I'm Alex Hantman, and I serve as an equity research analyst here at Sidoti & Company. Today, we're pleased to be in conversation with CFO Ran Daniel of Nano-X Imaging, ticker NNOX. During the presentation, please feel welcome to submit questions using the Zoom Q&A interface at the bottom of your screen. After the presentation, we'll open to your questions. And with that, Ran, I'll turn it over to you.
Thank you, Alex, and good morning, and thank you for participating in our presentation. Short disclaimer: There's a disclaimer on the screen. Please read it shortly, and we'll proceed, so I'll start from the beginning, and I'll give some business updates for who are familiar with our story and for who are not familiar with the stories. I'll try to summarize what Nano-X is all about. What we're offering: We're offering seamless end-to-end solutions from scan to diagnosis, providing advanced diagnostic imaging capabilities and elevating overall patient care. We have a vast set of solutions, which starts from our hardware, which is on the left, and this is the Nanox.ARC . This is a digital multi-source 3D tomosynthesis imaging system, which was cleared by the FDA and the CE, which means that we are ready in the commercialization in both the U.S. market and the European market.
We also have the component of our AI solutions, which are composed of three main solutions: one for the chest, one for the bone, and the third one is for the liver. All our AI solutions are also cleared by the FDA and also by the CE. And the purpose of those, the goal of those tools, is to highlight and help identify patients with asymptomatic, undetected chronic diseases, emphasizing an earlier diagnosis and preventative management to the patient. Another pillar of our business is our teleradiology services, which you don't see any diagram of here, but we do have the teleradiology services, which is based in Florida, formerly USARAD, and was acquired by us in November of 2021. Fourth pillar of our solutions is our OEM business, which is leveraging our technology, which is composed of a tube and chips.
This is actually the actual tube, which is a solely proprietary of Nano-X. It is being developed by our Korean subsidiary. It's been produced over there. It's been done. It's a ceramic tube. To this day, and I'll explain it later, we also have agreements with CEI in Italy and Varex in the U.S. to have additional glass tubes to serve in our, to be placed in our devices. Of course, our OEM business is not only applied for the medical device industry, but also for other industries such as security and other applications. What is our technology? As I showed you, the tube, but actually our source is a chip. It's a low-voltage nanoscale cold cathode generating electron stream needed for X-ray. Actually, our chip is replacing the hot filament that you have in the standard CT and X-ray machines.
This is actually the most innovative source that we have in the market today, one of them at least, and let's go, and this is our tubes. As I showed you, the ceramic tubes that were developed by our Korean subsidiary, but we also, as I mentioned, we have glass tubes that actually were in April 2025, that were approved by the FDA, the glass tube that is manufactured by CEI with our Nanox.ARC , our new generation of the ARC, which I'll show later. It's actually our tube that is replacing the single metal filament that is heated to 2,000 degrees Celsius. It's actually, this is a cold cathode, a cold source of energy, rather than hot. There's many applications, but it's mainly for the maintenance and the cost of the device. As I said, there's the benefits of cold cathode X-ray tubes.
First of all, you can do smaller systems, much simpler systems, and portable systems. The control and management of the tubes are much better, and it also enables us to use multi-source imaging, and I'll show the application in a few minutes. Just for you who are familiar with the story, some business updates, of course. I'll dare you to go to our 10-K filings and the PRs and everything that is on our website in the investor relations section of the website, but just to read in depth of our story, where we are today, we started the commercial deployment of the ARC systems in the U.S. and the EU markets. We are already showing some consistent utilization and clinical adoptions of our images.
Don't forget, in order to add some added value, it's not only the economic value of the device, it's also the clinical value, which is very important for our customers. And we'll still say more details in the presentation. We have advanced footprint in the EU countries. As to regulations, we already announced that we submitted the tomosynthesis software model to the FDA through the 510(k) program. The tomosynthesis software actually will enable us to enhance the capability of the machine, which is a 3D right now, but also to have a 2D and 3D in the same device. Of course, there's an infrastructure integration, which we already announced the acquisitions of Vaso Healthcare, which sells various PACS to radiologists in the U.S. market. Recently, we participated in the RSNA. We had a strong presence. We had a lot of traffic, etc. We have new clinical collaborations.
