Nano X Imaging Ltd Stock

[Operator Instructions]

Please be advised that this conference is being recorded. I would now like to hand the conference over to your speaker today, Mike Cavanaugh, Investor Relations. Please go ahead.

Good morning and welcome to Nanox Imaging's Q2 2026 Earnings Call. Earlier today, Nanox Imaging Limited released financial results for the quarter ending June 30, 2026. 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 Guy Nathanson, 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 research and development, manufacturing, 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. The reconciliation of the non-GAAP to GAAP measures is provided with our press release, which reconciles the following non-GAAP measures to the closest equivalent figures under GAAP: non-GAAP gross margin, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP net loss, and adjusted EBITDA loss. With that, I'd now like to turn the call over to Erez Meltzer.

Thank you all for joining us today. In the 2 months since our last call, we have advanced commercialization across several areas of the business. Our management team has completed a thorough review of the business and started implementing lessons learned with progress reflected across our commercial, operational, and strategic priorities. Today, I will focus on the steps we are taking to improve execution, extend commercialization, and support the long-term value of the Nanox platform. While our business is trending in the right direction, as we discussed last quarter, our commercialization has taken longer than we expected. When we initiated the commercial phase, we had already provided preliminary financial results last month, and our results are substantially consistent with those previously disclosed figures.

The main friction points have been, as mentioned, operational. Commercialization required close side-by-side coordination with small and medium-sized imaging centers, particularly around permitting, shielding, construction timelines, and integration. These are practical deployment requirements, but they have been important lessons as we refine how we move systems from commercial agreement to active utilization. By identifying where the friction has occurred, we have been able to shape the changes we are now implementing. Most importantly, we are increasingly leveraging commercial partners with established relationships and workflow in the imaging space to meaningfully enhance our presence in the U.S. At the same time, our direct sales effort continued to support additional Nanox-Arc CapEx agreements and deployment activity, including the first Nanox imaging network installation in Philadelphia, which has already scanned its first patients.

Beyond the U.S., we continue Nanox-Arc deployment activity across Europe and Latin America, advanced new Nanox AI commercial and pilot programs in India and the U.S., and move forward with the restructuring of our South Korea operations to better align resources with our core technologies and commercialization priorities. We continue to broaden our U.S. footprint through strategic collaborations, customer evaluations, and deployment activities, including our recently announced collaboration with RadNet and ongoing work with leading clinical institutions with the goal of expanding our engagement with healthcare chains and increasing activity within those chains.

As we disclosed in our last call, the Nanox system has been operational for several months at RadNet sites. RadNet is the largest outpatient imaging center operator in the United States and has deployed a Nanox-Arc system at one of its facilities where it is now in commercial use and integrated into routine clinical workflow. We continue to explore opportunities for clinical research, including early lung nodule detection. We believe this represents an important step in demonstrating Nanox-Arc's clinical value in a major outpatient imaging setting, and we are excited to continue this collaboration. We recently deployed a Nanox-Arc system through a capital equipment sale to an internationally recognized orthopedic center in Florida, which is part of an IDN, Integrated Delivery Network. As this organization integrates the system into its orthopedic imaging workflow, we are launching a strategic collaboration aimed at broadening the clinical use of Nanox-Arc in orthopedics and generating clinical experience in a high-volume specialty care environment.

We believe the true measure of innovation in medical imaging lies in clinical relevance and potential to improve patient care. Our continuing engagement with leading healthcare organizations reflects our commitment to generating more real-world evidence and evaluating a growing number of clinical applications for our technology. For example, we recently installed an Arc system in an urgent care unit located in New York. Turning to our commercial distribution partnership, we are seeing channel partners build pipeline activity that supports future CapEx sales. In addition, our U.S.-based subsidiary, Nanox Impact Inc., has entered into a distribution agreement with Associated X-Ray Imaging Corp., a New England-based provider of medical imaging equipment and services specializing in X-ray, MRI, and CT systems to support deployment of the Nanox-Arc across the region. We now have 10 signed commercial distribution partnerships in the United States. Associated has already supported the customer installation of the Nanox-Arc that is installed and operational, further demonstrating its ability to support deployment and service in the region. The agreement follows other recent engagements, including Digital X-Ray Imaging, Integrity Medical Services, and Elite Surgical Technologies. The goal is to supplement our direct sales force and increase our presence economically as we pursue broader coverage of major U.S. markets.

We are also expanding joint commercialization activity with our partners, including participation in Howard's annual sales summit, our webinar partnership with RadNet, and ongoing sales and marketing initiatives. As more customers, channel partners, and physicians gain firsthand experience with Nanox-Arc, we are seeing encouraging utilization, including sites performing hundreds of scans per month, and one customer transitioning from MSUs to CapEx purchase. The Nanox Imaging Network proof of concept is beginning to contribute to our commercialization strategy by targeting segments that may offer potentially higher reimbursement rates, such as worker compensation groups and concierge medical providers. Through this initiative, Nanox completed the first Nanox imaging network installation in Philadelphia, and the site has begun scanning its first patients. It is encouraging that we are already seeing reimbursement from insurers and payers with paid claims in the range of $200 to $700 per claim. This provides early validation of the commercial opportunity for the Nanox imaging network and supports our focus on targeted care segments where reimbursement dynamics can be favorable. Based on the preliminary business model, we believe each site may have the potential to generate annual revenue in the range of $0.5 million to $1 million, depending on utilization, reimbursement, payer mix, and site-level execution.

In our rest of the world markets, we advance commercialization activities across Europe and Latin America. During the quarter, we completed an end-user deployment in the Czech Republic and advanced system deliveries in Romania and Greece were local distribution partners, which we have discussed on previous calls. We also appointed Solme RCSA as our new distribution partner in Costa Rica, further expanding our presence in Latin America. We also continue to develop commercial opportunities with distributors in Slovenia and Ecuador, and are preparing to ship the system to Argentina. Since the acquisition, our Teleradiology Services Division, USARad, continued to deliver strong and consistent revenues during the first half of 2026, which grew on a year-over-year basis, averaging 14% growth driven by continued expansion of our teleradiology client base. USARad Holdings Inc. has once again earned the Joint Commission's Gold Seal of Approval for ambulatory healthcare accreditation by demonstrating continuous compliance with its performance standards. The gold seal is a symbol of quality that reflects a healthcare organization's commitment to providing safe and quality patient care.

We also extended USARad engagement with a leading multinational aerospace organization. This renewal reflects the value of USARad services offering in our ability to support large organizations with reliable, high-quality teleradiology services. We continue to view the radiology business as both a source of recurring revenues and an important channel for advancing the commercialization of our broader imaging and AI solutions. Nanox AI advanced on both the commercial and the clinical fronts during the quarter. We recently announced that Nanox entered into an exclusive sales reseller agreement with Vertec Scientific Limited for the Nanox AI bone solution in the United Kingdom. Vertec is also the exclusive supplier of Hologic DXA scanners in the U.K., and has an extensive network of key opinion leaders, clinics, and hospitals. Moreover, we launched 5 new AI installations, pilots, across the United States and India. These engagements expand our clinical and commercial footprint and provide opportunities to demonstrate the value of our AI solution in real-world healthcare settings.

We are actively supporting these organizations through the evaluation process and look forward to advancing discussions around broader deployments. We also completed a pilot study with Cedars-Sinai comparing Nanox AI Health AVC with standard of care tools for assessing aortic valve calcification. The study demonstrated greater than 92% agreement between the two approaches, reinforcing the accuracy of our technology and supporting its potential integration into existing imaging workflows. In addition, IRB approval has been received from a leading university-affiliated medical center for an upcoming clinical study and we are now moving forward with data collection. To end my update on the AI business, I would like to share some reimbursement news. In the U.S., the Centers for Medicare and Medicaid Services established a new Healthcare Common Procedure Coding System, coding code G0680, effective April 1, 2026, for algorithmic analysis of coronary artery calcium and aortic valve calcification from chest CT scans. This creates a potential reimbursement pathway for the Nanox AI cardiac solution when used with eligible chest CT exams and when applicable payer, documentation, and medical necessity requirements are met.

We view this as a positive development that may help support commercial adoption of Nanox AI by enabling providers to incorporate AI-driven analysis into existing imaging workflow. The new reimbursement code may expand the addressable market for the Nanox AI cardiac solution by creating a direct reimbursement pathway for outpatient imaging centers and clinics performing eligible chest CT examinations. This pathway may enable qualifying providers to incorporate our cardio solution into existing CT workflows and receive reimbursement without requiring an additional imaging procedure. We are exploring further our engagement with two of our leading research sites, Meir Medical Center and Rabin Medical Center, by expanding our ongoing clinical work into rheumatology, an area we believe may represent a meaningful extension of the Nanox-Arc value proposition. Together with these centers, we are evaluating the potential role of the Arc in the assessment and long-term management of chronic rheumatology conditions. While still in the research stage, we believe this work may help broaden our understanding of additional clinical applications for the Arc and inform future opportunities in rheumatology. I'd like to share a few additional updates on our OEM relationship and pursuits.

Varex tubes are undergoing the final integration process to become a main X-ray tube source for the Nanox-Arc X-system. We've additionally taken receipt of a Varex multi-beam X-ray vessel utilizing multiple Nanox emitters and have begun our initial testing. We are excited to measure our emitters' capabilities in this configuration and have potential partner interest in the areas of security, food inspection, and of course medical. Regarding Oak Ridge National Laboratory prototypes, we have completed and delivered prototypes of the latest design iteration to Oak Ridge for their assessment and integration with their intended application in security use cases. We are also pursuing discussions with other entities for this purpose. Overall, interest in the Nanox breakthrough source technology remains very strong. The Nanox Health IT that we acquired at the end of 2025 has proven to be a valuable addition to Nanox and continue to contribute meaningful revenue in the first half of the year, supported by an expanding customer base and more than 20 new projects going live.

