Good day, and welcome to the Nano-X Q1 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would now like to turn the call over to Mike Cavanaugh, Investor Relations. You may begin.

Good afternoon and thank you for joining us today. Earlier today, Nano-X Imaging Ltd. released financial results for the quarter ended March 31, 2023. 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 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, 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 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 financial measures to the nearest GAAP financial measure is provided in our press release. The non-GAAP financial measures include 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 the call today. I will provide an overview of our recent operational accomplishments before handing the call over to Ran to review our financial results, and then we will close, as usual, with a question-and-answer session. With that, I'll get right into it, and I'll start with the news that I'm sure is at the top of everyone's mind, which is the recent FDA clearance for the Nanox.ARC system. As a reminder, on April 28, 2023, we received a 510(k) clearance from the FDA to market the Nanox.ARC, including the Nanox.CLOUD, which is our company's cloud-based infrastructure. The approved device is intended to be used in professional healthcare facilities, our radiological environments, such as hospitals, clinics, imaging centers and other medical practices by radiographers, radiologists and physicians. Representing a major advancement in X-ray tube technology, the Nanox.ARC is a multistory 3D tomosynthesis system that utilizes novel cold cathode X-ray tubes, which the Company intends to offer using an innovative pay-per-scan business model. We believe that the Nanox.ARC has the potential to increase availability of medical imaging globally once approved by local regulatory authorities and deployed at scale. We intend to deploy the version of the Nanox.ARC that was cleared by the FDA, which is the power level necessary to scan the MSK system. We believe the FDA clearance will assist in our efforts to gain regulatory clearance in certain other jurisdictions, including in other countries that are FDA clearance-based markets. Following this clearance, Nano-X will continue to work with the FDA to pursue additional regulatory clearances and intend to expand clinical indications. Other applications may be available in other markets upon obtaining local regulatory approvals. With FDA clearance secured, we are in the process of setting up a U.S. demo center located in Fort Lauderdale, Florida, which will be used for commercial purposes. We are currently working to secure an import license and expect to ship the Nanox.ARC units later this quarter. Additionally, we continue pursuing the European Union CE Mark and continue our work with our notified body, BSI, to whom we've already submitted the contract package. While it is gratifying to see the commercial and regulatory process of recent months, at the same time, we are collecting additional data supporting the use of the Nanox.ARC system. Under the Helsinki permits, which we have previously disclosed, we started to collect clinical sample images of multiple human body anatomies with the Nanox.ARC system that was deployed in Shamir Hospital in Israel. Additionally, we recently passed an independent evaluation of the device by the Israeli Ministry of Health, which facilitates further clinical trials in Israel, utilizing the Nanox.ARC. We are planning to conduct a clinical trial in Israel to evaluate the diagnostic potential of the Nanox.ARC for chest and lung diseases on patients with these pathologies. The trial is expected to be executed in collaboration with a local hospital in Israel and is expected to begin in the second half of 2023. Turning to commercial deployment activities, Nano-X has entered into a three-year distribution agreement with a local partner in Morocco, Vital Tech SARL. Under the distribution agreement, Vital Tech will purchase, deploy and operate an estimated 270 Nanox.ARC units over three years for clinical use. The execution is subject to acceptance tests of the first unit and regulatory clearances. We have already received an import license. We have sent the first unit and our deployment team is on the ground as we speak. Morocco is enhancing our footprint in Africa in addition to work we are doing to deploy in Nigeria and Ghana which we have discussed on previous calls. I will now take a few minutes to introduce and discuss a new commercial partnership, which extends the reach of Nanox.AI. During this quarter, we entered into a global partnership with Blackford Analytics to market our Nanox.ARC product. Blackford Analytics is a global imaging AI solution provider, and this partnership is intended to broaden the reach of Nanox AI cardiac and bone solutions by presenting the Nanox.AI algorithms on Blackford's platform, which offers a wide portfolio of imaging AI software and services. We believe partnering with Blackford is an important step in expanding the reach of Nanox.AI HealthOST and HealthCCS solutions into radiology departments globally, including the U.S. and Europe. The Nanox.AI solution will also benefit downstream physicians in cardiology and endocrinology by enhancing their abilities and helping detect subclinical levels of osteoporosis and cardiac disease. Moreover, we have already completed the installation of our application in four out of five NHS clinical institutions in the UK and our system has been installed in 10 clinical institutions in the U.S. for the purpose of initial clinical pilots. Turning to Technology and Manufacturing, and as previously mentioned in our previous earnings calls, since the beginning of this year, we have been improving our production line capabilities and establishing an operational assembly line to enable the expected ramp-up in the production and preparation for the shipments of the Nanox.ARC system later this year. With deployment as a key focus, I am pleased to report that the production line is now fully operational. Furthermore, I'm happy to share that Nano-X Korea received the ISO 13485 certificate on April 5, 2023. The scope of this certificate obtained by Nano-X Korea covers design, development, manufacturing and sales of X-ray equipment for medical use. Before turning the call over to Ran, I'd like to touch on the Nanox.AI and teleradiology business segment, which continued to generate revenue. This business has generated top-line revenues of $2.4 million compared to $2.1 million of revenue in Q4 2022, almost a quarter-to-quarter increase of 15%. Ran will review the financials in more detail. But as I've stated before, these businesses are attracting customers, thereby demonstrating the utility of these services to healthcare systems, and we are confident they will add significant value to the fully integrated Nanox.ARC system upon deployment. Our work is not done, but we are now at an inflection point in our company's history and are now looking ahead to deploying the Nanox.ARC at a large scale globally. With that, I'd like to turn the call over to Ran Daniel, Chief Financial Officer, to review our financial results.

