NANO-X IMAGING LTD

We're standing by. Welcome to NADOC's third quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Please note today's conference is being recorded. I will now hand the conference over to your speaker host, Mike Cavanaugh of Investillations. Please go ahead.

Good morning and welcome to the Nanox Imaging third quarter 2025 investor call. Earlier today, Nanox Imaging Limited released financial results for the quarter ending September 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 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, and thank you for joining Nanook's third quarter 2025 earnings goal. While many companies talk about global expansion, Nanook is delivering on it. It is important for us to share not only where we stand today, but also the path we are shaping for 2026 as we work to fulfill our mission and strengthen Nanook as a leading company in the medical imaging industry. We are building a comprehensive medical imaging portfolio focused on increasing revenues and accelerating our path to profitability. Our strategy includes reinforcing our position in the medical AI sector, deepening our foothold in the US healthcare system, and driving meaningful change in the standard of care for medical imaging. we are entering into our second execution phase we plan to further expand the arc deployment and pipeline grow our ai presence through the acquisition of vaso healthcare i.t that is being complete contemplated and explore further opportunities in imaging equipment with potential acquisitions and collaborations. While not every element is fully within our control, we believe it is the right time to share our growth roadmap. For 2026, we are guiding for more than $35 million in revenues. Coming back to 2025, the third quarter brought progress across the organization, including our technology expansion, market scaling, ai infrastructure and operational efficiency today i'm excited to share with you the progress we are making across our strategic three pillars where we are demonstrating real momentum in moving from innovation to commercial scale with a measurable results our first pillar focuses on technology expansion and market scaling where we see momentum in our commercial deployment efforts nanox arc is now entering a growth phase in the retail imaging segment expanding access to advanced imaging and community and outpatient settings where patients need it most we recently signed two new agreements in the czech republic and in france that represents an important milestone in nanox european strategy and follows recent distribution agreement in Greece, Romania, demonstrating the rising demand for NANUC's imaging ecosystem and strengthening its presence across Europe. We are progressing toward our goal of deploying 100 systems worldwide in various stages for clinical, demo, and commercial purposes by the end of 2025. A number of systems are pending final regulatory approval and site preparations. As we scale our current ARC deployment, we are simultaneously working on unlock even greater market potential through the regulatory advancement. In the U.S., we continue to work with the FDA to remove the adjective use limitation, which will allow us to market the NANOX ARC as a standalone modality. Building on both our deployment momentum and anticipated regulatory progress, we are preparing to launch our next generation platform that will further accelerate market penetration. The new NUNX ArcX system, which is to be unveiled at the RS&A annual meeting in less than two weeks, will extend our commercial reach even further with its smaller footprint and simplified installation process. Importantly, it has the flexibility to support additional clinical indication in the future. This enhanced platform is designed specifically to meet the diverse needs of our growing customer base and expand our addressable market significantly. I'd like to highlight another example of how we are working to expand the market for NanoxART. The NanoX ArcX is AI-ready, which means it is compatible with future AI solutions that are currently under development to interpret the Arc images. Ultimately, the clinical output will be an AI-enhanced 3D digital tomosynthesis series with annotated pulmonary nodules, which may be an innovative new tool in the arsenal of lung cancer detection. Our second pillar, AI infrastructure and integration represent the technological heart of our strategy, connecting all the pieces of our ecosystem and driving new revenue opportunities. Artificial intelligence is part of our core value proposition, transforming us from a hardware company into a comprehensive imaging platform. In a key move to advance our AI business, we recently reached an agreement to acquire Vezo Healthcare IT, or VHC IT, a wholly-owned subsidiary of Vezo Corporation, which provides based-of-breed healthcare IT solutions from various technology partners specifically imaging information technology solutions, which support imaging workflow for providers. Nano-X and VHC-IT together create a powerful synergy that connects Nano-X AI's FDA-cleared imaging AI solution with VHC-IT's deep expertise in IT integration, implementation, and customer's operation. This will potentially help us deliver improved customer service to our growing U.S. customer base. This acquisition will align with our ongoing progress on multiple fronts as we expand our network and collaborations with prominent organizations such as CitoSignOn, 3DR, Covera Health, and others. More details are included in my remarks below. Now for an update on our third strategic pillar, which focuses on operational efficiency and