NNOX - Earnings call transcript Q2 2022

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Operator

Good day, and thank you for standing by. Welcome to the Nano-X Imaging Second Quarter 2022 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. [Operator Instructions] Please be advised that today's conference is being recorded. to Cavanaugh, conference Relations. Managing like speaker to now Mike today, Director would hand over the your I of Investor go ahead. Please

Mike Cavanaugh

this today, Officer, the ended Chief Ran June call. Good us XXXX. Erez The morning's its you Meltzer, thank currently XX, will of results Nano-X available Daniel, the is Earlier website. on financial quarter morning, and released section Imaging Chief Executive the for for host Officer; release Financial Limited Investors and today. joining company's

and Before making call to the uncertainties on and will forward-looking any those updated are statements we process representing and as would everyone remind not the are are regulatory of as and should expectations management's that to, like current assumptions Factors difference and not such include, limited regarding activities company's be research operations get but in a the these started, the statements statements subject I relied Exchange not other may today development, the upon as to that Securities that may management commercialization These based manufacturing company's with subsequent future. statements Commission. that views risks, Therefore, filings be cause financial results, this described of be date. and during include matters. company's in

SEC the to release, expenses. A press We now in Meltzer. will stock-based litigation our assets and class compensation, the COVID-related acquisitions, of reconciliation non-GAAP impairment, in amortization I'd the and investors. intangible the provide also of turn and Erez call provided to being merger to to with change goodwill refer of action like over obligation to connection measures information and certain to non-GAAP primary financial additional GAAP is differences measures with

Erez Meltzer

today. Thank you, call all us Mike, joining thank you the for and

support appreciate we Nano-X. continued always, your of As

our share Chief over achievements months As in Daniel, our overview review to our to the before Financial turning call I on and last will call, coming an outlook Ran financial our results. recent give of our Officer the

to to make advance ARC ahead proceed will call We FDA continue open the process. the to the system in then during Nano-X and progress questions. We've headway towards we clearance commercialization full force past continued make to quarter up to the

today, deployment earnings discuss since and teleradiology. what I by comments made into scale. breaking call we and distinct discuss have the in moved commercialization system AI these of the closer advances I at segments have our On and to will we we each of our call have three done segments: regulatory, last finally will how my goal

that, level, in million line QX Nano-X in results on do touch call. most commentary a the of later Ran’s million the compared quarter generated second financial to I'll our at leave $X.X in XXXX, high revenue of of top I details Before but XXXX. the we'll to $X.X

was all As deep in our company. Nano-X by AI, generated Nano-X unit teleradiology revenue quarter, learning analytics the services by business previous and machine

second our at gratifying this services small First, and quarter technology. strengthens with imaging proprietary integrated value of XXXX, such these And to important help stakeholders flow turn as during customers that services. the As within management. in new XX second, signed and cash their belief which add integrated happy teleradiology multisource to believe teleradiology These these since reasons: demonstrate our time services other hospitals report when client will of system we value systems applications in agreements and units revenue two our generating services, that are health I'm see these for our that its November began we most know, they our were revenues quarter-over-quarter. XXXX, they it's and growing business you improve and to acquisitions for relatively us

facilities. group, physicians segment in Our centers, mental imaging teleradiology research include urgent multi-specialty outpatient health cares, the facility hospitals, clients and

revenue traction accelerated existing teleradiology in business additions, clients. see to services, driven AI The the as gain growth organic to solution growth from continued new both continue by well in our U.S. as client We abroad. and

For Health on Centers go South example, on XXth, followed Hospital August by had Xth. at live Outpatient Shore July Nano-X five their Northwell first

outpatient sites throughout system and go through to September. and of anticipated live August remainder hospitals Additional the are into the

regulatory use the our health based strategic we this and solution. health one progress Michigan addition, on population Northwest facilities. reported share with agreement in that can an discuss XX to the In now previously of leading U.S. health customer the Spectrum a of Health, IDNs We care large the with network now in front. integrated AI hospitals I'd like to is our

just Beyond submission each of valuable the revenue gain from for and FDA of we we FDA our Nanox.ARC submission preparing helping for which our In optimize feedback parallel, believe full has XXX(k) Q progress to multisource that for our multisource it's the Nanox.ARC. clearance XXX(k) have a to regulations global made received our we Nanox.ARC. deployment mentioned will submission. in the submitted subject Recently, the further we feedback on requisite the received to are now I that supplement Nanox.ARC, been streams, multisource expect the previously to we The indications we agency. beneficial our have our market. Subsequently, local efforts us system. levels and we result According in and to successful power the FDA are approval to deployment will in we preparing

