NNOX

Ladies and gentlemen, thank you for standing by. Welcome to the Nanox fourth quarter 2025 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 would need to press star one one on your telephone. 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. I would like now to turn the conference over to Mike Cavanaugh, investor relations. Please go ahead.

Good morning, and welcome to the Nano-X Imaging fourth quarter 2025 investor call. Earlier today, Nano-X Imaging Ltd. released financial results for the quarter ending December 31st, 2025. The release is currently available on the investors 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, among 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, Mike, and thank you all for joining us today. In the fourth quarter of 2025, we continued to move the business forward across multiple fronts. While our primary focus remains on expanding our commercial presence, given the current geopolitical situation, we spent a lot of effort during the quarter and the beginning of 2026 to secure our supply chain and strengthen our financial positions as well. On top of that, we made good progress advancing the capabilities of Nanox platform and strengthening the operational infrastructure needed to support our long-term growth. I'm happy to report that we recently entered into an agreement with Howard Technology Solutions, a division of Howard Industries, which has a national reach and an established presence in healthcare and public sector markets, providing us with a scalable framework for expanding Nanox.ARC deployments.

This agreement reflects our confidence in the commercial demand for the Nanox.ARC and our ability to engage partners that can support sustained growth in system placement across the U.S. Under the framework of this agreement, Howard is expected to deploy 300 Nanox.ARC systems over a three-year period, of which 60 are indicated to be deployed in the first year. We also recently announced multiple commercial agreements, which together accumulate to roughly 360 systems over a two- to three-year period. These partnerships expand our reach across imaging centers and specialty care settings where point-of-care imaging is integral to clinical workflow and patient management. This represents a fundamental shift in how we're poised to scale our business from providing our technology to deploying in a meaningful volume, shifting toward a growing CapEx portion.

This is what we see as getting us closer to our indicated revenue of 2026. The framework has the potential to become a meaningful contributor over time and gives us confidence in our ability to convert our robust pipeline into revenue as we move forward. We view this as continued momentum and see ourselves moving closer to an inflection point. We observed a clear shift in the market perception at major radiology conferences, including RSNA in the U.S. and ECR in Europe, where engagement and inbound interest increased meaningfully. We have also taken important steps to strengthen our operational foundation. A key component of this initiative is the restructuring of certain activities in our Korean manufacturing facility. In order to reduce our Korean operation OpEx and cash burn, and improve efficiency while maintaining our supply of Nanox.ARC system components.

We are very pleased with the progress we have made recently, but it is clear that the pace of deployment continues to be influenced by various external processes, including import licenses, construction timeline, and regulatory requirements in certain markets. These steps take time to complete, and while we are not satisfied with the pace and would like to see deployments more faster, this reflects the current operating reality across multiple markets. We expect that many of these processes will be streamlined as additional sites move through the pipeline. Introducing new technology of any kind into a medical environment is always a complex process. It requires alignment across clinical workflow, regulatory frameworks, and operational infrastructure, as well as changing behaviors, which all takes time to achieve. While this can slow down the early stages of deployment, it is also a natural part of introducing innovative technology into the healthcare system.

Turning to revenues, we continue to target $35 million in revenue for the full year of 2026, based on the execution of our current plans. Today, as part of the above-mentioned, we have signed a commercial agreement, which we believe could result in present and future placements of about 400 systems globally over the next two to three years. Of this, approximately 38 systems are currently at various stages of deployment, including demonstration, commercial installation, and systems pending construction and/or regulatory approval. In addition, there are approximately 15 systems that are expected to be installed over the next few months as part of our Nanox Imaging Network.

That said, it is important to emphasize that our current revenue base remains at an early stage, and part of the deployed base is not generating revenues, and the pace of ramp-up will depend primarily on the timing of system activation, their transition into a revenue-generating operation, and the impact of the deployment by the business partners. As more systems move into operation and utilization increases, we expect revenues to build accordingly. However, the exact timing of this ramp may vary, and always depending on the deployment process and progress and other factors. I would like to provide some additional color on the capital restructuring that I referenced in my opening remarks. Recently, we adopted a restructuring plan designed to better align our manufacturing cost structure with our long-term financial model, support our path towards improved gross margin, and align our manufacturing capabilities with the company's strategic priorities.

As part of this plan and our broader cost reduction efforts, we are closing our chip manufacturing line in South Korea, downsizing our fabrication facilities, and shifting production to established international manufacturing partners, including CSEM, a Switzerland-based manufacturing partner. We currently hold substantial emitter inventory, which we plan to work through as we transition to a more efficient outsourced production model, better aligned with current and projected demand. With these actions, we expect to reduce structural and overhead costs, lower our cash burn, and enhance overall operational efficiency. With that overview, let's now take a detailed look at our various business segments, starting with the U.S. deployment. Beyond the hardware agreement, we also recently announced a distribution agreement with Imperial Imaging Technology, a U.S.-based provider of diagnostic imaging solution, to support rollout across the Southeast, particularly in orthopedic-focused environment where there is strong demand for point-of-care imaging.

In addition, we signed agreements with distributors such as Integrity Medical Service Inc., a U.S.-based provider of medical imaging solutions with established relationships across imaging centers and healthcare providers. Elite Surgical Technologies, which serves surgical and specialty care environments. Digital X-Ray Imaging, a leading diagnostic imaging provider with deep regional presence across Arkansas. Most recently, a collaboration with NewRx, an imaging solution provider focused on expanding access to diagnostic imaging and radiology oncology system, all to support the deployment of Nanox.ARC systems. These collaborations aim to strengthen our distribution capability by adding sales resources and on-the-ground presence, expands our geographic coverage, and we believe it has the potential to become a meaningful contributor to revenues over time. In parallel, we remain in active discussion with additional partners, reflecting continued interest from medical equipment providers and likely further expansion of our U.S. pipeline.

Alongside our channel strategy, our U.S. direct sales team on the ground continues to make progress in targeted clinical segments. For example, we recently signed an agreement with Regional Sports Medicine and Orthopedic Group, our first orthopedic practice customer in the United States. This represents an important step into a segment where imaging plays a central role in diagnostic and treatment decisions, and where providers benefit from having imaging available on site. orthopedics remain a high volume and imaging-driven specialty with strong incentives to retain imaging in-house. Additionally, we are advancing the Nanox Imaging Network, a focused initiative designed to build a network-based imaging services model in the U.S. This initiative targets segments such as workers' compensation and specialized care, where reimbursement dynamics may support higher per-scan pricing. We are currently deploying systems already across a number of sites in the U.S.

