XMax Inc. (NASDAQ:XMAX) saw its stock price slip initially by roughly 3% following a short report from Wolfpack Research, before the decline narrowed to about 0.1% as trading progressed.
The Wolfpack Research note leveled a series of allegations against XMax, asserting the company made false and contradictory claims across multiple areas of its business. The short seller said the discrepancies involve suppliers, customers, a material AI services deal, purported investments tied to SpaceX/xAI, and aspects of XMax's management team. Wolfpack published the report under the headline "We Believe XMAX is a Malaysian Hustle: Apparently Fabricated Purchase Orders From a Preschool and an Unrequited AI Deal Set the Stage for Up to a Billion in Dilution."
Central to Wolfpack's critique are announced purchase orders for stone slabs purportedly originating from Malaysian suppliers and issued in exchange for equity. The short seller reports that XMax announced roughly $4.6 million in purchase orders from five Malaysian suppliers, which it said raised equity and helped the company avoid delisting. According to Wolfpack, on-site checks at the addresses given for those suppliers found no businesses operating at those locations; one of the listed addresses, the report says, corresponded to a preschool. Wolfpack also contends that at least two of the named suppliers appear to be undisclosed related parties.
Wolfpack further points to a second tranche of purchase orders disclosed in February. XMax announced approximately $3.2 million in purchase orders for stone slabs from four additional Malaysian suppliers, again in exchange for stock. The short seller alleges that two of these entities do not appear to exist, that a third had ceased operations more than a year prior to the announced deal, and that the fourth was not located at the address provided in company disclosures.
The report also scrutinizes XMax's move into AI services. Wolfpack referenced an April 22 announcement in which XMax said it struck a deal with a US subsidiary of SUPX to buy $4.8 million of AI services. Wolfpack noted that SUPX has not disclosed the transaction, raising further questions in the short seller's account.
The companys stock reaction and the detailed allegations in the Wolfpack report underscore the scrutiny facing XMax following the disclosures. The claims in the short sellers report, as summarized here, remain allegations and reflect the content of the Wolfpack Research publication.