As we complete our integration to make the business more scalable and begin to more fully leverage its synergies with Nanox AI, Nanox-Arc, and USARad business segments, we are very excited about the growth potential of this business. Turning to our South Korea operations, as we previously disclosed, we have been evaluating a range of strategic alternatives aimed at optimizing our cost structure and maximizing the value of our asset in Korea. Following this review, we have decided to move forward with a broader structural transformation of our South Korea operation. As part of this process, we've idled our chip production line and reduced our workforce in Korea by two-thirds. We are transitioning volume production activities to qualified third-party manufacturing partners. In parallel, we have initiated the necessary processes with the relevant authorities and other stakeholders in preparation for the sale of the manufacturing facility. We believe these actions will further streamline our operating model, reduce our fixed cost base and burn rate, and allow us to focus our resources on our core technologies and commercialization priorities. Guy will work through the specifics of the restructuring in his financial overview.

We are also preparing for RSNA 2026, where we plan to engage with customers, partners, and key opinion leaders across the radiology community. RSNA provides an important platform to present our end-to-end imaging solution across Nanox-Arc, Nanox AI, and our broader imaging ecosystem, while supporting business development, customer engagement, and awareness of our recent commercial and clinical activity. We are preparing for RSNA 2026 with the goal of building on last year's success and using the event as a strong commercial kickoff for 2027. I will now turn the call over to Guy, whom we are very pleased to officially welcome to the team.

Thank you, Erez. Before I begin, I would like to say that I'm very excited to be at Nanox, and I look forward to helping drive our future success as we seek to change medical imaging. Thank you. As we implement the lessons we have learned and drive commercial growth, we've also sought various ways to extend our cash runway to the point where we are at a sustainable run rate. During the quarter and subsequently, we have taken deliberate steps to implement effective measures, including reduction to our cash expenditures and cash burn. Among those steps have been a 15% headcount reduction of our Israeli-based employees, and as previously noted, a reduction in our activities at our Korean location, mainly in the chip fabrication facility, as well as an approximately 67% in our headcount in Korea. We will instead rely on our OEM partners to supply the chips we need for future demand. The estimated annualized cost savings from these steps are expected to be approximately $2 million beginning in 2027. Along with cost reductions, we also recognize the need for additional capital and have recently raised fresh capital via an existing ATM program and a registered direct offering in August that raised together a total of $8.5 million of gross proceeds.

All figures that I'm reviewing now relate to the second quarter ending June 30, 2026. And all comparable figures relate to the comparable quarter of 2025, unless otherwise noted. Q2 2026 revenue was $4.2 million, compared to $3 million in Q2 2025, representing a year-over-year increase of 37%. The increase was driven mainly by the consolidation of the Nanox Health IT, formerly known as Vasal Healthcare IT business, which was consolidated as of November 19, 2025, and accounted for $0.9 million of revenue in Q2 2026. The company generated revenue of $3 million from our teleradiology services, $1 million from our AI and software solutions, and $0.2 million from the sale of imaging systems and OEM services. Q2 2026 adjusted EBITDA loss, a financial measure that is derived as described below under non-GAAP financial measures, was $11.3 million, compared with adjusted EBITDA loss of $10.4 million in Q2 2025. Q2 2026 GAAP gross loss margin was -1,051% compared to a GAAP gross loss margin of -107% for Q2 2025.

Non-GAAP gross loss margin was -13% compared to a non-GAAP gross loss margin of -21% in Q2 2025. In accordance with applicable accounting standards, as of June 30, 2026, the company performed an impairment assessment of its asset groups. The impairment assessment was triggered by significant decline in the company's share price and reduced forecasted revenue and operating results. The company recorded a charge of $40.7 million, which was accorded to cost of revenue, impairment of intangible assets, reducing the fair value of the intangible assets related to its AI solutions business unit, excluding Nanox Health IT, to $1.9 million. The company also re-evaluated the remaining useful life of the intangible assets and concluded that no changes were necessary. The impairment charge did not result in any cash outflow or impact the company's liquidity and was excluded from the calculation of the adjusted EBITDA for the period. Q2 2026 GAAP operating expense was $11.8 million compared to GAAP operating expense of $11.3 million in Q2 2025.

Q2 2026 non-GAAP operating expense was $11.1 million compared to a non-GAAP operating expense of $10.2 million in Q2 2025. The increase was mainly driven by the consolidation of Nanox Health IT business and an increase in the legal expense. Q2 2026 GAAP net loss was $55.5 million compared to a GAAP net loss of $14.7 million in Q2 2025. Q2 2026 non-GAAP net loss was $11.6 million compared to a non-GAAP net loss of $10.9 million in Q2 2025. The increase in net loss was mainly related to the impairment of certain intangible assets as described above. Cash and cash equivalents and restricted deposits as of June 30, 2026 were at $31.4 million. This compares to a cash and cash equivalents, short-term deposits, and restricted deposits balance of $60 million as of December 31, 2025.

Post-quarter end, the company raised aggregate gross proceeds of $8.5 million from its ATM program and a registered direct offering. The company intends to continue raising funds from various sources to improve its cash balance and support its activities. I'll now turn the call over to Erez for final comments and the questions and answer session.

Before we open the call for questions, I want to close by reflecting on the priorities I outlined today and the progress they have produced so far. We are focused on moving Nanox-Arc systems into active use, extending our commercial footprint through new partnerships, advancing the Nanox imaging network, and adding new Nanox AI customers, all while managing our resources decisively and responsibly. We made real progress across these areas. We are also taking the necessary steps to improve our operating structure and extend our runway. There is still plenty of work ahead, but we believe we are taking the right actions to support Nanox's long-term opportunity in medical imaging. I want to thank our employees, partners, customers, and shareholders for your continued support. Operator, you may now open the call for Q&A.

[Operator Instructions]

And our first question will be coming from the line of Jeffrey Cohen of Ladenburg, Thalmann & Company, Inc. Your line is open.

Good morning. Just a few questions from Aaron. And I guess firstly for Guy, what's expected on the impairment for the balance of 2026? I know you're at 40.69 currently.

So, hi. Currently we already completed the process as of today. And if required, according to the accounting rules, we will continue in the future. Currently we have no visibility for any other elements around the impairment. But we do the assessment according to the accounting rules every period.

And we'll do what we need to do. Okay, got it. What's the latest pro forma share count?

Sorry, could you repeat the question?

The latest pro forma outstanding share count.

I believe it is 70.6, if I remember correctly.

Million. Got it. And then could you talk about the placements out there? I'm curious about the evaluations and our placements. Could you give us a sense of how many were placed during the last quarter and maybe give us a sense of the pipeline that you expect throughout the balance of the year as far as evaluations.

I believe, Erez, would you like to take this answer? Erez, would you like to answer this question?

Oh, no, I was just wondering about placements.

Can you hear me? Can you hear me?

Okay. Now we can swap, no we can't do that. for the balance of the year. Jeff, can you hear me?

Yes. I can, yes.

Okay. So since the latest update, we have placed systems in Greece, in Romania, in Czech Republic. The systems for Peru are waiting for import license. Same goes with Argentina. In the U.S. we have one system which is converted from MSUs to CapEx. We've installed another one in an IDN. Another system for the first system in urgent care units in the U.S. We have 3 systems that are currently in the Nanox imaging network that we were talking about. One of them's already started. So, yeah, another one in the orthopedic clinic.

In a nutshell, that's where we are. So, quite nice progress in the last quarter.

Thank you for taking our questions.

Thank you. Thank you.

And our next question will be coming from the line of Scott Henry of AGP. Scott, your line is open.

Thank you and good morning. Sounds like there's a lot of progress going on behind the scenes as far as building momentum for future sales. Could you give us a sense of how we should think about the timing of when that traction should start? How should we think about Q3 relative to Q2 in terms of revenues? And if we're not going to see much there, when should we start to see that traction result in revenues? Thank you.

I think that we have addressed this question during the last call, that we saw the middle of the year as a sort of reflection point. First of all, what you can see is the progress that you actually were talking about. And second, we will start to see the impact of this progress in the next few months, as previously indicated already. We view the Nanox imaging network as part of the scale which is moving forward. The business partners are in terms of the pipeline which is being converted right now to installations or to sales. And from our point of view, the direct sales is also showing the progress. So I think that the reflection of these efforts and this momentum, we will see, as we said, in the next few months.

Okay, great. So it is on track with prior expectations. Thank you. And then the $2 million in cost savings for 2027, should we expect that to show up in kind of the gross margin line or more in the G&A line?

Which one? On the right. The one you're referring to?

The $2 million in cost savings on target for 2027. I just wanted to get a sense where in the model of those cost savings should be located because it is a manufacturing plant.

Yes, so the simple answer is that probably most of the expenses would be reflected in the operating expenses. Some of them in the COGS, but most of them in the OpEx.

Okay, great. And when we think about, I mean, it sounds like there are a lot of kind of cost rationalizations, getting costs out of the system, whether through contracting or what other reasons necessary. Where do you think you could get that operating expense? And that's on a GAAP basis. If it's been around $11 million, maybe a quarter of a million, maybe $11 million to $12 million per quarter on a GAAP basis, how much could you pull out of that as costs are shifted outside the system? Yes.