Accumulating clinical data is really in our core just because that's the way for us to get better and to improve our devices and our AI tools, and of course, we announced a commercial partnership with 3DR Labs, and we have more in the pipelines, and we announced more in the past. This is just a few pictures from the RSNA. We showed the actual Nanox.ARC X and showed some demos in our booth. Okay, so I'll start with the ARC. Whoever doesn't know what the ARC is, the ARC, as I said, it's a 3D digital multi-source system. The source of the energy is not hot cathode. It's cold cathode. This is the tube and our own chip inside the tube. Five of those go into the assembly arm of the device, and those are creating the imaging.
The output of the imaging is 35-72 images that are going to our cloud and be reconstructed by our sole proprietary software into one 3D image. I'll show some example later if the time will allow. I'm not going to say in details on everything because our time is short, but I want to show you this movie. This is a tomographic sweep of the human body. As you can see, it's very simple. You have a technician that was trained in a very short training. The ARC with the five tubes and overhead camera goes above the organ that needs to be scanned. It tilts 15-18 degrees to each side, which creates a tomographic effect. The end result is 35-72 images that go into our cloud and be reconstructed to one 3D image. I'll show you later what it is exactly.
Recently, in the RSNA, and recently, we announced that the FDA cleared our Nanox.ARC X, the second generation of our machine. It's much more simple. It's all included. All the external components of the device were inside the device. It's a plug-and-play device. It's a very smaller footprint. It's a mobile device. You actually can go and drag it from one room to another and just connect it to your electricity socket. It's really what we call the Tesla of the imaging devices. Of course, one of the advantages is that we have lower radiations than CT, much lower, and we have new protocols. We have an enhanced software embedded in these devices, and we have enhanced capability. With the clearance of the FDA of the tomosynthesis submission that we have done, this device, and also our former one, will be capable to provide 2D and 3D images.
The scan, the tomographic scan, is the same principle that you saw before. I'm not going to show another movie. I'm just going to explain what are the benefits of the Nanox.ARC X. Of course, it's less space, and of course, for us, it's less space. For us, the logistics of that, it's much more comfortable. It can go really to every small and medium imaging center or hospital or that has a shortage of space. That's really important to those businesses because they are operating on low margins, and the economic and the clinical value really are giving them a great value over here. Of course, there's less radiation and less power. As I said, it's going on a regular electricity. It actually consumes less electricity than your dishwasher, for example. Another benefit is that we are using one CPT code in the U.S.
It's a 76100, which applies for most of our tomosynthesis application. It provides the operator a reimbursable rate of $90-$110 per scan. In some applications, such as no-fault and work comp, we can get contracted rates. We can charge for more, more than $110 per scan. And we offer the machines on two models. One is the CapEx. One is the pay-per-use. For the pay-per-use, the operator pays $30 per scan. Of course, he's obliged to use the machine for several years, and he provides an obligation to pay for seven scans per day. But $30 per scan in full utilization, as opposed to $100 and more per scan, gives him a fat margin, which is a win-win situation for both of us. This is just a few pictures. We announced recently that we're producing the Nanox.ARC X in Israel, but it's in small quantities.
But the mass production will be fabricated in Thailand and will already commence, but it will accelerate in 2026. As for our commercialization, we are targeting four types of medical facilities: mainly imaging centers, orthopedic clinics, and other clinics, multispecialty clinics, urgent cares, and etc. As I said, the use of the imaging can go right now on a full-body scan, which means we can scan almost every organ in the body for adults per the FDA clearance. Our model goes, as I said, either you buy it outright and we provide the service, or you can use the, and you can go to do the pay-per-use model. The pay-per-use model, as I said, it's 7-10 minimum scans per day, and it's a multi-year contract. The minimum rate per scan will be, for us, $30 per scan.