Under this model, Nanox supports Nanox.ARC system deployment, maintenance, and connectivity while our partners manage site operation and local engagement. While still in the very early stage, we believe this initiative can become an important component of our long-term commercial strategy as utilization increases and the model is further validated. To provide additional context around this shift in engagement, we participated in two major industry events during the period. At RSNA, the world's largest annual radiology conference held in the U.S., our booth featuring live demonstration of the Nanox.ARC system saw strong interest throughout the event. At the European Congress of Radiology, ECR, the largest radiology conference in Europe, we showcased the Nanox.ARC live in Europe for the first time and presented new clinical and AI data. Engagement levels were high, reflecting growing awareness of the system's clinical value and its potential role in routine imaging workflows.

We were also proud to receive the Red Dot Award for Product Design 2026 for the Nanox.ARC X, a prestigious international recognition that reflects the maturity, usability, and clinical readiness of our platform. Let's now turn to work outside of the U.S. As I mentioned earlier regarding ECR, we were also honored to receive the Newcomer Award at ECR 2026, reflecting the growing recognition of Nanox within the European radiology community. In February, Nanox announced an exclusive distribution agreement with Intec SRL, a leading medical distributor in Argentina with more than 35 years of experience. Under this agreement, Intec will oversee marketing, distribution, installation, and support for the Nanox.ARC system and related services across the country. The collaboration intended to support commercial expansion of Nanox.3D digital tomosynthesis technology in Argentina and strengthen the company's presence in Latin America, leveraging Intec's established relationship with healthcare providers and nationwide service capabilities.

Commercialization will be subject to obtaining the required regulatory approval. In Latin America, we are expecting a significant presentation at the International Congress of Radiology, the ICR, in Cartagena, Colombia. The presentation will support clinical discussion around digital tomosynthesis and contribute to engagement with regional clinicians and industry stakeholders. In Europe, we continue to build momentum through partners and additional regional distributors. As a reminder, over the past few quarters, we have announced multiple European collaborations, including France, Romania, Czech Republic, Serbia, alongside additional engagements in other European markets. These collaborations support our ability to navigate local regulatory environments and advance commercialization across multiple countries. Switching gears, we continue to advance the regulatory work that supports our commercial initiatives by expanding the use cases for our solutions and making them accessible in more markets. We have advanced key milestones, including TAP2D clearance in the United States.

As a reminder, TAP2D is a 2D view image output for the Nanox.ARC system, a practical tool for radiologists to enhance their diagnostic confidence as they become more experienced evaluating digital tomosynthesis images, as part of our broader vision to alleviate adjunctive use limitations over time. We also updated the AMAR approval for Nanox.AI in Israel based on our existing CE Mark, enabling use of the systems without adjunctive limitations. Removal of the adjunctive use limitation in the U.S. remains a key regulatory priority. We believe this is an important step that can expand our addressable market and support broader adoption. We're also working to finalize our MDR submission for the Nanox.ARC in Europe, which is currently anticipated in 2026, subject to change based on regulatory priorities. Turning to our AI business, we continue to strengthen our position as a comprehensive platform for the interpretation of medical images.

I'm happy to report that Cedars-Sinai Medical Center in Los Angeles is joining a trial studying the benefits of Nanox.AI aortic valve calcification measurement solution, which is currently under development. We recently conducted an on-site evaluation of the model across approximately 600 retrospective cases. The results exceeded our expectations, with six cases of severe calcification identified and approximately 100 cases showing clinically relevant findings. The Cedars-Sinai team has also expressed interest in collaboration on scientific publication based on these results. We are very pleased to be partnering with Cedars-Sinai, one of the nation's premier medical institutions. Overall, we are seeing growth in Nanox.AI business driven by new customers, expansion of existing agreements, and the integration of Nanox Health IT.

During the quarter, we completed the strategic acquisition of Vaso Healthcare IT, now Nanox Health IT, a healthcare IT provider serving hospitals and healthcare systems across the United States with expertise in healthcare IT implementation. Since completing the acquisition, we have been progressing with integration and alignment while also signing several new customer agreements. We are seeing growth driven by new customers, expansion of existing agreements, and the integration of our health IT capabilities, and we expect this business contribute to revenue from day one. In addition to increasing our footprint in AI, the health IT platform enhance our ability to integrate into clinical workflow, expand customer cases access, and support cross-engagement across our ecosystems. Moreover, the rest of the organization is leveraging the health IT team's expertise and market presence, particularly as it pertains to lead generation for USARAD, Nanox.AI, and Nanox.ARC.

Similar to our regulatory work, clinical validation remains central to our strategy and support our commercial efforts to generating evidence across multiple applications and supporting the use of Nanox solutions. I've already mentioned that Cedars-Sinai Medical Center is joining a trial of Nanox.AI aortic valve calcification measurement solution, and we have accomplished much more recently. In an exciting update from our collaboration with MBS Health & Wellness Clinic, an independent provider of wellness screening programs located in Michigan, we secured our first institutional review board approval for a clinical trial within the U.S. The trial will focus on lung cancer screening of high-risk patients and the applicability of Nanox.ARC technology as it relates to patient population of MBS. As I stated earlier, we attended the European Congress of Radiology, the ECR, where we were able to present several scientific achievements, and I'd like to share some highlights now.

Dr. Noga Shabshin, ARC's Chief Medical Officer, presented our scientific work on lung cancer screening using the Nanox.ARC in our work with our collaborators, in which it was shown that in the majority of patients, the screening outcomes based on the Lung-RADS category, the standard lung cancer screening classification system, was similar when analyzing the CT and digital tomosynthesis. This further strengthens the applicability of the DTS as a potential addition to screening activities ramped up globally. Dr. Orit Wimpfheimer, Senior Medical and Clinical Advisor, presented the proven value of opportunistic screening for CT images using Nanox.AI, three FDA-cleared algorithms, enabling earlier detection of chronic disease.

Our latest imaging addition, tomosynthesis augmented projection, known as TAP2D, was also featured in several scientific posters showing the value of TAP2D image as a supplemental image to DTS in lieu of the traditional 2D X-ray imaging with no additional dose or acquisition time inflicted on the patient. In addition, at the recently concluded World Congress on Osteoporosis, Osteoarthritis and Musculoskeletal Diseases, Nanox.AI bone solution were featured, including updates from our ADOPT trial conducted across four NHS trusts and led by the University of Oxford, as well as initial observations from our collaboration with the Hellenic Air Force. The data will show once more the clinical and economic benefits of AI-based opportunistic screening for routine CT exams.

