Nano-X Imaging Q2 2026 Earnings Report

Nano-X Imaging EPS Results

• Actual EPS: -$0.79
• Consensus EPS: -$0.16
• Beat/Miss: Missed by -$0.63
• One Year Ago EPS: N/A

Nano-X Imaging Revenue Results

• Actual Revenue: $4.16 million
• Expected Revenue: $5.38 million
• Beat/Miss: Missed by -$1.22 million
• YoY Revenue Growth: N/A

Nano-X Imaging Announcement Details

• Quarter: Q2 2026
• Date: 9/9/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, September 9, 2026
• Conference Call Time: 8:30AM ET

Nano-X Imaging (NASDAQ:NNOX) (NASDAQ:NNOX) is an Israeli medical technology company focused on expanding access to diagnostic imaging. The company develops digital X-ray systems and related software intended to provide affordable, digitally managed imaging services for hospitals, clinics, and other healthcare providers.

Its principal platform, Nanox.ARC, is a digital X-ray system designed around a proprietary cold-cathode X-ray source and a multi-source imaging architecture. The company also offers Nanox.CLOUD, a cloud-based platform intended to connect imaging devices with radiologists and healthcare networks, and Nanox.AI, software designed to assist with the detection and prioritization of findings in medical images.

Nano-X markets its technologies to customers and partners in multiple international markets, with regulatory clearances and commercial availability varying by product and jurisdiction. The company was founded in 2012 and is headquartered in Israel. Its strategy combines imaging hardware, artificial-intelligence software, and cloud-based services to support medical imaging in regions where access to conventional imaging equipment and specialist interpretation may be limited.

Nano-X Imaging Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Commercialization expanded with Nanox.ARC installations at RadNet, an orthopedic IDN, urgent care, and the first Nanox Imaging Network site in Philadelphia; the company reported some sites completing hundreds of scans monthly and 10 U.S. distribution partnerships.
• Positive Sentiment: The Nanox Imaging Network has begun receiving insurer payments of approximately $200–$700 per claim, while management estimates potential annual revenue of roughly $500,000 to $1 million per site depending on utilization and reimbursement. A new CMS code for AI analysis of coronary and aortic valve calcification may also support Nanox.AI adoption.
• Positive Sentiment: Q2 revenue increased 37% year over year to $4.2 million, driven largely by the acquired Nanox Health IT business and continued growth in teleradiology, which averaged 14% year-over-year growth in the first half of 2026.
• Negative Sentiment: Financial losses and liquidity pressures remain significant: adjusted EBITDA loss widened to $11.3 million, cash and restricted deposits fell to $31.4 million from $60 million at year-end, and the company recorded a $40.7 million non-cash impairment charge. Nanox subsequently raised $8.5 million through equity offerings and said it expects to continue seeking additional capital.
• Negative Sentiment: Management acknowledged that commercialization has taken longer than expected and announced workforce and manufacturing reductions, including a 15% cut among Israeli employees and a two-thirds reduction in Korea, where chip production was idled. The company expects about $2 million in annualized savings beginning in 2027, while shifting production to third-party suppliers and preparing to sell its Korean facility.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Nano-X Q2 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that this conference is being recorded. I would now like to hand the conference over to your speaker today, Mike Cavanaugh, Investor Relations. Please go ahead.

[Mike Cavanaugh, Managing Director for Investor Relations at ICR Westwicke]

Good morning, and welcome to Nano-X Imaging's Second Quarter 2026 Investor Call. Earlier today, Nano-X Imaging Ltd. released financial results for the quarter ending June 30, 2026. The release is currently available on the investors section of the company's website. With me today are Erez Meltzer, Chief Executive Officer and acting Chairman, and Guy Nathanzon, Chief Financial Officer. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements regarding the company's financial results, research and development, manufacturing, commercialization activities, regulatory process, and clinical activities, and other matters. These statements are subject to risks, uncertainties, and assumptions that are based on management's current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date.