sustainable growth. We are building a leaner, more focused organization to support long-term success. Our workers' compensation and retail imaging initiatives continue to grow, creating scan-based revenue opportunities that strengthens our financial foundation. Additionally, we are strengthening our production capabilities through our partnership with FabriNet, preparing to manufacture hundreds of systems. And in parallel, we continue to enhance our tube manufacturing infrastructure as well. Nano-X remain dedicated to accelerating and development of a highly efficient manufacturing operation. Let's now review the progress we made during the quarter in our U.S. deployment progress, which demonstrates the strong commercial traction we are building across multiple channels. Currently, we have a growing number of AHRQ systems actively scanning, showing consistent utilization and clinical adaption. One of the most active sites is an imaging center in California during the third quarter It achieved above-average scanning levels, and the feedback from them has been very positive. Our installation plan provides us with a solid foundation for revenue generation and market presence. Another example is our recent collaboration with Kaiser University, where the Nanooks Arc has been integrated into their radiological technology graduate program. This flagship training and demonstration site is already actively scanning, giving future imaging professionals hands-on experience with Nanook's Arc early in their careers. The full engagement of our business partners and the upcoming retail infrastructure reinforces our confidence in the next year guidance. I also want to let you know that Nanooks will have a strong presence at the Radiology Society of North America, or in short, RSNA, annual meeting, which begins on November 30th in Chicago. There, we will provide more detailed insights into our commercial progress and future strategy. We welcome you to visit our booth if you are attending the event. In a recently announced partnership, we enter into a distribution agreement with X-Ray, a leading Czech distributor of medical imaging system to introduce Nano-X advanced imaging solution to healthcare providers across the Czech Republic. Under the terms of this agreement, X-Ray will lead the market introduction, sale and service of Nano-X medical imaging solution, the Nano-X Arc. Founded in 2013, X-Ray is recognized as the number one supplier of digital radiography system in the Czech Republic, with installations in more than half of the country's 200 healthcare facilities and nationwide sales and service coverage. Additionally, this week, we signed off a distribution agreement in France with Althea France SARL, part of Althea Group. one of Europe's largest independent providers of managed medical technology services. As part of the agreement, Altea France will lead the introduction, distribution, installation, and service of Nanook's medical imaging solution, the Nanook's Arc, across France's public and private healthcare sector. We've stated before that our initial foray into the many European countries will be best served by commercial partnerships such as this, and rest assured, we are working on others. These partnerships are just some of the steps we took in the third quarter to better position us to scale globally and redefine the standard of care through innovation that makes imaging more accessible and efficient. As we scale our current ARC deployment, we are simultaneously working to unlock even greater market potential through regulatory advancement. In the U.S., the company has submitted the TAP2D software module to the FDA through the 510K program. TAP2D is a 2D view image output for the NanoX ARC systems, a practical tool for audiologists to enhance their diagnostic confidence as they become more experienced evaluating digital tomosynthesis images. TEP2D, once cleared, will be part of a wider vision held by NANOPs to alleviate adjunctive use limitation in the future. For perspective, adjunctive use limitation do not apply for the CMARC NANOPs ARC in the European market. This remains one of our top priorities, and we believe that removing adjunctive use limitation will be a critical milestone that may unlock significant new market opportunities for the non-XR platform. This regulatory advancement represents a potential key catalyst for accelerated adoption across healthcare systems. Outside of the U.S., our regulatory efforts continue, but it is worth nothing that these efforts will not be as streamlined as those in the U.S., where FDA clearances allow distribution in the entire country. The rest of the world, by nature, is very fragmented, and we're working with many different countries which have their own processes and regulations. In some instances, regulatory progress is slower than we would like. Nevertheless, we have not stopped pushing ahead. with our regulatory efforts, which continue to be of paramount importance to NANUCs. Now, I'd like to discuss some of the extensive clinical work we are undertaking that supports all of our commercial efforts by generating robust data supporting the use of our solution across multiple clinical applications. I'm happy to report that the Theta Sinai Medical Center is joining a trial of NANOX AI for a new AI model for aortic valve calcification measurement solution that is under development. The solution is intended to quantify the level of aortic valve calcium, which is an important measure of risk for aortic valve disease. We are very pleased to be partnering with Cedars-Sinai, one of the nation's premier medical institutions. We also have begun a