The validation abstract comparing the accuracy of the CCS 2.2 compared with cardiology expert reader as part of AI informed trial was accepted as a poster at the Society of Cardiovascular Computed Tomography Annual Scientific Meeting in the coming July. Outside of the U.S., we are excited about our recent collaboration with Meir Medical Center in Israel, which is part of the Clalit, Israel's largest health services organization, where we have an exciting relationship. The Nanox.ARC has been deployed in the emergency department and will be utilized by orthopedic staff as part of the clinical workflow to help establish the digital tomosynthesis as an effective tool with lower dose and more efficient workflow than today's CT-based workflow. This is the first time that Nanox.ARC is installed within an emergency department in a major hospital and represent confidence our collaboration has in Nanox solution.

I'll now provide an update on our robust OEM relationship. Nanox continued to advance its technology pipeline with ongoing development of next-generation field emission X-ray sources and tube architecture. Recent progress includes improvement in an emitter design and fabrication processes aimed to extending chip lifetime and enhancing performance, development of microfocus and multi-zone emitter configuration for applications such as semiconductor inspection and HealthXRS, and continued advancement of the Nanox MDX, the multi-source tube platform enabling new system architecture for 3D imaging. The company is also progressing in multiple OEM collaboration and pilot projects across industrial, semiconductor, and security markets, supporting the expansion of Nanox technology into new applications. We recently received a purchase order from a leading semiconductor equipment manufacturer for developmental emitters, supporting exact inspection application at the leading edge of next-generation IC technologies.

With Oak Ridge National Laboratory, a U.S. government agency, a second round of prototype is currently in progress and in process with preparations underway as required materials become available. In parallel, one global imaging component supplier has agreed to evaluate our microfocus emitter technology and is preparing dedicated test infrastructure to support that work. Another major OEM continues to advance prototype development based on our emitter design, with validation activities ongoing. Overall, these engagements reflect continued momentum across multiple development tracks as we work to validate our technology with established industry partners. Before I move on, I'd like to briefly note that despite the current geopolitical situation in the Middle East, we have not experienced any material disruption to our operation, and our business continues to operate as planned. With that, I'll turn the call over to Ran to review our financials. Ran, over to you.

Thank you, Erez. We reported a GAAP net loss for the fourth quarter of 2025 of $33.4 million, which is the reported period, compared with a net loss of $14.1 million in the fourth quarter of 2024, which is the comparable period. The increase was largely due to an impairment of long-lived assets in the amount of $17.5 million, which was recorded during the reported period as a result of the company's restructuring plan that is intended to better align the company's manufacturing activities. The increase was also due to an increase of $0.7 million in the gross loss, increase of $1.1 million in the sales and marketing expenses, and increase of $1.4 million in other expenses. Revenue for the reported period was $3.7 million, compared to revenue of $3.0 million in the comparable period.

The increase of $0.7 million, increase of 23% in the revenues, stems from an increase of $0.3 million in our revenue from the teleradiology services and an increase of $0.4 million in our revenue due to the consolidations of Nanox Health IT Inc. since the completion of its acquisition on November 19th, 2025. Gross loss for the reported period was $3.6 million on a GAAP basis, compared to a gross loss of $2.9 million in the comparable period on a GAAP basis. Non-GAAP gross loss for the reported period was $1.2 million as compared to a gross loss of $0.3 million in the comparable period, which represents a gross loss margins of approximately 32% 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.

Revenue from the teleradiology services for the reported period was $3.1 million, compared to revenue of $2.8 million in the comparable period. The company's GAAP gross profit from the teleradiology services for the reported period was $0.9 million, gross profit margins of approximately 27%, compared to $0.6 million, gross profit margin of approximately 21% in the comparable period. Non-GAAP gross profit of the company's teleradiology services for the reported period was $1.5 million, gross profit margins of approximately 48%, compared to a non-GAAP gross profit of $1.1 million, gross profit margin of approximately 41% in the comparable period. The increase in the company's revenue and gross profit from the teleradiology services was mainly attributable to customer retention, increased rates, and increased volume of the company's reading services.

During the reported period, the company generated revenue through the sales and deployment of its imaging systems, which amounted to $49,000 for the reported period, with a gross loss of $2.6 million on a GAAP and non-GAAP basis, compared to a revenue of $136,000, with a gross loss of $1.5 million on a GAAP and non-GAAP basis in the comparable period. The revenue stems from the deployment of our Nanox Health systems and the sales of our OEM services in the U.S. The company's revenue from its AI and software solutions for the reported period was $0.5 million on a GAAP and non-GAAP basis, compared to revenue of $0.1 million on a GAAP and non-GAAP basis in the comparable period. Included in the reported period is revenue of $0.4 million, which was generated by Nanox Health IT Inc. since the completions of its acquisitions on November 19th, 2025.

The company's gross loss from its AI and software solutions for the reported period was $1.9 million on a GAAP basis, compared to a gross loss of $2.0 million on a GAAP basis in the comparable period. Non-GAAP gross profit of the company's AI and software solutions for the reported period was $0.1 million, compared to $6,000 in the comparable period. Research and development expenses net for the reported period were $4.8 million, compared to $5.4 million in the comparable period, which represents a decrease of $0.6 million. The decrease was mainly due to a decrease of $0.2 million in share-based compensation, $0.6 million in grants received net, and $0.4 million in expenses related to our research and development activities to maintain our current and future product. The decrease was mitigated by an increase of $0.5 million in salaries and wages.

Sales and marketing expenses for the reported period were $2.0 million, compared to $0.9 million in the comparable period, which represents an increase of $1.1 million, mainly due to an increase of $0.7 million in salaries and wages due to our increased efforts to commercialization of our products in the U.S. market, and $0.4 million in sales and marketing activities, mainly due to expenses that are related to the RSNA conference, which took place during the fourth quarter of 2025. General and administrative expenses for the reported period were $6.0 million, compared to $5.8 million in the comparable period. The increase of $0.2 million was mainly due to expenses that are related to the acquisitions of Nanox Health IT Inc. Other expenses, net for the reported period were $1.4 million, largely due to the non-cash settlement with the shareholder.

Recently, we initiated a restructuring plan that is intended to better align our manufacturing and overhead cost structure and to support gross profit margin improvement to the company's long-term financial model and the company's strategic priorities. As part of this restructuring plan, the company will shift its manufacturing operations from the company-owned facilities into a fully outsourced model. The plan will reduce restructuring and overhead costs by downsizing the manufacturing facilities located in the company's fab in South Korea and transfer the production to other international manufacturers such as the Swiss chip maker, CSEM. The restructuring plan is expected to be largely completed in fiscal year 2026 and resulting in the company recording a non-cash impairment of its long-lived assets of approximately $17.5 million in fiscal year 2025, a cost that is related to the impairment of its machinery and equipment of the company's chip manufacturing line.

