NANO-X IMAGING LTD

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. 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 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 would like now to turn the conference over to Mike Cavanaugh, Investor Relations. Sir, please go ahead.

Good morning, and thank you for joining us today.

Earlier today, Nanox Imaging Limited released financial results for the quarter-ended September 30, 2024. The release is currently available on the investor section of the company's website. With me today are Eris Meltzer, Chief Executive Officer and Acting Chairman, and Ron 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 operations, 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. 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.

Thank you for joining us today for our financial results call. I'm happy to share the progress we have made deploying our innovative Nano-X R technology, as well as further progress with Nano-X AI and the other components of the full Nano-X solutions. Since its commercial deployment at the beginning of this year, there are now 47 units, almost 50, that are in various stages of shipments and deployments for both commercial and clinical use. In the U.S., we are deployed across seven states. Our strategic growth plan is well underway, and we are committed to accelerating our efforts to expand our footprint and enhance our technology. 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, as well as supporting our growing customer base in the installations and ongoing use of Nanook solutions. 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, while also continue to generate trial data supporting the use of the NonoxARC. The positive feedback from healthcare providers and patients alike reinforce our belief in the transformative potential of NonoxARC We are confident that our continued focus on innovation and strategic partnership will drive significant value for our shareholders. We also signed several new deals for NanoX AI solutions, including Oxford University Hospitals, MHA's foundation trust in the UK. I will share more detail on this and other agreements later in my remarks. But I will say that all of the Nanooks are excited to partner with such prestigious institutions. We at Nanooks were also humbled and proud to have Nanooks AI selected for a special mention in Time's Best Inventions of 2024 list. 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. I'm also pleased to report that our U.S.-Saraj tele-radiology business continue to produce meaningful revenue for our organization, generating $2.6 million in revenues, which is quarterly record. And we anticipate its continued growth to complement our business lines. These milestones across all our business segments are a testament to our team's dedication and the growing demand for our cutting-edge medical imaging solutions globally. As we look ahead, we remain confident about the opportunities that lie before us. Our mission to make advanced medical imaging accessible and affordable is more critical than ever, and we are poised to lead the industry with our pioneering solutions. Thank you for continued support and confidence in our vision. I look forward to discussing our financial performance and future plan in more detail. Now let's dive right into some details around our deployments of the NanoX Arc in the US, a highly sophisticated and competitive market. I'm proud of our market penetration and notable job demonstrating the benefits of introducing the nano arc to imaging and medical centers in the U S which are by nature, sophisticated buyers and are exposed to the latest technology the world has to offer. Our accelerating commercial traction demonstrates not only the skill and the tenacity of our sales team, but also the value that the Nano-X Arc brings to healthcare providers. As our customer base increases along with rising awareness of the Nano-X Arc within the medical community, we will add to our team accordingly. As a result, during the quarter, we strengthened our sales team with representative as well as expanded our clinical team along with enhancement to our operational team. As we accelerate our year's commercialization, we doubled our sales and service personnel in the U.S. to support our expanding client base, along with various channel partners. Our team on the ground will be critical to our accelerating rollout, and we will steadily by carefully continue to add to this team. We have an internal target of 30 to 40 sales, service, marketing, and support personnel in place by the end of 2025 in alignment with our commercial progress. Additionally, we are focusing on expanding our network of strategic collaborations and distributors. I mentioned our last call that we have engaged with three prominent imaging groups in the U.S., and during Q3, we continue to gain traction with additional imaging groups. Our sales team continues to actively engage imaging groups across the U.S. in consultative discussions demonstrating the added clinical utility to be gained by adding the NANUX Arc to their practices. It is our aim as more standalone imaging groups adapt our technology that the NANUX Arc will eventually be viewed as a standard equipment alongside traditional X-ray and CT technologies. We are also working with multiple distributors in Europe charged with expanding our footprint in the EU. This is an important, as we anticipate receiving the CE mark designation for the NanoX ARC in the coming months. To further assist our commercial core technology OEM rollout, we have created a demo kit to more effectively educate potential buyers on the next value proposition. 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., and we know we must continue with this momentum and drive even greater adoption going forward. 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, where we have already made commercial inroads, we are waiting for the import license needed to deploy the Nano-X Arc. The system allocated for the Mexican market has been manufactured and tested, and is today ready for shipment, and our partner has already designated the first two sites for the NanoX ARC in Mexico. In Chile, the NanoX ARC is in registration process after a successful site visit in our demo center in the U.S. Also in Europe, we were excited to showcase the NanoX ARC technology at Merica 2024 in Düsseldorf, Germany, recently in November 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. Turning to the regulatory front, we have maintained ongoing communication with both the US FDA and the European regulatory bodies. As you are aware, We have a pending 510K applications to the FDA for the general use of NanoxARC, which could cover general use, including chest. We'll continue to work closely with the FDA and provide any supporting information as needed in a timely manner, including in recent weeks. In the EU, we continue to work with our notified body in the process aimed to securing the CMARC designation for the NanoxARC. Both new designations, when secured, would be, in our view, a considerable expansion for the nanoXR technology and help to make it standard part of medical imaging equipment worldwide and results in a significant increase in our total addressable market. 