When your own supplier exposes you as a fraud

At the Berengerg investor presentation today, Nanox CEO confirmed for the first time the name of its new supplier, CEI (Slide 17).

The problem is that CEI has a public website.  There we learn that the company's average production was 18/22,000 tubes/year and the revenue (turnover) in year 2007 was 3.4 million euros (things went downhill since).  So what exactly is the problem?  Well, the average price of CEI's legacy x-ray tubes, using those numbers above, comes to about EUR170 a piece (that's about $230 a piece at 2007 exchange rate).

But Slide 16 in the investor presentation had just stated that legacy x-ray tubes sell for $150,000 (that's almost three orders of magnitude discrepancy!).

And based on video leaked by Nanox, the Nanox tube that CEI is supposedly almost ready to make is a bit larger, not smaller than the legacy tubes that CEI makes.

Ooops!  Looks like CEI exposed Nanox as a fraud.

Now, yes, it is true that some x-ray tubes do indeed cost $150,000 or more.  But those tubes have nothing to do with the tubes that CEI is supposedly about to make for Nanox (as their power and performance is three orders of magnitude higher, too). 

 

This head here has this tube inside

The CEO got caught lying again, and the RSNA 2020 demo was fake.  

On the Q1 results call today, the CEO revealed that the Nanox.Cart device that received FDA clearance has a glass tube, not a ceramic tube.  But at the RSNA 2020 he said (about 5:27 into the video stream):

... this head here has this tube inside...

He was, of course, holding a ceramic tube, not a glass tube.  He now says Nanox is experiencing delays in manufacturing of said ceramic tube.

But maybe the head belongs to some other Nanox.Cart, not the one submitted for clearance?  Well, no.  Next to the device there is a sign saying "pending 510(k) clearance" and the Nanox.Cart is the only Nanox device ever submitted for clearance.

The Nanox.Cart is the only device submitted clearance

And we confirm again with Slide 22 from the April 2021 investor presentation that the ugly device with the enormous head containing "cooling fluid" is the Nanox.Cart.

The curious case of Nanox.Arc's development

Last week @Ehlyz on Yahoo linked to a webpage of the engineering firm Ziv-Av and wrote:

If you are still worried this company is fraud and there is no end product to sell, take a look at who is building their CT scanner, Ziv-Av, who is also a vendor for Mazor Robotics and other medical companies.

Sure enough, the engineering firm Ziv-Av claims that the Nanox.Arc device was developed by Ziv-Av's engineers, not by Nanox (Nanox supposedly only contributed a proposed x-ray source).

According to the webpage, published sometime in 2020 prior to Nanox IPO, Nanox.Arc is a revolutionary x-ray device that could do anything the current technology could, but it is smaller, more mobile, and at least 1/100 as affordable.  The device was developed in record time - just 3 months, from scratch and for peanuts (Nanox shows in its prospectus on page 9 less than $3 million in research and development expenses for the entire 2019).  It was this working prototype that supposedly led to the equity raise and Foxconn "endorsement" in January 2020.

The problem is that that the device shown on the webpage (Nanox.Arc version 1.0, according to Nanox tech webpage) is completely fake.  It cannot take any x-ray images because it does not have any x-ray tubes and any x-ray detectors.  It only has a battery and blue LED lights - no need for the special cooling system that Ziv-Av claims to have developed.   

Ziv-Av's claim that this was a "working" prototype also contradicts the draft registration statement that Nanox did not have a working prototype prior to February 2020 (that is, the equity raise in January 2020 must have occurred without a working prototype):

We have not produced a working prototype of the Nanox.Arc (page 9) 

Moreover, if the working prototype looked like what Ziv-Av is showing, then the device in the demo to Foxconn in December 2019 shown below must have used a non-working prototype - that is, the demo was fake.

device demoed to Foxconn, December 2019

Here is the list of all the false and weird claims by Ziv-Av on that webpage:

1.  Ziv-Av develops revolutionary and affordable CT scanner for Nanox

Nope, even if the device were not fake, it cannot be used as a CT scanner due to limited number of projections (a CT scan uses hundreds of projections at different angles per arc/rotation).  It is affordable only because it is completely fake. 

2.  Nanox is a medical imaging company which has developed a revolutionary CT device that is mobile, substantially smaller and extremely cheaper than the existing devices. 

Nanox now denies that its proposed concept device is a CT device, and says it is a tomosynthesis device (unable to generate axial slices).  The device is cheap only because it is fake - the main cost of a real device would be in the detector.

3.  Nanox’s CT technology is based on digital X-ray production using a MEMS component instead of conventional flame lamps enabling cost reduction by orders of magnitude. 

There is no such thing as digital x-ray production - the proposed Nanox x-ray source generates x-rays the same way as a regular $100 hot-cathode x-ray tube - by smashing a bunch of electrons into a metal target.  And the cost of a Nanox tube will always be higher than a regular x-ray tube of the same performance, as any non-defective chip will cost more to make than a filament (a piece of wire).  It is also apparent that Ziv-Av believes x-rays are generated by conventional flame lamps - not clear whether burning kerosene or lamp oil.

conventional x-ray tube per Ziv-Av ( image source: https://www.freeimages.com/photo/the-oil-lamp-3-1535516 )

4.  The device supports scans such as CT, mammography, fluoroscopy and angiography.

Nanox now denies the CT and mammography "support" (CT-like imagining with 11 sources is now a simulation only).  Fluoroscopy and angiography are still on the table for the concept device, but they would be extremely limited, as its device lacks the positional flexibility of modern low-cost C-arm devices.

5.  Ziv-Av engineers revolutionized the medical imaging system 

Nope - the medical imaging system is still the same.

6.  Nanox approached Ziv-Av for the design of the revolutionary digital X-ray machine and its prototype within a stringent timeline of three months.

This may actually be true.  But the only revolutionary thing was the complete fakeness of the device. 

7.  Among many other design features, Ziv-Av designed the arch of the scanner which scans the patient’s body from different angles. 

Oh, so the Arc idea came from Ziv-Av rather than Nanox...