We continue to evaluate the overall compositions of the restructuring-related charges, including potential additional cash components. The remaining restructuring-related costs, if any, are expected to be incurred over the course of the implementation of the restructuring plan. The estimates of the total charges and the timing thereof are subject to a number of assumptions and uncertainties, and actual results may differ materially. Non-GAAP net loss attributable to ordinary shares for the reported period was $11.2 million, compared to $10 million in the comparable period. The increase of $1.2 million in the non-GAAP net loss attributable to ordinary shares was mainly due to an increase of $0.9 million in the non-GAAP gross loss and the increase of $1.4 million in the non-GAAP operating expenses. Please refer to the non-GAAP adjustments which were included in the financial portion of the PR that we have issued today. Turning to our balance sheet.

As of December 31st, 2025, we had cash equivalents, and marketable securities of approximately $60 million, compared to $55.5 million as of September 30th, 2025. We also had a $3.1 million short-term loan from a bank as of December 31st, 2025. We ended the quarter with property and equipment, net of $29.7 million, compared to $45.4 million as of December 31st, 2024. The decrease was mainly attributable to an impairment of approximately $17.5 million that was recorded in the reported period as a result of the above-mentioned impairment related to the machinery and equipment of the company's Korean fab. We had approximately 69.6 and 63.8 million shares outstanding as of December 31st, 2025, and December 31st, 2024, respectively. During the fourth quarter of 2025, the company sold approximately 4.2 million ordinary shares, which generated net proceeds of approximately $15.5 million, net of issuance expenses.

With that, I will hand the call back over to Erez.

Thank you, Ran. Before closing, I'd like to address the leadership update. After five years with the company, our great Chief Financial Officer, Ran Daniel, decided to step down from his role to explore other opportunities. During his tenure, Ran played an important role in strengthening our financial discipline, supporting our transition to a public company, in building the financial and reporting infrastructure needed to support our long-term strategy. He also led successful capital raises that strengthened our balance sheet. In addition to leading our finance organization, Ran also oversaw our investor relations activity and worked closely with investors and analysts throughout his tenure. We are grateful for his many contributions and wish him continued success in his future endeavors. Ran will remain with the company to support a smooth transition period.

As we look ahead, we are pleased to announce that Guy Nathanzon will be joining Nanox as Chief Financial Officer. Guy brings extensive financial leadership experience with the U.S. publicly traded companies, including several senior CFO and COO roles in the med tech companies, as well as his deep experience supporting growth, scale, and global operations. His background includes capital raising, capital markets, both sell-side and buy-side, M&A, and global financial operations. Guy also brings deep medical technology leadership experience with senior CFO and COO at multiple med tech companies during periods of commercialization, scale-up, and global expansion. Guy also brings medical technology experience, having served in senior leadership roles during periods of commercialization and expansion. He's previously served as a CFO of Scopio Labs, a medical technology company developing AI-based diagnostic platform, and most recently was CFO of Valens Semiconductor and a New York Stock Exchange-listed company.

We are pleased to welcome Guy to the leadership team. He will join the company and will assume the role of Chief Financial Officer as of August 1st. As we look back to this quarter and ahead to the rest of 2026, I want to leave you with a few takeaways that underscore the momentum we are building at Nanox. First, our commercial progress in the United States has been good. We have established a strong foundation with various partners expected to place systems over the next two to three years, including significant agreements with Howard Industries, Imperial Imaging Technology, Integrity Medical Service Inc., and others.

This represents a fundamental shift in how we are poised to scale our business from providing our technology to deploying in a meaningful volume, shifting toward a growing CapEx portion. This is what we believe will get us closer to our indicated revenues of 2026.

Second, our strategic acquisition of Vaso Healthcare IT, now operating as Nanox Health IT, has immediately strengthened our capabilities and revenue base. The recognition we received at RSNA and ECR, including the Newcomer Award at ECR, reflects the broader truth. Nanox is now recognized as a credible player, contributing to conversation around the future standard of care in the medical imaging. That perception shift is translating into deeper market engagement and robust pipeline.

The foundation we have built positions us well to convert our pipeline into revenues and deliver on our growth objectives. We are excited about what lies ahead and remain committed to executing on our vision of democratizing medical imaging globally. Thank you all for your continued support, and we look forward to updating you on our progress in the quarters ahead. Operators, please open the call for questions.

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. The first question comes from Jeffrey Cohen with Ladenburg Thalmann & Co. Inc. Your line is open.

Hey, good morning, Erez and Ran. Just a couple questions I'd like you to dive in a little further. Could you talk a little bit about your footprint and commercial organization, mainly related in the U.S. as far as teams that are direct sales organizations, and talk a little bit about how that works with your distribution channels in the U.S?

Okay. We have, in the U.S., what we call Nanox Impact. We have five direct salespeople with the Director of National Sales that is coming from one of the biggest distributors in the country with a lot of experience. In addition, we have, what we call the clinical education specialist, where their role and assignment is to go to the places that we have systems installed, train the people, trying to get better understanding of these referring physicians who works with this site. Their job is to build awareness around the site and what's the clinical value that can be added for other referring physicians that will do that. We have a few administrative and operational responsibilities, including tech people who are doing the part of the installations. In addition, we have people who are doing the SDR, like they're building the deal flow.

We are in the process of adding another two people who will be responsible for the channel management. Because right now, since we have almost 10 business partners, one of them is, as mentioned today, is huge. This will require a lot of coordination, a lot of support. We have an onboarding process for each one of them, which is very methodological, that we do in the process to when we sign an agreement, the training process, the demo unit. For example, we have a few of the business partners that we lately signed. We have tens of meetings that already were arranged with the potential customers in order to expand and to fulfill what they are committed to in this agreement.

Okay, got it. As a follow-up, could you talk a little bit about the South Korean facility and the impairment? What should we expect for 2026? Do you anticipate further restructuring and impairment, and will that be in the front half of the year versus the back half of the year? Could you guesstimate for us if that will be cash or non-cash?

Besides the impairment expense that we recorded in 2025, which was the impairment of mainly whatever is related to the chip line in the Korean fab, which was amounted to $17.5 million in the non-cash expense. We do anticipate relatively minor expenses which are related to more efficiency steps that we're going to enact. We don't anticipate that it will be a significant amount of dollars. That's actually going probably to be a cash expense, but as I said, it's not going to be material.

Bear in mind that this fab was built during COVID, when semiconductors were not necessarily available. Right now we are rationalizing the situation where we have a sustainable supplier with a much lower cost of the chips that we do. The fab in Korea will be converted to more of a R&D center for the ceramic tubes that we are developing there and might be even another product that is going to come out from this region.

Perfect. Thanks for taking our questions.

Thank you. As a reminder to ask a question, please press star one one on your telephone. Our next question will come from Scott Henry with A.G.P. Your line is open.

Thank you, and good morning or afternoon, depending on your location. First, Ran, it was a pleasure working with you. I wish you the best in your future endeavors.