Thank you, Erez. We reported a GAAP net loss for the first quarter of 2023 of $11.8 million compared with a net loss of $21.7 million in the first quarter of 2022, which decrease was largely due to the decrease in earn-out liabilities in the amount of $5.0 million and the decrease in our general and administrative expenses in the amount of $3.5 million. Our non-GAAP net loss for the first quarter of 2023 was $10.5 million compared to a non-GAAP net loss of $11.6 million for the same period in 2022. Revenue for the first quarter of 2023 was $2.4 million and gross loss was $1.5 million on a GAAP basis. Revenue from teleradiology services for the same period was $2.4 million with a gross profit of $0.5 million on a GAAP basis and a gross profit of $1.1 million on a non-GAAP basis, which represents a gross profit margin of approximately 21% on a GAAP basis and 44% on a non-GAAP basis. The increase in the Company's revenue and gross profit margin in the first quarter of 2023 is mainly due to the increase in the amount of the radiologic interpretation or evaluations and our rates for teleradiology services during the three months ended March 31, 2023, as compared to the comparable period. Research and development expenses for the first quarter of 2023 were $6.3 million as compared to $6.8 million for the comparable period in 2022. The decrease of $0.5 million was mainly due to the decrease in the Company's cost of labor in the amount of $0.5 million and a decrease in share-based compensation in the amount of $0.8 million, which was mitigated by an increase of $0.2 million in development expenses. General and administrative expenses for the first quarter of 2023 were $7.8 million as compared to $11.3 million for the comparable period in 2022. The decrease was largely due to the decrease in the Company's cost of labor in the amount of $0.8 million, a decrease in share-based compensation in the amount of $4.5 million, and a decrease in the Company's directors and officers liability insurance premium of $0.3 million, which was offset in part by an increase in professional services in the amount of $0.5 million and an increase in the Company's legal fees in the amount of $1.4 million due to an increase in the Company's businesses in connection with the SEC investigation and class action litigation as described in the Company's Form 6-K filed on May 22, 2023. During the fourth quarter of 2022, we had accrued $8 million for future settlement expenses in connection with the two pending class actions lawsuits against the Company. On April 28, 2023, we signed a term sheet with the lead plaintiff in both actions to settle all claims in both actions in consideration for $8 million. The settlement is subject to finalization of a formal settlement agreement and court approval of the settlement. Change in contingent earn-out liabilities was minus $4.7 million in the three months ended March 31, 2023, as compared to $0.4 million in the comparable period in 2022, due to the decrease in the Company's contingent earn-out liability as a result of the amendment of the stock purchase agreement that we entered into with the former shareholders of USARAD on April 28, 2023. Under this amendment, the Company should pay an aggregated amount of approximately $0.3 million in cash and 45,392 ordinary shares to the former stockholders of USARAD in consideration for the achievement of certain milestones in connection with the first earn-out period as defined in the USARAD stock purchase agreement. In addition, the Company and the former shareholders of USARAD agreed that the Company shall pay an aggregate of $0.5 million in cash and 210,000 ordinary shares to the former stockholders of USARAD as consideration for the remainder of the milestones and applicable earn-out under the USARAD stock purchase agreement. Turning to our balance sheet. As of March 31, 2023, we had cash, cash equivalents, and marketable securities of approximately $91.0 million and a $3.5 million loan from the bank. We ended the quarter with property and equipment with a net of $45.1 million. As of March 31, 2023, we had approximately 55.2 million shares outstanding as compared to 52.1 million shares outstanding as of December 31, 2022. On April 28, 2023, we issued approximately 255,000 ordinary shares to the former stockholders of USARAD under the amendment to the USARAD stock purchase agreement previously discussed. With that, I'll hand the call back over to Erez.

