Activist short seller Hindenburg Research released a new report this morning on Renovaro BioSciences, the second go-round for the former Enochian BioSciences. The stock is down about 28% early in the session.
The report, called "Renovaro BioSciences: A Worthless AI Shell Game With A Murderous Magician Past" highlights a questionable merger between Renovaro, fresh off a name change after its former scientific founder was jailed for murder-for-hire allegations, and an "AI" company that the short seller alleges is little more than an empty shell.
Among other things, the report notes CEO Dr. Mark Dybul "has a prestigious background serving under Anthony Fauci at the National Institute of Health and "as a tenured professor at Georgetown University." The report includes photos of Dybul hobnobbing with people like Fauci, Justin Trudeau and Bill Gates.
"CEO Dybul praised [former, now jailed founder Serhat] Gumrukcu as a 'rare genius', saying he could be 'the most impactful scientist in generations'. In a now-deleted company video, Dybul praised Gumrukcu’s “brilliance” and said he created “some of the most innovative approaches to HIV and oncology” that he knew of," the report says.
"In May 2022, Gumrukcu, was charged by the Department of Justice over allegations that he conspired to hire a hitman to murder one of the victims of his many scams, a Vermont father of 6 who was taken from his home and executed in a snowbank," it continues.
In Hindenburg's earlier report it says it "revealed Gumrukcu had faked his entire academic history, including forging his Russian medical degrees, and that he was a magician who had fled authorities in Turkey after being charged over allegations he faked being a doctor to steal money from a terminally ill cancer patient."
The report says Dybul knew Gumrukcu was a felon but "kept working with him anyway" before Enochian's implosion. In fact, Hindenburg alleges that "in late 2022, 6 months after the murder charges and 2 months after the company sued Gumrukcu for 'brazen fraud', the board of Renovaro elected to pay Dybul a $100,000 cash performance bonus on top of his $850,000 annual salary."
Now, the short seller says Dybul is running a "shell game" of his own at the newly named company.
"In March and April 2023, with Enochian almost out of cash and its stock near lows, Chairman [Rene] Sindlev 'conducted multiple calls and in-person meetings' with representatives of GEDi Cube, an entity which didn’t even exist at the time, later company disclosures revealed," the report says, detailing the company's new move into AI.
Hindenburg writes: "8 days later, Renovaro publicly announced the merger, calling GEDi Cube an “AI Company” using “cutting edge AI/machine learning technology”. Renovaro stock spiked 83% on the day, trading 78.5x its preceding 30-day average volume."
And then, the 'shell game' allegation detailed: "At the time of the announcement, GEDi Cube was a 2-month-old entity with 'no operational history', no product, no revenue and virtually no assets, according to disclosures made months later. GEDi basically consisted of only a term sheet to acquire an entity called Grace Systems, which it claimed had AI technology."
"Grace Systems was a nearly insolvent tiny startup with no revenue and no commercial ready product after 10 years. It reported having $1,583 in cash on hand with ~$376,000 in liabilities at year end 2022. In April 2023, a Grace subsidiary filed for bankruptcy in the Netherlands," the report says.
The short seller also alleged taking liberties prior to the merger vote and in announcing a 'partnership' with Nvidia, stating: "Renovaro has repeatedly touted the importance of 'visionary' former Intel/Nvidia executive Craig Rhodes as CEO of GEDi Cube. Shareholders likely voted for the deal in part due to Rhodes’ background. Rhodes confirmed to us in an email that he resigned in December 2023, a month before the vote, with no apparent disclosure of the key resignation to shareholders."
"Renovaro and Dybul also repeatedly highlighted GEDi’s 'strategic partnership' with Nvidia as a key justification for the merger. But the Nvidia 'partnership' is a free program that over 17,000 companies have joined," the report says.
You can read Hindenburg's full report here. The company has yet to respond, but published two separate press releases this morning calling GEDi Cube an "AI Pioneer" and announcing a new binding LOI with a company called "Cyclomics".