I'll try to be very cautious at this point, and if it's okay for you, I prefer not to answer this question directly. Once we have something to announce, we'll probably announce. At this point, in high level, I would say we are always doing ongoing research, examination, and evaluation of our expenses. There is no number that I can specifically announce right now. And once there would be a number, we'll definitely announce it like we just did on the Korean side.

Okay, then I'll look forward to that. Also, in the press release, there was mention of a CMS reimbursement pathway. What would be the timing of developments on that front? Thank you.

The reimbursement of the Nanox Imaging Network? Ah, the AI. As far as through CMS. Ah, the... The AI or the Nanox Imaging Network?

Both, just the timing on either. How would we think about that?

So the Nanox AI, the G0680 is already right now. And we'll probably see the impact of it. Right now we expect that it will be affected in the very near future and we are going to address this segment of the market in order to benefit from this effort. In terms of the reimbursement, first of all, it's already done, so we have already revenue which is generated from this reimbursement. And the more systems and sites we add to the Nanox imaging network, which actually we've already previously indicated what's the pipeline on this, the more we'll see the revenues growing up. I think that based on the model that we currently have. And right now we are in the first proof of concept for this, but based on the model right now and the indications that we have from current scans that are being done on this segment of the market, we expect these numbers to be in the hundreds of millions of dollars, or can go up to even more than that, close to $1 million, if the system is operating on a very wide scale, and this will generate for each one of the systems as was recorded in the press release.

Okay, great. Thank you for taking the questions.

Thank you so much.

And I'm showing no further questions. This concludes today's conference call. Thank you for participating. You may now disconnect.

This live transcript is auto-generated without human intervention or review.

Good day, and thank you for standing by. Welcome to the Nanox First Quarter 2021 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mike Cavanaugh, Investor Relations. Please go ahead.

Good morning, and welcome to the Nano-X Imaging First Quarter 2026 Investor Call. Earlier today, Nano-X Imaging Ltd. released financial results for the quarter ending March 31, 2026. 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.

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'd now like to turn the call over to Erez Meltzer.

Good morning, and thank you for joining us today for the Nano-X Imaging First Quarter 2026 Financial Results Conference Call.

I'm pleased to report that as previously indicated, we are beginning to see early signs of revenue from Nanox.ARC. We are seeing momentum across multiple fronts from record deployments to expanding partnerships, supporting our technology and business model. We have worked diligently over the past 2 years to place a new technology in the medical imaging market. This process takes significant time and effort. We have learned mainly lessons during this time and we are using those lessons learned to help reshape our go-to-market strategy.

Specifically, we have made various adaptations to our company strategy and operating model to better position us for long-term success.

Changing behaviors is a long process, and we need to educate customers not only on the medical utility of the Nanox systems but also demonstrate while using them will benefit their practices financially. Here are some of the changes we have implemented based on lessons learned.

First, we have restructured our U.S. commercial model to emphasize partnerships. This multichannel approach supplements our direct sales efforts and provides broader market coverage more efficiently. In the first quarter alone, we secured multiple commercial agreements in the U.S. with established medical equipment distributors who have existing relationship and credibilities in the market.

Second, we are prioritizing deployments of Nanox.ARC systems at high visibility reference sites like [ RadNet ], the largest outpatient imaging center operator in the United States, where it is now commercial use and integrated into routine clinical workflows.

Third, we created the Nanox imaging network to seek out business segments, which offer potentially higher reimbursement rates such as workers' compensation groups and concierge medical providers.

Fourth, we initiated a restructuring process designed to optimize our cost structure, improve capital efficiency, reduce burn rates and better align our operations with our long-term business objectives. I will share more details about all of these changes in my remarks today.

While shifting the standard of care in medical imaging is a long-term endeavor, we believe these adjustments will better align our resources and position us to capitalize on the substantial market opportunity of Nanox.ARC.

With that, let me share some of the accomplishments we have achieved since our last call. We are seeing the early signs that our multichannel model is beginning to work with deployments increasing, scan-based activity started to contribute to revenues increased scanned volume at active sites and partners beginning to generate pipeline and initial commercial activity and engage directly with customers to support sales and adoption.

The Nanox imaging network proof of concept is also beginning to contribute to our progress. As a reminder, this is a focused initiative targeting segments such as workers' compensation, concierge medicine and outpatient specialty care where positive reimbursement development may support higher [ first ] scan pricing.

We are exploring opportunities across three segments: a large integrated health care campus, an independent rehab and pain clinic and an orthopedic physicians practice. These engagements will support our strategy of driving adoption across enterprise specialty outpatient and physician-led settings.

Important, I'm very excited to share a strategic deployment. The [ Nanox RX ] system has been operational for several months at the [ RadNet ] sites. [ RadNet ] is the largest outpatient imaging center operator in the United States, and has deployed a Nanox.ARC system and one of its facilities where it is now in commercial use and integrated into routine clinical workflow. Based on this experience, we are exploring opportunities for expanded deployment across additional outpatient imaging centers and for clinical research, including early lung nodule detection. We believe this represents an important step in demonstrating the Nanox.ARC clinical value in a major outpatient imaging settings and we are excited to continue this collaboration.

I'd also like to talk about how we are working to get our growing commercial relationship activated. In the first quarter, we secured multiple commercial agreements in the U.S. with established medical equipment distributors that have a strong market presence, credibility and existing customer relationships. Collectively, these agreements represent the potential for approximately 360 CapEx system sales over the next 2 or 3 years.

During the second quarter, our primary focus was on onboarding these partners, training their teams, aligning go-to-market activities and building the operational foundations required to support commercialization. We are now beginning to see the early results of these efforts, including initial leads for the Nanox.ARC and engaging with their customers and driving early commercial opportunities.

That said, commercialization in medicine imaging takes time the transition from signed agreements to active sales installation and revenue recognition depends on various factors that may affect commercialization, including site readiness regulatory processes.

For example, some segments may involve additional regulatory and [ SOC 2 ] requirements.

We've also advanced partnerships in Latin America where we signed a distribution agreement with [ Topmed SAC ] in Peru late May. Additional agreements are in advanced stages of negotiation.

Importantly, these agreements are already contributing to a growing pipeline of potential system deployment and expanded deployment opportunities, generating new sales leads, which have resulted in new discussions with medical imaging providers. We expect to announce more partnerships soon, further existing our commercial reach and market penetration.

We believe these highly focused medical imaging partners will play a key role in accelerating the commercial adoption of Nanox.ARC and helping us reach an inflection point in the growth of our business.

Indeed, we are now leading the shift towards a more CapEx-driven commercial model, supported by our partner network and initial purchase activity. We believe this evolution can contribute to revenue growth while helping reduce future cash needs and enhance our path to breakeven.

And finally, let me also provide an update regarding our South Korean operations. As previously announced, we initiated a restructuring process designed to optimize our cost structure, improve capital efficiency and better align our operations with our long-term business objectives. We have now commenced the implementation of that restructuring plan.

At the same time, we are evaluating additional alternatives to further optimize the economics of our South Korea operation and maximize the value of the related assets.

These alternatives include a broader restructuring initiative that originally contemplated a potential sale of South Korea operations and related assets or an orderly wind down of all the parts of those operations. No decision has made at this stage and our evaluation remains ongoing. What is important is that we are taking a disciplined approach to capital allocation and operational efficiency and are evaluating all available options throughout the lens of a long-term shareholder value.

Looking ahead, we remain focused on three key priorities: continuing to scale our deployment numbers, converting our pipelines of direct sales and partnerships discussions into purchase order and signed agreements and supporting our partners to drive system sales and utilization. The foundations we have built positions us well for sustained growth throughout 2026 and beyond.

We believe we are at the beginning of transforming access to medical imaging globally and the progress we have made this quarter reinforce our confidence in the path ahead.

Turning to our AI business. I'd like to update you on the previously announced clinical trial partnership with [ Cedar-Sinai ] in Los Angeles. This strategic health system partnership continues to support our clinical validation efforts. Based on the retrospective pilot at [ Cedar-Sinai ], we created and return on investment calculator for the downstream economy of follow-ups for the patients that will be flagged by the AI cardio solution. This calculator shows that analyzing a random group of 5,000 cases we can expect almost 1,800 patients with the RC classification, out of which 49 will be categorized as severe cases. This is expected to generate $3.8 million in the first year from downstream follow-ups to the medical center.

More importantly, identify severe cases early supports earlier clinical intervention, which may help improve patient outcomes.

For another AI customer update, following a highly successful prospective pilot and supported by a paper presented at the World Congress on osteoporosis last month, the 259 General Air Force Hospital in Greece, has transitioned to a revenue-generating commercial deployment. We view this as the meaningful milestone achieved in advancing the commercial rollout of our AI solutions. Highlights from the paper demonstrates that the AI bone solution was significantly better at correctly flagging vertical fractures and estimated that utilizing the solution showed a 14-fold increase in identified fractures compared to radiologists with no solution and a nearly fivefold improvement in endocrinologists who utilize the solution to evaluate images.

Beyond expanding our AI capabilities, we have begun to realize some of our anticipated synergies and between Health IT, Nanox.AI, Nanox.ARC and U.S. [indiscernible]. As an example, we have recently completed integration and performed a customer demo utilizing non-algorithm with a health IT partner [ PacSystems ]. We have presented the Nanox.ARC to multiple health IT customers, and we have gained new business for both U.S. [indiscernible] from Health IT by partnering together on a new opportunity, and the flow of opportunities is also coming back to IT from its sister divisions. The pipeline of cross division led generation is growing by the week.

