Class action lawsuit claims radiology vendor Nanox Imaging misled investors

Attorneys have filed a proposed class action lawsuit against Nanox Imaging and certain officers, claiming the radiology vendor has made false and misleading statements about its business. 

Attorneys submitted the complaint in a New Jersey federal court on June 12. They charge that the publicly traded, Israel-based company—which has developed a commercial grade, tomographic imaging device with a digital X-ray source—has touted purported improvements to its operations. 

These include efforts to scale up its manufacturing and production operations to meet anticipated demand for its Nanox.Arc system following regulatory approvals. 

“Defendants assured investors that such improvements would drive increased profitability and reduce costs, while touting various new distribution and supply agreements, creating the overall impression that the company was successfully and efficiently scaling its operations to meet increased demand,” the complaint claims. 

However, during the period in question between March 31, 2025, and April 17 of this year, Nanox allegedly made “misleading statements” regarding its business operations and prospects. This includes allegedly overstating both efficiency gains achieved in its operations, along with increased demand for its products. 

“In reality, Nanox’s production and manufacturing operations were poorly aligned with demand for the company’s products,” attorneys charge. “As a result, Nanox was experiencing significantly increased operating expenses and cash burn. The foregoing significantly increased the likelihood that Nanox would be forced to take disruptive remedial measures with respect to its manufacturing operations, entailing significant restructuring and impairment charges,” they added. 

Truth “began to emerge” on April 20 when Nanox announced its 2025 fourth quarter earnings results. This showed a net Q4 loss of $33.4 million, mainly due to a $17.5 million charge attributed to impairment of long-lived assets following a restructuring initiative at a Korean chip manufacturing facility. In the announcement, Nanox acknowledged it needed to shift to an outsourced production model “better aligned with current and anticipated demand.” In the same press release, the company also revealed that its CFO was stepping down, effective July 31. 

“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s securities, plaintiff and other class members have suffered significant losses and damages,” the complaint charges. 

Attorneys estimate there are “hundreds, if not thousands” of investors in Nanox, potentially impacted by the allegations. The complaint, filed by New York-based Pomerantz LLP, is on behalf of Katlyn Steele, who acquired the company’s stock during the yearlong period in question. Several other law firms also have put out press releases on the proposed class action lawsuit since Friday, seeking other investors interested in joining. 

Nanox did not immediately respond to a Radiology Business request for comment on Monday. In a recent SEC filing, the company noted that it was previously subject to two securities class action complaints against the company and its former officer. On June 2, 2023, Nanox entered into a formal agreement to settle those actions for $8 million. Additionally, the company also paid a $650,000 civil penalty to settle charges that it violated SEC rules in 2023.