8.  The arch is designed to work with a very high voltage of 70,000V which creates immense heat. 

The statement that 70kV is associated with immense heat shows that Ziv-Av engineers do not understand basic physics and engineering.  An x-ray tube that operates at 1mA generates less heat than a 100W lightbulb.  Also, 70kV tube voltage is too low for a general x-ray device (it could be ok for extremities). 

this lightbulb generates immense heat per Ziv-Av (image source: https://www.freeimages.com/photo/light-bulb-1531205 ) 

9.  Ziv-Av managed the heat dissipation by designing a cooling system. 

The cooling system in the device is fake and not needed, as there is no x-ray source.  Subsequent proposed device iterations by Nanox show that the proposed "cooling system" is just a CNC-cut metal slab - a simple, and not very effective, heat sink.

 

10.  Along with the arch of this amazing machine, Ziv-Av also provided the design of the machine’s table, mechanics, electricity, electronics and motion control system .

Wow - so the only thing that Nanox has developed was the proposed x-ray source, and everything else (fake, of course) came from Ziv-Av? 

11.  Through its specialists, Ziv-Av achieved a significant cost-reduction – realizing Nanox’ vision of affordability to all.

True.  A fake device without an x-ray source or a detector or even a high-voltage generator would be cheap and affordable, indeed.  And, as a plus, it does not even require radiation shielding.  The only downside - it can generate no images.

12.  Ziv-Av excels in cost-effective prototype production.  Ziv-Av’s multidisciplinary engineers provided a turnkey solution from design to production of this innovative machine. 

It is innovative and cost-effective, as it is completely fake - a rarity!

12.  All the production, assembly & integration and tests were performed in Ziv-Av’s well-equipped workshop. 

No doubt.  Again, Nanox only contributed a proposed (fake) x-ray source.  

13.  The demonstrations of this perfectly working prototype helped Nanox raise $26 million within three months from many investors including ‘Foxconn-the IT industry giant’. 

By perfectly working, Ziv-Av means it can light up in blue using the built-in LEDs and a 12V battery, of course.

14.  From scratch to a revolutionary, cost-effective design as well as a working prototype – Ziv-Av accomplished all in just 3 months.

Nice.

What the webpage does not say is that the engineering firm's owner, Mr. Ziv-Av, at some point a chief scientist of the Israeli Ministry of Transportation, was convicted of securities fraud and then claimed that he did not know what he was doing.

Update:  Apparently, a Nanox promoter also tweeted about Ziv-Av last week, transforming CT or computed tomography into "3d tomo" (tomo simply means slice in greek), falsely claiming that a single (non-axial) slice meant CT-like capability, and insisting 70kV or less is not a problem for chest:

Chest/lung, musculoskeletal including skull likely on this 510(k) w/ enhanced 3D, slices, plus 2D x-ray. Cheap device. Will expand market.

Yeah, will expand the market with a completely fake device.

Update December 20, 2021:  Minor spelling correction.  

The tube chart that proves that Nanox is a fraud

Nanox team does not (or pretends not to) understand basic x-ray physics and engineering.  Its "technology" webpage and white paper are full of false, nonsensical, and self-contradictory statements.

Probably the single best example is the chart illustrating the supposed superiority of Nanox "core technology" - a novel chip-based cathode incorporated in a novel x-ray tube (see page 55, annual report).  

the chart, with enhanced saturation and added 42MW label

The chart is prominent on the technology webpage and in the white paper, where it is labeled "Hight [sic] Voltage independence" (Figure 9).  The chart title "T-35 Gate-2 HV/Ia independence" is not explained anywhere, but apparently refers to a Nanox Tube with diameters of 35 mm, utilizing a gate version #2 (as supposed to version #1?), and showing the independence between the tube (high) voltage and the tube (or anode) current (Ia).

Nanox T-35  tube that needs 42MW of power

The chart is supposed to demonstrate that Nanox cathode can enable "specific current irrespective of the anode ‎voltage."

But the chart is completely non-sensical, for at least four different reasons. 

1. The current scale is simply wrong.

Nanox does not know how to write numbers using simple scientific or engineering notation.  Jeremy Rutman is more diplomatic when he states: 

we note that whoever produced this graph forgot to use a negative exponent for his/her current units.

The vertical (current) scale in the chart goes like this: 0A, 2,000A, 4,000A, 6,000A, 8,000A, 100A, 120A.  Note that the tube current in the most powerful x-ray tubes in medical diagnostic devices is less than 1A, and notice the sharp drop-off after 8,000A.

If we take the point on the Ia (tube current) line at about 6kV (or 6,000V) tube voltage, the current is about 7.0E+03A (or 7,000 A), which corresponds to power requirement of about 42 megawatts (42,000,000 W) to power just one Nanox tube.  That is the power output from the massive generator of a small power plant:

a 40MW generator

a modern 40MW power plant 

2. The tube voltage is too low

The tube voltage on the chart does not go above 30kV.  If Nanox cathode (and tube) can only withstand 30 kV tube voltage, then the tube cannot be used in diagnostic medical devices, except to perform mammography.  Nanox own technical paper states in the section with the chart:

Typical kV in radiography range from 40-120kV and 22-49kV in mammography

The problem is that a mammography tube needs to withstand currents up to 100mA, while the chart, even with  a "fixed" scale where + is replaced with -, shows that Nanox tube can do no more than 1.1E-02A, or 11mA (unclear for what fraction of a second).

Moreover, neither the ugly Nanox.Cart nor the fancy-but-fake Nanox.Arc devices can do mammography due to their design, and Nanox removed the link to the easter-egg mammography concept device from its webpage.  

3. The chart demonstrates nothing

The chart is clearly using made-up data rather than actual readings.  That is not surprising, as Nanox cannot manufacture the proposed chip (has no access to facilities to do so commercially) or assemble the proposed (ceramic) tubes.  Moreover, even if everything was ok with the chart, it still shows nothing special about Nanox cathode or tube.  Most modern x-ray sources are required and designed to maintain independent control of tube voltage and tube current, that is "HV/Ia Independence."