Regarding our new Health IT business, year-to-date, we've executed contracts with several new clients and received additional services add-on orders from existing clients. In terms of implementation, we have had customer solutions go live this year. This includes some sales made pre-acquisition that have since been implemented, and I want to confirm that we have begun to receive monthly recurring revenues from those accounts.

Next month, Nanox.AI will be featured at the [ SSCP ] Annual Scientific Meeting in San Diego, where Dr. Blast a member of our Advisory Board will present early results from our multisite AI-informed clinical trial. The data highlights two important points.

First, that AI-enabled opportunistic coronary calcium detection can help drive earlier preventive care; and second, that our cardiac solution, also known as Health CCS performs reliably across multiple U.S. clinical sites and real-world workflows.

Together, these studies built the case that AI-enabled opportunistic CAC detection is both clinically reliable and clinically meaningful.

I'd like to share a few additional updates on our OEM relationship and pursuits. Varex tubes are undergoing the final integration process to become our main X-ray tube source for the [ Nanox RX ] systems. Regarding the Oak Ridge National Laboratory prototypes, tube assembly has begun, and we anticipate testing completion and delivery in early Q3. We have initiated Nanox technology assessments with multiple global industry leaders in the security and inspection fields and we'll update as soon as appropriate.

Overall, interest in the Nanox chip source technology remains quite strong. And as stated, we are in various stages of development, fabrication, testing and technology assessment on multiple fronts.

Before I hand the call over to our financials, I would like to address our previously issued 2026 revenue targets. Since providing this target earlier this year, we have continued to advance our commercialization efforts across the business and have made meaningful progress across a number of commercial, operational and strategic initiatives.

At the same time, we have experienced longer-than-anticipated time lines between the execution of commercial agreements, system deployment, activations, commencement of services and the related recognition of revenue.

As we have gained additional experience across multiple markets and customer deployments, we have seen the timing of revenue generation and revenue recognition can vary significantly and is influenced by a number of factors that are often outside of our control, including site readiness, infrastructure, completion, customer implementation schedules activation timing, utilization ramp-up and third-party execution.

While we remain encouraged by the customer interest, commercial activity and market adoption, these factors can materially affect the timing at which revenue is recognized in a particular reporting period. As a result, we no longer expect to achieve the revenue target previously announced for 2026.

Importantly, what we are seeing is not a reduction in our confidence in the market opportunity, customer demand or the value proposition of our solutions. We continue to expand our installed base, advanced customer implementation and execute against commercial agreements that contemplate the deployment of hundreds of systems over the coming years.

We also continue to grow and advance our businesses across imaging, AI, teleradiology, OEM and health IT. Based on our experience to date, the variability associated with deployment time lines, implementation schedule and the revenue recognition, we have concluded that the annual revenue guidance is not currently the most effective way to evaluate the progress of our business.

Accordingly, we do not currently intend to provide annual revenue guidance going forward. Instead, we intend to focus investors on the operational, commercial and strategic milestones that we believe are more meaningful indications of our progress, including deployments, activations, utilization growth, customer adoption, service expansion and execution against our commercial agreements.

We remain highly confident in the long-term opportunity across our imaging, AI, teleradiology, OEM and health IT businesses. We believe the progress we have made to date positions us well for long-term growth, and we remain focused on disciplined execution and building long-term shareholder value.

With Nanox getting closer to an operational inflection point, let me step back and remind the challenges that we set out to address and vision behind it.

Our vision is to expand access to medical imaging and support a shift toward more preventive health care. Today, imaging remains constrained by cost, complexity and infrastructure, which limits access across many care settings.

To address this, we developed our proprietary digital x-ray technology, which enabled the cloud connected and AI compatible Nanox.ARC systems and support broader deployment and simpler operation across a range of clinical environments.

With development behind us, our focus is now on execution converting pipelines into deployments activating sites and integrating systems into routine clinical use throughout our direct efforts and partner network.

To better support our growth, we have recently taken steps to streamline the organization and align our cost structure with this stage while remaining fully focused on commercialization.

Going forward, progress will be driven by continued deployments, site activity and expansion throughout our partnerships.

Taking together the progress we have made to date across deployment partnerships and operational alignment is beginning to translate into a more visible and developing commercial trajectory.

Before we begin the financial review, I'd like to note that as previously announced, our CFO, Ran Daniel is in the process of transitioning out of his role. As far as this transition, [ Guy Nathan ] on will be joining the company and is working alongside the team to ensure a smooth handover. Today, financial review will be presented by me and [ Guy ] is with me here today.

Revenue for the reported period was $4.3 million compared to revenue of $2.8 million in the comparable period. All figures refer to the quarter ended March 31, 2026, and all comparable figures refer to the comparable quarter of 2025, unless otherwise stated. The increase largely stems for an increase of $0.9 million due to the consolidation of [ Aso ] Healthcare IT, now Nanox Health IT and an increase of $0.5 million in our revenue from our teleradiology services.

Gross loss for the reported period was $2.6 million on a GAAP basis compared to a gross loss of $3 million non-GAAP gross loss for the reported period was $0.2 million as compared to a gross loss of $0.4 million.

Revenue from teleradiology services for the reported period was $3.1 million compared to revenue of $2.6 million. The company's GAAP gross profit from teleradiology services for the reported period was $0.7 million gross profit margin of approximately 24% compared to $0.4 million, gross profit margin of approximately 17%.

Non-GAAP gross profit of the company's teleradiology services was $1.1 million, gross profit margin of approximately 36% and compared to a gross profit of $1 million, gross profit margin of approximately 39%. The increase in the revenue was mainly attributed to our customer retention and increased volume of the company reading services.

During the reported period, the company generated revenues to the sales and deployment of its imaging systems, which amounted to $1,067 compared to revenue of $3,000. The revenue stems for the sales and deployment of to now's [ Connex ] units in the amount of $1,018 deployment of its imaging systems in the amount of $11,000 and the revenue due to our OEM services in the amount of $38,000.

The company revenues from its AI and software solutions for the reported period was $1 million compared to revenue of $0.2 million revenue of $0.9 million was generated in the reporting period by Nanox Health IT.

The company gross loss from its AI and software solutions for the reported period was $1.7 million on a GAAP basis compared to a gross loss of $1.9 million. Non-GAAP gross profit to the company's AI and software solutions for the reported period was $0.3 million compared to $81,000.

Research and development expenses net for the reported period were $4.8 million compared to $5 million. Sales and marketing expenses for the reported period were $2.2 million compared to $0.9 million, mainly due to an increase of $0.8 million in salaries and wages and $0.3 million in sales and marketing activities.

General and administrative expenses for the reported period was $5.2 million compared to $5.1 million. GAAP net loss of the reported period was $14.3 million compared with a net loss of $13.2 million, the increase of $1.1 million was largely due to the increase of $0.9 million in operating expenses.

Non-GAAP net loss attributable to the ordinary shares for the reported period was $11.1 million compared to $9.4 million mainly due to an 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 to date.

Turning to our balance sheet. As of March 31, 2026, the company had total cash and cash equivalents, short-term deposits long-term restricted deposits of $44.2 million compared to $60 million as of December 31, 2025. over the reported period, the company experienced negative cash flow from operations of $14 million and an additional $1.8 million on a purchasing property and equipment, mainly for the building of [ ARCX ].

Management expects that the company's cash and cash equivalent and net deposits as of 31st of March 2026 are not sufficient to support the company operations under its current operating plans for at least 1 year, from the date of the press release. These factors raise substantial doubt as to the company ability to continue on an ongoing concern.

On a preliminary annual [indiscernible] basis, the company estimates that its cash and cash equivalent net of short-term bank loan to be approximately $27 million as of the date of the press release, management in continuing in the process of seeking to raise funds in the private equity and capital markets as the company will need to finance its operations.

However, there is no assurance that the company will be able to obtain such funding to the extent additional funding is provided by the sales of security for the insurance -- the issuance incurrence of the indeptable -- indebtedness ordinary shareholder ownership, interest may be diluted and the terms of the financing may adversely affect rights of ordinary shareholders, imposed restrictive covenants on the company and result in an increased fixed payment obligations.

In order to finance our operations, we may also raise funds through collaborations, strategic partnerships or marketing, distributing distribution of our licensing arrangement with the third parties, which may require us to relinquish valuable rights to our technologies, future revenue streams, research programs or products or grant license on terms that may not be favorable for us.

In addition, the company is exploring the use of mitigation actions such as [ spostolic ] expenses that are not based on firm commitment. If we're unable to raise additional funds, when needed, we may be required to delay reduce or eliminate our product development or future commercialization efforts or grand track to develop market products that we would otherwise prefer to develop market by ourselves. The consolidated financial statements do not include any adjustments that may necessary should the company be unable to continue as a core concern.

We ended the quarter with property and equipment net of $30.6 million compared to as of December 31, 2025. The increase was mainly attributable to purchase of property and equipment in the amount of $1.8 million during the reported period. We had approximately 69.6 million shares outstanding as of March 31, 2026 and December 31, 2025, respectively.

During the first quarter of 2026, the company granted officers, employees and consultants of the company a total of approximately 1 million RSUs.

And to the concluding remarks. While commercialization has not gone as rapidly as had planned 2 years ago, we remain confident in the ultimate success of the comprehensive suite of Nanox Rx solutions.

Looking ahead, we remain focused on three key priorities: continuing to scale our deployment numbers, converting our pipeline of partnership discussions into signed agreement and supporting our partners to drive system sales and utilization.

