEx. x.

Ross Osborne: Great. Lastly, how many states in the United States are you now approved in for users to operate a system?

Speaker #6: Great. And then lastly, how many states in the United States are you now approved in for users to operate a system?

Mike Cavanaugh: Right now, eight.

Speaker #4: Right now, eight.

Ross Osborne: Thank you.

Speaker #6: Thank you.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Scott Henry from AGP. Your line is open.

Speaker #2: Thank you. One moment for our next question. Our next question from Conference Line of Scott Henry from AGP. Your line is open.

Scott Henry: Thank you, and good morning or afternoon, depending on your location. First, to follow up on the placement of units, could you talk about the current revenue model? Is it, you know, mostly subscriptions versus capex sales in licensing? I am just trying to get an idea of how that model has evolved as the launch has continued. Thank you.

Speaker #7: Thank you, and good morning or afternoon depending on your location. I guess first to follow up on the placement of units, could you talk about the current revenue model?

Speaker #7: Is it, you know, mostly subscriptions? versus CapEx and licensing? Just trying to get an idea of how that model's evolved, as the launch has continued.

Speaker #7: Thank you.

Mike Cavanaugh: Well, you want to go? Go ahead. Ran.

Speaker #4: Okay. Well, you want to go, go ahead. Yeah, run.

Erez Meltzer: As we have discussed in the past, our leading model is the Managed Technology Operating Service model. But as we said also in the past, we do want to do some capex sales. Just to remind you, we said in the past that all the sales in the European countries will be in the capex sales model through our distributors. In the U.S., we expect to be a mixture of capex sales and the Managed Technology Operating Service model. Some other territories will be probably Managed Technology Operating Service or capex sales, depending on the traits of the geographics.

Speaker #7: So, and, so that's the we have discussed in the past, our leading model is the MSAS model, but as we said also, in the past we are, we are, we do, want to do some CapEx sales.

Speaker #7: just to remind you, we, we, we said in the past that all the sales in the European, countries will be in a CapEx sales model.

Speaker #7: Through our distributors. And in the US, we expect to, to be a mixture of CapEx sales, CapEx sales and, MSAS model. Some other territories will be probably MSAS or, or, or CapEx sales depend on the traits of the, of the geographics.

Scott Henry: Okay. Great. Thank you for that color. Looking at the quarterly revenues, the AI solutions line, it moves around a lot, and the numbers are pretty small. That would be the $96,000 reported in Q2. Could you give us a sense of where that number should go going forward? Should we start to see more trends evolve as opposed to a lot of volatility in it currently?

Speaker #7: Okay, great. Thank you for that color. Just looking at the quarterly revenues, the AI solutions line, you know, it moves around a lot and the numbers are pretty small.

Speaker #7: but I'm just, that would be the 96,000 reported into Q. Could you give us a sense of, of where that number should go going forward?

Speaker #7: I mean, should we start to see more, you know, trends evolve as opposed to kind of a lot of volatility in it currently?

Mike Cavanaugh: The answer is yes. From the AI point of view, we have indicated already that 2026 will be break-even in terms of revenues and expenses of the AI. We see a continuous growth in almost each one of the places that the system is located. Bear in mind that with respect to the AI, we have a lot of impact coming from the revenue recognition policy. So although, for example, we do install the systems, we get annual payments right now. From a cash flow point of view, we are by far more than the number that you see in the quarter. The other thing that should be noticed is the fact that, for example, Ezra Medical, the one that was mentioned last time and this time as well, is growing exponentially in terms of the numbers.

Speaker #4: The answer is yes. the, from the AI point of view, we have indicated already that 2026 will be a break-even in terms of revenues and, and expenses of the AI.

Speaker #4: we see, a continuous growth in almost each one of the places that the, they are located. the system. bear in mind that with respect to the AI, we have a lot of, we have a lot of, impact, coming from the revenue recognition policy.

Speaker #4: So though, for example, we do install the systems, we get annual payments. Right now, from a cash flow point of view, we are by far more than the number that you see in the quarter.

