Good afternoon, and thank you for joining us for the Nano-X Imaging investor webinar. During today's call, all participants are in a listen-only mode. A question-and-answer session will conclude today's event. If you would like to submit a question, please use the Q&A function at the bottom of your Zoom app. Today's webinar is being recorded, and a replay will be made available on the Nano-X Imaging website following the event. In the investor presentation, we ask all participants to forward-looking statements in the company on page two of the presentation. At this time, I'd like to turn the call over to your host and the Chief Executive Officer and Chairman of the Board of Nano-X Imaging, Ran Poliakine. Ran, please go ahead.
Thank you very much and thank you everybody for joining the Nano-X investor event today. As mentioned, also joining me on the call is Itzhak Maayan, our Chief Financial Officer, and Lydia Edwards, our President of Nano-X USA, that will join for the Q&A session. Less than three hours ago, we've demonstrated a working prototype of our next-generation digital X-ray technology, the Nanox.ARC, in a range of medical imaging procedures that produce unique clinical value. Before I will share with you a recording of this live demo and we'll open it for Q&A, I would like to dedicate a few minutes for an overview of our business and our overall exciting journey. So again, thank you very much for joining us, and like said, this is the disclaimer slide, and with that, I will dive into that.
Basically, there is a significant global unmet medical need as two-thirds of the world's population do not have any access to medical imaging. Basically, Nano-X intended to change that. We have a technology that originated in Japan. It's a deep technology that we've developed for the last many years that basically provides an alternative solution for Wilhelm Röntgen X-ray source, an alternative that makes this solution in a very small footprint and significantly much less expensive. Because of that, we believe that we can embark on a global network of full-body scanners in countries around the globe. Those scanners will be connected through the cloud to a service that will provide a better diagnostic and other AI services to patients around the world.
The business model that we are intending to introduce is a SaaS model or MSaaS, Medical Screening as a Service, which is a very unique model for this industry simply because of the fact that normally we're talking about a CapEx model. We're moving it into an MSaaS model. We are able to do that simply because of the fact that the devices seen on the right side of the screen cost us a fraction of what a full-body scanner costs today, and therefore, we intend to create a global network that belongs to us, connected to the service, and allow our customers to enjoy what we call a pay-per-scan model rather than a CapEx model.
I would tell you that the company is also enjoying a big support from big companies such as Fujifilm, Foxconn, and SK Telecom, all who have invested in the company and collaborating with us in order to create this vision into reality. With that, I really don't want to dwell too much on it, but just for those audience that came to this presentation and they are new for Nano-X, I would tell you that this technology, again, originated many years before Nano-X was established in Japan. The intention was to create a nanotechnology for the display market. Eight years ago, we bought the know-how and the core team that originated this technology, and we started to work tediously in order to create what we call a cold- cathode technology.
That was an MBO by a Japanese R&D team, and we established eight years ago Nano-X to focus on medical imaging. Our technology is a MEMS technology, which means it's semiconductor. And what we've done, we focus on moving the technology that was then glass-based into silicon-based, and that took us a lot of investment and a lot of time. Finally, we made it, and in June of 2019, that was recognized when Fujifilm and SK Telecom joined us after over two years of due diligence confirming that our claims that we have an alternative to Wilhelm Röntgen X-ray source may be good. And by the way, if we are writing our thesis, you can envision a full-body scanner sitting in any GP office, any clinics, any urgent care unit, which will change the landscape of the radiology market, not only in developed countries, but also in developing countries.
Last year, I mean, I'm sorry, at the beginning of this year, we went through a crossover funding. We raised about $80 million from strategic investors like Foxconn, SK Telecom, and many other investors. Then we went to the market with a prototype, enabling customers from all over the globe coming to Israel. That was pre-coronavirus to witness what we can do with this technology. Indeed, we signed eight pre-sale agreements for deployment of thousands of units based on the business model I just mentioned. That was, for us, a very big achievement since now we have customers, we have a demand subject to regulatory approval, and we can work on perfecting our prototype and go to manufacturing. To that end, I would say that we contacted Foxconn, and they are the designated manufacturer.
I think people know Foxconn because they are making the iPhone, but actually, Foxconn is a huge company that is also making medical devices, and specifically in their medical devices factory, we found a partner that is eager and capable of taking Nano-X at scale, so right now, the plan is to allow Foxconn to make thousands of those full-body scanners, and we are hoping to deploy many of those in the second half, starting from the second half of 2021. On August 25th, we completed an IPO, a successful IPO on Nasdaq. Basically, we told the story, we shared the status of where things are, and we got the trust of many investors. We raised over $170 million of net proceeds, and that gave us the tools in order to execute our plan.
We are working tediously right now to ramp up our manufacturing capabilities, both in Korea and in Israel. We are also anticipating that the FDA clearance, which we call 510(k), but others in other countries will come in during the first half of the year in a way that the second half of 2021 will be the first commercial units that we are going to actually deploy and operate based on this unique model. Overall, we have the first wave of our vision is to deploy 15,000 units by 2024. We believe this is very achievable as we see the demand growing and contracts that are being signed already for 13 countries and thousands of thousands of devices that customers that are capable and eager actually to take on changing their landscape of radiology market in their own countries, and I'll touch upon it in a bit.
With that, I want to just mention very, very quickly. I think you'll see it also in the video soon, but basically, the legacy system that was very good and working for a long time that was invented by Wilhelm Röntgen is basically a machine that generates electrons that are being collided into an anode. Those electrons are being generated by a very high temperature. So you need to have a very high temperature, over 1,000 degrees Celsius, before you can have those electrons collide and create the X-rays. All of that creates a very aggressive environment that is very hard to maintain cool and to actually maintain operation. And a lot of the costs that we see in different modalities of X-rays have to do with that fact. And what Nano-X actually is doing is providing an alternative. So it's not hot cathode, it's cold cathode.