Regarding submitted to this updates forward process additional begin obtain look for mark marking. providing CE for all process have advances. CE the we necessary regulatory at to We to efforts the documentation Nanox.ARC,

on Moving commercialization. to

areas. announce Nigeria. In on the deployment advance I'm We have to have preliminary training demonstration team deployment multisource we purposes. be of and to to send our there preparing commercial the steps taken the and unit Nanox.ARC continued are toward in to of in April, commercialization a we sent progress first for ground to that Nanox.ARC multisource happy several

area, we and Nanox.ARC these on health Nigeria to systems, the deploy we then total XXX agreement will Ghana, our regulatory for are We that requirements, [indiscernible] This Nigeria in that which will a to process. service we and new in company forward is local multisource (ph) the backlog milestone brings another which with I fulfill orders. with we have the of the to deploy orders hand great with see that units hand plan believe subject also local Nanox.ARC hospitals signed the development to units a system to the contracted shipment and worldwide. other to and begin pleasure XX,XXX recently Our the up. to distributors we is early fulfill under the and announce once in build agreed pushing that begin provides deployable a to have progressing [adaption] distributor relation

build training In place Bio in a is known for we accelerate patient strategically in sectors for income Health, have agreement care a non-profit diseases, develops across and and poverty and profit non-governmental an manage related to research as implementing R&D BVGH addition, in programs Seattle-based development a improve organization, organization middle low BVGH non-profit the medical in Global and imaging with capacity Ventures Africa. and biomedical that Nigeria. initiative developing full for cancer and countries,

developments. Some new and collaboration

Finally, we to on to another milestone I'd excited that are announce take like also a about. commercialization the path minute to

will to To complement look close our to the of will team wanted democratize and Ran over their hard work to support establishing healthcare to in in by next center-based our Financial years results. call. all, Nanox.ARC Chief come. develop investors affordable call But Daniel, our in for remark, Japan. to in our lead the to forward thank to imaging progress that all a and process I financial facilities want Korea earnings mission for world. anywhere the turn Israel more I tubes for be quarter. progress my are the in review would to of We the development This most on chips continued their With to I and Nano-X We that, and technology reporting available center thank like achieved the for this all making the our in Officer

Ran Daniel

you, Thank Eric.

Russell Russell First, that after indexes added market I'm XXXX the XXXX effective is were on of and the our great reconstitution. Indexes, annual development as announce June Russell company. U.S. XXth the to opened a for XXXX part This delighted to we

Nano-X administrative mitigated expenses, of AI and our and and and increase USARAD net XXXX to in expenses to $XX.X quarter our in with in our by obligation our expenses, XXXX As for in Nano-X XXXX, of reported of market million of $XX.X loss our The the in the and and results, quarter of goodwill sales to company the since was a development platform merger compared decrease quarter November expenses loss of of the GAAP acquisitions. fourth a related in connection due consolidation largely net of for second financial general which million, and and marketing research the a decrease the impairment XXXX. we second acquisition increasing

loss million, quarter Nano-X in in the were class organization our November the U.S. $X.X Nano-X U.S. the of was comparable goodwill research $X.X million, $X.X the period system $XX.X share-based obligation platform million period for the fees in in million quarter was Xnd, was profit was compared and a in revenues Change million The $XX.X million of a XXXX Our XXth, second in the from the were to of headcount basis $X.X market and to the for acquisition fourth Company's a litigation The period due due period million $X.X share-based XXst, gross with $X.X of and were the quarter and $X.X for in second $X.X to million connection $X.X in gross to increasing the XXXX for revenue to due for [indiscernible] of AI our for liability. a for filed due XXXX, the consolidation quarter due non-GAAP in company the quarter million, marketing change a XXXX, mainly and XXXX Commission services in to teleradiology compared of loss was XXXX for GAAP of Form the in non-GAAP merger decrease for company's November expenses of decrease mainly million, was legal and million, an basis. XXXX. XXXX. The the Goodwill licensings compensation. ended on $X.X million, comparable of XXXX the from increase increase XXXX. the $X.X the second million Securities of million, in overall and and described expenses Inquiry Company's a -- and General the XXXX, of increase development million second Sales development gross year due for was and AI acquisitions of to XX% May ended and December GAAP since $X.X the with XXXX. on gross three Nanox.ARC compensation expenses for and second company's XXXX. was XXXX basis. the of XXXX million. the the impairment margins comparable administrative the of profit balance the to impairment $X.X the Nano-X to compared On for $X.X an gross increase to solutions with quarter infrastructure the the due The the of $X.X quarter mainly basis in profit for was of contingent to of action consolidation of Research XX-F and as acquisitions million and Exchange June Nanox.AI. approximately to a compared in months a connection represents multisource basis, none expenses development increase the since on of period which of the second mainly Nanox.CLOUD. company $X.X were the of Revenue the million on AI non-GAAP the a on earnout with our