[Mike Cavanaugh, Managing Director for Investor Relations at ICR Westwicke]

Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission. We will also refer to certain non-GAAP financial measures to provide additional information to investors. A reconciliation of the non-GAAP to GAAP measures is provided with our press release, which reconciles the following non-GAAP measures to the closest equivalent figures under GAAP: non-GAAP gross margin, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP net loss, and adjusted EBITDA loss. With that, I would now like to turn the call over to Erez Meltzer.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Thank you all for joining us today. In the two months since our last call, we have advanced commercialization across several areas of the business. Our management team has completed a thorough review of the business and started implementing lessons learned with progress reflected across our commercial, operational, and strategic priorities. Today, I will focus on the steps we are taking to improve execution, extend commercialization, and support the long-term value of the Nanox platform. While our business is trending in the right direction, as we discussed last quarter, our commercialization has taken longer than we expected when we initiated the commercial phase. We have already provided preliminary financial results last month, and our results are substantially consistent with those previously disclosed figures. The main friction points have been, as mentioned, operational.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Commercialization requires close side-by-side coordination with small and medium-sized imaging centers, particularly around permitting, shielding, construction timelines, and integration into clinical workflows. These are practical deployment requirements, but they have been important lessons as we refine how we move systems from commercial agreement to active utilizations. By identifying where the frictions has occurred, we have been able to shape the changes we are now implementing. Most importantly, we are increasingly leveraging commercial partners with established relationship and workflow in the imaging space to meaningfully enhance our presence in the U.S. At the same time, our direct sales effort continue to support additional Nanox.ARC CapEx agreements and deployment activity, including the first Nanox Imaging Network installation in Philadelphia, which has already scanned its first patients.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Beyond the U.S., we continue Nanox.ARC deployment activity across Europe and Latin America, advanced new Nanox.AI commercial and pilot programs in India and the U.S., and moved forward with the restructuring of our South Korea operations to better align resources with our core technologies and commercialization priorities. We continue to broaden our U.S. footprint through strategic collaborations, customers evaluations, and deployment activities, including our recently announced collaboration with RadNet and ongoing work with leading clinical institutions with the goal of expanding our engagement with healthcare chains and increasing activity within those chains. As we disclosed in our last call, the Nanox.ARC system has been operational for several months at RadNet sites. RadNet is the largest outpatient imaging center operator in the United States and has deployed the Nanox.ARC system at one of its facilities, where it is now in commercial use and integrated into routine clinical workflow.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

We continue to explore opportunities for clinical research, including early lung nodule detection. We believe this represents an important step in demonstrating Nanox.ARC's clinical value in a major outpatient imaging setting, and we are excited to continue this collaboration. We recently deployed a Nanox.ARC system through a capital equipment sale to an internationally recognized orthopedic center in Florida, which is part of an IDN, integrated delivery network. As this organization integrates the system into its orthopedic imaging workflow, we are launching a strategic collaboration aimed at broadening the clinical use of Nanox.ARC in orthopedics and generating clinical experience in a high-volume specialty care environment. We believe the true measure of innovation in medical imaging lies in clinical relevance and potential to improve patient care.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Our continued engagement with leading healthcare organizations reflects our commitment to generating more real-world evidence and evaluating a growing number of clinical applications for our technology. For example, we recently installed an ARC system in an urgent care unit located in New Jersey. Turning to our commercial distribution partnership, we are seeing channel partners build pipelines activity that supports future CapEx sales. In addition, our U.S.-based subsidiary, Nanox Impact Inc., has entered into a distribution agreement with Associated X-Ray Imaging Corp., a New England-based provider of medical imaging equipment and services, specializing in X-ray, MRI, and CT systems to support deployment of the Nanox.ARC across the region. We now have 10 signed commercial distribution partnerships in the United States. Associated has already supported the customer installation of the Nanox.ARC that is installed and operational, further demonstrating its ability to support deployment and service in the region.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