We're generating those electrons by a nano-MEMS structure that is done in room temperature and with very minimal voltage. We also separate what's called the mA-kV dependency, which means we can work with one tube on different penetration powers, let's call it, and different brightness, which is also a very unique aspect that enables us in one modality to actually look in various tissues along the body. So the fundamental technology is changing from hot cathode analog to cold cathode digital. And for that reason, we're able to make something that is a very small footprint and much, much lower in cost.
With that in mind, we can propel the universe with those devices, not on a CapEx model, but rather by our MSaaS model, and by that, create a much more available and accessible access to these medical modalities so that we can drive higher rates of medical prevention through early detection. So that's our vision, basically. That's our invention, the cold cathode. We feel very comfortable, especially after today's show that I'll talk to you about, going with this vision. Just a little bit of technology. Again, I will touch upon it, and you'll see in the video the demonstration. But just for those that want to see on the bottom side of this slide, you can see a wafer. This is a silicon wafer. Each one of these little squares represents an X-ray source. Again, temperature is room temperature, alternative to Wilhelm Röntgen, 2,000 degrees Celsius.
You'll see also a clean room that we have in Japan. This is truly a deep technology. I mean, protected by the know-how and patents, many, many years of investment. We've invested a lot in protecting this IP to the level that we've decided to make our own chips. We're not giving it away to anyone else. Those X-ray sources will be always made by Nano-X, and with the help of SK Telecom, we're now establishing a big modern facility in Korea that will be able to cope with the ongoing demand that we have, so overall, deep technology and highly protected. Next slide is really showing another view of the legacy system on the left side. Again, the aggressive element of one filament at very high temperature, pushing a cloud of electrons versus on the right side, the chip.
This is an actual image of our chip under the microscope. There are hundreds and hundreds of millions of nanocones and nano-electron guns. Each one of them can emit one electron at a time, and that actually makes the trick of room temperature and very controlled digital X-ray source. Because of that reason, and this is another significant advantage that I want to convey to you, the cost associated with the source itself because of the heat generated, etc., is dramatically less when you talk about Nano-X technology, simply because it's mass-produced semiconductors that we estimate to be less than $100 in mass production versus $150,000 for average cost of a similar X-ray tube, and that's a big difference. When you can make something cost $100 versus $150,000, you can change the world.
And that's why when we push for availability and accessibility, we believe that once we completed the transfer from mass production, we can actually place those light bulbs in a way in different systems around the world, and by that, increase the accessibility to medical imaging. All of that we're doing through this machine. So that's the first full system of Nano-X. What we did here, we actually assembled a few of those tubes inside this ARC, and you'll see in the video soon the way we do it. And this machine actually is able to screen the full body from different angles, different energy levels, and the combination provides access to excellent clinical images that can be analyzed locally.
But our idea is to analyze it over the cloud simply because of the fact that radiologists can sit in one location, patients can be in other locations, especially for countries that do not have any access to medical imaging. The idea there that each one of these full-body screening machines is connected via the internet to a cloud, and our cloud is like a switchboard that can connect to radiologists, archiving annotation by AI, etc. And that's the way we see the future. Let's talk about regulatory paths. Like any medical device, we need to get clearances in the countries that we're working at. Right now, we have 13 countries that we need to clear. The first one, of course, is in the U.S., which is the FDA. As I said before, we expect to get the clearance for our commercial device during the first half of the year.
We took a multi-step approach in the U.S. Actually, we already submitted a single-source device as a 510(k) submission in January of 2020. And additionally, I would say we completed this by September of 2020, and we expect that to be cleared soon. And on top of that, we're going to have a multi-source submission, and that will be for the commercial device already. And when we do it in the U.S. in parallel, we'll do it in other countries like the EU and other countries that we already have contracts with. Overall, just from top line, our technology is ready. We're making the product.
We're going to submit in multiple countries and expect to get clearances during the first half of the year, at least for some countries, including the U.S., which will enable us to go live and actually make business in multiple countries based on the contract we signed as soon as the second half of this year. We also, it's worth to mention that we are planning to ship over 1,000 units in the second half of the year, and we're geared up totally from a capacity point of view. The only thing we're waiting for is actually the regulatory approval. With that, again, I will not touch upon it too much, but I would like to just go back to what I said before. This is an MSaaS model, basically pay-per-scan.
We're not putting the load of the CapEx on our customers, but rather, we've raised the money, and we're going to build the system ourselves. We're going to connect our customers to the service and basically have the customer commit to a minimum pay-per-scan, minimum number of scans per day. Our contracts are based on the fact that we in Nano-X want to see $14 per scan, and we want to see seven scans at a minimum, which takes us to about $27,000 a year. The cost of our product right now estimated installed to be less than $15,000. So as you can see, even at a minimum scan, we can get to a very nice ROI. However, we're not going to stop there because the global average of scans per device is about 60.
So we modeled our business based on something that could become 20 scans per day, which we think is very reasonable. And if so, based on the devices we have already committed. But overall, the first wave that we're trying to put, which are 15,000 units, we're talking about a very healthy business, both to us and, of course, to our partners. In terms of progress of sales, again, this is a map that is focusing first on 5,150 units that are all signed contract pending local regulatory approval. We've signed thousands of units in Australia, Norway, New Zealand, Taiwan, Singapore, Italy, Spain, Mexico, Guatemala, Brazil, Russia, Belarus, and South Africa. All of them signed contracts. We're talking about partners that are capable and eager to push forward this business model.