The foundations we have built in the beginning to result in growing deployments and positions us well for continued progress through 2026. We remain focused on the execution and believe we are building the right framework to support sustained commercialization over time. We believe we are at the beginning of expanding access to medical imaging and the progress we have made this quarter reinforces our confidence in the path ahead.

Thank you for joining our call today. And as always, we appreciate your continued support. Operator, please open the call to questions.

[Operator Instructions] Our first question comes from the line of Jeffrey Cohen with Ladenburg Thalmann & Company.

So two from my end. Firstly, could you talk about the teleradiology business? And you did call out customer retention, increased rates and increased volumes. Could you kind of drill into that a little bit for our benefit as far as rates go and number of customers and volumes and utilization?

I heard the teleradiology and what's the second question, Jeff?

Could you talk about the rates and the customers and volumes and utilization?

Of the teleradiology?

Yes, please.

So as you can see, since the acquisition of U.S. [ Arad ], we have managed to more than double the sales the revenues that comes from the teleradiology. This is mainly due to increase of the number of customers. Right now, it's a few hundred customers. Of course, they vary from one to another. One can do like a few hundred thousand dollars and the other can do a few thousand dollars. And what we are trying to do is also change the mix to the benefit of high-priced readings such as MRI and CP on the expense of X-ray.

Now of course, we don't choose what the customer is scanning so we have to do -- we do it all, but I would say that 1 of the trends that we see that we see a lot of increase in the scans of the MRI and the CT according to me. And this is one of the trends that impacted the increase in revenues. We saw the increase year-over-year, and we'll probably see hopefully an increase. We monitor it on a weekly basis and even the number of scans that are being read are higher than last year.

The one thing that I would say is that I mentioned about the cross-selling between Nanox units. So on one hand, U.S. [ Arad ], the teleradiology business gave us a lot of opportunities to sell the ARC and new customers to sell the AI and new customers to sell the Nanox [indiscernible] IP. But on the other hand, every ARC that we deploy and the -- it's a new system that before they didn't have X-ray or CT they ask us to provide the services in addition to the scans of the paper scan, they ask us to provide the reading services. So teleradiology are adding to, I would say, they are reading a meaningful part of the scans that the ARC is scanning, and I think you will see a growth in this one as well.

And then secondly, Erez a follow-up. Can you talk about the cadence of deployments for the balance of the year? I know you did call out units at various stages of which some will come online in the back half. What should we expect for ARC units coming online for second quarter and the balance of the year?

I will talk on the balance of the year. We mentioned that right now we have in the business partners. This is, of course, in addition to the direct sales that our salespeople are doing. We mentioned that we have currently 360 units that we sign agreements in the next 2, 3 years.

I think that we mentioned that the [ Howard ] estimate their part for 60 this year. And this is in addition to all the other efforts, which are being done to find more business partners that we mentioned. This is only in the U.S.

In the rest of the world, we mentioned that Greece is coming up. Romania is coming up, Peru is coming up, Argentina is coming up. Czech we sold already. In France, we have a system already. So there are many of them and more countries are -- right now, we are planning to do.

The most important element, and I think that for those of you who have listened carefully to my script today, [ RadNet ] is an interesting one. The system is there for quite some time. As you all know, [ RadNet ] is the largest imaging -- medical imaging chain in the U.S., probably one of the biggest in the world. and the system that was tested commercially by the way, and clinically in the last -- during the 2026 and even a bit before, was successfully implemented. And the plan right now is indicated previously to expand this collaboration to more systems across the sites of [ RadNet ].

Last but not least, we mentioned that right now, we are planning once again, everything depends on the -- on regulation, on approvals, on permits, on site preparation, et cetera, but we are planning to install 21 sites of the Nanox Imaging network, which, by the way, out of which one site, which is a retail is already scanning. And two, as of yesterday, two sites, the system arrived to the site. And as soon as they complete the preparations, it will start scanning.

Our next question comes from the line of Scott Henry with AGP.

A couple of questions. First, a little bit of a follow-up, but how should we think about 2Q? There's only a couple of days left in the quarter. So we should have a pretty good sense at this point.

Sequentially, should we expect Q2 to be stronger than Q1. I'm not looking for specifics, but just curious your thoughts, obviously, given that It's June 25.

Yes. I think that probably we'll be ready with these numbers shortly. And as soon as they are already, we're going to share them.

Okay. Fair enough. And then spending levels, how should -- I mean it sounds like you're going to rationalize some of the cost. Should we expect spending as far as total operating expenses to start to decline sequentially? Just wanted to get a thought on how we should think about that in the rest of the year.

The answer is yes. First of all, the outcome of the reduction in the Korean operation and the fact that we are doing all the efforts in order to save. We cut some costs in other places. We have reduced the headcount in -- mainly in Israel by 15 employees and cut the scope of employment of others. So based on early indication that we have for June, we can expect a reduction in the burn rate.

Okay. Great. Final question on the AI business. Certainly, the numbers getting notably higher. At what level would we expect that business to be breakeven as far as gross profit. Should we think about that as a 2027 event or a late '26? Just want to get an idea how to model that.

Yes. So initially, we have indicated in the past that probably at the tail or the end of 2026, we are going to be cash neutral or breakeven or -- but I would say that it may be pushed to by quarter or so. So I would say early 2027, probably. Based on the...

No, for clarity, I was just -- I was asking about the gross profit for the AI division. Should that -- as you reach $2 million a quarter, would that be breakeven for -- as far as gross profit, not spending, just I'm just trying to model that out.

Okay. The -- so the answer is a bit easier. From a gross profit since the gross profit of the AI and IT is very high. I would say in the probably in the '80s. So the answer is probably earlier than what you have asked for.

Our next question comes from the line of Sarah James with Cantor Fitzgerald.

This is Gabby on for Sarah. I can appreciate removing the revenue guidance in terms of visibility. But could you help us if you view the first quarter as sort of run rate once I back out the consolidation of Nanox, Health IT. And just kind of any sort of framing on how you expect -- what a more realistic 2026 revenue target is?

I'm not sure I understand the question. Can you elaborate or...

Yes. So with the removal of the $35 million revenue guidance, as I think about the rest of the year, can I think about the first quarter 2026 as sort of a run rate for the rest of the year? Do you expect revenue to ramp? Just anything that helps us with the full year.

So first of all, the fact that we have removed guidance as saying that anything that we're not going to work hard in order to be there where we want it to be. but I think that it probably may be pushed.

I think that I've indicated in my remarks that we are planning to ramp up from Q3 and for because in Q1, following the RSNA, we signed most of the agreements with the business partners, okay? We have indicated that we have another few of them another a few of them that are coming soon as well as other as well as the other countries in rest of the world, Europe and Latin America.

And Q2, which is currently where we are right now. The was mainly focused on the onboarding of the people, training the salespeople getting the list of 10, many tens of customers that we have already engaged in meetings with business partners. So our channel managers and the business partners are going to these customers and meeting them. And I would say that Q3 will probably be the implementation.

And I'm currently showing no further questions at this time. Erez, would you like to provide any further remarks?

Yes. Maybe I would say that we expect that Q2 will be better than Q1, whether it's much or more or a little, this will be shared probably in the very near future. And I would end with what I said earlier, we are really confident that we are taking the right steps. Yes, it's step by step. And -- but the way that we operate, the way that we put a framework for the success and for the scale is something that will enable us to justify the confidence in our ability to transform and become what we want to be and what our mission is.

Thank you. This does conclude today's conference. Thank you for participating. You may now disconnect.

Ladies and gentlemen, thank you for standing by. Welcome to the Nano-X Fourth Quarter 2025 Earnings Call. [Operator Instructions] 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 31, 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 Nano 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 powered industries, which has a national reach and an established presence in health care and public sector market, 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 placements across the U.S. Other the framework of this agreement, [ Howard ] is expected to deploy 300 Nanox.ARC systems over a 3 years period, of which 60 are indicated to be deployed in the first year. We also recently announced multiple commercial agreement, which together accumulates to roughly 360 [ systems ] over a 2 to 3 years' period. These partnerships expand our reach across imaging centers and specialty care setting where point-of-care imaging is integral to clinical workflow and patient management.

This represents a fundamental shift in how we are [ poised ] to scale our business from providing our technology to the [ play ] and a meaningful volume shifting toward a growing CapEx portion. This is what we see and getting us closer to our indicated revenue of 2026. The framework has the potential to become a meaningful contributor over time [ and ] just confidence in our ability to convert our robust pipeline into revenue as we move forward. We view this and continue 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've also taken important steps to strengthen our operational foundation, a key component of this initiative is the restructuring of cert 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 component.

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 time line, and regulatory [ required ] in certain markets. These steps take time to complete. And while we are not setting try with a pace and would like to deployments more faster, this reflects the current operating reality across multiple markets. We expect that many of these processes will streamline as additional sites moved through to the pipeline.

Introducing new technology of any time into a medical environment is always complex process. It requires alignment across clinical workflow, regulatory framework, and operational infrastructure as well as changing behaviors which all takes time to achieve it. While this can slow down the early stages of deployment, it is also a natural part of introducing innovative technology into the health care systems.

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 [ Tabat400 ] systems globally over the next 2, 3 years, of this, approximately 38 systems are currently adverse stages of deployment, including administration, commercial installation and system spending construction and/or regulatory approval.

In addition, there are approximately 15 systems that are expected to be installed over the next few months and start of our non imaging network. That said, it is important to emphasize that our current revenue base remain at an early stage and part of this deployed base is not generating revenue and the pace of [ rent ] prop 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 revenue to book accordingly. However, the exact timing of this trend may very and always depending on the deployment process and progress and our factors.

