Just too good to be true

Steven Koepke, who goes by koepkesd @ Stocktwits and Steven @ Yahoo, has been busy reading this blog while trying to justify the lies by the Nanox CEO that somehow the $200 (or $100, depending on the day) Nanox.Tube can replace the $150,000 modern CT tube (these are "list prices," of course).

For the longest time I was trying to figure out how Ran can claim that his field emitting device (FED) can generate x-rays on par with the high end x-ray tubes used in CT machines. Those large tubes can generate 800 to 1,000 mA at 120 kV. They also cost $120,000-$150,000. Here is the math. The MEMS (FED) chip has an active area of 0.126cm^2 (4mm diameter on chip in diameter and the power level was communicated at 2.5A/cm^2. The power is concentrated down via focusing device onto the tungsten anode. The basic math provides the power of the beam to be 314mA and 120 kV (per conference call last week). That's quite close and running multiple sources in parallel amplifies the power. Cost comparison: 5 small tubes @ $100 vs $150,000 for singe large CT device tube. Micro-X has a similar arrangement working today with a CNT device (also Field Emitting Device)

 

So, what's wrong with his reasoning?

There is no such thing as a field emitting device.  FED refers to a failed display technology -  a field emitting DISPLAY.  It does not contain "a field" of emitters, as Nanox CEO believes - it emits electrons induced by an electrostatic field.  It is not a more efficient or a cooler way to generate x-rays - all x-ray tubes, whether using a cold cathode (based on the field effect) or a hot cathode (using a hot filament) to emit electrons, have about 1% efficiency as 99% of the energy applied to the tube gets wasted as heat at the anode.  A hot filament uses a lower voltage - about 4V - than the 40V (or way more) needed by a cold cathode.  Roentgen discovered x-rays in 1895 using a cold-cathode (gas discharge) tube.  GE invented the hot-cathode x-ray tube in 1913 and obliterated the cold-cathode ones.

The proposed Nanox.Source chip is not MEMS, as there is nothing mechanical about it.  The chip is not real, or commercially available, of course, as Nanox has no ability to manufacture it commercially, at least not yet.

The current density of 2.5A/cm^2 comes from a fraudulent, that is, intentionally misleading, 2015 datasheet by Nanox predecessor, which I have previously linked here on this blog. 

The Nanox.Tube cannot do 314mA and 120 kVp.  The one used in the Nanox.Cart can do up to 2mA and up to 40 kVp, at most (or 0.08 kW, per 510K summary).  The CEI one can do up to 1mA and up to 100 kVp (or something like 0.1 kW, per CEI video).  The tube used by GE in the predicate device for Nanox.Cart can do about 40 kW - it has a rotating anode.  The CT tube can do about 120 kW (using Steven's numbers). So, to replicate the power of a $150,000 CT tube, one needs to use, oh, something like 1,000-1,500 Nanox tubes that cost $100,000 or more.  An after-market CT tube will cost less than $100,000, of course.  All this has been already discussed last year.

Micro-X has a 4.8 kW tube (a bulky stationary-anode one) - it uses carbon nanotubes, which Nanox says is impossible - it sells a few units a year.  The biggest CEI tubes are smaller sizes than Micro-X's and go up to about 2.5 kW (also stationary-anode ones).  

Update June 10, 2021:  Investors will eventually blame Nanox CEO for their delusions.  Steven continues:

The anode temperature becomes the challenge with the NNOX tube. CEI states that their tubes can handle about 60KJ. The RSNA video shows the bed is moving through the sources quickly (15-20 seconds for whole body). My guess is that NNOX is using high current short bursts to keep the anode temperature under control. In the video they may have used 300mA for up to 0.2 seconds to make 10 shots (capturing 8" per shot) while the cart moves through. 300mA x 0.2 X 10 shots = 60KJ. You can't shot this with dental tubes like that. They don't have the current and the image gets too blurry.

He is right that a typical dental tube (which has a better performance than the Nanox tube) cannot do 300mA.  He is also right that at some point, the heat capacity of the anode becomes a challenge (the anode temperature is not really a problem - it is the temperature of a part of the anode, the tungsten target, that is the challenge).

But Steven does not understand what heat capacity means.  Yes, one of CEI's most powerful medical tubes, OX125-06, can handle 60 kJ (CEI only makes stationary-anode tubes).  But that does not mean that it can do 300 mA or that 300 mA  x 0.2 s  x 100 kVp  x 10 shots = 60 kJ.  Nor does it mean that you can do 5 A x 0.2 s  x 60 kVp x 1 shot.  CEI provides nice charts in its datasheets to explain the interplay between heat capacity, tube current, tube voltage, and time.