The geographic locations, we have eight to nine states in the U.S. where we already have deployments, and of course, we are expanding our sales coverage, as we say, whether it's through direct sales force that we have in the U.S., which accounts for up to 15 people, or through U.S. distributors. By the way, in Europe, we do only CapEx sales through distributors in each country in the E.U. area. Okay, so I already said something about the business model. I'll just go forward with that. This is just a slide, and I dare you to go and look at the website in the resource section of our website. You can download the full presentation. It's just an illustration of the economic model over here.
It just shows that with the CPT code, the reimbursement code of 76100 and our economic models, it's a win-win situation because us and the operator are enjoying FT margins over here. For the customer, which is operating the machines, this model is appealing because they don't have to invest a huge amount of capital in an imaging device. CT, as you know, CT devices can be very expensive and rather just to go and do and lease our machines. On the other end, for us, the sales cycle for those types of customers is much shorter because we don't have to go through, it's not a big amount. We don't have to go through committees and etc., etc.
Just about regulations, as I said, we have the FDA, we have the 510(k) in the U.S., we have CE, we have some other approvals in other countries in the world, and we have some hospitals, installations in Israel and in Ghana. Those installations really use us to accumulate and expand our clinical data and the clinical usage of this machine, of our devices. What are the clinical benefits? Just to make it in a layperson language, we are superior over 2D images because we provide 3D images rather than 2D images. So, of course, you have one more dimension. So we are superior to regular 2D. On the other end, as it comes to CT, since we are doing tomographic, which is going between 30 - 36 degrees, and CT is actually the old thing. So CT may not be necessary when you use our machines.
So we cover few applications of the CT, but we don't cover 1% of them. Of course, when you compare CT to us with respect to radiation, so we create much less radiation, much closer to the X-ray levels rather than CT levels. So this is one advantage that we have. This is just the traits of each methodology: X-ray, tomosynthesis , CT, what I already explained, so I'm going forward. This is a comparison between a regular 2D on the left. This is an X-ray. And if I'll just run the 3D, you'll see this is a patient with a cast. So you can see that the picture is becoming very clear, and you can see deep and through the layers of the arm in this case.
This is really one of the advantages of our technology because it provides you more clarity and enables you to go the layers. You can find more examples on our website, so I don't want to spend a lot of time over here, but just in short, it's the visuality of the images that is one of our advantages. It's dismantling the complexity of the structure, and we have decreased the effect of metal artifacts and etc. I'm not going to make all of this. I want to speak about our AI applications. The goal of our AI tools is to turn every scan into a deeper insight. It provides greater value, meaning it's a very great innovation, and it's actually in the radiology space. We enable full PACS integration. Our AI tools can sit on the PACS of the radiologist.
It's also, of course, it's automatic, and it's a precision tool which provides accurate and efficient clinical value not only to the radiologists, but also to the other stakeholders like cardiologists and other physicians. We are targeting hospitals, imaging centers, clinics, and pharma companies, of course, and we also announced that we are also going to connect our AI tools by interfacing it to our AI device, so when I talk about end-to-end solutions, once the ARC is capable to be connected to our AI tools and create its own analysis on the created image through the device. We have three main AI tools that were approved by the FDA. The first one is the chest one, which is a coronary artery calcium score measurement tool. The other one, it's a bone solution, and the third one, which was approved last year, it's the liver measurement.
We also came with the second version of our chest tool. Today, you can actually, you are getting detected calcium scoring. You can see down over here. It's like a diagram, or you can see the score of the calcium over here. It can go from zero, which is even to more than 1,000. So it's really an advanced tool. I don't want to make more than this. You have all this information on our website. We just recently came with the [inaudible] Plus tool. It's a comprehensive patient database. It's automated patient follow-ups, enables you to do automated patient follow-ups. And the data reporting is much more advanced. And of course, it's reducing the administrative workload.