Thanks. Don't kill me yet. I have another earnings call.

Okay, fantastic.

In your conference.

Excellent. Thank you. I guess the first question, when we look at the guidance for 2026, the $35 million, which is strong growth, can you talk about the cadence throughout the year? Q1 is over, so when will we see that inflection point to reach those impressive numbers? Thank you.

Okay. I think that you will see most of it towards the second half of 2026. I don't think that they should expect a big ramp in the revenue in Q1, but I think once we will be able to materialize all the opportunities in terms of the distribution agreements that we just announced, you may see a ramp-up in the second half of 2026.

Okay, thanks.

Scott, most of the agreements were signed beginning of about a month or two after the RSNA, and part of them also after the ECR. Most of them, most of the business partners agreements, which are going to shift our revenues to be coming more from topics rather than only the USARAD, have been signed in the last few weeks, let's say a month. Right now, what we will do, we will start the onboarding the process, and the ramp-up will be hopefully exponential, but as Ran said, towards the second part of the year.

Okay. I appreciate that color. Just from a modeling perspective, the teleradiology services, which at this point is still your largest revenue driver. For 2026, should we be thinking about low double-digit growth? Is it still on that trajectory?

I don't think that we refer to the specific segment in our guidance, so I don't want to make any specific attribution to any specific line of business or segment. Generally saying, I think that your assumption will be-

Not far from real.

Not far from real. Yes.

Okay. Thank you.

That's not an official answer.

When we look at spending for Q4, removing the one-time items, it was a little elevated from Q3. With the restructuring, would you think that it should start declining from Q4 levels going forward? How should we think about those trends in spending?

You mean, if you look at the non-GAAP, of course, which adds on the impairment expenses and the other expenses mainly related to the settlement with the shareholder. You see an increase in G&A, which is, I would call it, a seasonal increase mainly because of audit and all kind of other items, and expenses that were related to the acquisition of Vaso Healthcare, which is one-time in nature. On the other hand, you also see an increase in the sales and marketing, which are, some of it is related to the commercialization-wide efforts in the U.S. market. That's actually something that is not one-time item in nature, but on the other hand, and if we will participate again in the RSNA conference, that really depends on the questions of the. We participate in the RSNA in the fourth quarter.

As you remember, that cost money, unfortunately. If we participate again, so then it will be recurring. If we won't, it won't.

Okay, great. That should do it for me. Thank you for taking the questions.

Thank you so much.

Thank you so much.

Thank you. This does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Good day, and thank you for standing by. Welcome to Nano-X Imaging Ltd.'s Third Quarter 2025 Earnings Conference Call. At this time, participants are in a listen-only mode. After the speakers' 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. Please note today's conference is being recorded. I will now hand the conference over to your speaker host, Mike Cavanaugh, of Investor Relations. Please go ahead.

Good morning, and welcome to the Nano-X Imaging Ltd. Third Quarter 2025 Investor Call. Earlier today, Nano-X Imaging Ltd. released financial results for the quarter ending September 30, 2025. The release is currently available on the Investors section of the company's website. With me today are Erez Meltzer, Chief Executive 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. 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 would now like to turn the call over to Erez Meltzer. Good morning, everyone. And thank you for joining Nano-X Imaging Ltd.'s Third Quarter 2025 Earnings Call.

While many companies talk about global expansion, Nano-X Imaging Ltd. 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 Nano-X Imaging Ltd. 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 deployments and pipeline, grow our AI presence through the acquisition of Vaso Healthcare IT that is being 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 am 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 measurable results. Our first pillar focuses on technology expansion and market scaling, where we see momentum in our commercial deployment efforts. Nano-X ARC is now entering a growth phase in the retail imaging segment, expanding access to advanced imaging in 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 Nano-X Imaging Ltd.'s European strategy and follows recent distribution agreements in Greece and Romania, demonstrating the rising demand for Nano-X Imaging Ltd.'s ecosystem and strengthening its presence across Europe. We are progressing toward our goal of 100 systems worldwide in various stages for clinical demo and commercial purposes by the end of 2025. A number of systems are pending regulatory approval and site preparations. As we scale our current ARC deployment, we are simultaneously working on unlocking even greater market potential through regulatory advancement. In the US, we continue to work with the FDA to remove the adjective use limitation, which will allow us to market the Nano-X 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 Nano-X ArcX system, which is to be unveiled at the RSNA 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 indications 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 would like to highlight another example of how we are working to expand the market for Nano-X ARC. The Nano-X ARC x 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 Vaso Healthcare IT or VHC IT, a wholly-owned subsidiary of Vaso Corporation, which provides best-of-breed healthcare IT solutions from various technology partners. Specifically, imaging information technology solutions, which support imaging workflow for providers. Nano-X Imaging Ltd. and VHC IT together create a powerful synergy that connects Nano-X Imaging Ltd.'s FDA-cleared imaging AI solution with VHC IT's deep expertise in IT integration, implementation, and customer operation. This will potentially help us deliver improved customer service to our growing US 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 Cedars-Sinai, 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 strengthen our financial foundation. Additionally, we are strengthening our production capabilities through our partnership with Fabrinet, preparing to manufacture hundreds of systems. In parallel, we continue to enhance our tube manufacturing infrastructure as well. Nano-X Imaging Ltd. remains dedicated to accelerating the development of a highly efficient manufacturing operation. Let's now review the progress we made during the quarter in our US deployment progress, which demonstrates the strong commercial traction we are building across multiple channels. Currently, we have a growing number of ARC systems actively scanning, showing consistent utilization and clinical adaptation. 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 Nano-X 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 Nano-X ARC early in their careers. The full engagement of our business partners and the upcoming retail infrastructure reinforces our confidence in the next year's guidance. I also want to let you know that Nano-X Imaging Ltd. will have a strong presence at the Radiology Society of North America, or in short RSNA, annual meeting which begins on November 30 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 entered into a distribution agreement with X-ray, a leading Czech distributor of medical imaging systems, to introduce Nano-X Imaging Ltd.'s advanced imaging solution to healthcare providers across The Czech Republic. Under the terms of this agreement, X-ray will lead the market sale and service of Nano-X Imaging Ltd.'s Medical Imaging Solution, the Nano-X ARC. Founded in 2013, X-ray is recognized as the number one supplier of digital radiography systems 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 Alphea France SARL, part of Altair 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 Nano-X Imaging Ltd.'s Medical Imaging solution, the Nano-X ARC, across France's public and private healthcare sector. We have stated before that our initial foray into 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 investment. In the US, the company has submitted the TAP 2D software module to the FDA through the 510(k) program. TAP 2D is a 2D view image output for the Nano-X ARC systems, a practical tool for radiologists to enhance their diagnostic confidence as they become more experienced evaluating digital tomosynthesis images. TAP 2D, once cleared, will be part of a wider vision held by Nano-X Imaging Ltd. to alleviate adjunctive use limitations in the future. For perspective, use limitations do not apply for the CE Mark, Nano-X ARC in the European market. This remains one of our top priorities, and we believe that removing the adjunctive use limitation will be a critical milestone that may unlock significant new market opportunities for the Nano-X ARC platform. This regulatory advancement represents a potential key catalyst for accelerated adoption across healthcare systems. Outside of the US, our regulatory efforts continue, but it is worth noting that these efforts will not be as streamlined as those in the US, where FDA clearances allow distribution in the entire country. The rest of the world by nature is very fragmented, and we are 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 Nano-X Imaging Ltd. Now I would 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 the