4. Energy is not measured in volts, and current is not power

The description of the chart on the webpage even shows ignorance of the difference between energy and tension and how each is measured:

The Nanox gate electrode practically "ejects" the electrons from the ‎cathode and controls the amount of X-ray radiation, enabling independent control of ‎the X-ray current (mA tube current) and the energy (kV) that is set at the Anode. ‎

While there is a relationship between the x-ray energy and the tube voltage, energy is not set in kV - tension (or voltage or potential difference) is.

Elsewhere on the tech page, Nanox claims that with its cathode technology 

the current's power is independent of ‎the voltage

But the current's power is very much dependent on voltage - in fact, power is current times voltage.

Update July 1, 2021:  The 510k summary shows that the "Nanox tube" described in the submission can't do more than 2 mA and it can do it only at 40 kVp tube voltage, confirming the tube chart in the white paper is complete fake and fraudulent. 

Update October 9, 2021:  The fraudulent chart is still present in the "updated" white paper (updated in August only with the new Nanox logo).  Even replacing + with -, the chart would still show 11mA, or more than 5x the value in the 510K summary.

News in Nanox annual report

What's news and notable in Nanox annual report, relative to the Prospectus filed in February? 

Material weakness

We have identified a material weakness in our internal control over financial reporting in connection with the audit of our financial statements as of and for the years ended December 31, 2019 and 2020. (page 49)

Oops.  That's even before any revenues are recognized.

Dangling chips 

 As mentioned above, we currently manufacture the MEMs X-ray chips in the clean rooms located in Tokyo, Japan (page 15)

Nothing like it is mentioned above (in the annual report).  The rest of the statement, of course, is also false - the clean rooms located in Tokyo, Japan do not allow commercial use, and therefore Nanox cannot manufacture the proposed "digital" x-ray source that relies on those chips (and, in reality, there is nothing digital or MEMs about them).

 

No working Nanox.Arc

Although we have produced a working prototype of the Nanox.ARC and developed a prototype of the Nanox.CLOUD, we have not produced any of the approximately 15,000 Nanox.ARC units planned for the initial global deployment under the contract manufacturing agreement with FoxSemicon Integrated Technology, Inc., a subsidiary of Foxconn (“FITI”).  (page 7)

So, one working prototype of Nanox.CART, the one that got cleared?   But no working prototypes of Nanox.Arc?  Is this an admission, finally, that the RSNA 2020 demo of the Nanox.Arc was faked?  Why couldn't Nanox complete even one of the 10 prototypes that Nanox was supposedly assembling in November 2020 (according to the Q3 2020 results call)?  What happened to those mock-ups in all these production photos pushed by Nanox and its promoters this year?

A side note here:  Nanox never signed an agreement with FITI, according to the text of the contract manufacturing agreement.  The agreement was signed with a Japanese company that is not a Nanox subsidiary, according to public corporate records.

No ceramic tubes

We are evaluating, subject to completion of testing, a transition from glass-based X-ray tubes to ceramics-based tubes for cost efficiency purposes, which are the tubes to be used in the multi-source version of the Nanox.ARC, and we intend to enter into an agreement for such ceramics-based tubes with a new manufacturer in the future. (page 14)

That is, Nanox still cannot manufacture the ceramic tubes that the CEO claimed were used at the RSNA 2020 demo of both the Nanox.Cart and Nanox.Arc.  So, the RSNA 2020 demo was fake and the FDA 510(k) submission may have been fraudulent.

Fuji is out

We have not entered into any licensing agreements; however, we expect to enter into negotiations regarding a commercial arrangement with FUJIFILM Corporation for the licensing of our Nanox System. Any of the above factors may negatively affect the implementation of our Licensing Model, or cause our Licensing Model to fail. (page 12)

This is an admission that Fuji is not a Nanox Mamography OEM (that is, all Nanox investor presentations so far have been misleading ).  In the Prospectus, Nanox still falsely claimed:  

We are currently discussing the terms of a potential commercial agreement with FUJIFILM Corporation.

Chinese tubes 

We have, and expect to enter into, agreements with manufacturers and/or suppliers in China for the production of our X-ray tube, the Nanox.ARC and some of their respective components. (page 23)

Is this an admission that Nanox is using a regular low-cost, low-quality, hot-cathode Chinese x-ray tube and calling it "digital?"

 

A confused FDA: Cart or Arc

 

... we submitted a 510(k) premarket notification for the Nanox Cart X-Ray System... in January 2020... On January 30, 2021, we received additional information requests from the FDA which, among other things, require us to address certain deficiencies and questions, including requests that we provide additional support regarding the intended use of the Nanox.ARC and the comparability of the Nanox.ARC to the predicate device. We submitted our response to these requests on March 1, 2021. On April 1, 2021, we received clearance from the FDA to market our Nanox Cart X-Ray System. ...we may seek alternatives for commercialization of our Nanox Cart X-Ray System.  (page 32) 

Why was the FDA asking about Nanox.Arc in January 2021?  The device that got submitted and eventually got clearance is Nanox Cart X-Ray System, that is, the ugly Nanox.Cart, not the fake Nanox.Arc. The FDA should have asked about Nanox Cart X-Ray System, no?

Nanox also confirms that it still has no plans the market/commercialize the Nanox Cart X-Ray System even after its pre-market notification got cleared.

Update:  Muddy Waters tweets about Gilad Yron, the Chief Business Officer, no longer counting as an executive, which I missed (it is not clear what his current role is, if any). 

Update April 8, 2021:  Fixed some spelling.  Also, the Nanox.Cloud prototype developed by Nanox is just a collection of a few mock-up screens that use stolen images and contain non-sensical findings.  

Nanox announces FDA clearance of something

According to the press release, Nanox

single-source Nanox.ARC digital x-ray technology has received 510(k) clearance from the US Food and Drug Administration (the “FDA”).

Quite interesting, since the FDA, by law, cannot clear a technology, only a device.  It is also interesting that the mythical single-source device is nowhere to be seen on/in Nanox website, SEC filings, investor presentation, or any other marketing materials or white papers. .

an ugly device demoed at RSNA 2020

 

Nanox also confirms that it does not intend to deploy the device for which it received clearance:.

