Good day, and thank you for standing by. Welcome to Nanox Nanox First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Mike Cavanaugh of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today. Earlier today, Nanox Imaging Ltd. released financial results for the quarter ended March 31, 2024. The release is currently available on the Investors section of the company's website. Erez Meltzer, Chief Executive Officer; and Ran Daniel, Chief Financial Officer, will host this morning's call. Before we get started, I would like to share some information with participants. First, if you're an institutional investor and would like to schedule a meeting with management or join an upcoming demonstration of the Nanox.ARC system, please contact me at mike.cavanaugh @westwick.com, and we will work to schedule a requested meeting. Second, I would like to remind everyone that management will be making state during this call that include forward-looking statements regarding the company's financial results, research and development manufacturing and commercialization activities, regulatory process operations and other matters. These statements are subject to risks, uncertainties and assumptions that are based on management's current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date. Factors that may cause such a difference include, but are not limited to, those described in the company's files with the Securities and Exchange Commission. We will also refer to certain non-GAAP financial measures to provide additional information to investors. A reconciliation of the non-GAAP to GAAP measures is provided with our press release, with the primary differences being non-GAAP net loss attributable to ordinary shares, non-GAAP cost of revenue non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP research and development expenses, non-GAAP sales and marketing expenses non-GAAP general and administrative expenses and non-GAAP gross loss per share. With that, I'd now like to turn the call over to Erez Meltzer.

Thank you for joining us today. And as always, we appreciate your continuing support of Nanox and our mission as we strive for global health equity via innovation, particularly in medical technology and AI, which we believe is key and can directly impact patient outcomes. We aim to offer a comprehensive solution that connects medical imaging solutions from skin to diagnosis. During this call, we will provide updates on our strategic partnerships product launches and market expansions. We will also discuss our operational achievements. Our CFO, Ran Daniel, will present the financial highlights, and we will conclude with a Q&A session. We look forward to sharing our progress with you and answering questions you may have. Let's get started. We have kicked off 2024 with a positive momentum, achieving milestones in our U.S. commercialization work, strategic partnership, product launches and market expansion outside the U.S. In the first quarter of 2024, we've continued to make strides in our operational performance. Our key operational metrics reflect our commitment to excellence and our rentals pursuit of our mission to make medical imaging more accessible globally through innovative medical imaging technology. In the U.S., we are continuing with our installation plan. As of today, we have about 20 systems in the U.S., of which some has been installed and several more are in different stages of shipment and deployment. We have manufactured dozens of systems today and we are confident that we can meet the accelerating demand for Nanox.ARC systems that we are seeing in the U.S. market. Last month, we hosted an in-personal live demonstration of the Nanox.ARC system on a patient as part of our investor event in Dynamic Medical Imaging in New Jersey. Investors witnessed the entire patient scanning workflow with Nanox ARC and observed the speed and precision of…

Thank you, Erez. We reported a [ government ] loss for the first quarter of 2024 of $12.2 million, which I'll refer to as the reported period compared with a net loss of $11.8 million in the first quarter of 2023, which I'll refer to as the comparable period. The increase was largely due to a onetime income that was recorded in the comparable period due to a decrease in the company's earn-out abilities in the amount of $4.7 million and a decrease in the gross profit in the amount of $0.5 million, which was offset by a decrease of $1.1 million in the research and development expenses, a decrease of $0.4 million in the sales and marketing expenses, $2.8 million in general and administrative expenses, an increase of $0.4 million in the company's financial income. Revenue for the reported period was $2.6 million and gross loss was $2.0 million on a GAAP basis compared to $2.4 million and a gross loss of $1.45 million on a GAAP basis for the comparable period. Non-GAAP gross profit for the reported period was $0.6 million as compared to $1.0 million in the comparable period which represents a gross profit margin of approximately 22% on a non-GAAP basis for the reported period as compared to 43% on a non-GAAP basis in the comparable period. Revenue from the teleradiology services for both the reported period and comparable period was $2.4 million, with a gross profit of $0.3 million on a GAAP basis in the reported period as compared to a gross profit of $0.5 million on a GAAP basis in the comparable period, which represents a gross profit margin of approximately 14% on a GAAP basis for the reported period as compared to 21% on a GAAP basis in the comparable period. Non-GAAP gross…

I want to thank you all once again for joining us on our call today, and your continued to support of Nanox. As stated, the first quarter of 2024 was one of the strong commercial progress. This progress was not confined solely to the deployment of the Nanox.ARC system. We now have several connect systems deployed and some are generating revenues. Regarding Nanox.AI we are proceeding with a pipeline of current and new product applications upgrades continue to generate revenues and gain adoption from health care providers worldwide. As always, we'll welcome your comments and are always available to meet with investors. Thanks again for your time today. That concludes our prepared remarks. Operator, please open the call for questions.

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

So starting off, you mentioned 20 systems in the U.S. in some stage of commercialization. How many of those were placed in being used during the quarter?

How many?

Yes. Of the 20 , I believe you said some have been imported, but not necessarily active. So just trying to update our model properly for the first quarter. in terms of those 20 systems that were actually being used during the quarter.