Cedars-Sinai Medical Center is joining the trial of Nano-X Imaging Ltd.'s 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 in clinical trials to further assess the clinical value of Nano-X ARC in the context of lung cancer detection, management, and screening. Last month, we attended the Early Lung Cancer Action Program's (ECLIP) 40th conference in New York, focused on lung cancer screening and early detection. Among several presentations about the advantages of digital tomosynthesis in lung cancer screening, Dr. Lauren Stannenbaum delivered an inspiring talk about how he believes that Nano-X ARC can be utilized in lung cancer screening and disease management protocols. Outside the US, we are excited about a recent collaboration with All Up Imagery, which is a group of independent radiologists who practice at several sites in Île-de-France, utilizing high-performance technical facilities. Through this collaboration, the Nano-X ARC system has been deployed at Hôpital Privé Jacques Cartier, one of the leading private hospital groups in the 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 advances our clinical evaluation effort in the second-largest country in the EU. The data derived from this trial is intended to demonstrate the ARC'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 Vaso Healthcare IT or VHC IT, a wholly-owned subsidiary of Vaso Corporation, which provides best-of-breed healthcare IT solutions from various technology partners. Specifically, imaging information technology solutions, which support imaging workflow for providers. Nano-X Imaging Ltd. and VHC IT together create a powerful synergy that connects Nano-X Imaging Ltd.'s FDA-cleared imaging AI solutions with VHC IT's deep expertise in IT integration, implementation, and customer operation. Under the terms of the proposed transaction, Nano-X Imaging Ltd. will acquire VHC IT for a total consideration of $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 the deployment of Nano-X Imaging Ltd.'s AI solutions across US 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 adviser to address and solve these issues. We expect this partnership to accelerate the commercialization of Nano-X Imaging Ltd.'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 cross-processing services in the US. 3DR Labs offers Nano-X Imaging Ltd.'s FDA-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 Nano-X Imaging Ltd.'s 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 Imaging Ltd.'s AI technology to support initiatives to drive early disease detection and improve clinical outcomes at scale across the United States. We are also expanding direct-to-clinician Nano-X Imaging Ltd.'s AI solutions and launching new AI applications 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 on-site and eliminating the need to send patients to other locations for CT scans. I am 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 asymptomatic 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 to 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 expanded 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 more in the pipeline. A key element of the third pillar is the creation of a sustainable and efficient supply chain to ensure we can meet anticipated future demand. With that in mind, we continue to engage with third-party manufacturers and suppliers for the commercial production of our digital X-ray tubes and other components for use in the Nano-X ARC. Based on, among other things, cost-effectiveness, etcetera. We are currently developing glass-based digital X-ray tubes for use in the Nano-X ARC. As previously disclosed, we are working with third parties such as CEI and Varex to build tubes and a system-on-a-chip maker located in Switzerland for our chips. Our work with our manufacturing partners is a key component of the third pillar of future success. We will continue close collaboration with our technology suppliers to secure the supply of components needed as our ARC deployment continues. As of today's call, we have fabricated enough emitters and begun scaling tube production to support the initial launch of our next-generation Nano-X ArcX. Specifically, with Varex, we are well underway with reforming all the necessary tubes and ARC-level testing to add them as an approved supplier early next year. We have additionally taken

receipt from them

of multiple MDX multi-source demonstrations to advance our testing and the development of stationary digital tomosynthesis and stationary CT-type solutions. Varex's NBX or multibeam X-ray combines the precision of traditional X-ray with the detailed insight of CT imaging and enables faster, higher-quality scans with reduced radiation exposure, offering clearer images and better patient outcomes. Varex personnel will visit our lab in Israel soon to support these efforts. We're also working in partnership with a novel imaging technology company to explore the utilization of our emitter with their specialty detectors. These efforts toward low-dose single-exposure dual-energy capabilities significantly enhance visualization for medical, security, and inspection applications. On the OEM business development front, in response to requests from the security materials analysis and high-resolution inspection market, we are in the process of fabricating several novel emitter layouts, each with unique functionality to specifically address pain points or add requested capabilities as compared to their current offering. We've also recently delivered two of our developer kits. One is to a leading US academic institute for medical solution development for medical application development, and another to one of the largest global providers of industrial X-ray NPT inspection sources developing their next-generation system. Regarding our project with Oak Ridge National Laboratory, we are now working towards material acquisition and fabrication of the second-generation prototype to be utilized in their novel and compact mobile X-ray technology development. As previously reported, we have entered into a multiyear volume supply agreement with Fabrinet, a leading global electronics manufacturing services provider, to support the scalable manufacturing of Nano-X ARC systems. We believe this collaboration will drive down our manufacturing costs over time, which will, in turn, support our mission to expand access to innovative, affordable imaging technology worldwide. Looking ahead, Nano-X Imaging Ltd. is dedicated to accelerating the development of a highly efficient and scalable manufacturing infrastructure. We will always be looking for ways to extract more efficiencies and may include future strategic collaborations. As we look ahead, we would like to provide our investors with some financial guidance for the coming year. Given our current business trajectory, sales funnel, new partnerships, and the Vaso acquisition, we expect to generate a minimum of $35 million in revenue in 2026. Furthermore, we project the AI business segment, with the addition of VHC IT, will achieve EBITDA breakeven on a quarterly basis sometime in 2026. We expect Nano-X Imaging Ltd. as a whole to reach EBITDA breakeven on a quarterly basis in 2027. These projections reflect our beliefs in an achievable path to sustainable profitability driven by our expanding commercial deployments and recurring revenue streams. We are executing a clear and consistent strategy across all three pillars, moving forward with confidence while systematically expanding our market presence and strengthening our foundation for long-term success. With that, I would like to hand the call to Ran Daniel for a review of our financials. Ran, over to you. Thank you, Erez. We reported a GAAP net loss