As we get the regulatory approval, we start to deploy one and then five and then hundreds, up to thousands of those devices starting from the second half of this year. On top of that, I would say that each one of these partners committed to this minimum annual service fee, which is very important. And then we have another strategic agreement in the U.S. with USARAD and in Korea with SK Telecom for additional 5,500 units. And this is not guaranteed by contract, but just by collaborative agreement. So all of that goes smooth because what's left to us is actually to get regulatory approval and get to make those units with Foxconn. Let's talk about the ecosystem. I mean, we're trying to change something that was pretty stagnant for many years, and we're trying to do it with a coalition of partners.
This is not for us to do alone. And what you see here is a kind of, I would say, roadmap of where we are going to find ourselves. All of those names are companies that already signed the contract with us, but you can see that we have three categories. First and foremost, we have strategic partners, those that can help us to scale, but also can use our technology for their own use. And we expect this list to grow and grow over time. In the middle, you see the new, I would say, era of software companies that can implement AI technology to better analyze, I would say, and give radiologists better access to data. And as you can see, we already signed with a handful of companies.
As we speak, the interest level, especially in RSNA, that we get is giving me the feeling that we'll see many more to come. On the right side, of course, this is a deployment partner. These are the companies that actually are working locally, territory by territory. They know the market. They know their customers. They're committed to carry on this vision, and we trust them to actually make our service available in their own countries. So that's really the philosophy there. I think before we go to this slide of the summary, I will now unshare my screen, and I will ask to actually share with you a little bit of today's news from the RSNA demonstration that we made earlier. please.
Hello and welcome to Nano-X. Welcome to the RSNA 2020. My name is Ran Poliakine, and I'm the CEO of Nano-X.
And today, I will be your host in this demonstration of Nano-X technology and system. We are streaming live. Actually, you'll see here a Bloomberg. We're streaming live from the heart of Israel. And as you can see, there are many people behind me, all working tediously in order to realize this vision. But this is not a local story. Actually, for years now, we've been collaborating with our teams in Japan, South Korea, the United States, and of course, in Israel, all with the intent to bring something new to the world of radiology, to create availability and accessibility to medical imaging. Together with me, I'm very happy to have two radiologists, certified radiologists from the US, that join us today to guide us through the images. So thank you very much for joining us, Dr. Yuz, Dr. Shabshin. You will take us through the images.
Again, thank you for coming and maybe a word of introduction.
Hi, I'm Noga Shabshin. I'm a musculoskeletal academic radiologist for the past 20 years and even more. And I'm working in Israel at Clalit Health Services and in the US at Penn Medicine, Philadelphia. I've been working with startup companies for the past 18 years.
And I'm Dr. Michael Yuz. I'm so pleased to be here. I'm a board-certified radiologist, practicing for over 15 years. I'm a CEO of USARAD Holdings, a company which is backed by Siemens Healthineers and other venture capital firms. And I'm also on the advisory board of Nano-X.
Thank you so much. Okay, thank you guys for joining us. And our radiologists will join me later to actually analyze those images. And let's start the magic. So the magic actually happened here. This is our demo room.
We're going to go in and outside later on. What you can see here is amazing, two devices that are based on Nano-X technology. We're going to demonstrate the way they work. We're going to show you the functionality and the freedom with these two machines. But before that, I want to talk about technology. I'm a technologist. I want to tell you about the technology of Nano-X that enables all of that. So Nano-X was originated technology in Japan, and we've been working for years and years to perfect something that actually Wilhelm Röntgen did many years ago, over 100 years ago. Wilhelm Röntgen created the mechanism to stream electrons into an X-ray. And this is RSNA. So many radiologists, you know that in order to create X-ray, you need the stream of electrons. So he's doing it in an analog thermionic way.
Namely, he's taking a filament, taking it over 1,000 degrees Celsius, and then there is a cloud of electrons ready to move into the anode. Well, it's very workable, but a lot of challenges. What we've been focusing on in the last eight years is actually creating a true alternative to Wilhelm Röntgen X-ray source, one that is digital and one that can work in room temperature. And what I'm going to show you here is the basis of this revolution. Namely, it's nanotechnology implemented on a semiconductor for the first time ever, and we call it a chip. So what I'm holding here may look to you small, but this is a significant, significant invention. This is a MEMS chip with nanotechnology that creates a stream of electrons that is controlled digitally.
Under the microscope, if you look, you can see hundreds and hundreds of millions of little electron guns that can emit one electron at a time. That's very important because if you can control the stream of electrons and you can independently control the mA and kV, you can actually create that. This is the Nano-X X-ray tube. This is the core technology that we have. This is the first-ever nanotechnology tube that can go the entire range of X-ray that can play with mA and kV independence. It's very low cost, so much low cost that you can place many of those. Hence our vision to populate the universe with those light bulbs that can actually give very good images as you'll see in a minute. Now, just for comparison, you need to understand that what we have here is a traditional typical X-ray thermionic source.
So we have the glass. We have a rotating anode. We need to rotate it via an engine, and we put all of this in a basin of oil, and that entails a lot of limitations. So that's basically a technology that we've developed. Again, deep technology. I like to call it deep because it's over a decade of development, and it all comes down to this. And this we can make in mass production in very, very low cost. Now, the next question you ask me, okay, we got it, but can you get X-ray? And you know what? I want to try it. I want to see if this little, really little, it's like the weight of an apple tube can generate an X-ray.