The agreement follows other recent engagements, including Digital X-ray Imaging, Integrity Medical Service Inc., and Elite Surgical Technologies. The goal is to supplement our direct sales force and increase our presence economically as we pursue broader coverage of major U.S. markets. We are also expanding joint commercialization activity with our partners, including participation in Howard Medical's Annual Sales Summit, our webinar partnership with ROS, and ongoing sales and marketing initiatives. As more customers, channel partners, and physical gain first-hand experience with Nanox.ARC, we are seeing encouraging utilization, including sites performing hundreds of scans per month, and one customer transitions from MSaaS to CapEx purchase. The Nanox Imaging Network proof of concept is beginning to contribute to our commercialization strategy by targeting segments that may offer potentially higher reimbursement rates, such as worker compensation groups and concierge medical providers.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Through this initiative, Nanox completed the first Nanox Imaging Network installation in Philadelphia, and the site has begun scanning its first patients. It is encouraging that we are already seeing reimbursement from insurers and payers, with paid claims in the range of $200 to $700 per claim. This provides early validation of the commercial opportunity for the Nanox Imaging Network and support our focus on targeted care segments where reimbursement dynamics can be favorable. Based on the preliminary business model, we believe each site may have the potential to generate annual revenue in the range of half a million dollars to $1 million, depending on utilization, reimbursement, payer mix, and site level execution. In our rest of the world markets, we advanced commercialization activities across Europe and Latin America.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

During the quarter, we completed an end-user deployment in the Czech Republic and advanced system deliveries in Romania and Greece through local distribution partners, which we have discussed on previous calls. We also appointed SOLME RC, S.A. as our new distribution partner in Costa Rica, further expanding our presence in Latin America. We also continue to develop commercial opportunities with distributors in Slovenia and Ecuador, and are preparing to ship a system to Argentina. Since the acquisition, our teleradiology services division, USARAD, continued to deliver strong and consistent revenues during the first half of 2026, which grew on a year-over-year basis, averaging 14% growth, driven by continued expansion of our teleradiology client base. USARAD Holdings, Inc. has once again earned The Joint Commission's Gold Seal of Approval for ambulatory healthcare accreditation by demonstrating continuous compliance with its performance standards.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

The Gold Seal of Approval is a symbol of quality that reflects a healthcare organization's commitment to providing safe and quality patient care. We also extended USARAD engagement with a leading multinational aerospace organization. This renewal reflects the value of USARAD services offering and our ability to support large organizations with reliable, high-quality teleradiology services. We continue to view the teleradiology business as both a source of recurring revenues and an important channel for advancing the commercialization of our broader imaging and AI solutions. Nanox.AI advanced on both the commercial and the clinical fronts during the quarter. We recently announced that Nanox entered into an exclusive sales reseller agreement with Virtek Vision International for the Nanox.AI bone solution in the U.K. Virtek Vision International is also the exclusive supplier of Hologic DXA scanners in the U.K. with an extensive network of opinion leaders, clinics, and hospitals.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Moreover, we launched five new AI installations pilots across the U.S. and India. These engagements expand our clinical and commercial footprint and provide opportunities to demonstrate the value of our AI solution in real-world healthcare settings. We are actively supporting these organizations through the evaluation process and look forward to advancing discussion around broader deployment. We also completed a pilot study with Cedars-Sinai comparing Nanox.AI Health AVC with standard of care tools for assessing aortic valve calcification. The study demonstrated greater than 92% agreement between the two approaches, reinforcing the accuracy of our technology and supporting its potential integration into existing imaging workflows. In addition, IRB approval has been received from a leading university-affiliated medical center for an upcoming clinical study, and we are now moving forward with data collection. To end my update on the AI business, I would like to share some reimbursement news.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