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. Turning to our clinical update, in Beilingson Hospital, more than 40 patients were already recruited for both the chest trial and the multi-site trial. Together with the staff of Beilingson, we have reviewed more than 25 of the patients' data sets, and the results are impressive. continue the trend we have published in a recent white paper from the first 12 patients. In Ghana, the multicenter trial site is actively recruiting, and the Nano-X Rx system is actively scanning patients, both for the clinical trial as well as part of the clinical practice. Furthermore, Nano-X is in active discussions with a prominent site in Europe for incorporation into the multi-site clinical trial. I'd like now to discuss the Nano-X AI business segment, which is generating revenues and is also gaining commercial traction worldwide. As previously announced during the quarter, we secured a new 510 clearances from the US FDA for Nano-X AI Health CCNG version 2.0, the upgraded version of Nano-X iCardic solution, which has already shown clinical utility in several healthcare systems. by identifying patients at high risk of coronary artery disease and enabling earlier intervention. The solution is also easy to use, being seamlessly integrated with existing picture archiving and communication systems and electronic medical record systems. 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 case, much of which is largely hypothetical at this point. Conversely, the NanoX AI application has been fully developed into a practical tool with significant clinical utilities in many imaging and diagnostic uses. Its advanced algorithm and robust data processing capabilities have been trained on thousands of images and enable healthcare providers to identify health problems in much earlier stage than was previously possible. With that, let's look at some recent NanoX AI being used in the real world. Corwell, 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 Nano-X AI health CCNG cardiac solution, the system will implement the health OST bone solution into its clinical system. The health OST algorithm automatically detects vertebral compression fractures and low bone mineral density to help identify patients at risk of MSK disease with a focus on osteoporosis. without a need for discrete imaging. 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 Nano-X AI solution. As previously reported, the UK National Health Services initiated the DAPT trial to evaluate the use of Nano-X AI bone solution. Through this study, the NHS discovered that it was able to identify six times as many patients with osteoporosis in routine CT scans as they were without Nanox AI. 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 bone solution. ADAPT will continue into Q1 2025, but has already decided to secure the solution plus the new RealPlus bone management tool for three years. 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. We have developed this application for use either as a standalone application or alongside the health health solution. And it is specifically designed to support fractural liaison service clinics in managing the entire patient life cycle more effectively. From initial detection, 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, update letters, and medication management. These are the latest examples of prominent health systems validating the utility of our Nano-X AI solution, and that is not just a concept, but a real value-add solution. We expect many more to come. In other AI business news, Dandelion Health extended its cooperation with Nano-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 ability to leverage Nano-AI products to extract clinical insights from their multi-model longitudinal patient data set of over 10 million patients. During the quarter, we also signed a new reseller agreement with Spinex Medical Inc., a distributor of medical equipment based in Florida. Spinex will distribute the Nanox AI solution in the large Florida market, and we look forward to a productive partnership. 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. We are now working on a pulmonary solution, which is expected to be the first AI application designed specifically for the NanoX Arc. The algorithm aims to automatically identify patients with pulmonary nodules with a goal of identifying chest diseases, especially lung cancer through routine chest scans. The NanoX team will provide timely updates on the development of this exciting new AI solutions as we advance its development. Turning to our OEM efforts, which will help to ensure we have the manufacturing capacity for our expected client base of the future. As mentioned in the past, we finalized the establishment of our technology development centers based in our headquarters. 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. 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. The library includes dozens patents and families for nanochs and nanochs AI. The team at the center is tasked with the ongoing work on nanochs 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. I'd now like to provide an update on our OEM partners 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. 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. VARICS has completed assembly of the first arc tubes with nanox proprietary 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, which will be used in the NANOX arc. Varix is also engaged in development of a multisource module utilizing the aforementioned NANOX emitters. Testing of this unit should commence in Q1 2025. As part of our efforts to raise awareness of Nanook's value in security applications such as screening, a Nanook's team attended the International Security Expert in September in London, where over 300 international exhibitors showcased products and solutions from across the entire security spectrum. 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 solution provider is Assembly, the first prototype tubes utilizing the Nano-X emitter. We are working closely with them and have delivered a Nano-X R demo kit to serve as test bench for prototypes under development. 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. 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. We also delivered in Q3 a NanoX demo kit to ViewWorks, a global X-ray imaging solution provider, for assessment of our technologies. ViewWorks recently completed their assessment, issued their findings, and has since requested to acquire NanoTubes towards specific application testing and development. We are pleased that our demo kit, inclusive of our amateur tube high voltage power supply and software, has already enabled multiple global solution providers to more easily experience our technology. Additionally, The first cube utilizing CSAM chips have been successfully built, and the initial sub of production quality chips is scheduled to commence in Q1 2025. This is another example of the Nano-X team's dedication to security manufacturing agreements to ensure the supply of Nano-X Arc System can meet our expected demand. That concludes my business update, and I would like now to turn the call over to Ran Daniel for a review of our financials. Ran?

