NANO-X IMAGING LTD

Good day and thank you for standing by. Welcome to the Nano QX Q1 2025 Earnings Conference 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 1 1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mike Cavanaugh of Investor Relations. Please go ahead.

Good morning and thank you for joining us today. Earlier today, Nanox Imaging Limited released financial results for the quarter ended March 31, 2025. The release is currently available on the investor section of the company's websites. With me today are Erez 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 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. 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 administrative expenses, and non-GAAP gross loss per share. With that, I'd now like to turn the call over to Erez Meltzer.

Good morning, everyone. Thank you for taking the time to review NANUPS Imaging's Q1 2025 financial results with us today. I'm pleased to report that we have made progress in our mission to improve medical imaging and enhance patient outcomes. At Nano-X, we pride ourselves on our comprehensive end-to-end solution that supports preventive healthcare and expand access to imaging services. With that goal in mind, we made two strategic acquisitions in 2021. USA-Rad, our teleradiology business, and Zebra Medical Imaging, which is now Nano-X AI, to build out our end-to-end solution around the core Nano-X Arc technology. Integrating AI-powered imaging analysis and a global teleradiology solution with our groundbreaking Nanux R technology takes us one step closer to creating a global connected medical imaging solution with the potential to meaningfully expand the delivery of healthcare. These acquisitions have proven to be good strategic decisions. Since the acquisitions less than four years ago, We have doubled the revenues generated by U.S. ARAD, and at the same time, Nano-X AI has progressed from a pre-revenue business to one that is now generating growing revenue. To highlight another benefit of our end-to-end solution, most of our Nano-X ARAD customers also use our teleradiology services, and this not only provides more effective imaging and diagnosis for providers, and patients, but also increases revenues per customer and creates value for our shareholders. Nano-X AI continues to be a key part of our strategy, driving forward our commitment to integrating artificial intelligence into medical imaging. By leveraging advanced AI capabilities, we aim to streamline workflows support clinical decision-making, and improve efficiency across the imaging ecosystem. Our innovative technologies, including Nanook's Arc and our AI solutions, are gaining traction in the market, and we are excited about the future of our company. Let's review some operational highlights. Beginning with our commercial efforts, we are employing a multi-proven strategy to generate a robust sales pipeline. This is led not only by our direct sales force in the US and in the EU, which calls on imaging providers directly, but also by forming business collaborations which leverage the marketing expertise of our medical imaging companies. We've also begun to engage with distributors worldwide, especially in the EU, which we believe will be an efficient way of potentially penetrating a market comprised of 27 different countries. Complementing our efforts to commercialize Nano-X ARC, we are benefiting from a steady revenue growth driven by our U.S.-Iraq teleradiology business and growing revenues from the sales of AI solutions. We are also supporting these marketing initiatives with marketing campaigns, and I'll touch on these aspects of our commercial plan today. And we've seen an increase in the number of scans performed by our systems, both in the US and worldwide, and we're beginning to see initial revenue streams for Nano-XR customers reflecting that we are gaining traction with our NanoX Arc systems, and customers can see the value in using the system. Our sales pipeline has doubled since January 2025, and our sales team, as of today, is handling over 1,000 leads. Our growing pipeline primarily consists of standalone multi-specialty, small and medium-sized health clinics, not only from the U.S., but also from countries around the world such as Peru, France, Azerbaijan, Hungary, and Poland, and various countries in the U.S. Since its commercial deployment at the beginning of this year, there are now over 60 units that are in various stages of implementation and execution of the deployment plan for commercial, demo, and clinical use. For the operational units, we are achieving an average target of seven scans per day. As we grow, we intend to share more information as our business evolves, and with a promise previously made to provide more details, we will do so today. We are targeting over 100 Arc systems in various stages of deployment by the end of 2025 worldwide. We are happy to now be in a position to share guidance on our commercial progress. But as we are all aware, recent market uncertainties could make our guidance subject to change as the year progresses. Introducing new and innovative technology in the U.S. market is always challenging. However, we are encouraged by the growing base of early adopters that have ordered and are using the NanoX Arc furthermore, the nature of our sales process is clinical, meaning that we've dedicated time and resources to our prospective customers to educate them on the benefits of the NanoX Arc, to their practices, how to use it, and why they should use it, all of which takes time. The US deployment of NanoX Arc is progressing, and we are preparing to ship the first systems to Puerto Rico. From the beginning of the year, we continue to strengthen our sales team with representatives now covering the west, east, and mid-coast regions. Additionally, we continue to expand our clinical team by structuring a continuous professional group along with continual enhancement to our operational team and an efficient interface with our local services partner. As we continue our accelerated U.S. commercializations, we provide all the necessary resources to our sales and services 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 but clearly continue to add to this team. We are making hiring decisions wisely. With 22 U.S. personnel on the ground, we are moving ahead towards our target of 30 to 40 sales, service, marketing, and support personnel in place by the end of 2025, depending on needs and progress. Now let's move on to some specific U.S. market commercial accomplishments and updates. We have made notable progress in forming solid distributor partnerships while continuing to pursue commercialization options. Beyond the engagement we announced last quarter with Advanced Southern Imaging, known as ASI, we have expanded a third-party service and support agreement with Srisway in Bridgewater, New Jersey. Srisway is one of the foremost experts in digital radiography from sales through installation, setup, training, and service. This relationship is off to a good start, and in addition to the support and services agreement, we enter into a non-exclusive