Speaker #4: and the, the other thing that, should be noticed is the, the fact that, for example, as remedical, the one that, was mentioned, last time and this time as well, is growing exponentially in terms of the numbers, and, this is, this is going to be part of the, really growing, activities that, that we see the B2B2C.

Mike Cavanaugh: This is going to be part of the really growing activities that we see, the B2B2C. We have a similar agreement that we announced today that was signed that is going to be, from our point of view, even double than the revenues which will be generated from Ezra Medical. With respect to the OEM, it's basically, when it comes, we register, and we only when we ship the numbers. I think that 2026 will probably be more of an indication of the numbers that will show the growth that we're talking about in the agreements that we sign.

Speaker #4: And we have a similar agreement that we announced today, which was signed and is going to be, from our point of view, even double the revenues that will be generated from As Remedical.

Speaker #4: With respect to the OEM, it's basically, it's, when, when it comes, we register and we only when we ship the, the numbers, so I think that the, 2026 will probably be more of, indication of the, numbers that, will show, the growth that we're talking about in the agreements that we signed.

Scott Henry: Okay. Great. Thank you. Then just quickly, on operating expenses, any trends we should expect? I mean, it has been pretty consistent around that kind of $11 million to $12 million a quarter range. Should we expect that to continue going forward? I guess it is probably the 2026 timeframe as well. When would you expect to start seeing the quarterly losses start to decline? I know it is an expensive business model, but at some point, you reach that inflection where the revenues start to outweigh the costs. Just trying to get an idea of when that is. Sorry, there are two questions in there.

Speaker #7: Okay, great. Thank you. and then just quickly, on operating expenses, any trends we should expect, I mean, it's been pretty consistent around that kind of 11 to 12 million a quarter range.

Speaker #7: Should we expect that to continue going forward? And, you know, I, I guess it, it's probably the 2026 timeframe as well. when would you expect to start seeing the quarterly, losses start to decline?

Speaker #7: I know it's an expensive business model, but at some point, you reach that inflection where the revenues start to outweigh the costs. I'm just trying to get an idea of when that is.

Speaker #7: Sorry there's two questions in there.

Erez Meltzer: Yes. With regards to the OpEx itself, you see it is correct that it is maintaining the same level in the past few quarters, and that comes from more efficiencies and more measurements that we do to maintain the level of the expenses and to keep our grant to the minimum. On the other hand, you see an increase of our sales and marketing expenses as a result of the deployment in the U.S. market and the increase in our sales and marketing activities. All in all, it is a trade-off. Once we increase in one place, we do decrease in one place, and we try to maintain the same level of expenses.

Speaker #4: Yes, so, with regards to the, to the OpEx itself, you see there's the, there's the, it's correct that it, it's maintaining the same level in the past few quarters and that comes from more, efficiencies and, more, more measurements that we do to maintain the level of the expenses and to, to, to keep our brand to the minimum.

Speaker #4: on the other hand, you, you, you, you see, an increase of our sales and marketing, expenses as a result of the, of the, of the deployment in the US market and the increase in our, sales and marketing activities.

Speaker #4: all in all, we, it's, it's a trade-off for once we, increase in one place, we, we do decrease in one place and we're trying to maintain the same level of expenses and as, we have said, before and in the past, once you see, especially in the, second half of this year and going forward when you're going to see, that, the revenue alleviating, then you should see, a decrease in the, the operating loss and the burn and etc.

Erez Meltzer: As we have said before and in the past, once you see, especially in the second half of this year and going forward, when you are going to see the revenue alleviating, then you should see a decrease in the operating loss and the burn, etc.

Scott Henry: Okay. Great. Thank you for taking the questions.

Speaker #7: Okay, great. Thank you for taking the questions.

Erez Meltzer: Thank you.

Speaker #4: Thank you.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Jeffrey Cohen from Ladenburg. Your line is open.