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, compared with a net loss of $21.4 million in the third quarter of 2023. We shall refer as 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. 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 GAAP basis for the comparable period. Non-GAAP gross loss for the reported period was $0.2 million, as compared to a non-GAAP gross profit of $0.9 million in their comparable period, which represents a gross loss margin of approximately 6% on a non-GAAP basis for the reported period. as compared to a gross profit margin of 37% on a non-GAAP basis in the comparable period. Revenue from the teleradiology services for the reported period was $2.6 million, with a gross profit of $0.3 million on a GAAP basis in the reported period, which represents a gross profit margin of approximately 13% on a GAAP basis for the reported period. Non-GAAP gross profit of the company's teleradiology service for the reported period was $0.9 million, which represents a gross profit margin of approximately 35% on a non-GAAP basis. Revenue from the teleradiology 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. Non-GAAP gross profits of the company's teleradiology services for the comparable period was $0.8 million, which represents a gross profit margin of approximately 36% on a non-GAAP basis. The increase in the company's revenue from the teleradiology services was mainly attributable to customer retention and increased volume of the company's reading services during the weekday shifts. 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 $0.1 million in the comparable period. The increase was mainly due to a completion of the project of the installations of our AI solutions. During the reported period, the company generated revenues 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. Those revenue stems from the sales and deployment of the NanoXARC systems in the US and the sales of our 2D systems in the rest of the world. Research and development expenses net for the reported period were $4.7 million compared to $6.0 million in the comparable period. 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. Sales and marketing expenses for the reported period were $0.9 million compared to $1.1 million in the comparable period. General and administrative expenses for the reported period were $5.7 million as compared to $5.0 million in the comparable period. The increase of $0.7 million was mainly due to an increase of $0.5 million in share based compensation, increase in our legal expenses in the amount of $0.5 million, which was offset by decreasing the cost of our DNO, liability insurance premium, in the amount of $0.3 million. Our non-GAAP net loss attributable to our ordinary shares for the reported period was $8.7 million. as compared to a non-GAAP net loss of $9.4 million in the comparable period. The decrease of $0.7 million was 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 in our non-GAAP gross profit. Turning to our balance sheet. As of September 30th, 2024, we had cash, cash equivalents, restricted deposits, and marketable securities of approximately $57.1 million. And we had $3.4 million loan from a bank. We ended the third quarter of 2024 with a property and equipment net of $44.7 million. As of September 30th, 2024, we had approximately 58.5 million shares outstanding. With that, I will end the call back over to Erez.

As we conclude our discussion today, I'm filled with confidence about the future of Nano-X, our initial deployment of the Nano-X ARC technology across multiple states in the U.S., 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. The positive feedback from healthcare providers and patients reaffirm their transformative potential for our solution. Coupled with a robust infrastructure we have established this past year, we are well positioned to accelerate our progress in 2025. 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. Our ongoing trials and collaboration 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. 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. Our commitment to providing advanced diagnosis imaging capabilities continues to elevate market needs and utilization, setting new standards in the industry. Moreover, we're constantly working to improve and innovate with solutions designed to meet and exceed market expectations. 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 healthcare. 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.

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. 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 and how many were operating? And as a follow-up, what types of imaging centers are adopting ARC?

I think it was mentioned altogether. The number was 47. I would say the majority of the of the medical centers are imaging centers, small and medium. Another part are imaging, medical imaging chains that we mentioned, and we added a few right now. And we have a few in hospitals, or I would say multifunctional functionality medical centers, and some chiropractors clinics or orthopedic clinics. All together in terms of 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.

Okay. And then looking at placements to date, how has average utilization trended in terms of scans per day or month for ARCA?