Please follow me, and we'll take you through a 2D X-ray modality and see if we can take a phantom of the wrist there. So we're going now, and we see our radiologist. This is our control room. We'll get there in a minute, but we're going through this X-ray room, and we're going to meet you on the other side, showing you the X-ray machine. Well, what you see here is a 2D modality of X-ray. It's very typical. You can see it in every hospital. The only big difference is that this is Nano-X, which means that this head here has this tube inside. And what I want to confirm or establish with you before we move on is that we can actually take this phantom. This is a phantom of a wrist.
We can place it on the detector, and we can actually get an X-ray, can take an image that is an X-ray image. You know what? I have a better idea. I feel like making history. I'm so happy that so many people came to join us today, and I want to refer to 1895. This is the time that Wilhelm Röntgen took an image of his wife. It's very iconic for X-ray, and what I want to do now, with your permission, I want to put an apron on and actually take an image of my hand, so I need the help from one of my team. Can you help me with the apron, please, and you know what? Let's take away this phantom. We don't need it. We'll take my hand.
So now I'm going to put this apron that is supposed to protect me from the radiation. Okay. And with that, now I'm protected. I will sit, and I will try to ask to take an image of my hand. So can you hit the button ? Okay, we're done. So now we took an X-ray image of my hand. I don't know how it's going to come out. This is a true real-life demo, so I have no idea if it even took the image. I heard the beep. And now I'm going to go out, and my team is going to help me to get out these 25 kilos of apron. Thank you very much. As you can see, I'm keep holding this technology. This is very precious technology. So what is happening now from the X-ray room? The images are being uploaded to our system.
It's taking a bit of time. And when it comes up, I will simply ask our radiologist to confirm very, very simple thing. I will ask them if they get the image and if this image is acceptable to them compared to other analog images. So it will take a bit of time. In the meantime, actually, you can watch beyond this glass, and you can see this beautiful machine. And here, I see that actually, I see my hand. As you can see, my wrist is very noticeable. And as you can see, I'm still married, okay, 28 years yesterday. So I'm still keeping this wedding ring. And I will hand it to you, radiologist, just to tell me if what you see is acceptable. Congratulations. Thank you very much. We forgot to take your bracelet off. Nice girl. Okay, so actually, this is a great quality.
We see the joints, the cortex, the bony trabecula, small details. Yeah, it's at least as good as the ones I'm used to seeing in my daily practice, some skin folds and fat planes. I can play with that. No, I couldn't tell the difference from a, can you wind it a little bit? Sure. I couldn't tell the difference from analog technology. This is quite impressive. We can even see the button of your jacket. Okay. Good contrast between bony and soft tissues, for sure. I like it. Okay. Anything to say about the kV and mA that you want to tell me? Yeah, this was done. I just want to confirm that it was done, as we spoke before, with kVp of 40 and mAs of 1.5, right? And typically, the X-rays are done at kVp of 50-60 and mA of about 3-5. 3-5. Yeah.
Okay. Okay. Thank you very much, Dr. Yuz, Dr. Shabshin. This was, for me, a confirmation because we talked to you about nanotechnology. We showed the modality, and then we wanted to confirm that we can actually generate a very simple 2D X-ray. Now I want to step up the game a notch, and I ask you to follow me into the magic room, the demo room where we have Nano-X, two systems in. I want to explain what we did here, and I want you guys to be as impressed as I am because what we did here is very unique. So conceivably, you have two machines here. They look like an imaging machine, very elegant. I like the design. But there are two fundamental differences. One, this is the first machine in the world that actually works with Nano-X tube. So this machine works with Nano-X tube.
And second, not like any other system that provides full-body scanning, this one has multi-source, which means we took separate tubes and we placed here six numbers of tubes here and here and here and here. And if you think about it, this machine can provide huge flexibility because now, as you can see, we can actually swing the patient under this gantry. We can swing the gantry, and we have the freedom to take separate images, projection in different kVp, different angles, put it all together into one very comprehensive file. And that's really what we believe to become a very new breed of medical imaging that, with the fact that it's so low cost, it will provide huge value. Now, for your information, these are prototypes, but subject to regulatory approval, we're going to produce these babies in thousands.
And during 2021, you'll see many of those going around the world or connected to the cloud provide real value. Without me getting too excited, let me actually show you this in action, so what we have here for you on this bed, we have a wrist. We have a phantom of the chest. And actually, we have a bone of a limb that we took from the butchery. And what we want to do now, I will leave the room because of the radiation, and I will ask my team to start a scan. And I want you to see the scan, how we're going about the scanning, so please follow me again, and I'm sitting now next to our radiologist. And what is happening, can you hit the button? I want to show you now what is happening.
So this system is now moving the targets across, and different projection images are being taken. And in a minute, you'll see that each image is actually uploaded through our system into the software here. But for now, what you see is that the image is scanning, and you can hear the noise, scanning different projections. By the way, different body parts come from different recipes. So we optimize. We call it the Nano-X Atlas , which is a unique recipe. And you can see, as we speak, the image is coming up here. So we take many, many images. Remember, we have many tubes, many angles, many kVps. And to provide a perfect image, we're combining all of them together. And in a minute, those images will start to upload. And there again, we have the wrist. And remember, we took 2D image of my hand.
Now we have something different of a hand. We took the chest, and we took a bone from the butchery, actually, so I'll be very, very interested to ask you, Dr. Shabshin and Dr. Yuz, why do you think that this type of modalities provide freedom? What do you expect to see? What are the challenges? And what will surprise you to see when the outcome will come? Ran, on the regular 2D images, we have this challenge very frequently of overlapping bones. And in a 3D tomosynthesis imaging, we are able to avoid this problem, and we will want to demonstrate with some images now. Okay. Fantastic, and actually, Dr. Yuz, I see that the images came. So for the audience to understand, we took images inside, uploaded many of them there. Our software combines it into something that our radiologists are going to review now and explain.