Speaker #2: Thank you. One question for one moment for our next question. Our next question from Conference Line of Jeffrey Cohen from Lattenberg. Your line is open.

Jeffrey Cohen: Hello, Erez and Ran. Thanks for taking our questions. Firstly, could you talk about studies and submittals and publications and presentations in the back half of the year, specifically around RSNA and your activities headed into RSNA?

Speaker #8: Oh, hello, Erez and Ryan. Thanks for taking our questions. firstly, could you talk about, studies and submittals and publications and presentations in the back half of the year specifically around, RSNA and your activities headed into RSNA?

Mike Cavanaugh: Towards the RSNA, we are going to submit, not we have submitted already. Actually, we will present the full Nano-X end-to-end solution, and the high-profile industry event for the first time that we are going to be there. We are going to present the Nano-X ARC, including that we are going to show the first installation or the first AI interpretation as part of the Nano-X ARC system. We are planning to, we have submitted one clinical paper that is going to be on the MSK. I mentioned it to you earlier, and when we are talking, I was talking about a few minutes ago in the earnings prepared remarks.

Speaker #4: So, towards the RSNA, we have, we're going to submit, not we have submitted already. Actually, we will present it the, the, full NanoX end-to-end solution, and the high-profile industry event in the, first time that we're going to be there.

Speaker #4: we are going to, to, present the RxX, including the we are going to show the first install the first installation or the first, AI interpretation on the, as part of the RxX, systems.

Speaker #4: And, we are planning to, to, we have, we've submitted one clinical, paper that it's going to be on the MSK, I mentioned it to you earlier in the, in the, and when we are talk with I was talking about, a few minutes ago in the, in the, earnings, preferred remarks.

Mike Cavanaugh: We are going to present at the AI Theater. We are going to have a presentation made by our Chief Medical Officer, and we are going to include our key opinion leaders that will talk in the various stages during the show, especially Dr. Lawrence Tannenbaum.

Speaker #4: and, we are going to, present at the, AI Theater, we're going to have a presentation made by, our chief medical officer, and we are going to, includes our, key opinion leaders, that will talk in the various stages, during the, during the show, especially, Dr. Tannenbaum, and, and, Jeff?

Erez Meltzer: Yep.

Jeffrey Cohen: Yep. Okay. Sorry. I lost you there for a second. Thank you for that, Joe. As a follow-up, Erez Meltzer, could you talk about geography specifically as far as both Nanox.ARC placements as well as the AI solutions into the balance of this year and throughout perhaps 2026 and 2027 as far as countries and regions of geographical presence and where you expect some nice uptake?

Speaker #8: Yep. Okay, sure. I was just watching it for a second. Thank you for that. So, as a follow-up, Erez, could you talk about geography specifically as far as both art placements and the AI solutions in the balance of this year and throughout perhaps 2026 and 2027, as far as countries and regions of geographical presence and where you expect some nice uptake?

Mike Cavanaugh: First of all, we have indicated today in my remarks that the focus will be in the United States, both for the AI solutions and for the Nano-X ARC, as well. This will be a major part of our efforts, including the number of people that are going to be dedicated to the sales and marketing efforts. In addition, we are planning to focus on the EU countries. Right now, we have in our list approximately eight countries. A few of them already signed, and a few of them are in the process of being signed shortly. We are very proud about the fact that less than half a year from the CE Mark, the first system is going to be sent to Europe and installed in Romania at our distributor. Next, probably in the line will be Greece.

Speaker #4: Okay. So first of all, we have indicated today in my remarks that the focus will be in the U.S., both for the AI and for the Rx as well.

Speaker #4: and this will be a major part of our efforts including the, the number of people that are going to be dedicated to the sales, and marketing, efforts.

Speaker #4: in addition, we are, planning to, focus on, on the EU countries. Right now, we have, in our list, approximately eight countries, a few of them already signed and a few of them are in the process of being signed there shortly.

Speaker #4: we are very proud about the fact that less than, half a year, from the CMRX, the first system is going to be sent to, Europe and installed, in Romania at our distributor.