I will now provide some bit color on the Korea 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 toward 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 system, a Switzerland-based manufacturing partner.

We currently hold substantial emitter inventory, which we plan to work through as we had transitioned 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, low [ our ] cash burn and enhanced overall operation 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 [ optic ] focused environment where there is strong demand for a point-of-care imaging.

In addition, we signed agreements with distributors such as integrity imaging, a U.S.-based provider of medical imaging solution with established relationships across hedging centers, health care providers. Elite Surgical, which serves surgical and specialty care environments, digital X-ray imaging a leading diagnostic imaging provider with deep reginal presence across [ Arcosa ]. And most recently, a collaboration with [ New ] an imaging solution provider focused on expanding access to diagnostic imaging and radiology oncology system to support 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 is the potential to become a meaningful contributor to revenues per time. In parallel, we remain 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 in [ Auto ] 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 a strong incentives to retain imaging in-house.

Additionally, we are advancing the [ Nano ] imaging network. A focused initiative designed to build a network-based imaging services model in [ the ]. This initiative target segment, such as the workers' compensation and specialized care for reimbursement dynamics may support higher per scan pricing. We are currently deploying already systems across a number of sites in the U.S.

Under this model, Nano-X supports Nanox.ARC system deployment, maintenance and connectivity, while our partners manage tight 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 the 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 showcase the Nanox.ARC [ 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 world. We were also proud to receive the [ redock ] awards from product design to [ 2 ]6 for the Nano-X [ ARC ] 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 will in the European radiology community. In February, Nano-X announced an exclusive distribution agreement with [ Inter ] a leading medical distributor in Argentina with more than 35 years of experience. Under this agreement, INTECH 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 Nano-X 3D digital tomosynthesis technology in Argentina and strengthened the company's presence in Latin America, leveraging [ Imec's ] established relationship with the health care providers and nationwide service capabilities. Commercialization will be subject to obtaining the required regulatory approval. In Latin America, we were expected for 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 engagement in other European markets. These collaborations support our ability to navigate local regulatory environment and advanced commercialization across multiple countries.

Switching gears, we continue to advance dilatory work that supports our commercial initiatives by expanding the use cases for our solution and making them accessible in more markets. We have advanced key milestones, including TAP2D clearance in the United States. As a reminder, TAP2D is the 2D new image output for the Nanox.ARC system, a practical tool for a geologist to enhance their diagnostic confidence as they become more experienced evaluating digital tomosynthesis images in part of our broader vision to alleviate agentive use limitation over time.

We also updated the AMR approval for Nanox.ARC in Israel based on our existing CE Mark enabling use of the system without object limitation. Removal of the agent [ usliitation ] in the U.S. remain a key regulatory priority. We believe this is an important step that can expand our addressable market and support broader adoption. We are also working to finalize our CMR 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 benefit of Nanox.AI aortic valve classification measurement solution, which is currently under development. We have recently conducted an on-site revaluation of the model across approximately 600 retrospective cases. The result exceeded our expectations with six cases over severe classification identified in approximately 100 cases showing clinical relevant findings.

The Cedars-Sinai team has also expressed interest in collaboration on scientific publications 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 Nano-X Health IT.

During the quarter, we completed the strategic acquisition of [ Vaso ] HealthCare IT, now Nano-X Health IT, a health care IT provider serving hospitals and health care systems across the United States with expertise in health care 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 to contribute to revenue from day 1.

In addition to increasing our footprint in AI, the Health IT platform, enhance our ability to integrate into clinical workflow, expand customer cases [ and ] support cross engagement across our ecosystems. Moreover, the rest of the organization is leveraging the [ LIP ] team's expertise and market presence, particularly as it pertains to lead generation for the U.S. [ Iron ] 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 Nano-X solution.

As already mentioned, the Cedars-Sinai Medical Center is joining a trial of Nanox.AI Arc [ clarification ] measurement solution, and we've accomplished much more recently. In an exciting update from our collaboration with MDS wellness, 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 line cancer screening of high-risk patients and the applicability of Nanox.ARC technology as it relates to patient population of Nano-X MPS.

As I stated earlier, we attended the European Conference of Radiology, the ECR, where we were able to present several scientific achievements and I'd like to share some highlights now. Dr. [ Nova Shashin ], ARC's Chief Medical Officer, presented our scientific work on lung cancer screening using the Nanox.ARC in the work with our operations in what was shown that is the majority of patients, the screening outcomes based on the lung [ rug ] category, the standard lung cancer premicalification system was similar when analyzing the CT and digital tomosynthesis.

This further strengthens the applicability of the TS as a potential addition to screening activities ramping up globally. Dr. [ At ] Wind firmer, senior medical and clinical adviser presented the proven value of our opportunistic screening for CT image using Nanox.AI and three FDA-cleared algorithm enabling earlier detection of chronic disease.

Our latest imaging, in addition, tomosynthesis augmented projection, known as TAP2D was also featured in several scientific posters showing value of TAP2D image and a supplemental image to DTS in lieu of the traditional two extra imaging with no additional dose or acquisition inflicted on the patient. And in addition, at the recently concluded World conference of osteoporosis, Nanox.AI bone solution were featured, including updates from our ADAPT trial conducted across four NHS Trust and led by the University of Oxford as well as initial observation from our collaboration with the Greek Air Force.

The data will show once more the clinical and economic benefits of AI-based opportunistic screening for routine city exempts. The validation abstract comparing the accuracy of the CCS 2.2 compared with cardiology expert reader as part of the [ InFO ] trial was expected as the poster at the Society of Cardiovascular Complete Thermotography Annual Scientific Meeting in the coming July. Outside the U.S., we are excited about our recent collaboration with their Medical Center in Israel, which is part of the [ Clalit ] Israel 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 tomography 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 the confidence our collaboration has a Nano-X solution.

I'll now provide an update on our robust OEM relationship. Nano-X continued to advance its technology pipeline with ongoing development of next-generation field demand X-ray sources and tube architecture. Recent progress includes improvement in [ telemeter ] design and fabrication processes aimed to expanding chip lifetime and enhancing performance, development of micro focus and multi-zone emitter configuration for application stated semiconductor inspection and held and continued advancement of the Nano-X MDX, the multisource two [ platform ] enabling new system architecture for 3D imaging.

The company is also progressing a multiple OEM collaboration in pilot projects across industrial, semiconductor and security market, supporting the expansion of Nano-X's technology into new applications. We recently received a purchase order from the leading semiconductor equipment manufacturer for the developmental meters, supporting advance inspection applications at the leading edge of next-generation IT technologies. With [ Obi ] National Laboratories, the U.S. government agency, a second round of product life 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 micro-focused meter technology and is [ caring ] dedicated test infrastructure to support that work. Another major OEM continues to advance prototype development based on our meter design with validation activities are going.

Overall, these engagements reflect continued momentum across multiple development track 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 event.

With that, I will turn the call over to Ran to review our financials. Ran, over to you.

Thank you. 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 $3.0 million in the comparable period. The increase of $0.7 million increase of 23% in the revenues stands 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 Nano-X Health IT Inc. since the completion of its acquisition on November 19, 2025.

Gross loss for the quarter 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 margin 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 got to 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 for the sales and deployment of its imaging systems, which amounted $49,000 for the reported period with a gross loss of $2.6 million on a GAAP and non-GAAP basis compared to 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.ARC 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 revenue of $0.4 million, which was generated by Nano-X Health IT Inc. since the completion of its acquisitions on November 19, 2025. The company's gross law for 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 products. The decrease was mitigated by an increase of $0.5 million in salaries and wages.

Sales and marketing expenses for the reported period are $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 the 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 was $6.0 million compared to $5.8 million in the comparable period, that the increase of $0.2 million was mainly due to expenses that are related to the acquisitions of Nano-X Health IT Inc. Other expenses net for the reported period were $1.4 million, largely due to the noncash settlement with the shareholder. Recently, we initiated a restructuring plan that is intended to better align our refracturing 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 structuring and overhead cost by downsizing the restructuring facilities located in the company's fab in South Korea to offer the production to other international manufacturers such as the Swiss chip maker System. The restructuring plan is expected to be largely completed in fiscal year 2026 resulted with the company recording a noncash impairment of long-lived assets of approximately $17.5 billion in fiscal year of 2025, a cost that is related to the impairment of its machinery and equipment of the company's cheap manufacturing line.

We continue to evaluate the overall composition 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 that 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 an 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 31, 2025, we had cash, cash equivalents and marketable securities of approximately $60 million compared to $55 5 million as of September 30, 2025. We also had a $3.1 million short-term loan from a bank as of December 31, 2025. We ended the quarter with a property and equipment net of $29.7 million compared to $45.4 million as of December 31, 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 million and 63.8 million shares outstanding as of December 31, 2025 and December 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 5 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. We 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 wishing continued success in the future endeavors.

One 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 Nano-X as Chief Financial Officer. Guy brings extensive financial leadership experience with the U.S. publicly traded companies including several senior CFO and CEO 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 medtech companies during periods of commercialization, [ CALA ] and global expansion. Guy also brings medical technology experience, having served interior leadership role during periods of commercialization and expansion.

His previous [ Lee ] served as the CFO Scorpio Labs Medical Technology company developing AI-based diagnostic platform and most recently was CFO of Valent Semiconductor and New York Stock Exchange listed company. We are pleased to welcome Guy to the leadership. He will join the company and will assume the role of Chief Financial Officer as of August 1. 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 [ holding ] at Nano-X.