So I will step back and get the professional to explain to me and to the audience what's going on. Okay. So this is a 2D study that was performed yesterday, as you can see the date here. And Michael, do you see? What do you think about the joints? I think it looks normal. It's a phantom, but I don't see any abnormalities. Do you see anything that is suspicious for a fracture, bone lesion, erosions? And if you look carefully at this area here, also the audience, anyone that is watching us? Okay. And let's move on to the tomo. So here, look at the great anatomic resolution. I like it. Obviously, that is missing in the 2D. Here, where the volar. Sorry, these are the live reconstructions coming from the chest. So let's go back to here, to ours. So this is the PC form.
This is in the volar aspect of the hand, and we see it very sharp, but the rest of the hand is really obscured. And as we move back, we see the hook of the hamate. This is an area that is prone for occult fractures. It's much harder to see on these 2Ds. And as we move on, I'll look at this resolution, Noga. Yeah. And as we move on, I'll play with the window. Can you see anything now? Would you change the way you tell me? Can I look at something? Look at this area here in the carpal bones. It almost looks like erosions. What do you think, Noga? I think so too. I would, and you don't see it. I would suspect that these are erosions, and I don't see these at all in this area.
I could maybe think, or one could think that this is. Oh yeah, look at this: a linear lucency like a fracture. I agree. Last thing is there may be some subtle calcifications or sclerotic lesions here in the bone, the radial styloid. Look how much nicer you can see them. Looks like this phantom was a little bit abused. Maybe. Okay. Let's move on to the next case. Our next case is going to be the. Sorry, the wrist. Okay. It's just. These are the live reconstructions of the tomo. This is a chest radiograph that was done at a hospital yesterday. It was done on a regular X-ray machine. Analog source. Yeah. This is the tomo. Okay. Let's look at the tomo for a quick second. Could you scroll the whole thing? I would like to see. Yeah, the whole images.
As you can see, now we are anterior, so we can see the sternum very well. There's no way to see the sternum here. The joints, the manubriosternal joint, and even if I go even more anterior, there's this sternal foramen that's like a normal variant. Look how beautiful it looks like. I see some there already, but we'll come back to that, and the trabecula of the ribs, and as we move back, we can see the airways. Beautiful trachea, and the posterior most slices of the tomo show the vertebra very sharp. The spine is very sharp, and what did you want to show in this case, well, we'd like to ask the audience if they see anything abnormal on a 2D analog X-ray. There's a few things that stand out, so maybe there are some several possible nodules.
We see this round lesion here and other ones down here. These could be vessels or lung lesions. Maybe there's a subtle nodule here. What does audience think? I don't see anything else. So now let's move from back to front slowly. So this large so-called nodule is actually a blood vessel. And this one is also a blood vessel. And here's this lesion. That's the maybe possible lesion that I mentioned here. It's a true lesion. And if we look on the other side, there are two additional lesions. Well, look at the size of this one. There must be at least seven, eight millimeters. And you don't see them on. That's impressive. No, not even retrospectively. And I want to ask you something. I saw something else, Noga. Hold on. Let me see if it's real or not. Oh, here it is. Did you see this? This is real.
This must be a four- to- five-millimeter nodule right there. And no way. This is smaller than the vessels. And there's no way you're going to see it on a chest X-ray. Any of these nodules could be cancerous. And we know we embedded a phantom nodule here. Of course. And as we move forward, there's one more lesion that is obscured by the cardiac silhouette. Can you see this one? I'd like to be a resident today. Can you see this one? I'm going to nail you. Here we go. Here it is. Here's this lesion. And it's obscured by the heart. Okay. So I think we can move on to the next case. So in this case, of course, there are multiple potential nodules that were not nodules. And the nodules that we don't see, we actually see them on the tomo. Okay.
So this one came out live. This looks like a turkey leg. No, this is not a turkey. Thanksgiving is over. And this is actually, I went to the butcher and I bought this lamb extremity. And we made some cuts into it to simulate fractures. So this is the lateral. Stay away from you, Noga. This is the lateral 2D that we did at the day that we purchased it, that we bought it. And now this is the tomo 2D, this one that was just done now. Can you see some fractures? Obviously, this is a complete fracture because we played with it too much. To me, it's this one. And then there's another fracture here, which you can see so much better with the tomo. Do you see any other fractures? I don't. I only see that obvious one and a little fracture above that, but that's it.
Do you see anything in this area? I don't. I see some growth plate below. Yes. So let's now start scrolling through the tomo. I don't see anything here, but I definitely see something here. This is—is this real? This is the fracture. There's no way to see this fracture on the lateral radiograph. You can definitely see it on the AP. So here we are on the left. That's why we can see this transverse line. And at this point, we're already out of it. We're going towards the right, and we're at this level here. The other nice thing is, look at the growth plate. How detailed it is on the tomo. I don't think I've ever seen in my life practicing here. This is the growth plate. So this area of the growth plate can be so well appreciated.
This area on the left, so much better than the 2D. If we need to summarize what we saw, we saw the sternum and the manubriosternal joint. We can see the small details. There's no way to see it in the 2D. It's impossible. And then we saw the anatomical resolution. We could tell when we're anterior and when we are posterior. We got a lot of information about the third dimension. We saw some false positive nodules that ended up being blood vessels. And we saw nodules in the tomo that were false negative. Not seen, not even retrospectively in the 2D. Imagine how many lives we can save with this technology, just from lung cancer. This is just one example. I'm speechless. This is really, really exciting. And what difference we can make on the planet.