collaboration with MDS Wellness, an independent provider of wellness screening programs located in Michigan, with whom we are engaging clinical trials to further assess the clinical value of NANUC's art in the context of lung cancer detection, management, and screening. Last month, We attended the Early Lung Cancer Action Programs, the ECLIP 40th Conference in New York, focused on lung cancer screening and early detection. Among several presentations about the advantages of digital tomosynthesis in the lung cancer screening, Dr. Lorenz Tenenbaum delivered an inspiring talk about how he believes that NANUX-R can be utilized in lung cancer screening and disease management protocols. Outside the U.S., we are excited about recent collaboration with All Up imagery, which is a group of independent radiologists who practice at several sites in La Défense, utilizing high-performance technical facilities. Through this collaboration, The Nano-X ARC system has been deployed at Hôpital Privé Jacques Cartier at Massy, one of the leading private hospital groups in Paris metropolitan area, for a clinical trial designed to further assess the value of the Nano-X ARC in supporting lung cancer detection, management, and screening. This collaboration advanced our clinical evaluation effort in the second largest country in the EU. The data derived from this trial is intended to demonstrate the AHRQ's potential to improve patient outcomes through early screening for lung cancer, which is the deadliest cancer worldwide. We continue to engage with research partners globally to execute a comprehensive clinical evidence generation strategy. I mentioned we will have a large presence at RSNA this year, and I encourage you to visit our booth. All details regarding our participation were published last week. As I mentioned in my opening remarks, we are acquiring Vazo Healthcare IT, or VHC IT, a wholly owned subsidiary of Vazo Corporation, which provides best-of-breed healthcare IT solution from various technology partners specifically imaging information technology solution, which support imaging workflow for providers. Nano-X and VHC-IT together create a powerful synergy that connect Nano-X FDA Clear Imaging AI solutions with VHC-IT's deep expertise in IT integration, implementation, and customer operation. Under the terms of the proposed transaction, Nano will acquire for a total consideration of up to $800,000, consisting of a $200,000 cash payment at closing and up to $600,000 in performance-based earn-out payments over a period of up to two years, contingent upon revenue retention targets with respect to existing customers. This transaction is intended to accelerate deployment of Nano-X AI solution across U.S. healthcare facilities and is expected to be executed and completed within a couple of weeks. Given the rapidly evolving nature of medical imaging technology, it is a challenge to keep up with these changes and informatics and Vaso Healthcare IT serves as a trusted advisor to address and solve these issues. We expect this partnership to accelerate the commercialization of Nanook's AI solutions and help generate scalable recurring revenues. Key synergies include cross-leveraging our organizational shared expertise, active accounts, sales funnels, and product offerings. We believe this acquisition immediately expands the value we deliver to customers and shareholders. We recently entered a commercial partnership with 3DR Labs, one of the largest and most trusted providers of 3D medical imaging post-processing services in the US. 3DR Labs offers Nanox AI SDA cleared imaging solution to its network of more than 1,800 hospitals and imaging centers across the US. The partnership enables 3DR Labs to market and distribute Nanox AI software solution to its client-based network of more than 1,800 hospitals and imaging centers across the US. The agreement positions Nano-X AI technology to support initiatives to drive early disease detection and improving clinical outcomes at a scale across the United States. We are also expanding direct-to-clinician access to Nano-X AI solutions and launching new AI application that have the potential to improve diagnostic accuracy, early detection, and patient management. I'm happy to report that we have closed our first deal under this new direct-to-clinician business model. This approach enables AI at the clinic level, equipping clinicians with value-added tools onsite, and eliminating the need to send patients to other locations for CT scans. I'm particularly excited about our current lineup of advanced AI solutions that analyze routine medical CT scans for any clinical indications to help identify patients with asymptotic or undetected findings correlated with chronic conditions in cardiac, liver, and bone, promoting preventive care management where AI assists clinicians in generating numerical indications for further decision support. We are in the process of developing more innovations to add our offering, and I look forward to announcing new AI developments as they become available. In other AI-related news, we have successfully expanded our existing agreement with Covera Health. This new agreement builds upon our initial collaboration, which focused on retrospective analysis to identify care gaps and support their platform. Our expanded agreement now includes prospective use cases such as opportunistic screening for improved care outcomes. We've also extended our AI footprint to India, having recently signed a distribution agreement with an Indian commercial partner, and we're already running two pilot projects with several

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