The Company remains on track and expects to submit a 510(k) application to the FDA for its multi-source Nanox.ARC and the Nanox.CLOUD in 2021. If cleared, the multi-source Nanox.ARC will be the Company’s commercial imaging system that it expects to deploy broadly across the globe.

That is really interesting, as 510(k) clearance is also known as pre-market notification, so it makes little sense to clear a device that it is not intended to be marketed.

But what is truly astonishing is that Nanox does not state in its press release that the device uses Nanox proposed "cold-cathode" x-ray source.  So does the device that just got cleared use a regular hot-cathode dental tube?

As of now, there is no public confirmation of the clearance by the FDA.  On Monday morning, the FDA should update its clearance database, and if the device got indeed cleared as Nanox claims, we will learn the product code, the name of the Third Party, and the date the Third Party recommended clearance, if there was any Third Party to begin with.  But we will have to wait for 30 days to read the Summary, where the predicate, intended use (extremities only?), and some tech characteristics will have to be made public...  And then Nanox will have some explaining to do - how do you enable early detection of cancer (also known as Nanox vision, or the oxymoronic "screening of symptomatic patients"), when all you are cleared to do is image broken wrists or feet?

Update April 4, 2021:  There is an argument floating around that an FDA clearance proves that the company is not a fraud.  The argument is flawed for at least three reasons:

1. Nanox claims that its Nanox.Arc device is novel.  A clearance, however, means that the company demonstrated that the device to be marketed is substantially equivalent to a legally marketed device.  Oops.  How can it be novel, if it is substantially equivalent to something already on the market?
2. A clearance is also known as pre-market notification.  But Nanox says that it has no plans to market/sell/ship/commercialize/deliver/deploy its single-source device.
3. Theranos, the fraud, also got clearance (in July 2015) for a device it did not intend to sell.  By January 2016, the federal government was after it.

Update April 5, 2021:  According to the FDA database, the device that was cleared is a cart - "Nanox Cart X-Ray System" - notice it is not named a (single-source) Nanox.Arc.  The product code is IZL (a mobile x-ray system).  There is no product code for a detector (MQB), so the device has no built-in detector, and so it cannot take images by itself (but should be able to use any $25,000+ cleared detector).  The clearance was recommended by a Third Party, Accelerated Device Approval Services, on December 28.  The summary should be released around May 1st.

KvP / mA - the shocking proof that Nanox is a fraud

Nanox prospectuses are riddled with false and misleading statements some consider to be material.  Here is a recent example that always trips Nanox promoters.

In a paragraph-long section in the latest prospectus titled "Multi-spectral imaging capacity using one X-ray source" (pages 83-84), Nanox states that it has (only) one "working prototype" and that prototype "uses 60 KvP / mA."  

The elaborate and nonsensical explanation of this novel metric, KvP / mA, may simply be a roundabout admission that the prototype's tube (almost certainly an "analog" dental/industrial one, with a hot-cathode and of low quality) can handle no more than 60 kV tube voltage.  Such a low tube voltage would render it ineffective for general diagnostic imaging (but could be ok in special cases, such as extremities, depending on its remaining tech characteristics).

Nanox mentions the "KvP / mA" metric five times in that section with the exact same spelling, and refers to it interchangeably as "a ratio" or "a combination" that demonstrates the superiority of the "novel" x-ray source, and that reflects "complete independence and separation between the strength of X-ray penetration and the amount of photons for illumination."  Elsewhere in the prospectus, Nanox claims that a slightly different spelling, "kVp/mA," represents energy with its acceptable range of values specified in industry standards:

The Nanox.ARC, using our X-ray source, is being designed  ...  to have a full kVp/mA energy throughout range as per industry standards (page 85) 

According to Nanox, the first component of the metric, KvP, "represents the speed of electrons that gives the X-ray its penetrating power," rather than misspelled tube voltage.  The second component, mA, "represents the amount of photons or brightness levels of the X-ray image," rather than tube current.

Ok so far?

Nanox then proceeds to make various assertions about modern x-ray sources:

For legacy X-ray sources, KvP / mA ratios were codependent in a linear relationship and each X-ray source could only produce one set of KvP / mA combinations dedicated for a particular use (for example, either tissue images or bone images, but not both simultaneously).  We believe our X-ray source technology can produce multi-spectral imaging from one X-ray source, which allows for variable energy levels to be controlled during one scan.  With multi-spectral imaging, one source chip can be used for multiple types of scans, such as head-scans, abdomen, mammography and angiograms, involving both soft and hard tissues at variable densities, simultaneously.

Those claims translate into the following false statements:

• modern diagnostic x-ray systems cannot image human tissues
• a bone is not made of tissues
• a particular intended use requires only one specific tube voltage/tube current combination
• tube voltage cannot be controlled independently of tube current in modern systems
• modern systems cannot vary photon energy levels (for example, by varying tube voltage) while scanning
• the relationship between tube voltage and tube current in modern x-ray sources is only linear
• it is impossible to use the same modern x-ray source for imaging tissues of different densities or for different radiological scans/examinations

Nanox then illustrates the "functionality and capability of multi-spectral (separation) imaging" of its proposed novel x-ray source, apparently not to be confused with modern spectral or energy-resolved imaging.

According to the diagram, a Nanox device can image six separate sets of body parts by using six different tube voltages and a fixed tube current, that is, six different ratios of tube voltage and tube current, which appears to contradict the single "60 KvP / mA" ratio that Nanox claims to be using.  The diagram also implies that imaging blood vessels with the proposed novel source requires much higher tube voltage than imaging lungs, and that the difference in tube voltages between imaging blood vessels and lungs is 5x the difference in tube voltages between imaging bones and lungs (worse, if the chart uses a log scale).

If all this was too long or too technical to read, here is the summary:  there is no such thing as KvP / mA or multi-spectral imaging.  That is Nanox for you.

Update:  Nope, not an April Fool's Day joke.