As the charts show, the tube cannot do more than 35mA at 60kVp for 0.1s or more than 20mA at 110 kVp for 0.1s. But it can do 15 mA at 100 kVp for 10 seconds.  The RSNS 2020 demo, which we now know was fake, never demonstrated a full-body scan - it scanned three phantom "organs." The "hand" scan consisted of 45 "shots" or images ( 5 tubes x 9 tilts/translations) - it took about 50 seconds for the images thumbnails to appear on the display.  That is about 1 second per shot, not 0.2 seconds (and we don't know what that's even real).

The CEI OX-70, a dental tube,  can do about 32mA at 60 kVp for 0.1s or more than 20mA at 90 kVp for 0.1s.  It can do 10mA at 90 kVp for 10 seconds.  Here is some summary table from CEI's datasheets.  Stationary-anode tubes all look kind of the same.  The tubes that do less than 100 kVp are "dental" and typically tolerate half the current than the "medical," and are a bit smaller. 

Model	Voltage  kVp	Current mA, 0.1s	Current mA, 100kV	Focal sp. (mm)	Diam. (mm)	Length (mm)
Small/Dental tubes
OX/70-P	70	19	N/A	0.8	30	72
OX/70-5	70	11	N/A	0.5	30	72
OCX/65-G	70	12	N/A	0.8	30	76
OX/70-4	70	9	N/A	0.4	30	72
OX/70	90	21	N/A	1.2	30	82
OX/90	90	9	N/A	0.5	30	83
OCX/70-G	70	12	N/A	0.8	30	65
OCX/70-G4	70	8	N/A	0.4	30	65
Medical/Mobile tubes
OPX/105	110	18	2.5	0.5	42	125
OPX/105-4	105	17	2.5	0.4	42	95
3D/cone-beam CT tubes
OCX/100	105	20	4	0.5	46	140
OX/100	100	26	1.5	1.0	35	85

Recall, the Nanox tube in Nanox.Cart can do only 2mA at 40 kVp (for 0.1s -1 s).  The CEI Nanox tube can do only 1 mA at 100 kVp for 40 seconds (per CEI video).  The CEI OX-70 dental tube can do about 40 mA at 40 kVp for 0.1s, about 25 mA at 40 kVp for 1s, and about 3 mA at 90 kVp for about 40 seconds (per datasheet charts).  If Nanox tubes perform like poorly-made hot-cathode dental tubes, they probably are.  No mystery Nanox.Source chip required.

Update June 10, 2021:   Just to clarify, regular dental tubes (just one or 5 ) can definitely replicate the fake RSNA 2020 Nanox.Arc demo.  The "hand" scan took about 50 seconds for 45 images.  Let's see whether a dental tube can do 45 images at 45 seconds, that is, a bit faster.  A CEI dental tube operating at 90 kVp can do 3mA continuously for 45 seconds, so each exposure (image) will be 3 mAs at 90 kVp.  The Nanox.Cart demo at RSNA 2020 image needed just 1.5 mAs at 40 kVp (so, significantly less than 1/4 of what the CEI dental tube can supply).  Commercial fluoroscopy equipment does ok with 100 kVp and 1 mAs for each frame (image) at 30 fps.  So, sure, with a good enough (expensive enough) detector, you can do the Nanox.Arc tomosynthesis within 45 seconds.  But the detector (regardless of the tubes used) won't cost anywhere near $10,000.  And no one would like to look at the images (the American College of Radiology never considers a tomosynthesis procedure to be "usually appropriate,"  except for breast, which the Arc cannot do).

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.

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.  

Pumping while selling

 The CEO went on Bloomberg yesterday to pump the stock.  

He did not tell the audience that he put an order to sell 1,003,931 shares just hours earlier (at a low expected price of about $41).  The CFO sold only 40,533 shares.   Both selling according to a 10b5-1 selling plan supposedly adopted on March 4, 2021 (but that plan was not disclosed in the two prior 144 forms filed by the CEO)...  Nice.

There are some gems in the Bloomberg interview - more later.

Update April 7, 2021:  

Gem #1:  The tube the CEO is holding, while selling his shares, is fake, non-functional - it appears the vacuum sealing has failed (if there was ever one) - and cathode elements are falling off...

Gem #2:  5 tubes in Nanox.Arc, not 6.  The CEO insisted on 6 tubes in Nanox.Arc (and finalized design) at RSNA 2020. 

Gem #3:  The predicate device for Nanox.Cart is one of GE machines.  That indicates potentially fraudulent 510(k) submission, as all GE machines (that I am aware of) under the IZL product code can do Chest PA, the most common x-ray image done in the world, while Nanox.Cart, as demoed at RSNA 2020, can't.  The upcoming 510(k) summary should shed more clarity here.

Update December 12, 2021:  The interview is still available on Youtube.  The CART is not cleared for chest, only for hands, wrists, and fingers.

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.

Marketing vs reality

Nanox greets us this morning with another tweet, as it is about to fail its milestone which called for "FDA approved" by the end of the day today.

