Imaging vendor Nanox says it will pay $650,000 in civil penalties to settle SEC investigation
Imaging startup Nanox estimated Thursday that it will pay $650,000 in civil penalties to settle an investigation launched by the U.S. Securities and Exchange Commission.
The Neve, Ilan-based company’s chairman and former CEO, Ran Poliakine, also is expected to pay “less than $500,000” in penalties, disgorgement and prejudgment interest, according to an Aug. 17 filing with the SEC. Nanox emphasized that these are only “agreements in principle,” which have yet to be finalized.
“The company can provide no assurances that satisfactory final agreements will be reached, that authorization by the commission or approval by the court will be obtained, or with respect to the timing or terms of any such agreements, authorization, and approval,” according to the SEC filing.
Nanox informed investors in 2021 that the SEC had launched an investigation into its business practices. This included subpoenaing the company for records on the development of a prototype for its imaging system, the Nanox.ARC, and cost estimates for assembling the final product.
Investors also hit Nanox with two separate class action lawsuits in 2020, which were later consolidated into one. They alleged Nanox violated federal securities laws in connection with disclosures about its submission for marketing clearance from the FDA, along with its reporting of customer contract signings. In the same SEC filing, Nanox said it entered into a formal agreement on June 2, 2023, to settle these suits for $8 million, pending court approval.
Nanox also reported its second quarter earnings results on Thursday, with officials noting that they’ve set aside $700,000 in anticipation of the SEC settlement. The company’s primary product is a stationary X-ray machine that produces images of the human musculoskeletal structure, which gained FDA clearance in late April. Nanox reported revenue of $2.6 million in Q2, with a net loss of $17.4 million and gross loss of $1.7 million.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.