[indiscernible] units. But as of March 31, we had already 13 of those 20 already installed. So I hope that answers your question.

Yes. That's very helpful. And then regarding...

Maybe additional point. Basically, this is making progress on an almost daily or weekly basis that we already mentioned that we have doesn't in the sales pipeline. And what I mean doesn't, it's not 1 or 2 or 3 dozen very paramo -- and another point that could be mentioned that we are, in fact, installing today. It's one of the national radiology providers the first system. So this is basically going forward on wave on a weekly basis being that big.

Great. Glad to hear that. And it's very helpful as well. And then maybe just switching to the utilization levels. During the fourth quarter call, you were saying that you're seeing initial stance of about [ 7 ] per day. Would you say that was consistent for the duration of the first quarter and how you see that uptake any?

Give and take yes.

Yes. But don't forget, it's too early to call. We're still in the midst of the soft launch. So we'll do all the conclusions once we conclude this phase of the deployment.

One other indication that I'm referring to items that I mentioned during the call is that the more clinical protocols that we are adding, we see more scans per day. For example, spine that we added. And the fact that we can do it online without the necessity to go to on site and the fact that we have the initial reimbursement. Each one of this component, the clinical in terms of view, even sometimes the incidental findings that we have that we talked about and we'll talk further, these are -- each one of them is adding to the number of skins more and more.

In essence, you can see as a chain of reactions that starts from the clinical data that we accumulate and then expand the commercial use of the machine.

[Operator Instructions] our next question coming from the line of Jeff Cohen with Ladenburg Thalmann.

so just a few questions on our end. I guess, firstly, you talked about another 2 program. Could you elaborate a little further as far as your comment about it being non-invasive. Is it similar to your current platform? Or what may be the difference?

I'm not sure I got the question. Are you referring about the tube?

Yes.

So basically, what we have indicated that we will have 3 suppliers for the tubes right now. and we may cooperate on other players in the future. The first one is, of course, what we do in Nanox [indiscernible]. We spoke about the Italian [indiscernible] tubes. We spoke about the future and intense and very broad cooperation that we have with [ Varex ] that we have already the final design. This will actually be a very broad technology breakthroughs that will come in the future. And we always spoke about our OEM business. We spoke about the English National Laboratory that we spoke about and we spoke about another player in the medical imaging industry that might and have currently interest in our tubes. So all of them basically are expanding our hub availability and tube installation in our system.

Got it. Okay. And actually, could you talk about the second opinion service? And where or when you may launch that? And would that be cash only as in not reimbursed by payers. And any specific data on that front would be helpful.

So in fact, it's been years right now. We are expanding these services to be to be available in other states. This is initially based on the technology and the platform that we have, first of all, integrated with the acquisition of USARAD and the marketplace, and BW that we did. And we build the product, the vulnerability of other players. So right now, we see operating and we are planning to expand. It's generating revenues. And it's part of what USARAD is offering -- service offering currently right now. It does not depend on the reimbursement?

And it's paid in cash.

And we are adding the AI capabilities to these services as well.

Okay. Got it. And then lastly for us, we've been doing some work on medical analytics. Regarding spine, skeletal, orthopedics. So could you talk about your platform versus CT straight up and the ability to transfer files directly into analytics software.

I'm not sure I got the question.

For a company that has been input of CTs versus Nanox Imaging. Could one be substituted for the other? And could you compare and contrast perhaps the capabilities amongst the skeletal system.

First of all, this is this is an area that we are going to elaborate more and more in the foreseeable -- the coming months because based on the various clinical trials that we do and based in the first installations that we have together a lot of clinical data. Based on this, as originally started and plan, what we would like to do is to be as close as the value that we see is provided, but more and more intelligent use our clinical [indiscernible] we bring will be able to add value to the users. What we see right now is a lot of great indications that our offering and basically, we are in many ways, changing the standard of care is something that we are adding value by far more than the x-ray [indiscernible] is providing, but very closely to CT. And we can talk about examples probably we'll talk about it later, but the answer is technically trying to do as much as we can with our equipment, it will enable to replace a lot of the CT [indiscernible] used as we go forward.

And that is all the time we have for questions today. I will now hand the conference back to Mr. Erez Meltzer for any closing remarks.

So thank you all for making the time to listen to the progress that we have made. As you all know, we are putting a lot of efforts in 3 areas commercial, which we make a lot of progress and we'll continue to update as we move forward. One of the amazing findings or the progress that we made is something that we put a lot of effort and dedication that this is the clinical evidence. This is coming from the clinical trials as well as the initial indications for the deployed systems. And last but not least, I would say a technology breakthrough that we are adding to the product road map to the future, a lot of the lessons learned from the process. We are, of course, taking all the necessary steps in order to ensure that the regulatory for being the same and to ensure that our promise permit software, namely AI and hardware will be the basis [indiscernible] conceptual offering from the end-to-end solution. I would say that every week, we are making progress. Even today, we received a few new orders and indication of the time that we're going to install the first system in Mexico as indicated. We received another purchase order from Philippines. So we are expanding on a global basis. And this will be something that will be shared as we move forward more and more. Thank you all, and have a great day.

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