Update:  Nanox predecessor called all this "Independant [sic] KVP [sic] /MA [sic] control."  It also called it "5D X-Ray Multi-spectral imaging"

We call it the 5th dimension of X-Ray, the ability to create an MRI like multi-energy derived image, which provides a novel separation between bones, hard tissue, soft tissue, lesions, cardiovascular system and more. ‍

Quite exciting, given that MRI has nothing to do with x-rays (it is a completely different technology) and that the old-style legacy 4D energy-resolved x-rays operate only in the four dimensions of space-time.  But then something happened, and Nanox never mentioned 5D ever again, to my knowledge.

Update:  Of course, kVp and mA are independently controlled in virtually all x-ray devices using legacy x-ray tubes, going back to year 1913 (some portable x-ray medical devices have fixed kVp and/or mA, for simplicity). 

The "nano" in Nanox isn't

So, Nanox has been boasting in the technology section on its website: 

Over nine years of development by a Japanese and Israeli engineering team, produced a ‎stable Cold-Cathode field emission MEMS silicon‎. Using proprietary Micro-Electrical-Mechanical-Systems (MEMS) techniques, ‎millions of nanoscale gates are fabricated on each silicon chip. ‎Nanox emitters are far more uniform than carbon nanotubes (CNT) and are orders of ‎magnitude smaller than conventional Spindt-type cathodes‎. ‍

But is any of it true?  For example, has Nanox been able to miniaturize a technology that was a complete failure and make it potentially successful?  The answer is:  No!

If Nanox' emitters are "orders of magnitude smaller" than conventional Spindt-type cathodes, this means they are smaller than 1/100 the size of the "conventional" emitters (that's two orders of magnitude).  Here is how Nanox emitters are supposed to look like under an electron microscope (Slide 13, January 2021 JP Morgan presentation).

They look tiny, but how tiny are they?  Nanox is withholding that information.  Luckily, Nanox predecessor company has already published the original image - in early 2016, in a one-page "Nanox Technology Brochure" - with an embedded scale in it, like any regular image, or micrograph, generated from a commercial electron microscope.  All we have to do is use that scale to measure the diameter of the gate holes and the distance between them, and compare to say state-of-the-art Spindt emitters twenty years ago.

Aha.  So the holes are about 300nm in diameter and the distance between them is about 500nm.

And, what was the state-of-the-art twenty years ago, in year 2001?  Here is a picture from the Motorola paper titled "Field Emission Displays: a critical review" 

Uh-oh.  Turns out the Spindt holes from Candescent Technologies were actually smaller - 100nm in diameter, and intentionally placed at random distances.

Is it possible that somehow Nanox' team did not know about those developments twenty years ago?  Nope.  Here is why.  According to the unofficial history of the Spindt scam,  three years prior, Sony, desperate to maintain its relevance in the TV market, but completely clueless, joined forces with Candescent.

In November 1998, CTC announced an agreement with Sony Corporation for joint development of a 14-inch diagonal FED by the year 2000. Both companies pledged to spend $50 million on this effort. Most of the work would be performed at CTC's plants. A team of six Sony engineers were sent to San Jose to begin the work, with some additional staff dedicated to the project in Japan

Motorola had already canceled its project in 1999, thus the paper in 2001, due to inability to "solve some basic technology problems."  Candescent went bankrupt in 2004.  It took Sony a few more years to realize its mistake, but the $1 billion R&D spending is a complete myth.

So, to reiterate, ‎Nanox emitters are not orders of ‎magnitude smaller than conventional Spindt-type cathodes‎ - they are, in fact, LARGER.  Not that it matters, because Nanox, contrary to the false claims in the Prospectus and elsewhere, has no access to facilities to fabricate them commercially.

And the "nano" should have been a red flag anyway - MEMS in the supposed Nanox "Cold-Cathode field emission MEMS silicon" stands for micro-electro-mechanical systems.  Electro, not electrical.  Micro, not nano.  And there is nothing mechanical (moving) - the "electro-ns" do not count.

Ok, but what about those 100 million emitters in Slide 13 above?  Well, that number is possible.  Assuming those are positioned in a 10,000 x 10,000 square, and assuming 800nm distance between the tips, that gets us to a 8mm x 8mm "chip," ballpark.  But such a chip, even if it were real, is not changing anything.

In case anyone was wondering how big the Spindt emitters were 50 years ago, here is a diagram and a micrograph from the 1976 Spindt paper.  The gate hole diameter is 1,500 nm.  So Nanox emitter is just 1/5 of it, not 1/100.

Update March 29, 2021:  reworded and added the original Spindt emitter size.

Update March 29, 2021:  Wikipedia's page on Field Emitter Arrays have an interesting entry about nano-Spindts.

Nano-Spindt arrays represent an evolution of the traditional Spindt-type emitter. Each individual tip is several orders of magnitude smaller; as a result, gate voltages can be lower, since the distance from tip to gate is reduced. In addition, the current extracted from each individual tip is lower, which should result in improved reliability.

How did this incorrect and misleading entry wind up on wiki?  After checking the edit history, it turns out Nanox added it on December 22, 2015, a few days after the failed attempt by Nanox predecessor to market its fake cathode at RSNA 2015 (Nanox current CEO was then the Chief Strategy Officer).  Here is who added it:

My name is Joshua Lilienstein. I am an American medical doctor, now specializing in medical device development. I currently serve as Chief Medical Officer for Nanox Imaging, Plc., a Japan-based startup. Nanox's core technology is the field effect cathode. I will be editing entries that pertain to this technology, and specifically, in its application to medical imaging. I am aware of Wikipedia's Conflict of Interest policies, and will endeavor to abide by them.

At least he was honest about something.

He referenced an interesting paper that does not support his wiki entry in any way, but describes the long-lost x-ray detector, SAPHIRE, that was supposed to use nano-Spindts.  This is a flashback to the times when Nanox team "believed" that the x-ray detector was more important than the x-ray source.

The chip that proves that Nanox is a fraud

Nanox tweets how its "small" chip is changing 100 years.  That would be quite a feat, if the chip were not fake.  But it is easy to see that it is fake.