for litigation in due to legal the this reconciliation Our A morning. of SEC press non-GAAP million, in amortization and and loss part assets, impairment, of and change $X.X million and and the net are is between net fees loss net compensation action period obligation and of XXXX for loss the that between XXXX non-GAAP non-GAAP merger net the goodwill second acquisition, issued financial offering of in in inquiry to mainly loss difference expenses. with loss the GAAP second results the quarter connection of connection in $X.X was the non-GAAP quarter release share-based net The same provided a of GAAP XXXX secondary intangible we compared the for XXXX. class is expenses,

million XXth, with million XXXX to of cash Turning to our of $X.X million, equipment. $XX.X balance approximately securities in the to purchase of Company's of the June sheet, of fabrication million. compared increase net cash, as the equivalents construction South marketable as equipment had a Korea ended is machinery and mainly first during XXst, net the $XXX.X XXXX. half The We the we of property $XX.X December and of facility of and ‘XX due completion quarter of the and

As $XXX.X of million, periodic The as decrease is intangible million amortization we compared December due of XXth, assets intangible as the of XXXX mainly impairment of June $XXX.X assets had and the to goodwill. XXXX. XXst, of to

had from XXXX, gross to As company (ph) million million warrants. and outstanding, The of approximately the of approximately increase generated options. exercise outstanding to proceeds of mainly exercise due Company options June as compared XXst, exercise such XXth, XX.X shares December million XXX,XXX of XX.X of the in [XXX,XXX] XXXX. The was the warrants and the shares $X.X

the the to achievement to during former Xth, the holders addition, Nanox.AI’s Company of I of Nanox.AI, the Company, of Merger, half XX,XXX and to a Ltd., among over the of of equity of equity shares Plan the that back pursuant amended, the Perryllion In first terms and call Agreement milestone as due XXXX, the dated representative to holders. will With hand XXXX, Erez. Nanox.AI as August issued

Erez Meltzer

like update. again, and I Nano-X to hope With open But with in to about a the in for you I recognize there quarter once meeting, joining results to in if thank the We like like team Relations very please also And all ICR. September, to Operator, months. at Thank us more session. would second provide is for that Investor I'd the good with Ran CEO. partners Q&A now management non-deal call updates a all share us weeks you that, today. roadshow our begin will would to additional you, schedule for as you the late of the coming Nano-X all do. feel financial have contact questions. investors the please

Operator

Cohen first with Instructions] [Operator comes you. Ladenburg. Our Jeff question Thank from

line open. now is Your

Jeff Cohen

How Hi, Erez and Ran. are you?

Erez Meltzer

and yourself? Great

Jeff Cohen

Just fine. of Couple questions end. from our

the facilities in opening and there and talk anticipate about anticipated So center that technology the on you're planning and the could current you the you capabilities in at Israel versus Korea capabilities Japan?

Erez Meltzer

of we to We roadmaps, for would be we the First further Korea we're of core our base going very in on technology that the our the both developed thought more appropriate will engineering and of that technologies. R&D, fact cetera. And the on chips willing in that Korea and will the very chips centers that we knowledge the be going et to supply future side. for and the the product now, where will it's to close Japan strengthen but products, are and be -- future have further all design, to similar, it tubes. do the advanced and the development kind be that be manufacturing a Right

Jeff Cohen

timeline the maybe the that at and Could you have it. manufactured about number product anticipated ARCs ARC the got of which of your manufacturing far as then by today? manufactured Okay, been your and talk ARCs, as tie end into And number anticipated year? of FDA

Erez Meltzer

Okay.

disconnected of chain, accelerating going we the as on the we're mentioned. the are first part this in of the in supply which -- not various the Obviously, reality the of of components, what's from production assembly. all, terms in market So terms of are