Speaker #4: next probably in the line will be Greece, we are talking about a few like, three or four countries in Europe, and, this will be the second part.

Mike Cavanaugh: We are talking about a few, like three or four countries in Europe, and this will be the second part. In addition, we are going to spend or dedicate efforts, including salespeople and the channel managers, the people that will focus on Mexico. Mexico is the country that we have already in agreement for quite some time, but the permit, the import license, and the local certification takes time. The system is, we are talking about.

Speaker #4: in addition, we are going to, spend or dedicate, efforts including salespeople, and the channel managers, people that, will, focus on Mexico. Mexico is, is, the country that we have already an agreement for quite some time, but the permit, the, the import license and the, and the local, certification takes, takes time.

Speaker #4: the system is, is, we are talking about a few systems that will be sent to, to Mexico, they are ready to be shipped. We are waiting for the, for the permit in the, very near future.

Operator: The fuel system that will be sent to Mexico, they are ready to be shipped. We are waiting for the permit in the very near future. We are negotiating right now for another few countries in Latin America that will be part of it. The one thing that I am saying is that right now, the Far East is not going to be the first priority. Although we have already a distributor that is working on the license in Korea, the rest will wait. We are not going to focus or spend a lot of time on Africa right now until we get more clarity on the economy situation of the countries that we are working with. But in terms of the AI that you asked, right now, the U.S. is the primary market. Europe is second, and Latin America is third.

Speaker #4: we are, negotiating right now for another few countries in, Latin America. That will be part of it. the one thing that I'm, I'm, I'm, I'm saying is that right now, the Far East is going, is, is not going to be, the first priority.

Speaker #4: Although we already have a distributor that is working on the licensing in Korea, the rest will wait. We are not going to focus our spending or spend a lot of time on Africa right now.

Operator: Although we have also, we mentioned that we have already two pilots in India. We have one system already installed in Thailand. This is in addition to what we say. In terms of the OEM, basically, we are working on an international basis. We have one customer in Europe, one big customer, and one bigger customer in the U.S., also in Israel that we have. One other market that I did not mention, but it is part of the efforts, is Israel. We have all the systems in Israel installed in hospitals. Right now, we are planning to install a few of the AI systems similar to the one that we have at Ezra Medical in Israel as well. Sorry for the long answer, but the detailed one.

Operator: Very much appreciated. Thanks for taking our questions.

Operator: Thank you.

Operator: The one thing that, I would say, Jeff, is basically, from the call, what you can see is that we are really playing across the whole court, with the business development in the workers' comp, in the mobile units that we are talking about the future. From our point of view, there are no shortcuts. We go step by step, one after the other. We are really changing the standard of care, and therefore, it's very organized. It's widespread in terms of the areas that we're focused on. We see the results of the way that we operate, this step by step, and no shortcuts. We see the results that are coming time after the other, quarter after quarter. We see the result, especially the efforts that we're making on the clinical side that I was talking about.

Operator: I elaborated today quite a bit because when you want to change the standard of care, you have to dedicate a lot of time to brand awareness, to clinical education, to referring physicians, to explain everything which relates to what's the value, what's the clinical value that you bring to the market and to the customers. We see the results of it.

And, um, and we see the results of the, the way that we operate, um, this step by step and uh, no shortcuts that we see the results that are coming time after the other quarter after quarter, we see the result, specially the efforts that we're making on the, um, on the clinical side that I was talking about, I elaborated today quite a bit because when you want to change the standard of care, you have to dedicate a lot of time to Brand awareness, to clinical education to uh, referring Physicians uh, to explain the um everything which relates to, what's the value. What's the clinical value that you bring to the uh, to the market and to the customers and we see the results?

Of it.

Operator: Thank you. With that, this concludes the question and answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.

Thank you. And with that this includes the question and answer session. Thank you for your participation. In today's conference, this does include the program, you may now disconnect everyone have a great day.