Thank you, operator, and thank you all once again for your support of Nano-X. I've been the CEO of Nano-X for over a year now and have been looking forward to sharing the welcome news of FDA clearance. The U.S. regulatory clearance also paves the way for Nanox.ARC to be approved in other countries that are FDA clearance-based markets. Other applications will be available in other markets for local regulatory approvals. We will continue to push ahead on multiple fronts: commercialization and deployment across multiple geographies, continue to strengthen our manufacturing capabilities of supply chains, and continue to generate and collect imaging data that supports the use of Nanox.ARC across multiple pathologies and users. I look forward to our next update call in August when we will discuss our Q2 results. In the meantime, if you want to connect with us, please contact our Investor Relations partner at ICR Westwicke. Have a good day.

Our first question comes from Jeffrey Cohen with Ladenburg Dolman. Your line is open.

So congratulations, again, on the clearance, it's very exciting. Can you walk us through and talk about a little bit as far as the backbone of production and where that's existing now and you mentioned fully operational and then talk about the components and subcomponents and manufacturing and tie that into the facility in Korea as well?

Thank you, Jeff. We are very excited about the FDA clearance and the work ahead of us. As mentioned in our previous discussion and press release, we continue to manufacture the chips and tubes in Korea. In the future, we plan to have more than one or two sources for each component, including the tubes. Additionally, we have opened a facility in Jish, Israel, where we will manufacture all the systems for assembly this year and distribute them to various deployment locations. This is what we mean by being fully operational. Looking ahead, we will also explore opportunities to assemble in other countries when we move to mass production, beyond Israel.

Thank you. Our next question comes from Ross Osborn with Cantor Fitzgerald. Your line is open.

Congrats on the progress. Thanks for taking my question. So maybe starting off, could you just provide an update out of Ghana and Nigeria, where does the Company stand in beginning to generate revenue there?

Okay. So right now, we've just started. The revenues are expected later this year. In terms of the deployment that you mentioned, we are working country by country with the local regulations, starting with the import license and the local regulations in those countries that are FDA-based clearance and are not FDA-based clearance and have their local regulations. We have indicated that we are focusing on Africa, and we are exploring and expanding the business in Africa. In Ghana, the system is already installed and operating. In Nigeria, the system is there. We'll be operating shortly when we get all the permits and certificates to operate it. We also indicated today that we signed another meaningful agreement in Morocco. The system is already at the hospital as we speak, and we have a team on the ground that is going to operate it, and it will start to generate, of course, the images. This is with respect to Morocco. In terms of the others, right now, we're going one by one on the agreements that we have in order to ensure that we'll have a test and roadmap for the deployment. At the same time, we have indicated today something very important: originally, we thought that the U.S. would be ready only next year. We really understand right now that we have to find a way and do our best in order to accelerate the process of the deployment and the go-to-market in the U.S., and it is going to be this year. We have already indicated that the first demo center we talked about in the script and the machine that will be sent this quarter. We will start to develop the process.

Maybe a follow-up on your Morocco contract. You mentioned you're deploying 270 units over three years. If you're able to receive the required license, let's say, tomorrow and begin deployment based upon your current manufacturing capabilities, would you be able to meet the three-year window?

The answer is there is no reason why not.

Okay. That's great to hear. And then maybe one more, if I may. Just on the U.S. commercialization. Is the plan to deploy systems in the U.S. also on a pay-per-scan model rather than a capital sale? And if so, should we think about a price around $14 similar to your global average?

The short answer is yes, but I think it's too early to say. Once we start the deployment, we'll see the various models that can be explored, and the different types of units, clinics, or hospitals that will be involved. Currently, from what we hear from the market, the answer is yes. We may explore and then decide on something else, but it's too early to say. I will reiterate that, in general, the answer is yes. It may not necessarily be the $14 mentioned, as it could be different or higher. But for now, that's the plan.

Thank you. That is all the time we have for questions. Thank you for your participation in today's conference. You may now disconnect. Everyone, have a great day.