 

Let's magnify:

The things in the red ovals are either defects or large specks of dust (which should not exist in a clean room).  The chip is not functional.

Why doesn't Nanox have a better picture of the chip?  Nanox has no access to facilities to manufacture the chip, contrary to the false claims in its Prospectus.  Specifically, Nanox claims to have its own equipment placed in clean rooms at the University of Tokyo.  However, there is no equipment that belongs to Nanox there.  Moreover, the University of Tokyo prohibits any commercial use of its clean room facilities, which it rents per day to anyone who is doing academic research. 

The proposed chip, even if manufactured without defects, changes nothing.  The proposed chip requires much higher voltage than a corresponding filament, first introduced by GE in 1913.  The proposed x-ray tube with such a chip in the cathode generates just as much heat as a regular tube using a filament (since 99% of the heat in both tubes is generated at the anode and 99% of the energy used by both tubes is wasted as heat).  Switching speed is the same as a regular tube with a grid.

Update:  Another view of the chip, from a snapshot of the RSNA 2020 "Nanox - Technology & Vision" video (1:02).

Importance of using the right terminology

Nanox and its promoters want you to believe that FDA clearance, also known as premarket notification or 510(k), and FDA approval are the same thing.  Here is what the Code of Federal Regulations, the US administrative law, states:

Submission of a premarket notification ... and a subsequent determination ... that the device intended for introduction into commercial distribution is substantially equivalent ... does not in any way denote official approval of the device. Any representation that creates an impression of official approval of a device because of complying with the premarket notification regulations is misleading and constitutes misbranding. ( 21 CFR Part 807.97 ) 

So, Nanox is misleading and misbranding on slide 3 of its investor presentation:

And on its investor calls.

And one more thing.  Notice the device is "intended for introduction into commercial distribution."  But Nanox claims it does not intend to introduce into commercial distribution the device it has submitted, the single-source Nanox.Arc, according to its latest prospectus.

Subject to receiving regulatory clearance, the first version of the Nanox.ARC that we expect to introduce to the market will be a 3D tomosynthesis imaging system [not the single-source device].  If cleared by the FDA, we expect to commercialize the multi-source Nanox.ARC and we may seek alternatives for commercialization of our single-source Nanox.ARC. (page 79)

If the device was not intended to be marketed in January 2020, then the premarket notification was redundant, and the Third Party should have immediately rejected it, if it knew that the device was not intended to be marketed.  Did the Third Party know what Nanox was writing in its draft registration statements filed with the SEC?  And that is one of the reasons why the submission was likely fraudulent, if Nanox submitted anything to anyone for clearance.

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (the ugly device).  So, what were the Third Party and the FDA told?  More hints when the FDA published the summary document, around May 1st...    

Quick credibility check

It is easy to spot that Nanox' management is not familiar with this simple thing called the truth.  Here is a quick example.  Today's press release announces:

With [the RSNA 2020] demonstration, we brought X-ray technology, which had not seen material technological advancements since its discovery more than 120 years ago, into the 21st century.

But Nanox own technology white paper states:

Modern X-ray and the evolution of radiologic modalities started in 1913 by introducing tungsten filament to the cathode part of the “Coolidge” tube, which supplied far better reliability than the preceding technologies. Over a hundred years later, X-rays continue to be generated by electrons supplied by heating tungsten filaments. The history of radiology is the history of the “Hot Cathode” invented by Mr. Coolidge.

1913, by the way, was just 108 years ago.  And X-rays were discovered in 1895, according to the same paper.

So, which one is it?    Did X-ray technology see a material technological advance after the discovery of X-rays but prior to RSNA 2020, or not?  The white paper says, yes, in 1913, when the hot-cathode technology introduced by GE completely obliterated the cold-cathode technology that Roentgen used and that Nanox now pretends to use.  The press release says no way!  Which one (press release or white paper) should we believe?   Which one (Coolidge or Poliakine) advanced X-ray technology?

Update:  By the way, Nanox cannot say that this is a simple mistake or misunderstanding, as Nanox claims that the Chair of its Advisory Board is Morry Blumenfeld, who was a GE employee.

The production Nanox.Arc has no detector?

So John Nosta puts a tweet out that shows that Nanox.Arc has no detector, and therefore, cannot make any images.  Stock goes up 15%.

Here is the fake, non-functional device that (supposedly) goes into production, with no clearance or any regulatory approval pending, in all its glory:

John Nosta is the same evangelist who in August 2019 posted the photo of the completely-fake 12V-battery-operated Nanox.Arc 1.0 that could emit electromagnetic waves, but only in the visible spectrum.  According to Nosta, it could fit in a suitcase (it must be a gigantic suitcase!)  and would emit "lower" radiation (which is correct, as visible light is lower in the energy spectrum than x-rays, but can't penetrate most human organs and is therefore useless for diagnostic purposes).  

Update:  In case it is not clear, here is where the detector goes in Nanox.Arc 2.0 (which is the finalized production-ready design, per CEO investor presentation post RSNA 2020 demo).

Cropped snapshot from the Making of Nanox Arc video 

Update:  Added zoomed view of Nanox.Streak and Nanox.Thread:

Update:  Apparently some people are confused where this picture was taken, and believe it is at Foxconn, where the volume production was initially supposed to take place.  The picture was taken in Israel, however (notice the green EXIT sign above the door in Hebrew יְצִיאָה - thanks google translate!).  

Due, in part, to travel restrictions as a result of the COVID-19 pandemic, we expect to manufacture a small number of Nanox.ARC units in Israel on a purchase order basis that will be used for the acceptance tests under our MSaaS agreements, demonstrations, regulatory approvals and for the initial global deployment, among other purposes. (page 5, prospectus)

Update:  Added a link to Nosta's August 2019 tweet and a few words about it.

Update:  Ok, ok, this could be the detector.  Added a question mark to the title of this post...

Update April 21, 2021:  Based on inspection of the latest Nanox video, the device in Nosta's tweet has no detector.  What looked like a possible detector in the view from this angle is likely just a part of the support frame.

zoomed-in snapshot from the new video

Fooling one or the other, or both

Someone liked this comment I made:

The draft registration statement filed by Nanox in early February states that the company is planning to file for clearance, meaning it did not file in January. Same draft registration statement says the company has "not produced a working prototype of the Nanox.Arc" (a later draft registration statement says it was produced in February). 