for 2025 of $13.7 million, which is the reported period, compared with a net loss of $13.6 million in 2024, which is the comparable period. Revenue for the reported period was $3.4 million, and gross loss was $2.9 million on a GAAP basis. Revenue for the comparable period was $3 million, and gross loss was $2.8 million on a GAAP basis. The increase of $400,000 in revenue stems from an increase of $600,000 in our revenue from our teleradiology services, a decrease of $300,000 in our revenue from our AI solutions, and an increase of $100,000 in our revenue from the sale and deployment of its imaging systems and OEM services. Non-GAAP gross loss for the reported period was $300,000 as compared to a gross loss of $200,000 in the comparable period, which represents a gross loss margin of approximately 8% on a non-GAAP basis for the reported period, as compared to a gross loss margin of 6% on a non-GAAP basis in the comparable period. Revenue from the teleradiology services for the reported period was $3.1 million, with a gross profit of $100,000 on a GAAP basis, as compared to revenue of $2.6 million with a gross profit of $300,000 on a GAAP basis in the comparable period, which represents a gross profit margin of approximately 25% on a GAAP basis for the reported period as compared to 13% on a GAAP basis in the comparable period. Non-GAAP gross profit of the company's teleradiology services for the reported period was $1.3 million as compared to $900,000 in the comparable period, which represents a gross profit margin of approximately 43% on a non-GAAP basis for the reported period as compared to 35% on a non-GAAP basis in the comparable period. The increase in the company's revenue and gross profit margins in the teleradiology services was mainly attributable to customer retention, increased rate, and increased volume of the company's reading services during the weekends and weekdays. During the reported period, the company generated revenue through the sale and deployment of its imaging systems and OEM services, which amounted to $175,000 for the reported period, with a gross loss of $1.7 million on a GAAP basis and a non-GAAP basis, compared to revenue of $29,000 with a gross loss of $1.5 million on a GAAP basis and a non-GAAP basis in the comparable period. The company's revenue from its AI solution for the reported period was $100,000 with a gross loss of $1.9 million on a GAAP basis, compared to revenue of $400,000 with a gross loss of $1.6 million in the comparable period. Non-GAAP gross profit of the company's AI solution for the reported period was $75,000, compared to a gross profit of $370,000 in the comparable period. Research and development expenses net for the reported period were $4.6 million compared to $4.7 million in the comparable period, which represents a decrease of $100,000. The decrease was mainly due to a decrease of $400,000 in share-based compensation and $500,000 in expenses related to our development activities, which were mitigated by an increase of $500,000 in salaries and wages and a decrease of $300,000 in grants received. Sales and marketing expenses for the reported period were $1.5 million compared to $900,000 in the comparable period, which represents an increase of $600,000 mainly due to an increase of $500,000 in salaries and wages, $500,000 in marketing activities with connection to the commercialization in the US market, which was mitigated by a decrease of $100,000 in share-based compensation. General and administrative expenses for the reported period were $5.3 million compared to $5.7 million in the comparable period. The decrease of $400,000 was mainly due to a decrease of $600,000 in share-based compensation, a decrease of $200,000 in the company's legal expenses, and a decrease of $200,000 in MVNO insurance expenses, which were mitigated by an increase of $500,000 in salaries and wages and recruiting fees.

Non-GAAP net loss

attributable to ordinary shares for the reported period was $9.9 million, compared to $8.7 million in the comparable period. The increase of $1.2 million in the non-GAAP net loss attributable to ordinary shares was mainly due to an increase of $100,000 in the non-GAAP gross loss and an increase of $1.1 million in the non-GAAP operating expenses. Turning to our balance sheet. As of September 30, 2025, we had cash, cash equivalents, and marketable securities of approximately $55.5 million and $3.2 million in short-term loans from a bank. We ended the quarter with property and equipment net of $46.7 million. As of September 30, 2025, and December 31, 2024, we had approximately 65.4 million and 63.8 million shares outstanding, respectively. With that, I will hand the call back over to Erez. Thank you, Ran. The 2025 was transformative for Nano-X Imaging Ltd.

As we evolved from a hardware company into a comprehensive imaging platform. With our acquisition of Vaso Healthcare IT, new partnerships with 3DR Labs, Altea, and X-ray, and the upcoming launch of our AI-ready ArcX system at RSNA, we are building the infrastructure for sustainable recurring revenue streams that will define our future growth. Together, with our recent collaboration in Greece, Romania, The Czech Republic, and France, we are strengthening our European footprint. In parallel, our collaborations with Cedars-Sinai and our ongoing clinical trials in France continue to advance the clinical validation of our technology and contribute to the global momentum behind our platform. Through our three strategic pillars, we are executing a comprehensive commercial strategy that combines innovative technology with robust clinical evidence generation and systematic market deployment. Although some elements are beyond our direct control, we believe this is the right moment to present our growth roadmap, and for 2026, we are guiding to revenues of over $35 million. Our purpose remains unchanged: to redefine medical imaging by uniting innovation, intelligence, and accessibility, creating meaningful impact for patients, clinicians, and healthcare systems worldwide. The momentum we are building across our commercial deployments and clinical evidence generation positions us well for continued growth and market leadership. Thank you for your continued support. Operator, please open the call for questions. Operator, just before the question, Erez. One comment regarding what actually was said that last night, we have actually closed the Vaso Healthcare IT acquisition. So actually, it's done. With that, you can go ahead and open for the Q and A.

Thank you. And wait for your name to be announced. To withdraw your question, simply press 11 again. Please stand by while we compile the Q&A roster. Now, the first question is coming from the line of Ross Osborn with Cantor Fitzgerald. Your line is now open.

Hi. Good morning. Thanks for taking our questions. Congrats on the progress. So starting with the quarter, would you walk through how many systems were in the field and performing scans that resulted in your revenue of $175,000?

A few dozens out of all together. A few of them are being installed as we speak. And a few will be installed in the next few weeks. And as mentioned, we are counting on the expansion of the retail, expansion of the business partners, the expansion of the salespeople that are closing deals right now. We have a few, as mentioned, some of them are waiting for regulatory approvals for physics approval, for site preparation, but altogether, this is gonna move.

Okay. Yeah. Sorry if I wasn't clear. Looking back during the March, so your reported revenue, how did you generate $125,000? Not for the rest of this year, but during the quarter.

It was a combination of revenue from scans and our OEM services. I assume that we are regarding the paragraph in the script and the PR that describes the revenue from deployed systems and OEM services. Correct?

Yes. So just curious how many systems were deployed. So I'll refer you to this paragraph, and I don't think in general, it's saying that the answer is changing. With regards to the system.

Okay.

And then looking to the balance of 2025 and meeting 100 units in various stages of deployment. You know, what types of agreements should we be thinking about in terms of those being at least versus capital sales?