In the U.S., the Centers for Medicare & Medicaid Services established a new healthcare common procedures coding system, code G0680, effective April 1, 2026 for algorithmic analysis of coronary artery calcium and/or aortic valve calcification from chest CT scans. This creates a potential reimbursement pathway for the Nanox.AI Cardio solution when used with eligible chest CT exams and when applicable payer documentation and medical necessity requirements are met. We view this as a positive development that may help support commercial adoption of Nanox.AI by enabling providers to incorporate AI-driven analysis into existing imaging workflow. The new reimbursement code may expand the addressable market for the Nanox.AI Cardio solution by creating a direct reimbursement pathway for outpatient imaging centers and clinics performing eligible chest CT examinations. This pathway may enable qualifying provider to incorporate our Cardio solution into existing CT workflows and receive reimbursement without requiring an additional imaging procedure.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

We are exploring further our engagement with two of our leading research sites, Meir Medical Center and Rabin Medical Center, by expanding our ongoing clinical work into rheumatology, an area we believe may represent a meaningful extension of the Nanox.ARC value proposition. Together with these centers, we are evaluating the potential role of the ARC in the assessment and long-term management of chronic rheumatology conditions. While still in the research stage, we believe this work may help broaden our understanding of additional clinical applications for the ARC and inform future opportunities in rheumatology. I would like to share a few additional updates on our OEM relationship and pursuits. Varex tubes are undergoing the final integration process to become our main X-ray tubes source for the Nanox.ARC X system. We have additionally taken receipt of a Varex multi-beam X-ray vessel utilizing multiple Nanox emitters and have begun our initial testing.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

We are excited to measure our emitters' capabilities in this configuration and have potential partner interest in the areas of security, food inspection, and of course, medical. Regarding Oak Ridge National Laboratory prototypes, we have completed and delivered prototypes of the latest design iteration to Oak Ridge for their assessment in integration with their intended application in security use cases. We are also pursuing discussions with other entities for this purpose. Overall, interest in the Nanox breakthrough source technology remains very strong. The Nanox Health IT that we acquired at the end of 2025 has proven to be a valuable addition to Nanox and continue to contribute meaningful revenue in the first half of the year, supported by an expanding customer base and more than 20 new projects going live.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

As we complete our integration to make the business more scalable and begin to more fully leverage its synergies with Nanox.AI, Nanox.ARC, and USARAD business segments, we are very excited about the growth potential of this business. Turning to our South Korea operations, as we previously disclosed, we have been evaluating a range of strategic alternatives aimed at optimizing our cost structure and maximizing the value of our asset in Korea. Following this review, we have decided to move forward with a broader structural transformation of our South Korea operation. As part of this process, we have idled our chip production line and reduced our workforce in Korea by two-thirds. We are transitioning volume production activities to qualified third-party manufacturing partners. In parallel, we have initiated the necessary processes with the relevant authorities and other stakeholders in preparation for the sale of the manufacturing facility.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

We believe these actions will further streamline our operating model, reduce our fixed cost base and burn rate, and allow us to focus our resource on our core technologies and commercialization priorities. Guy will work through the specifics of the restructuring in his financial overview. We are also preparing for RSNA 2026, where we plan to engage with customers, partners, and key opinion leaders across the radiology community. RSNA provides an important platform to present our end-to-end imaging solution across Nanox.ARC, Nanox.AI, and our broader imaging ecosystems while supporting business development, customer engagement, and awareness of our recent commercial and clinical activity. We are preparing for RSNA 2026 with the goal of building on last year's success and using the event as a strong commercial kickoff for 2027. I will now turn the call over to Guy, whom we are very pleased to officially welcome to the team.

[Guy Nathanzon, CFO at Nano-X Imaging]

Thank you, Erez. Before I begin, I would like to say that I am very excited to be at Nano-X, and I look forward to helping drive our future success as we seek to change medical imaging. As we implement the lessons we have learned and drive commercial growth, we have also sought various ways to extend our cash runway to the point where we are at a sustainable run rate. During the quarter and subsequently, we have taken deliberate steps to implement effective measures, including reductions to our cash expenditures and cash burn. Among those steps have been a 15% headcount reduction of our Israeli-based employees and, as previously noted, a reduction in our activities at our Korean location, mainly in the chip fabrication facility, as well as approximately 67% in our headcount in Korea.