And lastly, although the fracture was occult on the lateral radiograph, we can still see it on the lateral tomo. And we can see a lot more information, get a lot more information about the growth plate than on the 2D. That's the concept of overlapping bone mass. This is the perfect example. Guys, I think this is amazing. First of all, thank you so much for being here today. For me as an entrepreneur, I must tell you, I'm so excited. I'll explain why. I mean, we've been working on technology. And my vision and my passion is to connect technology to the masses. And today, what we've seen so far is actually we explain technology, and we talked about nano and whatever.
But when you actually speak to physicians and you see your comment about what we can see and what not in this technology, it really makes me very excited and very hopeful because I know that as the CEO of Nano-X, I can place many of those around the globe and provide many, many of those images in that quality. And before we move on, I just want to ask you, Michael, do you have any other modalities that you have in mind that you want to share with the audience? Absolutely. Because this technology is quite flexible. So maybe I will be pleased. Maybe you want to come here and, thank you so much. I will stand next to you because I think our audience will be quite amazed by what you have in your imagination when you see this technology.
First of all, I would like to mention that I've spent a week at this facility working with Ran and many engineers. I've seen probably thousands of images by now. Not only am I convinced, but there's something that we came across by discussing with engineers, something that I had to share with everybody. The Nano-X's uniqueness is of being multi-source technology, which means that you could have 2D, 3D, fluoroscopy, and even axial imaging all in one device. This is still a work in progress. This is a phantom simulations, noise-free data, preliminary results. We use 11 sources with axial, sagittal, and volumetric reconstruction. And we achieved one millimeter voxel resolution. You can judge for yourself. To summarize, this is exciting. And I'm very emotional because I can imagine what this technology can be done to people throughout the world. In one machine, you can have multiple modalities.
And I'm going to stop here. Thank you very much, Dr. Yuz, Dr. Shabshin. And with that, I think there is no better way to go back into where the magic is and to summarize the day. So please follow me again into our demo room where we have the two machines of Nano-X waiting to be operated and propelled around the globe. So again, just I want the camera to see this beautiful machine again. Remember, this is a core technology. This is what we've invented. And today, we actually connected the dot between the technology and an actual radiologist looking at an image and attached value to that. And that's really important to us.
And with that, I just want to mention that it is the technology that enables us to create a very low-cost, very accessible, very available medical imaging system that in one machine can do so many modalities. And that's only the beginning because if you go back to what Michael just talked about, we are sure that when we give this technology in the hands of scientific people and scientists, they will do so much with it. And we think that this is the next era of this technology. But moreover, we are here and our vision, and I mean, this is our invention, but our vision, remember, is actually to create accessibility and availability to medical imaging around the world. And I think today we established that we are way in the way to go there. Thank you for everybody participating. Thank you, Michael and Noga.
I hope we'll join us in this journey. Thank you.
Thank you, everyone. At this time, I'll now turn the call over to Bob Yedid at LifeSci Advisors for the Q&A session. Please go ahead, Bob.
Great. Thank you very much. I really appreciate Ran's outstanding presentation and video. With us are, as Ran mentioned, Lydia Edwards, President of Nano-X USA, as well as Itzhak Maayan, who is the CFO of the company. So with that, let's start with the questions. Ravi Misra, I see you have raised your hand from Berenberg. If you could please unmute yourself and go next, please.
Hi. Thanks for taking the question. Can you hear me okay, guys? And Lydia. Thanks. So congratulations on the demonstration. I think it's a big moment for the company.
In the few hours since the demonstration, can you maybe talk about the types of questions you've been getting from clinicians at RSNA? I'm curious kind of what are people asking about now that they've seen this device, some of the capabilities or technical specs in terms of uptime or kind of installation requirements. I'm more curious about some of the scientific questions rather than the commercial aspects that you may be getting so far. And then I have one follow-up.
Thank you. Okay. And thank you, Ravi. And thank you for joining today. Lydia, do you want to take this one since you're presenting at RSNA all the time? So maybe you can take this one.
So overall, we're getting a large number of mostly technical questions from the professional community.
It was really exciting to see that one of the keynotes in the opening for RSNA was limited worldwide access to medical imaging and the equipment and basically the lack of radiologists in the developing countries because there are so few resources, which this is exactly the purpose of Nano-X, as we know. We've heard that from Ran repeatedly, and that is the Nano-X vision. We have seen extensive interest from the radiologists across the board, including national and international partners. We're extremely excited to note that we've had direct interaction with our team because hundreds of people are downloading the scientific white papers, which have been made available through our virtual booth, and some more exciting news that just came across, as you probably all have heard, Entrepreneur has named Nano-X as the game-changing technology at RSNA.
We have well over 500-600 inquiries that we have to respond to that came up after the live demo, which we'll be doing immediately.
Great. Thanks. And then just one more, maybe just on regulatory. That's the kind of big one that we're all asking about. Any updates there in terms of the submission, Ran? I know it seems like you're talking about a half to US launch. If you could just kind of give us whatever updates since the last time we spoke on the earnings call about where things stand with the FDA and CE and maybe some of the other regulatory agencies you're working with.
Yeah. Well, Ravi, I think this one is pretty stable at this stage. We're waiting for the FDA to respond on the first submission, which we're expecting to come any day now.