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 2 to 3 years including significant agreements with our industry's internal imaging integrity, imaging 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 towards a growing CapEx portion, this is what we believe will get us closer to our [ India ] revenues of 2026.

Second, our strategic acquisition of [ Veda ] Healthcare IT, now operating as Nano-X Health IT has immediately strengthen our capabilities and revenue base. The recognition we received at RSNA and ER including the newcomer awards at ACR reflect the broader truth. Nano-X recognize as a credible player contributing to conversation around the future standard of care in the medical imaging. That perception shift in translating into deeper market engagement and robust supply. 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 demarketizing 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.

[Operator Instructions] And the first question comes from Jeffrey Cohen with Ladenburg Waman & Company.

Just a couple of questions to [ diving ] a little further. So 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. So we have in the U.S., what we call Nano-X impact. We have five direct salespeople with the director of the national sales that is coming from our biggest distributors in the country with a lot of experience.

In addition, we have which we call the clinical education specialists where their role and assignment is to go to the places that we have the systems installed, trade the [ people ], trying to get a better understanding of the referring physician who works with this site. So their job is to build awareness around the site and what's the clinical value that can be added or other referring physicians that we'll do there.

We are -- we have a few organization and operational responsibilities, including tech people who are doing the part of the installations. And in addition, we are -- we have people who are doing the STR like building the deal flow. We are in the process of adding another two people who would be responsible for the channel management. But right now, since we have almost 10 business partners, one of them has mentioned today, is huge. This will require a lot of coordination, a lot of support. We have an onboarding processes for each one of them, which is very methodological that we do in the process to -- when we sign an agreement, the trading process, the unit, for example, we have a few of the business partners in the [ late ] time. We have tens of [ billings ] that already were arranged with the potential customers in order to expand into from field where they are [ committed ] to in the agreement.

Okay. Got it. And then as a follow-up, could you talk a little bit about the South Korean facility and the impairment, what should we expect for 2026, you anticipate further restructuring and impairment? And will that be in the front half year versus the back half of the year? And could you estimate for us if there will be cash and noncash?

Besides the impairment expenses we recorded in 2025, which was the impairment of mainly whatever is related to the chip line in [ the ] fab which was amounted to $17.5 million in the noncash expense, we do anticipate relatively minor expenses which are related to more efficiency that we're going to enact. It won't be -- we don't anticipate that will be a significant amount of dollar. So 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. So right now, we are rationalizing the situation where we have a sustainable supplier with a much lower cost of being chips that we do. The Southern Korea go, we converted to more of R&D center for the ceramic teams that we are developing there and might be even another product which is going to come out from this region.

[Operator Instructions] And our next question will come from Scott Henry with AGP.

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.

But don't give me. I have another one earnings call.

Excellent. And then, 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 number?

I think that you will see most of the -- in the second half -- 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 distribution agreements that we just announced, you will see. You may see a ramp-up in the second half of 2026.

Scott, most of the agreements were signed beginning of about a month or 2 after the RSNA and part of them also after the ECR. And most of them -- most of the business partners agreements, which are going to shift our revenues to be more coming from more from CapEx rather than only the stuff has been signed in the last few weeks, let's say, a month. So right now, we say we will do -- we will start the onboarding the process and the ramp-up will be, hopefully, its financial towards, as Ran said, towards the second part of the year.

Okay. I appreciate that color. And 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 kind of low double-digit growth? Is it still on that trajectory?

I don't think that we refer to the [indiscernible] in our guidance. So I don't want to make any specific attribution to any specific line of visits or segments. But [ general ] saying I think that your assumption not far from real [indiscernible] from real.

And then when we look at spending for Q4 removing the onetime items, it was a little elevated from Q3 with the restructuring, do you -- would you think that it should start declining from Q4 levels going forward? How should we think about those trends in spending?

Well, what happened in the -- you mean, if you look at the non-GAAP, of course, which adds on the impairment expenses and the expense -- the other expenses, that's mainly related to the settlement with the shareholder, you've seen an increase in G&A, which is, I would call it a seasonal increase mainly because of audit and all kind of other year-end items and expenses that were related to the acquisition of [ Base ] Healthcare, which is onetime 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 [ ization ] oil efforts in the U.S. market. So that's actually something that is not onetime item in nature, but on the other, and if we will participate again in our S&A conference that -- that really depends on the questions. We participate in the RSNA in the [ out ] quarter, as you remember, that cost money, unfortunately. But if we participate against then it will be recurring if we won't, we won't.

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

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 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 and other matters.

These statements are subject to risks, uncertainties and assumptions that are based on management's current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date. Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission.

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

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

Good morning, everyone, and thank you for joining Nanox's Third Quarter 2025 Earnings Call. While many companies talk about global expansion, Nanox 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 Nanox 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 U.S. health care 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 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 road map. 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 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 Nanox 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 adjunctive use limitation, which will allow us to market the Nanox.ARC as a stand-alone 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 Nanox.ARC X system, which is to be unveiled at the RSNA Annual Meeting in less than 2 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 Nanox.ARC. The Nanox.ARC X is AI-ready, which means it is compatible with future AI solution 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 [ VHCIT ], a wholly owned subsidiary of Vaso Corporation, which provides best-of-breed health care IT solutions from various technology partners

Nanox and [ VHCIT ] together create a powerful synergy that connects Nanox.AI's FDA-cleared imaging AI solution with [ VHCIT's ] deep expertise in IT integration, implementation and customers' operations. 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 [ Cedar Sinai ], 3DR, Covera Health and others. More details are included in my remarks below.

Now for an update on our third strategic pillar, which focus 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. Nanox remained 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 ARC systems actively scanning showing consistent utilization and clinical adoption. One of the most active sites is an imaging center in California.

During the third quarter, 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 Nanox.ARC has been integrated into their radiological technology graduate program, this flagship training and demonstration is already actively scanning giving future imaging professionals hands-on experience with Nanox.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 Nanox 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 system to introduce Nanox advanced imaging solution to health care providers across the Czech Republic. Under the terms of this agreement, X-ray will lead the market introduction sale and service of Nanox Medical Imaging solution than Nanox.ARC, founded in [ 2,13 ] X-ray is recognized as the #1 supplier of digital radiography system in the Czech Republic with installations in more than half of the country's 200 health care facilities and nationwide sales and service coverage. Additionally, this week, we signed a distribution agreement in France with [ Altea ] France SARL, part of Altea 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 Nanox Medical Imaging Solution, the Nanox.ARC, across France's public and private health care sector. We have stated before that our initial for 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 deployments, we are simultaneously working to unlock even greater market potential through regulatory advancements. In the U.S., the company has submitted the [ Tap 2D ] software module to the FDA through the 510(k) program. That today is a 2D view image output for the Nanox.ARC systems, a practical tool for our geologists to enhance their diagnostic confidence as they become more experienced evaluating digital tomosynthesis images. [ TAP 2D1 ] cleared will be part of a wider vision held by Nanox to alleviate adjunctive use limitation in the future. For perspective, adjunctive use limitation do not apply for the CE mark Nanox.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 Nanox.ARC platform. This regulatory advancement represents a potential key catalyst for accelerated adoption across health care system.

Outside of the U.S., our regulatory efforts continue. But it is worth nothing that these efforts will not be 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 are working with many different countries, which have their own processes and relations.

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 important to Nanox.

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 [ Cedar Sinai ]Medical Center is joining a trial of Nanox.AI for a new AI model for [indiscernible] classification measurement solution that is under development. The solution is intended to quantify the level of [ artic cells ] calcium, which is an important measure of freezed for [ arctic cell ] 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 [ NDS ] 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 Nanox.ARC in the context of lung cancer detection management and screening.

Last month, we attended the early lung cancer action programs, the [ ECL IP ] 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. Laurence Tennenbaum ] delivered and inspiring talk about how he believes that Nanox.ARC can be utilized in lung cancer screening and disease management protocols.

Outside the U.S., we are excited about recent collaboration with [ OLAP ] imagery, which is a group of independent radiologists through practice at several sites in [indiscernible] France, utilizing high-performance technical facilities. Through this collaboration, the Nanox RF system has been deployed at [ Opital Trive Jacques-Cartier at Masi ], one of the leading private hospital groups in Paris metropolitan area for a clinical trial design to further assess the value of the Nanox.ARC in supporting lung cancer detection, management and screening. This collaboration advanced our clinical valuation effort, in the second large [indiscernible] is intended 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 deadest 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 [ VHCIT ], a wholly owned subsidiary of [ Vaso ] Corporation, which provides best-of-breed health care IT solution from various technology partners, specifically imaging information technology solutions, which support imaging workflow for providers. Nanox and [ VHCIT ] together, create a powerful synergy that connect Nanox.ARC FDA clear imaging AI solutions with VHCIT's deep expertise in IT integration, implementation and customer operations.

Under the terms of the proposed transaction, Nanox will acquire VHCIT for a total consideration of up to $800,000 and consisting of is $200,000 cash payment at closing and up to $600,000 in performance-based earn-out payments over a period of up to 2 years, contingent upon revenue retention targets with respect to existing customers. This transaction is intended to accelerate deployment of Nanox.AI solution across U.S. health care 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 Nanox.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 U.S. 3DR Labs offers Nanox.AI FDA clear imaging solution to its network of more than 1,800 hospitals and imaging centers across the U.S. The partnership enables 3DR labs to market and distribute Nanox.AI software solution to its client-based network of more than 1,800 hospitals an imaging center as the U.S. The agreement positions Nanox.AI technology to support initiatives to drive early disease detection and improving clinical outcomes at scale across the United States.