A single-source unit may have been available for a century, but the FDA and the EU say it must pass certain safety and effectiveness thingies, including HVL and S-Values and non-fake images. And the company should not lie to the FDA or the Third Party or the investors about what x-ray source is used in the unit.  Yes, the FDA has approved devices that also use a dental tube (including a 2 mA one for limited intended use such as extremities, which is worse than Nanox' 11 mA from the hand drawing), but at least that dental tube is not crappy.  

Nanox tried to fool the FDA, or tried to fool the investors, or both.

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (the ugly single-source device).  So, both the FDA and investors were fooled?  More hints will come around May 1st, when the decision summary is expected to be published by the FDA.  

How SK Telecom promotes its investment

If the lie is big enough, and if you repeat it, maybe people will start believing it.

Someone posted a link to the June 2020 press release by SK Telecom as a proof that Nanox is not a fraud.

The press release states:

Nanox developed the innovative Nanox System, which is composed of the Nanox.Arc, a novel digital X-ray device.

Oops.  Novel!  Apparently, nobody told SK Telecom that a novel X-ray device cannot be cleared by the FDA, because clearance requires a substantial equivalence to an already legally marketed device.  So being  novel, the device is clearly (pun intended!) not equivalent to anything on the market already, and so cannot obtain a 510(k) clearance. 

So, if SK Telecom did not lie about the novel thing, then Nanox regulatory strategy goes poof.  Because Nanox has been telling investors that it plans to 

submit an additional 510(k) application with respect to the multi-source Nanox.ARC, which, if cleared, will be our commercial imaging system

 

But how exactly is Nanox device novel?  Well, it is fake and non-functional.  That's its novelty.  The press release helpfully supplies its picture.

Only for angels (humans too heavy for this "body scanner") 

The table clearly can't support a human being.  The Arc is immobile and cannot move along the table (even though it is labeled BODY SCANNER on the side).  The whole thing is powered by a 12V battery (to light up a few LEDs for the photographer and the greedy investors and advisors).  There are no functioning x-ray sources or detectors in the device.  Nanox says on its tech webpage that this is version 1.0 of the device, and claims:

Cold cathode tubes allow the use of a single high voltage power supply and a ‎single high voltage supply line (connecting all the anodes in the system). Digitally ‎controlling each tube enables the system to be significantly reduced and saves ‎power supply cables, installation space, and so on.‎ ‍

Which could be true, indeed, if 12V is high voltage, if and those cold cathode tubes do not generate x-rays but simply multi-spectral light.

The press release also shows an animation gif of the levitating scan, that must generate antigravitons.  Nanox has not provided information as to which version of Nanox.Arc that is.

Roentgen discovered X-rays in 1895, Nanox discovered levitation in 2019.

Update:  Apparently at least one radiologist agrees about Nanox.Arc.

Nanox chances for FDA clearance are dimming

Nanox claims to have submitted its official response to an accredited Review Organization under the FDA 510(k) Third Party Review Program as part of the company’s 510(k) application process for a single-source version of the Nanox.ARC on September 3, 2020.  That single-source version of the Nanox.ARC is the ugly plain x-ray "machine" shown here.

Assuming the Review Organization ("Third Party") took a month, instead of a day, to read that response and recommend the device for clearance to the FDA, when should investors expect news of a 510(k) clearance?

If Nanox responses were satisfactory, the Third Party should have submitted its recommendation to the FDA by October 3, 2020, and the FDA should have cleared the device within 30 days, or by November 3, 2020. We are now at day 97.  What is happening?

Well, while the FDA review timeframe is within a month, that doesn't always happen, for various reasons, including the FDA asking for more information. 

Here is the histogram of all clearances of diagnostic x-ray systems (including tomo and mammo, but excluding dental) done through a Third Party since 1999. 

Histogram of x-ray diagnostic clearances through a Third Party
source:  FDA 510(k) database

Of the 179 clearances, only 10, or 6%, have occurred past day 97 since 1999.

Worse, of the 10 clearances in the past 5 years, none have occurred past day 86.  All of the four successful clearances submitted in 2020 (submitted in April-November) were done within 22-26 days.

Oops.

Note:  There are reasons to believe that Nanox never submitted for clearance anything, either directly to the FDA or through the Third Party Review Program,  or if it did, the submission was likely fraudulent.

Note 2:  If anyone is wondering what was that outlier device that took almost a year after the Third Party recommendation to get cleared, here it is. A simple wireless controller for an x-ray system.  It actually took 550 days since the company had submitted to the Third Party.  That Third Party is no longer participating in the FDA program, by the way, and it is not clear whether the company is still in business (last website update in 2019?).

Note 3 (added January 22, 2021):  It appears Nanox is confused about how its single-source source device looks like.  Here is a fancy-looking one (from a presentation slide at a JP Morgan conference), not the ugly one presented at RSNA 2020 in December 2020.  If Nanox is confused, think about how confused the Third Party and the FDA must be (assuming Nanox ever submitted anything for clearance, of course)!

Note 4 (added January 27, 2021):  An avid reader of this blog,  @Midas touch on Youtube, has remarked:

[RichardXRoe's] "perspective" is at best biased. Please don't throw allegations around without any sources - you will get sued for such false statements without providing proof.

E.g your claim that the external company answered within 1-30 days and sent it to the FDA and that the approval is now delayed. How would you know how long it took the external company to respond? If you make such drastic claims like "it's" a fraud you simply must provide evidence. I am more than happy to look at a different angle if you would present it. I assume you probably started shorting below $40 and I am sorry for you, but these statements will just bring you more trouble.

And here is my response:

First of all, there is no external company and no approval in the 510(k) Third Party Review Program.  There is a Third Party and a recommendation.  If that recommendation is "substantially equivalent," then the FDA has 30 days, by statute, to clear the device or not, as already explained.  The Third Party does not answer.