distribution agreement for the sales of our system and services to government official public health authorities, and medical institutions in the U.S. Furthermore, we are in negotiation with additional leading national distributors. And finally, we are in the finalization stages of a new project around workers' compensation segments. With over 100 million workers estimated To be covered on the workers' compensation in the U.S., this business segment presents a large potential opportunity for NANOPs, helping to promote the recovery of injured workers by providing imaging services to individuals and insurers. The project is structured to build a network of medical imaging centers, starting with two to three proof of concept sites, with plans to expand from there. If the POC be completed successfully, the collaboration will kick off its commercial binding level. The engagement relies on attractive terms based on contractual rates of 120 to 180 per patient. If achieved, this potential line of business will be part of the NANOX Services Division, which will oversee the program's development. Turning to our efforts in markets outside of the US, we have also made strides in deploying our NanoX Arc systems since our last update call. Our efforts in the EU have been assisted by the recent key milestones of securing the CE mark for the NanoX Arc in February. As of today's call, we are ready to ship NanoX Arc and make our first installations in Europe subject to local approvals by country with our distributors. We are working on deploying systems to Greece and Romania with demo units expected to be shipped to those countries soon, and we are also preparing for demo units to be shipped to Mexico. These are necessary steps to create a commercial presence that we can build from in which of these countries and we will work hard to maintain this momentum. Turning to our AI solutions business, we are seeing tremendous momentum. Trial data has shown that our AI solutions provide strong and proven data, and customer feedback has been overwhelming. We are seeing strong interest in our solutions as they grow and the sales pipeline expands. I believe that our AI business is also getting an added boost from the secular growth of AI in the broader economy, as well as the excitement surrounding AI in general. On our last call, we announced an agreement with Ezra AI. a healthcare artificial intelligence company revolutionizing early detection through full-body MRIs and low-dose chest CT screens. This agreement is moving ahead, and we expect to expand the use of our AI solutions in dozens of Ezra locations throughout the U.S. To continue with our commercial efforts, we have engaged with new AI marketplaces and are currently in negotiation with several companies. These collaborations will help us expand on a global scale, especially in the US, providing a steady stream of new client referrals. We also have three pilot programs running with similar AI platform companies, and we will provide more details once these pilots are completed. As previously mentioned, we continue to cooperate with various prestigious academic centers that are using our AI solutions, including Oxford University Hospitals, NHS Foundation Trust in the UK, which has published trial data on the Health Host Don't solution, and following that secured a three-year contract for Health Host. We are also working with Duke University Hospital in North Carolina, UVA Health in Virginia, UW Health in Wisconsin on various AI-related projects. With respect to regulatory, we have also had some notable regulatory success recently. And in April, we were proud to announce that we have received 510 clearance from the FDA for the Nano-X ARC-X, our updated multi-source digital tomosynthesis systems. Now for an update on our clinical work, which is always going on behind the scenes, and the reason is simple. Clinical validation is one of the key drivers of our future growth. It is imperative to generate fresh clinical data to support the use of a medical device, especially when introducing new technology and to encourage a change to the standard of care. Recognizing this reality, we continue to expand our efforts to implement our clinical trials with the goal of producing a robust database supporting the use of the Nano-X Arc. Regarding our ongoing multi-site trial, we are working on clinical sites collaboration in two new sites in Europe, a leading teaching hospital as well as a large private hospital. We are excited to welcome these two prominent healthcare providers into our trial. I can also announce that the NanoX ArcX system was installed successfully in the Shamir Hospital to be used for a multi-site trial. It is now being used to actively scan patients. Finally, U.S. RAD, our color radiology subsidiary, continues to provide valuable outsourced radiology services to healthcare imaging centers, and most of our NanoXR customers also utilize this service. We have recently signed an agreement with a large U.S.-based company to provide technology services for their self-insurance program, which will further strengthen our position in the market. Our second opinion services is a consumer-oriented platform provided by U.S. ERAD, which connects patients with radiologists and other subspecialty physicians for additional consultation on their medical diagnosis. Second Opinion has integrated all three of NADOC's AI SBA cleared AI solutions and is now generating revenues and interpreting approximately 20 scans per month. We are very active with our OEM partners, particularly to ensure adequate supply of components for the ARC, but also with the intention of finding additional applications for our nanos proprietary technology. One such active engagement is with the U.S. government agency Oak Ridge National Laboratories to develop novel and compact mobile x-ray technologies. We began our partnerships in Q2 of last year and have progress to developing and building prototypes due to be completed this summer. More good news is from Varix, who recently delivered to Israel several tubes for our next generation ARCX. They also passed incoming inspections and are now being assembled into ARCs to complete system level integration. Additionally, we have technical staff at VARICS this month for validation and training on multi-source demonstration units we are producing for future applications development. The Nanooks team is excited to attend the RSNA 2025, which is the annual meeting of the Radiological Society of North America to be held in Chicago from November 30 through December 4. We are especially excited for RSNA 2025 as we will be presenting the full Nano-X end-to-end solution at this high-profile industry event for the first time. Our booth will feature the new Nano-X ArcX cold tomography system and ArcAI teleradiology services and AI solutions. We hope to see some of you there, and we welcome you to stop by the Nano-X booth to meet some members of our team and see the Nanook solutions for yourself. With that, I will close my prepared remarks and turn the call over to Rand Daniel to review our financials. Rand, over to you.