As to our OEM business, we have a few models to work with the OEM business, which is licensing, royalty, or just to do equipment manufacturing agreement, like we do with our tubes, with Varex, for example. I saw earlier in the presentation the tube and the chip, so we are going to leverage on those two components because of our core technology. We announced our collaborations with the U.S. semi-government agency. I refer you to our PR and our filings. It's described pretty well over there, and we are building on more and more partnerships with third-party providers. I'm sorry. Just to give you financial highlights of our Q3, the latest Q3. As of September 30, 2025, we had $55 million in cash and cash equivalents. We announced a raise of $50 million that we have done last month.
So, of course, we increased the cash that we had as of date. Shareholders' equity was $156 million. We had PP&E inventory, which composed from the device that are designated for our pay-per-use model. It's $49.5 million. We had a revenue of $3.5 million revenue in the third quarter of 2025 and we had 71.9 million shares on a fully diluted basis.
That's all. Ran, a lot of great info. Thank you very much for sharing. We'll go a few minutes over just because we started late. Maybe we can start with some of the exciting recent news, so I think you unveiled the Nanox.ARC X at the biggest radiology conference in North America a few weeks ago, Nanox.ARC X. Could you tell us a little bit about the reception? How was that received, both the hardware, and I think you demonstrated some of the newer software AI capabilities.
So I can say that we experienced. The RSNA is taking place in Chicago. It's a four-day conference. Both people from the U.S. and outside of the U.S. are coming to visit the show. So we had a visitor from outside of the U.S. and a lot of the U.S., of course. We had prospective clients, prospective distributors, and some other companies that just saw us because that's the first year that we showed our devices in the RSNA and came and were interested to learn more about the Nanox.ARC X and the technology and the source and the AI and our teleradiology services. We even had in the booth, we even had two stations where we showed with two of our RCMO and our Chief Tomographic Officer showed to prospects and whoever was interested and was there how exactly the images are being read, interpretations, annotated, and etc. That's great.
Yeah. Thank you for taking us there. And you had also one more announcement. After your earnings call a few weeks ago, you announced a $15 million registered direct offering. Could you talk a little bit about how that positions you for success and how that aligns with your burn and capital needs of the company?
Of course, in every company that is not in the break-even point, cash is the oxygen. And we use our cash to further advance in the commercializations in the U.S. market, whether it's to recruit more people, whether it's to invest a lot in marketing, in product awareness, in KOLs, in conferences. And of course, it's. I'm sorry. And it enables us to advance the sales of our products in the U.S. and the European markets as well.
Yeah. Of course, I want just to make an emphasis.
We already made the transitions from an R&D company towards being a product company, so I think investors should expect us to, of course, we're still investing in R&D, and in the future, we are still developing our X-scanner, future X-scanner, and etc., but the main focus right now is the commercializations, rather other aspects of the business, because as every company is made to make profit for its shareholders, we are focusing on bringing the company to profitability as soon as we can and to create value for our shareholders.
Absolutely, and I think that was right to my last question, which is for investors who are excited about AI and the potential impact in healthcare and maybe even medical imaging specifically, but they're unsure about the commercial pacing and timing and when is the right time to invest.
What would you say to them about why now is a good time for Nano-X?
Because I think we have approved our technology. We have approved our technology. We have proved that we are advanced in our technology and our capability to apply those assets that we have and to leverage them. And we are showing that we are starting to monetize those assets, which is the important thing for shareholders. When you go to the AI, for example, you can see that we already have customers like Spectrum Health in the U.S., which are using our chest and other applications for the fourth year in a row. We also started to develop our economics models as to B2B2C, like we do with Ezra Scan, where we are charging per scans of our AI tools in their diagnostic scans that they provide to customers.
So it's not that we are monetizing our technology. We are also expanding the models where we create more value for the company and for the shareholders. So especially with the AI, we can see some acceleration over here, which I'm sure will be shown and demonstrated in 2026.
Great context. Thank you, Ran. And with that, we are at time. So I'd like to thank everybody listening for spending time with us today. And Ran, thank you again for sharing the Nano-X story with us. Thank you, Ran. It was a pleasure to participate, as always. Looking forward for the next time. Perfect.