-- are even We So we we to units I that systems the this hope beyond which in arrangement assembly FDA. the units. end the X,XXX will the before X,XXX that about first you QX locations, question production, to discussion going XXXX mass for X,XXX year, the we go the with respect after either for the have or asked will the we not next the to be two year, next to with of in systems the explore to and falling are With assembled or even that further one of Israel QX mentioned to have respect be actually And the the of the Israel. mean and is are the in first will beginning. production pushed hopefully the units step the we part to all

the all, not preparation last say helpful and -- last, very that received I last would the was was the was held submission. happy meeting the for from FDA last us. before actually feedback but we for week, of the meeting I that which this meaningful First was with final very the that the

submission formal eight we say, preparation the almost to in into and that proven so to say we right the aligned easier the Q to that it, the and the think it's the that we I will for eight FDA be us as the advantage we and So we are that decision. it months that for to feedback continue moving have submission idea -- final I dialogue, say itself got FDA forward. going about to the take the the go I and with the are to with Right FDA pre-sub would to our path had now, with be and -- with cooperation much continuous we make all dialogue And -- for do would

Jeff Cohen

Ghana talk expect Got many then coming and it. to be would And about delivering finally, How units. two? or delivered there quarter far ARC in as you as manufacturing the

Erez Meltzer

be would Right the them explained that say one past like we FDA the the regulation, all that of countries working require that we Nigeria, basically mentioned, another in not the now, one. and -- in Ghana we're will I

special say the through, indications, during We have the another be fourth probably I the Ghana year, that a see wouldn't wouldn't Overall, they my to eyes, process until XXX starting submission to agreement we -- in the going it quarter. we that that but of of is the for -- system related have And are the gave hope -- units. sent. us FDA. actually not be formal commit approval are really actually two more I to to the to will next would will systems gun I I the send approval it has the

Jeff Cohen

for any Would expect year goodwill impairment of on one the QX or for half then it. Got the And you QX? quick Ran. question back

Ran Daniel

But on there rate, yes it in any change other or parameters, formats. the capital will market be in will as interest depends say really the an market PR, the but we increase be there

again, do on test also estimate. to may it we we impairment And at to depends have it an least. management our internal So have

Jeff Cohen

it That for does perfect. the Thanks Okay, taking for questions. us.

Erez Meltzer

Jeff. you, Thank

Ran Daniel

you, Jeff. Thank

Operator

Thank you.

Suraj of from Our line Oppenheimer. with next question comes the Kalia

open. now is line Your

Suraj Kalia

Erez, morning, you Good alright? Ran. me Can hear

Erez Meltzer

Loud and clear.

Ran Daniel

Perfect.

Suraj Kalia

everyone the following multisource Erez, healthy. in a is it cover comments ever entire to KvP, Was mentioned think from Nanox.ARC correctly, from submission. and power I'm just XXX I up on Hope maybe remember Hey, safe feedback had gamut. from the FDA. If on doubt, so, last you all that so I the Perfect. your full level misreading quarter, XX the would

if some additional could feedback? shed your specific the on maybe at full level you So light kindly power comments

Erez Meltzer

question, the First I it that understand of a never hope has doubt. all, but I been

Suraj Kalia

Okay, fair enough.

Ran, can to at be So, are when us filed? And or will multisource you you're a -- when when expecting actually you -- give as the clearance? timeframe XXX(k)

Ran Daniel

already only commit time I'm or indicate actually things actually which that or will willing say to As be sure -- you I there the can I'm know, are that on committing. XXX%

enough I information right I that think So the about background now, timeline. and gave

in the advantage few the shortly. feedback the to I things few that the think the will it weeks that think the be be gave in final that are and in the -- We FDA preparation this we got I that submission a And will say, added from is positively done to be next us system. would the -- will add to the done submission

about submitted, once know submission shortly. this that be And -- then sure hope will will I So I'm it. you'll that it's

Suraj Kalia

file likely than QX? So you will more in

Ran Daniel

always I'm all to Basically, level trying on all fronts. and so? earlier said do things You

Suraj Kalia

CE just MDR Erez, a on have very multisource? concern, remarks process process the generally and the maybe CE Nanox.ARC I become your in companies the speaking, lot voiced has Mark become very for overall updated cumbersome it prepared cumbersome. missed timelines CE Mark, for of has

Erez Meltzer

with already the we all, registration body. have documentation notified the necessary of all First submitted the for

We we all have selected gave information. notified them body, the the

whatever guy, I you I You things. a have that can, you know learned when control the you was when can young that, to -- do,

the be the are you the and right managing to have You you or the This rather for we'll for FDA. that have can't last their privilege cannot later. they we in wisdom but CE cannot, patient have are that fact preparations between the results have of control the them. okay? months, doing, is CE the a will we done during few hurt control what than basically We we will give the not And hope and that will -- systems us when us not to We hope lot the FDA. you overload and the that we processes sooner that differentiate give