We are also expanding direct to clinician access to Nanox.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 on-site and eliminating the needs to send patients to other locations for CT scans. I'm particularly excited about our current lineup of advanced AI solution that analyzed 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 [indiscernible] promoting preventive care management where AI assist 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 focus on rest prospective analysis to identify care gaps and support their platform. Our expanded agreement now includes prospective use cases such as opportunistic streaming 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 pilots projects with several more in the pipeline.

A key element of the third pillar in the creation of 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 the use in the Nanox.ARC based on, among other things, cost effectiveness, et cetera. We are currently developing glass-based digital X-ray tubes for use in the Nanox.ARC, as previously disclosed, we are working with the third parties such as [ CI ] and [ Varex ] to build tubes and system, a cheap maker located in Switzerland, floral 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 meters and begun scaling due production to support the initial launch of our next-generation [ ARC ]. Specifically, to [ Varex ], we are well underway with performing all the necessary cube and art level testing to add them as an approved supplier early next year. We have additionally taken received from them of multiple [ MBX ] multi-source demonstration to advance our testing and development of stationary digital tomosynthesis and stationary CT type solution. [ Varex's MBX ] or multi-beam X-ray combines the precision of traditional X-ray with a detailed insight of CT imaging and enable faster, higher quality scans with reduced radiation exposure, offering clearer images and better patient outcome. Large personnel will visit our lab in Israel soon to support these efforts.

We are also working in partnership with Novel imaging technology company to explore utilization of our meter with their specialty detectors. These efforts to were low-dose single exposure dual energy capabilities significantly and hence, visualization for medical, security and inspection applications.

On the OEM business development front, in response to requests from the security materials analyst analysis and high-resolution inspection market, we are in the process of fabricating several novel immature layouts each with unique functionality to specifically address pain points or add requested capability as compared to their current offering.

We have also recently delivered two of our developer kits. One is the leading U.S. 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 to recess 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 Nanox.ARC system. We believe this collaboration will drive down our manufacturing cost over time, which will in turn to support our mission to expand access to innovative affordable imaging technology worldwide.

Looking ahead, Nanox 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 partnership and the [ Vaso ] acquisition, we expect to generate a name of $35 million in revenue in 2026.

Furthermore, we project the AI business segment with the addition of [ VHCIT ] will achieve EBITDA breakeven on a quarterly basis sometimes in 2026. We expect Nanox 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 the 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 the first quarter of 2025 or $13.7 million, which is the reported period compared with a net loss of $13.6 million in the third quarter of 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 $3.0 million and gross growth was $2.8 million on a GAAP basis. The increase of $0.4 million in the revenue sales from an increase of in our revenue from our teleradiology services a decrease of $0.3 million in our revenue from our AI solutions and an increase of $0.1 million in our revenue from the sales and deployment of imaging systems and OEM services. .

Non-GAAP gross loss for the reported period was $0.3 million as compared to a gross loss of $0.2 million 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 an 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 $0.2 million on a GAAP basis as compared to revenue of $2.6 million with a gross profit of $0.3 million on a GAAP basis in the comparable period which represented gross profit margins 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 $0.9 million in the comparable period, which represents gross profit margins 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 from the teleradiology services was mainly attributable to customer retention, increased rates 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 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 a 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 $0.1 million. With a gross loss of $1.9 million on a GAAP basis compared to revenue of $0.4 million 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 $0.1 million. The decrease was mainly due to a decrease of $0.4 million in share-based compensation and $0.5 million in expenses related to our development activities which were mitigated by an increase of $0.5 million in salaries and wages and a decrease of $0.3 million in grant received.

Sales and marketing expenses for the reported period were $1.5 million compared to $0.9 million in the comparable period, which represents an increase of $0.6 million mainly due to an increase of $0.5 million in salaries and wages, $0.5 million in marketing activities with connection to the commercialization in the U.S. market, which mitigated by a decrease of $0.1 million 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 $0.4 million was mainly due to a decrease of $0.6 million in share-based compensation, a decrease of $0.2 million in the company's legal expenses and a decrease of $0.2 million in D&O insurance expenses, which were mitigated by an increase of $0.5 million 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, an increase of $1.2 million in the non-GAAP net worth attributable to ordinary shares was mainly due to an increase of $0.1 million in the non-GAAP gross loans, 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 add 3.2 million short-term loans from a bank. We ended the quarter with the property and equipment net of $46.7 million.

As of September 30, 2025 and December 31, 2024, with 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 third quarter of 2025 was transformative for Nanox 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 ARC system at RSNA, we are building the infrastructure for sustainable recurring revenue streams that will define our future growth.

Together, we have our recent collaboration in Greece, Romania, the Czech Republic and France, we are strengthening our European footprint. And in parallel, our collaborations with [ Cedar 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 combined innovative technology with a robust clinical evidence generation and systematic market deployment. For those some elements being beyond our dire control, we believe this is the right moment to present our growth road map. And for 2026, we are guiding to revenues of $35 million.

Our purpose remains unchanged, to redefine medical imaging by uniting innovation intelligence and accessibility, creating meaningful impact for patients, clinicians and health care system 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 the -- 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&A. .

[Operator Instructions] Now first question coming from the line of Ross Osborn with Cantor Fitzgerald.

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?

Seasons out of all the 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, 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 has been [indiscernible].

Okay. Yes. Sorry, if I wasn't clear. Looking back during the 3Q, so you reported revenue, how did you generate $175,000, 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 we are regarding to 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.

I'll refer you to the paragraph. And I don't think in general 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, what types of agreements should we be thinking about in terms of those being a lease versus capital sales? .

Most, I would say, the majority of the [indiscernible], the majority are [indiscernible].

But we still see where we can see an increased activities in the CapEx sales [indiscernible], okay? So we do expect to have some [indiscernible].

Our next question coming from the line of Jeffrey Cohen with Ladenburg Thalmann.

Nice to see the company in [ Medicare ] this week. So a few for beer end, it seems like we've got a good sense of the top line from what we're talking about for the balance of this year and certainly for 2026 with the many partnerships...

Jeff, I'm sorry, can you raise your voice, please? Because you far away from the [indiscernible].

So could you talk about how OpEx could look over the next 4 to 6 quarters as you talk about achieving these 2026 targets versus currently?

Generally saying 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 hand, 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.

That's a major portion of our G&A expenses are related to us being a public company. And sometimes those expenses increased.

Got it. Could you talk about Vaso. I saw in the press release, there's 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 Nanox 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, the -- we have a lot of cross-selling that can be achieved. They can -- the majority of the -- I would say, the main purpose of the Vaso acquisition will be to serve the operational and the customer base -- growing customer base of Nanox.AI. But the more we go into the details what we see right now within the PMI and the post major 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 those customers are modality related customers. .

In addition, what we see is that customers -- a few of the customers already mentioned an interest that U.S.A. teleradiology business will be provided by our teleradiology services. And in addition, the teleradiology, those customers 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 we definitely can see their network and their customer base as a way to grow our business -- our existing business.

Got it. And one more, if I may. I did hear you mentioned breakeven EBITDA levels. But just prior to that, you mentioned something about '26. Could you reiterate that?

Yes. We mentioned this is already the second time that we say that what we are aiming that on a run rate basis on '26 the AI business will be breakeven. In fact, this was even before [ Revill ] acquisition. So right now, we believe probably that it will accelerate the probability of this to be breakeven sometimes that at the end of 2026. And the other thing that we said that the hardware business will shoot for a breakeven in 2027. This is something that we already mentioned in the past.

And what you can see right now based on the wide -- and what you see is 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 would actually enable us to be there. Ran, would you like to add anything?

Yes. Let me find tune it. What we have said in the past that the AI business will be breakeven on a quarterly breakeven during -- sometime during 2026. We didn't specify in the quarter. We do emphasize the growth of the division by the expansions of their B2B2C model enter into new geographics. And of course, with the acquisition of [ Vaso ], which expands expand their operations and the potential for growth and achieving the quarterly breakeven on a 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 sometimes in 2027, we may be breakeven on a wide company range. Just to be more correct.

Our next question coming from the line of Scott Henry with AGP.

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 any -- just trying to gauge your confidence in that number.

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, we are based on preorder and the outcome of what we are doing right now, including those three elements, the business partners, the retail, which is a major part. And the sales force that we currently have, not to mention the new acquisition.

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

Just to add 54% EBITDA we do see some more activities. I'm going to refer to the at what we said in the last question for Jeff. We don't forget that the current sensors and our estimates are based without the peso acquisitions. So when you add the best acquisitions you already going up you have to account for the $4 million in revenues that approximately the vessel. So other than this, the growth may come probably organic in the.

Okay. I think, Ran, did you say that [ Vaso ] would contribute $4 million in revenues? Have you broke up yet?

Yes, approximately.

Okay. And as far as the levers in 2026, what about teleradiology? It reported a strong growth rate in 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 you look at the numbers that we gave as guidance, the numbers are not based on a major quantum lead growth on the teleradiology. 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 over growth will come from the other business that we have, namely the ARC business and the essentially deployment of the [ ARC X ] and especially the -- hopefully, the elimination of the adjunct device of the FDA and the other business that we set and the AI business that we're talking.

I think that OEM also will grow slowly, and we will see a major growth from 2027 based on the indications that we currently have from our existing customers and potential customers of the OEM business.

[ Out ] will be the AI and the ARC, and outwear product.

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