Spectral AI Supports Naked Short Selling Inquiry

Rhea-AI Summary

Spectral AI (Nasdaq: MDAI), a leading AI company in medical diagnostics for wound care, has announced its support for an inquiry into potential market manipulation of its common stock. The inquiry, spearheaded by board member and major shareholder Erich Spangenberg, focuses on the illegal practice of naked short selling, which has allegedly inflated the company's public float by over 40%. Spectral AI is collaborating with Nasdaq and state securities authorities in Florida, Louisiana, and Texas to address this issue, aiming to strengthen market transparency and protect investors.

Positive

• Support for inquiry into potential market manipulation could lead to better market transparency.
• Collaboration with Nasdaq and state securities authorities may enhance investor protection.
• Potential resolution of naked short selling could stabilize stock prices.

Negative

• Naked short selling has allegedly inflated the public float by over 40%, impacting stock value.
• Ongoing market manipulation concerns may create investor uncertainty.
• Potential legal and regulatory scrutiny could affect company operations.

DALLAS, June 24, 2024 (GLOBE NEWSWIRE) -- Spectral AI, Inc. (Nasdaq: MDAI) (“Spectral AI” or the “Company”), an artificial intelligence (AI) company focused on medical diagnostics for faster and more accurate treatment decisions in wound care, today announced that it has provided support to Nasdaq and the state securities authorities in Florida, Louisiana and Texas to bring to their attention potential market manipulation of the Company’s common stock, primarily in the form of naked short selling.

This inquiry is being led by Erich Spangenberg, a member of the Board of Directors and the Company’s largest shareholder.

Naked short selling is a practice in which shares are sold without first being borrowed or ensuring that they can be borrowed. This creates an artificial selling pressure and allows traders to artificially drive down prices at the expense of retail investors. The practice is generally illegal pursuant to Securities and Exchange Commission (“SEC”) Regulation SHO.       

“As detailed in the Company’s SEC filing today, a simple examination of our shareholder lists we obtained from reliable authorities clearly shows that our public float has been artificially increased by over 40% as a result of what I believe is illegal naked shorting,” said Mr. Spangenberg. “We recognize and appreciate Nasdaq’s commitment to ensuring market transparency and integrity, and its mission to protect the interests of investors. It is in this spirit that we look forward to collaborating with all relevant authorities to address instances of potentially illegal naked short selling in our stock, strengthen compliance, and protect our investors.”            

About Spectral AI 

Spectral AI, Inc. is a Dallas-based predictive AI company focused on medical diagnostics for faster and more accurate treatment decisions in wound care, with initial applications involving patients with burns and diabetic foot ulcers. The Company is working to revolutionize the management of wound care by “Seeing the Unknown^®” with its DeepView System. The DeepView System is a predictive device that offers clinicians an objective and immediate assessment of a wound’s healing potential prior to treatment or other medical intervention. With algorithm-driven results and a goal to change the current standard of care, the DeepView System is expected to provide faster and more accurate treatment insight towards value care by improving patient outcomes and reducing healthcare costs. For more information about the DeepView System, visit www.spectral-ai.com. 

Forward Looking Statements 
Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s strategy, plans, objectives, initiatives and financial outlook. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. 

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. As such, readers are cautioned not to place undue reliance on any forward-looking statements. 

Investors should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” sections of the Company’s filings with the SEC, including the Registration Statement and the other documents filed by the Company. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. 

Investors: 
The Equity Group 
Devin Sullivan 
Managing Director 
dsullivan@equityny.com 

Conor Rodriguez 
Analyst 
crodriguez@equityny.com

FAQ

What did Spectral AI announce on June 24, 2024?

Spectral AI announced its support for an inquiry into potential market manipulation of its stock, focusing on the illegal practice of naked short selling.

Who is leading the inquiry into the potential market manipulation of MDAI stock?

The inquiry is being led by Erich Spangenberg, a member of Spectral AI's Board of Directors and the company's largest shareholder.

What is naked short selling?

Naked short selling is the practice of selling shares without borrowing them first, creating artificial selling pressure that can drive down stock prices.

How much has Spectral AI's public float been artificially increased due to naked short selling?

According to the company, its public float has been artificially increased by over 40% due to naked short selling.

Which authorities is Spectral AI collaborating with to address naked short selling?

Spectral AI is collaborating with Nasdaq and state securities authorities in Florida, Louisiana, and Texas.

Why is Spectral AI concerned about naked short selling of its stock?

Spectral AI is concerned because naked short selling creates artificial selling pressure, potentially driving down stock prices and harming retail investors.