Wow, that proposed "digital" source will make x-ray systems not only affordable, but cool and multifunctional, too?  

Guess which of the two devices below belongs to Nanox?

Device 1.

Device 2.

Nanox claims that the ugly Device 1 is the only one it has submitted for FDA clearance and it does not intend to market it.  Device 2 uses the 100-year-old technology, and so does Nanox device, I believe, even though Nanox denies it.  Device 2 has been on the market since last year.

Update:  Nanox failed to get "FDA approved" in Q1 2021, and missed its "milestone."

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (the ugly device).

How does the device look like?

Nanox website, investor presentations, social media, press releases and promo pieces are all littered with designs and photos of various versions of the fancy but fake multi-source Nanox.ARCs.  But you will never find the single-source device that Nanox claims to have submitted for FDA clearance in January 2020.  Not once.

So, how do we know for sure what the device is supposed to look like?  Is it the ugly one that supposedly took the radiograph of the CEO's hand at RSNA 2020 or some fancy multi-source one with just one tube activated?   Has Nanox ever stated, in writing, how the device looks like?

Yes.  A presentation slide helps here - this one, Slide 22, is taken from the January 2021 JP Morgan presentation deck.

It states:

On the left the hand of Ran Poliakine, Nanox s CEO, as was taken during the 2020 RSNA live demo, using the Nanox single source device with the Nanox tube;

So the ugly device from the RSNA 2020 live demo is indeed the device Nanox claims to have submitted for FDA clearance. 

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (the ugly device).

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...    

Tricky terminology

Nanox has a problem with the terminology it is using - is it innocently incompetent or intentionally misleading?  

Nanox typically, but not always (see below), claims to have submitted for FDA clearance (aka 510(k)) rather than FDA approval (aka PMA).  In its draft registration statement filed July 30, 2020, the company states:

In response to the feedback we received from the reviewer, we are conducting standard functional and safety tests to support the 510(k) application, and expect to submit the results from these tests in the third quarter of 2020. (page 1)

Just two weeks later, that statement became:

As part of the review process, in March 2020, we received an additional information request, referred to as a major deficiency letter, 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. In response to the feedback we received from the Review Organization, we have conducted additional product testing and expect to submit the results from these tests, along with our response, to the Review Organization, in the third quarter of 2020. (page 1)

Ok, feedback sounds less ominous than a request for additional information, but why, oh, why did Nanox have to mention a major deficiency letter?  Why didn't it just put a "deficiency letter," without the "major?" See,

FDA refers to PMA ... deficiency letters as “major deficiency letters” and 510(k) ... deficiency letters as “additional information letters” or “requests for additional information.” (page 2)

And, yes, the reviewer - the Third Party - can send "requests for additional information," according to the overview published by the FDA. 

So, again, why not just write "a request for additional information?" Why confuse anyone reading the filing (and Prospectus) with the addition of the "major deficiency letter," which would imply seeking FDA approval rather than clearance?

Here is an excerpt from the busy Slide 3 titled "Nanox at a glance" in Nanox investor presentation dated January 14, 2021 stating that Nanox expects FDA approval, although this appears to refer to an upcoming submission of the fancy multi-source device (in which case, approval is impossible in Q1 2021, because it takes years of human trials, unlike simple clearance within 90 days).

Update April 5, 2021:  Nanox got clearance, in the beginning of Q2 2021, for a Nanox.Cart (an ugly device).

Planned spontaneity

There are two reasons why the scan of the CEO's hand at RSNA 2020 was not spontaneous as he pretended.

Reason 1:  About 9:20 into video the DICOM tag displayed on top of the radiograph says "Ran_3" - meaning, this was the third time they tried this (the CEO's name is Ran, of course).

Reason 2:  The video overlay with the CEO's name comparing his hand with the hand of Roentgen's wife was prepared well in advance.  It appears briefly in a frame before his radiograph actually shows on the display at about 8:06 into the video.

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).

These are the facts

Ugly
source:  RSNA2020 live demo

1. Nanox has not submitted anything for FDA approval.
   
   
2. It is illegal to market a Class II MEDICAL device, such as an x-ray diagnostic system, in the United States without clearance (or De Novo grant) pending (there are limited exceptions, but they don't apply here).
   
   
3. Nanox now claims to have submitted an x-ray system for FDA clearance in January 2020 and that it does not intend to ever market that system. That "system" is very ugly, and is completely different from what Nanox has been showing in its investor presentations. The one shown in investor presentations has not been submitted for clearance, approval, or De Novo grant. There are reasons to believe that Nanox did not submit anything for clearance in January 2020, or, if a submission happened, it was fraudulent.

These are the facts. They are indisputable.

Fake (notice the XANON label)
source:  November 2020 Investor Presentation, Slide 3 

Update April 5, 2021:  Nanox got clearance, not approval, for a Nanox.Cart (the ugly device).