Less than 24 hours after filing a lawsuit against Nano-X Imaging, the world’s first commercial-grade digital X-ray source for real-world medical imaging applications, the Securities and Exchange Commission has reached a $1.1 million settlement.

According to Reuters, which broke the news of the filing and settlement the same day, the SEC sued Nano-X and its founder Ran Poliakine on September 29, accusing them of lying to investors about how much it would cost to mass-produce Nanox.Arc, the company’s flagship solution.

In 2019, Nano-X introduced its digital X-ray technology, which is based on a proprietary silicon MEMs semiconductor technology, to generate electrons without the use of heat as a power source, making its scanners more affordable than traditional radiography systems. The technology is the key component in its Nanox.Arc, a stationary X-ray system that reconstructs 2D images into 3D tomographic visualizations using a novel, cold-cathode X-ray tube as its power source.

In 2020 and 2021, Poliakine said that Nano-X could mass-produce the solution for $8,000 to $12,000 per device, ignoring business executives and engineers who gave him higher estimates. He also told investors this before and after its initial public offering in August 2020, which raised $165 million.

As part of the settlement, Nano-X will pay $650,000 in civil fines, while Poliakine, who was chief executive at the time and is now nonexecutive chairman, will pay $150,000 in civil fines and $267,000 in disgorgement plus interest.

Nano-X declined Reuters’ request for comment. The company has been the subject of class action lawsuits in the past for reportedly making false statements about its technology. Investors filed one in 2020 following a report by online stock commentator Citron Research that accused it of failing to produce any evidence comparing Nanox.Arc to conventional CTs, as well as for its R&D spending and for fabricating distribution agreements with fake customers.

Another by short-selling firm Muddy Waters also questioned the partnerships Nanox claimed it had made for distributing its Nanox.Arc system. This led to a more than 50% plunge in its stock at the time.

The company obtained FDA clearance for its single-source digital X-ray technology in April 2021, and more recently for its multisource version in May of this year.

It expects its technologies to potentially increase access for two-thirds of the world where imaging and screening are lacking, as well as decrease waiting times and help detect serious or chronic illnesses in early stages.

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