Then prior to that, the commercial device that we show on the video, we actually need to submit a multi-source submission both in the U.S. and other countries. That is happening very, very soon. The reason that we're named the first half of the year as a time where we believe that we'll get cleared is simply because we allow for enough time to submit properly and get the proper response. So not much happening other than the fact that the unit that you've seen in the video is being documented and being tested to comply with the perfect submission that is expected to be done very soon.
And if I could just sneak one more last one in there. Do you anticipate any sort of inspections or kind of site visits on the manufacturing ahead of that? Thanks. And congrats again. No, of course.
I mean, to comply with the FDA, you have a huge amount of things that you need to comply with, including third-party certification about the quality of the way you do things and other such, I would say, audit that is done to a third party. And we're no different. So we expect all of that to be done as part of the review of our submission. Thank you, Ravi. Great.
Thank you very much, Ravi. Now we turn to Suraj Kalia from Oppenheimer. Suraj, if you could unmute yourself and go ahead. Sure.
Hey, Ran. It's Lydia. Everyone, congrats on the presentations. Can you hear me all right? Yes, we can. Yeah, we can. Perfect. So, Ran, one technical question from my side. I think Dr. Shabshin mentioned this. I hope I pronounced her name right. But I just wanted to make sure I got that right.
So the chest that was measured was a phantom with a nodule and vasculature in it, right? And the side-by-side image was measured at Schneider Children's Hospital. That was the phantom that was measured at Schneider Hospital, not a human chest X-ray, correct?
Yeah, you're right. So it's the same phantom. We took one image quickly at the Schneider Hospital. And the same phantom, actually, we did in the live event. And this is the one that was uploaded to the tomo. So it's the same object. One is a 2D image by analog. The other one is a Nano-X image that you saw live uploaded and examined.
Got it. Okay. Fair enough. And, Ran, the Nanox.ARC in action today had a ceramic tube or a glass tube?
Ceramic tube.
Ceramic tube. Okay.
Remind us on the X-ray tube, Ran, where is the receptacle, the high-voltage receptacle for the Nano-X tube?
No, you're talking about, yeah. So I mean, the tube itself is a combination of anode and cathode. So the anode is being driven by a high-voltage circuit that is, sorry?
No, I was just saying the high-voltage receptacle because you have to connect it. I was just curious how where does that get configured?
I'm getting there. So inside the gantry, we have connecting one by one the tubes into the high-power voltage and all the way to a card, a PCB card that is then connecting to the high-power supply.
Got it. Okay. That was great. I do appreciate the help. Those are all the questions I have. Congrats again. Okay.
Great. Next, we'll turn to Steve Halper, Equity Research Analyst at Cantor Fitzgerald. Steve?
Yep. Hi.
Can you hear me?
Yes, we can.
Hi. How are you? So I just wanted to go back to the regulatory commentary. We're waiting for some feedback on the single source. But does that prevent you from submitting the multi-source application?
Yeah, not at all, Steve. Actually, we're working seriously now on submitting the multi-source. What was holding us up was actually to complete the prototype, run through the test, see that the images are to the satisfaction of our radiologist. It's a parallel process and in no way or shape limiting us from submitting when we're ready. We're simply not ready. We're documenting as we speak. We're taking the third-party testing. And once this is done, we'll submit. And that's expected to be in the next weeks.
In the next?
Yeah, in the next weeks. I mean, weeks to months.
Next week. Okay. So next week. That's helpful.
So would you? Steve, I'm sorry to clarify. Next weeks, not week. So it may be yeah.
Okay. So when you look at the prototype that you showed at RSNA today, are you 90% there in terms of the design? Could you give us a percentage of where you're at in terms of the design aspects of the prototype?
Yeah. I mean, this prototype represents what we're going to make. This is 100% our design. If you recall, we used to have a previous prototype that actually was reviewed by our customers. And that was a prototype. And we got some comments. So the model that we've shown today is 100% what we want to make. And actually, we're making, I think, 110 of those as we speak, 10 in Israel and another 100 outside of Israel as we speak, exactly by the same design.
We're very happy with the performance. We're very happy with the reliability. And we think that this is a winner product simply because we also believe that we can make it at the target cost over time. And that's something that we believe. And actually, we got some evidence today by radiologists that provide a huge value to our customers. So it's absolutely what we're going to make.
Right. And the 100 that you're working on outside of Israel, is that being done by Foxconn?
It's done with collaboration with Foxconn. I mean, we're still fighting the coronavirus quarantine issues. But those units are going to be made most likely by Foxconn. And by the way, the usage of them will be actually to do a dry run.
Because remember, even though we commercially start to deploy in mass at the second half of the year, during the first half of the year, we'll see many units that are going to be shipped, deployed, and actually have a dry run connected with the cloud and make sure that everything is done. We're going to train our partners. We're going to train a team of technicians that will operate the system. So all of that is happening with 110 units that are being made as we speak and will be shipped to the designated countries that we've signed contracts with.
Thanks. Congrats on the demo today.
Thank you so much, Steve.
Great. Thank you very much. I have a few questions that have been submitted by the audience. If I could run through those, and part of this relates to a comment that you just made, Itzhak.
I think this is something you could cover, which is Ran had displayed a ceramic tube in the video. Actually, let me back up. We started talking about a Japanese fab that you have currently to produce the MEMS chips to support the initial launch. And do you have a sense of what the capacity of that fab is in terms of the number of machines that could be produced?
Absolutely. Thank you Bob for the question.
Itzhak, if you could move a little closer, I have a little trouble hearing you. Thank you.
Yeah. The Japanese factory that we currently operate is very much capable of supporting this 1,000 units that we intend to ship and deploy during 2021.