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

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 ArcX and then the label extension for full body?

So, 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, All the information, all the answers, all the questions were answered. From our point of view, the indication is positive. And from the FDA point of view, I don't see a reason why it will not be in the short future. In terms of the RKEX, this is something that we are going to submit in a few months, early next year. And the RKEX is anyhow scheduled to be deployed sometime during the next year. I would say probably second half, if everything goes well. From the FDA point of view, right now, the process seems to be in line. Great.

Thanks for taking our questions.

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

Good morning, Iris and Ran. How are you? Good. So a few questions from Maryland, and congrats on the progress. I know you called out Medica that you were at. Could you talk about Europe, generally speaking, how that may play out throughout the first year or two of commercialization after a CE mark? Are you anticipating that that will also become 30 or 40 or 50 commercial folks on the ground across Europe? Or do you imagine that will be more clinical and related to agreements by country as far as distribution?

So if you remember from what we presented as a strategy for the company for sales and distribution, 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 from other countries, new distributors. And based on right now the current indication, I think that 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 in concrete. And once we get the CE, I think we have already a plan or an action plan for the go-to market is already in place, and we're going to start. One other thing which is important with respect to Europe, we have indicated that we are planning to 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 to work in Europe. But in terms of the sales people, our channel management directors, the agreement with the distributors and the contact and the promotion and the marketing, we are already in place and we are

uh running uh fast forward uh bear in mind that another country that is relates to the euce is australia which we have already an agreement over there got it and there's carry that over for a moment to uh apac and latam as far as uh those territories and walk us through um plans there and also uh you know talk about the uh the regulatory and who's carrying that burden and where that's being pursued currently besides Mexico and Chile.

Okay. So LATAM is also 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. in touch with them actually with Mexico just now I I've used another call and It's going to be similar in terms of the efforts that we do there we have a channel manager and that is responsible for this area. The beauty of what we can do is we bring people from Latin America to see the demos that we have in the US in order to take them all the way 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. uh discuss the economic value that we can contribute etc 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 anticipation for that platform for 25. um the uh we'll probably have uh more clarity on 2025 but uh right now uh i think the next the next one on the agenda will be Mexico, and that we're going to get orders once we get the approval. And we have submitted already a request for regulation approvals in a few other countries for the Connect as well.

Perfect. Eris Rayan, thanks for the call. Thank you.

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

Thank you and good afternoon. For starters, when we think about Europe 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.

I cannot say that we don't have any internal thoughts about it and indication what's the split between the U.S. and the rest of the world and especially Europe. But I would say that I will be smarter to indicate or to give an answer to your question once we get the CE approval. And we know that we can move fast forward. In terms of strategy and the go-to-market, we've definitely, 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., We have put the U.S. as a priority, mainly because of the FDA approval and the fact that we can get easier access to customer and customer base and to generate the big deal flow and the pipeline. And so right now, U.S. would be a priority, and Europe will – We'll follow after.

But Scott, in terms of modeling, you should think about it like the way that we did with the US. We have learned more lessons from the past, so you can think about a more efficient post-processing.

Okay, great. And then I noticed revenues for AI solutions 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 strong in third quarter of last year as well. Just trying to get a sense of that line.

Okay, so the first question. I will start, then Ron will continue. The first question is yes. You can anticipate that the number will continue to grow. In terms of seasonality, it usually relates to the budget-related decisions, especially in the U.S., in the public health market. But since part of it is in the U.K. and it's not necessarily related to the U.S. budget processes, then I wouldn't say that it's a seasonality impact. On this run, would you like to add anything else?

Yes, thank you. So as we explained in the PR, this decrease in the revenue of the AI division was due to a completion of a project of where we installed our solution. As for what the second part of your question, we do continue to build up our customer base and backlog, whether it's existing or expanded to the with existing customers. So, you know, it's not related to seasonality and there's no linear expansion over here, but you do see some expansion in the scope of the AI division.

Okay, thank you for that feedback. The final question, which is very much a big-picture question, 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've got 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.

Yes. So without specifying any specific point of time, it's connected for various factors. Of course, first of all, I'm drilling the clinical value of our devices, the commercialization, Of course, it's also related to expanding the clearances for the general use in the U.S. and the CEMARC. So it's really a combination of many things, which we hope that will come to fruition in the near future. Okay.

Thank you for taking the time. I would actually look at it more – not – not as an inflection point, but more of a kind of a milestone that each one of them can make and be a game changer. So one will be the chest and the full body. Another one will be the CE later on, sometimes 2025. the FDA approval of the ARC-X, the ARC-X 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.

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

Thank you.

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.