Suraj Kalia

final back two it. Got queue. Erez question, in I'll hop

XXXX. what been units Maybe about questions. of still you So taking these these before there remember units? validation three Erez you they contractual greatly my there us any for amendments? in or second or color are done thank the me seeing right, question contracts, And year referenced just talk could to in additional Any from be appreciated? have old amounts. memory you the my last start -- serves shipping Ghana, that would more terms you'll has whether of Gentlemen, if been these I valid a than side X,XXX do is, the our of If substantial testing portion terms in

Erez Meltzer

Okay.

question of to validation. all, the answer with not exactly is What check referring about that first respect first systems about the the I'm the are you yes. to So sure we

second of positive referring Ghana? to the of in to to technology regulation validation are in With say of you question. in would terms in I the clearance terms respect the kind region, or So what

Suraj Kalia

of performance [Multiple slew product have Erez go what Speakers] through launch testing, testing before meant you No, I was you any to commercially, a

Erez Meltzer

course. of the Not Yes, yes. yes. basically answer basically is answer is The yes, yes. Yes,

Suraj Kalia

Thank Okay. you.

Operator

Thank you.

Rakhit LifeSci the of Our with Capital. line from next question Rahul comes

open. Your now line is

Rahul Rakhit

guys. for Thanks the question. taking Hey,

provide conversations you don't you mentioned Maybe in could about timing any indication and two countries that necessarily talk you are geographies So other there require if deployment. in FDA there? are on where those that for clearance

Erez Meltzer

we because preference going not announced answer share. to be soon would the we market are signed countries are signed. actually you are the do the that which is necessarily we -- FDA. public have let the In as there it that as know the know My that when in announce only the no, a need they public, will not to The we since few agreements were XX-F past, that

Rahul Rakhit

right. Right,

Okay, that agreements ultimately revenue is makes sense. the about these integration broader And help could I about mean, potential AI to opportunity? big Maybe you us really there? then what excited hear broader some there. And it's look guys does obviously announced. that of what the think the integration like -- you what is health systems, revenue like

Erez Meltzer

this So of think X-K now we the I -- already are we the system in and respect script over first And to timeline in installed and the there. -- few there we is a next all, that the in have in the implemented few months. with integration, are a these mentioned right

going install plan. and will think, November last the as to hospitals system last going the November. to this I November is of the gave October be that think that specifically part that, the be the we're Northwell to in I us one one all in

few In old, to it's is in by scale. million terms be the go. between our unlike model basically to past dollars to Medical. a And in is few in used it what what business can [IBN] in everywhere the that (ph) now, of way Right be and Zebra used the this a $XXX,XXX general,

Rahul Rakhit

it. Got

timing for submission of the decision. had very Q on like conversations far, appreciate in a these I the the the know just the sounds Q&A on that. based maybe fruitful. a then timing submission. want you impact it on help of conversations But understand has lot so I lock FDA don't you can what the to the Okay. actual been in And the specific of us with

take filing, So FDA the long expect once clearance there? you X-K obtain you to do it from to actually do how submit

Ran Daniel

I us, very ideally would to the since unworth Q I we probably in a that helpful right we reasonable the be But So one and on would the will the that -- -- that benefit but the would say process cooperate process. that to would we the say, I not give make rather it's basically, we that sooner process. that's will know a say, process the think with because I have -- I timeline, hope for the have it dialogue, would the we clearance and thing same had process FDA submission it in of say, wouldn't logical working know was the it positive than now, and process know I be market later, will us have the on the that hope based them, on and I I or them accelerate the would say they privilege, that are what the Overall, with I the it mentioned. the done the impact benefit overload

Rahul Rakhit

Got sense. it. Appreciate it. Makes

Operator

the for have I'd over now today. we Meltzer closing call like back time the turn Erez for to all That's you. questions Thank remarks.

Erez Meltzer

sorry. So

September, in any at were address to audience being you much with see at to may will U.S. who willing what we're call question again, for thank of from investors day. or question come I'd that and you are are We'll September. doing this the part from once for and so any you doing we're you So the shortly of to -- Thank -- related all for ICR those so are like that what that far. And we in always of end the today. sometimes

Operator

today's concludes Thank for conference participating. This call. you

may disconnect. You now

Nano-X Imaging (NNOX) 16 Aug 222022 Q2 Earnings call transcript