Most. I would say the majority of the majority are ancestors.

Okay. Thanks for taking the question. But we still see increased activities in the CapEx arena. Okay? So we do expect to have some CapEx over here.

And the retail. Got it.

I'll jump back in queue. Thank you.

No problem. Take your help.

Thank you. Our next question is coming from the line of Jeffrey Cohen with Ladenburg Thalmann. Your line is now open.

Oh, hi, Erez and Ran. Thanks for taking our questions, and nice to see the company at Medica this week. So a few from our end. It seems like we got a good sense of the top line from where you're talking about for the balance of this year and certainly for 2026 with the many partnerships and

Jeff, I'm sorry. Can you raise your voice, please? Because you are a little bit far away from the Sorry. Could you talk about how OpEx could look over the next four to six quarters as you talk about

achieving these, 2026 targets. Versus currently?

You generally say, what you would expect to see is that

our investment in the deployment efforts, namely the sales and marketing expenses, will increase, of course. Because we need to invest in all the activities that are related to the deployment of the systems and the sales. On the other end, you should see more tamed R&D expenses. As the focus is going towards commercialization and less on development activities. And we are trying our best to be more, as you know, to be as efficient as we can be, and you should see the same level of G&A. With some fluctuations.

Okay. Got it.

Could you talk about Don't forget that the major portion of our G&A expenses are related to us being a public company. And know, sometimes those expenses increase.

Got it. Could you talk about Vaso? I saw in the press release, is a mention of approximately 100 customers. Could you talk about what types of customers that they currently have? And the opportunity for those customers into the Nano-X Imaging Ltd. family. So

the 100 customers of Vaso are all of them are medical-related.

They are actually serving hospitals

Imaging Centers, Across The United States. From our point of view, we have a lot of cross-selling that can be achieved. They can of the Vaso acquisition the the the majority of the I would say the main purpose will be to serve the operational and the customer base the the growing customer base of of Nano-X Imaging Ltd. AI. But the more we go into, into the the details what we see right now, what's in the PMI and the post-merger integration, that they will be able to expand our sales force to the ARC systems to those institutions. To expand the services of the IT services that they are providing because many of the of those customers are modality-related

customers.

In addition, what we see is that customers a few of the customers already mentioned an interest that USA Rod, the pillar radiology business, will be provided by our teleradiology services. And in addition, the teleradiology the the the those customers are are saying that they can actually refer a few of their customers to teleradiology services to be obtained. The I would say that this will actually strengthen our IT and software, which is one of the major pillars of our growth. And and and we definitely can see their network and their customer base as a as a way to grow our business. Our existing business. Got it. And one more, if I may.

I did hear you mentioned breakeven 2027 EBITDA levels. But just prior to that, you mentioned something about '26 Could you reiterate that?

Yeah. We mentioned this is already the second time that we say that what we are aiming that on a run route basis on '26 where the AI business will be breakeven In fact, this was even before before Vaso acquisition. So right now,

we believe probably that it will accelerate the

probability of this to be breakeven sometimes at at the end of the 2026. And the other thing that we said that the ARC hardware business will will shoot for a breakeven and in 2027. This is something that we already mentioned in the past. And what you can see right now based on the wide and the the what what you see here is the that we are making progress in all the fronts. In technology and the regulation and the commercialization of the business, And we strongly believe that the retail business, the business partners, and our facility with with the actually enable us to be there. Ron, would you like to add anything?

Yes. Let me fine-tune it. What we have said in the past that, the AI business will be breakeven on a quarterly breakeven during sometimes during 2026, didn't specify any quarter. We do we do emphasize that the growth of the AI division by their expansions of their B2B2B to B to C model, enter into new geographics, and, of course, with the acquisition of Vaso, which expands their operations and the potential for growth and achieving the quarterly breakeven on the one on the quarterly run rate. And while we also have said that we expect that sometimes to during 2027, we may be breakeven in the ARC division. All in total, it will bring us sometime in 2027. We may be break breakeven on a wide company range. Just to be more accurate.

Okay. That's perfect. Thank you for taking our questions.

No problem. Thank you, sir.

Hopefully, you enjoy the Medica.

Conference. Yeah.

Thank you. Next question coming from the line of Scott Henry with HEP. Your line is now open.

Thank you, and good morning or afternoon depending on your location. I want to talk a little bit about the 2026 number. $35 million, that's a pretty big number. So my question is, how should you think about the cadence of the year? Do you expect that to start in Q1 and ramp up? Or should we think about that in the second part? And then as well, do you have any preorders or or any just trying to gauge your confidence in that number. Thank you.

So first of all, I would start with the second comment. Most of what we say we are based on not most, but I would say major part, are based on on preorder And the

and the the outcome of what

we are doing right now, the the the those three elements, the the business partners, the retail which is a major part, and the and the sales force that we currently have. Not to mention the the new position.

Second,

I would say that it will start slowly from Q1 and ramp up over the quarters and and achieve the the the number at the fourth quarter. If I have to say something about mathematics, I would say that's probably the line will be kind of an exponential one. And not the linear. Okay.

Great. Thank you for that color. And and in terms of levers,

Just to add a follow-up question is that we do we do see some more activities there. I'm I'm going to refer to the ad of just what we said in the in the last questions for Jeffrey. Of Jeffrey. Don't forget that the current census and your estimates are based without the Vaso position. So when you add the Vaso positions, you're already going up you have to account for the $4 million in revenues that approximately that Vaso have. So other than this, the the growth may come probably organic. And email.

Okay. It I think, Ron, did you say that Vaso would

contribute $4 million in revenues? You broke up. You broke up the

Yes. Approximately.

Okay. And as far as the levers, in 2026, what about teleradiology? It reported a strong growth rate in the third quarter. Is that growth increasing? I mean historically, it's been kind of a 10% grower Are you looking for kind of a breakout in that category? Certainly, it was strong in Q3.

The answer is, if if you look at the at the numbers that, we gave as guidance, The numbers are not based on on a major quantum leap growth the teleradiology. We We hope that it will grow, but based on the indication that we gave it's based on the sort of the existing plus-minus numbers. The all the growth will come from the other business that we have, namely the ARC business and the, especially the deployment of the ARC X and especially the hopefully, the elimination of the adjunct device of the FDA and the other business that we said, and the AI business that that we're talking. I think that OEM also will grow slowly and we will see a major growth from 2027. Based on the indication that we currently have. From our existing customers and potential customers of the OEM business. Okay.

Yeah. The first Both and both will be the AI and the R.

K, and the hardware and the product.

Okay. Great. Thank you for taking the and I look forward to seeing you down at the RSNA conference.

See you there. See you.

Thank you very much.

Thank you. And that's the end of our Q&A session. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. And you may now disconnect.