[Guy Nathanzon, CFO at Nano-X Imaging]

We will instead rely on our OEM partners to supply the chips we need for future demand. The estimated annualized cost savings from these steps are expected to be approximately $2 million beginning in 2027. Along with cost reductions, we also recognize the need for additional capital and have recently raised fresh capital via an existing ATM program and a registered direct offering in August that raised together a total of $8.5 million of gross proceeds. All figures that I am reviewing now relate to the second quarter ending June 30, 2026, and all comparable figures relate to the comparable quarter of 2025, unless otherwise noted. Q2 2026 revenue were $4.2 million compared to $3 million in Q2 2025, representing a year-over-year increase of 37%.

[Guy Nathanzon, CFO at Nano-X Imaging]

The increase was driven mainly by the consolidation of the Nanox Health IT, formerly known as VasoHealthcare IT business, which was consolidated as of November 19, 2025, and accounted for $0.9 million of revenue in Q2 2026. The company generated revenue of $3 million from our teleradiology services, $1 million from our AI and software solutions, and $0.2 million from the sale of imaging systems and OEM services. Q2 2026 adjusted EBITDA loss, a financial measure that is derived as described below under non-GAAP financial measures, was $11.3 million, compared with adjusted EBITDA loss of $10.4 million in Q2 2025. Q2 2026 GAAP gross loss margin was -1,051% compared to a GAAP gross loss margin of -107% for Q2 2025. Non-GAAP gross loss margin was -13% compared to a non-GAAP gross loss margin of -21% in Q2 2025.

[Guy Nathanzon, CFO at Nano-X Imaging]

In accordance with applicable accounting standards, as of June 30, 2026, the company performed an impairment assessment of its asset groups. The impairment assessment was triggered by a significant decline in the company's share price and reduced forecasted revenue and operating results. The company recorded an impairment charge of $40.7 million, which was accorded to cost of revenue, impairment of intangible assets, reducing the fair value of the intangible assets related to its AI solutions business unit, excluding Nanox Health IT, to $1.9 million. The company also reevaluated the remaining useful life of the intangible assets and concluded that no changes were necessary. The impairment charge did not result in any cash outflow or impact the company's liquidity and was excluded from the calculation of the adjusted EBITDA for the period. Q2 2026 GAAP operating expenses were $11.8 million, compared to GAAP operating expenses of $11.3 million in Q2 2025.

[Guy Nathanzon, CFO at Nano-X Imaging]

Q2 2026 non-GAAP operating expenses were $11.1 million, compared to a non-GAAP operating expense of $10.0 million in Q2 2025. The increase was mainly driven by the consolidation of Nanox Health IT business and an increase in the legal expense. Q2 2026 GAAP net loss was $55.5 million, compared to a GAAP net loss of $14.7 million in Q2 2025. Q2 2026 non-GAAP net loss was $11.6 million, compared to a non-GAAP net loss of $10.9 million in Q2 2025. The increase in net loss was mainly related to the impairment of certain intangible assets as described above. Cash and cash equivalents and restricted deposits as of June 30, 2026, were at $31.4 million. This compares to a cash and cash equivalents short-term deposits and restricted deposits balance of $60 million as of December 31, 2025.