While we're doing that, we are ramping up and building an additional fab in South Korea with the collaboration of SK Telecom that we intend to be fully operational to take on additional capacity of MEMS manufacturing starting in 2022. It is part of the strategic collaboration agreement that we have with SK Telecom, in which we intend to leverage the expertise of SK Telecom being the owner of one of the most prominent semiconductor MEMS manufacturing, accompanied by SK hynix. We intend to leverage that expertise while building that fabrication manufacturing facility as part of our fully-owned subsidiary in South Korea during the next year.
Great. Thanks very much.
The other question related to that that I was trying to get to, which is in terms of the ceramic tube that Ran displayed, are the initial shipments going to have the ceramic tube, or is there a combination of both ceramic and glass?
No, no. It's all ceramic.
Yeah. Yeah. It's a very good question. First of all, it's very important to mention that in terms of the throughput, in terms of the functionality, both the glass tube as well as the ceramic tube can actually cover all the standard X-ray throughputs like any other analog X-ray device. However, in terms of the manufacturing, there is much more efficient cost structure of producing our tube by ceramic. And as part of our ramp-up of overall capacity of our tube manufacturer, we intend to transition into ceramic tube manufacturing.
We do anticipate that the vast majority of the units that we ship next year will contain ceramic tubes.
Great. Got it. Okay. Fantastic. Maybe I could turn a question to Lydia because Lydia, I think this question that's been submitted pertains to you. Maybe you could talk about the commercialization efforts that Nano-X is going to pursue, whether on its own or in cooperation with service providers once you get regulatory approval, whether in the U.S., E.U., or other locations.
Okay. Thanks, Bob. Basically, our overall go-to-market strategy is based on collaboration with strong partners. That includes local service providers, AI companies, radiology organizations, and medical data and image management cloud software companies like Ambra. As you know, we've just announced an agreement with them.
While our service providers are going to be responsible for operating the device and drive the scanning volume, we're going to be there to support them with things like maintenance, the future enhancements of our machine capabilities and our technology, and of course, training, all the support they need in order to drive the success in all of their respective countries and markets.
Great. Thanks very much. Ran, I just wanted before we wrap it up, I just want to turn back to you in terms of when you think about overall strategy for the business, what's the main focus for your team as you look forward over the next period of time?
I think thank you Bob. I think basically, in terms of strategy, it's pretty clear. We announced that our first wave are going to be 15,000 units based on the pay-per-scan model.
So I would assume that our team will focus on signing additional MSaaS model or contract to support our objective to deploy 15,000 units by 2024. I think that obtaining the FDA and local regulatory approvals to initiate shipment of our systems to already contracted nine MSaaS agreements for 5,000 systems is something very important. And I can tell you there are lots of people that we recruited, actually a little army of people that are doing all of that, not only for the FDA but also for other countries. I think, as Itzhak mentioned, we are ramping up as we speak. And finally, we got visas. So our Israeli engineers are going to meet our Korean engineers soon. We're going to really ramp up our chip and tube manufacturing capacity toward the big demand that we believe is there beyond the 1,000 units.
That needs a lot of work and investment in 2021. Overall, I think that the biggest execution hurdle or challenge that we have is really being a global company that needs to operate over many continents. We will need to step up in terms of a global deployment team. We are recruiting people as we speak. We need to have a very clear method of how we treat partners from training to service. And that's something that is very much into our focus. Actually, those things are less strategic but more tactical because I think the strategy that we have is simply to take a bold move, place 15,000 units, try to provide a service that will actually prove that this model that we call it MSaaS is a viable model and that's provided a lot of benefits clinically but also business-wise. That's our strategy.
Great. Okay.
I think we now exceeded the hour mark. We'll buy it. Maybe Ran, I could just turn it back to you in terms of wrapping up the event.
Okay. So guys, I'll just try to summarize quickly, and I will put this slide. I don't know if you can see it because I think it pretty much says everything that I want to say, so first of all, thank you, everybody, for joining us today. Yeah, I will try to put it like this. I mean, basically, in summary, the company had a fundamental milestone achieved today. We actually presented at the RSNA. We are very proud to connect the dots between technology to radiologists.
I just want to remind everybody that it's interesting that we have developed a digital X-ray source technology that enables us to generate a new breed of imaging and a new breed of imaging devices that could significantly reduce the cost of medical imaging systems. We allow for multi-source, which means we don't have one source that is rotating around the body, but actually, our architecture is capable of supporting multi-source because we can control each one of them digitally, and that's due to the low cost of the X-ray source, and that's opened the door to a lot of innovation that will come from us but also from others. I mean, we're aiming actually to significantly increase medical imaging availability and affordability worldwide. We're going very, very bullish on that. We're going to make it.
We believe that the industry should shift from a CapEx model into the pay-per-scan model and moreover into something that is more like an app kind of system where you see third-party services that are being offered to clinicians and to patients in order to upgrade the level of healthcare they're getting. So that's something we're very much open to. And if you see from our partnership, actually, we encourage to connect to other software companies through an API because we believe that at the end of the day, this is a future model and there is a win-win solution there. We believe that medical imaging should migrate to a universally connected global cloud service. I mean, this is the 21st century. It's time for this industry to move to this direction.
We are actually very focusing on the first wave that promotes our social agenda, which is namely to place 15,000 units globally by the year 2024. So I mean, for you, audience, I would just say, please join us in this journey. We believe that our invention is important, but our vision is even much more important. We feel really privileged to be part of this company. And we promise you, we will not stop until we see 15,000 units out there providing better health. So I want to thank everybody for joining today. And thank you, Bob, for facilitating this investor conference. Thank you very much.
Ran, thank you very much. And that concludes today's event.