Biopharmaceutical company Renovaro BioSciences was put under the investor microscope as renowned short-seller Hindenburg Research called out its merger with Netherlands-based AI medical startup GEDi Cube, alleging inflated valuations and revisiting a history of controversy.

Like a story out of the mind of H.P. Lovecraft, Hindenburg’s report also features a hitman, a magician, and artificial intelligence in an eyebrow-raising narrative.

In Hindenburg Research’s latest disclosure, the company notes that it has taken a short position in publicly traded Renovaro shares and encourages readers to do their due diligence. In the report, Hindenburg Research said the AI promises are overstated and called attention to founder Serhat Gumrukcu’s past run-ins with the law.

In finance, short selling refers to a trading strategy where investors sell borrowed shares, hoping to repurchase them at a lower price, aiming to profit from the price difference. Hindenburg previously shorted Jack Dorsey’s Block, and attempted to crowdsource research into determining where the Tether stablecoin gets its backing.

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The release of the Hindenburg report, titled “A Worthless AI Shell Game With A Murderous Magician Past,” likely prompted shares of Renovaro BioSciences to drop more than 42% from $3.29 to $1.98 today, according to MarketWatch—a calculated boon for the short-selling specialist.

Hindenburg Research and Renovaro BioSciences did not immediately respond to Decrypt’s request for comment.

Gumrukcu originally founded Renovaro BioScience as Enochian BioScience in 2011. Current CEO Mark Dybul, who also served as an ambassador in the second Bush and Obama Administrations, joined the Enochian BioSciences board and became its Executive Vice Chair in 2019 before officially becoming CEO in 2021.

Hindenburg Research’s report came the same day Renovaro announced the acquisition of GEDi Cube. The merger announcement highlighted the AI startup’s “existing relationship” with global computer hardware company NVIDIA.

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GEDi Cube, Hindenburg said, claimed a self-assessed valuation of $225 million, which the firm called “clearly absurd.”

Launched in 2023, GEDiCube, now RenovaroCube, focuses on early cancer detection and effective treatment using artificial intelligence. GEDi Cube claims to have developed an “award-winning” AI model known as “The Cube” that the company says combines proprietary AI/ML technology, algorithms, multi-modal data, biological analysis, and the expertise of a select multidisciplinary team.

“In the months leading up to the close of the merger, Renovaro enlisted stock promoters, including one previously sanctioned by the SEC, to help hype up the GEDi Cube deal and pump its shares to retail investors,” the Hindenburg report claimed.

And despite GEDi Cube touting a relationship with NVIDIA, Hindenburg Research said the relationship was non-existent.

“Renovaro and Dybul repeatedly highlighted GEDi Cube’s ‘strategic partnership’ with Nvidia as a key justification for the merger transaction,” Hindenburg Research said. “Reality: the Nvidia ‘partnership’ is a free program over 17,000 companies have joined.”

Hindenburg Research’s report reiterated previous reports that focused on Gumrukcu’s legal troubles in Turkey and the United States. The report also claims that his medical certifications were fabricated.

In May 2022, Gumrukcu was arrested and charged by the U.S. Department of Justice with involvement in a murder-for-hire plot that led to the death of Vermont resident Gregory Davis. Gumrukcu faces life in federal prison if convicted. A month after Gumrukcu’s arrest, Hindenburg Research published its first report on Enochian Biosciences, calling the company a scam.

In addition to a murder-for-hire plot, in December 2022, the DOJ indicted Gumrukcu on charges of wire fraud, saying that he and co-conspirator Berk Eratay attempted to defraud Davis and others by inflating the amount of money Gumrukcu had, as well as the identities of others involved with him.

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In both reports, Hindenburg Research said Renovaro BioSciences leadership knew about its leader’s past criminal activities, including a previous arrest in California in 2017 for what the firm called an “alleged crime spree.”

Additionally, Hindenburg repeatedly referred to Gumrukcu as a “magician,” saying in the 2022 report the firm found recordings of Gumrukcu's “performances” in Turkey.

“We learned of Gumrukcu’s actual past by scouring old magic shops and second-hand bookstores in Turkey, finding that he was a local magician,” Hindenburg Research said. “With his stage name ‘Dr. No,’ he studied and taught spoon-bending, firewalking, and performing as a mentalist, claiming magical healing powers.”

According to Hindenburg Research, Gumrukcu was performing magic in Turkey when he claimed to be studying medicine in Russia.

Renovaro’s original name, Enochian BioSciences, refers to Enochian Magic, a system of ceremonial magic based on the evocation and commanding of various spirits.

“There’s no magic here—just a new name and the same shameless scammers, in our view,” Hindenburg Research said.

Despite Gumruckcus’ arrest, Hindenburg Research says he and his husband are still the largest shareholders of Renovaro, owning nearly 19 million shares, 28% of the company.

“Gumrukcu’s husband still controls 3.6 million shares that are free to trade, as of an order in late October 2023,” Hindenburg said. “With Gumrukcu’s murder trial scheduled for later this year and with mounting civil litigation costs, we expect his husband will dump this stock imminently.”

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