[Guy Nathanzon, CFO at Nano-X Imaging]

Post quarter end, the company raised aggregate gross proceeds of $8.5 million from its ATM program and a registered direct offering. The company intends to continue raising funds from various sources to improve its cash balance and support its activities. I'll now turn the call over to Erez for final comments and the questions-and-answer session.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Before we open the call for questions, I want to close by reflecting on the priorities I outlined today and the progress they have produced so far. We are focused on moving Nanox.ARC systems into active use, extending our commercial footprint through new partnerships, advancing the Nanox Imaging Network, and adding new Nanox.AI customers, all while managing our resource decisively and responsibly. We made real progress across these areas. We are also taking the necessary steps to improve our operating structure and extend our runway. There is still plenty of work ahead, but we believe we are taking the right actions to support Nano-X's long-term opportunity in medical imaging. I want to thank our employees, partners, customers, and shareholders for your continued support. Operator, you may now open the call for Q&A.

[Operator]

Certainly. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Our first question will be coming from the line of Jeffrey Cohen of Ladenburg Thalmann & Co. Inc.. Your line is open.

[Jeffrey Cohen, Analyst at Ladenburg Thalmann]

Hey, good morning. Just a few questions from our end. I guess firstly for Guy, what is expected on the impairment for the balance of 2026? I know you are at 40.69 currently.

[Guy Nathanzon, CFO at Nano-X Imaging]

So, hi. Currently, we already completed the process as of today, and if required, according to the accounting rules, we will continue in the future. Currently, we have no visibility for any other elements around the impairment. But we do the assessment according to the accounting rules every period, and we will do what we need to do.

[Jeffrey Cohen, Analyst at Ladenburg Thalmann]

Okay, got it. What's the latest pro forma share count?

[Guy Nathanzon, CFO at Nano-X Imaging]

Sorry, could you repeat the question?

[Jeffrey Cohen, Analyst at Ladenburg Thalmann]

On the latest pro forma outstanding share count.

[Guy Nathanzon, CFO at Nano-X Imaging]

I believe it is 70.6, if I remember correctly, million.

[Jeffrey Cohen, Analyst at Ladenburg Thalmann]

Got it. Could you talk about the placements out there? I am curious about the evaluations and the ARC placements. Could you give us a sense of how many were placed during the last quarter, and maybe give us a sense of the pipeline that you expect throughout the balance of the year as far as placements, analysis, and evaluations?

[Guy Nathanzon, CFO at Nano-X Imaging]

Erez? I believe, Erez, would you like to take this answer?

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Sure.

[Guy Nathanzon, CFO at Nano-X Imaging]

Erez?

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Yes.

[Guy Nathanzon, CFO at Nano-X Imaging]

Would you like to answer this question?

[Jeffrey Cohen, Analyst at Ladenburg Thalmann]

Oh, no, I was just wondering about placements of the ARC system.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Can you hear me?

[Jeffrey Cohen, Analyst at Ladenburg Thalmann]

Okay.

[Guy Nathanzon, CFO at Nano-X Imaging]

Now we can.

[Jeffrey Cohen, Analyst at Ladenburg Thalmann]

Just wondering about viral placements for the balance of the year.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Jeff, can you hear me?

[Jeffrey Cohen, Analyst at Ladenburg Thalmann]

Yes, I can.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Okay. Since the latest update, we have placed systems in Greece, in Romania, in Czech Republic. The system for Peru are waiting for import license. Same goes with Argentina. In the U.S., we have one system which is converted from MSaaS to CapEx. We have installed another one in an IDN. Another system for the first system in urgent care unit in the U.S. We have three systems that are currently in the Nanox Imaging Network that we were talking about. One of them is already started. Yeah, another one in the orthopedic clinic. In a nutshell, that's where we are. Quite nice progress in the last quarter.

[Jeffrey Cohen, Analyst at Ladenburg Thalmann]

Perfect. Thank you for taking the questions.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Thank you.

[Operator]

Our next question will be coming from the line of Scott Henry of A.G.P. Scott, your line is open.

[Scott Henry, Analyst at A.G.P.]