Second of all, there are now reasons to believe that Nanox never submitted anything for clearance to anyone ever, or, if it did, it did so fraudulently (see, for example, Note 3 above).  

So, of course, I have never claimed that the external company answered something within some days, sent something to somebody, and the approval is now delayed.

What I do claim is that, according to Nanox, the Third Party received a reply to its additional information request on September 3, 2020.  The response, according to Nanox,  included additional data and other information to complete the application and to address certain deficiencies highlighted by the reviewer, including the results of certain performance tests, and was submitted within the required time frame.  So it is reasonable to assume that the Third Party, after waiting for six months, read the reply on the same day.  It is also reasonable to assume that the Third Party, being busy and such, waited a few more days and submitted its recommendation (substantially equivalent or not substantially equivalent) to the FDA within a month.  The rest is history.  That is, the history of the 510(k) Third Party Review Program shows that the chances of clearance for Nanox have now dimmed, assuming that Nanox ever submitted anything for clearance to anyone to begin with.  And that is trouble.

Note 5 (January 28, 2021):  I just saw that the 6K filing announcing the supposed response incorrectly characterizes the equivalence claim.  

The submission was based on a predicate filing for an equivalence claim to an existing FDA-approved X-ray imaging system by another market participant, and no new claims were made as to the operation, image quality or functionality of the Nanox.ARC versus the predicate device.

A 510(k) requires demonstration of substantial equivalence to another legally U.S. marketed device, not to an existing FDA-approved X-ray imaging system.  Most x-ray imaging systems are FDA-cleared, and very few are FDA-approved. All of those approvals are over 5-year-old (a search for "tomo" in the PMA database shows the latest original device was in April 2015, for example), and therefore are not good predicates.  Why did Nanox mis-characterize the equivalence requirement?  The device that Nanox has supposedly submitted is a simple x-ray device - why would its predicate require any approval (like say a breast tomosynthesis device would 10 years ago)?

Note 6 (January 29, 2021):  A question was posed on Seeking Alpha:  If the device were fake, why did Nanox submit for clearance?  And the answer (heavily paraphrased) is:  Well, without the promise of clearance or approval or grant, Nanox has nothing (since so far no one is interested in its x-ray cold cathode or source, an exempt device that does not require clearance, after 5+ years of heavy marketing).  I have reasons to believe that the company never submitted anything to anyone for clearance. But let's assume for a moment that the company did indeed submit a device for clearance through the Third Party Review Program, as the company says. Well, the Third Party may have already recommended to the FDA not to clear the device (that is, an NSE recommendation).  How would one know, since it is not public information?  Why would Nanox tell the public the truth, if it did not tell the truth to begin with?  Maybe Nanox has already withdrawn or abandoned its submission - no way to know without a FOIA request that the FDA says it can take a year.  And about that device:  Nanox stated in a draft registration statement filed with the SEC in early February 2020 that the device was NOT WORKING when submitted for clearance in January 2020, which sounds like fraud (unless it was an "honest" mistake or mixup, of course):

We have not produced a working prototype of the Nanox.Arc (page 9)

Moreover, see also Note 3 above.

Note 7 (January 30, 2021):   There is a theory on StockTwits that somehow COVID-19 has disrupted and delayed the clearance process through the Third Party Review Program.  That is completely untrue, and it makes no sense - in fact, FDA issued a special guidance to expand availability and capability of x-ray systems since they have been used for COVID-19 diagnostics.  As already pointed out above, all the four clearances in 2020 were done within less than 30 days.  Micro-C, the only x-ray clearance through a Third Party so far in 2021, was also done within 30 days (although that device's clearance had been "pending" and "imminent,"  whatever those mean, since 2018, see also here) 

Note 8 (February 2, 2021):  The company filed this gem with the SEC yesterday.  So it appears the FDA has requested additional information.  The good news is that Nanox did submit something to someone at some point.  The bad news is that the submission may have been fraudulent, as the FDA is asking about intended use and predicate.

Note 9 (February 9, 2021): Nanox now changes its story.  Nanox now says that Third Party was not entirely happy with Nanox response, but at the end recommended the submission for clearance on December 28, 2020

In the United States, we are taking a multi-step approach to the regulatory clearance process. As a first step, we submitted a 510(k) premarket notification for a single-source version of the Nanox.ARC to an accredited Review Organization under the Third Party Review Program in January 2020. As part of the review process, in March 2020, we received an information request, referred to as a major deficiency letter [no such thing in the 510k process, but ok], from the Review Organization, which among other things, required us to provide additional data and other information to complete the application and to address certain deficiencies highlighted by the reviewer, including the results of certain performance tests. On September 3, 2020, we submitted our response to the Review Organization. The response included additional data and other information to complete the application and to address certain deficiencies identified by the reviewer, including the results of certain performance tests. On September 10, 2020, the Review Organization requested that we include a second predicate device in our 510(k) premarket notification [ oops, a second predicate!?! and Nanox proved substantial equivalence to it in 16 days, wow! ] . On September 26, 2020, we submitted our revised 510(k) premarket notification to the Review Organization, which the Review Organization subsequently recommended to the FDA for clearance on December 28, 2020. On January 1, 2021, we received an information request from the FDA through the Review Organization regarding our submission, which we responded to on January 4, 2021. On January 30, 2021, we received additional information requests from the FDA which, among other things, require us to address certain deficiencies and questions, including requests that we provide additional support regarding the intended use of the Nanox.ARC and the comparability of the Nanox.ARC to the predicate device. We plan to respond to these requests promptly. In addition, we will continue to work to address further information requests, if any.

So, since Nanox now says the clock started on December 28, 2020, we are now  43 days into the 30-day  process, giving a 15% chance of clearance, using the entire history since 1999.

Note 10 (March 11, 2021):  Wrote a blog post about what was supposed to happen, if Nanox did not lie to investors about the status of its FDA submission, if there was any, of course.

Update March 11, 2021: Fixed the Notes numbering.

Update April 5, 2021:  Nanox beat the odds and got clearance for a Nanox.Cart (an ugly single-source device).