Muddy Waters accuses Nano-X Imaging of fraud

(Muddy Waters) – We are short NNOX because we think it is a much bigger piece of garbage than Nikola will ever be. There are important similarities, though. Nikola rolled a truck down the hill to try to prove it’s real.

NNOX almost certainly used somebody else’s chest images to try to make its ARC machine look real. Both Nikola and NNOX try to legitimize themselves by using the halo of respectable companies. Nikola gave a bunch of stock away to GM. Nanox issued options for 1.2 million shares at $2.21 per share (worth ~$32.1 million) to the president of SK Telecom after SK Telecom happened to invest in NNOX.

But NNOX gets much worse. A convicted felon, who crashed an $8 billion market cap dotcom into the ground, was seemingly instrumental in plucking NNOX out of obscurity and bringing its massively exaggerated story to the U.S. NNOX touts distribution partnerships that supposedly amount to $180.8 million in annual commitments. Almost all of the company’s partnerships give reason for skepticism.

Another halo NNOX is using to try to legitimize itself is that of “Nobel Peace Prize-nominated” Hadassah hospital. We are convinced that this partnership has been greatly misrepresented. As background, the chairman of NNOX’s audit committee is the chairman of the board of Hadassah. He also received options exercisable at $2.21 per share. We have tried multiple routes to understand what exactly is happening with the ARC at Hadassah, yet we have been unable to get anybody to even confirm that the device is operating at the hospital. Some investors are apparently under the impression that data from studies at Hadassah forms the backbone of NNOX’s 510(k) submission. However, that misunderstands the timeline of events and the submission process.

If NNOX’s claims are achievable, it seemingly will come as a shock to most of the radiology profession. We interviewed five radiologists who were familiar with NNOX’s claims. Not a single one expressed credulity of NNOX. Four of the radiologists – without any prompting – compared NNOX to Theranos. The ARC appears to be little more than a futuristic movie prop. In fact, an Israeli company that designed a pickup truck used in the movie Jurassic World claims credit for its design.

We conclude that NNOX has no real product to sell other than its stock.


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