Thank you, and good morning. It sounds like there is a lot of progress going on behind the scenes as far as building momentum for future sales. Could you give us a sense of how we should think about the timing of when that traction should start? How should we think about Q3 relative to Q2 in terms of revenues? If we are not going to see much there, when should we start to see that traction result in revenues? Thank you.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

I think that we have addressed this question during the last call, that we saw the middle of the year as a sort of reflection point. First of all, what you can see is the progress that you actually were talking about. Second, we will start to see the impact of this progress in the next few months, as previously indicated already. We view the Nanox Imaging Network as part of the scale which is moving forward. The business partners are, in terms of the pipeline, which is being converted right now to installations or to sales. From our point of view, the direct sales is also showing the progress. So I think that the reflection of these efforts and this momentum, we will see, as we said, in the next few months.

[Scott Henry, Analyst at A.G.P.]

Okay, great. So it is on track with prior expectations. Thank you. The $2 million in cost savings for 2027, should we expect that to show up in kind of the gross margin line or more in the G&A line?

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Which one

[Guy Nathanzon, CFO at Nano-X Imaging]

On order?

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Were you referring to?

[Scott Henry, Analyst at A.G.P.]

The $2 million in cost savings on target for 2027. I just want to get a sense where in the model most of those cost savings should be located. Because it is a manufacturing plant.

[Guy Nathanzon, CFO at Nano-X Imaging]

Yeah. The simple answer that probably most of the expenses would be reflected in the operating expenses, some of them in the COGS, but most of them in the OpEx.

[Scott Henry, Analyst at A.G.P.]

Okay, great. When we think about it sounds like there are a lot of cost rationalizations, getting costs out of the system, whether through contracting or what other reasons necessary. Where do you think you could get that operating expense? That is on a GAAP basis. If it has been around $11 million- maybe $11 million to $12 million per quarter on a GAAP basis. How much could you pull out of that as costs are shifted outside the system?

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Guy?

[Guy Nathanzon, CFO at Nano-X Imaging]

I will try to be very cautious at this point, and if it is okay for you, I will prefer not to answer this question directly. Once we have something to announce, we will probably announce. At this point, in high level, I would say we are always doing ongoing examination and evaluation of our expenses. There is no number that I can specifically announce right now, and the would-be number, we will definitely announce like we just did on the Korean site.

[Scott Henry, Analyst at A.G.P.]

Okay. Then I will look forward to that. Also, in the press release, there was mention of a CMS reimbursement pathway. What would be the timing of developments on that front? Thank you.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

The reimbursement of the Nanox Imaging Network?

[Scott Henry, Analyst at A.G.P.]

As far as through CMS.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

The AI or the Nanox Imaging Network?

[Scott Henry, Analyst at A.G.P.]

Both. Just the timing on either. How would we think about that?

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

The Nanox.AI, the G0680, is already right now, and we will probably see the impact of it. Right now we expect that it will be affected in the very near future. We are going to address this segment of the market in order to benefit from this effort. In terms of the reimbursement, first of all, it is already done, so we have already revenues which are generated from this reimbursement. The more systems and sites we add to the Nanox Imaging Network, which actually we have already previously indicated what is the pipeline on this, the more we will see the revenues growing up.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

I think that based on the model that we currently have, and right now we are in the first proof of concept for this, but based on the model right now and the indications that we have from current scans that are being done on this segment of the market, we expect these numbers to be the hundreds of thousand USD or can go up to even more than that, close to million, if the system is operating on a very wide scale. This will generate for each one of the systems as was recorded in the press release.

[Scott Henry, Analyst at A.G.P.]

Okay, great. Thank you for taking the question.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Thank you so much.

[Operator]

I am showing no further questions. This concludes today's conference call. Thank you for participating. You may now disconnect.

[Erez Meltzer, CEO and Acting Chairman at Nano-X Imaging]

Thank you.

Participants

Executives

• Erez Meltzer, CEO and Acting Chairman
• Guy Nathanzon, CFO

Analysts

• Mike Cavanaugh, Managing Director for Investor Relations at ICR Westwicke
• Jeffrey Cohen, Analyst at Ladenburg Thalmann
• Scott Henry, Analyst at A.G.P.